<PAGE> 1
================================================================================
As filed with the Securities and Exchange Commission on February 23, 1996
Registration Nos. 2-81110/811-4293
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
/x/
Post-Effective Amendment No. 45
REGISTRATION STATEMENT UNDER THE
/x/
INVESTMENT COMPANY ACT OF 1940
/x/
Amendment No. 47
________________________________
PACIFIC HORIZON FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road
Columbus, OH 43219
(Address of Principal Executive Offices)
Registrant's Telephone Number, including area code: (800) 332-3863
W. Bruce McConnel, III
Drinker Biddle & Reath
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
<PAGE> 2
Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940, as amended. The Registrant has filed its Rule 24f-2 Notice relating
to such shares for Registrant's most recent fiscal year on April 28, 1995.
================================================================================
<PAGE> 3
THIS POST-EFFECTIVE AMENDMENT IS BEING FILED SOLELY WITH RESPECT TO
THE PRIME FUND. ACCORDINGLY, THE PROSPECTUSES AND STATEMENTS OF ADDITIONAL
INFORMATION FOR THE OTHER PACIFIC HORIZON FUNDS ARE NOT INCLUDED IN THIS
FILING.
<PAGE> 4
PACIFIC HORIZON FUNDS, INC.
X Shares:
Prime Fund
Cross Reference Sheet
______________________
<TABLE>
<CAPTION>
Form N-1A Item Prospectus Caption
- -------------- ------------------
Part A
- ------
<S> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . . . . . . . . Expense Summary
3. Condensed Financial Information . . . . . . . . . . . . Financial Highlights;
4. General Description of Registrant . . . . . . . . . . . Description of Shares; Cover
Page; Investment Objectives
and Policies
5. Management of the Fund . . . . . . . . . . . . . . . . . Management of the Fund;
Description of Shares
5A. Management's Discussion of
Fund Performance . . . . . . . . . . . . . . . . . . . *
6. Capital Stock and Other
Securities . . . . . . . . . . . . . . . . . . . . . . Description of Shares;
Dividends, Distributions and
Taxes
7. Purchase of Securities Being
Offered . . . . . . . . . . . . . . . . . . . . . . . . Purchases of Shares;
Management of the Fund;
Additional Shareholder
Services
8. Redemption or Repurchase . . . . . . . . . . . . . . . . Redemption of Shares;
Management of the Fund;
Additional Shareholder
Services
9. Pending Legal Proceedings . . . . . . . . . . . . . . . *
</TABLE>
______________
* Item inapplicable or answer negative.
<PAGE> 5
PROSPECTUS
___________, 1996
PRIME FUND
(Investment Portfolio offered by Pacific Horizon Funds, Inc.)
________________________________________________________________________________
THIS PROSPECTUS APPLIES TO THE X SHARES OF THE PRIME FUND (THE "FUND"), A
DIVERSIFIED INVESTMENT PORTFOLIO OFFERED BY PACIFIC HORIZON FUNDS, INC. (THE
"COMPANY"). THE COMPANY IS REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940
AS AN OPEN-END MANAGEMENT INVESTMENT COMPANY. THE FUND IS DESIGNED TO PROVIDE
INVESTORS WITH DAILY LIQUIDITY.
THE INVESTMENT OBJECTIVE OF THE PRIME FUND IS TO SEEK HIGH CURRENT INCOME AND
STABILITY OF PRINCIPAL. THE PRIME FUND SEEKS TO ACHIEVE THIS OBJECTIVE BY
INVESTING SUBSTANTIALLY ALL OF ITS ASSETS IN A DIVERSIFIED PORTFOLIO OF U.S.
DOLLAR-DENOMINATED "MONEY MARKET" INSTRUMENTS SUCH AS BANK CERTIFICATES OF
DEPOSIT AND BANKERS' ACCEPTANCES, COMMERCIAL PAPER AND REPURCHASE AGREEMENTS,
IN ADDITION TO OBLIGATIONS ISSUED OR GUARANTEED BY THE U.S. GOVERNMENT, ITS
AGENCIES OR INSTRUMENTALITIES.
CURRENTLY, CLASS X SHARES ARE AVAILABLE ONLY TO QUALIFIED RETAIL CUSTOMERS WHO
PURCHASE SUCH SHARES THROUGH A SWEEP ACCOUNT ("SWEEP ACCOUNT") OFFERED BY BA
INVESTMENT SERVICES, INC. ("BAIS") AND CERTAIN OTHER BROKER-DEALERS AND
FINANCIAL SERVICE ORGANIZATIONS ("SERVICE ORGANIZATIONS"). A SWEEP ACCOUNT
COMBINES A BROKERAGE ACCOUNT (THE "TRANSACTION ACCOUNT") WITH A DAILY SWEEP OF
BALANCES TO OR FROM THE FUND'S CLASS X SHARES. BAIS OR SERVICE ORGANIZATIONS,
AS APPLICABLE, ARE RESPONSIBLE FOR PROVIDING PERSONS INVESTING IN CLASS X
SHARES THROUGH A SWEEP ACCOUNT WITH A SWEEP ACCOUNT AGREEMENT AND DISCLOSURE
STATEMENT (COLLECTIVELY, THE "DISCLOSURE DOCUMENTS") DESCRIBING THE VARIOUS
FEATURES AND OPERATIONS OF THE SWEEP ACCOUNT. THE DISCLOSURE DOCUMENTS SHOULD
BE REVIEWED IN CONJUNCTION WITH THIS PROSPECTUS.
PORTFOLIO SECURITIES HELD BY THE FUND HAVE REMAINING MATURITIES OF THIRTEEN
MONTHS OR LESS FROM THE DATE OF PURCHASE BY THE FUND. PORTFOLIO SECURITIES
WHICH HAVE CERTAIN PUT OR DEMAND FEATURES EXERCISABLE BY THE FUND WITHIN
THIRTEEN MONTHS (AS WELL AS CERTAIN U.S. GOVERNMENT OBLIGATIONS WITH FLOATING
OR VARIABLE INTEREST RATES) AND SECURITIES HELD AS COLLATERAL FOR REPURCHASE
AGREEMENTS MAY HAVE LONGER MATURITIES. SHARES OF THE FUND MAY BE PURCHASED OR
REDEEMED AT ANY TIME WITHOUT CHARGE OR PENALTY IMPOSED BY THE FUND.
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BANK OF AMERICA"), SAN
FRANCISCO, CALIFORNIA, ACTS AS INVESTMENT ADVISER
<PAGE> 6
TO THE COMPANY. CONCORD FINANCIAL GROUP, INC. SPONSORS THE FUND AND ACTS AS
ITS DISTRIBUTOR AND CONCORD HOLDING CORPORATION ACTS AS ITS ADMINISTRATOR,
NEITHER OF WHICH IS AFFILIATED WITH BANK OF AMERICA.
This Prospectus briefly sets forth certain information about the Fund described
herein that you should know before investing. It should be read and retained
for future reference. A Statement of Additional Information dated __________,
1996 (as it may, from time to time be revised), is incorporated by reference
herein and discusses certain subjects in this Prospectus further as well as
other matters which may be of interest to investors. A free copy of the
Statement of Additional Information may be obtained by calling 800-332-3863.
- --------------------------------------------------------------------------------
Shares of the Fund are not bank deposits or obligations of, or guaranteed or
endorsed by, Bank of America or any of its affiliates and are not federally
insured by, guaranteed by, or obligations of or otherwise supported by the U.S.
Government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board or any other governmental agency. The Fund seeks to maintain a net asset
value per share at $1.00 for purposes of purchases and redemptions, although
there can be no assurance that it will be able to do so on a continuous basis.
Investment in the Fund involves investment risk, including the possible loss of
principal amount invested.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus and in the
Statement of Additional Information, in connection with the offering of the
Fund's shares and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company or its distributor.
This prospectus does not constitute an offer by the Fund or by the distributor
to sell, or a solicitation of any offer to buy, any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful for the Fund or
the distributor to make such offer in such jurisdiction.
- --------------------------------------------------------------------------------
<PAGE> 7
CONTENTS
Expense Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . 4
Investment Objective and Policies . . . . . . . . . . . . . . . . . . 6
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . 13
Purchases of Shares . . . . . . . . . . . . . . . . . . . . . . . . . 16
Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . 18
Additional Shareholder Services . . . . . . . . . . . . . . . . . . . 18
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . 18
Description of Shares . . . . . . . . . . . . . . . . . . . . . . . . 20
Performance Calculations . . . . . . . . . . . . . . . . . . . . . . 22
DISTRIBUTOR: INVESTMENT ADVISER:
Concord Financial Group, Inc. Bank of America National Trust and
3435 Stelzer Road Savings Association
Columbus, OH 43219 555 California Street
San Francisco, CA 94104
<PAGE> 8
EXPENSE SUMMARY
The following table sets forth certain information regarding the shareholder
transaction expenses imposed by the Prime Fund and the annual operating
expenses expected to be incurred by the Prime Fund for the next twelve months
with respect to its X Shares. Actual expenses may vary. Hypothetical examples
based on the table are also shown.
<TABLE>
<CAPTION>
PRIME
FUND
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
Maximum Sales Load Imposed on Purchases (as a
percentage of offering price) . . . . . . . . . . . . . . . . . None
Sales Load Imposed on Reinvested Dividends . . . . . . . . . . . . None
Sales Load Imposed on Redemptions (1) . . . . . . . . . . . . . . . None
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . . . None
Exchange Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees . . . . . . . . . . . . . . . . . . . . . . . . . 0.10%
-----
Rule 12b-1 and Shareholder Service Fees (2) . . . . . . . . . . . 0.55%
-----
All Other Expenses . . . . . . . . . . . . . . . . . . . . . . . 0.13%
-----
Administration Fees . . . . . . . . . . . . . . . . . . . . . . 0.10%
-----
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . 0.03%
-----
Total Fund Operating Expenses (3) . . . . . . . . . . . . . . . . 0.78%
=====
_______________________________
</TABLE>
(1) The Company reserves the right to impose a charge for wiring
redemption proceeds.
(2) Includes distribution fees payable at the annual rate of 0.30% of the
average daily net assets of the Fund's Class X Shares and shareholder
service fees payable at the annual rate of 0.25% of the average daily
net assets of the Fund's Class X Shares. Because of the Distribution
Plan payments paid by the Fund as shown in the above table, long-term
Class X shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted by the National Association
of Securities Dealers, Inc.
(3) Additional fees charged by BAIS or Service Organizations related to
the Sweep Account are not included in this table. For additional
information with respect to Sweep Account fees and charges, including
a description of the services available to Sweep Account holders, you
should refer to the Disclosure Documents.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
<S> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) a 5% annual return and
(2) redemption at the end of each time period:
Prime Fund . . . . . . . . . . . . . . . $8 $25
______________________________________________________________________________
</TABLE>
-2-
<PAGE> 9
The foregoing Expense Summary and Example are intended to assist investors in X
Shares in understanding the various shareholder transaction and operating
expenses that investors bear either directly or indirectly. From time to time,
the investment adviser and administrator may prospectively waive a portion of
their respective fees and/or assume certain expenses of the Fund. For a
further description of the Fund's operating expenses, see "Management of the
Fund" in this Prospectus.
THE EXAMPLE SHOWN ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RETURN AND OPERATING EXPENSES. ACTUAL INVESTMENT RETURN AND
OPERATING EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
-3-
<PAGE> 10
FINANCIAL HIGHLIGHTS
On March 30, 1984, the Company commenced its public sale of shares (Pacific
Horizon Shares) in the Prime Fund which was originally called the "Money Market
Portfolio." On January 19, 1990, the Company began offering Horizon Shares and
Horizon Service Shares in the Prime Fund. As of the date of this prospectus:
Class S Shares of the Prime Fund have been classified by the Company's Board of
Directors but have not been offered to the public as of the date of this
prospectus, and the Company began its public offering of Class X Shares of the
Prime Fund. The shares of each class in the Fund represent equal pro rata
interests in the Fund, except that they bear different expenses which reflect
the difference in the range of services provided to them. Class X Shares bear
the expense of a distribution and services plan (the "Distribution and Services
Plan") at annual rates not to exceed 0.55% of the average daily net asset value
on the Fund's outstanding Class X Shares. See "Description of Shares" below.
The table below sets forth certain information concerning the investment
results of Pacific Horizon Shares of the Prime Fund for the periods indicated.
The table is presented for informational purposes only. Actual investment
results of the Class X Shares of the Prime Fund may be different. The
information contained in the Financial Highlights insofar as it pertains to
each of the five fiscal years in the five year period ended February 28, 1995
has been audited by Price Waterhouse LLP, independent accountants for this
Fund, whose unqualified report on the financial statements containing such
information, is incorporated by reference in the Statement of Additional
Information, which may be obtained upon request. The information contained in
the Financial Highlights for each of the four years in the period ended
February 28, 1989 was audited by other independent accountants whose report
thereon dated April 20, 1989 expressed an unqualified opinion on the statements
containing such information. The Financial Highlights should be read in
conjunction with the financial statements and notes thereto and the unqualified
report of the independent accountants which are incorporated by reference in
the Statement of Additional Information. See "Description of Shares" below for
certain differences among the Pacific Horizon Shares, Horizon Shares, Horizon
Service Shares, Class S Shares and Class X Shares, including differences
relating to expenses.
-4-
<PAGE> 11
Selected Data for a Pacific Horizon Share Outstanding throughout Each of the
Periods Indicated:
________________________________________________________________________________
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Prime Fund Year Ended
------------------------------------------------------------------------------------
Six Months
Ended
Aug. 31, Feb. 28, Feb. 28, Feb. 28, Feb. 29, Feb. 28, Feb. 28,
1995 1995+ 1994+ 1993+ 1992 1991 1990
---- ----- ----- ----- ---- ---- ----
(Unaudited)
-----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................... 0.0279 0.0424 0.0287 0.0340 0.0558 0.0762 0.0855
Net realized gain (loss) on
securities......................... 0.0002 (0.0227) (0.0016) 0.0000 0.0005 (0.0001) 0.0001
-------- -------- -------- -------- -------- -------- --------
Total income from investment
operations.............................. 0.0281 0.0197 0.0271 0.0340 0.0563 0.0761 0.0856
-------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from net investment income.... (0.0279) (0.0422) (0.0287) (0.0341) (0.0557) (0.0762) (0.0855)
Increase due to voluntary capital
contribution from investment adviser.... (0.0000) 0.0233 0.0000 0.0000 0.0000 0.0000 0.0000
-------- -------- -------- -------- -------- -------- --------
Net change in net asset value
per share............................... 0.0002 0.0008 0.0016 (0.0001) 0.0006 (0.0001) 0.0001
-------- -------- -------- -------- -------- -------- --------
Net asset value per share,
end of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ========
Total return................................. 2.82%+++ 4.30%** 2.91% 3.45% 5.72% 7.89% 8.90%
Ratio/Supplemental Data:
Net assets, end of year (millions)...... $ 1,726 $ 1,129 $ 1,216 $ 992 $ 1,413 $ 1,086 $ 890
Ratio of expenses to average net
assets............................. 0.56%*** 0.51%* 0.52%* 0.55% 0.56% 0.56% 0.63%
Ratio of net investment income to
average net assets...................... 5.53%*** 4.19%* 2.86%* 3.42% 5.51% 7.61% 8.52%
<CAPTION>
Prime Fund Year Ended
-------------------------------------------------
Feb. 29, Feb. 28, Feb. 28, Feb. 28,
1989 1988 1987 1986
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net asset value, beginning of year........... $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
Income from Investment Operations:
Net investment income................... 0.0738 0.0643 0.0606 0.0768
Net realized gain (loss) on
securities......................... (0.0002) 0.0003 (0.0001) (0.0003)
-------- -------- -------- --------
Total income from investment
operations.............................. 0.0736 0.0646 0.0605 0.0765
-------- -------- -------- --------
Less Distributions:
Dividends from net investment income.... (0.0738) (0.0643) (0.0606) (0.0768)
Increase due to voluntary capital
contribution from investment adviser.... 0.0000 0.0000 0.0000 0.0000
-------- -------- -------- --------
Net change in net asset value
per share............................... (0.0002) 0.0003 (0.0001) (0.0003)
-------- -------- -------- --------
Net asset value per share,
end of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total return................................. 7.63%++ 6.62%++ 6.23%++ 7.96%++
Ratio/Supplemental Data:
Net assets, end of year (millions)...... $ 921 $ 957 $ 484 $ 464
Ratio of expenses to average net
assets............................. 0.63% 0.58% 0.57% 0.57%
Ratio of net investment income to
average net assets...................... 7.38% 6.42% 6.02% 7.74%
- ----------------------------
</TABLE>
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the
ratio of net investment income to average net assets by 0.05% and 0.01% for
the years ended February 28, 1995 and February 28, 1994, respectively.
** Total return includes the effect of a voluntary capital contribution from
the investment adviser. Without this capital contribution, the total return
would have been lower.
*** Annualized.
+ Security Pacific National Bank served as investment adviser through April
21, 1992. Bank of America National Trust and Savings Association served as
investment adviser commencing April 22, 1992.
++ Unaudited.
+++ Not Annualized.
-5-
<PAGE> 12
INVESTMENT OBJECTIVE AND POLICIES
This section describes the investment objective and policies of the Fund.
Assets of the Fund will be invested in dollar-denominated debt securities with
remaining maturities of thirteen months or less as defined by the Securities
and Exchange Commission, and the dollar-weighted average portfolio maturity of
the Fund will not exceed 90 days. All securities acquired by the Fund will be
determined by the investment adviser, under guidelines established by the
Company's Board of Directors, to present minimal credit risks and will be U.S.
Government securities or other "First Tier Securities" (as defined by the
Securities and Exchange Commission) of the types described below. First Tier
Securities consist of instruments that are either rated at the time of purchase
in the top rating category by one (if rated by only one) or more unaffiliated
nationally recognized statistical rating organizations ("NRSROs") including
Standard and Poor's Ratings Group, Division of McGraw Hill ("Standard &
Poor's"), Moody's Investors Service, Inc. ("Moody's"), Duff & Phelps Credit
Co. ("Duff & Phelps") or Fitch Investors Service, Inc. ("Fitch") or issued by
issuers with such ratings. The Appendix to the Statement of Additional
Information includes a description of applicable NRSRO ratings. Unrated
instruments (including instruments with long-term but no short-term ratings)
purchased by the Fund will be of comparable quality as determined by the Fund's
investment adviser pursuant to guidelines approved by the Board of Directors.
The Prime Fund's investment objective is to seek high current income and
stability of principal. The Fund invests substantially all of its assets in a
diversified portfolio of U.S. dollar-denominated money market instruments.
Portfolio securities held by the Fund have remaining maturities of thirteen
months or less from the date of purchase by the Fund. (Portfolio securities
which are subject to repurchase agreements or have certain put or demand
features exercisable by the Fund within thirteen months, as well as certain
U.S. Government obligations with floating or variable interest rates, may have
longer maturities.)
In pursuing its investment objective, the Prime Fund invests in a broad range
of government, bank and commercial obligations that may be available in the
money markets. The money market instruments in which the Fund invests will
generally have neither as much risk nor as high a return as longer-term or
lower-rated instruments. In accordance with current regulations of the
Securities and Exchange Commission, the Fund intends to limit its investments
in the securities of any single issuer (other than securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities) to not
more than 5% of the Fund's total assets at the time of purchase, provided that
the Fund may
-6-
<PAGE> 13
invest up to 25% of its total assets in the securities of any one issuer for a
period of up to three business days.
The Prime Fund may purchase bank obligations such as certificates of deposit
and bankers' acceptances issued or supported by the credit of domestic banks,
foreign branches of domestic banks ("Euro CDs") or domestic branches of foreign
banks ("Yankee Cds" and "Yankee BAs"). Such banks must have total assets at
the time of purchase in excess of $2.5 billion. No more than 25% of the Prime
Fund's total assets at the time of purchase may be invested in Yankee Cds and
Bas and Euro Cds. The Fund may also make interest- bearing savings deposits in
such commercial banks in amounts not in excess of 5% of the Fund's total
assets.
The Prime Fund may be subject to additional investment risks because the Fund
may hold securities issued by foreign branches of domestic banks and domestic
branches of foreign banks (and, as described below, commercial paper issued by
foreign issuers). These risks are different in some respects from those
incurred by a fund which invests only in debt obligations of U.S. domestic
issuers. Such risks include future political and economic developments, the
possible imposition of withholding taxes on interest income payable on the
securities by the particular country in which the branch is located, the
possible seizure or nationalization of foreign deposits, the possible
establishment of exchange controls or the adoption of other foreign
governmental restrictions which might adversely affect the payment of principal
and interest on these securities. In addition, foreign branches of domestic
banks and domestic branches of foreign banks are not necessarily subject to the
same regulatory requirements that apply to domestic branches of domestic banks
(such as reserve requirements, loan limitations, examinations, accounting,
auditing and recordkeeping requirements, and public availability of
information) and the Fund may experience difficulties in obtaining or enforcing
a judgment against the issuing bank.
The Prime Fund may purchase commercial paper, short-term notes and corporate
bonds that meet the Fund's maturity limitations. Commercial paper purchased by
the Fund may include instruments issued by foreign issuers, such as Canadian
Commercial Paper ("CCP"), which is U.S. dollar-denominated commercial paper
issued by a Canadian corporation or a Canadian counterpart of a U.S.
corporation, and Europaper, which is U.S. dollar-denominated commercial paper
of a foreign issuer.
The Prime Fund may also invest in commercial paper issued in reliance on the
so-called "private placement" exemption from registration afforded by Section
4(2) of the Securities Act of 1933 ("Section 4(2) paper"). Section 4(2) paper
is restricted as to disposition under the Federal securities laws and generally
is sold to institutional investors such as the Fund that agree that they are
purchasing the paper for investment and not with a view
-7-
<PAGE> 14
to public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) paper normally is resold to other institutional
investors like the Prime Fund through or with the assistance of the issuer or
investment dealers that make a market in Section 4(2) paper. Section 4(2) paper
will not be subject to the Fund's 10% limitation on illiquid securities set
forth below where the Board of Directors or Bank of America (pursuant to
guidelines adopted by the Board) determines that a liquid trading market exists.
INVESTMENT POLICIES OF THE PRIME FUND
GOVERNMENT OBLIGATIONS. The Prime Fund may purchase obligations
issued or guaranteed by the U.S. Government or its agencies and
instrumentalities. Obligations of certain agencies and instrumentalities of
the U.S. Government, such as the Small Business Administration, are backed by
the full faith and credit of the United States. Others are backed by the right
of the issuer to borrow from the U.S. Treasury (such as obligations of the
Federal Home Loan Bank), by the discretionary authority of the U.S. Government
to purchase the agency's obligations (such as obligations of the Federal
National Mortgage Association), or only by the credit of the agency or
instrumentality issuing the obligation (such as the Student Loan Marketing
Association). Securities issued or guaranteed by the U.S. Government and its
agencies and instrumentalities have historically involved little risk of loss
of principal if held to maturity. However, no assurance can be given that the
U.S. Government would provide financial support to any agency or
instrumentality if it is not obligated to do so by law.
Certain securities issued or guaranteed by all governmental agencies may be
prepaid by the issuer without penalty. Thus, when prevailing interest rates
decline, the value of these securities is not likely to rise on a comparable
basis with other debt securities that are not so prepayable. The proceeds of
prepayments and scheduled payments of principal of these securities will be
reinvested by the Fund at then-prevailing interest rates, which may be lower
than the rate of interest on the securities on which these payments were
received.
"STRIPPED" SECURITIES. The Fund may invest in "stripped" securities,
which are U.S. Treasury bonds and notes the unmatured interest coupons of which
have been separated from the underlying obligation. Stripped securities are
zero coupon obligations that are normally issued at a discount to their "face
value," and may exhibit greater price volatility than ordinary debt securities
because of the manner in which their principal and interest are returned to
investors.
REPURCHASE AGREEMENTS. The Fund may agree to purchase securities from
financial institutions such as banks and broker-
-8-
<PAGE> 15
dealers, as are deemed creditworthy by the Company's investment adviser under
guidelines approved by the Board of Directors, subject to the seller's
agreement to repurchase them at an agreed upon time and price ("repurchase
agreements"). Although the securities subject to a repurchase agreement may
bear maturities exceeding thirteen months, the Fund intends only to enter into
repurchase agreements having maturities not exceeding 60 days. Securities
subject to repurchase agreements are held either by the Company's custodian or
sub-custodian, or in the Federal Reserve/Treasury Book-Entry System. The
seller under a repurchase agreement will be required to maintain the value of
the securities subject to the agreement at not less than the repurchase price,
and such value will be continuously monitored by the investment adviser on an
ongoing basis. Default by the seller would, however, expose the Fund to
possible loss because of adverse market action or delay in connection with the
disposition of the underlying obligations. Repurchase agreements are
considered to be loans under the Investment Company Act of 1940.
REVERSE REPURCHASE AGREEMENTS. The Fund may borrow monies for
temporary purposes by entering into reverse repurchase agreements in accordance
with the investment restrictions described below. Pursuant to such agreements,
the Fund would sell portfolio securities to banks and other financial
institutions, and agree to repurchase them at an agreed upon date and price.
At the time the Fund enters into a reverse repurchase agreement, it will place
in a segregated custodian account liquid assets or high grade debt securities
having a value equal to or greater than the repurchase price, and the Company's
investment adviser will continuously monitor the account to insure that the
value is maintained. The Fund would only enter into reverse repurchase
agreements to avoid otherwise selling securities during unfavorable market
conditions to meet redemptions. Reverse repurchase agreements involve the risk
that the market value of the portfolio securities sold by the Fund may decline
below the price of the securities the Fund is obligated to repurchase.
Interest paid by the Fund in connection with a reverse repurchase agreement
will reduce the net investment income of the Fund. Reverse repurchase
agreements are considered to be borrowings under the Investment Company Act of
1940.
VARIABLE AND FLOATING RATE INSTRUMENTS. Securities purchased by the
Fund may include variable and floating rate instruments, which may have a stated
maturity in excess of the Fund's maturity limitations but which will, except for
certain U.S. Government obligations, permit the Fund to demand payment of the
principal of the instrument at least once every thirteen months upon not more
than thirty days' notice. Variable and floating rate instruments may include
variable amount master demand notes that permit the indebtedness thereunder to
vary in
-9-
<PAGE> 16
addition to providing for periodic adjustments in the interest rate. There may
be no active secondary market with respect to a particular variable or floating
rate instrument. Nevertheless, the periodic readjustments of their interest
rates tend to assure that their value to the Fund will approximate their par
value. Illiquid variable and floating rate instruments (instruments which are
not payable upon seven days notice and do not have an active trading market)
that are acquired by the Fund are subject to the Fund's percentage limitations
regarding securities that are illiquid or not readily marketable. The Fund's
investment adviser will continuously monitor the creditworthiness of issuers of
variable and floating rate instruments in which the Fund invests, and their
ability to repay principal and interest.
Variable and floating rate instruments purchased by the Fund may include
participation certificates issued by trusts or financial institutions in
variable and floating rate obligations owned by such issuers or affiliated
organizations. A participation certificate gives the Fund a specified
undivided interest (up to 100%) in the underlying obligation and the right to
demand payment of the unpaid principal balance plus accrued interest on the
participation interest from the institution upon a specified number of days'
notice. If the credit of the obligor is of minimal credit risk, no credit
support from a bank or other financial institution will be necessary. In other
circumstances, the participation certificate will be backed by an irrevocable
letter of credit or guarantee of a bank, or will be insured by an insurer, that
the Fund's investment adviser has determined meets the quality standards for
the Fund involved. If an interest is backed by an irrevocable letter of credit
or guarantee of a bank or is insured as described above, the Fund will usually
have the right to sell the interest back to the institution or draw on the
letter of credit or insurance policy on demand after a specified notice period,
for all or any part of the principal amount of the interest plus accrued
interest. Although a participation interest may be sold by the Fund, under
normal circumstances they will be held until maturity.
The Fund may also invest in obligations which provide for a variable or
floating interest rate which is determined through a periodic "auction
process." From time to time, holders of the obligations have the right to
tender any such obligations to a remarketing agent which then remarkets the
obligations which have been tendered and thereby determines a new interest rate
for the following period.
WHEN-ISSUED PURCHASES, FORWARD COMMITMENTS AND DELAYED SETTLEMENTS.
The Fund may purchase securities on a "when-issued" basis and may purchase or
sell securities on a "forward commitment" or "delayed settlement" basis.
When-issued securities are securities purchased for delivery beyond the
-10-
<PAGE> 17
normal settlement date at a stated price and yield. When-issued and forward
commitment transactions, which involve a commitment by the Fund to purchase or
sell particular securities with payment and delivery taking place at a future
date (perhaps one or two months later), permit the Fund to lock in a price or
yield on a security it owns or intends to purchase or sell, regardless of
changes in interest rates. Delayed settlement describes a securities
transaction in a secondary market for which settlement will occur sometime in
the future. When-issued, forward commitment and delayed settlement transactions
involve the risk, however, that the yield or price obtained in a transaction may
be less favorable than the yield or price available in the market when the
securities delivery takes place. The Fund's forward commitments, when-issued
purchases and delayed settlements are not expected to exceed 25% of the value of
the total assets of the Fund absent unusual market conditions. The liquidity
and the ability of its investment adviser to manage its portfolio may be
adversely affected in the event the Fund's forward commitments, commitments to
purchase when-issued securities and delayed settlements ever exceed 25% of the
value of its total assets. The Fund does not intend to engage in these
transactions for speculative purposes but only in furtherance of its investment
objectives.
INVESTMENT LIMITATIONS. The investment objectives of the Fund are fundamental
policies that may not be changed without a vote of the holders of a majority of
the Fund's outstanding shares (as defined in the Investment Company Act of
1940). The Fund's policies may be changed by the Company's Board of Directors
without the affirmative vote of the holders of a majority of the Fund's
outstanding shares, except that the investment limitations set forth below may
not be changed without such a vote of shareholders. A description of certain
other fundamental investment limitations is contained in the Statement of
Additional Information.
The Prime Fund may not:
1. Purchase any securities which would cause 25% or more of the Fund's
total assets at the time of purchase to be invested in the securities
of one or more issuers conducting their principal business activities
in the same industry, provided that (a) there is no limitation with
respect to obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities or domestic bank certificates of
deposit, bankers' acceptances and repurchase agreements secured by
instruments of domestic branches of U.S. banks or obligations of the
U.S. Government, its agencies or instrumentalities; (b) wholly-owned
finance companies will be considered to be in the industries of their
parents if their activities are primarily related to financing the
activities of the parents; and (c) the industry
-11-
<PAGE> 18
classification of utilities will be determined according to their
service. For example, gas, gas transmission, electric and gas, electric
and telephone will each be considered a separate industry.
2. Borrow money or issue senior securities, except that the Fund may
borrow from banks or enter into reverse repurchase agreements to meet
redemptions or for other temporary purposes in amounts up to 10% of
its total assets at the time of such borrowing; or mortgage, pledge or
hypothecate any assets except in connection with any such borrowing
and in amounts not in excess of the lesser of the dollar amount
borrowed or 10% of its total assets at the time of such borrowing; or
purchase securities at any time after such borrowings (including
reverse repurchase agreements) have been entered into and before they
are repaid.
3. Purchase securities without available market quotations which cannot
be sold without registration or the filing of a notification under
federal or state securities laws, enter into repurchase agreements
providing for settlement more than seven days after notice, or
purchase any other securities deemed illiquid by the Directors if, as
a result, such securities and repurchase agreements would exceed 10%
of the Fund's total assets.
The Prime Fund intends that, except as stated above under "Investment
Policies--Variable and Floating Rate Instruments," variable amount master
demand notes with maturities of nine months or less, as well as investments in
securities that are not registered under the Securities Act of 1933 but that
may be purchased by institutional buyers under Rule 144A and for which a liquid
trading market exists as determined by the Board of Directors or Bank of
America (pursuant to guidelines adopted by the Board) will not be subject to
the 10% limitation on illiquid securities set forth in Investment Limitation
No. 2 above.
INVESTMENT DECISIONS. Investment decisions for the Fund are made independently
from those for other portfolios of the Company and other investment companies
and common trust funds managed by Bank of America and its affiliated entities.
Such other investment companies and common trust funds may also invest in the
same securities as the Fund. When a purchase or sale of the same security is
made at substantially the same time on behalf of the Fund and another portfolio,
investment company or common trust fund, available investments or opportunities
for sales will be allocated in a manner which Bank of America believes to be
equitable. In some instances, this investment procedure may adversely affect
the price paid or received by
-12-
<PAGE> 19
the Fund or the size of the position obtained or sold by the Fund.
In addition, in allocating purchase and sale orders for portfolio securities
(involving the payment of brokerage commissions or dealer concessions), Bank of
America may take into account the sale of shares of the Fund by broker-dealers
and other financial institutions (including affiliates of Bank of America and
the Distributor), provided Bank of America believes that the quality of the
transaction and the amount of the commission are not less favorable than what
they would be with any other unaffiliated qualified firm.
MANAGEMENT OF THE FUND
BOARD OF DIRECTORS. The business of the Company is managed under the direction
of its Board of Directors. Information about the Directors and Officers of the
Company is included in the Statement of Additional Information.
INVESTMENT ADVISER. Bank of America serves as the Fund's investment adviser.
Bank of America, which has principal offices at 555 California Street, San
Francisco, California 94104, is a national banking association formed in 1904
which provides commercial banking and trust business through an extensive
system of branches across the western United States. Bank of America's
principal banking affiliates operate branches in ten U.S. states as well as
corporate banking, business credit and thrift offices in major U.S. cities and
branches, corporate offices and representative offices in 37 countries. Bank
of America is the successor by merger to Security Pacific National Bank
("Security Pacific"), which previously served as investment adviser to the
Company since it commenced operations in 1984. Bank of America and its
affiliates have over $50 billion under management, including over $10 billion
in mutual funds. Bank of America is a subsidiary of BankAmerica Corporation, a
registered bank holding company.
As investment adviser Bank of America manages the investments of the Fund and
is responsible for all purchases and sales of the Fund's portfolio securities.
For its investment advisory services, Bank of America is entitled to receive a
fee accrued daily and payable monthly at the following annual rates: .10% of
the first $3 billion of the Fund's net assets, plus .09% of the next $2 billion
of the Fund's net assets, plus .08% of the Fund's net assets over $5 billion.
For the fiscal year ended February 28, 1995, the Prime Fund paid Bank of
America advisory fees at the effective annual rate of .07% of the Fund's net
assets, and Bank of America waived advisory fees at the effective annual rate
of .03% of the Fund's net assets.
-13-
<PAGE> 20
In addition, BAIS or Service Organizations may receive fees charged directly to
its customers' accounts in connection with investments in Fund shares.
ADMINISTRATOR. Concord Holding Corporation (the "Administrator") serves as the
Company's administrator and assists generally in supervising the Fund's
operations. The Administrator is a wholly-owned subsidiary of The BISYS Group,
Inc. Its offices are located at 3435 Stelzer Road, Columbus, OH 43219.
Under its Basic Administrative Services Agreement for the Fund, the
Administrator has agreed to provide facilities, equipment and personnel to
carry out administrative services that are for the benefit of all series of
shares in the Fund, including coordination of reports to shareholders and the
Securities and Exchange Commission; calculation of the net asset value of Fund
shares and dividends and capital gains distributions to shareholders; payment
of the costs of maintaining the Fund's offices; preparation of tax returns;
provision of internal legal and accounting compliance services; maintenance (or
oversight of the maintenance by others approved by the Board of Directors) of
the Fund's books and records; and the provision of various services for
shareholders who have made a minimum initial investment of at least $500,000,
including the provision of a facility to receive purchase and redemption orders
for the accounts of such shareholders.
For these administrative services the Administrator is entitled to receive an
administration fee computed daily and payable monthly at the following annual
rates: .10% of the first $7 billion of the Fund's net assets, plus .09% of the
next $3 billion of the Fund's net assets, plus .08% of the Fund's net assets
over $10 billion. For the fiscal year ended February 28, 1995, the Fund paid
the Administrator administration fees at the effective annual rate of .07% of
the Fund's net assets, and the Administrator waived administration fees at the
effective annual rate of .03% of the Fund's net assets.
Pursuant to the authority granted in its agreement with the Company, the
Administrator has entered into an agreement with The Bank of New York under
which the bank performs certain of the services listed above--e.g. calculating
the net asset value of Fund shares and dividends to shareholders and
maintaining the Fund's books and records. The Fund bears all fees and expenses
charged by the bank for these services.
DISTRIBUTOR. Concord Financial Group, Inc. (the "Distributor") is the
principal underwriter and distributor of shares of the Fund. The Distributor
is a wholly owned subsidiary of the Administrator organized to distribute
shares of mutual funds to
-14-
<PAGE> 21
institutional and retail investors. Its offices are located at 3435 Stelzer
Road, Columbus, OH 43219.
The Distributor makes a continuous offering of the Fund's shares and bears the
costs and expenses of printing and distributing to selected dealers and
prospective investors copies of any prospectuses, statements of additional
information and annual and interim reports of the Fund (after such items have
been prepared and set in type by the Fund) that are used in connection with the
offering of shares, and the costs and expenses of preparing, printing and
distributing any other literature used by the Distributor or furnished by it
for use by selected dealers in connection with the offering of the Fund's
shares for sale to the public.
CUSTODIAN AND TRANSFER AGENT. The Bank of New York, located at 90 Washington
Street, New York, New York 10286, serves as custodian for the Fund and Bank of
America serves as the Prime Fund's sub-custodian. BISYS Fund Services, Ohio,
Inc., 3435 Stelzer Road, Columbus, OH 43219-3035 (the "Transfer Agent"), serves
as the Fund's transfer agent and dividend disbursing agent. The Company has
also entered into a Cash Management and Related Services Agreement with The
Bank of New York pursuant to which The Bank of New York receives and disburses
funds in connection with the purchase and redemption of and the payment of
dividends and other distributions with respect to the Fund's shares. Other
services are provided for in the Cash Management Agreement with United Missouri
Bank of Kansas City, N.A.
DISTRIBUTION AND SERVICES PLAN
Under the Distribution and Services Plan, the Fund pays the Distributor for
distribution expenses primarily intended to result in the sale of the Fund's
Class X shares and for shareholder servicing expenses. Such distribution
expenses include expenses incurred in connection with advertising and marketing
the Fund's Class X shares; payments to Service Organizations for assistance in
connection with the distribution of Class X shares; and expenses incurred in
connection with preparing, printing and distributing prospectuses for the Fund
(except those used for regulatory purposes, or for distribution to existing
shareholders of the Fund) and in implementing and operating the Distribution
and Services Plan. Shareholder servicing expenses include expenses incurred in
connection with shareholder services provided by the Distributor and payments
to Service Organizations for the provision of support services with respect to
the beneficial owners of Class X shares, such as establishing and maintaining
accounts and records relating to their clients who invest in Class X shares,
assisting clients in processing exchange and redemption requests and in
changing dividend options and account descriptions, responding to client
inquiries concerning their investments and developing, maintaining and
operating systems necessary to support Sweep Accounts.
-15-
<PAGE> 22
Under the Distribution and Services Plan, payments by a Fund for distribution
expenses may not exceed 0.30% (annualized) of the average daily net assets of
such Fund's Class X shares and payments for shareholder servicing expenses may
not exceed 0.25% (annualized) of the average daily net assets of such Fund's
Class X shares. These amounts may be reduced pursuant to undertakings by the
Distributor. Payments for distribution expenses under the Distribution and
Services Plan are subject to Rule 12b-1 under the 1940 Act.
The Company will obtain a representation from the Service Organizations (and
from Bank of America and the Distributor) that they are or will be licensed as
dealers as required by applicable law or will not engage in activities which
would require them to be so licensed.
FEE WAIVERS. Except as noted in this Prospectus and the Statement of
Additional Information, the Fund's service contractors bear all expenses in
connection with the performance of their services and the Fund bears the
expenses incurred in their operations. From time to time during the course of
the Fund's fiscal year, the Administrator and/or Bank of America may
prospectively waive payment of fees and/or assume certain expenses of the Fund
as a result of competitive pressures and in order to protect the business and
reputation of the Administrator and Bank of America. This will have the effect
of increasing yield to investors at the time such fees are not received, or
amounts are assumed, and decreasing yield when such fees or amounts are
reimbursed.
PURCHASES OF SHARES
OPENING AN ACCOUNT. Class X Shares of the Fund are offered by this Prospectus
to customers of BAIS or Service Organizations that establish a Sweep Account
with BAIS or a Service Organization. Each Sweep Account combines a Transaction
Account with a periodic sweep of balances to or from the Fund. Investors may
open a Sweep Account by completing and signing the Disclosure Documents. The
Disclosure Documents contain important information about the various features
and operations of the Sweep Account and should be reviewed in conjunction with
this Prospectus.
Class X Shares may be purchased by making a deposit into your Transaction
Account. On each day that both the Fund's custodian and the New York Stock
Exchange (the "Exchange") are open for business (a "Business Day) and BAIS or a
Service Organization is open for business, BAIS or a Service Organization
computes the net amount of all deposits, withdrawals, charges and credits made
to and from a Transaction Account in accordance with their sweep account
procedures (the "Net Sweep Amount"). If deposits and credits exceed withdrawals
and charges, you authorize BAIS or a Service Organization, on your behalf, to
transmit a purchase order to the Fund designated in your Sweep Account in the
amount of that day's
-16-
<PAGE> 23
Net Sweep Amount in accordance with the Sweep Account procedures of Bank of
America or a Service Organization. Your purchase order will be made effective
and full and fractional Shares will be purchased at the net asset value per
share next determined after receipt by the Transfer Agent. It is the
responsibility of BAIS or the Service Organization to transmit orders for the
purchases of shares by its customers to the Transfer Agent and deliver required
funds on a timely basis, in accordance with the procedures stated above. Share
purchases and redemptions executed through BAIS or a Service Organization are
executed only on Business Days that BAIS or a Service Organization,
respectively, is open for business. Contact Bank of America or your Service
Organization for additional information about Bank of America's or the Service
Organization's Sweep Account procedures.
SHARE PRICE. The net asset value per share of the Prime Fund is the value of
all securities and other assets owned by the Fund that are allocable to X
Shares, less the liabilities charged to X Shares, divided by the number of
outstanding X Shares.
Shares of the Fund may be purchased on any Business Day that BAIS or the
particular Service Organization, as applicable, is open for business. The net
asset value of the Prime Fund is determined on each Business Day as of 2:30
p.m. Eastern time and the close of regular trading hours on the Exchange (or
4:00 p.m. Eastern time if the Exchange is closed). All transaction orders are
processed by the Company at the net asset value next determined after the order
is received by the Company. In computing net asset value, the Fund uses the
amortized cost method of valuation as described in the Statement of Additional
Information under "Additional Purchase and Redemption Information--Valuation."
The net asset value per share for purposes of pricing purchase and redemption
orders for the Fund is determined independently of that for other portfolios of
the Company. For voice recorded price and yield information call (800)
227-1545.
-17-
<PAGE> 24
Federal regulations require that each investor provide a certified Taxpayer
Identification Number upon opening or reopening an account. See the Fund's
Sweep Account Application for further information about this requirement.
REDEMPTION OF SHARES
If, on any Business Day that BAIS or the particular Service Organization is
open for business, withdrawals from and charges to your Sweep Account,
including without limitation check transactions, exceed deposits and credits,
BAIS or the Service Organization, as applicable, will transmit a redemption
order on your behalf to the Fund in the dollar amount of that day's Net Sweep
Amount. If your Sweep Account with BAIS or the Service Organization, as
applicable, is closed as described in the Disclosure Documents, BAIS or the
Service Organization, as applicable, transmits a redemption request on your
behalf to the Fund for the balance of the Class X Shares of the Fund held
through your Sweep Account. Redemptions are effected by the Company on a
Business Day at the net asset value per share next determined after receipt of
the redemption order by the Transfer Agent. The Fund will make payment for all
shares redeemed after receipt by the Transfer Agent of a request in proper
form, except as provided by the rules of the Securities and Exchange
Commission. During the period prior to the time the shares are redeemed,
dividends on such shares will accrue and be payable, and an investor will be
entitled to exercise all other rights of beneficial ownership. The Fund
imposes no charge when shares are redeemed. It is the responsibility of BAIS
or the particular Service Organization to transmit the redemption order and
credit its customer's Transaction Account with the redemption proceeds on a
timely basis. BAIS or the Service Organization may withhold redemption
proceeds pending check collection or processing or for other reasons all as set
forth more fully in the Disclosure Documents.
ADDITIONAL SHAREHOLDER SERVICES
Certain optional services available to persons who invest directly in Pacific
Horizon, Horizon, and Horizon Service Shares of the Fund, including but not
limited to certain exchange privileges which allow shareholders to exchange
their Fund shares for shares of other funds in the Company; an automatic
investment program; automatic withdrawal program; and direct deposit program;
are not available to persons who invest in Class S and Class X Shares of the
Prime Fund.
-18-
<PAGE> 25
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS. The shareholders of the Fund are entitled to
dividends and distributions arising from the net income and realized gains, if
any, earned on investments held by the Fund. The Fund's net income is declared
daily as a dividend. Shares begin accruing dividends on the day the purchase
order for the shares is executed and continue to accrue dividends through and
including the day before the redemption order for the shares is executed.
Dividends are paid within five business days after the end of each month.
Although the Fund does not expect to realize net long-term capital gains, any
such capital gains as may be realized will be distributed no more than twice a
year after reduction for any available capital loss carryforward.
Dividends are paid in the form of additional full and fractional shares of the
same series as the shares on which the dividends are declared at the net asset
value of such shares on the payment date.
FEDERAL TAXES. Management of the Company believes that the Fund qualified
separately for its last taxable year as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code") and it is intended
that the Fund will continue to qualify as a regulated investment company in
future years as long as such qualification is in the best interest of its
shareholders. Such qualification generally relieves the Fund of liability for
federal income taxes to the extent its earnings are distributed in accordance
with the Code.
In connection with such tax qualification, the Fund contemplates declaring as
dividends at least 90% of its investment company taxable income for each
taxable year. An investor of the Fund who receives a dividend derived from net
investment company taxable income (including any excess of net short-term
capital gain over net long-term capital loss) treats it as ordinary income in
the computation of his gross income, whether such dividend is paid in the form
of cash or additional shares of the Fund. Because all of the net investment
income of the Fund is expected to be derived from earned interest, it is
anticipated that all dividends paid by the Fund will be taxable as ordinary
income to shareholders who are not exempt from federal income taxes and that no
part of any distribution paid by the Fund will be eligible for the dividends
received deduction for corporations.
Although the Fund anticipates that it will not have net long-term capital gain,
any distribution of the Fund's excess of net long-term capital gain over its
net short-term capital loss will be taxable to shareholders of the Fund as
long-term capital
-19-
<PAGE> 26
gain regardless of how long the shareholder has held shares of the Fund.
Dividends declared in December of any year payable to shareholders of record on
a specified date in December will be deemed for federal tax purposes to have
been paid by the Fund and received by the shareholders on December 31, if such
dividends are paid during January of the following year.
The foregoing is only a brief summary of some of the important federal income
tax considerations generally affecting the Fund and its shareholders, and is
based on federal tax laws and regulations which are in effect as of the date of
this Prospectus. Such laws and regulations may be changed by legislative or
administrative actions. Potential investors in the Fund should consult their
tax advisers with specific reference to their own tax situation. Shareholders
will be advised at least annually as to the federal income tax consequences of
distributions made each year.
STATE AND LOCAL TAXES. Investors are advised to consult their tax advisers
concerning the application of state and local taxes, which may have different
consequences from those of the federal income tax law described above.
DESCRIPTION OF SHARES
The Company was organized on October 27, 1982 as a Maryland corporation. On
March 30, 1984, the Company commenced its public sale of shares (Pacific
Horizon Shares) in the Prime Fund, which was originally called the "Money
Market Portfolio." On January 19, 1990, the Prime Fund of The Horizon Funds, a
Massachusetts business trust, was combined with the Money Market Portfolio of
the Company; the Company changed the name of its resulting portfolio to "Prime
Fund;" and, in addition to continuing its offering of Pacific Horizon Shares in
such Fund, the Company began offering Horizon Shares and Horizon Service Shares
in the Prime Fund. (Horizon Shares and Horizon Service Shares are sold to
institutions and may not be purchased by individuals directly.) As of the date
of this Prospectus: S Shares of the Prime Fund have been classified by the
Company's Board of Directors but have not yet been offered to the public, and
the Company began its public offering of Class X Shares of the Prime Fund.
The Company's charter authorizes the Board of Directors to issue up to two
hundred billion full and fractional shares of capital stock, and to classify
and reclassify any authorized and unissued shares into one or more classes of
shares. The Board of Directors may similarly classify or reclassify any class
of shares into one or more series.
-20-
<PAGE> 27
Pursuant to such authority, the Board of Directors has authorized the issuance
of the following series of shares representing interests in the Fund, each of
which is classified as a diversified company under the Investment Company Act
of 1940: ten billion X Shares; ten billion S Shares; fifteen billion Pacific
Horizon Shares, twenty-eight billion Horizon Shares and fifteen billion Horizon
Service Shares representing interests in the Prime Fund. S Shares, Pacific
Horizon Shares, Horizon Shares and Horizon Service Shares of the Fund are
described in separate Prospectuses available from the Distributor at the
telephone number on the cover of this Prospectus. The Board of Directors has
also authorized the issuance of additional classes of shares representing
interests in other investment portfolios of the Company, which are likewise
described in separate Prospectuses available from the Distributor. This
Prospectus relates primarily to the X Shares of the Prime Fund and describes
only the investment objectives and policies, operations, contracts and other
matters relating to such Shares.
Each X Share, S Share, Pacific Horizon Share, Horizon Share and Horizon Service
Share in the Fund has a par value of $.001, and, except as noted below, is
entitled to participate equally in the dividends and distributions declared by
the Board of Directors with respect to such Fund and in the net distributable
assets of the Fund on liquidation. Holders of the Fund's X Shares bear the
fees described in this Prospectus that are paid to the Distributor and Service
Organizations by the Fund under the Company's Distribution and Services Plan.
The fees paid under the Distribution and Services Plan are for distribution and
shareholder services paid to Shareholder Organizations in connection with S and
X Shares. Holders of the Fund's S Shares bear the fees described in the
prospectus for such shares that are paid to the Distributor and Service
Organizations by the Fund under the Company's Distribution and Services Plan.
Similarly, holders of Horizon Service Shares bear the fees described in the
Prospectus for such shares that are paid to Shareholder Organizations by the
Fund under the Company's Shareholder Services Plan and holders of Pacific
Horizon Shares bear the fees described in the Prospectus for such shares that
are paid to Shareholder Organizations by the Fund under the Company's
Administrative Services Plan. The fees paid under the Shareholder Services and
Administrative Services Plans are for services provided by Shareholder
Organizations to their customers in connection with Horizon Service and Pacific
Horizon Shares, respectively, and Shareholder Organizations do not receive
similar fees with respect to the Fund's Horizon Shares. As a result of the
different fees borne by the series of shares in the Fund, at any given time,
the net yield on a Fund's X Shares generally will be approximately 0.23% lower
than the yield on the Fund's Pacific Horizon Shares; 0.30% lower than the yield
on the same Fund's Horizon Service Shares; 0.55% lower than the yield on the
same Fund's Horizon Shares and 0.45% higher
-21-
<PAGE> 28
than the yield on the Fund's S Shares. Standardized yield quotations will be
computed separately for each series of Shares.
Shareholders are entitled to one vote for each full share held and fractional
votes for fractional shares held, and will vote in the aggregate and not by
class or series except as otherwise required by law or when class voting is
permitted by the Board of Directors. It is contemplated that all shareholders
of the Fund will vote together as a single class on matters relating to the
Fund's investment advisory agreement and on any change in its fundamental
investment limitations. Only holders of particular Pacific Horizon Shares of
the Fund, if affected by changes to such Plan, will be entitled to vote on
matters submitted to a vote of shareholders pertaining to the Fund's
Administrative Services Plan relating to the particular series. Only holders
of particular Horizon Service Shares of the Fund, if affected by changes to
such Plan, will be entitled to vote on matters submitted to a vote of
shareholders pertaining to the Fund's Shareholder Services Plan relating to the
particular series. Only holders of particular S and X Shares, if affected by
changes to such Plan, will be entitled to vote on matters submitted to a vote
of shareholders pertaining to the Fund's Distribution and Services Plan
relating to the particular series. Shares have no preemptive rights and only
such conversion and exchange rights as the Board may grant at its discretion.
When issued for payment as described in this Prospectus, shares will be fully
paid and non-assessable. Certificates for shares will not be issued.
The Company does not presently intend to hold annual meetings of shareholders
for the election of directors and other business unless and until such time as
less than a majority of the directors holding office have been elected by the
shareholders of the Company, at which time the directors then in office will
call a shareholders' meeting for the election of directors. Under certain
circumstances, however, shareholders have the right to call a meeting of
shareholders to consider the removal of one or more directors and such meetings
will be called when requested by the holders of record of 10% or more of the
Company's outstanding shares of common stock. To the extent required by law
and the Company's undertaking with the Securities and Exchange Commission, the
Company will assist in shareholder communications in such matters. Shares have
cumulative voting rights to the extent that may be required by applicable law.
PERFORMANCE CALCULATIONS
From time to time the "yield" or "effective yield" of the Fund may be quoted in
advertisements or reports to shareholders. Both yield figures are based on
historical earnings and are not intended to indicate future performance. The
"yield" of the Fund refers to the income generated by an investment in the Fund
over a seven-day period (which period will be stated in the
-22-
<PAGE> 29
advertisement or report). This income is then "annualized"--that is, the
amount of income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated similarly but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment.
Additionally, the yields of the Fund may be compared to those of other mutual
funds with similar investment objectives and to other relevant indices or to
rankings prepared by independent services or other financial or industry
publications that monitor the performance of mutual funds. For example, the
Fund's yields may be compared to Donoghue's Money Fund Averages, which are
averages compiled by Donoghue's Money Fund Report. Yield data as reported in
national financial publications, including Money, Forbes, Barron's, The Wall
Street Journal and The New York Times, or in publications of a local or
regional nature, may also be used in comparing the yields of the Fund. A
complete listing of the indices, rankings and publications discussed above is
contained in the Statement of Additional Information.
Since yields fluctuate, yield data cannot necessarily be used to compare an
investment in the shares of the Fund with bank deposits, savings accounts and
similar investment alternatives which often provide an agreed or guaranteed
fixed yield for a stated period of time. Shareholders should remember that
yield is generally a function of the kind and quality of the instruments held
in a portfolio, portfolio maturity, operating expenses and market conditions.
Any fees charged by Bank of America or other institutional investors directly
to their customers in connection with investments in shares of the Fund (which
fees may include, for example, account maintenance fees, compensating balance
requirements or fees based upon account transactions, assets or income) will
not be included in the Fund's calculations of yield.
---------------
Shareholder inquiries should be addressed to the Distributor at the address or
telephone numbers stated on the inside cover of this Prospectus.
-23-
<PAGE> 30
X SHARES
OF THE
PRIME FUND
PROSPECTUS
____________, 1996
NOT FDIC INSURED
-24-
<PAGE> 31
PACIFIC HORIZON FUNDS, INC.
X Shares of the Prime Fund
Cross Reference Sheet
---------------------------
<TABLE>
<CAPTION>
Part B
Item No. Heading
- -------- -------
<S> <C> <C>
10. Cover Page............................................................ Cover Page
11. Table of Contents..................................................... Table of Contents
12. General Information and History....................................... The Company
13. Investment Objectives and Policies.................................... Investment Objectives and Policies
14. Management of the Fund................................................ Management of the Fund
15. Control Persons and Principal Holders of Securities................... Management of the Fund; Miscellaneous
16. Investment Advisory and Other Services................................ Management of the Fund; Investment Adviser;
Administrator; Distributor; Custodian and
Transfer Agent
17. Brokerage Allocation and Other Practices.............................. Portfolio Transactions
18. Capital Stock and Other Securities.................................... General Information; Description of Shares
19. Purchase, Redemption and Pricing of Securities Being Offered.......... Additional Purchase and Redemption Information
20. Tax Status............................................................ Additional Information Concerning Taxes
21. Underwriters.......................................................... Management of the Fund; Distributor
</TABLE>
<PAGE> 32
<TABLE>
<S> <C> <C>
22. Calculation of Performance Data....................................... Additional Performance Information
</TABLE>
PART C
Information to be included in Part C is set forth under the appropriate Item,
so numbered in Part C to this Registration Statement.
<PAGE> 33
PACIFIC HORIZON FUNDS, INC.
X SHARES
OF THE
PRIME FUND
(INVESTMENT PORTFOLIO OF
PACIFIC HORIZON FUNDS, INC.)
STATEMENT OF ADDITIONAL INFORMATION
______________, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT OBJECTIVE AND POLICIES . . . . . . . . . . . . . . . . . . . . . 2
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION . . . . . . . . . . . . . . 13
ADDITIONAL INFORMATION CONCERNING TAXES . . . . . . . . . . . . . . . . . . 16
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . 19
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>
This Statement of Additional Information, which applies to the
X Shares of the Prime Fund (the "Fund") of Pacific Horizon Funds, Inc.
("Pacific Horizon" or the "Company"), is meant to be read in conjunction with
the prospectus dated _______________, 1996 with respect to the X Shares of the
Fund, as may from time to time be revised, and is incorporated by reference in
its entirety into such Prospectus. Because the Statement of Additional
Information is not itself a prospectus, no investment in shares of the Fund
should be made solely upon the information contained herein. Copies of the
Prospectus relating to the Company's X Shares may be obtained by calling
Concord Financial Group, Inc. at 800-332-3863. Capitalized terms used but not
defined herein have the same meaning as in the Prospectus.
<PAGE> 34
THE COMPANY
The Company was organized on October 27, 1982 as a Maryland
corporation. On March 30, 1984, the Company commenced its public sale of
shares (Pacific Horizon Shares) in the Prime Fund, which was originally called
the "Money Market Portfolio." On January 19, 1990, the Prime Fund of The
Horizon Funds, a Massachusetts business trust (sometimes called the
"Predecessor Prime Fund"), was combined with the Money Market Portfolio of the
Company; the Company changed the name of its resulting portfolio to "Prime
Fund"; and, in addition to continuing its offering of Pacific Horizon Shares in
such Fund, the Company began offering Horizon Shares and Horizon Service Shares
in the Prime Fund. As of the date of this Statement of Additional Information,
Class S Shares of the Prime Fund have been classified by the Company's Board of
Directors but have not been offered to the public, and the Company began its
public offering of Class X Shares of the Prime Fund.
The Company offers other classes and series of shares,
including S Shares, Pacific Horizon Shares, Horizon Shares and Horizon Service
Shares, in the aforementioned funds and in other investment portfolios which
are described in separate Prospectuses and Statements of Additional
Information. For information concerning these other shares, contact the
Distributor at the telephone number stated on the cover page of this statement
of additional information.
INVESTMENT OBJECTIVE AND POLICIES
The Prospectus for the Prime Fund describes the investment
objective of the Fund. The following information supplements and should be
read in conjunction with the descriptions of the investment objective and
policies in the Prospectus for such Fund.
PORTFOLIO TRANSACTIONS
Subject to the general control of the Company's Board of
Directors, Bank of America National Trust and Savings Association ("Bank of
America") is responsible for, makes decisions with respect to and places orders
for all purchases and sales of portfolio securities for the Fund. Securities
purchased and sold by the Fund are generally traded in the over-the-counter
market on a net basis (i.e., without commission) through dealers, or otherwise
involve transactions directly with the issuer of an instrument. During its last
three fiscal periods, the Fund did not pay any brokerage commissions. The cost
of securities purchased by the Fund from underwriters generally include an
underwriting commission or concession, and
-2-
<PAGE> 35
the prices at which securities are purchased from and sold to dealers include a
dealer's mark-up or mark-down.
In executing portfolio transactions and selecting brokers or
dealers, it is the Company's policy to seek the best overall terms available.
The investment advisory agreement between the Company and Bank of America
provides that, in assessing the best overall terms available for any
transaction, Bank of America shall consider factors it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, for the specific transaction and
on a continuing basis. In addition, the investment advisory agreement
authorizes Bank of America, subject to the approval of the Company's Board of
Directors, to cause the Company to pay a broker-dealer which furnishes
brokerage and research services a higher commission than that which might be
charged by another broker-dealer for effecting the same transaction, provided
that such commission is deemed reasonable in terms of either that particular
transaction or the overall responsibilities of Bank of America to the Fund and
the Company. Brokerage and research services may include: (1) advice as to
the value of securities, the advisability of investing in, purchasing or
selling securities and the availability of securities or purchasers or sellers
of securities and (2) analyses and reports concerning industries, securities,
economic factors and trends, portfolio strategy and the performance of
accounts.
The Directors will periodically review the commissions paid by
the Company to consider whether the commissions, if any, paid over
representative periods of time appear to be reasonable in relation to the
benefits inuring to the Company. It is possible that certain of the brokerage
or research services received will primarily benefit one or more other
investment companies or other accounts for which investment discretion is
exercised. Conversely, the Company or any given Fund may be the primary
beneficiary of the brokerage or research services received as a result of
portfolio transactions effected for such other accounts or investment
companies.
Brokerage or research services so received are in addition to
and not in lieu of services required to be performed by Bank of America and do
not reduce the advisory fee payable to Bank of America by the Company. Such
services may be useful to Bank of America in serving both the Company and other
clients and, conversely, services obtained by the placement of business of
other clients may be useful to Bank of America in carrying out its obligations
to the Company. The Company will not acquire certificates of deposit or other
securities issued by Bank of America or its affiliates, and will give no
preference to
-3-
<PAGE> 36
certificates of deposit or other securities issued by Service Organizations.
In addition, portfolio securities in general will be purchased from and sold to
Bank of America, Concord Financial Group, Inc. (the "Distributor") and their
affiliates acting as principal underwriter, syndicate member, market-maker,
dealer, broker or in any other similar capacity during the life of the
syndicate, provided such purchase, sale or dealing is permitted under the
Investment Company Act of 1940 and the rules thereunder.
The Fund's annual portfolio turnover rate is calculated by
dividing the lesser of purchases or sales of portfolio securities for the year
by the monthly average value of the Fund's portfolio securities. The
calculation excludes all securities the maturities of which at the time of
acquisition were thirteen months or less. The annual portfolio turnover rate
is expected to be zero for regulatory reporting purposes for the Fund.
The Fund may participate, if and when practicable, in bidding
for the purchase of securities directly from an issuer in order to take
advantage of the lower purchase price available to members of a bidding group.
The Fund will engage in this practice only when Bank of America, in its sole
discretion, subject to guidelines adopted by the Board of Directors, believes
such practice to be in the Fund's interest.
Subsequent to its purchase by the Fund, an issue of securities
may cease to be rated or its rating may be reduced below the minimum rating
required for purchase by the Fund. The Board of Directors or Bank of America,
pursuant to guidelines established by the Board, will promptly consider such an
event in determining whether the Fund should continue to hold the obligation
but will continue to hold the obligation only if retention is in accordance
with the interests of the Fund and applicable regulations of the Securities and
Exchange Commission. In addition, it is possible that unregistered securities
purchased by the Fund in reliance upon Rule 144A under the Securities Act of
1933 could have the effect of increasing the level of the Fund's illiquidity to
the extent that qualified institutional buyers become, for a period,
uninterested in purchasing these securities.
To the extent permitted by law, Bank of America may aggregate
the securities to be sold or purchased for the Fund with those to be sold or
purchased for other investment companies or common trust funds in order to
obtain best execution.
The Company is required to identify any securities of its
regular brokers or dealers (as defined in Rule 10b-1 under the Investment
Company Act of 1940) or their parents held by the
-4-
<PAGE> 37
Company as of the close of its most recent fiscal year. As of February 28,
1995: the Prime Fund held the following securities, Merrill Lynch & Co., Inc.,
commercial paper in the principal amount of $100,000,000; Goldman, Sachs Group
L.P., Daily Variable Rate Master Note in the principal amount of $120,000,000;
Morgan Stanley Group, Inc., Daily Variable Rate Master Note in the principal
amount of $120,000,000; Bear Stearns Co., Inc., Series B, Monthly Variable Rate
Note in the principal amount of $100,000,000; Repurchase Agreement with
Goldman, Sachs & Co. in the principal amount of $120,000,000.
PORTFOLIO INSTRUMENTS
Certificates of Deposit, Bankers' Acceptances, Commercial
Paper and Short-Term Notes. Certificates of deposit are negotiable
certificates issued against funds deposited in a commercial bank for a definite
period of time and earning a specific return. Bankers' acceptances are
negotiable deposits or bills of exchange, normally drawn by an importer or
exporter to pay for specific merchandise, which are "accepted" by a bank
(meaning, in effect, that the bank unconditionally agrees to pay the face value
of the instrument at maturity). Certificates of deposit and bankers'
acceptances acquired by the Fund will be dollar-denominated obligations of
domestic or foreign banks having total assets at the time of purchase in excess
of $2.5 billion (including assets of both domestic and foreign branches).
Commercial paper consists of unsecured promissory notes issued by corporations.
Short-term notes acquired by the Fund may be issued by commercial or investment
banking firms, financing companies or industrial or manufacturing concerns.
Commercial paper and short-term notes, except for variable and floating rate
instruments, will normally have maturities of nine months or less, although
such instruments may have maturities of up to thirteen months. Commercial
paper and short-term notes will consist of issues which are "First Tier
Securities" as defined by the Securities and Exchange Commission. First Tier
Securities consist of instruments that are either rated at the time of purchase
in the top rating category by one (if rated by only one) or more unaffiliated
nationally recognized statistical rating organizations ("NRSROs") or issued by
issuers with such ratings. See the Appendix to this Statement of Additional
Information for a description of the applicable NRSRO ratings. Unrated
instruments (including instruments with long-term but no short-term ratings)
purchased by the Fund will be of comparable quality as determined by Bank of
America pursuant to guidelines approved by the Board of Directors and Bank of
America.
A Fund holding Euro CDs, Yankee CDs, Yankee BAs or commercial
paper of foreign issuers may be subject to investment risks that are different
in some respects from those incurred by a Fund which invests only in
obligations of domestic
-5-
<PAGE> 38
branches of U.S. banks. Such risks include future political and economic
developments, the possible imposition of withholding taxes by the particular
country in which the issuer is located on interest income payable on the
securities, the possible seizure or nationalization of foreign deposits, the
possible establishment of exchange controls or the adoption of other foreign
governmental restrictions which might adversely affect the payment of principal
and interest on these securities.
Domestic banks and foreign banks are subject to different
governmental regulations with respect to the amount and types of loans which
may be made and interest rates which may be charged. In addition, the
profitability of the banking industry is dependent largely upon the
availability and cost of funds for the purpose of financing lending operations
under prevailing money market conditions. General economic conditions as well
as exposure to credit losses arising from possible financial difficulties of
borrowers play an important part in the operations of the banking industry.
As a result of federal and state laws and regulations,
domestic banks are, among other things, required to maintain specified levels
of reserves, limited in the amount which they can loan to a single borrower and
subject to other regulations designed to promote financial soundness. However,
such laws and regulations do not necessarily apply to the Euro CDs, Yankee CDs
and Yankee BAs that the Fund may acquire.
U.S. Government Obligations. Obligations of the U.S.
Government and its agencies and instrumentalities include Treasury bills,
certificates of indebtedness, notes and bonds, Treasury Strips, and issues of
such entities as the Federal Home Loan Banks, Federal Land Banks, Federal
Housing Administration, Farmers Home Administration, Export-Import Bank of the
United States, Small Business Administration, Government National Mortgage
Association, General Services Administration, Student Loan Marketing
Association, Central Bank for Cooperatives, Federal Home Loan Mortgage
Corporation, Federal Intermediate Credit Banks, Resolution Funding Corporation,
Maritime Administration, Tennessee Valley Authority and Federal National
Mortgage Association. The Prime Fund will not acquire obligations issued by
the International Bank for Reconstruction and Development, the Asian
Development Bank or the Inter-American Development Bank.
Government National Mortgage Association ("GNMA") certificates
are U.S. Government agency mortgage-backed securities representing part
ownership of a pool of mortgage loans. These loans, issued by lenders such as
mortgage bankers, commercial banks and savings and loan associations, are
either insured by the Federal Housing Administration or guaranteed by
-6-
<PAGE> 39
the Veterans Administration. A "pool" or group of such mortgages is assembled
and, after being approved by GNMA, is offered to investors through securities
dealers. Once approved by GNMA, the timely payment of interest and principal
on each mortgage is guaranteed by GNMA and backed by the full faith and credit
of the U.S. Government. GNMA certificates differ from bonds in that principal
is paid back monthly by the borrower over the term of the loan rather than
returned in a lump sum at maturity. GNMA certificates are called
"pass-through" securities because both interest and principal payments
(including prepayments) are passed through to the holder of the certificate.
In addition to GNMA certificates, mortgage-backed securities issued by the
Federal National Mortgage Association ("FNMA") and by the Federal Home Loan
Mortgage Corporation ("FHLMC") may also be acquired. Securities issued and
guaranteed by FNMA and FHLMC are not backed by the full faith and credit of the
United States. If either fixed or variable rate pass-through securities issued
by the U.S. Government or its agencies or instrumentalities are developed in
the future, the Prime Fund reserves the right to invest in them, after making
appropriate disclosure to investors. Certain securities issued by all
governmental agencies may be prepaid. Prepayment of mortgages underlying most
mortgage-backed securities may reduce their current yield and total return.
During periods of declining interest rates, such prepayments can be expected to
accelerate and the Fund would be required to reinvest the proceeds at the lower
interest rates then available.
COMMON PORTFOLIO INSTRUMENTS
Variable and Floating Rate Instruments. The Fund may acquire
variable and floating rate instruments as described in the Prospectus.
Variable and floating rate instruments are frequently not rated by credit
rating agencies; however, unrated variable and floating rate instruments
purchased by the Fund will be determined by the investment adviser under
guidelines established by the Company's Board of Directors to be of comparable
quality at the time of purchase to rated instruments eligible for purchase by
the Fund. In making such determinations, the investment adviser will consider
the earning power, cash flows and other liquidity ratios of the issuers of such
instruments (such issuers include financial, merchandising, bank holding and
other companies) and will continuously monitor their financial condition.
There may not be an active secondary market with respect to a particular
variable or floating rate instrument purchased by the Fund. The absence of
such an active secondary market could make it difficult for the Fund to dispose
of the variable or floating rate instrument involved. In the event the issuer
of the instrument defaulted on its payment obligations, the Fund involved
could, for this or other reasons, suffer a loss to the extent of the default.
Variable and floating rate instruments may be secured by bank letters of
-7-
<PAGE> 40
credit and may have maturities of more than thirteen months. In determining
the Fund's average weighted maturity and whether a variable or floating rate
instrument has a remaining maturity of thirteen months or less, each variable
rate instrument having a demand feature that entitles the Fund to receive the
principal amount thereof at any time, or at specified intervals not exceeding
thirteen months, in each case on not more than thirty days' notice, shall be
deemed by the Company to have a maturity equal to the longer of the period
remaining until its next interest rate adjustment or the period remaining until
the principal amount can be recovered through demand; each variable rate
instrument not having such a demand feature but having a stated maturity of
thirteen months or less or issued or guaranteed by the U.S. Government or its
agencies will be deemed to have a maturity equal to the period remaining until
the next interest rate adjustment; each floating rate instrument having a
demand feature that entitles the Fund to receive the principal amount thereof
at any time, or at specified intervals not exceeding thirteen months, in each
case on not more than thirty days' notice, shall be deemed to have a maturity
equal to the period of time remaining until the principal amount owed can be
recovered through demand. Variable and floating rate instruments which are not
payable upon seven days' notice and which do not have an active trading market
are considered illiquid securities.
Ratings and Issuer's Obligations. The ratings of Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's Ratings Group, Division
of McGraw Hill ("S&P"), Duff & Phelps Credit Rating Co. ("D&P"), Fitch
Investors Service, Inc. ("Fitch"), Thomson Bankwatch, Inc. ("Thomson") and IBCA
Limited and IBCA Inc. ("IBCA") represent their opinions as to the quality of
debt securities. However, ratings are general and are not absolute standards
of quality, and debt securities with the same maturity, interest rate and
rating may have different yields while debt securities of the same maturity and
interest rate with different ratings may have the same yield.
An issuer's obligations under its debt securities are subject
to the provisions of bankruptcy, insolvency and other laws affecting the rights
and remedies of creditors, such as the Federal Bankruptcy Code and laws which
may be enacted by federal or state legislatures extending the time for payment
of principal or interest, or both, or imposing other constraints upon
enforcement of such obligations or, in the case of governmental entities, upon
the ability of such entities to levy taxes. The power or ability of an issuer
to meet its obligations for the payment of interest on, and principal of, its
debt securities may be materially adversely affected by litigation or other
conditions.
-8-
<PAGE> 41
Repurchase Agreements. The Fund may enter into repurchase
agreements with respect to its portfolio securities as indicated in the
Prospectus. Pursuant to such agreements, the Fund purchases securities from
financial institutions such as banks and broker-dealers which are deemed to be
creditworthy by the investment adviser under guidelines approved by the Board
of Directors, subject to the seller's agreement to repurchase and the Fund's
agreement to resell such securities at a specified date and price. The Fund
will not enter into repurchase agreements with Bank of America or Bank of
America's affiliates, nor will the Fund give preference to repurchase
agreements with Service Organizations. The repurchase price generally equals
the price paid by the Fund plus interest negotiated on the basis of current
short-term rates (which may be more or less than the rate on the underlying
portfolio security). Securities subject to repurchase agreements will be held
by the Fund's custodian or a sub-custodian or in the Federal Reserve/Treasury
book-entry system, and the Fund will make payment for such securities only upon
receipt of evidence of physical delivery of the securities or of such book
entry. The seller under a repurchase agreement will be required to deliver
instruments the value of which is 102% of the repurchase price (excluding
accrued interest), provided that notwithstanding such requirement, the advisor
shall require that the value of the collateral, after transaction costs
(including loss of interest reasonably expected to be incurred on a default),
shall be equal to or greater than the resale price (including interest)
provided in the agreement. If the seller defaulted on its repurchase
obligation, the Fund holding the repurchase agreement would suffer a loss to
the extent that the proceeds from a sale of the underlying securities were less
than the repurchase price under the agreement. Bankruptcy or insolvency of
such a defaulting seller may cause the Fund's rights with respect to such
securities to be delayed or limited. Repurchase agreements are considered to
be loans by the Fund under the Investment Company Act of 1940.
Reverse Repurchase Agreements. The Fund may also enter into
reverse repurchase agreements with respect to its securities. Whenever the
Fund enters into a reverse repurchase agreement, it will place in a segregated
account maintained with the Fund's custodian cash, U.S. Government securities
and other liquid high grade debt securities having a value equal to the
repurchase price (including accrued interest) and will subsequently monitor the
account for maintenance of such equivalent value. Reverse repurchase
agreements are considered to be borrowings by the Fund under the Investment
Company Act of 1940.
-9-
<PAGE> 42
INVESTMENT PRACTICES
When-Issued Securities, Forward Commitments and Delayed
Settlements. The Fund may purchase securities on a "when-issued," "forward
commitment" or "delayed settlement" basis (i.e., for delivery beyond the normal
settlement date at a stated price and yield). When the Fund agrees to purchase
securities on a when-issued, forward commitment or delayed settlement basis,
its custodian will set aside cash or liquid portfolio securities equal to the
amount of the commitment in a separate account. Normally the custodian will
set aside portfolio securities to satisfy a purchase commitment, and in such a
case the Fund may be required subsequently to place additional assets (cash or
liquid securities) in the separate account so that the value of the account
remains equal to the amount of the Fund's commitment. The Fund does not intend
to engage in these transactions for speculative purposes but only in
furtherance of its investment objectives. Because the Fund will set aside cash
or liquid investments to satisfy its purchase commitments in the manner
described, the Fund's liquidity and the ability of the investment adviser to
manage it may be affected in the event the Fund's forward commitments,
commitments to purchase when-issued securities and delayed settlements ever
exceeded 25% of the value of its assets.
The Fund will purchase securities on a when-issued, forward
commitment or delayed settlement basis only with the intention of completing
the transaction. If deemed advisable as a matter of investment strategy,
however, the Fund may dispose of or renegotiate a commitment after it is
entered into, and may sell securities it has committed to purchase before those
securities are delivered to the Fund on the settlement date. In these cases
the Fund may realize a taxable capital gain or loss.
When the Fund engages in when-issued, forward commitment and
delayed settlement transactions, it relies on the other party to consummate the
trade. Failure of such party to do so may result in the Fund's incurring a
loss or missing an opportunity to obtain a price considered to be advantageous.
The market value of the securities underlying a when-issued
purchase, a forward commitment to purchase securities, or a delayed settlement
and any subsequent fluctuations on their market value is taken into account
when determining the market value of the Fund starting on the day the Fund
agrees to purchase the securities. The Fund does not earn interest on the
securities it has committed to purchase until they are paid for and delivered
on the settlement date.
Loans of Securities. The Prime Fund may lend its securities
to brokers, dealers and financial institutions,
-10-
<PAGE> 43
provided (1) the loan is secured continuously by collateral consisting of U.S.
Government securities or cash or letters of credit which is marked to the
market daily to ensure that each loan is fully collateralized at all times; (2)
the Fund may at any time call the loan and obtain the return of the securities
loaned within five business days; (3) the Fund will receive any interest or
dividends paid on the securities loaned; and (4) the aggregate market value of
securities loaned will not at any time exceed 30% of the total assets of the
Fund.
The Fund will earn income for lending its securities because
cash collateral pursuant to these loans will be invested in short term money
market instruments. In connection with lending securities, the Fund may pay
reasonable finders, administrative and custodial fees. Loans of securities
involve a risk that the borrower may fail to return the securities or may fail
to provide additional collateral.
INVESTMENT LIMITATIONS
The Prospectus for the Fund sets forth certain fundamental
policies that may not be changed with respect to the Fund without the
affirmative vote of the holders of the majority of the Fund's outstanding
shares (as defined below under "General Information - Miscellaneous").
Similarly, the following enumerated additional fundamental policies may not be
changed with respect to the Fund without such a vote of shareholders.
The Prime Fund may not:
1. Purchase or sell real estate (however, the Fund may,
to the extent appropriate to its investment objective, purchase securities
issued by companies investing in real estate or interests therein).
2. Underwrite the securities of other issuers.
3. Purchase securities of companies for the purpose of
exercising control.
4. Purchase securities on margin, make short sales of
securities or maintain a short position.
5. Acquire any other investment company or investment
company security except in connection with a merger, consolidation,
reorganization or acquisition of assets.
6. Make loans, except that the Fund: (i) may purchase
or hold debt instruments and enter into repurchase
-11-
<PAGE> 44
agreements pursuant to its investment objective and policies, and (ii) may lend
portfolio securities.
7. Purchase securities of any one issuer (other than
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities) if immediately thereafter more than 15% of its total assets
would be invested in certificates of deposit or bankers' acceptances of any one
bank, or more than 5% of its total assets would be invested in other securities
of any one bank or the securities of any other issuer (except that up to 25% of
the Fund's total assets may be invested without regard to this limitation).
* * *
Interpretations: If a percentage restriction is satisfied at
the time of investment, a later increase or decrease in such percentage
resulting from a change in asset value will not constitute a violation of such
restriction.
For purposes of Investment Limitation No. 1 relating to the
Prime Fund, the Fund treats, in accordance with the current views of the
Securities and Exchange Commission and as a matter of non-fundamental policy
that may be changed without a vote of shareholders, all supranational
organizations as a single industry and each foreign government (and all of its
agencies) as a separate industry.
For purposes of Investment Limitation No. 7, a security is
considered to be issued by the governmental entity (or entities) whose assets
and revenues back the security, or, with respect to a private activity bond
that is backed only by the assets and revenues of a non-governmental user, such
non-governmental user. In certain circumstances, the guarantor of a guaranteed
security may also be considered to be an issuer in connection with such
guarantee. In addition, in accordance with current regulations of the
Securities and Exchange Commission, the Prime Fund presently intends to limit
its investments in the securities of any single issuer (other than securities
issued by the U.S. Government, its agencies or instrumentalities) to not more
than 5% of the Fund's total assets at the time of purchase, provided that the
Fund may invest up to 25% of its total assets in the securities of any one
issuer for a period that does not exceed three business days. For purposes of
Investment Limitation No. 6, the Prime Fund may hold debt instruments whether
such instruments are part of a public offering or privately negotiated.
-12-
<PAGE> 45
In order to permit the sale of shares in certain states, the
Fund may make commitments more restrictive than the investment policies and
limitations described above. To permit the sale of shares of the Fund in
Texas, the Company has agreed to the following addition restrictions:
1. The Fund will not invest in oil, gas or mineral
leases.
2. The Fund will not invest more than 5% of its net
assets in warrants (valued at the lower of cost or market), of which not more
than 2% may be warrants which are not listed on the New York or American Stock
Exchanges.
Should the Fund determine that these commitments or any other
commitments are no longer in the best interests of the Fund, it will revoke
such commitments by terminating sales of its shares in the state involved.
The policies and practices stated in this sub-section are not
fundamental policies of the Fund.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Information on how to purchase and redeem Company shares, and
how such shares are priced, is included in the Prospectus. Additional
information is contained below.
NET ASSET VALUE
In General. The Fund's net asset value per share is
calculated by dividing the total value of the assets belonging to the Fund,
less the value of any liabilities applicable to the Fund, by the total number
of outstanding shares of the Fund. The Fund's net asset value is calculated
separately from each other of the Company's Fund's net asset value. "Assets
belonging to" the Fund consist of the consideration received upon the issuance
of shares representing interests in the Fund together with all income,
earnings, profits and proceeds derived from the investment thereof, any
proceeds from the sale, exchange or liquidation of such investments, any funds
or payments derived from any re-investment of such proceeds, and a portion of
any general assets of the Company not belonging to the Fund. The Fund is
charged with the direct expenses of the Fund and with a share of the general
expenses of the Company. The determinations by the Board of Directors as to
direct and allocable expenses and the allocable portion of general assets with
respect to the various portfolios are conclusive. The expenses that are
charged to the Fund are borne equally by each share of the Fund except for
payments to Shareholder Organizations and Rule 12b-1 fees
-13-
<PAGE> 46
that are borne solely by X and S Shares of the Fund, certain payments that are
borne solely by Pacific Horizon Shares of the Funds, and payments to Shareholder
Organizations that are borne solely by Horizon Service Shares of the Funds as
described in the Prospectuses for such Shares.
Amortized Cost Method. The Fund uses the amortized cost
method of valuation in computing the net asset value of its shares for purposes
of sales and redemptions. Under this method the Fund values each of its
portfolio securities at cost on the date of purchase and thereafter assumes a
constant proportionate amortization of any discount or premium until maturity
of the security. As a result the value of a portfolio security for purposes of
determining net asset value normally does not change in response to fluctuating
interest rates. While the amortized cost method seems to provide certainty in
portfolio valuation it may result in periods during which values, as determined
by amortized cost, are higher or lower than the amount the Fund would receive
if it sold its portfolio securities. The market value of the securities in the
Fund can be expected to vary inversely with changes in prevailing interest
rates. Thus, if interest rates have increased from the time a security was
purchased, such security, if sold, might be sold at a price less than its
amortized cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price
greater than its amortized cost. In either instance, if the security is held
to maturity, no gain or loss will be realized.
In connection with its use of amortized cost valuation, the
Fund limits the dollar-weighted average maturity of its portfolio to not more
than 90 days and does not purchase any instrument with a remaining maturity of
greater than 397 calendar days. The Company's Board of Directors has also
established, pursuant to rules promulgated by the Securities and Exchange
Commission, procedures that are intended to stabilize the Fund's net asset
value per share for purposes of sales and redemptions at $1.00. Such
procedures include the determination, at such intervals as the Board deems
appropriate, of the extent, if any, to which the Fund's net asset value per
share calculated by using available market quotations deviates from $1.00 per
share. In the event such deviation exceeds 1/2 of 1% the Board will promptly
consider what action, if any, should be initiated. If the Board believes that
the amount of any deviation may result in material dilution or other unfair
results to investors or existing shareholders, it will take such steps as it
considers appropriate to eliminate or reduce to the extent reasonably
practicable any such dilution or unfair results. These steps may include
selling portfolio instruments prior to maturity, shortening the Fund's average
portfolio maturity, withholding or reducing dividends, reducing the number of
the
-14-
<PAGE> 47
Fund's outstanding shares without monetary consideration or determining net
asset value per share by using available market quotations. If the Fund reduces
the number of its outstanding shares without monetary consideration it will mail
written notice to shareholders at least three business days before the
redemption and in the notice will state the reason for the redemption and the
fact that the redemption may result in a capital loss to shareholders.
The Fund's administrator, Concord Holding Corporation (the
"Administrator"), may use a pricing service to value certain portfolio
securities where the prices provided are believed to reflect the fair value of
such securities. In valuing the Fund's securities the pricing service would
normally take into consideration such factors as yield, risk, quality,
maturity, type of issue, trading characteristics, special circumstances and
other factors it deems relevant in determining valuations for normal
institutional-sized trading units of debt securities and would not rely on
quoted prices. The methods used by the pricing service and the valuations so
established will be utilized under the general supervision of the Company's
Board of Directors. Additionally, in determining market-based net asset value
per share, all portfolio securities for which market quotations (or appropriate
substitutes that reflect current market conditions) are not readily available,
shall be valued at their fair value as determined by the valuation committee in
accordance with procedures established by the Board of Directors.
X SHARES
Persons wishing to establish a Sweep Account at BAIS or
certain other Service Organizations should contact BAIS or a Service
Organization directly for appropriate instructions. Depending on the terms of
the Sweep Account, BAIS its affiliates and Service Organizations also may
charge its customers fees for investment, redemption and other services
provided. Such fees may include, for example, account maintenance fees,
compensating balance requirements or fees based upon account transactions,
assets or income. BAIS or the particular Service Organization is responsible
for providing information concerning these services and any charges to any
customers who must authorize the purchase of shares prior to such purchase.
Miscellaneous. Certificates for shares will not be issued.
A "business day" for purposes of processing share purchases
and redemptions received by the Transfer Agent at its Columbus office is a day
on which both the Fund's custodian and the New York Stock Exchange are open for
trading, except a
-15-
<PAGE> 48
"business day" does not include Martin Luther King, Jr. Day, Columbus Day or
Veteran's Day. In 1996, the holidays on which the New York Stock Exchange is
closed are: New Year's Day, Presidents' Day, Good Friday, Memorial Day
(observed), Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Company may suspend the right of redemption or postpone
the date of payment for shares during any period when (a) trading on the New
York Stock Exchange is restricted by applicable rules and regulations of the
Securities and Exchange Commission; (b) the New York Stock Exchange is closed
for other than customary weekend and holiday closings; (c) the Securities and
Exchange Commission has by order permitted such suspension; or (d) an emergency
exists as determined by the Securities and Exchange Commission. (The Company
may also suspend or postpone the recordation of the transfer of its shares upon
the occurrence of any of the foregoing conditions.)
The Company's Charter permits its Board of Directors to
require a shareholder to redeem involuntarily shares in the Fund if the balance
held of record by the shareholder drops below $500 and such shareholder does
not increase such balance to $500 or more upon 60 days' notice. The Company
will not require a shareholder to redeem shares of the Fund if the balance held
of record by the shareholder is less than $500 solely because of a decline in
the net asset value of the shares. The Company may also redeem shares
involuntarily if such redemption is appropriate to carry out the Company's
responsibilities under the Investment Company Act of 1940.
If the Company's Board of Directors determines that conditions
exist which make payment of redemption proceeds wholly in cash unwise or
undesirable, the Company may make payment wholly or partly in readily
marketable securities or other property. In such an event, a shareholder would
incur transaction costs in selling the securities or other property. The
Company has committed that it will pay all redemption requests by a shareholder
of record in cash, limited in amount with respect to each shareholder during
any ninety-day period to the lesser of $250,000 or 1% of the net asset value at
the beginning of such period.
ADDITIONAL INFORMATION CONCERNING TAXES
The following is only a summary of certain additional
considerations generally affecting the Fund and its shareholders that are not
described in the Prospectus for the Fund. No attempt is made to present a
detailed explanation of the tax treatment of the Fund or its shareholders, and
the discussion here and in the Prospectus is not intended as a substitute for
careful tax planning. Investors are advised to
-16-
<PAGE> 49
consult their tax advisers with specific reference to their own tax situations.
FEDERAL
The Fund will be treated as a separate corporate entity under
the Internal Revenue Code of 1986, as amended (the "Code"), and intends to
qualify as a "regulated investment company." By following this policy, the Fund
expects to eliminate or reduce to a nominal amount the federal income taxes to
which it may be subject. If for any taxable year the Fund of the Company does
not qualify for the special federal tax treatment afforded regulated investment
companies, all of the Fund's taxable income would be subject to tax at regular
corporate rates (without any deduction for distributions to shareholders). In
such event, the Fund's dividend distributions to shareholders would be taxable
as ordinary income to the extent of the current and accumulated earnings and
profits of the Fund and would be eligible for the dividends received deduction
in the case of corporate shareholders.
Qualification as a regulated investment company under the Code
requires, among other things, that the Fund distribute to its shareholders an
amount equal to at least the sum of 90% of its investment company taxable
income (if any) and 90% of its tax-exempt income (if any) net of certain
deductions for each taxable year. In general, the Fund's investment company
taxable income will be its taxable income, subject to certain adjustments and
excluding the excess of any net long-term capital gain for the taxable year
over the net short-term capital loss, if any, for such year. The Fund will be
taxed on its undistributed investment company taxable income, if any.
The Fund will not be treated as a regulated investment company
under the Code if 30% or more of the Fund's gross income for a taxable year is
derived from gains realized on the sale or other disposition of securities and
certain other investments held for less than three months (the "short-short
test"). Interest (including original issue and accrued market discount)
received by the Fund upon maturity or disposition of a security held for less
than three months will not be treated as gross income derived from the sale or
other disposition of such security within the meaning of this requirement.
However, any other income that is attributable to realized market appreciation
will be treated as gross income from the sale or other disposition of
securities for this purpose.
Any distribution of the excess of net long-term capital gains
over net short-term capital losses is taxable to shareholders as long-term
capital gains, regardless of how long the shareholder has held the distributing
Fund's shares and
-17-
<PAGE> 50
whether such gains are received in cash or additional Fund shares. The Fund
will designate such a distribution as a capital gains dividend in a written
notice mailed to shareholders after the close of the Fund's taxable year.
Ordinary income of individuals is taxable at a maximum nominal
rate of 39.6%; however, because of limitations on itemized deductions otherwise
allowable and the phase-out of personal exemptions, the maximum nominal
effective marginal rate of tax for some taxpayers may be higher. An
individual's long-term capital gains are taxable at a maximum nominal rate of
28%. For corporations, long-term capital gains and ordinary income are both
taxable at a maximum nominal rate of 35% (or at a maximum effective marginal
rate of 39% in the case of corporations having taxable income between $100,000
and $335,000).
A 4% non-deductible excise tax is imposed on regulated
investment companies that fail to currently distribute specified percentages of
their ordinary taxable income for each calendar year and capital gain net
income (excess of capital gains over capital losses). The Fund intends to make
sufficient distributions or deemed distributions of its ordinary taxable income
and any capital gain net income prior to the end of each calendar year to avoid
liability for this excise tax.
The Company will be required in certain cases to withhold and
remit to the United States Treasury 31% of taxable dividends or 31% of gross
sale proceeds paid to shareholders who (i) have failed to provide a correct tax
identification number in the manner required, (ii) who are subject to
withholding by the Internal Revenue Service for failure to properly include on
their return payments of taxable interest or dividends, or (iii) who have
failed to certify to the Company that they are not subject to backup
withholding when required to do so or that they are "exempt recipients."
At February 28, 1995, the Prime Fund had unused capital loss
carryovers of approximately $2,764,492 (of which $22,098 will expire in fiscal
1999, $1,171,786 will expire in fiscal 2002 and $1,570,608 will expire in
fiscal 2003) available for federal income tax purposes to be applied against
future capital gains, if any.
OTHER INFORMATION
Depending upon the extent of activities in states and
localities in which its offices are maintained, in which its agents or
independent contractors are located, or in which it is otherwise deemed to be
conducting business, the Fund may be subject to the tax laws of such states or
localities.
-18-
<PAGE> 51
Exempt-interest dividends will generally be exempt from state
and local taxes as well. However, except as noted above with respect to
California state personal income tax, in some situations income distributions
may be taxable to shareholders of the Fund under state or local law as dividend
income even though all or a portion of such distributions may be derived from
interest on tax-exempt obligations or U.S. Government obligations which, if
realized directly, would be exempt from such income taxes. Shareholders are
advised to consult their tax advisers concerning the application of state and
local taxes.
The foregoing discussion is based on tax laws and regulations
which are in effect on the date of this Statement of Additional Information.
Such laws and regulations may be changed by legislative or administrative
action.
MANAGEMENT OF THE FUND
Directors and Officers
The directors and officers of the Company, their addresses,
ages, and principal occupations during the past five years are:
<TABLE>
<CAPTION>
Position with
Name and Address Age Company Principal Occupations
- ---------------- --- ------- ---------------------
<S> <C> <C> <C>
Thomas M. Collins 61 Director Of counsel, law firm of
McDermott & Trayner McDermott & Trayner;
225 S. Lake Avenue Partner of the law firm
Suite 410 of Musick, Peeler &
Pasadena, CA 91101-3005 Garrett (until April,
1993); Trustee, Master
Investment Trust, Series
I and Master Investment
Trust, Series II
(registered investment
companies) (since 1993);
former Director, Bunker
Hill Income Securities,
Inc. (registered
investment company)
through 1991.
Douglas B. Fletcher 70 Vice Chairman Chairman of the Board
Fletcher Capital of the Board and Chief Executive
Advisors Incorporated Officer, Fletcher
4 Upper Newport Plaza Capital Advisors,
Suite 100 Incorporated,
Newport Beach, CA 92660-2629 (registered investment
adviser) 1991 to date;
Partner, 1991 Newport
Partners (private
venture capital firm),
</TABLE>
-19-
<PAGE> 52
<TABLE>
<CAPTION>
Position with
Name and Address Age Company Principal Occupations
- ---------------- --- ------- ---------------------
<S> <C> <C> <C>
1981 to date; Chairman
of the Board and Chief
Executive Officer,
First Pacific Advisors,
Inc. (registered
investment adviser) and
seven investment companies
under its
management, prior to 1983;
former Allied
Member, New York
Stock Exchange; Chairman
of the Board of FPA
Paramount Fund, Inc.
through 1984; Director,
TIS Mortgage Investment
Company (real estate
investment trust);
Trustee and former Vice
Chairman of the Board,
Claremont McKenna
College; Chartered
Financial Analyst.
Robert E. Greeley 62 Director Chairman, Page Mill
Page Mill Asset Asset Management (a
Management private investment
433 California Street company) since 1991;
Suite 900 Manager, Corporate
San Francisco, CA 94104 Investments, Hewlett
Packard Company from
1979 to 1991; Trustee,
Master Investment Trust,
Series I and Master
Investment Trust, Series
II (since 1993);
Director, Morgan
Grenfell Small Cap Fund
(since 1986); former
Director, Bunker Hill
Income Securities, Inc.
(since 1989) (registered
investment companies);
former Trustee,
SunAmerica Fund Group
(previously Equitec
Siebel Fund Group) from
1984 to 1992.
</TABLE>
-20-
<PAGE> 53
<TABLE>
<CAPTION>
Position with
Name and Address Age Company Principal Occupations
- ---------------- --- ------- ---------------------
<S> <C> <C> <C>
Kermit O. Hanson 79 Director Vice Chairman of the
17760 14th Ave., N.W. Advisory Board, 1988 to
Seattle, WA 98177 date, Executive
Director, 1977 to 1988,
Pacific Rim Bankers
Program (a non-profit
educational
institution); Dean
Emeritus, 1981 to date,
Dean, 1964-81, Graduate
School of Business
Administration,
University of
Washington; Director,
Washington Federal
Savings & Loan
Association; Trustee,
Seafirst Retirement
Funds (since 1993)
(registered investment
company).
Cornelius J. Pings* 66 Chairman of President, Association
Association of American the Board and of American
Universities President Universities, February
One DuPont Circle 1993 to date; Provost,
Suite 730 1982 to January
Washington, DC 20036 1993, Senior Vice
President for Academic
Affairs, 1981 to January
1993, University of
Southern California;
Trustee, Master
Investment Trust, Series
I and Master Investment
Trust, Series II (since
1995).
Kenneth L. Trefftzs 83 Director Private Investor;
11131 Briarcliff Drive formerly Distinguished
San Diego, CA 92131-1329 Emeritus Professor
of Finance and Chairman
of the Department of
Finance and Business
Economics of the
Graduate School of
Business of the
University of Southern
California; former
Director, Metro Goldwyn
Mayer, Inc.; Director,
Fremont General
Corporation (insurance
and financial services
holding company);
Director, Source
</TABLE>
-21-
<PAGE> 54
<TABLE>
<CAPTION>
Position with
Name and Address Age Company Principal Occupations
- ---------------- --- ------- ---------------------
<S> <C> <C> <C>
Capital, Inc. (closed-
end investment company);
Director of three open-
end investment companies
managed by First Pacific
Advisors, Inc.; formerly
Chairman of the Board of
Directors (or Trustees)
of nineteen investment
companies managed by
American Capital Asset
Management, Inc.
Richard E. Stierwalt Executive Chairman of the Board
125 W. 55th Street 40 Vice President and Chief Executive
New York, NY 10019 Officer, July 1993 to
date, prior thereto
Senior Director,
Managing Director and
Chief Executive Officer
of the Administrator and
Distributor, February
1987 to July 1993;
President, Master
Investment Trust, Series
I, Master Investment
Trust, Series II and
Seafirst Retirement
Funds (since 1993);
First Vice President,
Trust Operation
Administration, Security
Pacific National Bank,
1983-1987.
William B. Blundin 57 Executive Vice Vice Chairman, July 1993
125 W. 55th Street President to date, prior thereto
New York, NY 10019 Director and President
of the Administrator and
Distributor, February
1987 to July 1993;
Executive Vice
President, Master
Investment Trust, Series
II and Seafirst
Retirement Funds (since
1993); Senior Vice
President, Shearson
Lehman Brothers, 1978-
1987.
</TABLE>
-22-
<PAGE> 55
<TABLE>
<CAPTION>
Position with
Name and Address Age Company Principal Occupations
- ---------------- --- ------- ---------------------
<S> <C> <C> <C>
Irimga McKay 35 Vice Senior Vice President,
1230 Columbia Street President July 1993 to date, prior
5th Floor thereto First Vice
San Diego, CA 92101 President of the
Administrator and
Distributor, November
1988 to July 1993; Vice
President, Master
Investment Trust, Series
II and Seafirst
Retirement Funds (since
1993); Regional Vice
President, Continental
Equities, June 1987 to
November 1988; Assistant
Wholesaler, VMS Realty
Partners (a real estate
limited partnership),
May 1986 to June 1987.
W. Eugene Spurbeck 39 Assistant Vice Manager of Client
BISYS Fund Services President Services of the
515 Figueroa Street Administrator (1993 to
Suite 335 date); Assistant Vice
Los Angeles, CA 92307 President, Master
Investment Trust, Series
II; Vice President,
Seafirst Retirement
Funds (since 1995); Vice
President of Retail
Lending Operations Banc
One (1989 to 1993).
Stephanie L. Blaha 36 Assistant Vice Manager of Client
BISYS Fund Services President Services of the
First and Market Building Administrator, March 1995
100 First Avenue to date, prior thereto
Suite 300 Assistant Vice President
Pittsburgh, PA 15222 of the Administrator and
Distributor, October
1991 to March 1995;
Assistant Vice
President, Master
Investment Trust, Series
II (since 1996); Vice
President, Seafirst
Retirement Funds (since
1996); Account Manager,
AT&T American Transtech,
Mutual Fund Division,
July 1989 to October
1991.
</TABLE>
-23-
<PAGE> 56
<TABLE>
<CAPTION>
Position with
Name and Address Age Company Principal Occupations
- ---------------- --- ------- ---------------------
<S> <C> <C> <C>
Mark E. Nagle 36 Treasurer Senior Vice President,
BISYS Fund Services Fund Accounting
3435 Stelzer Road Services, The BISYS
Columbus, OH 43219 Group, Inc. September
1995 to Present; Senior
Vice President Fidelity
Institutional Retirement
Services (1993 to
September 1995; Fidelity
Accounting and Custody
Services (1981 to 1993).
Martin R. Dean 31 Assistant Treasurer Manager of Fund
BISYS Fund Services Accounting of BISYS
3435 Stelzer Road Fund Services, May 1994
Columbus, OH 43219 to Present; Treasurer,
Master Investment Trust,
Series II and Seafirst
Retirement Funds (since
1995); Senior Manager at
KPMG Peat Marwick
previously 1990-1994.
W. Bruce McConnel, III 52 Secretary Partner of the law firm
1345 Chestnut Street of Drinker Biddle &
Philadelphia National Bank Reath. Secretary,
Building, Suite 1100 Master Investment Trust,
Philadelphia, PA 19107 Series I, Master
Investment Trust, Series
II and Seafirst
Retirement Funds.
</TABLE>
-24-
<PAGE> 57
<TABLE>
<CAPTION>
Position with
Name and Address Age Company Principal Occupations
- ---------------- --- ------- ---------------------
<S> <C> <C> <C>
George O. Martinez 35 Assistant Senior Vice President
3435 Stelzer Road Secretary and Director of Legal
Columbus, OH 43219 and Compliance Services,
of the Administrator.
since April 1995;
Assistant Secretary,
Master Investment Trust,
Series II and Seafirst
Retirement Funds (since
1995); prior thereto,
Vice President and
Associate General
Counsel, Alliance
Capital Management, L.P.
_____________________________
</TABLE>
* Mr. Pings is an "interested director" of the Company as defined in the
1940 Act.
The Audit Committee of the Board is comprised of all directors
and is chaired by Dr. Trefftzs. The Board does not have an Executive
Committee.
Each director is entitled to receive an annual fee of $25,000
plus $1,000 for each day that a director participates in all or a part of a
Board meeting; the President receives an additional $20,000 per annum for his
services as President; Mr. Collins, in consideration of his years of service
as President and Chairman of the Board, receives an additional $40,000 per
annum in recognition of his years of service to the Company until February 28,
1997; each member of a Committee of the Board is entitled to receive $1,000 for
each Committee meeting they participate in (whether or not held on the same day
as a Board meeting); and each Chairman of a Committee of the Board shall be
entitled to receive an annual retainer of $1,000 for his services as Chairman
of the Committee. The Fund, and each other fund of the Company, pays its
proportionate share of these amounts based on relative net asset values.
For the fiscal year ended February 28, 1995, the Company paid
or accrued for the account of its directors as a group for services in all
capacities a total of $334,168; of this total amount, $23,318 of directors'
compensation were allocated to the Prime Fund. Each director is also
reimbursed for out-of-pocket expenses incurred as a director. Drinker Biddle &
Reath, of which Mr. McConnel is a partner, receives legal fees as counsel to
the Company. As of the date of this Statement of Additional Information, the
directors and officers of the
-25-
<PAGE> 58
Company, as a group, own less than 1% of the outstanding shares of each of the
Company's investment portfolios.
Under a retirement plan approved by the Board of Directors,
including a majority of its directors who are not "interested persons" of the
Company, a director who dies or resigns after five years of service is entitled
to receive ten annual payments each equal to the greater of: (i) 50% of the
annual director's retainer that was payable by the Company during the year of
his/her death or resignation, or (ii) 50% of the annual director's retainer
then in effect for directors of the Company during the year of such payment. A
director who dies or resigns after nine years of service is entitled to receive
ten annual payments each equal to the greater of: (i) 100% of the annual
director's retainer that was payable by the Company during the year of his/her
death or resignation, or (ii) 100% of the annual director's retainer then in
effect for directors of the Company during the year of such payment. Further,
the amount payable each year to a director who dies or resigns is increased by
$1,000 for each year of service that the director provided as Chairman of the
Board.
Years of service for purposes of calculating the benefit
described above are based upon service as a director or Chairman after February
28, 1994. Retirement benefits in which a director has become vested may not be
reduced by later Board action.
In lieu of receiving ten annual payments, a director may elect
to receive substantially equivalent benefits through a single-sum cash payment
of the present value of such benefits paid by the Company within 45 days of the
death or resignation of the director. The present value of such benefits is to
be calculated (i) based on the retainer that was payable by the Company during
the year of the director's death or resignation (and not on any retainer
payable to directors thereafter), and (ii) using the interest rate in effect as
of the date of the director's death or resignation by the Pension Benefit
Guaranty Corporation (or any successor thereto) for valuing immediate annuities
under terminating defined benefit pension plans. A director's election to
receive a single sum must be made in writing within the 30 calendar days after
the date the individual is first elected as a director.
In addition to the foregoing, the Board of Directors may, in
its discretion and in recognition of a director's period of service before
March 1, 1994 as a director and possibly as Chairman, authorize the Company to
pay a retirement benefit following the director's death or resignation (unless
the director has vested benefits as a result of completing nine years of
service). Any such action shall be approved by the Board and
-26-
<PAGE> 59
by a majority of the directors who are not "interested persons" of the Company
within 120 days following the director's death or resignation and may be
authorized as a single sum cash payment or as not more than ten annual payments
(beginning the first anniversary of the director's date of death or resignation
and continuing for one or more anniversary date(s) thereafter).
The obligation of the Company to pay benefits to a former
director is neither secured nor funded by the Company but shall be binding upon
its successors in interest. The payment of benefits under the retirement plan
has no priority or preference over the lawful claims of the Company's creditors
or shareholders, and the right to receive such payments is not assignable or
transferable by a director (or former director) other than by will, by the laws
of descent and distribution, or by the director's written designation of a
beneficiary.
The following chart provides certain information about the
director/trustee fees of the Company as of February 28, 1995.
<TABLE>
<CAPTION>
====================================================================================================================================
TOTAL
COMPENSATION
PENSION OR FROM
RETIREMENT ESTIMATED REGISTRANT
AGGREGATE BENEFITS ANNUAL AND FUND
COMPENSATION ACCRUED AS BENEFITS COMPLEX*
NAME OF PERSON/ FROM THE PART OF FUND UPON PAID TO
POSITION COMPANY EXPENSES RETIREMENT DIRECTORS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thomas M. Collins $100,000 $0 $0 $110,000
Director+
- ------------------------------------------------------------------------------------------------------------------------------------
Douglas B. Fletcher $ 57,500 $0 $0 $ 57,500
Vice Chairman of
the Board
- ------------------------------------------------------------------------------------------------------------------------------------
Robert E. Greeley** $ 57,500 $0 $0 $ 65,781
Director
- ------------------------------------------------------------------------------------------------------------------------------------
Kermit O. Hanson $ 57,500 $0 $0 $ 63,500
Director
- ------------------------------------------------------------------------------------------------------------------------------------
Cornelius J. Pings $ 57,500 $0 $0 $ 57,500
President and
Chairman of the
Board
- ------------------------------------------------------------------------------------------------------------------------------------
Kenneth L. Trefftzs $ 57,500 $0 $0 $ 57,500
Director
====================================================================================================================================
- --------------------------
</TABLE>
* The "Fund Complex" consists of the Company, Seafirst Retirement Funds,
Master Investment Trust, Series I and Master Investment Trust, Series
II.
** Mr. Greeley became a director of the Company on April 25, 1994.
+ Mr. Collins was President and Chairman of the Board of the Company
until August 31, 1995
-27-
<PAGE> 60
INVESTMENT ADVISER
Bank of America is the successor by merger to Security Pacific
National Bank ("Security Pacific"), which previously served as investment
adviser to the Fund, since the commencement of its operations. In the
investment advisory agreement, Bank of America has agreed to provide investment
advisory services as described in the Prospectus. Bank of America has also
agreed to pay all expenses incurred by it in connection with its activities
under its agreement other than the cost of securities, including brokerage
commissions, if any, purchased for the Company. In rendering its advisory
services, Bank of America may utilize Bank officers from one or more of the
departments of the Bank which are authorized to exercise the fiduciary powers
of Bank of America with respect to the investment of trust assets. In some
cases, these officers may also serve as officers, and utilize the facilities,
of wholly-owned subsidiaries or other affiliates of Bank of America or its
parent corporation. For the services provided and expenses assumed pursuant to
the investment advisory agreement, the Company has agreed to pay Bank of
America fees, accrued daily and payable monthly, at the following annual rates:
.10% of the first $3 billion of the Fund's net assets, plus .09% of the next $2
billion of the Fund's net assets, plus .08% of the Fund's net assets over $5
billion. From time to time, Bank of America may waive fees or reimburse the
Company for expenses voluntarily or as required by certain state securities
laws.
For the fiscal years ended February 28, 1993, February 28,
1994 and February 28, 1995, Bank of America (Security Pacific prior to April
22, 1992) was paid, pursuant to the investment advisory agreements then in
effect, advisory fees net of fee waivers by the Prime Fund of $8,106,253,
$11,293,545, and $2,330,203, respectively. For the fiscal years ended February
28, 1994 and February 28, 1995, aggregate fee waivers and expense
reimbursements for the Prime Fund were $367,233 and $920,627, respectively.
The Company's investment advisory agreement for the Fund
provides that Bank of America shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Company in connection with the
performance of the investment advisory agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or negligence
in the performance of its duties or from reckless disregard by it of its duties
and obligations thereunder.
-28-
<PAGE> 61
THE GLASS-STEAGALL ACT AND PROPOSED LEGISLATION
The Glass-Steagall Act, among other things, prohibits banks
from engaging in the business of underwriting securities, although national and
state-chartered banks generally are permitted to purchase and sell securities
upon the order and for the account of their customers. In 1971, the United
States Supreme Court held in Investment Company Institute v. Camp that the
Glass-Steagall Act prohibits a bank from operating a fund for the collective
investment of managing agency accounts. Subsequently, the Board of Governors of
the Federal Reserve System (the "Board") issued a regulation and interpretation
to the effect that the Glass-Steagall Act and such decision forbid a bank
holding company registered under the Federal Bank Holding Company Act of 1956
(the "Holding Company Act") or any non-bank affiliate thereof from sponsoring,
organizing or controlling a registered, open-end investment company continuously
engaged in the issuance of its shares, but do not prohibit such a holding
company or affiliate from acting as investment adviser, transfer agent and
custodian to such an investment company. In 1981, the United States Supreme
Court held in Board of Governors of the Federal Reserve System v. Investment
Company Institute that the Board did not exceed its authority under the Holding
Company Act when it adopted its regulation and interpretation authorizing bank
holding companies and their non-bank affiliates to act as investment advisers to
registered closed-end investment companies.
Bank of America believes that if the question were properly
presented, a court should hold that Bank of America may perform the services for
the Company contemplated by the investment advisory agreement, the Prospectus,
and this Statement of Additional Information without violation of the
Glass-Steagall Act or other applicable banking laws or regulations. It should be
noted, however, that there have been no cases deciding whether a bank may
perform services comparable to those performed by Bank of America and future
changes in either federal or state statutes and regulations relating to
permissible activities of banks or trust companies and their subsidiaries or
affiliates, as well as further judicial or administrative decisions or
interpretations of present and future statutes and regulations, could prevent
Bank of America from continuing to perform such services for the Company or from
continuing to purchase Company shares for the accounts of its customers.
On the other hand, as described herein, the Fund is currently
distributed by the Distributor, and the Administrator, its parent, provides the
Company with administrative services. If current restrictions under the
Glass-Steagall Act preventing a bank from sponsoring, organizing, controlling or
distributing
-29-
<PAGE> 62
shares of an investment company were relaxed, the Company expects that Bank of
America would consider the possibility of offering to perform some or all of the
services now provided by the Administrator or the Distributor. From time to
time, legislation modifying such restriction has been introduced in Congress
which, if enacted, would permit a bank holding company to establish a non-bank
subsidiary having the authority to organize, sponsor and distribute shares of an
investment company. If this or similar legislation were enacted, the Company
expects that Bank of America's parent bank holding company would consider the
possibility of one of its non-bank subsidiaries offering to perform some or all
of the services now provided by the Administrator or the Distributor. It is not
possible, of course, to predict whether or in what form such legislation might
be enacted or the terms upon which Bank of America or such a non-bank affiliate
might offer to provide services for consideration by the Company's Board of
Directors.
ADMINISTRATOR
Concord Holding Corporation (the "Administrator"), with
principal offices at 125 West 55th Street, 11th Floor, New York, New York 10019
and 3435 Stelzer Road, Columbus, Ohio 43219, is a wholly-owned subsidiary of The
BISYS Group, Inc. The Administrator also serves as administrator to several
other investment companies.
The Administrator provides administrative services for the
Fund as described in its Prospectus pursuant to a Basic Administrative Services
Agreement. The agreement will continue in effect with respect to the Fund until
October 31, 1996 and thereafter will be extended with respect to the Fund for
successive periods of one year, provided that each such extension is
specifically approved (a) by vote of a majority of those members of the
Company's Board of Directors who are not interested persons of any party to the
agreement, cast in person at a meeting called for the purpose of voting on such
approval, and (b) the Company's Board of Directors or by vote of a majority of
the outstanding voting securities of the Fund. The agreement is terminable at
any time without penalty by the Company's Board of Directors or by a vote of a
majority of the Fund's outstanding shares upon 60 days' notice to the
Administrator, or by the Administrator upon 90 days' notice to the Company.
For its services under the Basic Administrative Services
Agreement, the Administrator is entitled to receive an administration fee,
accrued daily and payable monthly, at the following annual rates: .10% of the
first $7 billion of the Fund's net assets, plus .09% of the next $3 billion of
the Fund's net assets, plus .08% of the Fund's net assets over $10
-30-
<PAGE> 63
billion. From time to time, the Administrator may waive fees or reimburse the
Company for expenses, either voluntarily or as required by certain state
securities laws.
For the fiscal years ended February 28, 1993, February 28,
1994 and February 28, 1995, the Administrator earned, net of fees waived
pursuant to the administration agreements then in effect, administration fees of
$8,835,608, $12,158,419, and $2,366,035, respectively, from the Prime Fund. For
the years ended February 28, 1994 and February 28, 1995, the Administrator
waived fees of $381,513 and $949,233, respectively, with respect to the Prime
Fund.
The Administrator will bear all expenses in connection with
the performance of its services under its Basic Administrative Services
Agreement for the Fund with the exception of fees charged by The Bank of New
York for certain fund accounting services which are borne by the Fund. See
"Custodian and Transfer Agent" below. Expenses borne by the Company include
taxes, interest, brokerage fees and commissions, if any, fees of directors who
are not officers, directors, partners, employees or holders of 5% or more of the
outstanding voting securities of Bank of America or the Administrator or any of
their affiliates, Securities and Exchange Commission fees and state securities
qualification fees, advisory fees, fees payable under the Basic Administrative
Services Agreement, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, outside auditing and legal expenses,
costs of maintaining corporate existence, costs attributable to investor
services, including without limitation telephone and personnel expenses, costs
of preparing and printing prospectuses and statements of additional information
for regulatory purposes, cost of shareholders' reports and corporate meetings
and any extraordinary expenses.
The Basic Administrative Services Agreement provides that the
Administrator shall not be liable for any error of judgment or mistake of law or
any loss suffered by the Fund in connection with the matters to which the
agreement relates, except a loss resulting from willful misfeasance, bad faith
or negligence in the performance of the Administrator's duties or from the
reckless disregard by the Administrator of its obligations and duties
thereunder.
Bank of America has received an option entitling it to
purchase approximately 4% of the Administrator's authorized common stock on or
before December 31, 1998.
-31-
<PAGE> 64
FEE WAIVERS AND EXPENSE REIMBURSEMENTS
If total expenses borne by the Fund in any fiscal year exceed
the expense limitations imposed by applicable state securities regulations, the
Company may deduct from the payments to be made with respect to the Fund to Bank
of America and the Administrator, respectively, or Bank of America and the
Administrator each will bear, the amount of such excess to the extent required
by such regulations. Such amount, if any, will be estimated and accrued daily
and paid on a monthly basis. As of the date of this Statement of Additional
Information, the most restrictive expense limitation that may be applicable to
the Company limits aggregate annual expenses with respect to the Fund, including
management and advisory fees but excluding interest, taxes, brokerage
commissions, and certain other expenses, to 2-1/2% of the first $30 million of
its average daily net assets, 2% of the next $70 million, and 1- 1/2% of its
remaining average daily net assets. During the course of the Company's fiscal
year, the Administrator and Bank of America may prospectively waive payment of
fees and/or assume certain expenses of one or more of the Company's funds as a
result of competitive pressures and in order to preserve and protect the
business and reputation of the Administrator and Bank of America. This will have
the effect of increasing yield to investors at the time such fees are not
received or amounts are assumed and decreasing yield when such fees or amounts
are reimbursed.
DISTRIBUTOR
The Distributor acts as the exclusive distributor of the
shares of the Fund pursuant to a distribution agreement with the Company. Shares
are sold on a continuous basis by the Distributor as agent, although the
Distributor is not obliged to sell any particular amount of shares. The
distribution agreement shall continue in effect with respect to the Fund until
October 31, 1996. Thereafter, if not terminated, the distribution agreement
shall continue automatically for successive terms of one year, provided that
such continuance is specifically approved at least annually (a) by a vote of a
majority of those members of the Board of Directors of the Company who are not
parties to the distribution agreement or "interested persons" of any such party,
cast in person at a meeting called for the purpose of voting on such approval,
and (b) by the Board of Directors of the Company or by vote of a "majority of
the outstanding voting securities" of the Fund as to which the distribution
agreement is effective; provided, however, that the distribution agreement may
be terminated by the Company at any time, without the payment of any penalty, by
vote of a majority of the entire Board of Directors of the Company or
-32-
<PAGE> 65
by a vote of a "majority of the outstanding voting securities" of the Fund on 60
days' written notice to the Distributor, or by the Distributor at any time,
without the payment of any penalty, on 90 days' written notice to the Company.
This Agreement will automatically and immediately terminate in the event of its
"assignment."
The Distribution and Services Plan. The Distributor is also
entitled to payment from the Company for distribution and service fees pursuant
to the Distribution and Services Plan (the "12b-1 Plan") adopted on behalf of
the Class X shares. Under the 12b-1 Plan, the Company may pay the Distributor
for: (a) direct out-of-pocket promotional expenses incurred by the Distributor
in advertising and marketing Class X shares; (b) expenses incurred in connection
with preparing, printing, mailing, and distributing or publishing advertisements
and sales literature for Class X shares; (c) expenses incurred in connection
with printing and mailing Prospectuses and Statements of Additional Information
to other than current Class X shareholders; (d) periodic payments or commissions
to one or more securities dealers, brokers, financial institutions or other
industry professionals, such as investment advisors, accountants, and estate
planning firms (severally, "a Distribution Organization") with respect to the
Fund's Class X shares beneficially owned by customers for whom the Distribution
Organization is the Distribution Organization of record or holder of record of
such Class X shares; (e) the direct or indirect cost of financing the payments
or expenses included in (a) and (d) above; or (f) for such other services as may
be construed, by any court or governmental agency or commission, including the
Securities and Exchange Commission, to constitute distribution services under
the 1940 Act or rules and regulations thereunder.
Pursuant to the 12b-1 Plan, the Company may also pay a
Distribution Organizations for administrative support services provided with
respect to its Clients Class X shares. Administrative services provided may
include some or all of the following: (i) processing dividend and distribution
payments from the Fund on behalf of its Clients; (ii) providing information
periodically to its Clients showing their positions in Class X shares; (iii)
arranging for bank wires; (iv) responding to routine Client inquiries concerning
their investment in Class X shares; (v) providing the information to the Fund
necessary for accounting or sub-accounting; (vi) if required by law, forwarding
shareholder communications from the Fund (such as proxies, shareholder reports,
annual and semi-annual financial statements and dividend, distribution and tax
notices) to its Clients; (vii) aggregating and processing purchase and
redemption requests from its Clients and placing net purchase and redemption
orders for its Clients; (viii) establishing and maintaining accounts and records
relating to
-33-
<PAGE> 66
Clients that invest in Class X shares; (ix) assisting Clients in changing
dividend options, account designations and addresses; (x) developing,
maintaining and operating systems necessary to support Sweep Accounts or (xi)
other similar services if requested by the Company.
The 12b-1 Plan for Class X shares provides that the
Distributor is entitled to receive payments on a monthly basis at an annual rate
not exceeding 0.55% of the average daily net assets during such month of the
outstanding Class X shares to which such 12b-1 Plan relates. Not more than 0.25%
of such net assets will be used to compensate Service Organizations for personal
services provided to Class X shareholders and/or the maintenance of such
shareholders' accounts and not more than 0.30% of such net assets will be used
for promotional and other primary distribution activities.
Payments made out of or charged against the assets of a
particular class of shares of the Fund must be in payment for expenses incurred
on behalf of that class.
Payments for distribution expenses under the 12b-1 Plan are
subject to Rule 12b-1 (the "Rule") under the 1940 Act. The Rule defines
distribution expenses to include the cost of "any activity which is primarily
intended to result in the sale of [Company] shares." The Rule provides, among
other things, that an investment company may bear such expenses only pursuant to
a plan adopted in accordance with the Rule. In accordance with the Rule, the
12b-1 Plan provides that a written report of the amounts expended under the
12b-1 Plan, and the purposes for which such expenditures were incurred, will be
made to the Board of Directors for its review at least quarterly. In addition,
the 12b-1 Plan provides that it may not be amended to increase materially the
costs which the Fund may bear for distribution pursuant to the 12b-1 Plan
without shareholder approval and that other material amendments of the 12b-1
Plan must be approved by a majority of the Board of Directors, and by a majority
of the directors who are neither "interested persons" (as defined in the 1940
Act) of the Company nor have any direct or indirect financial interest in the
operation of the 12b-1 Plan, or in any agreements entered into in connection
with the 12b-1 Plan, by vote cast in person at a meeting called for the purpose
of considering such amendments (the "Non-Interested Plan Directors"). The
selection and nomination of the directors of the Company who are not "interested
persons" of the Company have been committed to the discretion of the
Non-Interested Plan Directors.
The Company's Board of Directors has concluded that there is a
reasonable likelihood that the 12b-1 Plan will benefit the Fund and its Class X
shareholders. The 12b-1 Plan is subject to annual reapproval by a majority of
the Company's Board of Directors, including a majority of the Non-Interested
Plan
-34-
<PAGE> 67
Directors and is terminable without penalty at any time with respect to the Fund
by a vote of a majority of the Non-Interested Plan Directors or by vote of the
holders of a majority of the outstanding Class X shares of the Fund. Any
agreement entered into pursuant to the 12b-1 Plan with a Service Organization is
terminable with respect to the Fund without penalty, at any time, by vote of a
majority of the Non-Interested Plan Directors, by vote of the holders of a
majority of the outstanding Class X shares of the Fund, or by the Service
Organization. Each agreement will also terminate automatically in the event of
its assignment.
CUSTODIAN AND TRANSFER AGENT
The Bank of New York, 90 Washington Street, New York, New York
10286, has been appointed by the Company as custodian for the Fund.
Additionally, BISYS Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus, Ohio
43219-3035, has been appointed as transfer and dividend disbursing agent. The
Bank of New York also provides the Company with certain accounting, bookkeeping,
pricing, and dividend and distribution calculation services pursuant to a fund
accounting services agreement with the Administrator. The monthly fees charged
by the bank under the fund accounting agreement are borne by the Fund. The
Company and The Bank of New York have appointed Bank of America to act as
sub-custodian for the Fund pursuant to a Sub-Custodian Agreement. As
sub-custodian of the Company's assets, Bank of America (i) maintains a separate
account or accounts in the name of the Company, (ii) holds and disburses
portfolio securities on account of the Company, (iii) makes receipts and
disbursements of money on behalf of the Company, (iv) collects and receives all
income and other payments and distributions on account of the Company's
portfolio securities held by Bank of America, (v) responds to correspondence
from security brokers and others relating to its duties and (vi) makes periodic
reports to the Company's Board of Directors concerning its duties thereunder.
Under the Sub-Custodian Agreement, the Company will reimburse Bank of America
for its costs and expenses in providing services thereunder. Bank of America is
the successor to Security Pacific under the Sub-Custodian Agreement. For the
fiscal years ended February 28, 1993, February 28, 1994, and February 28, 1995,
Bank of America (and Security Pacific prior to April 22, 1992) in their capacity
as sub-custodian, did not hold any of the Company's assets and, accordingly,
received no fees.
ADDITIONAL PERFORMANCE INFORMATION
The "yields" and "effective yields" of the Fund are calculated
according to formulas prescribed by the Securities and
-35-
<PAGE> 68
Exchange Commission. The standardized seven-day yield for the Fund's series of
shares is computed separately for each series by determining the net change,
exclusive of capital changes, in the value of a hypothetical pre-existing
account in the Fund involved having a balance of one share at the beginning of
the period, dividing the net change in account value by the value of the account
at the beginning of the base period to obtain the base period return, and
multiplying the base period return by (365/7). The net change in the value of an
account in the Fund includes the value of additional shares purchased with
dividends from the original share, and dividends declared on both the original
share and any such additional shares, net of all fees, other than nonrecurring
account or sales charges, that are charged to all shareholder accounts in
proportion to the length of the base period and the Fund's average account size.
The capital changes to be excluded from the calculation of the net change in
account value are realized gains and losses from the sale of securities and
unrealized appreciation and depreciation. The effective annualized yield for the
Fund is computed by compounding the Fund's unannualized base period returns
(calculated as above) by adding 1 to the base period returns, raising the sums
to a power equal to 365 divided by 7, and subtracting 1 from the results. The
fees which may be imposed by institutional investors directly on their customers
for cash management services are not reflected in the Fund's calculations of
yields. The current yields for the Fund may be obtained by calling (800)
227-1545.
From time to time, the yields of the Fund may be quoted in and
compared to other mutual funds with similar investment objectives in
advertisements, shareholder reports or other communications to shareholders. The
Fund may also include calculations in such communications that describe
hypothetical investment results. (Such performance examples will be based on an
express set of assumptions and are not indicative of the performance of the
Fund.) Such calculations may from time to time include discussions or
illustrations of the effects of compounding in advertisements. "Compounding"
refers to the fact that, if dividends or other distributions on the Fund
investment are reinvested by being paid in additional Fund shares, any future
income of the Fund would increase the value of the Fund investment more quickly
than if dividends or other distributions had been paid in cash. The Fund may
also include discussions or illustrations of the potential investment goals of a
prospective investor (including but not limited to tax and/or retirement
planning), investment management techniques, policies or investment suitability
of the Fund, economic conditions, legislative developments (including pending
legislation), the effects of inflation and historical performance of various
asset classes. From time to time advertisements or communications to
shareholders may summarize the substance of information contained
-36-
<PAGE> 69
in shareholder reports (including the investment composition of a Fund), as well
as the views of the investment adviser as to current market, economic, trade and
interest rate trends, legislative, regulatory and monetary developments,
investment strategies and related matters believed to be of relevance to the
Fund. The Fund may also include in advertisements charts, graphs or drawings
which illustrate the potential risks and rewards of investment in various
investment vehicles. In addition, advertisements or shareholder communications
may include a discussion of certain attributes or benefits to be derived by an
investment in the Fund and may include testimonials as to the investment
adviser's capabilities by clients. Such advertisements or communications may
include symbols, headlines or other material which highlight or summarize the
information discussed in more detail therein. With proper authorization, a Fund
may reprint articles (or excerpts) written regarding the Fund and provide them
to prospective shareholders. Performance information with respect to the Fund is
generally available by calling (800) 346-2087.
In addition to the publications listed in the Fund's
Prospectus, yield data as reported in the following publications may be used in
comparing the yields of the Fund to those of other mutual funds with similar
investment objectives: Business Week, Investor's Business Daily, Kiplinger, U.S.
News, Financial World, USA Today, Morningstar, Mutual Fund Monitor, and American
Banker.
GENERAL INFORMATION
DESCRIPTION OF SHARES
The Company is an open-end management investment company
organized as a Maryland corporation on October 27, 1982. The Fund's Charter
authorizes the Board of Directors to issue up to two hundred billion full and
fractional shares of capital stock. The Board of Directors has authorized the
issuance of twenty-two classes of stock - Classes A through W Common Stock,
representing interests in twenty-two separate investment portfolios. Each share
of capital stock has a par value of $.001. This Statement of Additional
Information describes the X Shares of the Prime Fund.
Shares have no preemptive rights and only such conversion or
exchange rights as the Board may grant in its discretion. When issued for
payment as described in its Prospectuses, the Company's shares will be fully
paid and non-assessable. For information concerning possible restrictions upon
the transferability of the Company's shares and redemption provisions with
respect to such shares, see "Additional Purchase
-37-
<PAGE> 70
and Redemption Information" in this Statement of Additional Information.
The Fund's Pacific Horizon, Horizon Shares and Horizon Service
Shares differ from X Shares in the following respects. Only X Shares bear the
fees payable under the 12b-1 Plan that has been adopted for X Shares, which are
payable at the rate of up to .55% (on an annualized basis) of the average daily
net asset value of the X Shares that are outstanding from time to time. S Shares
bear the fees payable under the distribution and services plan that has been
adopted for S Shares, which are payable at the rate of up to 1.00% (on an
annualized basis) of the average daily net asset value of the S Shares that are
outstanding from time to time. Pacific Horizon Shares and Horizon Service Shares
bear the fees payable under the Administrative Services Plan and Shareholder
Services Plan, respectively, that have been adopted for Pacific Horizon Shares
and Horizon Service Shares, which are payable at the rate of up to .32% and.25%,
respectively, (on an annualized basis) of the average daily net asset value of
the respective Pacific Horizon and Horizon Service Shares that are outstanding
from time to time as described in the Prospectuses for such shares. As a result,
at any given time, the net yield on a Fund's X Shares will be approximately
0.23% lower than the yield on this Fund's Pacific Horizon Shares; 0.55% lower
than the yield on that Fund's Horizon Shares; 0.30% lower than the yield on the
Fund's Horizon Service Shares and 0.45% higher than the yield on the Fund's S
Shares. Standardized yield quotations will be computed separately for each
series of Shares.
Holders of the outstanding shares of the Fund will vote
together in the aggregate and not by class on all matters, except that only X
and S Shares of the Fund will be entitled to vote on matters submitted to a vote
of shareholders pertaining to their respective 12b-1 Plans; Pacific Horizon
Shares of the Fund will be entitled to vote on matters submitted to a vote of
shareholders pertaining to its respective Administrative Services Plan and only
Horizon Service Shares of the Fund will be entitled to vote on matters submitted
to a vote of shareholders pertaining to its respective Shareholder Services
Plan. Further, shareholders of the Fund, as well as those of any other
investment portfolio now or hereafter offered by the Company, will vote together
in the aggregate and not separately on a Fund-by-Fund basis, except as otherwise
required by law or when permitted by the Board of Directors. Rule 18f-2 under
the 1940 Act provides that any matter required to be submitted to the holders of
the outstanding voting securities of an investment company such as the Company
shall not be deemed to have been effectively acted upon unless approved by a
majority of the outstanding shares of the Fund affected by the matter. The Fund
is affected by a matter unless it is clear that the
-38-
<PAGE> 71
interests of the Fund in the matter are substantially identical or that the
matter does not affect any interest of the Fund. Under the Rule, the approval of
an investment advisory agreement or any change in a fundamental investment
policy would be effectively acted upon with respect to the Fund only if approved
by a majority of the outstanding shares of the Fund. However, the Rule also
provides that the ratification of independent public accountants, the approval
of principal underwriting contracts and the election of directors may be
effectively acted upon by shareholders of the Company voting in the aggregate
without regard to the Fund.
Notwithstanding any provision of Maryland law requiring a
greater vote of the Company's common stock (or of the shares of the Fund voting
separately as a class) in connection with any corporate action, unless otherwise
provided by law (for example, by Rule 18f-2 discussed above) or by the Company's
Charter, the Company may take or authorize such action upon the favorable vote
of the holders of more than 50% of the outstanding common stock of the Company
voting without regard to class.
REPORTS
Shareholders will be sent unaudited semi-annual reports
describing the Fund's investment operations and annual financial statements
together with a report of independent accountants.
COUNSEL
Drinker Biddle & Reath (of which W. Bruce McConnel, III,
Secretary of the Company, is a partner), 1345 Chestnut Street, Philadelphia
National Bank Building, Philadelphia, Pennsylvania 19107, serves as counsel to
the Company and will pass upon the legality of the shares offered hereby.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, independent accountants, with offices at
1177 Avenue of the Americas, New York, New York 10036, has been selected as
independent accountants of the Company for the fiscal year ending February 28,
1996.
MISCELLANEOUS
As used in the Prospectus and this Statement of Additional
Information, a "vote of a majority" of the outstanding shares of the Fund or a
particular series means, with respect to the approval of an investment advisory
agreement, a distribution plan or a change in a fundamental investment policy,
the affirmative vote of the lesser of (a) more than 50% of the
-39-
<PAGE> 72
outstanding shares of the Fund or such series, or (b) 67% of the shares of the
Fund or series present at a meeting at which more than 50% of the outstanding
shares of the Fund or series are represented in person or by proxy.
At February 10, 1996, the name, address and share ownership of
the entities which held more than 5% of the outstanding Pacific Horizon Shares
of the Treasury Fund were as follows: Hare & Company, Bank of New York and Short
Term Investment Funds, Attn: Bimal Saha, One Wall Street, New York, NY 10286,
106,860,148.040 shares (9.85%); BA Investment Services, Inc., For the Benefit of
Clients, P.O. Box 7042, Attn: Unit #7852 - Bob Santilli, San Francisco, CA
94120, 199,971,028.65 shares (18.43%); and Bank of America State Trust Company,
299 N. Euclid Avenue, Pasadena, CA 91101, 663,427,955.10 shares (61.15%).
At February 10, 1996, the name, address and share ownership of
the entities which held more than 5% of the outstanding Horizon Service Shares
of the Treasury Fund were as follows: Omnibus Account Horizon for the
Shareholder Accounts Maintained By Concord Financial Services, Inc., Attn: Linda
Zerbe, First and Market Building, 100 First Avenue, Suite 300, Pittsburgh, PA
15222, 142,805,428.42 shares (14.09%); and Omnibus Account for the Shareholder
Accounts Maintained By Concord Financial Services, Inc., Attn: Linda Zerbe,
First and Market Building, 100 First Avenue, Suite 300, Pittsburgh, PA 15222,
291,827,859.37 shares (28.80%).
At February 10, 1996, the name, address and share ownership of
the entities which held more than 5% of the outstanding Horizon Service Shares
of the California Tax-Exempt Money Market Fund were as follows: Omnibus Account
For the Shareholder Accounts Maintained By Concord Financial Services, Inc.,
Attn: Linda Zerbe, First and Market Building, 100 First Avenue, Suite 300,
Pittsburgh, PA 15222, 28,670,044.87 shares (13.68%); and Omnibus Account For the
Shareholder Accounts Maintained By Concord Financial Services, Inc., Attn: Linda
Zerbe, First and Market Building, 100 First Avenue, Suite 300, Pittsburgh, PA
15222, 82,951,311.59 shares (39.57%).
At February 10, 1996, the name, address and share ownership of
the entities which held more than 5% of the outstanding Pacific Horizon Shares
of the Prime Fund were as follows: Hare & Co., Bank of New York, and Short Term
Investment Funds, Attn: Bimal Saha, One Wall Street, New York, NY 10286,
175,865,801.62 shares (8.63%); and BA Investment Services, Inc., For the Benefit
of Clients, P.O. Box 7042, Attn: Unit #7852 - Bob Santilli, San Francisco, CA
94120, 1,527,007,320.95 shares (74.90%).
-40-
<PAGE> 73
At February 10, 1996, the name, address and share ownership of
the entities which held more than 5% of the outstanding Horizon Service Shares
of the Government Fund were as follows: COHU, Inc., 5755 Kearny Villa Road, San
Diego, CA 92123, 29,628,758.15 shares (13.08%); Toasty, Ltd., Leslie L.
Alexander, One Greenway Plaza, Suite 645, Houston, TX 77046, 12,958,038.58
shares (5.72%); Rocket Ball, Ltd., One Greenway Plaza, Suite 645, Houston, TX
77046, 19,720,740.540 shares (8.70%); Omnibus Account for the Shareholder
Accounts Maintained By Concord Financial Services, Inc., Attn: Linda Zerbe,
First and Market Building, 100 First Avenue, Suite 300, Pittsburgh, PA 15222,
34,049,721.71 shares (15.03%); Good Health Plan of Washington, Attn: Linda Lam
Ha, 1501 4th Avenue, Suite 500, Seattle, WA 98101, 12,209,081.11 shares (5.39%);
and Providence Health Care, Attn: Linda Lam Ha, 1501 4th Avenue, Suite 500,
Seattle, WA 98101-1621, 14,832,444.90 shares (6.55%).
At such dates, no other person was known by the Company to
hold of record or beneficially more than 5% of the outstanding shares of any
investment portfolio of the Company.
FINANCIAL STATEMENTS AND EXPERTS
The Annual Reports for the Fund for its fiscal year or periods
ended February 28, 1995 and the Semi-Annual Report for the period ended August
31, 1995 (the "Annual Reports" and "Semi-Annual Reports" respectively)
accompanies this Statement of Additional Information. The financial statements
and notes thereto in the Annual Report and Semi-Annual Report are incorporated
in this Statement of Additional Information by reference. The financial
statements and notes in the Annual Report have been audited by Price Waterhouse,
LLP, whose report thereon also appears in each Annual Report and is also
incorporated herein by reference. Such financial statements have been
incorporated herein in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
-41-
<PAGE> 74
APPENDIX A
COMMERCIAL PAPER RATINGS
A Standard & Poor's commercial paper rating is a current
assessment of the likelihood of timely payment of debt considered short-term in
the relevant market. The following summarizes the rating categories used by
Standard and Poor's for commercial paper:
"A-1" - Issue's degree of safety regarding timely payment is
strong. Those issues determined to possess extremely strong safety
characteristics are denoted "A-1+."
"A-2" - Issue's capacity for timely payment is satisfactory.
However, the relative degree of safety is not as high as for issues designated
"A-1."
"A-3" - Issue has an adequate capacity for timely payment. It
is, however, somewhat more vulnerable to the adverse effects of changes and
circumstances than an obligation carrying a higher designation.
"B" - Issue has only a speculative capacity for timely
payment.
"C" - Issue has a doubtful capacity for payment.
"D" - Issue is in payment default.
Moody's commercial paper ratings are opinions of the ability
of issuers to repay punctually promissory obligations not having an original
maturity in excess of 9 months. The following summarizes the rating categories
used by Moody's for commercial paper:
"Prime-1" - Issuer or related supporting institutions are
considered to have a superior capacity for repayment of short-term promissory
obligations. Prime-1 repayment capacity will normally be evidenced by the
following characteristics: leading market positions in well established
industries; high rates of return on funds employed; conservative capitalization
structures with moderate reliance on debt and ample asset protection; broad
margins in earning coverage of fixed financial charges and high internal cash
generation; and well established access to a range of financial markets and
assured sources of alternate liquidity.
A-1
<PAGE> 75
"Prime-2" - Issuer or related supporting institutions are
considered to have a strong capacity for repayment of short-term promissory
obligations. This will normally be evidenced by many of the characteristics
cited above but to a lesser degree. Earnings trends and coverage ratios, while
sound, will be more subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions. Ample
alternative liquidity is maintained.
"Prime-3" - Issuer or related supporting institutions have an
acceptable capacity for repayment of short-term promissory obligations. The
effects of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.
"Not Prime" - Issuer does not fall within any of the Prime
rating categories.
The three rating categories of Duff & Phelps for investment
grade commercial paper and short-term debt are "D-1," "D-2" and "D-3." Duff &
Phelps employs three designations, "D-1+," "D-1" and "D-1-," within the highest
rating category. The following summarizes the rating categories used by Duff &
Phelps for commercial paper:
"D-1+" - Debt possesses highest certainty of timely payment.
Short-term liquidity, including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is just below risk-
free U.S. Treasury short-term obligations.
"D-1" - Debt possesses very high certainty of timely payment.
Liquidity factors are excellent and supported by good fundamental protection
factors. Risk factors are minor.
"D-1-" - Debt possesses high certainty of timely payment.
Liquidity factors are strong and supported by good fundamental protection
factors. Risk factors are very small.
"D-2" - Debt possesses good certainty of timely payment.
Liquidity factors and company fundamentals are sound. Although ongoing funding
needs may enlarge total financing requirements, access to capital markets is
good. Risk factors are small.
"D-3" - Debt possesses satisfactory liquidity, and other
protection factors qualify issue as investment grade. Risk
A-2
<PAGE> 76
factors are larger and subject to more variation. Nevertheless, timely payment
is expected.
"D-4" - Debt possesses speculative investment characteristics.
Liquidity is not sufficient to ensure against disruption in debt service.
Operating factors and market access may be subject to a high degree of
variation.
"D-5" - Issuer has failed to meet scheduled principal and/or
interest payments.
Fitch short-term ratings apply to debt obligations that are
payable on demand or have original maturities of up to three years. The
following summarizes the rating categories used by Fitch for short-term
obligations:
"F-1+" - Securities possess exceptionally strong credit
quality. Issues assigned this rating are regarded as having the strongest degree
of assurance for timely payment.
"F-1" - Securities possess very strong credit quality. Issues
assigned this rating reflect an assurance of timely payment only slightly less
in degree than issues rated "F-1+."
"F-2" - Securities possess good credit quality. Issues
assigned this rating have a satisfactory degree of assurance for timely payment,
but the margin of safety is not as great as the "F-1+" and "F-1" categories.
"F-3" - Securities possess fair credit quality. Issues
assigned this rating have characteristics suggesting that the degree of
assurance for timely payment is adequate; however, near-term adverse changes
could cause these securities to be rated below investment grade.
"F-S" - Securities possess weak credit quality. Issues
assigned this rating have characteristics suggesting a minimal degree of
assurance for timely payment and are vulnerable to near-term adverse changes in
financial and economic conditions.
"D" - Securities are in actual or imminent payment default.
Fitch may also use the symbol "LOC" with its short-term
ratings to indicate that the rating is based upon a letter of credit issued by a
commercial bank.
Thomson BankWatch short-term ratings assess the likelihood of
an untimely or incomplete payment of principal or interest of unsubordinated
instruments having a maturity of one
A-3
<PAGE> 77
year or less which is issued by United States commercial banks, thrifts and
non-bank banks; non-United States banks; and broker-dealers. The following
summarizes the ratings used by Thomson BankWatch:
"TBW-1" - This designation represents Thomson BankWatch's
highest rating category and indicates a very high degree of likelihood that
principal and interest will be paid on a timely basis.
"TBW-2" - This designation indicates that while the degree of
safety regarding timely payment of principal and interest is strong, the
relative degree of safety is not as high as for issues rated "TBW-1."
"TBW-3" - This designation represents the lowest investment
grade category and indicates that while the debt is more susceptible to adverse
developments (both internal and external) than obligations with higher ratings,
capacity to service principal and interest in a timely fashion is considered
adequate.
"TBW-4" - This designation indicates that the debt is regarded
as non-investment grade and therefore speculative.
IBCA assesses the investment quality of unsecured debt with an
original maturity of less than one year which is issued by bank holding
companies and their principal bank subsidiaries. The following summarizes the
rating categories used by IBCA for short-term debt ratings:
"A1+" - Obligations supported by the highest capacity for
timely repayment.
"A1" - Obligations are supported by the highest capacity for
timely repayment.
"A2" - Obligations are supported by a satisfactory capacity
for timely repayment, although such capacity may be susceptible to adverse
changes in business, economic or financial conditions.
"A3" - Obligations are supported by a satisfactory capacity
for timely repayment. Such capacity is more susceptible to adverse changes in
business, economic or financial conditions than for obligations in higher
categories.
"B" - Obligations for which the capacity for timely repayment
is susceptible to adverse changes in business, economic or financial conditions.
A-4
<PAGE> 78
"C" - Obligations for which there is an inadequate capacity to
ensure timely repayment.
"D" - Obligations which have a high risk of default or which
are currently in default.
CORPORATE AND MUNICIPAL LONG-TERM DEBT RATINGS
The following summarizes the ratings used by Standard & Poor's
for corporate and municipal debt:
"AAA" - This designation represents the highest rating
assigned by Standard & Poor's to a debt obligation and indicates an extremely
strong capacity to pay interest and repay principal.
"AA" - Debt is considered to have a very strong capacity to
pay interest and repay principal and differs from AAA issues only in small
degree.
"A" - Debt is considered to have a strong capacity to pay
interest and repay principal although such issues are somewhat more susceptible
to the adverse effects of changes in circumstances and economic conditions than
debt in higher-rated categories.
"BBB" - Debt is regarded as having an adequate capacity to pay
interest and repay principal. Whereas such issues normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher-rated categories.
"BB," "B," "CCC," "CC" and "C" - Debt is regarded, on balance,
as predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "C" the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
"BB" - Debt has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payments. The "BB"
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BBB-" rating.
"B" - Debt has a greater vulnerability to default but
currently has the capacity to meet interest payments and
A-5
<PAGE> 79
principal repayments. Adverse business, financial or economic conditions will
likely impair capacity or willingness to pay interest and repay principal. The
"B" rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BB" or "BB-" rating.
"CCC" - Debt has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of principal. In the
event of adverse business, financial or economic conditions, it is not likely to
have the capacity to pay interest and repay principal. The "CCC" rating category
is also used for debt subordinated to senior debt that is assigned an actual or
implied "B" or "B-" rating.
"CC" - This rating is typically applied to debt subordinated
to senior debt that is assigned an actual or implied "CCC" rating.
"C" - This rating is typically applied to debt subordinated to
senior debt which is assigned an actual or implied "CCC-" debt rating. The "C"
rating may be used to cover a situation where a bankruptcy petition has been
filed, but debt service payments are continued.
"CI" - This rating is reserved for income bonds on which no
interest is being paid.
"D" - Debt is in payment default. This rating is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless S & P believes such payments
will be made during such grace period. "D" rating is also used upon the filing
of a bankruptcy petition if debt service payments are jeopardized.
PLUS (+) OR MINUS (-) - The ratings from "AA" through "CCC"
may be modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.
"r" - This rating is attached to highlight derivative, hybrid,
and certain other obligations that S & P believes may experience high volatility
or high variability in expected returns due to non-credit risks. Examples of
such obligations are: securities whose principal or interest return is indexed
to equities, commodities, or currencies; certain swaps and options; and interest
only and principal only mortgage securities.
The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:
"Aaa" - Bonds are judged to be of the best quality. They
carry the smallest degree of investment risk and are
A-6
<PAGE> 80
generally referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
"Aa" - Bonds are judged to be of high quality by all
standards. Together with the "Aaa" group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in "Aaa"
securities.
"A" - Bonds possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds considered medium-grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
"Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of
these ratings provide questionable protection of interest and principal ("Ba"
indicates some speculative elements; "B" indicates a general lack of
characteristics of desirable investment; "Caa" represents a poor standing; "Ca"
represents obligations which are speculative in a high degree; and "C"
represents the lowest rated class of bonds). "Caa," "Ca" and "C" bonds may be in
default.
Con. (---) - Bonds for which the security depends upon the
completion of some act or the fulfillment of some condition are rated
conditionally. These are bonds secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operation experience, (c)
rentals which begin when facilities are completed, or (d) payments to which some
other limiting condition attaches. Parenthetical rating denotes probable credit
stature upon completion of construction or elimination of basis of condition.
Moody's applies numerical modifiers 1, 2 and 3 in each generic
classification from "Aa" to "B" in its bond rating system. The modifier 1
indicates that the issuer ranks in the
A-7
<PAGE> 81
higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issuer ranks at the lower end of
its generic rating category.
The following summarizes the long-term debt ratings used by
Duff & Phelps for corporate and municipal long-term debt:
"AAA" - Debt is considered to be of the highest credit
quality. The risk factors are negligible, being only slightly more than for
risk-free U.S. Treasury debt.
"AA" - Debt is considered of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.
"A" - Debt possesses protection factors which are average but
adequate. However, risk factors are more variable and greater in periods of
economic stress.
"BBB" - Debt possesses below average protection factors but
such protection factors are still considered sufficient for prudent investment.
Considerable variability in risk is present during economic cycles.
"BB," "B," "CCC," "DD," and "DP" - Debt that possesses one of
these ratings is considered to be below investment grade. Although below
investment grade, debt rated "BB" is deemed likely to meet obligations when due.
Debt rated "B" possesses the risk that obligations will not be met when due.
Debt rated "CCC" is well below investment grade and has considerable uncertainty
as to timely payment of principal, interest or preferred dividends. Debt rated
"DD" is a defaulted debt obligation, and the rating "DP" represents preferred
stock with dividend arrearages.
To provide more detailed indications of credit quality, the
"AA," "A," "BBB," "BB" and "B" ratings may be modified by the addition of a plus
(+) or minus (-) sign to show relative standing within these major categories.
The following summarizes the highest four ratings used by
Fitch for corporate and municipal bonds:
"AAA" - Bonds considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
"AA" - Bonds considered to be investment grade and of very
high credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong
A-8
<PAGE> 82
as bonds rated "AAA." Because bonds rated in the "AAA" and "AA" categories are
not significantly vulnerable to foreseeable future developments, short-term debt
of these issuers is generally rated "F-1+."
"A" - Bonds considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
"BBB" - Bonds considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have an adverse impact on these
bonds, and therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.
"BB," "B," "CCC," "CC," "C," "DDD," "DD," and "D" - Bonds that
possess one of these ratings are considered by Fitch to be speculative
investments. The ratings "BB" to "C" represent Fitch's assessment of the
likelihood of timely payment of principal and interest in accordance with the
terms of obligation for bond issues not in default. For defaulted bonds, the
rating "DDD" to "D" is an assessment of the ultimate recovery value through
reorganization or liquidation.
To provide more detailed indications of credit quality, the
Fitch ratings from and including "AA" to "C" may be modified by the addition of
a plus (+) or minus (-) sign to show relative standing within these major rating
categories.
IBCA assesses the investment quality of unsecured debt with an
original maturity of more than one year which is issued by bank holding
companies and their principal bank subsidiaries. The following summarizes the
rating categories used by IBCA for long-term debt ratings:
"AAA" - Obligations for which there is the lowest expectation
of investment risk. Capacity for timely repayment of principal and interest is
substantial such that adverse changes in business, economic or financial
conditions are unlikely to increase investment risk substantially.
"AA" - Obligations for which there is a very low expectation
of investment risk. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic or financial conditions may
increase investment risk albeit not very significantly.
A-9
<PAGE> 83
"A" - Obligations for which there is a low expectation of
investment risk. Capacity for timely repayment of principal and interest is
strong, although adverse changes in business, economic or financial conditions
may lead to increased investment risk.
"BBB" - Obligations for which there is currently a low
expectation of investment risk. Capacity for timely repayment of principal and
interest is adequate, although adverse changes in business, economic or
financial conditions are more likely to lead to increased investment risk than
for obligations in higher categories.
"BB," "B," "CCC," "CC," and "C" - Obligations are assigned one
of these ratings where it is considered that speculative characteristics are
present. "BB" represents the lowest degree of speculation and indicates a
possibility of investment risk developing. "C" represents the highest degree of
speculation and indicates that the obligations are currently in default.
IBCA may append a rating of plus (+) or minus (-) to a rating
to denote relative status within major rating categories.
Thomson BankWatch assesses the likelihood of an untimely
repayment of principal or interest over the term to maturity of long term debt
and preferred stock which are issued by United States commercial banks, thrifts
and non-bank banks; non-United States banks; and broker-dealers. The following
summarizes the rating categories used by Thomson BankWatch for long-term debt
ratings:
"AAA" - This designation represents the highest category
assigned by Thomson BankWatch to long-term debt and indicates that the ability
to repay principal and interest on a timely basis is extremely high.
"AA" - This designation indicates a very strong ability to
repay principal and interest on a timely basis with limited incremental risk
compared to issues rated in the highest category.
"A" - This designation indicates that the ability to repay
principal and interest is strong. Issues rated "A" could be more vulnerable to
adverse developments (both internal and external) than obligations with higher
ratings.
"BBB" - This designation represents Thomson BankWatch's lowest
investment grade category and indicates an acceptable capacity to repay
principal and interest. Issues rated "BBB"
A-10
<PAGE> 84
are, however, more vulnerable to adverse developments (both internal and
external) than obligations with higher ratings.
"BB," "B," "CCC," and "CC," - These designations are assigned
by Thomson BankWatch to non-investment grade long-term debt. Such issues are
regarded as having speculative characteristics regarding the likelihood of
timely payment of principal and interest. "BB" indicates the lowest degree of
speculation and "CC" the highest degree of speculation.
"D" - This designation indicates that the long-term debt is in
default.
PLUS (+) OR MINUS (-) - The ratings from "AAA" through "CC"
may include a plus or minus sign designation which indicates where within the
respective category the issue is placed.
MUNICIPAL NOTE RATINGS
A Standard and Poor's rating reflects the liquidity concerns
and market access risks unique to notes due in three years or less. The
following summarizes the ratings used by Standard & Poor's Ratings Group for
municipal notes:
"SP-1" - The issuers of these municipal notes exhibit very
strong or strong capacity to pay principal and interest. Those issues determined
to possess overwhelming safety characteristics are given a plus (+) designation.
"SP-2" - The issuers of these municipal notes exhibit
satisfactory capacity to pay principal and interest.
"SP-3" - The issuers of these municipal notes exhibit
speculative capacity to pay principal and interest.
Moody's ratings for state and municipal notes and other
short-term loans are designated Moody's Investment Grade ("MIG") and variable
rate demand obligations are designated Variable Moody's Investment Grade
("VMIG"). Such ratings recognize the differences between short-term credit risk
and long-term risk. The following summarizes the ratings by Moody's Investors
Service, Inc. for short-term notes:
"MIG-1"/"VMIG-1" - Loans bearing this designation are of the
best quality, enjoying strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the market for
refinancing.
A-11
<PAGE> 85
"MIG-2"/"VMIG-2" - Loans bearing this designation are of high
quality, with margins of protection ample although not so large as in the
preceding group.
"MIG-3"/"VMIG-3" - Loans bearing this designation are of
favorable quality, with all security elements accounted for but lacking the
undeniable strength of the preceding grades. Liquidity and cash flow protection
may be narrow and market access for refinancing is likely to be less well
established.
"MIG-4"/"VMIG-4" - Loans bearing this designation are of
adequate quality, carrying specific risk but having protection commonly regarded
as required of an investment security and not distinctly or predominantly
speculative.
"SG" - Loans bearing this designation are of speculative
quality and lack margins of protection.
Fitch and Duff & Phelps use the short-term ratings described
under Commercial Paper Ratings for municipal notes.
A-12
<PAGE> 86
FORM N-1A
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) Included in Part A hereof:
Financial Highlights for:
- Prime Fund
(2) Incorporated by reference into Part B hereof:
- The audited financial statements, related
notes thereto and the Auditor's reports
thereon included in the Registrant's Annual
Report to Pacific Horizon Shareholders of
the Prime, Treasury, Government, Treasury
Only, Tax-Exempt Money Funds and California
Tax- Exempt Money Market Fund (the "Funds")
dated February 28, 1995 are incorporated
herein by reference.
- The unaudited financial statements and
related notes thereto included in the
Registrant's Semi-Annual Report to Pacific
Horizon Shareholders of the Prime, Treasury,
Government, and Treasury Only Funds dated
August 31, 1995 are incorporated herein by
reference.
(b) Exhibits:
(1) (a) Restated Articles of Incorporation filed
November 22, 1983.
(b) Articles Supplementary filed January 9,
1986.
(c) Articles Supplementary to increase
authorized capital stock filed
August 31, 1989.
C-1
<PAGE> 87
(d) Articles Supplementary classifying
shares filed August 31, 1989.
(e) Articles Supplementary classifying
shares filed June 3, 1991.
(f) Articles Supplementary classifying and
reclassifying shares filed August 1,
1991.
(g) Articles Supplementary to increase
authorized capital stock filed August
16, 1991.
(h) Articles Supplementary classifying
shares filed August 16, 1991.
(i) Articles Supplementary classifying
shares filed November 25, 1991.
(j) Articles Supplementary classifying
shares filed May 11, 1992.
(k) Articles Supplementary reclassifying
shares filed May 15, 1992.
(l) Articles Supplementary classifying
shares filed July 20, 1992.
(m) Articles Supplementary to increase
authorized capital stock filed August 6,
1992.
(n) Articles Supplementary classifying
shares filed August 6, 1992.
(o) Articles Supplementary classifying
shares filed March 3, 1993.
(p) Articles Supplementary reclassifying
shares filed May 12, 1993.
(q) Articles of Amendment eliminating
restriction on number of classes of
shares filed May 8, 1990.
(r) Articles of Amendment reclassifying
shares filed on July 9, 1993.
(s) Articles Supplementary classifying
shares filed November 18, 1993.
C-2
<PAGE> 88
(t) Articles Supplementary reclassifying
shares filed November 18, 1993.
(u) Articles Supplementary reclassifying
shares filed January 21, 1994.
(v) Articles of Amendment cancelling shares
filed on January 26, 1996.
(w) Articles Supplementary classifying
shares filed on January 26, 1996.
(x) Articles Supplementary reclassifying
shares filed on January 26, 1996.
(2) (a) Amended By-Laws dated January 15, 1987.
(b) Amendment to By-Laws dated July 17,
1987.
(c) Amendment to By-Laws as approved by the
Registrant's Board of Directors on
March 30, 1989.
(d) Amendment to By-Laws as approved by the
Registrant's Board of Directors on
January 29, 1990.
(3) None.
(4) (a) Specimen copy of share certificate for
all Classes and Series of Shares is
incorporated by reference to Exhibit
(4)(a) to Post-Effective Amendment No.
37 to Registration Statement on Form N-
1A (No. 2-81110) filed July 1, 1994
("Post-Effective Amendment No. 37").
(5) (a) Investment Advisory Agreement dated as
of April 22, 1992 between Registrant and
Bank of America National Trust and
Savings Association (Money Market
Funds).
(b) Investment Advisory Agreement dated as
of April 22, 1992 between Registrant and
Bank of America National Trust and
Savings Association (Non-Money Market
Funds).
(c) Addendum to Investment Advisory
Agreement dated as of March 1, 1993
between Registrant and Bank of
America National Trust and Savings
Association (Money Market Funds -
Prime Value
C-3
<PAGE> 89
Fund).
(d) Addendum to Investment Advisory
Agreement dated as of March 1, 1993
between Registrant and Bank of America
National Trust and Savings Association
(Money Market Funds - Government and
Treasury Only Funds).
(e) Investment Advisory Agreement dated
November 1, 1994 between Registrant
and Bank of America with respect to
the Capital Income Fund.
(6) (a) Distribution Agreement between the
Registrant and Concord Financial Group,
Inc.
(b) Agreement relating to the Distribution
Agreement between Registrant and Concord
Financial Group, Inc.
(c) Form of Broker/Dealer Agreement.
(d) Form of Bank Agreement.
(e) Form of Amended and Restated
Distribution Agreement is incorporated
by reference to Exhibit (6)(e) to Post-
Effective Amendment No. 42 to the
Registration Statement of the Registrant
on Form N-1A (No. 2-81110) filed July
31, 1995 ("Post-Effective Amendment No.
42").
(7) Board Guidelines on Significant
Governance Issues (which includes a
description of the Board of
Director's retirement policy and
benefit).
(8) (a) Custody Agreement between Registrant and
The Bank of New York dated as of
April 3, 1989.
(b) Amendment No. 1 to Custody Agreement
between Registrant and The Bank of New
York dated as of March 30, 1990.
(c) Custodian Services Agreement between
Registrant and PNC Bank, N.A.
C-4
<PAGE> 90
(d) Form of Transfer Agency Agreement
between Registrant and BISYS Fund
Services Ohio, Inc. is incorporated by
reference to Exhibit 8(d) to Post-
Effective Amendment No. 43 to the
Registration Statement of the Registrant
on Form N-1A (No. 2-81110) filed on
December 15, 1995 ("Post-Effective
Amendment No. 43").
(e) Sub-Custodian Agreement between
Registrant, The Bank of New York, and
Security Pacific National Bank.
(f) Sub-Custodian Agreement between The Bank
of New York and Citibank, N.A. dated
May 18, 1988.
(g) Form of Sub-Custody Agreement
between The Bank of New York and
Bank of America National Trust and
Savings Association is incorporated
by reference to Exhibit (8)(i) to
Post-Effective Amendment No.
37.
(9) (a) Basic Administrative Services Agreement
between Registrant and Concord Holding
Corporation (Money Market Funds) dated
as of November 13, 1989.
(b) Amendment No. 1 to Basic Administrative
Services Agreement between Registrant
and Concord Holding Corporation (Money
Market Funds) dated November 1, 1991.
(c) Amendment No. 2 to Basic Administrative
Services Agreement dated as of March 1,
1993 between Registrant and Concord
Holding Corporation (Money Market
Funds).
(d) Amendment No. 3 to Basic Administrative
Services Agreement dated as of March
1, 1993 between Registrant and
Concord Holding Corporation.
(e) Amendment No. 4 to Basic Administrative
Services Agreement dated November 1,
1993 between Registrant and Concord
Holding Corporation.
C-5
<PAGE> 91
(f) Agreement relating to the Basic
Administrative Services Agreement
between Registrant and Concord Holding
Corporation.
(g) Special Management Services Agreement
among Registrant, Concord Holding
Corporation and Bank of America National
Trust and Savings Association (Money
Market Funds) dated as of April 22,
1992.
(h) Amendment No. 1 to Special Management
Services Agreement dated as of March 1,
1993 between Registrant, Concord Holding
Corporation and Bank of America National
Trust and Savings Association (Money
Market Funds).
(i) Amendment No. 2 to Special Management
Services Agreement dated as of March 1,
1993 among Registrant, Concord Holding
Corporation and Bank of America National
Trust and Savings Association (Money
Market Funds).
(j) Amendment No. 3 to Special Management
Services Agreement dated as of April 1,
1993 among Registrant, Concord Holding
Corporation and Bank of America National
Trust and Savings Association (Money
Market Funds).
(k) Amendment No. 4 to Special Management
Services Agreement among Registrant,
Concord Holding Corporation and Bank of
America National Trust and Savings
Association (Money Market Funds).
(l) Agreement relating to the Special
Management Services Agreement among
Registrant, Concord Holding Corporation
and Bank of America National Trust and
Savings Association (Money Market
Funds).
(m) Administration Agreement between
Registrant and Concord Holding
Corporation (Non-Money Market Funds)
dated as of November 13, 1989.
C-6
<PAGE> 92
(n) Amendment No. 1 to Administration
Agreement between Registrant and Concord
Holding Corporation (Aggressive Growth
Fund, U.S. Government Securities Fund,
Capital Income Fund and California Tax-
Exempt Bond Fund) dated as of
November 1, 1991.
(o) Amendment No. 2 to Administration
Agreement between Registrant and Concord
Holding Corporation (non-Money Market
Funds).
(p) Amendment No. 3 to the Administration
Agreement between Registrant and Concord
Holding Corporation (non-Money Market
Funds).
(q) Amendment No. 4 to the Administration
Agreement between Registrant and Concord
Holding Corporation (non-Money Market
Funds).
(r) Agreement relating to the Administration
Agreement between Registrant and Concord
Holding Corporation (non-Money Market
Funds).
(s) Cash Management and Related Services
Agreement between Registrant and The
Bank of New York (Horizon Shares and
Horizon Service Shares) dated as of
May 1, 1990.
(t) Amendment to Cash Management and Related
Services Agreement between Registrant
and The Bank of New York dated as of
June 21, 1993.
(u) Accounting Services Agreement between
the Registrant and Provident Financial
Processing Corp.
(10)(1) Opinion of counsel that shares are validly
issued, fully paid and non-assessable.
- --------
(1) Filed with the SEC on April 28, 1995 under Rule 24f-2 as part of
Registrant's 24f-2 Notice.
C-7
<PAGE> 93
(11) (a) Consent of Drinker Biddle &
Reath.
(b) Consent of Price Waterhouse, LLP.
(12) None
(13) (a) Purchase Agreement between Registrant
and The Dreyfus Corporation.
(b) Purchase Agreement between Registrant
and Hambrecht & Quist Group, Inc. dated
March 31, 1988.
(c) Investment Letter of Concord Financial
Group, Inc. to The Horizon Funds.
(d) Purchase Agreement between Pacific
Horizon Tax-Exempt Money Market
Portfolio, Inc. and Hambrecht & Quist
Group, Inc..
(e) Purchase Agreement between Pacific
Horizon Tax-Exempt Money Market
Portfolio, Inc. and Pacific Horizon Tax-
Exempt Funds, Inc.
(f) Purchase Agreement between Pacific
Horizon Tax-Exempt Money Market
Portfolio, Inc. and The Dreyfus
Corporation.
(g) Purchase Agreement between Pacific
Horizon California Tax-Exempt Bond
Portfolio, Inc. and Hambrecht & Quist
Group, Inc.
(h) Purchase Agreement between Pacific
Horizon California Tax-Exempt Bond
Portfolio, Inc. and The Dreyfus
Corporation.
(i) Purchase Agreement between Pacific
Horizon California Tax-Exempt Bond
Portfolio, Inc. and Pacific Horizon Tax-
Exempt Funds, Inc.
(j) Investment Letter of Concord Financial
Group, Inc. to The Horizon Capital
Funds.
C-8
<PAGE> 94
(14) (a) Individual Retirement Account and
accompanying Custodial Agreement,
Disclosure Statement, IRA Application
and IRA Transfer/Rollover Request Form.
(b) Appointment of Successor Custodian for
Individual Retirement Account dated as
of August 3, 1990.
(15) (a) Shareholder Service Plan for Non-Money
Market Funds.
(b) Shareholder Services Plan for Horizon
Service Shares as modified by
Registrant's Board of Directors on
January 29, 1993.
(c) Revised Shareholder Servicing Agreement.
(d) Revised Shareholder Service Agreement as
modified by Registrant's Board of
Directors on January 29, 1993.
(e) Revised Shareholder Servicing Agreement
for Non-Money Market Funds.
(f) Distribution and Services Plan and
related Distribution and Administrative
Servicing Agreement.
(g) Administrative Services Plan and Form of
Administrative Services Agreement.
(16) (a) Schedule for Computation of Performance
Quotations with respect to the Prime
Fund, Treasury Fund, Tax-Exempt Money
Fund, Tax-Exempt Money Market Fund,
California Tax-Exempt Money Market Fund,
Aggressive Growth Fund, California Tax-
Exempt Bond Fund, U.S. Government
Securities Fund (formerly known as the
GNMA Extra Fund) and Capital Income Fund
(formerly known as the Convertible
Securities Fund).
(b) Schedule for Computation of Performance
Quotations with respect to the
Government Fund, Treasury Only Fund and
Prime Value Fund.
C-9
<PAGE> 95
(c) Schedule for Computation of Performance
Quotations with respect to the
Corporate Bond Fund, Flexible Bond
Fund, Blue Chip Fund, Asset
Allocation Fund and National
Municipal Bond Fund.
(17) Financial Data Schedules.
(18) Amended and Restated Plan Pursuant to
Rule 18f-3 for Operation of a Multi-
Class System.
24(a) The audited financial statements,
related notes thereto and the Auditor's
reports included in the Annual Report dated
February 28, 1995 for the Pacific Horizon
Shares of the Prime Fund, Treasury Fund,
Government Fund, Treasury Only Fund,
Tax-Exempt Money Fund, California
Tax-Exempt Money Market Fund and Money
Market Fund.
24(b) The unaudited financial statements and
related notes thereto included in the
Semi-Annual Report dated August 31, 1995 for
the Pacific Horizon Shares of the Prime Fund,
Treasury Fund, Government Fund and Treasury
Only Fund.
Item 25. Persons Controlled by or under
Common Control with Registrant
Registrant is controlled by its Board of Directors.
C-10
<PAGE> 96
Item 26. Number of Holders of Securities
<TABLE>
<CAPTION>
Number of Record
Holders as of
Title of Class February 2, 1996
-------------- ----------------
<S> <C>
Class A Common Stock 1207
Class A Common Stock - 575
Special Series 1
Class A Common Stock - 0
Special Series 2
Class B Common Stock 12,573
Class B Common Stock - 1,049
Special Series 1
Class B Common Stock - 0
Special Series 2
Class D Common Stock 14,758
Class E Common Stock 4,657
Class F Common Stock 16,282
Class G Common Stock 4,541
Class H Common Stock
Class I Common Stock 161
Class I Common Stock - 55
Special Series 1
Class I Common Stock - 0
Special Series 2
Class J Common Stock 597
Class J Common Stock - 186
Special Series 1
Class K Common Stock 750
Class K Common Stock - 125
Special Series 1
Class K Common Stock - 0
Special Series 2
Class L Common Stock 135
Class L Common Stock - 191
Special Series 1
Class L Common Stock - 0
Special Series 2
Class M Common Stock 539
Class N Common Stock 5,278
Class O Common Stock 1,677
Class Q Common Stock 340
Class R Common Stock 0
Class S Common Stock 0
Class T Common Stock 0
Class U Common Stock 0
Class V Common Stock 0
Class W Common Stock 2,549
</TABLE>
Item 27. Indemnification
Article VII, Section 3, of Registrant's Restated Articles of
Incorporation, filed herein as Exhibit (1)(a) hereto, and Article VI, Section 2,
of Registrant's By-Laws, filed herein as Exhibit (2)(a) hereto, provide for the
C-11
<PAGE> 97
indemnification of Registrant's directors and officers. Indemnification of the
Fund's principal underwriter, custodians, sub-custodians, transfer agent and
sub-transfer agent is provided for, respectively, in Article V of the
Distribution Agreement, filed herein as Exhibit (6)(a), Article XV (and in
Article V of the amended and restated Distribution Agreement incorporated herein
by reference as Exhibit (6)(e)), Section 15 of the Custody Agreement filed
herein as Exhibit (8)(a) hereto, Article III, Section 4 of the Sub-Custodian
Agreement, filed herein as Exhibit (8)(f) hereto, and Section 8 of the form of
Sub-Custody Agreement incorporated herein by reference as Exhibit (8)(g),
Article VIII, Section 7, of the form of Transfer Agency Agreement filed herein
as Exhibit (8)(d), and Article VI, Section 3, of the Cash Management and Related
Services Agreement filed herein as Exhibit (9)(s) hereto. Registrant has
obtained from a major insurance carrier a directors and officers' liability
policy covering certain types of errors and omissions. In no event will
Registrant indemnify any of its directors, officers, employees or agents against
any liability to which such person would otherwise be subject by reason of his
willful misfeasance, bad faith or gross negligence in the performance of his
duties or by reason of his reckless disregard of the duties involved in the
conduct of his office or under his agreement with Registrant. Registrant will
comply with Rule 484 under the Securities Act of 1933 and Release 11330 under
the Investment Company Act of 1940 in connection with any indemnification.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a director, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 28. Business and Other Connections of Investment
Adviser
Bank of America National Trust and Savings Association ("Bank of
America") performs investment advisory services for Registrant. Bank of America
and its predecessors have been in
C-12
<PAGE> 98
the business of managing the investments of fiduciary and other accounts since
1904. In addition to its trust business, Bank of America provides commercial and
consumer banking services.
To the knowledge of Registrant, none of the directors or officers of
Bank of America, except those set forth below, is or has been, at any time
during the past two calendar years, engaged in any other business, profession,
vocation or employment of a substantial nature, except that certain directors
and officers of Bank of America also hold various positions with, and engage in
business for, BankAmerica Corporation, which owns all the outstanding stock of
Bank of America, or other subsidiaries of BankAmerica Corporation. Set forth
below are the names and principal businesses of the directors of Bank of America
and the directors and certain of the senior executive officers of Bank of
America who are engaged in any other business, profession, vocation or
employment of a substantial nature, other than with BankAmerica Corporation.
<TABLE>
<S> <C> <C> <C>
Director................... Joseph F. Alibrandi Chairman of the Manufacturer of
Board, Whittaker Aerospace and
Corporation Biotechnology
Products
Director................... Jill Elikann Barad President and Chief Toy manufacturer
Operating Officer,
Mattel, Inc.
Director................... Peter B. Bedford Chairman and CEO, California based
Bedford Property Real Estate Dev-
Investors, Inc. elopment and In-
vestment Firm
Director................... Andrew F. Brimmer President, Consulting
Brimmer & Co., Inc.
Director................... Richard A. Retired Chairman of Utility
Company Clarke the Board, Pacific
Gas and Electric
Company
President and
Director.................. David A. Coulter Chief Executive Banking
Officer and
President, Bank
America Corporation
and Bank of
America National
Trust & Savings
Association
</TABLE>
C-13
<PAGE> 99
<TABLE>
<CAPTION>
Position with
Bank of America
and Savings Principal Type of
Association Name Occupation Business
- ----------- ---- ---------- --------
<S> <C> <C> <C>
Director ............... Timm F. Crull Retired Chairman of Food and Related
the Board, Products
Nestle USA, Inc.
Director ............... Kathleen Feldstein President, Economic
Economics Consulting
Studies, Inc.
Director ............... Donald E. Guinn Chairman Emeritus, Telecommuni-
Pacific Telesis cations and
Group Diversified
Holding Com-
pany
Director ............... Philip M. Hawley Retired Chairman Retail
and Chief Executive Department
Officer, The Stores
Broadway
Stores, Inc.
Director ............... Frank L. Hope, Jr. Consulting Architectural
Architect and Engineering
Consulting
Director ............... Ignacio E. Lozano, Chairman, Newspaper
Jr. "La Opinion" Publishing
Director ............... Walter E. Massey, President, Higher
Ph.D. Morehouse Education
College
Director ............... John M. Richman Counsel, Wachtell, Law firm
Lipton, Rosen &
Katz
Chief Executive
Officer and
Director .............. Richard M. Chairman of the Banking
Rosenberg Board, Bank
America
Corporation and
Bank of America
National Trust &
Savings
Association
Director ............... A. Michael Spence Dean of the Higher
Graduate School of Education
Business, Stanford
University
</TABLE>
C-14
<PAGE> 100
Item 29. Principal Underwriters
(a) Principal underwriter (exclusive distributor) also acts as
principal underwriter or exclusive distributor for The Infinity Funds, Inc., The
Pilot Funds, Seafirst Retirement Funds, Time Horizon Funds and The Victory
Funds.
(b) For information as to the business, profession, vocation or
employment of a substantial nature of each of the principal underwriter, its
officers and directors, reference is made to their Form BD File No. 8-37601
filed by the principal underwriter. For information, as to the positions or
offices of each of the principal underwriter, its officers and directors,
reference is made to the section entitled "Management" in the Statements of
Additional Information. Both the principal underwriter's Form BD and the
Registrants Statements of Additional Information are incorporated by reference
herein.
(c) Not Applicable.
Item 30. Location of Accounts and Records
(1) Concord Holding Corporation, 125 West 55th Street,
New York, New York 10019 (records relating to the
administrator).
(2) Concord Financial Group, Inc., 125 West 55th
Street, New York, New York 10019 (records relating to
the distributor).
(3) Concord Management (Ireland) Limited, ITI House, 23
Earlsfort Terrace, Dublin 2, Ireland (records
relating to the administrator for the Funds it
services).
(4) Bank of America National Trust and Savings
Association, 555 California Street, San Francisco,
California 94104 (records relating to the investment
adviser).
(5) Bank of America National Trust and Savings
Association, 555 California Street, San Francisco,
California 94104 (records relating to the Sub-
Custodian for the Funds it services).
(6) The Bank of New York, 90 Washington Street, New York,
New York 10286) (records relating to the custodian
for the Funds it services).
C-15
<PAGE> 101
(7) BISYS Fund Services Ohio, Inc., 3435 Stelzer Road,
Columbus, Ohio 43219 (records relating to the
transfer agent for the Funds it services).
(8) Drinker Biddle & Reath, Philadelphia National Bank
Building, 1345 Chestnut Street, Philadelphia,
Pennsylvania 19107-3496 (Registrant's Charter, By-
Laws and Minute Books).
(9) PNC Bank, N.A., Broad and Chestnut Streets,
Philadelphia, PA 19101, (records relating to the
custodian for the Funds it services).
(10) PFPC, Inc. 103 Bellevue Parkway, Wilmington, DE
19809, (records relating to the sub-administrator
for the Funds it services).
(11) Concord Financial Services, Inc. First and Market
Building, 100 First Avenue, Suite 300, Pittsburgh,
PA 15222 (records relating to the transfer agent
for the class of shares it services).
Item 31. Management Services
Inapplicable.
Item 32. Undertakings
Registrant hereby undertakes to comply with the provisions of Section
16(c) of the Investment Company Act of 1940, as amended, as though such
provisions were applicable to it.
Registrant hereby undertakes to furnish its Annual Report to
Shareholders upon request and without charge to any person to whom a prospectus
is delivered.
C-16
<PAGE> 102
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Philadelphia, and the Commonwealth of
Pennsylvania, on this 23rd day of February 1996.
PACIFIC HORIZON FUNDS, INC.
Registrant
*/ Cornelius John Pings
---------------------------
Cornelius John Pings
President
(Signature and Title)
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
*/ Cornelius John Pings Chairman of the February 23, 1996
- ------------------------
Cornelius John Pings Board and President
/s/ Martin R. Dean Treasurer (Chief February 23, 1996
- ------------------
Martin R. Dean Accounting and
Financial Officer)
*/ Thomas M. Collins Director February 23, 1996
- ---------------------
Thomas M. Collins
*/ Douglas B. Fletcher Director February 23, 1996
- -----------------------
Douglas B. Fletcher
*/ Robert E. Greeley Director February 23, 1996
- ---------------------
Robert E. Greeley
*/ Kermit O. Hanson Director February 23, 1996
- --------------------
Kermit O. Hanson
*/ Kenneth L. Trefftzs Director February 23, 1996
- -----------------------
Kenneth L. Trefftzs
*By: /s/ W. Bruce McConnel, III
--------------------------
W. Bruce McConnel, III
Attorney-in-fact
</TABLE>
C-17
<PAGE> 103
PACIFIC HORIZON FUNDS, INC.
Certificate of Secretary
The following resolution was duly adopted by the Board of
Directors of Pacific Horizon Funds, Inc. on January 30, 1996 and remains in
effect on the date hereof:
FURTHER RESOLVED, that the directors and officers of Pacific
Horizon who may be required to execute any amendments to Pacific
Horizon's Registration Statement be, and each hereby is,
authorized to execute a power of attorney appointing W. Bruce
McConnel, III and Cornelius J. Pings their true and lawful
attorney or attorneys, to execute in their name, place and stead,
in their capacity as director or officer, or both, of Pacific
Horizon any and all amendments to the Registration Statement, and
all instruments necessary or incidental in connection therewith,
and to file the same with the SEC; and either of said attorneys
shall have the power to act thereunder with or without the other
said attorney and shall have full power of substitution and
resubstitution; and to do in the name and on behalf of said
directors and officers, or any or all of them, in any and all
capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as each
of said directors or officers, or any or all of them, might or
could do in person, said acts of said attorneys, being hereby
ratified and approved.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of
February, 1996.
PACIFIC HORIZON FUNDS, INC.
/s/ W. Bruce McConnel, III
---------------------------
W. Bruce McConnel, III
Secretary
<PAGE> 104
PACIFIC HORIZON FUNDS, INC.
POWER OF ATTORNEY
Cornelius John Pings, whose signature appears below, does hereby
constitute and appoint W. Bruce McConnel, III, his true and lawful attorney and
agent, with power of substitution or resubstitution, to do any and all acts and
things and to execute any and all instruments which said attorney and agent may
deem necessary or advisable or which may be required to enable Pacific Horizon
Funds, Inc. (the "Fund"), to comply with the Investment Company Act of 1940, as
amended, and the Securities Act of 1933, as amended ("Acts"), and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, in connection with the filing and effectiveness of any and all
amendments (including post-effective amendments) to the Fund's Registration
Statement pursuant to said Acts, including specifically, but without limiting
the generality of the foregoing, the power and authority to sign in the name and
on behalf of the undersigned as a director and/or officer of the Fund any and
all such amendments filed with the Securities and Exchange Commission under said
Acts, and any other instruments or documents related thereto, and the
undersigned does hereby ratify and confirm all that said attorney and agent
shall do or cause to be done by virtue hereof.
/s/ Cornelius John Pings
------------------------
Cornelius John Pings
Date: December 6, 1995
<PAGE> 105
PACIFIC HORIZON FUNDS, INC.
POWER OF ATTORNEY
Thomas M. Collins, whose signature appears below, does hereby
constitute and appoint Cornelius John Pings and W. Bruce McConnel, III, and
either of them his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, or either of them, may
deem necessary or advisable or which may be required to enable Pacific Horizon
Funds, Inc. (the "Fund"), to comply with the Investment Company Act of 1940, as
amended, and the Securities Act of 1933, as amended ("Acts"), and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, in connection with the filing and effectiveness of any and all
amendments (including post-effective amendments) to the Fund's Registration
Statement pursuant to said Acts, including specifically, but without limiting
the generality of the foregoing, the power and authority to sign in the name and
on behalf of the undersigned as a director and/or officer of the Fund any and
all such amendments filed with the Securities and Exchange Commission under said
Acts, and any other instruments or documents related thereto, and the
undersigned does hereby ratify and confirm all that said attorneys and agents,
or either of them, shall do or cause to be done by virtue hereof.
/s/ Thomas M. Collins
---------------------
Thomas M. Collins
Date: December 7, 1995
<PAGE> 106
PACIFIC HORIZON FUNDS, INC.
POWER OF ATTORNEY
Douglas, B. Fletcher, whose signature appears below, does hereby
constitute and appoint Cornelius John Pings and W. Bruce McConnel, III, and
either of them his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, or either of them, may
deem necessary or advisable or which may be required to enable Pacific Horizon
Funds, Inc. (the "Fund"), to comply with the Investment Company Act of 1940, as
amended, and the Securities Act of 1933, as amended ("Acts"), and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, in connection with the filing and effectiveness of any and all
amendments (including post-effective amendments) to the Fund's Registration
Statement pursuant to said Acts, including specifically, but without limiting
the generality of the foregoing, the power and authority to sign in the name and
on behalf of the undersigned as a director and/or officer of the Fund any and
all such amendments filed with the Securities and Exchange Commission under said
Acts, and any other instruments or documents related thereto, and the
undersigned does hereby ratify and confirm all that said attorneys and agents,
or either of them, shall do or cause to be done by virtue hereof.
/s/ Douglas B. Fletcher
-----------------------
Douglas B. Fletcher
Date: December 7, 1995
<PAGE> 107
PACIFIC HORIZON FUNDS, INC.
POWER OF ATTORNEY
Robert E. Greeley, whose signature appears below, does hereby
constitute and appoint Cornelius John Pings and W. Bruce McConnel, III, and
either of them his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, or either of them, may
deem necessary or advisable or which may be required to enable Pacific Horizon
Funds, Inc. (the "Fund"), to comply with the Investment Company Act of 1940, as
amended, and the Securities Act of 1933, as amended ("Acts"), and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, in connection with the filing and effectiveness of any and all
amendments (including post-effective amendments) to the Fund's Registration
Statement pursuant to said Acts, including specifically, but without limiting
the generality of the foregoing, the power and authority to sign in the name and
on behalf of the undersigned as a director and/or officer of the Fund any and
all such amendments filed with the Securities and Exchange Commission under said
Acts, and any other instruments or documents related thereto, and the
undersigned does hereby ratify and confirm all that said attorneys and agents,
or either of them, shall do or cause to be done by virtue hereof.
/s/ Robert E. Greeley
---------------------
Robert E. Greeley
Date: December 7, 1995
<PAGE> 108
PACIFIC HORIZON FUNDS, INC.
POWER OF ATTORNEY
Kermit O. Hanson, whose signature appears below, does hereby constitute
and appoint Cornelius John Pings and W. Bruce McConnel, III, and either of them
his true and lawful attorneys and agents, with power of substitution or
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Pacific Horizon Funds,
Inc. (the "Fund"), to comply with the Investment Company Act of 1940, as
amended, and the Securities Act of 1933, as amended ("Acts"), and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, in connection with the filing and effectiveness of any and all
amendments (including post-effective amendments) to the Fund's Registration
Statement pursuant to said Acts, including specifically, but without limiting
the generality of the foregoing, the power and authority to sign in the name and
on behalf of the undersigned as a director and/or officer of the Fund any and
all such amendments filed with the Securities and Exchange Commission under said
Acts, and any other instruments or documents related thereto, and the
undersigned does hereby ratify and confirm all that said attorneys and agents,
or either of them, shall do or cause to be done by virtue hereof.
/s/ Kermit O. Hanson
--------------------
Kermit O. Hanson
Date: December 6, 1995
<PAGE> 109
PACIFIC HORIZON FUNDS, INC.
POWER OF ATTORNEY
Kenneth L. Trefftzs, whose signature appears below, does hereby
constitute and appoint Cornelius John Pings and W. Bruce McConnel, III, and
either of them his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, or either of them, may
deem necessary or advisable or which may be required to enable Pacific Horizon
Funds, Inc. (the "Fund"), to comply with the Investment Company Act of 1940, as
amended, and the Securities Act of 1933, as amended ("Acts"), and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, in connection with the filing and effectiveness of any and all
amendments (including post-effective amendments) to the Fund's Registration
Statement pursuant to said Acts, including specifically, but without limiting
the generality of the foregoing, the power and authority to sign in the name and
on behalf of the undersigned as a director and/or officer of the Fund any and
all such amendments filed with the Securities and Exchange Commission under said
Acts, and any other instruments or documents related thereto, and the
undersigned does hereby ratify and confirm all that said attorneys and agents,
or either of them, shall do or cause to be done by virtue hereof.
/s/ Kenneth L. Trefftzs
-----------------------
Kenneth L. Trefftzs
Date: December 6, 1995
<PAGE> 110
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(1) (a) Restated Articles of Incorporation filed
November 22, 1983.
(b) Articles Supplementary filed January 9, 1986.
(c) Articles Supplementary to increase authorized
capital stock filed August 31, 1989.
(d) Articles Supplementary classifying shares filed
August 31, 1989.
(e) Articles Supplementary classifying shares filed
June 3, 1991.
(f) Articles Supplementary classifying and
reclassifying shares filed August 1, 1991.
(g) Articles Supplementary to increase authorized
capital stock filed August 16, 1991.
(h) Articles Supplementary classifying shares filed
August 16, 1991.
(i) Articles Supplementary classifying
shares filed November 25, 1991.
(j) Articles Supplementary classifying shares filed
May 11, 1992.
(k) Articles Supplementary reclassifying shares filed
May 15, 1992.
(l) Articles Supplementary classifying shares filed
July 20, 1992.
(m) Articles Supplementary to increase authorized
capital stock filed August 6, 1992.
(n) Articles Supplementary classifying shares filed
August 6, 1992.
(o) Articles Supplementary classifying shares filed
March 3, 1993.
(p) Articles Supplementary reclassifying shares filed
May 12, 1993.
<PAGE> 111
(q) Articles of Amendment eliminating restriction on
number of classes of shares filed May 8, 1990.
(r) Articles of Amendment reclassifying shares filed
on July 9, 1993.
(s) Articles Supplementary classifying shares filed
November 18, 1993.
(t) Articles Supplementary reclassifying shares filed
November 18, 1993.
(u) Articles Supplementary reclassifying shares filed
January 21, 1994.
(v) Articles of Amendment cancelling shares filed on
January 26, 1996.
(w) Articles Supplementary classifying shares filed on
January 26, 1996.
(x) Articles Supplementary reclassifying shares filed
on January 26, 1996.
(2) (a) Amended By-Laws dated January 15, 1987.
(b) Amendment to By-Laws dated July 17, 1987.
(c) Amendment to By-Laws as approved by the
Registrant's Board of Directors on March 30, 1989.
(d) Amendment to By-Laws as approved by the
Registrant's Board of Directors on January 29,
1990.
(5) (a) Investment Advisory Agreement dated as of April
22, 1992.
(b) Investment Advisory Agreement dated as of April
22, 1992.
(c) Addendum to Investment Advisory Agreement dated as
of March 1, 1993.
(d) Addendum to Investment Advisory Agreement dated as
of March 1, 1993.
(e) Investment Advisory Agreement dated November 1,
1994.
(6) (a) Distribution Agreement between the Registrant and
Concord Financial Group, Inc.
<PAGE> 112
(b) Agreement relating to the Distribution Agreement
between Registrant and Concord Financial Group,
Inc.
(c) Form of Broker/Dealer Agreement.
(d) Form of Bank Agreement.
(7) Board Guidelines on Significant Governance Issues
(which includes a description of the Board of
Director's retirement policy and benefit).
(8) (a) Custody Agreement between Registrant and The Bank
of New York dated as of April 3, 1989
(b) Amendment No. 1 to Custody Agreement between
Registrant and The Bank of New York.
(c) Custodian Services Agreement between Registrant
and PNC Bank, N.A.
(e) Sub-Custodian Agreement between Registrant, The
Bank of New York, and Security Pacific National
Bank.
(f) Sub-Custodian Agreement between The Bank of New
York and Citibank, N.A. dated May 18, 1988.
(9) (a) Basic Administrative Services Agreement between
Registrant and Concord Holding Corporation (Money
Market Funds) dated as of November 13, 1989.
(b) Amendment No. 1 to Basic Administrative Services
Agreement between Registrant and Concord Holding
Corporation (Money Market Funds) dated November 1,
1991.
(c) Amendment No. 2 to Basic Administrative Services
Agreement dated as of March 1, 1993 between
Registrant and Concord Holding Corporation (Money
Market Funds).
(d) Amendment No. 3 to Basic Administrative Services
Agreement dated as of March 1, 1993 between
Registrant and Concord Holding Corporation.
(e) Amendment No. 4 to Basic Administrative Services
Agreement dated November 1, 1993 between
Registrant and Concord Holding Corporation.
- 3 -
<PAGE> 113
(f) Agreement relating to the Basic Administrative
Services Agreement between Registrant and Concord
Holding Corporation.
(g) Special Management Services Agreement among
Registrant, Concord Holding Corporation and Bank of
America National Trust and Savings Association (Money
Market Funds) dated as of April 22, 1992.
(h) Amendment No. 1 to Special Management Services
Agreement dated as of March 1, 1993 between
Registrant, Concord Holding Corporation and Bank
of America National Trust and Savings Association
(Money Market Funds).
(i) Amendment No. 2 to Special Management Services
Agreement dated as of March 1, 1993 among
Registrant, Concord Holding Corporation and Bank
of America National Trust and Savings Association
(Money Market Funds).
(j) Amendment No. 3 to Special Management Services
Agreement dated as of April 1, 1993 among
Registrant, Concord Holding Corporation and Bank
of America National Trust and Savings Association
(Money Market Funds).
(k) Amendment No. 4 to Special Management Services
Agreement among Registrant, Concord Holding
Corporation and Bank of America National Trust and
Savings Association (Money Market Funds).
(l) Agreement relating to the Special Management
Services Agreement among Registrant, Concord
Holding Corporation and Bank of America National
Trust and Savings Association (Money Market
Funds).
(m) Administration Agreement between Registrant and
Concord Holding Corporation (Non-Money Market
Funds) dated as of November 13, 1989.
(n) Amendment No. 1 to Administration Agreement
between Registrant and Concord Holding Corporation
(Aggressive Growth Fund, U.S. Government
Securities Fund, Capital Income Fund and
California Tax-Exempt Bond Fund) dated as of
November 1, 1991.
(o) Amendment No. 2 to Administration Agreement
between Registrant and Concord Holding Corporation
(non-Money Market Funds).
- 4 -
<PAGE> 114
(p) Amendment No. 3 to the Administration Agreement
between Registrant and Concord Holding Corporation
(non-Money Market Funds).
(q) Amendment No. 4 to the Administration Agreement
between Registrant and Concord Holding Corporation
(non-Money Market Funds).
(r) Agreement relating to the Administration Agreement
between Registrant and Concord Holding Corporation
(non-Money Market Funds).
(s) Cash Management and Related Services Agreement
between Registrant and The Bank of New York
(Horizon Shares and Horizon Service Shares) dated
as of May 1, 1990.
(t) Amendment to Cash Management and Related Services
Agreement between Registrant and The Bank of New York
dated as of June 21, 1993.
(u) Accounting Services Agreement between the
Registrant and Provident Financial Processing
Corp.
(11) (a) Consent of Drinker Biddle & Reath.
(b) Consent of Price Waterhouse, LLP.
(13) (a) Purchase Agreement between Registrant and The
Dreyfus Corporation.
(b) Purchase Agreement between Registrant and
Hambrecht & Quist Group, Inc. dated March 31,
1988.
(c) Investment Letter of Concord Financial Group, Inc.
to The Horizon Funds.
(d) Purchase Agreement between Pacific Horizon Tax-
Exempt Money Market Portfolio, Inc. and Hambrecht
& Quist Group, Inc.
(e) Purchase Agreement between Pacific Horizon Tax-
Exempt Money Market Portfolio, Inc. and Pacific
Horizon Tax-Exempt Funds, Inc.
(f) Purchase Agreement between Pacific Horizon Tax-
Exempt Money Market Portfolio, Inc. and The
Dreyfus Corporation.
- 5 -
<PAGE> 115
(g) Purchase Agreement between Pacific Horizon
California Tax-Exempt Bond Portfolio, Inc. and
Hambrecht & Quist Group, Inc.
(h) Purchase Agreement between Pacific Horizon
California Tax-Exempt Bond Portfolio, Inc. and The
Dreyfus Corporation.
(i) Purchase Agreement between Pacific Horizon
California Tax-Exempt Bond Portfolio, Inc. and
Pacific Horizon Tax-Exempt Funds, Inc.
(j) Investment Letter of Concord Financial Group, Inc.
to The Horizon Capital Funds.
(14) (a) Individual Retirement Account and accompanying
Custodial Agreement, Disclosure Statement, IRA
Application and IRA Transfer/Rollover Request
Form.
(b) Appointment of Successor Custodian for Individual
Retirement Account dated as of August 3, 1990.
(15) (a) Shareholder Service Plan for Non-Money Market
Funds.
(b) Shareholder Services Plan for Horizon Service
Shares as modified by Registrant's Board of Directors
on January 29, 1993.
(c) Revised Shareholder Servicing Agreement.
(d) Revised Shareholder Service Agreement as modified
by Registrant's Board of Directors on January 29,
1993.
(e) Revised Shareholder Servicing Agreement for Non-
Money Market Funds.
(f) Distribution and Services Plan and related
Distribution and Administrative Servicing
Agreement.
(g) Administrative Services Plan and Form of
Administrative Services Agreement.
(16) (a) Schedule for Computation of Performance Quotations
with respect to the Prime Fund, Treasury Fund,
Tax-Exempt Money Fund, Tax-Exempt Money Market
Fund, California Tax-Exempt Money Market Fund,
Aggressive Growth Fund, California Tax-Exempt Bond
Fund, U.S. Government Securities Fund (formerly
- 6 -
<PAGE> 116
known as the GNMA Extra Fund) and Capital Income Fund
(formerly known as the Convertible Securities Fund).
(b) Schedule for Computation of Performance Quotations
with respect to the Government Fund, Treasury Only
Fund and Prime Value Fund.
(c) Schedule for Computation of Performance Quotations
with respect to the Corporate Bond Fund, Flexible
Bond Fund, Blue Chip Fund, Asset Allocation Fund and
National Municipal Bond Fund.
(17) Financial Data Schedules
(18) Amended and Restated Plan Pursuant to Rule 18f-3
for Operation of a Multi-Class System.
(24) (a) The audited financial statements, related notes thereto
and the Auditor's reports included in the Annual Report
dated February 28, 1995 for the Pacific Horizon Shares of
the Prime Fund, Treasury Fund, Government Fund, Treasury
Only Fund, Tax-Exempt Money Fund, California
Tax-Exempt Money Market Fund and Money Market Fund.
(b) The unaudited financial statements and related notes
thereto included in the Semi-Annual Report dated August
31, 1995 for the Pacific Horizon Shares of the Prime
Fund, Treasury Fund, Government Fund and Treasury Only
Fund.
- 7 -
<PAGE> 1
EXHIBIT 1(A)
ARTICLES OF RESTATEMENT
OF
PACIFIC HORIZON FUNDS, INC.
Pacific Horizon Funds, Inc., a Maryland corporation, having its
principal office in the City of Baltimore, Maryland, (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Corporation desires to restate its Charter.
SECOND: The Articles of Incorporation of the Corporation are
hereby restated in their entirety as follows:
ARTICLES OF INCORPORATION
OF
PACIFIC HORIZON FUNDS, INC.
* * * *
ARTICLE I
THE UNDERSIGNED, W. Bruce McConnel, III, whose post office
address is 1100 Philadelphia National Bank Building, Philadelphia, Pennsylvania
19107, being at least eighteen years of age, does hereby act as an incorporator,
under and by virtue of the General Laws of the State of Maryland authorizing the
formation of corporations and with the intention of forming a corporation.
ARTICLE II
The name of the Corporation is:
PACIFIC HORIZON FUNDS, INC.
ARTICLE III
The purpose for which the Corporation is formed is to act as a
management investment company under the Investment Company Act of 1940.
<PAGE> 2
ARTICLE IV
The Corporation is expressly empowered as follows:
(1) To hold, invest and reinvest its assets in securities and
other investments or to hold part or all of its assets in cash.
(2) To issue and sell shares of its capital stock in such
amounts and on such terms and conditions and for such purposes and for such
amount or kind of consideration as may now or hereafter be permitted by law.
(3) To redeem, purchase or otherwise acquire, hold, dispose of,
resell, transfer, reissue or cancel (all without the vote or consent of the
stockholders of the Corporation) shares of its capital stock, in any manner and
to the extent now or hereafter permitted by law and by the Charter of the
Corporation.
(4) To enter into a written contract or contracts with any
person or persons providing for a delegation of the management of all or part of
the Corporation's securities portfolio(s) and also for the delegation of the
performance of various administrative or corporate functions, subject to the
direction of the Board of Directors. Any such contract or contracts may be made
with any person even though such person may be an officer, other employee,
director or stockholder of this Corporation or a corporation, partnership, trust
or association in which any such officer, other employee, director or
stockholder may be interested.
(5) To enter into a written contract or contracts appointing
one or more distributors or agents or both for the sale of the shares of the
Corporation on such terms and conditions as the Board of Directors of this
Corporation may deem reasonable and proper, and to allow such person or persons
a commission on the sale of such shares. Any such contract or contracts may be
made with any person even though such person may be an officer, other employee,
director or stockholder of this Corporation or a corporation, partnership, trust
or association in which any such officer, other employee, director or
stockholder may be interested.
(6) To enter into a written contract or contracts employing
such custodian or custodians for the safekeeping of the property of the
Corporation and of its shares, such dividend disbursing agent or agents, and
such transfer agent or agents and registrar or registrars for its shares, on
such terms and conditions as the Board of Directors of the Corporation may deem
reasonable and proper for the conduct of the affairs of the Corporation, and to
pay the fees and disbursements of such custodians, dividend disbursing agents,
transfer agents, and
-2-
<PAGE> 3
registrars out of the income and/or any other property of the Corporation.
Notwithstanding any other provision of these Articles of Incorporation or the
By-Laws of the Corporation, the Board of Directors may cause any or all of the
property of the Corporation to be transferred to, or to be acquired and held in
the name of, any custodian so appointed or any nominee or nominees of the
Corporation or nominee or nominees of such custodian satisfactory to the Board
of Directors.
(7) To employ the same person in any multiple capacity under
Sections (4), (5) and (6) of this Article IV who may receive compensation from
the Corporation in as many capacities in which such person shall serve the
Corporation.
(8) To do any and all such further acts or things and to
exercise any and all such further powers or rights as may be necessary,
incidental, relative, conducive, appropriate or desirable for the
accomplishment, carrying out or attainment of the purposes stated in Article III
hereof.
The Corporation shall be authorized to exercise and enjoy all
of the powers, rights and privileges granted to, or conferred upon, corporations
by the General Laws of the State of Maryland now or hereafter in force, and the
enumeration of the foregoing shall not be deemed to exclude any powers, rights
or privileges so granted or conferred.
ARTICLE V
The post office address of the principal office of the
Corporation in the State of Maryland is c/o The Corporation Trust Incorporated,
32 South Street, Baltimore, Maryland 21202. The name of the resident agent of
the Corporation in this State is The Corporation Trust Incorporated, a
corporation of this State, and the post office address of the resident agent is
32 South Street, Baltimore, Maryland 21202.
ARTICLE VI
(1) The total number of shares of capital stock which the
Corporation shall have authority to issue is Ten Billion (10,000,000,000)
shares, of the par value of One Mill ($0.001) per share and of the aggregate par
value of Ten Million Dollars ($10,000,000).
(2) Any fractional share shall carry proportionately all the
rights of a whole share, excepting any right to receive a certificate evidencing
such fractional share, but including, without limitation, the right to vote and
the right to receive dividends.
-3-
<PAGE> 4
(3) All persons who shall acquire stock in the Corporation
shall acquire the same subject to the provisions of the Charter and the By-laws
of the Corporation.
(4) Except to the extent otherwise provided by applicable law,
the Board of Directors shall have authority by resolution to classify and
reclassify any authorized but unissued shares of capital stock from time to time
by setting or changing in any one or more respects the preferences, conversion
or other rights, voting powers, restrictions, limitations as to dividends,
qualifications or terms or conditions of redemption of the capital stock. The
power of the Board of Directors to classify or reclassify any of the shares of
capital stock shall include, without limitation, authority to classify or
reclassify any such stock into a class or not more than ten (10) classes of
capital stock and to divide and classify shares of any class into one or more
series of such class.
Subject to the Board of Directors' authority to classify and
reclassify any authorized but unissued shares as hereinabove provided,
One Billion (1,000,000,000) shares of capital stock of the
Corporation (of the aggregate par value of One Million Dollars ($1,000,000)) are
classified and designated as Class A Common Stock,
One Billion (1,000,000,000) shares of capital stock of the
Corporation (of the aggregate par value of One Million Dollars ($1,000,000)) are
classified and designated as Class B Common Stock,
One Billion (1,000,000,000) shares of capital stock of the
Corporation (of the aggregate par value of One Million Dollars ($1,000,000)) are
classified and designated as Class C Common Stock, and
One Billion (1,000,000,000) shares of capital stock of the
Corporation (of the aggregate par value of One Million Dollars ($1,000,000)) are
classified and designated as Class D Common Stock.
(5) Subject to the power of the Board of Directors to classify
and reclassify any authorized but unissued shares of capital stock pursuant to
Section 4 of this Article VI, shares of capital stock of the Corporation shall
have the following preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption:
(A) Assets Belonging to a Class. All consideration received by
the Corporation for the issue or sale of stock
-4-
<PAGE> 5
of any class of capital stock, together with all income, earnings,
profits and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation thereof, any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be,
and any general assets of the Corporation not belonging to any
particular class which the Board of Directors may, in its sole
discretion, allocate to a class, shall irrevocably belong to the class
of shares of capital stock with respect to which such assets, payments
or funds were received or allocated for all purposes, subject only to
the rights of creditors, and shall be so handled upon the books of
account of the Corporation. Such assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale, exchange
or liquidation thereof, and any assets derived from any reinvestment of
such proceeds in whatever form, are herein referred to as "assets
belonging to" such class.
(B) Liabilities Belonging to a Class. The assets belonging to
any class of capital stock shall be charged with the liabilities in
respect to such class, and shall also be charged with such class's share
of the general liabilities of the Corporation, in proportion to the
asset value of the respective classes of capital stock determined as
hereinafter provided. The liabilities so allocated to a class are herein
referred to as "liabilities belonging to" such class.
(C) Dividends and Distributions. Shares of each class of
capital stock shall be entitled to such dividends and distributions, in
stock or in cash or both, as may be declared from time to time by the
Board of Directors, acting in its sole discretion, with respect to such
class; provided, however, that dividends and distributions on shares of
a class of capital stock shall be paid only out of the lawfully
available "assets belonging to such class" as such phrase is defined in
Section 5(A) of this Article VI.
(D) Liquidating Dividends and Distributions. In the event of
the liquidation or dissolution of the Corporation, stockholders of each
class of capital stock shall be entitled to receive, as a class, out of
the assets of the Corporation available for distribution to
stockholders, but other than general assets not belonging to any
particular class of stock, the assets belonging to such class; and the
assets so distributable to the stockholders of any class of capital
stock shall be distributed among such stockholders in proportion to the
number of shares of such class held by them and recorded on the books of
the Corporation. In the event that there are any general assets not
belonging to any particular class of stock and available for
distribution,
-5-
<PAGE> 6
such distribution shall be made to the holders of stock of all classes
of capital stock in proportion to the asset value of the respective
classes of capital stock determined as hereinafter provided.
(E) Voting. Each stockholder of each class of capital stock
shall be entitled to one vote for each share of capital stock,
irrespective of the class, then standing in his name on the books of the
Corporation, and on any matter submitted to a vote of stockholders, all
shares of capital stock then issued and outstanding and entitled to vote
shall be voted in the aggregate and not by class except that: (i) when
expressly required by law, shares of capital stock shall be voted by
individual class and (ii) only shares of capital stock of the respective
class or classes affected by a matter shall be entitled to vote on such
matter. At any meeting of shareholders at which an election of directors
is to take place, if a shareholder of record gives notice, prior to the
voting of such election, of such shareholder's intention to cumulate
such shareholder's votes, and if the Board of Directors of the
Corporation has determined that cumulative voting is or may be required
by applicable law, which determination shall be conclusive, each
shareholder may cumulate votes for candidates in nomination, by giving
one candidate a number of votes equal to the number of directors to be
elected, multiplied by the number of votes to which the shareholder's
shares are entitled hereunder or by distributing such shareholder's
votes on the same principle among as many candidates as such shareholder
thinks fit.
(F) Redemption. To the extent the Corporation has funds or
other property legally available therefor, each holder of shares of
capital stock of the Corporation shall be entitled to require the
Corporation to redeem all or any part of the shares of capital stock of
the Corporation standing in the name of such holder on the books of the
Corporation, and all shares of capital stock issued by the Corporation
shall be subject to redemption by the Corporation, in the manner and at
the redemption price of such shares as in effect from time to time as
may be determined by the By-Laws or the Board of Directors of the
Corporation in accordance with the provisions hereof, subject to the
right of the Board of Directors of the Corporation to suspend the right
of redemption of shares of capital stock of the Corporation or postpone
the date of payment of such redemption price in accordance with
provisions of applicable law. Without limiting the generality of the
foregoing, the Corporation shall, to the extent permitted by applicable
law, have the right at any time to redeem the shares owned by any holder
of capital stock of the Corporation (i) if such redemption is, in the
-6-
<PAGE> 7
opinion of the Board of Directors of the Corporation, desirable in
order to prevent the Corporation from being deemed a "personal holding
company" within the meaning of the Internal Revenue Code of 1954, as
amended, (ii) if the value of such shares in the account maintained by
the Corporation or its transfer agent for any class of capital stock is
less than $500.00 (Five Hundred Dollars); provided, however, that each
stockholder shall be notified that the value of his account is less
than $500.00 and allowed sixty (60) days to make additional purchases
of shares before such redemption is processed by the Corporation, or
(iii) if the net income with respect to any particular class of capital
stock should be negative or it should otherwise be appropriate to carry
out the Corporation's responsibilities under the Investment Company Act
of 1940, as amended, in each case subject to such further terms and
conditions as the Board of Directors of the Corporation may from time
to time adopt. The redemption price of shares of any class of capital
stock of the Corporation shall, except as otherwise provided in this
Section 5(F), be the net asset value thereof as determined by the Board
of Directors of the Corporation from time to time in accordance with
the provisions of applicable law, less such redemption fee or other
charge, if any, as may be fixed by resolution of the Board of Directors
of the Corporation. Payment of the redemption price shall be made in
cash by the Corporation at such time and in such manner as may be
determined from time to time by the Board of Directors of the
Corporation unless, in the opinion of the Board of Directors, which
shall be conclusive, conditions exist which make payment wholly in cash
unwise or undesirable; in such event the Corporation may make payment
wholly or partly by securities or other property included in the assets
belonging or allocable to the class of the shares redemption of which
is being sought, the value of which shall be determined as provided
herein. When the net income with respect to any particular class of
capital stock is negative or whenever deemed appropriate by the Board
of Directors in order to carry out the Corporation's responsibilities
under the Investment Company Act of 1940, as amended, the Corporation
may, without payment of monetary compensation but in consideration of
the interest of the Corporation and the stockholders in maintaining a
constant net asset value per share of such class, redeem pro rata from
each stockholder of record on such day, such number of full and
fractional shares of the Corporation's capital stock of such class, as
may be necessary to reduce the aggregate number of outstanding shares
in order to permit the net asset value thereof to remain constant.
(G) Conversion. Each holder of any class of capital stock of
the Corporation, who surrenders his share
-7-
<PAGE> 8
certificate in good delivery form to the Corporation or, if the shares
in question are not represented by certificates, who delivers to the
Corporation a written request in good order signed by the stockholder,
shall, to the extent permitted by the By-Laws or by resolution of the
Board of Directors, be entitled to convert the shares in question on
the basis hereinafter set forth, into shares of stock of any other
class of the Corporation. The Corporation shall determine the net asset
value, as provided herein, of the shares to be converted and may deduct
therefrom a conversion cost, in an amount determined within the
discretion of the Board of Directors. Within five (5) business days
after such surrender and payment of any conversion cost, the
Corporation shall issue to the stockholder such number of shares of
stock of the class desired as, taken at the net asset value thereof
determined as provided herein in the same manner and at the same time
as that of the shares surrendered, shall equal the net asset value of
the shares surrendered, less any conversion cost as aforesaid. Any
amount representing a fraction of a share may be paid in cash at the
option of the Corporation. Any conversion cost may be paid and/or
assigned by the Corporation to the underwriter and/or to any other
agency, as it may elect.
(H) Restrictions on Transferability. If, in the opinion of the
Board of Directors of the Corporation, concentration in the ownership of
shares of capital stock might cause the Corporation to be deemed a
personal holding company within the meaning of the Internal Revenue
Code, as now or hereafter in force, the Corporation may at any time and
from time to time refuse to give effect on the books of the Corporation
to any transfer or transfers of any share or shares of capital stock in
an effort to prevent such personal holding company status.
ARTICLE VII
(1) The number of directors of the Corporation shall be three
(3), which number may be increased or decreased pursuant to the By-laws of the
Corporation but shall never be less than three (3). The names of the directors
who shall act until the first annual meeting of stockholders or until their
successors are duly elected and qualify are:
Thomas M. Collins
Kermit O. Hanson
Cornelius John Pings
(2) No holder of stock of the Corporation shall, as such
holder, have any right to purchase or subscribe for any shares of the capital
stock of the Corporation or any other
-8-
<PAGE> 9
security of the Corporation which it may issue or sell (whether out of the
number of shares authorized by the Charter, or out of any shares of the capital
stock of the Corporation acquired by it after the issue thereof, or otherwise)
other than such right, if any, as the Board of Directors, in its discretion, may
determine.
(3) Each director and each officer of the Corporation shall be
indemnified by the Corporation to the full extent permitted by the Investment
Company Act of 1940 and applicable state corporation law, now or hereafter in
force, including advance of related expenses.
ARTICLE VIII
Any determination made in good faith and, so far as accounting
matters are involved, in accordance with generally accepted accounting
principles by or pursuant to the direction of the Board of Directors, as to the
amount and value of assets, obligations or liabilities of the Corporation, as to
the amount of net income of the Corporation from dividends and interest for any
period or amounts at any time legally available for the payment of dividends, as
to the amount of any reserves or charges set up and the propriety thereof, as to
the time of or purpose for creating reserves or as to the use, alteration or
cancellation of any reserves or charges (whether or not any obligation or
liability for which such reserves or charges shall have been created shall have
been paid or discharged or shall be then or thereafter required to be paid or
discharged), as to the value of any security owned by the Corporation, as to the
allocation of any assets or liabilities to any class of capital stock, as to the
times at which shares of any class of capital stock shall be deemed to be
outstanding or no longer outstanding, or as to any other matters relating to the
issuance, sale, redemption or other acquisition or disposition of securities or
shares of capital stock of the Corporation, and any reasonable determination
made in good faith by the Board of Directors as to whether any transaction
constitutes a purchase of securities on "margin," a sale of securities "short,"
or an underwriting of the sale of, or a participation in any underwriting or
selling group in connection with the public distribution of, any securities,
shall be final and conclusive, and shall be binding upon the Corporation and all
holders of its capital stock, past, present and future, and shares of the
capital stock of the Corporation are issued and sold on the condition and
understanding, evidenced by the purchase of shares of capital stock or
acceptance of share certificates, that any and all such determinations shall be
binding as aforesaid. No provision of the Charter of the Corporation shall be
effective to (i) require a waiver of compliance with any provision of the
Securities Act of 1933, as amended, or the Investment Company Act of 1940, as
amended, or of any valid rule, regulation or order of the Securities and
-9-
<PAGE> 10
Exchange Commission thereunder or (ii) protect or purport to protect any
director or officer of the Corporation against any liability to the Corporation
or its security holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
ARTICLE IX
The duration of the Corporation shall be perpetual.
ARTICLE X
(1) The Corporation reserves the right from time to time to
make any amendments to its Charter which may now or hereafter be authorized by
law, including any amendments changing the terms or contract rights, as
expressly set forth in its Charter, of any of its outstanding stock by
classification, reclassification or otherwise, but no such amendment which
changes such terms or contract rights of any of its outstanding stock shall be
valid unless such amendment shall have been authorized by not less than a
majority of the aggregate number of the votes entitled to be cast thereon by a
vote at a meeting.
(2) Notwithstanding any provision of the General Laws of the
State of Maryland requiring any action to be taken or authorized by the
affirmative vote of the holders of a designated proportion of the votes of all
classes or of any class of stock of the Corporation, such action shall be
effective and valid if taken or authorized by the affirmative vote of the
holders of a majority of the total number of shares outstanding and entitled to
vote thereon, except as otherwise required by applicable law or otherwise
provided herein.
(3) So long as permitted by Maryland law, the books of the
Corporation may be kept outside of the State of Maryland at such place or places
as may be designated from time to time by the Board of Directors or in the
By-Laws of the Corporation.
(4) In furtherance, and not in limitation, of the powers
conferred by the laws of the State of Maryland, the Board of Directors is
expressly authorized:
(A) To make, alter or repeal the By-Laws of the Corporation,
except where such power is reserved by the By-Laws to the stockholders,
and except as otherwise required by the Investment Company Act of 1940,
as amended.
(B) From time to time to determine whether and to what extent
and at what times and places and under what
-10-
<PAGE> 11
conditions and regulations the books and accounts of the Corporation, or
any of them other than the stock ledger, shall be open to the inspection
of the stockholders, and no stockholder shall have any right to inspect
any account or book or document of the Corporation, except as conferred
by law or authorized by resolution of the Board of Directors or of the
stockholders.
(C) Without the assent or vote of the stockholders, to
authorize the issuance from time to time of shares of the stock of any
class of the Corporation, whether now or hereafter authorized, and
securities convertible into shares of its stock of any class or classes,
whether now or hereafter authorized, for such consideration as the Board
of Directors may deem advisable.
(D) Without the assent or vote of the stockholders, to
authorize and issue obligations of the Corporation, secured and
unsecured, as the Board of Directors may determine, and to authorize and
cause to be executed mortgages and liens upon the property of the
Corporation, real or personal.
(E) Notwithstanding anything in these Articles of Incorporation
to the contrary, to establish in its absolute discretion the basis or
method for determining the value of the assets belonging to any class,
the value of the liabilities belonging to any class, the allocation of
any assets or liabilities to any class, the times at which shares of any
class shall be deemed to be outstanding or no longer outstanding and the
net asset value of each share of any class of capital stock of the
Corporation for purposes of sales, redemptions, repurchases of shares or
otherwise.
(F) To determine in accordance with generally accepted
accounting principles and practices what constitutes net profits,
earnings, surplus or net assets in excess of capital, and to determine
what accounting periods shall be used by the Corporation for any
purpose, whether annual or any other period, including daily; to set
apart out of any funds of the Corporation such reserves for such
purposes as it shall determine and to abolish the same; to declare and
pay any dividends and distributions in cash, securities or other
property from surplus or any funds legally available therefor, at such
intervals (which may be as frequently as daily) or on such other
periodic basis, as it shall determine; to declare such dividends or
distributions by means of a formula or other method of determination, at
meetings held less frequently than the frequency of the effectiveness of
such declarations; to establish payment dates for dividends or any other
distributions on any basis, including dates occurring less frequently
than the effectiveness of declarations thereof; and to provide for
-11-
<PAGE> 12
the payment of declared dividends on a date earlier or later than the
specified payment date in the case of stockholders of the Corporation
redeeming their entire ownership of shares of any class of the
Corporation.
(G) In addition to the powers and authorities granted herein
and by statute expressly conferred upon it, the Board of Directors is
authorized to exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation, subject, nevertheless,
to the provisions of Maryland law, these Articles of Incorporation and
the By-Laws of the Corporation.
THIRD: Restatement of the Corporation's Charter as currently in
effect has been approved by a majority of the entire Board of Directors.
FOURTH: The provisions set forth in these Articles of
Restatement are all the provisions of the Charter currently in effect; the
Charter is not amended by these Articles of Restatement; the current address of
the principal office of the Corporation and the name and address of the
Corporation's current resident agent are set forth in ARTICLE V hereinabove; the
number of directors of the Corporation and the names of those currently in
office are set forth in ARTICLE VII Section (1) hereinabove; no stock entitled
to be voted on the matter was outstanding or subscribed for at the time of
approval. These Articles of Restatement having been approved in the manner
required for a charter amendment, they shall become the Charter of this
Corporation and shall supercede all prior charter documents.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf
-12-
<PAGE> 13
by its President and its corporate seal to be hereunto affixed and attested by
its Secretary on this 21st day of November, 1983.
PACIFIC HORIZON FUNDS, INC.
By /s/ Thomas M. Collins
------------------------
Thomas M. Collins
President
(Corporate Seal)
Attest:
/s/ W. Bruce McConnel, III
- -----------------------------
W. Bruce McConnel, III
Secretary
-13-
<PAGE> 14
CERTIFICATE
The undersigned, President of PACIFIC HORIZON FUNDS INC., who
executed on behalf of said Corporation the foregoing Articles of Restatement, of
which this Certificate is made a part, hereby acknowledges, in the name and on
behalf of said Corporation, the foregoing Articles of Restatement to be the
corporate act of said Corporation and certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to authorization and approval are true in all material respects, under
the penalties of perjury.
/s/ Thomas M. Collins
---------------------
Thomas M. Collins
President
-14-
<PAGE> 1
EXHIBIT 1(B)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Two
Billion (2,000,000,000) of the Six Billion (6,000,000,000) shares of authorized,
unissued and unclassified capital stock of the Corporation (par value One Mill
($0.001) per share) as Class A Common Stock and One Billion (1,000,000,000) of
said shares of authorized, unissued and unclassified capital stock of the
Corporation (par value One Mill ($0.001) per share) as Class B Common Stock,
pursuant to the following resolutions adopted at a regular meeting of the Board
of Directors of the Corporation held on January 7, 1986.
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation, Two Billion (2,000,000,000)
shares of authorized, unissued and unclassified capital stock
of the Corporation (par value One Mill ($0.001) per share and
of the aggregate par value of Two Million Dollars ($2,000,000))
be, and hereby are, classified and designated as Class A Common
Stock, with all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of
redemption set forth in the Charter of the Corporation with
respect to Class A Common Stock;
FURTHER RESOLVED, that pursuant to Article VI of the
Articles of Restatement of the Corporation, One Billion
(1,000,000,000) shares of authorized, unissued and unclassified
capital stock of the Corporation (par value One Mill ($0.001)
per share and of the aggregate par value of One Million Dollars
($1,000,000)) be, and hereby are, classified and designated as
Class B Common Stock, with all of the preferences, conversion
and other rights, voting powers, restrictions, limitations as
to dividends, qualifications, and terms and conditions of
redemption set forth in the Charter of the Corporation with
respect to Class B Common Stock.
<PAGE> 2
SECOND: The shares of Class A Common Stock and Class B Common
Stock of the Corporation classified pursuant to the resolutions set forth in
Article FIRST of these Articles Supplementary have been classified by the
Corporation's Board of Directors under the authority contained in the Charter of
the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its President and
its corporate seal to be hereunto affixed and attested by its Secretary on this
9th day of January, 1986.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ Thomas M. Collins
-----------------------
Thomas M. Collins
President
Attest:
/s/ W. Bruce McConnell, III
- ---------------------------
W. Bruce McConnel, III
Secretary
<PAGE> 3
CERTIFICATE
THE UNDERSIGNED, President of PACIFIC HORIZON FUNDS, INC., who
executed on behalf of said Corporation the attached Articles Supplementary of
said Corporation, of which this certificate is made a part, hereby acknowledges,
in the name and on behalf of said Corporation, the attached Articles
Supplementary to be the corporate act of said Corporation, and certifies that to
the best of his knowledge, information and belief the matters and facts set
forth in the attached Articles Supplementary with respect to authorization and
approval are true in all material respects, under the penalties for perjury.
/s/ Thomas M. Collins
---------------------
Thomas M. Collins
President
Dated: January 9, 1986
<PAGE> 1
EXHIBIT 1(C)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Pursuant to sections 2-105(c) and 2-208.1 of the
Maryland General Corporation Law, the Board of Directors of the Corporation, an
open-end company registered under the Investment Company Act of 1940, has
increased the total number of shares of capital stock which the Corporation
shall have authority to issue from Ten Billion (10,000,000,000) shares, of the
par value of One Mill ($0.001) per share, and of the aggregate par value of Ten
Million Dollars ($10,000,000), to Twenty Billion (20,000,000,000) shares, of the
par value of One Mill ($0.001) per share, and of the aggregate par value of
Twenty Million Dollars ($20,000,000), pursuant to the following resolution
adopted at a regular meeting of the Board of Directors of the Corporation held
on July 21, 1989:
RESOLVED, that the total number of shares of capital
stock which the Corporation shall have authority to issue be
increased to Twenty Billion (20,000,000,000) shares, of the par
value of One Mill ($0.001) per share, and of the aggregate par
value of Twenty Million Dollars ($20,000,000).
<PAGE> 2
SECOND: The total number of classified and authorized shares of
each class of the Corporation as of immediately before the increase is:
Class A Common Stock, Three Billion (3,000,000,000)
shares of capital stock of the Corporation (of the aggregate
par value of Three Million Dollars ($3,000,000));
Class B Common Stock, Two Billion (2,000,000,000)
shares of capital stock of the Corporation (of the aggregate
par value of Two Million Dollars ($2,000,000));
Class C Common Stock, one Billion (1,000,000,000)
shares of capital stock of the Corporation (of the aggregate
par value of One Million Dollars ($1,000,000)); and
Class D Common Stock, one Billion (1,000,000,000)
shares of capital stock of the Corporation (of the aggregate
par value of One Million Dollars ($1,000,000)).
The total number of authorized and unclassified shares of capital stock of the
Corporation as of immediately before the increase is Three Billion
(3,000,000,000) shares, of the par value of One Mill ($0.001) per share, and of
the aggregate par value of Three Million Dollars ($3,000,000).
THIRD: The total number of classified and authorized shares of
each class of the Corporation as increased is:
Class A Common Stock, Three Billion (3,000,000,000)
shares of capital stock of the Corporation (of the aggregate
par value of Three Million Dollars ($3,000,000));
Class B Common Stock, Two Billion (2,000,000,000)
shares of capital stock of the Corporation (of the aggregate
par value of Two Million Dollars ($2,000,000));
-2-
<PAGE> 3
Class C Common Stock, One Billion (1,000,000,000)
shares of capital stock of the Corporation (of the aggregate
par value of One Million Dollars ($1,000,000)); and
Class D Common Stock, One Billion (1,000,000,000)
shares of capital stock of the Corporation (of the aggregate
par value of One Million Dollars ($1,000,000)).
The total number of authorized and unclassified shares of capital stock of the
Corporation as increased is Thirteen Billion (13,000,000,000) shares, of the par
value of One Mill ($0.001) per share, and of the aggregate par value of Thirteen
Million Dollars ($13,000,000).
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its President and
its corporate seal to be hereunto affixed and attested by its Secretary on this
first day of August, 1989.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ Thomas M. Collins
-----------------------
Thomas M. Collins
President
Attest:
/s/ W. Bruce McConnel, III
- --------------------------
W. Bruce McConnel, III
Secretary
-3-
<PAGE> 4
CERTIFICATE
THE UNDERSIGNED, President of PACIFIC HORIZON FUNDS, INC., who
executed on behalf of said Corporation the attached Articles Supplementary of
said Corporation, of which this Certificate is made a part, hereby acknowledges,
in the name and on behalf of said Corporation, the attached Articles
Supplementary to be the corporate act of said Corporation, and certifies that to
the best of his knowledge, information and belief the matters and facts set
forth in the attached Articles Supplementary with respect to authorization and
approval are true in all material respects, under the penalties for perjury.
/s/ Thomas M. Collins
---------------------
Dated: August 1, 1989 Thomas M. Collins
President
-4-
<PAGE> 1
EXHIBIT 1(D)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class A Common Stock - Special Series 1
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class A
common Stock - Special Series 1 (par value One Mill ($0.001) per share) pursuant
to the following resolutions adopted at a regular meeting of the Board of
Directors of the Corporation held on July 21, 1989:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the corporation one Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as a separate series of Class A Common
Stock to be known as Class A common Stock - Special Series 1;
RESOLVED, that all consideration received by the
Corporation for the issue or sale of shares of Class A Common Stock -
Special Series 1 shall be invested and
<PAGE> 2
reinvested with the consideration received by the Corporation for the
issue and sale of all other shares now or hereafter designated as Class
A Common Stock (irrespective of whether said shares have been
designated as Special Series of said Class and, if so designated as
Special Series, irrespective of the particular Series designations),
along with all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of
the Corporation allocated to the shares of Class A Common Stock -
Special Series 1 or such other shares by the Board of Directors in
accordance with the Charter of the Corporation, and each share of Class
A Common Stock Special Series 1 shall share equally with each such
other share in such consideration and other assets, income, earnings,
profits and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class A Common
Stock - Special Series 1 shall be charged equally with each other share
now or hereafter designated as Class A Common Stock (irrespective of
whether said share has been designated as part of a Special Series of
said Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the Corporation in respect of shares of Class A
Common Stock - Special Series 1 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class A Common Stock - Special Series 1 or such other shares
in accordance with the Charter of the Corporation, except that:
(a) shares of Class A Common Stock - Special
Series 1 shall bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees to
provide services with respect to such Series but not with respect to
shares of Class A Common Stock of the Corporation other than Class A
Common Stock - Special Series 1 , as well as any other expenses and
liabilities directly attributable to Class A Common Stock - Special
Series 1 which the Board of Directors determines should be borne solely
by such Series; and
(b) shares of Class A Common Stock -Special
Series 1 shall not bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an
-2-
<PAGE> 3
organization or other person agrees to provide services with respect to
other shares of Class A Common Stock of the Corporation but not with
respect to Class A Common Stock - Special Series 1, as well as any
other expenses and liabilities directly attributable to shares of Class
A Common Stock other than Class A Common Stock - Special Series 1 which
the Board of Directors determines should be borne solely by such other
shares;
FURTHER RESOLVED, that each share of Class A Common
Stock - Special Series 1 shall otherwise have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as Class A Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a Special
Series, irrespective of the particular Series designation), except
that:
(a) on any matter that pertains to the
agreements, arrangements, expenses or liabilities described in clause
(a) of the immediately preceding resolution (or to any plan or other
document adopted by the Corporation relating to said agreements,
arrangements, expenses or liabilities) and is submitted to a vote of
shareholders of the Corporation, only shares of Class A Common Stock -
Special Series 1 shall be entitled to vote, except that: (i) if said
matter affects shares, of capital stock of the Corporation other than
shares of Class A Common Stock - Special Series 1, such other affected
shares of capital stock shall also be entitled to vote, and in such
case shares of Class A Common Stock - Special Series I shall be voted
in the aggregate together with such other affected shares and not by
Class or Series except where otherwise required by law or permitted by
the Board of Directors of the Corporation; and (ii) if said matter does
not affect shares of Class A Common Stock - Special Series 1, said
shares shall not be entitled to vote (except where otherwise required
by law or permitted by the Board of Directors) even though the matter
is submitted to a vote of the holders of shares of capital stock of the
Corporation other than shares of Class A Common Stock - Special Series
1; and
(b) on any matter that pertains to the
agreements, arrangements, expenses or liabilities described in clause
(b) of the immediately preceding resolution (or any plan or other
document adopted by the Corporation relating to said agreements,
arrangements, expenses or liabilities) and is submitted to a vote of
shareholders of the Corporation, shares of Class A Common Stock -
Special Series 1 shall not be entitled to vote, except where
-3-
<PAGE> 4
otherwise required by law or permitted by the Board of Directors of the
Corporation, and except that if said matter affects shares of Class A
Common Stock - Special Series 1 such shares shall be entitled to vote,
and in such case shares of Class A Common Stock - Special Series 1
shall be noted in the aggregate together with all other shares of
capital stock of the Corporation voting on the matter and not by Class
or Series except where otherwise required by law or permitted by the
Board of Directors.
Class A Common Stock - Special Series 2
SECOND: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value one mill ($0.001) per share) as Class A
Common Stock - Special Series 2 (par value One Mill ($0.001) per share) pursuant
to the following resolutions adopted at a regular meeting of the Board of
Directors of the Corporation held on July 21, 1989:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as a separate series of Class A Common
Stock to be known as Class A Common Stock - Special Series 2;
FURTHER RESOLVED, that all consideration received by
the Corporation for the issue or sale of shares of Class A Common Stock
- Special Series 2 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale for
all other shares now or hereafter designated as Class A Common Stock
(irrespective of whether said shares have been designated as Special
Series of said Class and, if so designated as Special Series,
irrespective of the particular Series designations), along with all
income, earnings, profits and
-4-
<PAGE> 5
proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, and any
general assets of the Corporation allocated to the shares of Class A
Common Stock - Special Series 2 or such other shares by the Board of
Directors in accordance with the Charter of the Corporation, and each
share of Class A Common Stock - Special Series 2 shall share equally
with each such other share in such consideration and other assets,
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, and any assets
derived from any reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class A Common
Stock - Special Series 2 shall be charged equally with each other share
now or hereafter designated as Class A Common Stock (irrespective of
whether said share has been designated as part of a Special Series of
said Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the Corporation in respect of shares of Class A
Common Stock - Special Series 2 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class A Common Stock - Special Series 2 or such other shares
in accordance with the Charter of the Corporation, except that:
(a) shares of Class A Common Stock - Special
Series 2 shall bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees to
provide services with respect to such Series but not with respect to
shares of Class A Common Stock of the Corporation other than Class A
Common Stock - Special Series 2, as well as any other expenses and
liabilities directly attributable to Class A Common Stock - Special
Series 2 which the Board of Directors determines should be borne solely
by such Series; and
(b) shares of Class A Common Stock - Special
Series 2 shall not bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees to
provide services with respect to other shares of Class A Common Stock
of the Corporation but not with respect to Class A Common Stock -
Special Series 2, as well as any other expenses and liabilities
directly attributable to shares of Class A Common Stock other than
Class A Common Stock - Special
-5-
<PAGE> 6
Series 2 which the Board of Directors determines should be borne solely
by such other shares;
FURTHER RESOLVED, that each share of Class A Common
Stock - Special Series 2 shall otherwise have the same preferences,
conversion and other rights, voting powers, restriction, limitations as
to dividends, qualifications and terms and conditions of redemption as
each other share now or hereafter designated as Class A Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a Special
Series, irrespective of the particular Series designation), except
that:
(a) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, only shares of Class A Common Stock - Special Series 2
shall be entitled to vote, except that: (i) if said matter affects
shares of capital stock of the Corporation other than shares of Class A
Common Stock - Special Series 2, such other affected shares of capital
stock shall also be entitled to vote, and in such case shares of Class
A Common Stock - Special Series 2 shall be voted in the aggregate
together with such other affected shares and not by Class or Series
except where otherwise required by law or permitted by the Board of
Directors of the Corporation; and (ii) if said matter does not affect
shares of Class A Common Stock - Special Series 2, said shares shall
not be entitled to vote (except where otherwise required by law or
permitted by the Board of Directors) even though the matter is
submitted to a vote of the holders of shares of capital stock of the
Corporation other than shares of Class A Common Stock - Special Series
2; and
(b) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, shares of Class A Common Stock - Special Series 2
shall not be entitled to vote, except where otherwise required by law
or permitted by the Board of Directors of the Corporation, and except
that if said matter affects shares of Class A Common Stock - Special
Series 2 such shares shall be entitled to vote, and in such case
shares of Class A Common Stock - Special Series 2 shall be voted in
the aggregate together with all other shares of
-6-
<PAGE> 7
capital stock of the Corporation voting on the matter and not by Class
or Series except where otherwise required by law or permitted by the
Board of Directors.
Class B Common Stock - Special Series 1
THIRD: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified one
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class B
Common Stock - Special Series 1 (par value one Mill ($0.001) per share) pursuant
to the following resolutions adopted at a regular meeting of the Board of
Directors of the Corporation held on July 21, 1989:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of one Mill ($0.001) per share and of the
aggregate par value of one Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as a separate series of Class B Common
Stock to be known as Class B Common Stock - Special Series 1;
RESOLVED, that all consideration received by the
Corporation for the issue or sale of shares of Class B Common Stock -
Special Series 1 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale of all
other shares now or hereafter designated as Class B Common Stock
(irrespective of whether said shares have been designated as Special
Series of said Class and, if so designated as Special Series,
irrespective of the particular Series designations), along with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of the Corporation
allocated to the shares of Class B Common Stock - Special Series 1 or
such other shares by the Board of Directors in accordance with the
Charter of the
-7-
<PAGE> 8
Corporation, and each share of Class B Common Stock - Special Series 1
shall share equally with each such other share in such consideration
and other assets, income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
thereof, and any assets derived from any reinvestment of such proceeds
in whatever form;
FURTHER RESOLVED, that each share of Class B Common
Stock - Special Series 1 shall be charged equally with each other share
now or hereafter designated as Class B Common Stock (irrespective of
whether said share has been designated as part of a Special Series of
said Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the Corporation in respect of shares of Class B
Common Stock - Special Series 1 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class B Common Stock - Special Series 1 or such other shares
in accordance with the Charter of the Corporation, except that:
(a) shares of Class B Common Stock - Special
Series 1 shall bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees to
provide services with respect to such Series but not with respect to
shares of Class B Common Stock of the Corporation other than Class B
Common Stock - Special Series 1, as well as any other expenses and
liabilities directly attributable to Class B Common Stock - Special
Series 1 which the Board of Directors determines should be borne solely
by such Series; and
(b) shares of Class B Common Stock Special
Series 1 shall not bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees to
provide services with respect to other shares of Class B Common Stock
of the Corporation but not with respect to Class B Common Stock -
Special Series 1, as well as any other expenses and liabilities
directly attributable to shares of Class B Common Stock other than
Class B Common Stock - Special Series 1 which the Board of Directors
determines should be borne solely by such other shares;
FURTHER RESOLVED, that each share of Class B Common
Stock - Special Series 1 shall otherwise have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as
-8-
<PAGE> 9
each other share now or hereafter designated as Class B Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a Special
Series, irrespective of the particular Series designation), except
that:
(a) on any matter that pertains to the
agreements, arrangements, expenses or liabilities described in clause
(a) of the immediately preceding resolution (or to any plan or other
document adopted by the Corporation relating to said agreements,
arrangements, expenses or liabilities) and is submitted to a vote of
shareholders of the Corporation, only shares of Class B Common Stock -
Special Series 1 shall be entitled to vote, except that: (i) if said
matter affects shares of capital stock of the Corporation other than
shares of Class B Common Stock - Special Series 1, such other affected
shares of capital stock shall also be entitled to vote, and in such
case shares of Class B Common Stock - Special Series 1 shall be voted
in the aggregate together with such other affected shares and not by
Class or Series except where otherwise required by law or permitted by
the Board of Directors of the Corporation; and (ii) if said matter does
not affect shares of Class B Common Stock - Special Series 1, said
shares shall not be entitled to vote (except where otherwise required
by law or permitted by the Board of Directors) even though the matter
is submitted to a vote of the holders of shares of capital stock of the
Corporation other than shares of Class B Common Stock - Special Series
1; and
(b) on any matter that pertains to the
agreements, arrangements, expenses or liabilities described in clause
(b) of the immediately preceding resolution (or any plan or other
document adopted by the Corporation relating to said agreements,
arrangements, expenses or liabilities) and is submitted to a vote of
shareholders of the Corporation, shares of Class B Common Stock -
Special Series 1 shall not be entitled to vote, except where otherwise
required by law or permitted by the Board of Directors of the
Corporation, and except that if said matter affects shares of Class B
Common Stock - Special Series 1 such shares shall be entitled to vote,
and in such case shares of Class B Common Stock - Special Series 1
shall be voted in the aggregate together with all other shares of
capital stock of the Corporation voting on the matter and not by Class
or Series except where otherwise required by law or permitted by the
Board of Directors.
-9-
<PAGE> 10
Class B Common Stock - Special Series 2
FOURTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified one
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class B
Common Stock - Special Series 2 (par value one Mill ($0.001) per share) pursuant
to the following resolutions adopted at a regular meeting of the Board of
Directors of the Corporation held on July 21, 1989:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of one Mill ($0.001) per share and of the
aggregate par value of one Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as a separate series of Class B Common
Stock to be known as Class B Common Stock - Special Series 2;
FURTHER RESOLVED, that all consideration received by
the Corporation for the issue or sale of shares of Class B Common Stock
- Special Series 2 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale of all
other shares now or hereafter designated as Class B Common Stock
(irrespective of whether said shares have been designated as Special
Series of said Class and, if so designated as Special Series,
irrespective of the particular Series designations), along with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of the Corporation
allocated to the shares of Class B Common Stock - Special Series 2 or
such other shares by the Board of Directors in accordance with the
Charter of the Corporation, and each share of Class B Common Stock -
Special Series 2 shall share equally with each such other share in such
consideration and other assets, income, earnings, profits and proceeds
thereof, including any proceeds derived
-10-
<PAGE> 11
from the sale, exchange or liquidation thereof, and any assets derived
from any reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class B Common
Stock - Special Series 2 shall be charged equally with each other share
now or hereafter designated as Class B Common Stock (irrespective of
whether said share has been designated as part of a Special Series of
said Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the Corporation in respect of shares of Class B
Common Stock - Special Series 2 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class B Common Stock - Special Series 2 or such other shares
in accordance with the Charter of the Corporation, except that:
(a) shares of Class B Common Stock - Special
Series 2 shall bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees to
provide services with respect to such Series but not with respect to
shares of Class B Common Stock of the Corporation other than Class B
Common Stock - Special Series 2, as well as any other expenses and
liabilities directly attributable to Class B Common Stock - Special
Series 2 which the Board of Directors determines should be borne solely
by such Series; and
(b) shares of Class B Common Stock - Special
Series 2 shall not bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees to
provide services with respect to other shares of Class B Common Stock
of the Corporation but not with respect to Class B Common Stock -
Special Series 2, as well as any other expenses and liabilities
directly attributable to shares of Class B Common Stock other than
Class B Common Stock - Special Series 2 which the Board of Directors
determines should be borne solely by such other shares;
FURTHER RESOLVED, that each share of Class B Common
Stock - Special Series 2 shall otherwise have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as Class B Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if
-11-
<PAGE> 12
so designated as part of a Special Series, irrespective of the
particular Series designation), except that:
(a) on any matter that pertains to the
agreements, arrangements, expenses or liabilities described in clause
(a) of the immediately preceding resolution (or to any plan or other
document adopted by the Corporation relating to said agreements,
arrangements, expenses or liabilities) and is submitted to a vote of
shareholders of the Corporation, only shares of Class B Common Stock -
Special Series 2 shall be entitled to vote, except that: (i) if said
matter affects shares of capital stock of the Corporation other than
shares of Class B Common Stock - Special Series 2, such other affected
shares of capital stock shall also be entitled to vote, and in such
case shares of Class B Common Stock - Special Series 2 shall be voted
in the aggregate together with such other affected shares and not by
Class or Series except where otherwise required by law or permitted by
the Board of Directors of the Corporation; and (ii) if said matter does
not affect shares of Class B Common Stock - Special Series 2, said
shares shall not be entitled to vote (except where otherwise required
by law or permitted by the Board of Directors) even though the matter
is submitted to a vote of the holders of shares of capital stock of the
Corporation other than shares of Class B Common Stock - Special Series
2; and
(b) on any matter that pertains to the
agreements, arrangements, expenses or liabilities described in clause
(b) of the immediately preceding resolution (or any plan or other
document adopted by the Corporation relating to said agreements,
arrangements, expenses or liabilities) and is submitted to a vote of
shareholders of the Corporation, shares of Class B Common Stock -
Special Series 2 shall not be entitled to vote, except where otherwise
required by law or permitted by the Board of Directors of the
Corporation, and except that if said matter affects shares of Class B
Common Stock - Special Series 2 such shares shall be entitled to vote,
and in such case shares of Class B Common Stock - Special Series 2
shall be voted in the aggregate together with all other shares of
capital stock of the Corporation voting on the matter and not by Class
or Series except where otherwise required by law or permitted by the
Board of Directors.
Class E Common Stock
FIFTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the
-12-
<PAGE> 13
Corporation has classified Two Hundred Fifty Million (250,000,000) shares of
authorized, unissued and unclassified capital stock of the Corporation (par
value one mill ($0.001) per share) as Class E Common Stock (par value One Mill
($0.001) per share) pursuant to the following resolutions adopted at a regular
meeting of the Board of Directors of the Corporation held on July 21, 1989:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Two Hundred Fifty Million
(250,000,000) authorized, unissued and unclassified shares of capital
stock of the Corporation (of the par value of One Mill ($0.001) per
share and of the aggregate par value of Two Hundred Fifty Thousand
Dollars ($250,000)) be, and hereby are, divided into and classified as
a separate class of Common Stock to be known as Class E Common Stock;
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
Class F Common Stock
SIXTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Two
Hundred Fifty Million (250,000,000) shares of authorized, unissued and
unclassified capital stock of the Corporation (par value One Mill ($0.001) per
share) as Class F Common Stock (par value One Mill ($0.001) per share) pursuant
to the following resolutions adopted at a regular meeting of the Board of
Directors of the Corporation held on July 21, 1989:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Two Hundred Fifty
-13-
<PAGE> 14
Million (250,000,000) authorized, unissued and unclassified shares of
capital stock of the Corporation (of the par value of One Mill ($0.001)
per share and of the aggregate par value of Two Hundred Fifty Thousand
Dollars ($250,000)) be, and hereby are, divided into and classified as
a separate class of Common Stock to be known as Class F Common Stock;
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
Class G Common Stock
SEVENTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Two
Hundred Fifty Million (250,000,000) shares of authorized, unissued and
unclassified capital stock of the Corporation (par value One mill ($0.001) per
share) as Class G Common Stock (par value One Mill ($0.001) per share) pursuant
to the following resolutions adopted at a regular meeting of the Board of
Directors of the Corporation held on July 21, 1989:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Two Hundred Fifty Million
(250,000,000) authorized, unissued and unclassified shares of capital
stock of the Corporation (of the par value of One Mill ($0.001) per
share and of the aggregate par value of Two Hundred Fifty Thousand
Dollars ($250,000)) be, and hereby are, divided into and classified as
a separate class of Common Stock to be known as Class G Common Stock;
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
-14-
<PAGE> 15
Class H Common Stock
EIGHTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified one
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class H
Common Stock (par value One Mill ($0.001) per share) pursuant to the following
resolutions adopted at a regular meeting of the Board of Directors of the
Corporation held on July 21, 1989:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as a separate class of Common Stock to
be known as Class H Common Stock;
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
Class I Common Stock - Special Series 1
NINTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of the Corporation's authorized, unissued and
unclassified capital stock (par value One Mill ($0.001) per share) as Class I
Common Stock - Special Series 1 (par value One Mill ($0.001) per share) pursuant
to the following resolutions adopted at a regular meeting of the Board of
Directors of the Corporation
-15-
<PAGE> 16
held on July 21, 1989:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of one Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as a separate series of Class I Common
Stock to be known as Class I Common Stock - Special Series 1;
FURTHER RESOLVED, that all consideration received by
the Corporation for the issue or sale of shares of Class I Common Stock
- Special Series 1 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale of all
other shares now or hereafter designated as Class I Common Stock
(irrespective of whether said shares have been designated as a Special
Series of said Class and, if so designated as a Special Series,
irrespective of the particular Series designation), along with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of the Corporation
allocated to the shares of Class I Common Stock - Special Series 1 or
such other shares by the Board of Directors in accordance with the
Charter of the Corporation, and each share of Class I Common Stock -
Special Series 1 shall share equally with each such other share in such
consideration and other assets, income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any assets derived from any reinvestment of
such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class I Common
Stock - Special Series 1 shall be charged equally with each other share
now or hereafter designated as Class I Common Stock (irrespective of
whether said share has been designated as part of a Special Series of
said Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the Corporation in respect of shares of Class I
Common Stock - Special Series 1 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class I Common Stock - Special Series 1 or such other shares
in accordance with the Charter of the Corporation, except that:
-16-
<PAGE> 17
(a) shares of Class I Common Stock - Special
Series 1 shall bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees to
provide services with respect to such Series but not with respect to
shares of Class I Common Stock of the Corporation other than Class I
Common Stock - Special Series 1, as well as any other expenses and
liabilities directly attributable to Class I Common Stock - Special
Series 1 which the Board of Directors determines should be borne solely
by such Series; and
(b) shares of Class I Common Stock - Special
Series 1 shall not bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees to
provide services with respect to other shares of Class I Common Stock
of the Corporation but not with respect to Class I Common Stock -
Special Series 1, as well as any other expenses and liabilities
directly attributable to shares of Class I Common Stock other than
Class I Common Stock - Special Series 1 which the Board of Directors
determines should be borne solely by such other shares;
FURTHER RESOLVED, that each share of Class I Common
Stock - Special Series 1 shall otherwise have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as Class I Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a Special
Series, irrespective of the particular Series designation), except
that:
(a) on any matter that pertains to the
agreements, arrangements, expenses or liabilities described in clause
(a) of the immediately preceding resolution (or to any plan or other
document adopted by the Corporation relating to said agreements,
arrangements, expenses or liabilities) and is submitted to a vote of
shareholders of the Corporation, only shares of Class I Common Stock -
Special Series 1 shall be entitled to vote, except that: (i) if said
matter affects shares of capital stock of the Corporation other than
shares of Class I Common Stock - Special Series 1, such other affected
shares of capital stock shall also be entitled to vote, and in such
case shares of Class I Common Stock - Special Series 1 shall be voted
in the aggregate together with such other affected shares and not by
Class or Series except where otherwise required by law or permitted by
the Board of Directors of
-17-
<PAGE> 18
the Corporation; and (ii) if said matter does not affect shares of
Class I Common Stock - Special Series 1, said shares shall not be
entitled to vote (except where otherwise required by law or permitted
by the Board of Directors) even though the matter is submitted to a
vote of the holders of shares of capital stock of the Corporation other
than shares of Class I Common Stock - Special Series 1; and
(b) on any matter that pertains to the
agreements, arrangements, expenses or liabilities described in clause
(b) of the immediately preceding resolution (or any plan or other
document adopted by the Corporation relating to said agreements,
arrangements, expenses or liabilities) and is submitted to a vote of
shareholders of the Corporation, shares of Class I Common Stock -
Special Series 1 shall not be entitled to vote, except where otherwise
required by law or permitted by the Board of Directors of the
Corporation, and except that if said matter affects shares of Class I
Common Stock - Special Series 1 such shares shall be entitled to vote,
and in such case shares of Class I Common Stock - Special Series I
shall be voted in the aggregate together with all other shares of
capital stock of the Corporation voting on the matter and not by Class
or Series except where otherwise required by law or permitted by the
Board of Directors.
Class I Common Stock - Special Series 2
TENTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of the Corporation's authorized, unissued and
unclassified capital stock (par value One Mill ($0.001) per share) as Class I
Common Stock - Special Series 2 (par value One Mill ($0.001) per share) pursuant
to the following resolutions adopted at a regular meeting of the Board of
Directors of the Corporation held on July 21, 1989:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of
-18-
<PAGE> 19
One Million Dollars ($1,000,000)) be, and hereby are, divided into and
classified as a separate series of Class I Common Stock to be known as
Class I Common Stock - Special Series 2;
FURTHER RESOLVED, that all consideration received by
the Corporation for the issue or sale of shares of Class I Common Stock
- Special Series 2 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale of all
other shares now or hereafter designated as Class I Common Stock
(irrespective of whether said shares have been designated as a Special
Series of said Class and, if so designated as a Special Series,
irrespective of the particular Series designation), along with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of the Corporation
allocated to the shares of Class I Common Stock - Special Series 2 or
such other shares by the Board of Directors in accordance with the
Charter of the Corporation, and each share of Class I Common Stock -
Special Series 2 shall share equally with each such other share in such
consideration and other assets, income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any assets derived from any reinvestment of
such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class I Common
Stock - Special Series 2 shall be charged equally with each other share
now or hereafter designated as Class I Common Stock (irrespective of
whether said share has been designated as part of a Special Series of
said Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the Corporation in respect of shares of Class I
Common Stock - Special Series 2 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class I Common Stock - Special Series 2 or such other shares
in accordance with the Charter of the Corporation, except that:
(a) shares of Class I Common Stock - Special
Series 2 shall bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees to
provide services with respect to such Series but not with respect to
shares of Class I Common Stock of the Corporation other than Class I
Common Stock - Special Series 2, as well as any other expenses and
-19-
<PAGE> 20
liabilities directly attributable to Class I Common Stock - Special
Series 2 which the Board of Directors determines should be borne solely
by such Series; and
(b) shares of Class I Common Stock - Special
Series 2 shall not bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees to
provide services with respect to other shares of Class I Common Stock
of the Corporation but not with respect to Class I Common Stock -
Special Series 2, as well as any other expenses and liabilities
directly attributable to shares of Class I Common Stock other than
Class I Common Stock - Special Series 2 which the Board of Directors
determines should be borne solely by such other shares;
FURTHER RESOLVED, that each share of Class I Common
Stock - Special Series 2 shall otherwise have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as Class I Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a Special
Series, irrespective of the particular Series designation), except
that:
(a) on any matter that pertains to the
agreements, arrangements, expenses or liabilities described in clause
(a) of the immediately preceding resolution (or to any plan or other
document adopted by the Corporation relating to said agreements,
arrangements, expenses or liabilities) and is submitted to a vote of
shareholders of the Corporation, only shares of Class I Common Stock -
Special Series 2 shall be entitled to vote, except that: (i) if said
matter affects shares of capital stock of the Corporation other than
shares of Class I Common Stock - Special Series 2, such other affected
shares of capital stock shall also be entitled to vote, and in such
case shares of Class I Common Stock - Special Series 2 shall be voted
in the aggregate together with such other affected shares and not by
Class or Series except where otherwise required by law or permitted by
the Board of Directors of the Corporation; and (ii) if said matter does
not affect shares of Class I Common Stock - Special Series 2, said
shares shall not be entitled to vote (except where otherwise required
by law or permitted by the Board of Directors) even though the matter
is submitted to a vote of the holders of shares of capital stock of the
Corporation other than shares of Class I Common Stock - Special Series
2; and
-20-
<PAGE> 21
(b) on any matter that pertains to the
agreements, arrangements, expenses or liabilities described in clause
(b) of the immediately preceding resolution (or any plan or other
document adopted by the Corporation relating to said agreements,
arrangements, expenses or liabilities) and is submitted to a vote of
shareholders of the Corporation, shares of Class I Common Stock -
Special Series 2 shall not be entitled to vote, except where otherwise
required by law or permitted by the Board of Directors of the
Corporation, and except that if said matter affects shares of Class I
Common Stock - Special Series 2 such shares shall be entitled to vote,
and in such case shares of Class I Common Stock - Special Series 2
shall be voted in the aggregate together with all other shares of
capital stock of the Corporation voting on the matter and not by Class
or Series except where otherwise required by law or permitted by the
Board of Directors.
Class J Common Stock
ELEVENTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One mill ($0.001) per share) as Class J
Common Stock (par value One Mill ($0.001) per share) pursuant to the following
resolutions adopted at a regular meeting of the Board of Directors of the
Corporation held on July 21, 1989:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Million Dollars ($1,000,000) be, and hereby
are, divided into and classified as a separate class of Common Stock to
be known as Class J Common Stock;
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
-21-
<PAGE> 22
General
TWELFTH: The shares of capital stock of the Corporation
classified pursuant to the resolutions set forth in Article FIRST through
Article ELEVENTH of these Articles Supplementary have been classified by the
Corporation's Board of Directors under the authority contained in the Charter of
the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its President and
its corporate seal to be hereunto affixed and attested by its Secretary on this
first day of August, 1989.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ Thomas M. Collins
-----------------------
Thomas M. Collins
President
Attest:
/s/ W. Bruce McConnel, III
- --------------------------
W. Bruce McConnel, III
Secretary
-22-
<PAGE> 23
CERTIFICATE
THE UNDERSIGNED, President of PACIFIC HORIZON FUNDS, INC., who
executed on behalf of said Corporation the attached Articles Supplementary of
said Corporation, of which this Certificate is made a part, hereby acknowledges,
in the name and on behalf of said Corporation, the attached Articles
Supplementary to be the corporate act of said Corporation, and certifies that to
the best of his knowledge, information and belief the matters and facts set
forth in the attached Articles Supplementary with respect to authorization and
approval are true in all material respects, under the penalties for perjury.
Dated: August 1, 1989 /s/ Thomas M. Collins
---------------------
Thomas M. Collins
President
-23-
<PAGE> 1
EXHIBIT 1(E)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class B Common Stock - Special Series I
FIRST: Pursuant to Section 2-208 of the Maryland General Corporation
Law, the Board of Directors of the Corporation has classified One Billion
(1,000,000,000) shares of authorized, unissued and unclassified capital stock of
the Corporation (par value one Mill ($0.001) per share) as Class B Common Stock
- - Special Series 1 (par value one Mill ($0.001) per share), such that there now
exists a total of Two Billion (2,000,000,000) shares of capital stock of the
Corporation classified as Class B Common Stock - Special Series 1, pursuant to
the following resolution adopted at a meeting of the Board of Directors oil the
Corporation held on June 3, 1991:
RESOLVED, that pursuant to Article VI of the Articles
of the Corporation One Billion (1,000,000,000) authorized unissued and
unclassified shares of capital stock of the Corporation (of the par
value of One Mill ($0.001) per share and of the aggregate par value of
One Million Dollars ($1,000,000)) be, and hereby are, divided into and
classified as that separate series of Class B Common Stock known as
Class B Common Stock - Special Series 1, with all of the preferences,
conversion and other rights, voting
<PAGE> 2
powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption set forth in the Charter of the
Corporation with respect to Class B Common Stock - Special Series 1.
Class B Common Stock - Special Series 2
SECOND: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class B
Common Stock - Special Series 2 (par value One Mill ($0.001) per share), such
that there now exists a total of Two Billion (2,000,000,000) shares of capital
stock of the Corporation classified as Class B Common Stock - Special Series 2,
pursuant to the following resolution adopted at a meeting of the Board of
Directors of the Corporation held on June 3, 1991:
RESOLVED, that pursuant to Article VI of the Articles of the
Corporation One Billion (1,000,000,000) authorized, unissued and
unclassified shares of capital stock of the Corporation (of the par
value of One Mill ($0.001) per share and of the aggregate par value of
One Million Dollars ($1,000,000)) be, and hereby are, divided into and
classified as that separate series of Class B Common Stock known as
Class B Common Stock - Special Series 2, with all of the preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications, and terms and conditions of redemption
set forth in the Charter of the Corporation with respect to Class B
Common Stock - Special Series 2.
General
THIRD: The shares of capital stock of the Corporation
classified pursuant to the resolutions set forth in Article FIRST and Article
SECOND of these Articles Supplementary have been
-2-
<PAGE> 3
classified by the Corporation's Board of Directors under the authority contained
in the Charter of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its President and
its corporate seal to be hereunto affixed and attested by its Secretary on this
3rd day of June, 1991.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ William B. Blundin
-----------------------
William B. Blundin
Executive Vice President
Attest:
/s/ James W. Bernaiche
- ----------------------
James W. Bernaiche
Assistant Secretary
-3-
<PAGE> 4
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON FUNDS,
INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
/s/ William B. Blundin
------------------------
Dated: June 3, 1991 William B. Blundin
Executive Vice President
-4-
<PAGE> 1
EXHIBIT 1(F)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class A Common Stock
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified one
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class A
Common Stock (par value One Mill ($0.001) per share), such that there now exists
a total of Four Billion (4,000,000,000) shares of capital stock of the
Corporation classified as Class A Common Stock, pursuant to the following
resolution adopted by a Unanimous Consent of the Board of Directors of the
Corporation dated June 25, 1991:
RESOLVED, that pursuant to Article VI of the Articles
of the Corporation One Billion (1,000,000,000) authorized, unissued and
unclassified shares of capital stock of the Corporation (of the par
value of One Mill ($0.001) per share and of the aggregate par value of
One Million Dollars ($1,000,000)) be, and hereby are, divided into and
classified as Class A Common Stock, with all of the preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications, and terms and conditions of redemption
set forth in the Charter of the Corporation with respect to Class A
Common Stock.
Class A Common Stock - Special Series 1
SECOND: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill
<PAGE> 2
($0.001) per share) as Class A Common Stock - Special Series 1 (par value One
Mill ($0.001) per share), such that there now exists a total of Two Billion
(2,000,000,000) shares of capital stock of the Corporation classified as Class A
Common Stock - Special Series 1, pursuant to the following resolution adopted by
a Unanimous Consent of the Board of Directors of the Corporation dated June 25,
1991:
RESOLVED, that pursuant to Article VI of the Articles
of the Corporation One Billion (1,000,000,000) authorized, unissued and
unclassified shares of capital stock of the Corporation (of the par
value of One Mill ($0.001) per share and of the aggregate par value of
One Million Dollars ($1,000,000)) be, and hereby are, divided into and
classified as that separate series of Class A Common Stock known as
Class A Common Stock Special Series 1, with all of the preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications, and terms and conditions of redemption
set forth in the Charter of the Corporation with respect to Class A
Common Stock - Special Series 1.
Class A Common Stock - Special Series 2
THIRD: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Two
Hundred Fifty Million (250,000,000) shares of authorized, unissued and
unclassified capital stock of the Corporation (par value One Mill ($0.001) per
share) and reclassified Seven Hundred Fifty Million (750,000,000) shares of
authorized and unissued capital stock of the Corporation previously classified
as Class C Common Stock (par value One Mill ($0.001) per share) as Class A
Common Stock - Special Series 2 (par value One Mill ($0.001) per share), such
that there now exists a total of Two Billion (2,000,000,000) shares of capital
stock of the Corporation classified as Class A Common Stock - Special Series 2,
pursuant to the following resolution adopted by a Unanimous Consent of the Board
of Directors of the Corporation dated June 25, 1991:
RESOLVED, that pursuant to Article VI of the Articles
of the Corporation Two Hundred Fifty Million (250,000,000) authorized,
unissued and unclassified shares of capital stock of the Corporation
(of the par value of One Mill ($0.001) per share and of the aggregate
par value of Two Hundred Fifty Thousand Dollars ($250,000)) and Seven
Hundred Fifty Million (750,000,000) authorized and unissued shares of
capital stock of the Corporation previously classified as Class C
Common Stock (of the par value of
-2-
<PAGE> 3
One Mill ($0.001) per share and of the aggregate par value of Seven
Hundred Fifty Thousand Dollars $750,000)) be, and hereby are, divided
into and classified as that separate series of Class A Common Stock
known as Class A Common Stock - Special Series 2, with all of the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions
of redemption set forth in the Charter of the Corporation with respect
to Class A Common Stock - Special Series 2.
General
FOURTH: The shares of capital stock of the Corporation
classified and reclassified pursuant to the resolutions set forth in Article
FIRST, Article SECOND and Article THIRD of these Articles Supplementary have
been classified and reclassified by the Corporation's Board of Directors under
the authority contained in the Charter of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its President and
its corporate seal to be hereunto affixed and attested by its Secretary on this
27th day of June, 1991.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By:/s/ Thomas M. Collins
---------------------
Thomas M. Collins
President
Attest:
/s/ W. Bruce McConnel, III
- --------------------------
-3-
<PAGE> 4
CERTIFICATE
THE UNDERSIGNED, President of PACIFIC HORIZON FUNDS, INC.,
who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a
part, hereby acknowledges, in the name and on behalf of said
Corporation, the attached Articles Supplementary to be the corporate
act of said Corporation, and certifies that to the best of his
knowledge, information and belief the matters and facts set forth in
the attached Articles Supplementary with respect to authorization and
approval are true in all material respects, under the penalties for
perjury.
/s/ Thomas M. Collins
---------------------
Dated: June 27, 1991 Thomas M. Collins
President
-4-
<PAGE> 1
EXHIBIT 1(G)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Pursuant to sections 2-105(c) and 2-208.1 of the Maryland
General Corporation Law, the Board of Directors of the Corporation, an open-end
company registered under the Investment Company Act of 1940, has increased the
total number of shares of capital stock which the Corporation shall have
authority to issue from Twenty Billion (20,000,000,000) shares, of the par value
of One Mill ($0.001) per share, and of the aggregate par value of Twenty Million
Dollars ($20,000,000), to Forty Billion (40,000,000,000) shares, of the par
value of One Mill ($0.001) per share, and of the aggregate par value of Forty
Million Dollars ($40,000,000), pursuant to the following resolution adopted at a
regular meeting of the Board of Directors of the Corporation held on July 10,
1991:
RESOLVED, that the total number of shares of capital stock which
the Corporation shall have authority to issue be increased to Forty
Billion (40,000,000,000) shares, of the par value of One Mill ($0.001)
per share, and of the aggregate par value of Forty Million Dollars
($40,000,000).
<PAGE> 2
SECOND: The total number of classified and authorized
shares of each class of the Corporation as of immediately before
the increase is:
Class A Common Stock, Four Billion (4,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of Four
Million Dollars ($4,000,000));
Class A Common Stock - Special Series 1, Two Billion
(2,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Two Million Dollars ($2,000,000));
Class A Common Stock - Special Series 2, Two Billion
(2,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Two Million Dollars ($2,000,000));
Class B Common Stock, Two Billion (2,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of Two
Million Dollars ($2,000,000));
Class B Common Stock - Special Series 1, Two Billion
(2,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Two Million Dollars ($2,000,000));
Class B Common Stock - Special Series 2, Two Billion
(2,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Two Million Dollars ($2,000,000));
Class C Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class D Common Stock, One Billion (1,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of One
Million Dollars ($1,000,000));
Class E Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class F Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars
-2-
<PAGE> 3
($250,000));
Class G Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class H Common Stock, One Billion (1,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of One
Million Dollars ($1,000,000));
Class I Common Stock - Special Series 1, One Billion
(1,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of One Million Dollars ($1,000,000));
Class I Common Stock - Special Series 2, One Billion
(1,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of One Million Dollars ($1,000,000)); and
Class J Common Stock, One Billion (1,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of One
Million Dollars ($1,000,000)).
The total number of authorized and unclassified shares of capital stock of the
Corporation as of immediately before the increase is Zero shares, of the par
value of One Mill ($0.001) per share, and of the aggregate par value of Zero
Dollars.
THIRD: The total number of classified and authorized
shares of each class of the Corporation as increased is:
Class A Common Stock, Four Billion (4,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of Four
Million Dollars ($4,000,000));
Class A Common Stock - Special Series 1, Two Billion
(2,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Two Million Dollars ($2,000,000));
Class A Common Stock - Special Series 2, Two Billion
(2,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Two Million Dollars ($2,000,000));
Class B Common Stock, Two Billion (2,000,000,000) shares
-3-
<PAGE> 4
of capital stock of the Corporation (of the aggregate par
value of Two Million Dollars ($2,000,000));
Class B Common Stock - Special Series 1, Two Billion
(2,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Two Million Dollars ($2,000,000));
Class B Common Stock - Special Series 2, Two Billion
(2,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Two Million Dollars ($2,000,000));
Class C Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class D Common Stock, One Billion (1,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of One
Million Dollars ($1,000,000));
Class E Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class F Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class G Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class H Common Stock, One Billion (1,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of One
Million Dollars ($1,000,000));
Class I Common Stock - Special Series 1, One Billion
(1,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of One Million Dollars ($1,000,000));
Class I Common Stock - Special Series 2, One Billion
(1,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of One Million Dollars ($1,000,000)); and
Class J Common Stock, One Billion (1,000,000,000) shares
-4-
<PAGE> 5
of capital stock of the Corporation (of the aggregate par
value of One Million Dollars ($1,000,000)).
The total number of authorized and unclassified shares of capital stock of the
Corporation as increased is Twenty Billion (20,000,000,000) shares, of the par
value of One Mill ($0.001) per share, and of the aggregate par value of Twenty
Million Dollars ($20,000,000).
-5-
<PAGE> 6
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused these presents
to be signed in its name and on its behalf by its Executive Vice President and
its corporate seal to be hereunto affixed and attested by its Secretary on this
14th day of August, 1991.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ William B. Blundin
-----------------------
William B. Blundin
Executive Vice President
Attest:
/s/ James W. Bernaiche
- ----------------------
James W. Bernaiche
Assistant Secretary
-6-
<PAGE> 7
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON FUNDS, INC.,
who executed on behalf of said Corporation the attached Articles Supplementary
of said Corporation, of which this Certificate is made a part, hereby
acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: August 14, 1991 /s/ William B. Blundin
--------- ----------------------
William B. Blundin
Executive Vice President
-7-
<PAGE> 1
EXHIBIT 1(H)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class A Common Stock
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class A
Common Stock (par value One Mill ($0.001) per share), such that there now exists
a total of Five Billion (5,000,000,000) shares of capital stock of the
Corporation classified as Class A Common Stock, pursuant to the following
resolution adopted at a regular meeting of the Board of Directors of the
Corporation held on July 10, 1991:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as Class A Common Stock, with all of
the preferences, conversion and other rights, voting
<PAGE> 2
powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption set
forth in the Charter of the Corporation with respect to
Class A Common Stock.
Class A Common Stock - Special Series 1
SECOND: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class A
Common Stock - Special Series 1 (par value One Mill ($0.001) per share), such
that there now exists a total of Three Billion (3,000,000,000) shares of capital
stock of the Corporation classified as Class A Common Stock - Special Series 1,
pursuant to the following resolution adopted at a regular meeting of the Board
of Directors of the Corporation held on July 10, 1991:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as that separate series of Class A
Common Stock known as Class A Common Stock - Special Series 1, with all
of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms
and conditions of redemption set forth in the Charter of the
Corporation with respect to Class A Common Stock - Special Series 1.
Class A Common Stock - Special Series 2
THIRD: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the
-2-
<PAGE> 3
Corporation has classified One Billion (1,000,000,000) shares of authorized,
unissued and unclassified capital stock of the Corporation (par value One Mill
($0.001) per share) as Class A Common Stock - Special Series 2 (par value One
Mill ($0.001) per share), such that there now exists a total of Three Billion
(3,000,000,000) shares of capital stock of the Corporation classified as Class A
Common Stock - Special Series 2, pursuant to the following resolution adopted at
a regular meeting of the Board of Directors of the Corporation held on July 10,
1991:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as that separate series of Class A
Common Stock known as Class A Common Stock - Special Series 2, with all
of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms
and conditions of redemption set forth in the Charter of the
Corporation with respect to Class A Common Stock - Special Series 2.
Class B Common Stock
FOURTH: Pursuant to Section 2-208 of Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Three
Billion (3,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class B
Common Stock (par value One Mill ($0.001) per share), such that there now exists
a total of Five Billion (5,000,000,000) shares of capital stock of
-3-
<PAGE> 4
the Corporation classified as Class B Common Stock, pursuant to the following
resolution adopted at a regular meeting of the Board of Directors of the
Corporation held on July 10, 1991:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Three Billion (3,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Three Million Dollars ($3,000,000)) be, and
hereby are, divided into and classified as Class B Common Stock, with
all of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms
and conditions of redemption set forth in the Charter of the
Corporation with respect to Class B Common Stock.
Class B Common Stock - Special Series 1
FIFTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class B
Common Stock - Special Series 1 (par value One Mill ($0.001) per share), such
that there now exists a total of Three Billion (3,000,000,000) shares of capital
stock of the Corporation classified as Class B Common Stock - Special Series 1,
pursuant to the following resolution adopted at a regular meeting of the Board
of Directors of the Corporation held on July 10, 1991:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares
-4-
<PAGE> 5
of capital stock of the Corporation (of the par value of One Mill
($0.001) per share and of the aggregate par value of One Million
Dollars ($1,000,000)) be, and hereby are, divided into and classified
as that separate series of Class B Common Stock known as Class B Common
Stock - Special Series 1, with all of the preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption set forth in the
Charter of the Corporation with respect to Class B Common Stock -
Special Series 1.
Class B Common Stock - Special Series 2
SIXTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class B
Common Stock - Special Series 2 (par value One Mill ($0.001) per share), such
that there now exists a total of Three Billion (3,000,000,000) shares of capital
stock of the Corporation classified as Class B Common Stock - Special Series 2,
pursuant to the following resolution adopted at a regular meeting of the Board
of Directors of the Corporation held on July 10, 1991:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as that separate series of Class B
Common Stock known as Class B Common Stock - Special Series 2, with all
of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms
and conditions of redemption set forth in the Charter of the
Corporation with respect to Class B Common Stock - Special Series 2.
-5-
<PAGE> 6
Class I Common Stock - Special Series 1
SEVENTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Two
Billion (2,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class I
Common Stock - Special Series 1 (par value One Mill ($0.001) per share), such
that there now exists a total of Three Billion (3,000,000,000) shares of capital
stock of the Corporation classified as Class I Common Stock - Special Series 1,
pursuant to the following resolution adopted at a regular meeting of the Board
of Directors of the Corporation held on July 10, 1991:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Two Billion (2,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Two Million Dollars ($2,000,000)) be, and hereby
are, divided into and classified as that separate series of Class I
Common Stock known as Class I Common Stock - Special Series 1, with all
of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms
and conditions of redemption set forth in the Charter of the
Corporation with respect to Class I Common Stock - Special Series 1.
Class I Common Stock - Special Series 2
EIGHTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Two
Billion (2,000,000,000) shares of authorized, unissued and unclassified capital
stock of the
-6-
<PAGE> 7
Corporation (par value One Mill ($0.001) per share) as Class I Common Stock -
Special Series 2 (par value One Mill ($0.001) per share), such that there now
exists a total of Three Billion (3,000,000,000) shares of capital stock of the
Corporation classified as Class I Common Stock - Special Series 2, pursuant to
the following resolution adopted at a regular meeting of the Board of Directors
of the Corporation held on July 10, 1991:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Two Billion (2,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Million ($0.001) per share and of
the aggregate par value of Two Million Dollars ($2,000,000)) be, and
hereby are, divided into and classified as that separate series of
Class I Common Stock known as Class I Common Stock - Special Series 2,
with all of the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption set forth in the Charter of the
Corporation with respect to Class I Common Stock - Special Series 2.
Class K Common Stock
NINTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Two
Billion (2,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share ) as Class K
Common Stock (par value One Mill ($0.001) per share) pursuant to the following
resolutions adopted at a regular meeting of the Board of Directors of the
Corporation held on July 10, 1991:
-7-
<PAGE> 8
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Two Billion (2,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Two Million Dollars ($2,000,000)) be, and hereby
are, divided into and classified as a separate class of Common Stock to
be known as Class K Common Stock;
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
Class L Common Stock
TENTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Two
Billion (2,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class L
Common Stock (par value One Mill ($0.001) per share) pursuant to the following
resolutions adopted at a regular meeting of the Board of Directors of the
Corporation held on July 10, 1991:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Two Billion (2,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Two Million Dollars ($2,000,000) be, and hereby
are, divided into and classified as a separate class of Common Stock to
be known as Class L Common Stock;
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of
-8-
<PAGE> 9
redemption that are set forth in the Charter of the Corporation with
respect to its shares of capital stock.
General
ELEVENTH: The shares of capital stock of the Corporation
classified pursuant to the resolutions set forth in Article FIRST, Article
SECOND, Article THIRD, Article FOURTH, Article FIFTH, Article SIXTH, Article
SEVENTH, Article EIGHTH, Article NINTH and Article TENTH of these Articles
Supplementary have been classified by the Corporation's Board of Directors under
the authority contained in the Charter of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Secretary on this 14th day of August, 1991.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ William B. Blundin
----------------------
William B. Blundin
Executive Vice President
Attest:
/s/ James W. Bernaiche
- ----------------------
James W. Bernaiche
Assistant Secretary
-9-
<PAGE> 10
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON FUNDS,
INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: August 14, 1991 /s/ William B. Blundin
----------------------
William B. Blundin
Executive Vice President
-10-
<PAGE> 1
EXHIBIT 1(I)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland Corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class B Common Stock-Special Series 2
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Two
Billion ($2,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class B
Common Stock-Special Series 2 (par value One Mill ($0.001) per share), such that
there now exists a total of Five Billion (5,000,000,000) shares of capital stock
of the Corporation classified as Class B Common Stock-Special Series 2, pursuant
to the following resolution adopted by a Unanimous Consent of the Board of
Directors of the Corporation dated November 18, 1991:
RESOLVED, that pursuant to Article VI of the
Articles of Restatement of the Corporation Two Billion
(2,000,000,000) authorized, unissued and unclassified shares
of capital stock of the Corporation of the par value of One
Mill ($0.001) per share and of the aggregate par value of Two
Million Dollars ($2,000,000)) be, and hereby are, divided into
and classified as Class B Common Stock-Special Series 2, with
all of the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of
<PAGE> 2
redemption set forth in the Charter of the Corporation with
respect to Class B Common Stock-Special Series 2.
General
SECOND: The shares of capital stock of the Corporation
classified pursuant to the resolution set forth in Article FIRST of these
Articles Supplementary have been classified by the Corporation's Board of
Directors under the authority contained in the Charter of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Secretary on this 22nd day of November, 1991.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By:/s/ William B. Blundin
----------------------
William B. Blundin
Executive Vice President
Attest: /s/ W. Bruce McConnel, III
--------------------------
-2-
<PAGE> 3
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: November 22, 1991 /s/ William B. Blundin
----------------------
William B. Blundin
Executive Vice President
-3-
<PAGE> 1
EXHIBIT 1(J)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class B Common Stock-Special Series 2
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of authorized unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class B
Common Stock-Special Series 2 (par value One Mill ($0.001) per share), such that
there now exists a total of Six Billion (6,000,000,000) shares of capital stock
of the Corporation classified as Class B Common Stock-Special Series 2, pursuant
to the following resolution adopted by a Unanimous Consent of the Board of
Directors of the Corporation dated May 8, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as Class B Common Stock-Special Series
2, with all of the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption set forth in the Charter of the
Corporation with respect to Class B Common Stock-Special Series 2.
<PAGE> 2
General
SECOND: The shares of capital stock of the Corporation
classified pursuant to the resolution set forth in Article FIRST of these
Articles Supplementary have been classified by the Corporation's Board of
Directors under the authority contained in the Charter of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Secretary on this 11th day of May, 1992.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ William B. Blundin
----------------------
William B. Blundin
Executive Vice President
Attest:
/s/ W. Bruce McConnel, III
----------------------
-2-
<PAGE> 3
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: May 8, 1992 /s/ William B. Blundin
----------------------
William B. Blundin
Executive Vice President
<PAGE> 1
EXHIBIT 1(K)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class B Common Stock-Special Series 2
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has reclassified Two
Billion (2,000,000,000) shares of authorized and unissued capital stock of the
Corporation previously classified as Class L Common Stock (par value One Mill
($0.001) per share) as Class B Common Stock-Special Series 2 (par value One Mill
($0.001) per share), such that there now exists a total of Eight Billion
(8,000,000,000) shares of capital stock of the Corporation classified as Class B
Common Stock-Special Series 2, pursuant to the following resolution adopted by a
Unanimous Consent of the Board of Directors of the Corporation dated May 12,
1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Two Billion (2,000,000,000)
authorized and unissued shares of capital stock of the
Corporation previously classified as Class L Common Stock (of
the par value of One Mill ($0.001) per share and of the
aggregate par value of Two Million Dollars ($2,000,000)) be,
and hereby are, divided into and reclassified as Class B
Common Stock-
<PAGE> 2
Special Series 2, with all of the preferences, conversion and
other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of
redemption set forth in the Charter of the Corporation with
respect to Class B Common Stock-Special Series 2.
General
SECOND: The shares of capital stock of the Corporation
reclassified pursuant to the resolution set forth in Article FIRST of these
Articles Supplementary have been reclassified by the Corporation's Board of
Directors under the authority contained in the Charter of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Assistant Secretary on this 13th day of May, 1992.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ William B. Blundin
--------------------------
William B. Blundin
Executive Vice President
Attest:
/s/ W. Bruce McConnel, III
- ----------------------------
-2-
<PAGE> 3
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: May 13, 1992 /s/ William B. Blundin
---------------------------
William B. Blundin
Executive Vice President
<PAGE> 1
EXHIBIT 1(L)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class B Common Stock-Special Series 2
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has reclassified Two
Billion (2,000,000,000) shares of authorized and unissued capital stock of the
Corporation previously classified as Class K Common Stock (par value One Mill
($0.001) per share) as Class B Common Stock-Special Series 2 (par value One Mill
($0.001) per share), such that there now exists a total of Ten Billion
(10,000,000,000) shares of capital stock of the Corporation classified as Class
B Common Stock-Special Series 2, pursuant to the following resolution adopted by
a Unanimous Consent of the Board of Directors of the corporation dated July 16,
1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Two Billion (2,000,000,000)
authorized and unissued shares of capital stock of the Corporation
previously classified as Class K Common Stock (of the par value of One
Mill ($0.001) per share and of the aggregate par value of Two Million
Dollars ($2,000,000)) be, and hereby are, divided into and reclassified
as Class B Common Stock-Special Series 2, with all of the preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends,
<PAGE> 2
qualifications, and terms and conditions of redemption set forth in the
Charter of the Corporation with respect to Class B Common Stock-Special
Series 2.
General
SECOND: The shares of capital stock of the Corporation
reclassified pursuant to the resolution set forth in Article FIRST of these
Articles Supplementary have been reclassified by the Corporation's Board of
Directors under the authority contained in the Charter of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Assistant Secretary on this 17th day of July, 1992.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ William B. Blundin
--------------------------
William B. Blundin
Executive Vice President
Attest:
/s/ W. Bruce McConnel, III
- --------------------------
-2-
<PAGE> 3
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: July 17, 1992 /s/ William B. Blundin
----------------------
William B. Blundin
Executive Vice President
<PAGE> 1
EXHIBIT 1(M)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Pursuant to sections 2-105(c) and 2-208.1 of the
Maryland General Corporation Law, the Board of Directors of the Corporation, an
open-end company registered under the Investment Company Act of 1940, has
increased the total number of shares of capital stock which the Corporation
shall have authority to issue from Forty Billion (40,000,000,000) shares, of the
par value of One Mill ($0.001) per share, and of the aggregate par value of
Forty Million Dollars ($40,000,000), to Two Hundred Billion (200,000,000,000)
shares, of the par value of One Mill ($0.001) per share, and of the aggregate
par value of Two Hundred Million Dollars ($200,000,000), pursuant to the
following resolution adopted at a regular meeting of the Board of Directors of
the Corporation held on July 23, 1992:
RESOLVED, that the total number of shares of capital stock
which the Corporation shall have authority to issue be increased to Two
Hundred Billion (200,000,000,000) shares, of the par value of One Mill
($0.001) per share, and of the aggregate par value of Two Hundred
Million Dollars ($200,000,000).
<PAGE> 2
SECOND: The total number of classified and authorized
shares of each class of the Corporation as of immediately before the increase
is:
Class A Common Stock, Five Billion (5,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of Five
Million Dollars ($5,000,000));
Class A Common Stock - Special Series 1, Three Billion
(3,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Three Million Dollars ($3,000,000));
Class A Common Stock - Special Series 2, Three Billion
(3,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Three Million Dollars ($3,000,000));
Class B Common Stock, Five Billion (5,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of Five
Million Dollars ($5,000,000));
Class B Common Stock - Special Series 1, Three Billion
(3,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Three Million Dollars ($3,000,000));
Class B Common Stock - Special Series 2, Ten Billion
(10,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Ten Million Dollars ($10,000,000));
Class C Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class D Common Stock, One Billion (1,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of One
Million Dollars ($1,000,000));
Class E Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class F Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
-2-
<PAGE> 3
Class G Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class H Common Stock, One Billion (1,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of One
Million Dollars ($1,000,000));
Class I Common Stock - Special Series 1, Three Billion
(3,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Three Million Dollars ($3,000,000));
Class I Common Stock - Special Series 2, Three Billion
(3,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Three Million Dollars ($3,000,000));
Class J Common Stock, One Billion (1,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of One
Million Dollars ($1,000,000));
Class K Common Stock, Zero (0) shares of capital stock of the
Corporation (of the aggregate par value of Zero Dollars ($0)); and
Class L Common Stock, Zero (0) shares of capital stock of the
Corporation (of the aggregate par value of Zero Dollars ($0)).
The total number of authorized and unclassified shares of capital stock of the
Corporation as of immediately before the increase is One Billion (1,000,000,000)
shares, of the par value of One Mill ($0.001) per share, and of the aggregate
par value of One Million Dollars ($1,000,000).
THIRD: The total number of classified and authorized
shares of each class of the Corporation as increased is:
Class A Common Stock, Five Billion (5,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of Five
Million Dollars ($5,000,000));
Class A Common Stock - Special Series 1, Three Billion
(3,000,000,000) shares of capital stock of the Corporation
-3-
<PAGE> 4
(of the aggregate par value of Three Million Dollars ($3,000,000));
Class A Common Stock - Special Series 2, Three Billion
(3,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Three Million Dollars ($3,000,000)) ;
Class B Common Stock, Five Billion (5,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of Five
Million Dollars ($5,000,000));
Class B Common Stock - Special Series 1, Three Billion
(3,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Three Million Dollars ($3,000,000));
Class B Common Stock - Special Series 2, Ten Billion
(10,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Ten Million Dollars ($10,000,000));
Class C Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class D Common Stock, One Billion (1,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of One
Million Dollars ($1,000,000));
Class E Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class F Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class G Common Stock, Two Hundred Fifty Million (250,000,000)
shares of capital stock of the Corporation (of the aggregate par value
of Two Hundred Fifty Thousand Dollars ($250,000));
Class H Common Stock, One Billion (1,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of One
Million Dollars ($1,000,000));
Class I Common Stock - Special Series 1, Three Billion
(3,000,000,000) shares of capital stock of the Corporation
-4-
<PAGE> 5
(of the aggregate par value of Three Million Dollars ($3,000,000));
Class I Common Stock - Special Series 2, Three Billion
(3,000,000,000) shares of capital stock of the Corporation (of the
aggregate par value of Three Million Dollars ($3,000,000));
Class J Common Stock, One Billion (1,000,000,000) shares of
capital stock of the Corporation (of the aggregate par value of One
Million Dollars ($1,000,000));
Class K Common Stock, Zero (0) shares of capital stock of the
Corporation (of the aggregate par value of Zero Dollars ($0)); and
Class L Common Stock, Zero (0) shares of capital stock of the
Corporation (of the aggregate par value of Zero Dollars ($0)).
The total number of authorized and unclassified shares of capital stock of the
Corporation as increased is One Hundred Sixty-One Billion (161,000,000,000)
shares, of the par value of One Mill ($0.001) per share, and of the aggregate
par value of One Hundred Sixty-One Million Dollars (161,000,000).
-5-
<PAGE> 6
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Secretary on this 5th day of August, 1992.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ William B. Blundin
----------------------
William B. Blundin
Executive Vice President
Attest:
/s/ W. Bruce McConnel,III
- -------------------------
W. Bruce McConnel, III
Secretary
-6-
<PAGE> 7
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: August 5, 1992 /s/William B. Blundin
---------------------
William B. Blundin
Executive Vice President
-7-
<PAGE> 1
EXHIBIT 1(N)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class A Common Stock
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Ten
Billion (10,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class A
Common Stock (par value One Mill ($0.001) per share), such that there now exists
a total of Fifteen Billion (15,000,000,000) shares of capital stock of the
Corporation classified as Class A Common Stock, pursuant to the following
resolution adopted at a regular meeting of the Board of Directors of the
Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Ten Billion (10,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Ten Million Dollars ($10,000,000)) be, and
hereby are, divided into and classified as Class A Common Stock, with
all of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms
and conditions of redemption set
<PAGE> 2
forth in the Charter of the Corporation with respect to
Class A Common Stock.
Class A Common Stock - Special Series 1
SECOND: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Twelve
Billion (12,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class A
Common Stock - Special Series 1 (par value One Mill ($0.001) per share), such
that there now exists a total of Fifteen Billion (15,000,000,000) shares of
capital stock of the Corporation classified as Class A Common Stock - Special
Series 1, pursuant to the following resolution adopted at a regular meeting of
the Board of Directors of the Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Twelve Billion (12,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Twelve Million Dollars ($12,000,000)) be, and
hereby are, divided into and classified as Class A Common Stock -
Special Series 1, with all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption set forth in the
Charter of the Corporation with respect to Class A Common Stock -
Special Series 1.
Class A Common Stock - Special Series 2
THIRD: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Twelve
Billion (12,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class A
-2-
<PAGE> 3
Common Stock - Special Series 2 (par value One Mill ($0.001) per share), such
that there now exists a total of Fifteen Billion (15,000,000,000) shares of
capital stock of the Corporation classified as Class A Common Stock - Special
Series 2, pursuant to the following resolution adopted at a regular meeting of
the Board of Directors of the Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Twelve Billion (12,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Twelve Million Dollars ($12,000,000)) be, and
hereby are, divided into and classified as Class A Common Stock -
Special Series 2, with all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption set forth in the
Charter of the Corporation with respect to Class A Common Stock -
Special Series 2.
Class B Common Stock
FOURTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Ten
Billion (10,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class B
Common Stock (par value One Mill ($0.001) per share), such that there now exists
a total of Fifteen Billion (15,000,000,000) shares of capital stock of the
Corporation classified as Class B Common Stock, pursuant to the following
resolution adopted at a regular meeting of the Board of Directors of the
Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the
Articles of Restatement of the Corporation Ten Billion
-3-
<PAGE> 4
(10,000,000,000) authorized, unissued and unclassified shares of
capital stock of the Corporation (of the par value of One Mill ($0.001)
per share and of the aggregate par value of Ten Million Dollars
($10,000,000)) be, and hereby are, divided into and classified as Class
B Common Stock, with all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption set forth in the
Charter of the Corporation with respect to Class B Common Stock.
Class B - Common Stock - Special Series 1
FIFTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Twelve
Billion (12,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class B
Common Stock - Special Series 1 (par value One Mill ($0.001) per share), such
that there now exists a total of Fifteen Billion (15,000,000,000) shares of
capital stock of the Corporation classified as Class B Common Stock - Special
Series 1, pursuant to the following resolution adopted at a regular meeting of
the Board of Directors of the Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Twelve Billion (12,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Twelve Million Dollars ($12,000,000)) be, and
hereby are, divided into and classified as Class B Common Stock -
Special Series 1, with all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption set forth in the
Charter of the Corporation with respect to Class B Common Stock -
Special Series 1.
Class B Common Stock - Special Series 2
-4-
<PAGE> 5
SIXTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Ten
Billion (10,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class B
Common Stock - Special Series 2 (par value One Mill ($0.001) per share), such
that there now exists a total of Twenty Billion (20,000,000,000) shares of
capital stock of the Corporation classified as Class B Common Stock - Special
Series 2, pursuant to the following resolution adopted at a regular meeting of
the Board of Directors of the Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Ten Billion (10,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Ten Million Dollars ($10,000,000)) be, and
hereby are, divided into and classified as Class B Common Stock Special
Series 2, with all of the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption set forth in the
Charter of the Corporation with respect to Class B Common Stock -
Special Series 2.
Class J Common Stock - Special Series 1
SEVENTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Billion (1,000,000,000) shares of authorized, unissued and unclassified capital
stock of the Corporation (par value One Mill ($0.001) per share) as Class J
Common Stock - Special Series 1 (par value One Mill ($0.001) per share) pursuant
to the following resolutions adopted at a regular
-5-
<PAGE> 6
meeting of the Board of Directors of the Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Billion (1,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Million Dollars ($1,000,000)) be, and hereby
are, divided into and classified as a separate series of Class J Common
Stock to be known as Class J Common Stock - Special Series 1;
FURTHER RESOLVED, that all consideration received by
the Corporation for the issue or sale of shares of Class J Common Stock
- Special Series 1 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale of all
other shares now or hereafter designated as Class J Common Stock
(irrespective of whether said shares have been designated as Special
Series of said Class and, if so designated as Special Series,
irrespective of the particular Series designation), along with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of the Corporation
allocated to the shares of Class J Common Stock - Special Series 1 or
such other shares by the Board of Directors in accordance with the
Charter of the Corporation, and each share of Class J Common Stock
Special Series 1 shall share equally with each such other share in such
consideration and other assets, income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any assets derived from any reinvestment of
such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class J Common
Stock - Special Series 1 shall be charged equally with each other share
now or hereafter designated as Class J Common Stock (irrespective of
whether said share has been designated as part of a Special Series of
said Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the Corproation in respect of shares of Class J
Common Stock - Special Series 1 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class J Common Stock Special Series 1 or such other shares in
accordance with the Charter of the Corporation, except that:
-6-
<PAGE> 7
(a) shares of Class J Common Stock - Special Series 1
shall bear the expenses and liabilities relating to any agreements or
arrangements entered into by or on behalf of the Corporation pursuant
to which an organization or other person agrees to provide services
with respect to such Series but not with respect to shares of Class J
Common Stock of the Corporation other than Class J Common Stock Special
Series 1, as well as any other expenses and liabilities directly
attributable to Class J Common Stock Special Series 1 which the Board
of Directors determines should be borne solely by such Series; and
(b) shares of Class J Common Stock - Special Series 1
shall not bear the expenses and liabilities relating to any agreements
or arrangements entered into by or on behalf of the Corporation
pursuant to which an organization or other person agrees to provide
services with respect to other shares of Class J Common Stock of the
Corporation but not with respect to Class J Common Stock Special Series
1, as well as any other expenses and liabilities directly attributable
to shares of Class J Common Stock other than Class J Common Stock -
Special Series 1 which the Board of Directors determines should be
borne solely by such other shares;
FURTHER RESOLVED, that each share of Class J Common
Stock - Special Series 1 shall otherwise have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as Class J Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a Special
Series, irrespective of the particular Series designation), except
that:
(a) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, only shares of Class J Common Stock Special Series 1
shall be entitled to vote, except that: (i) if said matter affects
shares of capital stock of the Corporation other than shares of Class J
Common Stock Special Series 1, such other affected shares of capital
stock shall also be entitled to vote, and in such case shares of Class
J Common Stock - Special Series 1 shall be voted in the aggregate
together with such other affected shares and not by Class or Series
except where otherwise required by law or permitted by the Board of
Directors of
-7-
<PAGE> 8
the Corporation; and (ii) if said matter does not affect shares of
Class J Common Stock - Special Series 1, said shares shall not be
entitled to vote (except where otherwise required by law or permitted
by the Board of Directors) even though the matter is submitted to a
vote of the holders of shares of capital stock of the Corporation other
than shares of Class J Common Stock - Special Series 1; and
(b) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other document adopted
by the Corporation relating to said agreements, arrangements, expenses
or liabilities) and is submitted to a vote of shareholders of the
Corporation, shares of Class J Common Stock - Special Series 1 shall
not be entitled to vote, except where otherwise required by law or
permitted by the Board of Directors of the Corporation and except that
if said matter affects shares of Class J Common Stock - Special Series
1 such shares shall be entitled to vote, and in such case shares of
Class J Common Stock - Special Series 1 shall be voted in the aggregate
together with all other shares of capital stock of the Corporation
voting on the matter and not by Class or Series except where otherwise
required by law or permitted by the Board of Directors.
Class K Common Stock
EIGHTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified
Fifteen Billion (15,000,000,000) shares of authorized, unissued and unclassified
capital stock of the Corporation (par value One Mill ($0.001) per share) as
Class K Common Stock (par value One Mill ($0.001) per share), such that there
now exists a total of Fifteen Billion (15,000,000,000) shares of capital stock
of the Corporation classified as Class K Common Stock, pursuant to the following
resolution adopted at a regular meeting of the Board of Directors of the
Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the
Articles of Restatement of the Corporation Fifteen Billion
-8-
<PAGE> 9
(15,000,000,000) authorized, unissued and unclassified shares of
capital stock of the Corporation (of the par value of One Mill ($0.001)
per share and of the aggregate par value of Fifteen Million Dollars
($15,000,000)) be, and hereby are, divided into and classified as Class
K Common Stock, with all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption set forth in the
Charter of the Corporation with respect to Class K Common Stock.
Class K Common Stock - Special Series 1
NINTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified
Fifteen Billion (15,000,000,000) shares of authorized, unissued and unclassified
capital stock of the Corporation (par value One Mill ($0.001) per share) as
Class K Common Stock - Special Series 1 (par value One Mill ($0.001) per share)
pursuant to the following resolutions adopted at a regular meeting of the Board
of Directors of the Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Fifteen Billion (15,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Fifteen Million Dollars ($15,000,000)) be, and
hereby are, divided into and classified as a separate series of Class K
Common Stock to be known as Class K Common Stock - Special Series 1;
FURTHER RESOLVED, that all consideration received by
the Corporation for the issue or sale of shares of Class K Common Stock
- Special Series 1 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale of all
other shares now or hereafter designated as Class K Common Stock
(irrespective of whether said shares have been designated as Special
Series of said Class and, if so designated as Special Series,
irrespective of the particular Series designation), along with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the
-9-
<PAGE> 10
sale, exchange or liquidation thereof, any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may
be, and any general assets of the Corporation allocated to the shares
of Class K Common Stock - Special Series 1 or such other shares by the
Board of Directors in accordance with the Charter of the Corporation,
and each share of Class K Common Stock Special Series 1 shall share
equally with each such other share in such consideration and other
assets, income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof, and
any assets derived from any reinvestment of such proceeds in whatever
form;
FURTHER RESOLVED, that each share of Class K Common
Stock - Special Series 1 shall be charged equally with each other share
now or hereafter designated as Class K Common Stock (irrespective of
whether said share has been designated as part of a Special Series of
said Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the Corporation in respect of shares of Class K
Common Stock - Special Series 1 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class K Common Stock Special Series 1 or such other shares in
accordance with the Charter of the Corporation, except that:
(a) shares of Class K Common Stock - Special Series 1
shall bear the expenses and liabilities relating to any agreements or
arrangements entered into by or on behalf of the Corporation pursuant
to which an organization or other person agrees to provide services
with respect to such Series but not with respect to shares of Class K
Common Stock of the Corporation other than Class K Common Stock Special
Series 1, as well as any other expenses and liabilities directly
attributable to Class K Common Stock Special Series 1 which the Board
of Directors determines should be borne solely by such Series; and
(b) shares of Class K Common Stock - Special Series 1
shall not bear the expenses and liabilities relating to any agreements
or arrangements entered into by or on behalf of the Corporation
pursuant to which an organization or other person agrees to provide
services with respect to other shares of Class K Common Stock of the
Corporation but not with respect to Class K Common Stock Special Series
1, as well as any other expenses and liabilities directly attributable
to shares of Class K Common Stock other than Class K Common Stock -
Special Series 1 which the Board of Directors determines should be
borne solely by such other shares;
-10-
<PAGE> 11
FURTHER RESOLVED, that each share of Class K Common
Stock - Special Series 1 shall otherwise have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as Class K Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a Special
Series, irrespective of the particular Series designation), except
that:
(a) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, only shares of Class K Common Stock Special Series 1
shall be entitled to vote, except that: (i) if said matter affects
shares of capital stock of the Corporation other than shares of Class K
Common Stock Special Series 1, such other affected shares of capital
stock shall also be entitled to vote, and in such case shares of Class
K Common Stock - Special Series 1 shall be voted in the aggregate
together with such other affected shares and not by Class or Series
except where otherwise required by law or permitted by the Board of
Directors of the Corporation; and (ii) if said matter does not affect
shares of Class K Common Stock - Special Series 1, said shares shall
not be entitled to vote (except where otherwise required by law or
permitted by the Board of Directors) even though the matter is
submitted to a vote of the holders of shares of capital stock of the
Corporation other than shares of Class K Common Stock - Special Series
1; and
(b) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other document adopted
by the Corporation relating to said agreements, arrangements, expenses
or liabilities) and is submitted to a vote of shareholders of the
Corporation, shares of Class K Common Stock - Special Series 1 shall
not be entitled to vote, except where otherwise required by law or
permitted by the Board of Directors of the Corporation and except that
if said matter affects shares of Class K Common Stock - Special Series
1 such shares shall be entitled to vote, and in such case shares of
Class K Common Stock - Special Series 1 shall be voted in the aggregate
together with all other shares of capital stock of the Corporation
voting on the matter and not by Class or Series except where otherwise
required by law or permitted by the Board of Directors.
-11-
<PAGE> 12
Class K Common Stock - Special Series 2
TENTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified
Fifteen Billion (15,000,000,000) shares of authorized, unissued and unclassified
capital stock of the Corporation (par value One Mill ($0.001) per share) as
Class K Common Stock - Special Series 2 (par value One Mill ($0.001) per share)
pursuant to the following resolutions adopted at a regular meeting of the Board
of Directors of the Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Fifteen Billion (15,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Fifteen Million Dollars ($15,000,000)) be, and
hereby are, divided into and classified as a separate series of Class K
Common Stock to be known as Class K Common Stock - Special Series 2;
FURTHER RESOLVED, that all consideration received by
the Corporation for the issue or sale of shares of Class K Common Stock
- Special Series 2 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale of all
other shares now or hereafter designated as Class K Common Stock
(irrespective of whether said shares have been designated as Special
Series of said Class, and if so designated as Special Series,
irrespective of the particular Series designation), along with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of the Corporation
allocated to the shares of Class K Common Stock - Special Series 2 or
such other shares by the Board of Directors in accordance with the
Charter of the Corporation, and each share of Class K Common Stock
Special Series 2 shall share equally with each such other share in such
consideration and other assets, income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation
-12-
<PAGE> 13
thereof, and any assets derived from any reinvestment of
such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class K Common
Stock - Special Series 2 shall be charged equally with each other share
now or hereafter designated as Class K Common Stock (irrespective of
whether said share has been designated as part of a Special Series of
said Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the Corporation in respect of shares of Class K
Common Stock - Special Series 2 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class K Common Stock Special Series 2 or such other shares in
accordance with the Charter of the Corporation, except that:
(a) shares of Class K Common Stock - Special Series 2
shall bear the expenses and liabilities relating to any agreements or
arrangements entered into by or on behalf of the Corporation pursuant
to which an organization or other person agrees to provide services
with respect to such Series but not with respect to shares of Class K
Common Stock of the Corporation other than Class K Common Stock Special
Series 2, as well as any other expenses and liabilities directly
attributable to Class K Common Stock Special Series 2 which the Board
of Directors determines should be borne solely by such Series; and
(b) shares of Class K Common Stock - Special Series 2
shall not bear the expenses and liabilities relating to any agreements
or arrangements entered into by or on behalf of the Corporation
pursuant to which an organization or other person agrees to provide
services with respect to other shares of Class K Common Stock of the
Corporation but not with respect to Class K Common Stock Special Series
2, as well as any other expenses and liabilities directly attributable
to shares of Class K Common Stock other than Class K Common Stock -
Special Series 2 which the Board of Directors determines should be
borne solely by such other shares;
FURTHER RESOLVED, that each share of Class K Common
Stock - Special Series 2 shall otherwise have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as Class K Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a Special
Series, irrespective of the particular Series designation), except
that:
-13-
<PAGE> 14
(a) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, only shares of Class K Common Stock Special Series 2
shall be entitled to vote, except that: (i) if said matter affects
shares of capital stock of the Corporation other than shares of Class K
Common Stock Special Series 2, such other affected shares of capital
stock shall also be entitled to vote, and in such case shares of Class
K Common Stock - Special Series 2 shall be voted in the aggregate
together with such other affected shares and not by Class or Series
except where otherwise required by law or permitted by the Board of
Directors of the Corporation; and (ii) if said matter does not affect
shares of Class K Common Stock - Special Series 2, said shares shall
not be entitled to vote (except where otherwise required by law or
permitted by the Board of Directors) even though the matter is
submitted to a vote of the holders of shares of capital stock of the
Corporation other than shares of Class K Common Stock - Special Series
2; and
(b) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other document adopted
by the Corporation relating to said agreements, arrangements, expenses
or liabilities) and is submitted to a vote of shareholders of the
Corporation, shares of Class K Common Stock - Special Series 2 shall
not be entitled to vote, except where otherwise required by law or
permitted by the Board of Directors of the Corporation, and except that
if said matter affects shares of Class K Common Stock - Special Series
2 such shares shall be entitled to vote, and in such case shares of
Class K Common Stock - Special Series 2 shall be voted in the aggregate
together with all other shares of capital stock of the Corporation
voting on the matter and not by Class or Series except where otherwise
required by law or permitted by the Board of Directors.
Class L Common Stock
ELEVENTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified
Fifteen Billion (15,000,000,000) shares of authorized, unissued and unclassified
capital stock of
-14-
<PAGE> 15
the Corporation (par value One Mill ($0.001) per share) as Class L Common Stock
(par value One Mill ($0.001) per share), such that there now exists a total of
Fifteen Billion (15,000,000,000) shares of capital stock of the Corporation
classified as Class L Common Stock, pursuant to the following resolution adopted
at a regular meeting of the Board of Directors of the Corporation held on July
23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Fifteen Billion (15,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Fifteen Million Dollars ($15,000,000)) be, and
hereby are, divided into and classified as Class L Common Stock, with
all of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms
and conditions of redemption set forth in the Charter of the
Corporation with respect to Class L Common Stock.
Class L Common Stock - Special Series 1
TWELFTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified
Fifteen Billion (15,000,000,000) shares of authorized, unissued and unclassified
capital stock of the Corporation (par value one Mill ($0.001) per share) as
Class L Common Stock - Special Series 1 (par value One Mill ($0.001) per share)
pursuant to the following resolutions adopted at a regular meeting of the Board
of Directors of the corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Fifteen Billion (15,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par
-15-
<PAGE> 16
value of Fifteen Million Dollars ($15,000,000)) be, and hereby are,
divided into and classified as a separate series of Class L Common
Stock to be known as Class L Common Stock - Special Series 1;
FURTHER RESOLVED, that all consideration received by
the Corporation for the issue or sale of shares of Class L Common Stock
- Special Series 1 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale of all
other shares now or hereafter designated as Class L Common Stock
(irrespective of whether said shares have been designated as Special
Series of said Class and, if so designated as Special Series,
irrespective of the particular Series designation), along with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of the Corporation
allocated to the shares of Class L Common Stock - Special Series 1 or
such other shares by the Board of Directors in accordance with the
charter of the Corporation, and each share of Class L Common Stock
Special Series I shall share equally with each such other share in such
consideration and other assets, income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any assets derived from any reinvestment of
such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class L Common
Stock - Special Series 1 shall be charged equally with each other share
now or hereafter designated as Class L Common Stock (irrespective of
whether said share has been designated as part of a Special Series of
said Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the corporation in respect of shares of Class L
Common Stock - Special Series 1 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class L Common Stock Special Series 1 or such other shares in
accordance with the Charter of the Corporation, except that:
(a) shares of Class L Common Stock - Special Series 1
shall bear the expenses and liabilities relating to any agreements or
arrangements entered into by or on behalf of the Corporation pursuant
to which an organization or other person agrees to provide services
with respect to such Series but not with respect to shares of Class L
Common Stock of the Corporation other than Class L Common Stock Special
Series 1, as well as any other expenses and
-16-
<PAGE> 17
liabilities directly attributable to Class L Common Stock Special
Series 1 which the Board of Directors determines should be borne solely
by such Series; and
(b) shares of Class L Common Stock - Special Series 1
shall not bear the expenses and liabilities relating to any agreements
or arrangements entered into by or on behalf of the Corporation
pursuant to which an organization or other person agrees to provide
services with respect to other shares of Class L Common Stock of the
Corporation but not with respect to Class L Common Stock Special Series
1, as well as any other expenses and liabilities directly attributable
to shares of Class L Common Stock other than Class L Common Stock -
Special Series 1 which the Board of Directors determines should be
borne solely by such other shares;
FURTHER RESOLVED, that each share of Class L Common
Stock - Special Series 1 shall otherwise have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as Class L Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a Special
Series, irrespective of the particular Series designation), except
that:
(a) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, only shares of Class L Common Stock Special Series 1
shall be entitled to vote, except that:
(i) if said matter affects shares of capital stock of the Corporation
other than shares of Class L Common Stock Special Series 1, such other
affected shares of capital stock shall also be entitled to vote, and in
such case shares of Class L Common Stock - Special Series 1 shall be
voted in the aggregate together with such other affected shares and not
by Class or Series except where otherwise required by law or permitted
by the Board of Directors of the Corporation; and (ii) if said matter
does not affect shares of Class L Common Stock - Special Series 1, said
shares shall not be entitled to vote (except where otherwise required
by law or permitted by the Board of Directors) even though the matter
is submitted to a vote of the holders of shares of capital stock of the
Corporation other than shares of Class L Common Stock - Special Series
1; and
-17-
<PAGE> 18
(b) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other document adopted
by the Corporation relating to said agreements, arrangements, expenses
or liabilities) and is submitted to a vote of shareholders of the
Corporation, shares of Class L Common Stock - Special Series 1 shall
not be entitled to vote, except where otherwise required by law or
permitted by the Board of Directors of the Corporation, and except that
if said matter affects shares of Class L Common Stock - Special Series
1 such shares shall be entitled to vote, and in such case shares of
Class L Common Stock - Special Series 1 shall be voted in the aggregate
together with all other shares of capital stock of the Corporation
voting on the matter and not by Class or Series except where otherwise
required by law or permitted by the Board of Directors.
Class L Common Stock - Special Series 2
THIRTEENTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified
Fifteen Billion (15,000,000,000) shares of authorized, unissued and unclassified
capital stock of the Corporation (par value One Mill ($0.001) per share) as
Class L Common Stock - Special Series 2 (par value One Mill ($0.001) per share)
pursuant to the following resolutions adopted at a regular meeting of the Board
of Directors of the Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Fifteen Billion (15,000,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Fifteen Million Dollars ($15,000,000)) be, and
hereby are, divided into and classified as a separate series of Class L
Common Stock to be known as Class L Common Stock - Special Series 2;
FURTHER RESOLVED, that all consideration received by
the Corporation for the issue or sale of shares of Class L Common Stock
- Special Series 2 shall be invested and reinvested with the
consideration received by the
-18-
<PAGE> 19
Corporation for the issue and sale of all other shares now or hereafter
designated as Class L Common Stock (irrespective of whether said shares
have been designated as Special Series of said Class and, if so
designated as Special Series, irrespective of the particular Series
designation), along with all income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, and any
general assets of the Corporation allocated to the shares of Class L
Common Stock - Special Series 2 or such other shares by the Board of
Directors in accordance with the Charter of the Corporation, and each
share of Class L Common Stock Special Series 2 shall share equally with
each such other share in such consideration and other assets, income,
earnings, profits and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation thereof, and any assets derived
from any reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class L Common
Stock - Special Series 2 be charged equally with each other share now
or hereafter designated as Class L Common Stock (irrespective of
whether said share has been designated as part of a Special Series of
said Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the Corporation in respect of shares of Class L
Common Stock - Special Series 2 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class L Common Stock Special Series 2 or such other shares in
accordance with the Charter of the Corporation, except that:
(a) shares of Class L Common Stock - Special Series 2
shall bear the expenses and liabilities relating to any agreements or
arrangements entered into by or on behalf of the Corporation pursuant
to which an organization or other person agrees to provide services
with respect to such Series but not with respect to shares of Class L
Common Stock of the Corporation other than Class L Common Stock Special
Series 2, as well as any other expenses and liabilities directly
attributable to Class L Common Stock Special Series 2 which the Board
of Directors determines should be borne solely by such Series; and
(b) shares of Class L Common Stock - Special Series 2
shall not bear the expenses and liabilities relating to any agreements
or arrangements entered into by or on behalf of the Corporation
pursuant to which an organization or other person agrees to provide
services with
-19-
<PAGE> 20
respect to other shares of Class L Common Stock of the Corporation but
not with respect to Class L Common Stock Special Series 2, as well as
any other expenses and liabilities directly attributable to shares of
Class L Common Stock other than Class L Common Stock - Special Series 2
which the Board of Directors determines should be borne solely by such
other shares;
FURTHER RESOLVED, that each share of Class L Common
Stock - Special Series 2 shall otherwise have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as Class L Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a Special
Series, irrespective of the particular Series designation), except
that:
(a) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, only shares of Class L Common Stock Special Series 2
shall be entitled to vote, except that: (i) if said matter affects
shares of capital stock of the Corporation other than shares of Class L
Common Stock Special Series 2, such other affected shares of capital
stock shall also be entitled to vote, and in such case shares of Class
L Common Stock - Special Series 2 shall be voted in the aggregate
together with such other affected shares and not by Class or Series
except where otherwise required by law or permitted by the Board of
Directors of the Corporation; and (ii) if said matter does not affect
shares of Class L Common Stock - Special Series 2, said shares shall
not be entitled to vote (except where otherwise required by law or
permitted by the Board of Directors) even though the matter is
submitted to a vote of the holders of shares of capital stock of the
Corporation other than shares of Class L Common Stock - Special Series
2; and
(b) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other document adopted
by the Corporation relating to said agreements, arrangements, expenses
or liabilities) and is submitted to a vote of shareholders of the
Corporation, shares of Class L Common Stock - Special Series 2 shall
not be entitled to vote, except where otherwise required by law or
permitted by the Board of
-20-
<PAGE> 21
Directors of the Corporation, and except that if said matter affects
shares of Class L Common Stock - Special Series 2 such shares shall be
entitled to vote, and in such case shares of Class L Common Stock -
Special Series 2 shall be voted in the aggregate together with all
other shares of capital stock of the Corporation voting on the matter
and not by Class or Series except where otherwise required by law or
permitted by the Board of Directors.
Class M Common Stock
FOURTEENTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Hundred Million (100,000,000) shares of authorized, unissued and unclassified
capital stock of the Corporation (par value One Mill ($0.001) per share) as
Class M Common Stock (par value One Mill ($0.001) per share) pursuant to the
following resolutions adopted at a regular meeting of the Board of Directors of
the Corporation held on July 23, 1992:
RESOLVED that pursuant to Article VI of the Articles
of Restatement of the Corporation One Hundred Million (100,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Hundred Thousand Dollars ($100,000)) be, and
hereby are, divided into and classified as a separate class of Common
Stock to be known as Class M Common Stock;
FURTHER RESOLVED, that each Share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
Class N Common Stock
FIFTEENTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Hundred Million (100,000,000) shares of authorized, unissued and unclassified
capital stock of
-21-
<PAGE> 22
the Corporation (par value One Mill ($0.001) per share) as Class N Common Stock
(par value One Mill ($0.001) per share) pursuant to the following resolutions
adopted at a regular meeting of the Board of Directors of the Corporation held
on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Hundred Million (100,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Hundred Thousand Dollars ($100,000)) be, and
hereby are, divided into and classified as a separate Class of Common
Stock to be known as Class N Common Stock;
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
Class O Common Stock
SIXTEENTH: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Hundred Million (100,000,000) shares of authorized, unissued and unclassified
capital stock of the Corporation (par value One Mill ($0.001) per share) as
Class O Common Stock (par value One Mill ($0.001) per share) pursuant to the
following resolutions adopted at a regular meeting of the Board of Directors of
the Corporation held on July 23, 1992:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Hundred Million (100,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Hundred Thousand Dollars ($100,000)) be, and
hereby are, divided into and classified as a separate class of Common
Stock to be known as Class O Common Stock;
-22-
<PAGE> 23
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
General
SEVENTEENTH: The shares of capital stock of the Corporation
classified pursuant to the resolutions set forth in Article FIRST, Article
SECOND, Article THIRD, Article FOURTH, Article FIFTH, Article SIXTH, Article
SEVENTH, Article EIGHTH, Article NINTH, Article TENTH, Article ELEVENTH, Article
TWELFTH, Article THIRTEENTH, Article FOURTEENTH, Article FIFTEENTH and Article
SIXTEENTH of these Articles Supplementary have been classified by the
Corporation's Board of Directors under the authority contained in the Charter of
the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Secretary on this 5th day of August, 1992.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By:/s/ William B. Blundin
----------------------
William B. Blundin
Executive Vice President
Attest:
/s/ W. Bruce McConnel, III
- --------------------------
-23-
<PAGE> 24
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: August 5, 1992 /s/ William B. Blundin
----------------------
William B. Blundin
Executive Vice President
-24-
<PAGE> 1
EXHIBIT 1(O)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class I Common Stock
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified Five
Hundred Million (500,000,000) shares of authorized, unissued and unclassified
capital stock of the Corporation (par value One Mill ($0.001) per share), such
that there now exists a total of Five Hundred Million (500,000,000) shares of
capital stock of the Corporation classified as Class I Common Stock, pursuant to
the following resolutions adopted at a regular meeting of the Board of Directors
of the Corporation held on January 29, 1993:
RESOLVED, that pursuant to Article VI of the Articles of
Restatement of the Corporation Five Hundred Million (500,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of Five Hundred Thousand Dollars ($500,000)) be,
and hereby are, divided into and classified as Class I Common Stock;
FURTHER RESOLVED, that all consideration received by the
Corporation for the issue or sale of shares of Class I Common Stock
shall be invested and reinvested with the consideration received by the
Corporation for the issue and sale of all other shares now or hereafter
designated as
<PAGE> 2
Class I Common Stock (irrespective of whether said shares have been
designated as a Special Series of said Class and, if so designated as a
Special Series, irrespective of the particular Series designation),
along with all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of
the Corporation allocated to the shares of Class I Common Stock or such
other shares by the Board of Directors in accordance with the Charter
of the Corporation, and each share of Class I Common Stock shall share
equally with each such other share in such consideration and other
assets, income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof, and
any asset derived from any reinvestment of such proceeds in whatever
form;
FURTHER RESOLVED, that each share of Class I Common Stock
shall be charged equally with each other share now or hereafter
designated as Class I Common Stock (irrespective of whether said share
has been designated as part of a Special Series of said Class and, if
so designated as a part of a Special Series, irrespective of the
particular Series designation) with the expenses and liabilities of the
Corporation in respect of shares of Class I Common Stock or such other
shares and in respect of any general expenses and liabilities of the
Corporation allocated to shares of Class I Common Stock or such other
shares in accordance with the Charter of the Corporation, except that:
(a) shares of Class I Common Stock shall bear the
expenses and liabilities relating to any agreements or arrangements
entered into by or on behalf of the Corporation pursuant to which an
organization or other person agrees to provide services with respect to
such Series but not with respect to shares of Class I Common Stock of
the Corporation other than Class I Common Stock, as well as any other
expenses and liabilities directly attributable to Class I Common Stock
which the Board of Directors determines should be borne solely by such
Series; and
(b) shares of Class I Common Stock shall not bear the
expenses and liabilities relating to any agreements or arrangements
entered into by or on behalf of the Corporation pursuant to which an
organization or other person agrees to provide services with respect to
other shares of Class I Common Stock of the Corporation but not with
respect to Class I Common Stock as well as any other expenses and
liabilities directly attributable to shares of Class I Common Stock
other than Class I Common Stock which the Board
-2-
<PAGE> 3
of Directors determines should be borne solely by such other
shares;
FURTHER RESOLVED, that each share of Class I Common Stock
shall otherwise have the same preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption as each other
share now or hereafter designated as Class I Common Stock (irrespective
of whether said share has been designated as part of a Special Series
of said Class and, if so designated as part of a Special Series,
irrespective of the particular Series designation), except that:
(a) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, only shares of Class I Common Stock shall be entitled
to vote, except that: (i) if said matter affects shares of capital
stock of the Corporation other than shares of Class I Common Stock,
such other affected shares of capital stock shall also be entitled to
vote, and in such case shares of Class I Common Stock shall be voted in
the aggregate together with such other affected shares and not by Class
or Series except where otherwise required by law or permitted by the
Board of Directors of the Corporation; and (ii) if said matter does not
affect shares of Class I Common Stock, said shares shall not be
entitled to vote (except where otherwise required by law of permitted
by the Board of Directors) even though the matter is submitted to a
vote of the holders of shares of capital stock of the Corporation other
than shares of Class I Common Stock; and
(b) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other document adopted
by the Corporation relating to said agreements, arrangements, expenses
or liabilities) and is submitted to a vote of shareholders of the
Corporation, shares of Class I Common Stock shall not be entitled to
vote, except where otherwise required by law or permitted by the Board
of Directors of the Corporation and except that if said matter affects
shares of Class I Common Stock such shares shall be entitled to vote,
and in such case shares of Class I Common Stock shall be voted in the
aggregate together with all other shares of capital stock of the
Corporation voting on the matter and not by Class or
-3-
<PAGE> 4
Series except where otherwise required by law or permitted by the Board
of Directors.
Class P Common Stock
SECOND: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
and One-half Billion (1,500,000,000) shares of authorized, unissued and
unclassified capital stock of the Corporation (par value One Mill ($0.001) per
share) as Class P Common Stock (par value One Mill ($0.001) per share), such
that there now exists a total of One and One-half Billion (1,500,000,000) shares
of capital stock of the Corporation classified as Class P Common Stock, pursuant
to the following resolutions adopted at a regular meeting of the Board of
Directors of the Corporation held on January 29, 1993:
RESOLVED, that pursuant to Article VI of the Articles of
Restatement of the Corporation One and One-half Billion (1,500,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One and One-half Million Dollars ($1,500,000))
be, and hereby are, divided into and classified as Class P Common
Stock;
FURTHER RESOLVED, that all consideration received by the
Corporation for the issue or sale of shares of Class P Common Stock
shall be invested and reinvested with the consideration received by the
Corporation for the issue and sale of all other shares now or hereafter
designated as Class P Common Stock (irrespective of whether said shares
have been designated as Special Series of said Class and, if so
designated as Special Series, irrespective of the particular Series
designation), along with all income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, and any
general assets of the Corporation allocated to the shares of Class P
Common Stock or such other shares by the Board of
-4-
<PAGE> 5
Directors in accordance with the Charter of the Corporation, and each
share of Class P Common Stock shall share equally with each such other
share in such consideration and other assets, income, earnings, profits
and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class P Common Stock
shall be charged equally with each other share now or hereafter
designated as Class P Common Stock (irrespective of whether said share
has been designated as part of a Special Series of said Class and, if
so designated as a part of a Special Series, irrespective of the
particular Series designation) with the expenses and liabilities of the
Corporation in respect of shares of Class P Common Stock or such other
shares and in respect of any general expenses and liabilities of the
Corporation allocated to shares of Class P Common Stock or such other
shares in accordance with the Charter of the Corporation, except that:
(a) shares of Class P Common Stock shall bear the
expenses and liabilities relating to any agreements or arrangements
entered into by or on behalf of the Corporation pursuant to which an
organization or other person agrees to provide services with respect to
such Series but not with respect to shares of Class P Common Stock of
the Corporation other than Class P Common Stock, as well as any other
expenses and liabilities directly attributable to Class P Common Stock
which the Board of Directors determines should be borne solely by such
Series; and
(b) shares of Class P Common Stock shall not bear the
expenses and liabilities relating to any agreements or arrangements
entered into by or on behalf of the Corporation pursuant to which an
organization or other person agrees to provide services with respect to
other shares of Class P Common Stock of the Corporation but not with
respect to Class P Common Stock as well as any other expenses and
liabilities directly attributable to shares of Class P Common Stock
other than Class P Common Stock which the Board of Directors determines
should be borne solely by such other shares;
FURTHER RESOLVED, that each share of Class P Common Stock
shall otherwise have the same preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption as each other
share now or hereafter designated as Class P Common Stock (irrespective
of whether said share has been designated as part of a Special Series
of said Class and, if so designated as part of a Special Series,
-5-
<PAGE> 6
irrespective of the particular Series designation), except
that:
(a) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, only shares of Class P Common Stock shall be entitled
to vote, except that: (i) if said matter affects shares of capital
stock of the Corporation other than shares of Class P Common Stock,
such other affected shares of capital stock shall also be entitled to
vote, and in such case shares of Class P Common Stock shall be voted in
the aggregate together with such other affected shares and not by Class
or Series except where otherwise required by law or permitted by the
Board of Directors of the Corporation; and (ii) if said matter does not
affect shares of Class P Common Stock, said shares shall not be
entitled to vote (except where otherwise required by law or permitted
by the Board of Directors) even though the matter is submitted to a
vote of the holders of shares of capital stock of the Corporation other
than shares of Class P Common Stock; and
(b) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other document adopted
by the Corporation relating to said agreements, arrangements, expenses
or liabilities) and is submitted to a vote of shareholders of the
Corporation, shares of Class P Common Stock shall not be entitled to
vote, except where otherwise required by law or permitted by the Board
of Directors of the Corporation and except that if said matter affects
shares of Class P Common Stock such shares shall be entitled to vote,
and in such case shares of Class P Common Stock shall be voted in the
aggregate together with all other shares of capital stock of the
Corporation voting on the matter and not by Class or Series except
where otherwise required by law or permitted by the Board of Directors.
Class P Common Stock - Special Series 1
THIRD: Pursuant to Section 2-208 of the Maryland
General Corporation Law, the Board of Directors of the
Corporation has classified One and One-half Billion
-6-
<PAGE> 7
(1,500,000,000) shares of authorized, unissued and unclassified capital stock of
the Corporation (par value One Mill ($0.001) per share) as Class P Common Stock
- - Special Series 1 (par value One Mill ($0.001) per share) pursuant to the
following resolutions adopted at a regular meeting of the Board of Directors of
the Corporation held on January 29, 1993:
RESOLVED, that pursuant to Article VI of the Articles of
Restatement of the Corporation One and One-half Billion (1,500,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One and One-half Million Dollars ($1,500,000))
be, and hereby are, divided into and classified as a separate series of
Class P Common Stock to be known as Class P Common Stock - Special
Series 1);
FURTHER RESOLVED, that all consideration received by the
Corporation for the issue or sale of shares of Class P Common Stock -
Special Series 1 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale of all
other shares now or hereafter designated as Class P Common Stock
(irrespective of whether said shares have been designated as Special
Series of said Class, and if so designated as Special Series,
irrespective of the particular Series designation), along with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of the Corporation
allocated to the shares of Class P Common Stock - Special Series 1 or
such other shares by the Board of Directors in accordance with the
Charter of the Corporation, and each share of Class P Common Stock -
Special Series 1 shall share equally with each such other share in such
consideration and other assets, income, earnings, profits and proceeds
thereof, including any proceeds derived form the sale, exchange or
liquidation thereof, and any assets derived from any reinvestment of
such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class P Common Stock -
Special Series 1 shall be charged equally with each other share now or
hereafter designated as Class P Common Stock (irrespective of whether
said share has been designated as part of a Special Series of said
Class and, if
-7-
<PAGE> 8
so designated as a part of a Special Series, irrespective of the
particular Series designation) with the expenses and liabilities of the
Corporation in respect of shares of Class P Common Stock - Special
Series 1 or such other shares and in respect of any general expenses
and liabilities of the Corporation allocated to shares of Class P
Common Stock Special Series 1 or such other shares in accordance with
the Charter of the Corporation, except that:
(a) shares of Class P Common Stock - Special Series 1
shall bear the expenses and liabilities relating to any agreements or
arrangements entered into by or on behalf of the Corporation pursuant
to which an organization or other person agrees to provide services
with respect to such Series but not with respect to shares of Class P
Common Stock of the Corporation other than Class P Common Stock Special
Series 1, as well as any other expenses and liabilities directly
attributable to Class P Common Stock Special Series 1 which the Board
of Directors determines should be borne solely by such Series; and
(b) shares of Class P Common Stock - Special Series 1
shall not bear the expenses and liabilities relating to any agreements
or arrangements entered into by or on behalf of the Corporation
pursuant to which an organization or other person agrees to provide
services with respect to other shares of Class P Common Stock of the
Corporation but not with respect to Class P Common Stock Special Series
1, as well as any other expenses and liabilities directly attributable
to shares of Class P Common Stock other than Class P Common Stock -
Special Series 1 which the Board of Directors determines should be
borne solely by such other shares;
FURTHER RESOLVED, that each share of Class P Common Stock -
Special Series 1 shall otherwise have the same preferences, conversion
and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption as
each other share now or hereafter designated as Class P Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a Special
Series, irrespective of the particular Series designation), except
that:
(a) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, only shares of Class P Common Stock -
-8-
<PAGE> 9
Special Series 1 shall be entitled to vote, except that: (i) if said
matter affects shares of capital stock of the Corporation other than
shares of Class P Common Stock Special Series 1, such other affected
shares of capital stock shall also be entitled to vote, and in such
case shares of Class P Common Stock - Special Series 1 shall be voted
in the aggregate together with such other affected shares and not by
Class or Series except where otherwise required by law or permitted by
the Board of Directors of the Corporation; and (ii) if said matter does
not affect shares of Class P Common Stock - Special Series 1, said
shares shall not be entitled to vote (except where otherwise required
by law or permitted by the Board of Directors) even though the matter
is submitted to a vote of the holders of shares of capital stock of the
Corporation other than shares of Class P Common Stock - Special Series
1; and
(b) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other document adopted
by the Corporation relating to said agreements, arrangements, expenses
or liabilities) and is submitted to a vote of shareholders of the
Corporation, shares of Class P Common Stock - Special Series 1 shall
not be entitled to vote, except where otherwise required by law or
permitted by the Board of Directors of the Corporation, and except that
if said matter affects shares of Class P Common Stock - Special Series
1 such shares shall be entitled to vote, and in such case shares of
Class P Common Stock - Special Series 1 shall be voted in the aggregate
together with all other shares of capital stock of the Corporation
voting on the matter and not by Class or Series except where otherwise
required by law or permitted by the Board of Directors.
General
FOURTH: The shares of capital stock of the
Corporation classified pursuant to the resolutions set forth in Article
FIRST, Article SECOND and Article THIRD of these Articles Supplementary
have been classified by the Corporation's Board of Directors under the
authority contained in the Charter of the Corporation.
-9-
<PAGE> 10
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has
caused these presents to be signed in its name and on its behalf by an
Executive Vice President and its corporate seal to be hereunto affixed
and attested by its Secretary on this 3rd day of March, 1993.
PACIFIC HORIZON FUNDS, INC.
(SEAL) By: /s/ William B. Blundin
---------------------------
William B. Blundin
Executive Vice President
Attest:
/s/ W. Bruce McConnel, III
- -----------------------------
-10-
<PAGE> 11
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: March 3, 1993 /s/ William B. Blundin
----------------------
William B. Blundin
Executive Vice President
-11-
<PAGE> 1
EXHIBIT 1(P)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the city of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class B Common Stock-Special Series 2
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has reclassified
Eight Billion (8,000,000,000) shares of authorized and unissued capital stock of
the Corporation previously classified as Class K Common Stock-Special Series 2
(par value One Mill ($0.001) per share) as Class B Common StockSpecial Series 2
(par value One Mill ($0.001) per share), such that there now exists a total of
Twenty-Eight Billion (28,000,000,000) shares of capital stock of the Corporation
classified as Class B Common Stock-Special Series 2, pursuant to the following
resolution adopted by a Unanimous Consent of the Board of Directors of the
Corporation dated May 10, 1993:
RESOLVED, that Pursuant to Article VI of the Articles
of Restatement of the Corporation Eight Billion (8,000,000,000)
authorized and unissued shares of capital stock of the Corporation
previously classified as Class K Common Stock-Special Series 2 (of the
par value of One Mill ($0.001) per share and of the aggregate par value
of Eight Million Dollars ($8,000,000)) be, and hereby are, divided into
and reclassified as Class B Common Stock-Special
<PAGE> 2
Series 2, with all of the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption set forth in the
Charter of the Corporation with respect to Class B Common Stock-Special
Series 2.
General
SECOND: The shares of capital stock of the Corporation
reclassified pursuant to the resolution set forth in Article FIRST of these
Articles Supplementary have been reclassified by the Corporation's Board of
Directors under the authority contained in the Charter of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Assistant Secretary on this 10th day of May, 1993.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ William B. Blundin
---------------------------
William B. Blundin
Executive Vice President
Attest:
/s/ James W. Bernaiche
- -----------------------------
James W. Bernaiche
Assistant Secretary
-2-
<PAGE> 3
CERTIFICATE
THE UNDERSIGNED, Executive Vice President Of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: May 10, 1993 /s/ William B. Blundin
------------------------------
William B. Blundin
Executive Vice President
<PAGE> 1
EXHIBIT 1(Q)
PACIFIC HORIZON FUNDS, INC.
ARTICLES OF AMENDMENT
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies:
FIRST: The Charter of the Corporation is hereby
amended as follows:
By striking out the second sentence of Article VI, Section
(4), of the Restated Articles of Incorporation in its entirety and inserting in
lieu thereof the following:
The power of the Board of Directors to classify or
reclassify any of the shares of capital stock shall include, without
limitation, authority to classify or reclassify any such stock into any
number of one or more class or classes of capital stock and to divide
and classify shares of any class into one or more series of such class.
SECOND: The foregoing amendment to the Charter was
advised by the Board of Directors and approved by the
shareholders of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has
caused these presents to be signed in its name and on its behalf
<PAGE> 2
by its President and its corporate seal to be hereunto affixed and attested by
its Secretary on this 4th day of May, 1990.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ Thomas M. Collins
---------------------------
Thomas M. Collins
President
Attest: /s/ W. Bruce McConnel, III
--------------------------------
W. Bruce McConnel, III
Secretary
-2-
<PAGE> 3
CERTIFICATE
The undersigned, President of PACIFIC HORIZON FUNDS, INC., who
executed on behalf of said Corporation the foregoing Articles of Amendment, of
which this certificate is made a part, hereby acknowledges in the name and on
behalf of said Corporation, the foregoing Articles of Amendment to be the
corporate act of said Corporation and certifies that to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to authorization and approval are true in all material respects, under
the penalties of perjury.
Dated: May 4, 1990 /s/ Thomas M. Collins
---------------------
Thomas M. Collins
President
-3-
<PAGE> 1
EXHIBIT 1(R)
PACIFIC HORIZON FUNDS, INC.
ARTICLES OF AMENDMENT
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (the "Corporation"),
certifies that:
FIRST: The Charter of the Corporation is amended by
reclassifying all of the shares of the Corporation's Class H Common Stock as
shares of the Corporation's Class I Common Stock.
SECOND: Upon effectiveness of these Articles of
Amendment:
(a) All the assets and liabilities belonging to
the Corporation's Class H Common Stock shall be conveyed, transferred and
delivered to the Corporation's Class I Common Stock, and shall thereupon become
and be assets and liabilities belonging to Class I Common Stock;
(b) All of the issued and outstanding shares of
the Corporation's Class H Common Stock, par value $.001 per share, will be
automatically, and without the need of any further act or deed, reclassified as
an equal number of full and fractional, issued and outstanding, shares of the
Corporation's Class I Common Stock, par value $.001 per share.
(c) Open accounts on the share records of the
Corporation's Class I Common Stock shall be established representing the
appropriate number of shares of Class I Common
<PAGE> 2
Stock owned by each former holder of Class H Common Stock as a result of the
reclassification.
THIRD: This amendment shall not increase the authorized
capital stock of the Corporation. The amendment reclassifies the 1,000,000,000
authorized shares of Class H Common Stock as 1,000,000,000 additional shares of
Class I Common Stock but does not amend the description of any class of stock as
set forth in the Charter.
FOURTH: Outstanding certificates representing issued and
outstanding shares of Class H Common Stock immediately prior to these Articles
of Amendment becoming effective shall, upon these Articles becoming effective,
be deemed to represent the same number of shares of Class I Common Stock.
Certificates representing shares of Class I Common Stock resulting from the
aforesaid reclassification need not be issued until certificates representing
the shares of Class H Common Stock so reclassified, if issued, have been
received by the Corporation or its agent duly endorsed for transfer.
FIFTH: This amendment has been duly advised by the
Board of Directors of the Corporation and approved by the
stockholders of the Corporation entitled to vote thereon.
SIXTH: These Articles of Amendment shall be effective
as of 4:59 p.m., July 9, 1993.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has
caused these Articles of Amendment to be signed in its name and
-2-
<PAGE> 3
on its behalf by its President, and attested by its Secretary, on
the 2nd day of July, 1993.
ATTEST: PACIFIC HORIZON FUNDS, INC.
/s/ W. Bruce McConnel, III By: /s/ Thomas M. Collins
- ----------------------------- --------------------------
W. Bruce McConnel, III Thomas M. Collins
Secretary President
-3-
<PAGE> 4
CERTIFICATE
The undersigned, President of Pacific Horizon Funds, Inc., who
executed on behalf of said Corporation the foregoing Articles of Amendment, of
which this Certificate is made a part, hereby acknowledges, in the name and on
behalf of said Corporation, the foregoing Articles of Amendment to be the
corporate act of said Corporation and certifies that to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to authorization and approval are true in all material respects, under
the penalties of perjury.
Dated: July 2, 1993 /s/ Thomas M. Collins
-------------------------
Thomas M. Collins
President
-4-
<PAGE> 1
EXHIBIT 1(S)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class Q Common Stock
FIRST: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has classified One
Hundred Million (100,000,000) shares of authorized, unissued and unclassified
capital stock of the Corporation (par value One Mill ($0.001) per share) as
Class Q Common Stock (par value One Mill ($0.001) per share) pursuant to the
following resolutions adopted at a regular meeting of the Board of Directors of
the Corporation held on July 15, 1993:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Hundred Million (100,000,000)
authorized, unissued and unclassified shares of capital stock of the
Corporation (of the par value of One Mill ($0.001) per share and of the
aggregate par value of One Hundred Thousand Dollars ($100,000) be, and
hereby are, divided into and classified as a separate class of Common
Stock to be known as Class Q Common Stock; and
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of
<PAGE> 2
redemption that are set forth in the Charter of the Corporation with
respect to its shares of capital stock.
General
SECOND: The shares of capital stock of the Corporation
classified pursuant to the resolutions set forth in Article FIRST of these
Articles Supplementary have been classified by the Corporation's Board of
Directors under the authority contained in the Charter of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by an Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Assistant Secretary on this 12th day of November, 1993.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ William B. Blundin
--------------------------
William B. Blundin
Executive Vice President
Attest:
/s/ James W. Bernaiche
- -----------------------------
James W. Bernaiche
Assistant Secretary
-2-
<PAGE> 3
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the attached
Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: November 12, 1993 /s/ William B. Blundin
------------------------------
William B. Blundin
Executive Vice President
-3-
<PAGE> 1
EXHIBIT 1(T)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class P Common Stock - Special Series 2
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has reclassified
Eight Billion (8,000,000,000) shares of authorized and unissued capital stock
of the Corporation previously classified as Class L Common Stock - Special
Series 2 (par value One Mill ($0.001) per share) as Class P Common Stock -
Special Series 2 (par value One Mill ($0.001) per share), such that there now
exists a total of Eight Billion (8,000,000,000) shares of capital stock of the
Corporation classified as Class P Common Stock - Special Series 2, pursuant to
the following resolutions adopted at a regular meeting of the Board of
Directors of the Corporation held on October 5, 1993:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation Eight Billion (8,000,000,000)
authorized and unissued shares of capital stock of the Corporation
previously classified as Class L Common Stock - Special Series 2 (of
the par value of One Mill ($0.001) per share and of the aggregate par
value of Eight Million Dollars ($8,000,000)) be, and hereby are,
divided into and reclassified as a separate series of Class
<PAGE> 2
P Common Stock to be known as Class P Common Stock - Special Series 2;
FURTHER RESOLVED, that all considerations received by
the Corporation for the issue or sale of shares of Class P Common
Stock - Special Series 2 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale of
all other shares now or hereafter designated as Class P Common Stock
(irrespective of whether said shares have been designated as Special
Series of said Class, and if so designated as Special Series,
irrespective of the particular Series designation), along with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of the Corporation
allocated to the shares of Class P Common Stock - Special Series 2 or
such other shares by the Board of Directors in accordance with the
Charter of the Corporation, and each share of Class P Common Stock -
Special Series 2 shall share equally with each such other share in
such consideration and other assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each share of Class P Common
Stock - Special Series 2 shall be charged equally with each other
share now or hereafter designated as Class P Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as a part of a
Special Series, irrespective of the particular Series designation)
with the expenses and liabilities of the Corporation in respect of
shares of Class P Common Stock - Special Series 2 or such other shares
and in respect of any general expenses and liabilities of the
Corporation allocated to shares of Class P Common Stock - Special
Series 2 or such other shares in accordance with the Charter of the
Corporation, except that:
(a) shares of Class P Common Stock - Special Series
2 shall bear the expenses and liabilities relating to any agreements
or arrangements entered into by or on behalf of the Corporation
pursuant to which an organization or other person agrees to provide
services with respect to such Series but not with respect to shares of
Class P Common Stock of the Corporation other than Class P Common
Stock - Special Series 2, as well as any other expenses and
liabilities directly attributable to Class P Common Stock -
<PAGE> 3
Special Series 2 which the Board of Directors determines should be
borne solely by such Series; and
(b) shares of Class P Common Stock - Special Series
2 shall not bear the expenses and liabilities relating to any
agreements or arrangements entered into by or on behalf of the
Corporation pursuant to which an organization or other person agrees
to provide services with respect to other shares of Class P Common
Stock of the Corporation but not with respect to Class P Common Stock
- Special Series 2, as well as any other expenses and liabilities
directly attributable to shares of Class P Common Stock other than
Class P Common Stock - Special Series 2 which the Board of Directors
determines should be borne solely by such other shares;
FURTHER RESOLVED, that each share of Class P Common
Stock - Special Series 2 shall otherwise have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as Class P Common
Stock (irrespective of whether said share has been designated as part
of a Special Series of said Class and, if so designated as part of a
Special Series, irrespective of the particular Series designation),
except that:
(a) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, only shares of Class P Common Stock - Special Series
2 shall be entitled to vote, except that: (i) if said matter affects
shares of capital stock of the Corporation other than shares of Class
P Common Stock - Special Series 2, such other affected shares of
capital stock shall also be entitled to vote, and in such case shares
of Class P Common Stock - Special Series 2 shall be voted in the
aggregate together with such other affected shares and not by Class or
Series except where otherwise required by law or permitted by the
Board of Directors of the Corporation; and (ii) if said matter does
not affect shares of Class P Common Stock - Special Series 2, said
shares shall not be entitled to vote (except where otherwise required
by law or permitted by the Board of Directors) even though the matter
is submitted to a vote of the holders of shares of capital stock of
the Corporation other than shares of Class P Common Stock - Special
Series 2; and
-3-
<PAGE> 4
(b) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, shares of Class P Common Stock - Special Series 2
shall not be entitled to vote, except where otherwise required by law
or permitted by the Board of Directors of the Corporation, and except
that if said matter affects shares of Class P Common Stock - Special
Series 2 such shares shall be entitled to vote, and in such case
shares of Class P Common Stock - Special Series 2 shall be voted in
the aggregate together with all other shares of capital stock of the
Corporation voting on the matter and not by Class or Series except
where otherwise required by law or permitted by the Board of
Directors.
General
SECOND: The shares of capital stock of the Corporation
reclassified pursuant to the resolutions set forth in Article FIRST of these
Articles Supplementary have been reclassified by the Corporation's Board of
Directors under the authority contained in the Charter of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by an Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Assistant Secretary on this 12th day of November, 1993.
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ William B. Blundin
------------------------
William B. Blundin
Executive Vice President
-4-
<PAGE> 5
Attest:
/s/ James W. Bernaiche
- ------------------------------
James W. Bernaiche, Asst. Sec.
-5-
<PAGE> 6
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the
attached Articles Supplementary to be the corporate act of said Corporation,
and certifies that to the best of his knowledge, information and belief the
matters and facts set forth in the attached Articles Supplementary with respect
to authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: November 12, 1993 /s/ William B. Blundin
--------------------------
William B. Blundin
Executive Vice President
-6-
<PAGE> 1
EXHIBIT 1(U)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class R Common Stock
FIRST: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has reclassified One
Hundred Million (100,000,000) shares of authorized and unissued capital stock
of the Corporation previously classified as Class A - Special Series 2 Common
Stock (par value One Mill ($0.001) per share) as Class R Common Stock (par
value One Mill ($0.001) per share) pursuant to the following resolutions
adopted at a regular meeting of the Board of Directors of the Corporation held
on December 7, 1993:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Hundred Million (100,000,000)
authorized and unissued shares of capital stock of the Corporation
previously classified as Class A - Special Series 2 Common Stock (of
the par value of One Mill ($0.001) per share and of the aggregate par
value of One Hundred Thousand Dollars ($100,000)) be, and hereby are,
divided into and reclassified as a separate class of Common Stock to
be known as Class R Common Stock; and
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion
<PAGE> 2
and other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption that
are set forth in the Charter of the Corporation with respect to its
shares of capital stock.
Class S Common Stock
SECOND: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has reclassified One
Hundred Million (100,000,000) shares of authorized and unissued capital stock
of the Corporation previously classified as Class A - Special Series 2 Common
Stock (par value One Mill ($0.001) per share) as Class S Common Stock (par
value One Mill ($0.001) per share) pursuant to the following resolutions
adopted at a regular meeting of the Board of Directors of the Corporation held
on December 7, 1993:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Hundred Million (100,000,000)
authorized and unissued shares of capital stock of the Corporation
previously classified as Class A - Special Series 2 Common Stock (of
the par value of One Mill ($0.001) per share and of the aggregate par
value of One Hundred Thousand Dollars ($100,000)) be, and hereby are,
divided into and reclassified as a separate class of Common Stock to
be known as Class S Common Stock; and
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
Class T Common Stock
<PAGE> 3
THIRD: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has reclassified One
Hundred Million (100,000,000) shares of authorized and unissued capital stock
of the Corporation previously classified as Class A - Special Series 2 Common
Stock (par value One Mill ($0.001) per share) as Class T Common Stock (par
value One Mill ($0.001) per share) pursuant to the following resolutions
adopted at a regular meeting of the Board of Directors of the Corporation held
on December 7, 1993:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Hundred Million (100,000,000)
authorized and unissued shares of capital stock of the Corporation
previously classified as Class A - Special Series 2 Common Stock (of
the par value of One Mill ($0.001) per share and of the aggregate par
value of One Hundred Thousand Dollars ($100,000)) be, and hereby are,
divided into and reclassified as a separate class of Common Stock to
be known as Class T Common Stock; and
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
Class U Common Stock
FOURTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has reclassified One
Hundred Million (100,000,000) shares of authorized and unissued capital stock
of the Corporation previously classified as Class A - Special Series 2 Common
Stock (par value One Mill ($0.001) per share) as Class U
-3-
<PAGE> 4
Common Stock (par value One Mill ($0.001) per share) pursuant to the following
resolutions adopted at a regular meeting of the Board of Directors of the
Corporation held on December 7, 1993:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Hundred Million (100,000,000)
authorized and unissued shares of capital stock of the Corporation
previously classified as Class A - Special Series 2 Common Stock (of
the par value of One Mill ($0.001) per share and of the aggregate par
value of One Hundred Thousand Dollars ($100,000)) be, and hereby are,
divided into and reclassified as a separate class of Common Stock to
be known as Class U Common Stock; and
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
Class V Common Stock
FIFTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has reclassified One
Hundred Million (100,000,000) shares of authorized and unissued capital stock
of the Corporation previously classified as Class A - Special Series 2 Common
Stock (par value One Mill ($0.001) per share) as Class V Common Stock (par
value One Mill ($0.001) per share) pursuant to the following resolutions
adopted at a regular meeting of the Board of Directors of the Corporation held
on December 7, 1993:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Hundred Million (100,000,000)
authorized and unissued shares of
-4-
<PAGE> 5
capital stock of the Corporation previously classified as Class A -
Special Series 2 Common Stock (of the par value of One Mill ($0.001)
per share and of the aggregate par value of One Hundred Thousand
Dollars ($100,000)) be, and hereby are, divided into and reclassified
as a separate class of Common Stock to be known as Class V Common
Stock; and
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that are set
forth in the Charter of the Corporation with respect to its shares of
capital stock.
Class W Common Stock
SIXTH: Pursuant to section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has reclassified One
Hundred Million (100,000,000) shares of authorized and unissued capital stock
of the Corporation previously classified as Class A - Special Series 2 Common
Stock (par value One Mill ($0.001) per share) as Class W Common Stock (par
value One Mill ($0.001) per share) pursuant to the following resolutions
adopted at a regular meeting of the Board of Directors of the Corporation held
on December 7, 1993:
RESOLVED, that pursuant to Article VI of the Articles
of Restatement of the Corporation One Hundred Million (100,000,000)
authorized and unissued shares of capital stock of the Corporation
previously classified as Class A - Special Series 2 Common Stock (of
the par value of One Mill ($0.001) per share and of the aggregate par
value of One Hundred Thousand Dollars ($100,000)) be, and hereby are,
divided into and reclassified as a separate class of Common Stock to
be known as Class W Common Stock; and
FURTHER RESOLVED, that each share of such Class of
Common Stock shall have all of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of
-5-
<PAGE> 6
redemption that are set forth in the Charter of the Corporation with
respect to its shares of capital stock.
General
SEVENTH: The shares of capital stock of the Corporation
classified pursuant to the resolutions set forth in Article FIRST through
Article SIXTH of these Articles Supplementary have been classified by the
Corporation's Board of Directors under the authority contained in the Charter
of the Corporation.
-6-
<PAGE> 7
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached Articles
Supplementary of said Corporation, of which this Certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, the
attached Articles Supplementary to be the corporate act of said Corporation,
and certifies that to the best of his knowledge, information and belief the
matters and facts set forth in the attached Articles Supplementary with respect
to authorization and approval are true in all material respects, under the
penalties for perjury.
Dated: January 13, 1994 /s/ William B. Blundin
------------------------
William B. Blundin
Executive Vice President
-7-
<PAGE> 1
EXHIBIT 1 (V)
ARTICLES OF AMENDMENT
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the State of Maryland in Baltimore City (hereinafter called
the "Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The charter of the Corporation is hereby amended to
provide that any shares of the Corporation's Class P Common Stock and Class P
Common Stock - Special Series 2 (constituting the "Prime Value Fund" of the
Corporation) that are issued and outstanding immediately prior to these
Articles of Amendment becoming effective, shall, upon these Articles of
Amendment becoming effective, be canceled and, until thereafter reclassified,
shall be authorized and unissued shares of the Corporation.
SECOND: The foregoing amendment to the charter of the
Corporation was advised by the board of directors of the Corporation and
approved by the affirmative vote of the holders of a majority of the total
number of shares of the Prime Value Fund of the Corporation outstanding and
entitled to vote thereon in accordance with the charter of the Corporation.
<PAGE> 2
The undersigned Executive Vice President of the Corporation
acknowledges these Articles of Amendment to be the corporate act of the
Corporation and states to the best of his knowledge, information and belief,
that the matters and facts set forth in these Articles of Amendment with
respect to the authorization and approval thereof are true in all material
respects and that this statement is made under the penalties of perjury.
IN WITNESS WHEREOF, Pacific Horizon Funds, Inc. has caused
these Articles of Amendment to be signed in its name and on its behalf by its
Executive Vice President and witnessed by its Secretary as of January 24, 1996.
PACIFIC HORIZON FUNDS, INC.
By: /s/ William B. Blundin
---------------------------
William B. Blundin
Executive Vice President
WITNESS:
/s/ W. Bruce McConnel, III
- ----------------------------
W. Bruce McConnel, III
Secretary
<PAGE> 1
EXHIBIT 1 (W)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the State of Maryland in Baltimore City (hereinafter called
the "Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation hereby
reclassifies: (1) One Billion Five Hundred Million (1,500,000,000) shares of
authorized and unissued capital stock of the Corporation previously classified
as Class P Common Stock (par value One Mill ($0.001) per share) as authorized,
unissued and unclassified capital stock of the Corporation; (2) One Billion
Five Hundred Million (1,500,000,000) shares of authorized and unissued capital
stock of the Corporation previously classified as Class P Common Stock -
Special Series 1 (par value One Mill ($0.001) per share) as authorized,
unissued and unclassified capital stock of the Corporation; and (3) Eight
Billion (8,000,000,000) shares of authorized and unissued capital stock of the
Corporation previously classified as Class P Common Stock - Special Series 2
(par value One Mill ($0.001) per share)
<PAGE> 2
as authorized, unissued and unclassified capital stock of the Corporation.
SECOND: The shares of capital stock hereby reclassified shall
be unclassified, and shall only have such preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption as shall hereafter be
determined by the Board of Directors of the Corporation and reflected in
Articles Supplementary hereafter filed before issuance of such shares.
THIRD: The shares of capital stock of the Corporation
reclassified pursuant to these Articles Supplementary have been reclassified by
the Corporation's Board of Directors under the authority contained in the
Charter of the Corporation.
FOURTH: These Articles Supplementary do not increase the
authorized number of shares of the Corporation or the aggregate par value
thereof. The total number of shares of capital stock which the Corporation is
presently authorized to issue remains Two Hundred Billion (200,000,000,000)
shares (of the par value of One Mill ($.001) each) and of the aggregate par
value of Two Hundred Million Dollars ($200,000,000) of Common Stock classified
as follows:
-2-
<PAGE> 3
<TABLE>
<CAPTION>
Number of shares
Classification Authorized
- -------------- ----------------
<S> <C>
Class A 15,000,000,000
Class A-Special Series 1 15,000,000,000
Class A-Special Series 2 14,400,000,000
Class B 15,000,000,000
Class B-Special Series 1 15,000,000,000
Class B-Special Series 2 28,000,000,000
Class C 250,000,000
Class D 400,000,000
Class D-Special Series 3 600,000,000
Class E 100,000,000
Class E-Special Series 3 150,000,000
Class F 100,000,000
Class F-Special Series 3 150,000,000
Class G 100,000,000
Class G-Special Series 3 150,000,000
Class I 1,500,000,000
Class I-Special Series 1 3,000,000,000
Class I-Special Series 2 3,000,000,000
Class J 1,000,000,000
Class J-Special Series 1 1,000,000,000
Class K 15,000,000,000
Class K-Special Series 1 15,000,000,000
Class K-Special Series 2 7,000,000,000
Class L 15,000,000,000
Class L-Special Series 1 15,000,000,000
Class L-Special Series 2 7,000,000,000
Class M 40,000,000
Class M-Special Series 3 60,000,000
Class N 40,000,000
Class N-Special Series 3 60,000,000
Class O 40,000,000
Class O-Special Series 3 60,000,000
Class Q 40,000,000
Class Q-Special Series 3 60,000,000
Class R 40,000,000
Class R-Special Series 3 60,000,000
Class S 40,000,000
Class S-Special Series 3 60,000,000
Class T 40,000,000
Class T-Special Series 3 60,000,000
Class U 40,000,000
Class U-Special Series 3 60,000,000
Class V 40,000,000
Class V-Special Series 3 60,000,000
Class W 40,000,000
Class W-Special Series 3 60,000,000
Unclassified 11,100,000,000
</TABLE>
-3-
<PAGE> 4
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its Executive Vice
President and its witnessed by its Secretary on this 24th day of January, 1996.
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., hereby acknowledges, in the name and on behalf of said
Corporation, these Articles Supplementary to be the corporate act of said
Corporation, and certifies that to the best of his knowledge, information and
belief, the matters and facts set forth in these Articles Supplementary with
respect to the authorization and approval thereof are true in all material
respects and that this statement is made under the penalties of perjury.
PACIFIC HORIZON FUNDS, INC.
By: /s/ William B. Blundin
------------------------
William B. Blundin
Executive Vice President
Witness:
/s/ W. Bruce McConnel, III
- --------------------------
W. Bruce McConnel, III
Secretary
-4-
<PAGE> 1
EXHIBIT 1 (X)
ARTICLES SUPPLEMENTARY
OF
PACIFIC HORIZON FUNDS, INC.
PACIFIC HORIZON FUNDS, INC., a Maryland corporation having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Class J Common Stock-Special Series 2
FIRST: Pursuant to Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation has reclassified
Five-Hundred (500) Million (500,000,000) shares of authorized and unissued
capital stock of the Corporation previously classified as Class J Common Stock-
Special Series 1 (par value One Mill ($0.001) per share) as Class J Common
Stock-Special Series 2 (par value One Mill ($0.001) per share), such that there
now exists a total of Five-Hundred Million (500,000,000) shares of capital
stock of the Corporation classified as Class J Common Stock-Special Series 2,
pursuant to the following resolution adopted by a Unanimous Consent of the
Board of Directors of the Corporation dated November 22, 1995:
RESOLVED, that pursuant to Article VI of the Articles of
Incorporation of the Corporation Five-Hundred Million (500,000,000)
authorized and unissued shares of capital stock of the Corporation
previously classified as Class J-
<PAGE> 2
Special Series 1 Common Stock (of the par value of One Mill ($0.001)
per share and of the aggregate par value of Five-Hundred Thousand
Dollars ($500,000)) be, and hereby are, divided into and reclassified
as Class J Common Stock-Special Series 2.
FURTHER RESOLVED, that all consideration received by the
Corporation for the issue or sale of shares of Class J Common Stock -
Special Series 2 shall be invested and reinvested with the
consideration received by the Corporation for the issue and sale of
all other shares now or hereafter designated as Class J Common Stock
(irrespective of whether said shares have been designated as Special
Series of said Class, and if so designated as Special Series,
irrespective of the particular Series designation), along with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of the Corporation
allocated to the shares of Class J Common Stock - Special Series 2 or
such other shares by the Board of Directors in accordance with the
Charter of the Corporation, and each share of Class J Common Stock -
Special Series 2 shall share equally with each such other share in
such consideration and other assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each shares of Class J Common Stock -
Special Series 2 shall be charged equally with each other share now or
hereafter designated as Class J Common Stock (irrespective of whether
said shares has been designated as part of a Special Series of said
Class and, if so designated as a part of a Special Series,
irrespective of the particular Series designation) with the expenses
and liabilities of the Corporation in respect of shares of Class J
Common Stock - Special Series 2 or such other shares and in respect of
any general expenses and liabilities of the Corporation allocated to
shares of Class J Common Stock - Special Series 2 or such other shares
in accordance with the Charter of the Corporation, except that:
(a) shares of Class J Common Stock - Special Series 2
shall bear the expenses and liabilities relating to any agreements or
arrangements entered into by or on behalf of the Corporation pursuant
to which an organization or other person agrees to provide services
with respect to such Series but not with respect to shares of Class J
Common Stock of the Corporation other than Class J Common Stock -
-2-
<PAGE> 3
Special Series 2, as well as any other expenses and liabilities
directly attributable to Class J Common Stock - Special Series 2 which
the Board of Directors determines should be borne solely by such
Series; and
(b) shares of Class J Common Stock - Special Series 2
shall not bear the expenses and liabilities relating to any agreements
or arrangements entered into by or on behalf of the Corporation
pursuant to which an organization or other person agrees to provide
services with respect to other shares of Class J Common Stock of the
Corporation but not with respect to Class J Common Stock- Special
Series 2, as well as any other expenses and liabilities directly
attributable to shares of Class J Common Stock other than Class J
Common Stock - Special Series 2 which the Board of Directors
determines should be borne solely by such other shares;
FURTHER RESOLVED, that each share of Class J Common Stock -
Special Series 2 shall otherwise have the same preferences, conversion
and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption as
each other share now or hereafter designated as Class J Common Stock
(irrespective of whether said share has been designated as part of a
Special Series of said Class and, if so designated as part of a
Special Series, irrespective of the particular Series designation),
except that:
(a) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, only shares of Class J Common Stock - Special Series
2 shall be entitled to vote, except that: (i) if said matter affects
shares of capital stock of the Corporation other than shares of Class
J Common Stock - Special Series 2, such other affected shares of
capital stock shall also be entitled to vote, and in such case shares
of Class J Common Stock - Special Series 2 shall be voted in the
aggregate together with such other affected shares and not by Class or
Series except where otherwise required by law or permitted by the
Board of Directors of the Corporation; and (ii) if said matter does
not affect shares of Class J Common Stock - Special Series 2, said
shares shall not be entitled to vote (except where otherwise required
by law or permitted by the Board of Directors) even though the matter
is submitted to a vote of the holders of shares of capital stock of
the Corporation other than shares of Class J Common Stock - Special
Series 2; and
-3-
<PAGE> 4
(b) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other document
adopted by the Corporation relating to said agreements, arrangements,
expenses or liabilities) and is submitted to a vote of shareholders of
the Corporation, shares of Class J Common Stock - Special Series 2
shall not be entitled to vote, except where otherwise required by law
or permitted by the Board of Directors of the Corporation, and except
that if said matter affects shares of Class J Common Stock - Special
Series 2 such shares shall be entitled to vote, and in such case
shares of Class J Common Stock - Special Series 2 shall be voted in
the aggregate together with all other shares of capital stock of the
Corporation voting on the matter and not by Class or Series except
where otherwise required by law or permitted by the Board of
Directors.
General
SECOND: The share of capital stock of the Corporation
reclassified pursuant to the resolution set forth in Article FIRST of
these Articles Supplementary have been reclassified by the
Corporation's Board of Directors under the authority contained in the
Charter of the Corporation.
IN WITNESS WHEREOF, PACIFIC HORIZON FUNDS, INC. has caused
these presents to be signed in its name and on its behalf by its
Executive Vice President and its corporate seal to be hereunto affixed
and attested by its Secretary on this 24th day of January 1996.
-4-
<PAGE> 5
PACIFIC HORIZON FUNDS, INC.
[SEAL] By: /s/ William B. Blundin
-----------------------
William B. Blundin
Executive Vice President
Attest:
/s/ W. Bruce McConnel, III
- -------------------------
W. Bruce McConnel, III
Secretary
<PAGE> 6
CERTIFICATE
THE UNDERSIGNED, Executive Vice President of PACIFIC HORIZON
FUNDS, INC., who executed on behalf of said Corporation the attached
Articles Supplementary of said Corporation, of which this Certificate
is made a part, hereby acknowledges, in the name and on behalf of said
Corporation, the attached Articles Supplementary to be the corporate
act of said Corporation, and certifies that to the best of his
knowledge, information and belief the matters and facts set forth in
the attached Articles Supplementary with respect to authorization and
approval are true in all material respects, under the penalties for
perjury.
Dated: January 25, 1996 /s/ William B. Blundin
------------------------
William B. Blundin
Executive Vice President
<PAGE> 1
EXHIBIT 2(A)
Amended January 15, 1987
PACIFIC HORIZON FUNDS, INC.
BY-LAWS
ARTICLE I
STOCKHOLDERS
SECTION 1. Annual Meetings. The annual meeting of the
stockholders of the Corporation shall be held at the registered office of the
Corporation, or at such other place, within or without the State of Maryland,
as may be determined by the Board of Directors and as shall be designated in
the notice of said meeting, on such day and at such time as shall be specified
by the Board of Directors for the purpose of electing directors and for the
transaction of such other business as may properly be brought before the
meeting.
SECTION 2. Special Meetings. Special meetings of the
stockholders for any purpose or purposes, unless otherwise prescribed by
statute or by the Charter, may be held at any place, within or without the
State of Maryland, and may be called at any time by the Board of Directors or
by the President, and shall be called by the President or Secretary at the
request in writing of a majority of the Board or at the request in writing of
stockholders entitled to cast at least twenty-five (25) percent of all the
votes entitled to be cast at such meeting. Such request shall state the
purpose or purposes of the proposed meeting and the matters proposed to be
acted on at it; provided, however, that unless requested by stockholders
entitled to cast a majority of all the votes entitled to be cast at the
meeting, a special meeting need not be called to consider any matter which is
substantially the same as a matter voted on at any special meeting of the
stockholders held during the preceding twelve (12) months.
SECTION 3. Notice of Meetings and Shareholder List. Written
or printed notice of the purpose or purposes and of the time and place of every
meeting of the stockholders shall be given by the Secretary of the Corporation
to each stockholder of record entitled to vote at the meeting and each other
stockholder entitled to notice of the meeting, by placing such notice in the
mail at least ten (10) days, but not more than ninety (90) days, and in any
event within the period prescribed by law, prior to the date named for the
meeting addressed to each stockholder at his address appearing on the books of
the Corporation or supplied by him to the Corporation for the purpose of
notice. The notice
-1-
<PAGE> 2
of every meeting of stockholders may be accompanied by a form of proxy approved
by the Board of Directors in favor of such actions or persons as the Board of
Directors may select.
At least five (5) days prior to each meeting of stockholders, the
officer or agent having charge of the share transfer books of the Corporation
shall make a complete list of stockholders entitled to vote at such meeting, in
alphabetical order with the address of and the number of shares held by each
stockholder.
SECTION 4. Record Date. The Board of Directors may fix a
date not more than ninety (90) days preceding the date of any meeting of
stockholders, or the date fixed for the payment of any dividend, or the date of
the allotment of rights or the date when any change or conversion or exchange
of shares shall go into effect, as a record date for the determination of
stockholders entitled to notice of, or to vote at, any such meeting (or any
adjournment thereof) or entitled to receive payment of any dividend, or to
receive such allotment of rights, or to exercise such rights, as the case may
be. In such case, only stockholders of record at the close of business on the
date so fixed shall be entitled to vote, to receive notice, or receive
dividends or rights, or to exercise rights, notwithstanding any subsequent
transfer on the books of the Corporation. The Board of Directors shall not
close the books of the Corporation against transfers of shares during the whole
or any part of such period. In the case of the meeting of stockholders, the
record date shall be fixed not less than ten (10) days prior to the date of the
meeting.
SECTION 5. Quorum and Shareholder Action. Except as
otherwise provided by statute or by the Charter, the presence in person or by
proxy of stockholders of all the Corporation entitled to cast at least a
majority of all the votes to be cast at the meeting shall constitute a quorum
and a majority of all the votes cast at a meeting at which a quorum is present
shall be sufficient to approve any matter which properly comes before the
meeting. In the absence of a quorum, the stockholders present in person or by
proxy, by majority vote and without notice other than by announcement, may
adjourn the meeting from time to time as provided in Section 7 of this Article
I until a quorum shall attend. The stockholders present at any duly organized
meeting may continue to do business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
SECTION 6. Organization. At every meeting of the
stockholders, the Chairman of the Board, if one has been selected and is
present or, if not, the President, or in the absence of the Chairman of the
Board and the President, a Vice President, or in the absence of the Chairman of
the Board, the President and all the Vice Presidents, a chairman chosen by the
Board of
-2-
<PAGE> 3
Directors of the Corporation or, in the absence of the Chairman, the President,
all the Vice Presidents and a chairman chosen by the Board of Directors, a
chairman chosen by the stockholders, shall act as chairman; and the Secretary,
or in his absence, an Assistant Secretary, or in the absence of the Secretary
and all the Assistant Secretaries, a person appointed by the chairman, shall
act as secretary of the meeting.
SECTION 7. Adjournment. Any meeting of the stockholders may
be adjourned from time to time, without notice other than by announcement at
the meeting at which such adjournment is taken, and at any such adjourned
meeting at which a quorum shall be present any action may be taken that could
have been taken at the meeting originally called; provided, that the meeting
may not be adjourned to a date more than the number of days after the original
record date for the meeting permitted by law, and if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
adjourned meeting.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. Election and Powers. The number of directors
shall be fixed from time to time by resolution of the Board of Directors
adopted by a majority of the directors then in office; provided, however, that
the number of directors shall in no event be less than three (3) nor more than
fifteen (15). The business, affairs and property of the Corporation shall be
managed by the Board of Directors, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute, the
Charter or these By-Laws required to be exercised or done by the stockholders.
The members of the Board of Directors shall be elected by the stockholders at
their annual meeting and each Director shall hold office until the annual
meeting next after his election and until his successor shall have been duly
elected and qualified, until he shall have resigned, or until he shall have
been removed as provided in Section 11 of this Article II.
SECTION 2. Regular Meetings. Regular meetings of the Board
of Directors may be held without notice on such dates as the Board may from
time to time determine.
SECTION 3. Special Meetings. Special meetings of the Board
of Directors shall be held whenever called by the Chairman of the Board,
President or by a majority of the directors either in writing or by vote at a
meeting.
SECTION 4. Notice of Special Meetings. Notice of the place,
day and hour of every special meeting shall be delivered
-3-
<PAGE> 4
personally to each director or mailed, telegraphed or cabled to his address on
the books of the Corporation at least one (1) day before the meeting. It shall
not be requisite to the validity of any meeting of the Board of Directors that
notice thereof shall have been given to any director who is present thereat,
or, if absent, waives notice thereof in writing filed with the records of the
meeting either before or after the holding thereof.
SECTION 5. Place of Meetings. The Board of Directors may
hold its regular and special meetings at such place or places within or without
the State of Maryland as the Board may from time to time determine.
SECTION 6. Quorum and Board Action. Except as otherwise
provided by statute or by the Charter: (a) one-third (1/3) of the entire Board
of Directors, but in no case less than two (2) directors, shall be necessary to
constitute a quorum for the transaction of business at each meeting of the
Board; (b) the action of a majority of the directors present at a meeting at
which a quorum is present shall be the action of the Board; and (c) if at any
meeting there be less than a quorum present, a majority of those directors
present may adjourn the meeting from time to time, but not for a period greater
than thirty (30) days at any one time, without notice other than by
announcement at the meeting until a quorum shall attend. At any such adjourned
meeting at which a quorum shall be present, any business may be transacted
which might have been transacted at the meeting as originally scheduled.
SECTION 7. Chairman. The Board of Directors may at any time
appoint one of its members as Chairman of the Board, who shall serve at the
pleasure of the Board and who shall perform and execute such duties and powers
as may be conferred upon or assigned to him by the Board or these By-Laws, but
who shall not by reason of performing and executing these duties and powers be
deemed an officer or employee of the Corporation.
SECTION 8. Organization. At every meeting of the Board of
Directors, the Chairman of the Board, if one has been selected and is present,
and, if not, the President, or in the absence of the Chairman of the Board and
the President, a Vice President, or in the absence of the Chairman of the
Board, the President and all the Vice Presidents, a chairman chosen by a
majority of the directors present, shall preside; and the Secretary, or in his
absence, an Assistant Secretary, or in the absence of the Secretary and all the
Assistant Secretaries, a person appointed by the chairman, shall act as
secretary.
SECTION 9. Vacancies. Any vacancy on the Board of Directors
occurring by reason of any increase in the number of directors may be filled by
d majority of the entire Board of Directors. Any vacancy on the Board of
Directors occurring for
-4-
<PAGE> 5
any other cause may be filled by a majority of the remaining members of the
Board of Directors, whether or not these members constitute a quorum under
Section 6 of this Article II. Any director so chosen to fill a vacancy shall
hold office until the next annual meeting of stockholders and until his
successor shall have been duly elected and qualified.
SECTION 10. Removal. At any meeting of the stockholders
called for that purpose, the stockholders of the Corporation may remove from
office any director, with or without cause, by the affirmative vote of a
majority of the votes entitled to be cast for the election of directors, and
another director may be elected in the place of the director so removed to
serve for the remainder of the term of the removed director.
SECTION 11. Resignations. Any director may resign at any
time by giving written notice to the Board of Directors, the President or the
Secretary. Any such resignation shall take effect at the time of the receipt
of such notice or at any later time specified therein; and unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 12. Committees. The Board of Directors may appoint
from among its members an executive and other committees of the Board composed
of two (2) or more directors. To the extent permitted by law, the Board of
Directors may delegate to any such committee or committees any of the powers of
the Board of Directors in the management of the business, affairs and property
of the Corporation and may authorize the seal of the Corporation to be affixed
to all papers which may require it. Such committee or committees shall have
such name or names as may be determined from time to time by resolution adopted
by the Board of Directors. Each committee shall keep regular minutes of its
meetings and report the same to the Board of Directors when required. The
members of a committee present at any meeting, whether or not they constitute a
quorum, may appoint a director to act in the place of an absent member.
SECTION 13. Telephone Conference. Members of the Board of
Directors or any committee thereof may participate in a meeting of the Board or
such committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other at the same time and participation by such means shall constitute
presence in person at the meeting.
SECTION 14. Compensation of Directors. Any director, whether
or not he is a salaried officer, employee or agent of the Corporation, may be
compensated for his services as director or as a member of a committee, or as
Chairman of the Board or chairman of a committee, and in addition may be
reimbursed for
-5-
<PAGE> 6
transportation and other expenses, all in such manner and amounts as the
directors may from time to time determine.
ARTICLE III
OFFICERS
SECTION 1. Number. The officers of the Corporation shall be
a President, a Secretary, a Treasurer, and a Controller, and may include one or
more Vice Presidents, one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other officers as the Board of Directors may from time to
time determine. Any officer may hold more than one office in the Corporation,
except that an officer may not serve concurrently as both President and
Vice-President.
SECTION 2. Election and Term of Office. The officers of the
Corporation shall be elected by the Board of Directors and, subject to earlier
termination of office, each officer shall hold office for one year and until
his successor shall have been elected and qualified.
SECTION 3. Resignations. Any officer may resign at any time
by giving written notice to the Board of Directors or to the President, or the
Secretary of the Corporation. Any such resignation shall take effect at the
date of the receipt of such notice or at any later time specified therein; and,
unless otherwise specified therein, the acceptance of such resignation shall
not be necessary to make it effective.
SECTION 4. Removal. If the Board of Directors in its
judgment finds that the best interests of the Corporation will be served, the
Board may remove any officer of the Corporation at any time.
SECTION 5. President. The President shall be the chief
executive officer of the Corporation and shall have general supervision over
the business and operations of the Corporation, subject, however, to the
control of the Board of Directors. He, or such persons as he shall designate,
shall sign, execute, acknowledge, verify, deliver and accept, in the name of
the Corporation, deeds, mortgages, bonds, contracts and other instruments
authorized by the Board of Directors, except in the case where the signing,
execution, acknowledgement, verification, delivery or acceptance thereof shall
be delegated by the Board to some other officer or agent of the Corporation;
and, in general, he shall have general executive powers as well as other powers
and duties as from time to time may be conferred upon or assigned to him by the
Board.
SECTION 6. The Vice Presidents. In the absence or disability
of the President, or when so directed by the President, any Vice President
designated by the Board of
-6-
<PAGE> 7
Directors may perform any or all of the duties of the President, and, when so
acting, shall have all the powers of, and be subject to all the restrictions
upon, the President; provided, however, that no Vice President shall act as a
member of or as chairman of any committee of which the President is a member or
chairman by designation of ex-officio, except when designated by the Board.
Each Vice President shall perform such other duties as from time to time may be
conferred upon or assigned to him by the Board or the President.
SECTION 7. The Secretary. The Secretary shall record all the
votes of the stockholders and of the directors and the minutes of the meetings
of the stockholders and of the Board of Directors in a book or books to be kept
for that purpose; he shall see that notices of meetings of the stockholders and
the Board of Directors are given and that all records and reports are properly
kept and filed by the Corporation as required by law; he shall be the custodian
of the seal of the Corporation and shall see that it is affixed to all
documents to be executed on behalf of the Corporation under its seal, provided
that in lieu of affixing the corporate seal to any document, it shall be
sufficient to meet the requirements of any law, rule or regulation relating to
a corporate seal to affix the word "(SEAL)" adjacent to the signature of the
authorized officer of the Corporation; and, in general, he shall perform all
duties incident to the office of Secretary, and such other duties as from time
to time may be conferred upon or assigned to him by the Board or the President.
SECTION 8. Assistant Secretaries. In the absence or
disability of the Secretary, or when so directed by the Secretary, any
Assistant Secretary may perform any or all of the duties of the Secretary, and,
when so acting, shall have all the powers of, and be subject to all
restrictions upon, the Secretary. Each Assistant Secretary shall perform such
other duties as from time to time may be conferred upon or assigned to him by
the Board of Directors, the President or the Secretary.
SECTION 9. The Treasurer. Subject to the provisions of any
contract which may be entered into with any custodian pursuant to authority
granted by the Board of Directors, the Treasurer shall have charge of all
receipts and disbursements of the Corporation and shall have or provide for the
custody of its funds and securities; he shall have full authority to receive
and give receipts for all money due and payable to the Corporation, and to
endorse checks, drafts and warrants, in its name and on its behalf, and to give
full discharge for the same; he shall deposit all funds of the Corporation,
except such as may be required for current use, in such banks or other places
of deposit as the Board of Directors may from time to time designate; and, in
general, he shall perform all duties incident to the office of Treasurer and
such other duties as from time to
-7-
<PAGE> 8
time may be conferred upon or assigned to him by the Board or the President.
SECTION 10. Assistant Treasurers. In the absence or
disability of the Treasurer, or when so directed by the Treasurer, any
Assistant Treasurer may perform any or all of the duties of the Treasurer, and,
when so acting, shall have all the powers of, and be subject to all the
restrictions upon, the Treasurer. Each Assistant Treasurer shall perform all
such other duties as from time to time may be conferred upon or assigned to him
by the Board of Directors, the President or the Treasurer.
SECTION 11. The Controller. The controller shall be the
officer in charge of, and shall be responsible for, accounting and accounting
methods, office procedures and routines, budgets, preparation of statistics to
assist in executive control of the business of the Corporation, and the
examination and verification of the corporate records. He shall perform such
other duties, and shall render such reports, as shall from time to time be
required of him by the Board, the President, or the Treasurer.
SECTION 12. Compensation of Officers. The compensation of
all officers shall be fixed from time to time by the Board of Directors, or any
committee or officer authorized by the Board so to do. No officer shall be
precluded from receiving such compensation by reason of the fact that he is
also a director of the Corporation.
ARTICLE IV
STOCK
SECTION 1. Certificates. Each stockholder shall be entitled
upon written request to a stock certificate or certificates, representing and
certifying the number and kind of full shares held by him, signed by the
President, a Vice President or the Chairman of the Board and countersigned by
the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer,
which signatures may be either manual or facsimile signatures, and sealed with
the seal of the Corporation, which seal may be either facsimile or any other
form of seal. Stock certificates shall be in such form, not inconsistent with
law or with the Charter, as shall be approved by the Board of Directors.
SECTION 2. Transfer of Shares. Transfers of shares shall be
made on the books of the Corporation at the direction of the person named on
the Corporation's books or named in the certificate or certificates for such
shares (if issued), or by his attorney lawfully constituted in writing, upon
surrender of such certificate or certificates (if issued) properly endorsed,
together with a proper request for redemption, to the Corporation's Transfer
Agent, with such evidence of the
-8-
<PAGE> 9
authenticity of such transfer, authorization and such other matters as the
Corporation or its agents may reasonably require, and subject to such other
reasonable terms and conditions as may be required by the Corporation or its
agents; or, if the Board of Directors shall by resolution so provide, transfer
of shares may be made in any other manner provided by law.
SECTION 3. Transfer Agents and Registrars. The Corporation
may have one or more Transfer Agents and one or more Registrars of its stock,
whose respective duties the Board of Directors may, from time to time, define.
No certificate of stock shall be valid until countersigned by a Transfer Agent,
if the Corporation shall have a Transfer Agent, or until registered by a
Registrar, if the Corporation shall have a Registrar. The duties of Transfer
Agent and Registrar may be combined.
SECTION 4. Mutilated, Lost, Stolen or Destroyed Certificates.
The Board of Directors, by standing resolution or by resolutions with respect
to particular cases, may authorize the issuance of a new stock certificate in
lieu of any stock certificate lost, stolen, destroyed or mutilated, upon such
terms and conditions as the Board may direct. The Board may in its discretion
refuse to issue such a new certificate, unless ordered to do so by a court of
competent jurisdiction.
SECTION 5. Stock Ledgers. The Corporation shall not be
required to keep original or duplicate stock ledgers at its principal office in
the City of Baltimore, Maryland, but stock ledgers shall be kept at the
respective offices of the Transfer Agents of the Corporation's capital stock.
ARTICLE V
SEAL
The seal of the Corporation shall be in such form as the Board
of Directors shall prescribe.
ARTICLE VI
SUNDRY PROVISIONS
SECTION 1. Amendments. (a) By Stockholders. ByLaws may be
adopted, altered, amended or repealed in the manner provided in Section 5 of
Article I hereof at any annual or special meeting of the stockholders.
(b) By Directors. By-Laws may be adopted, altered,
amended or repealed in the manner provided in Section 6 of Article II hereof by
the Board of Directors at any regular or special meeting of the Board.
-9-
<PAGE> 10
SECTION 2. Indemnification of Directors and Officers. (a)
Indemnification. Any person who was or is a party or is threatened to be made
a party in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that such person is a current or former director or officer of the Corporation,
or is or was serving while a director or officer of the Corporation, at the
request of the Corporation, as a director, officer, partner, trustee, employee,
agent or fiduciary of another corporation, partnership, joint venture, trust,
enterprise or employee benefit plan, shall be indemnified by the Corporation
against judgments, penalties, fines, excise taxes, settlements and reasonable
expenses (including attorney's fees) actually incurred by such person in
connection with such action, suit or proceeding to the full extent permissible
under applicable state corporation law, the Securities Act of 1933 and the
Investment Company Act of 1940, as such statutes are now or hereafter in force,
except that such indemnity shall not protect any such person against any
liability to the Corporation or any stockholder thereof to which such person
would otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
(b) Advances. Any current or former director or
officer of the Corporation claiming indemnification within the scope of this
Section 2 shall be entitled to advances from the Corporation for payment of the
reasonable expenses incurred by him in connection with the proceedings to which
he is a party in the manner and to the full extent permissible under applicable
state corporation law, the Securities Act of 1933 and the Investment Company
Act of 1940, as such statutes are now or hereafter in force.
(c) Procedures. On the request of any current or
former director or officer requesting indemnification or an advance under this
Section 2, the Board of Directors shall determine, or cause to be determined,
in a manner consistent with applicable state corporation law, the Securities
Act of 1933 and the Investment Company Act of 1940, as such statutes are now or
hereafter in force, whether the standards required by this Section 2 have been
met.
(d) Other Rights. The indemnification provided by
this Section 2 shall not be deemed exclusive of any other right, in respect of
indemnification or otherwise, to which those seeking such indemnification may
be entitled under any insurance or other agreement, vote of stockholders or
disinterested directors or otherwise, both as to action by a director or
officer of the Corporation in his official capacity and as to action by such
person in another capacity while holding such office or position, and shall
continue as to a person who has
-10-
<PAGE> 11
ceased to be a director or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person.
-11-
<PAGE> 1
EXHIBIT 2(B)
PACIFIC HORIZON FUNDS, INC.
AMENDMENT TO BY-LAWS
ADOPTED BY THE BOARD OF DIRECTORS
ON JULY 17, 1987
RESOLVED, that Article I of the Fund's By-Laws be, and hereby
is, amended by the addition of the following as Section 8 thereof:
SECTION 8. No Annual Meeting Required. No annual meeting of
stockholders of the Corporation shall be held unless required
by applicable law or otherwise determined by the Board of
Directors.
FURTHER RESOLVED, that the last sentence of Article II,
Section 1 of the Fund's By-Laws be, and hereby is, amended to provide as
follows:
Subject to the provisions of Article I, Section 8, the members
of the Board of Directors shall be elected by the stockholders
at their annual meeting and each Director shall hold office
until the annual meeting next after his election and until his
successor shall have been duly elected and qualified, until he
shall have resigned, or until he shall have been removed as
provided in Sections 10 and 11 of this Article II.
<PAGE> 1
EXHIBIT 2(C)
PACIFIC HORIZON FUNDS, INC.
March 30, 1989
Amendment of By-Laws.
RESOLVED, that Article I, Section 1 of the By-Laws of Pacific Horizon
be, and the same hereby is, amended and restated in its entirety as follows:
SECTION 1.
Annual Meetings. Subject to the provisions of Article I,
Section 8, the annual meeting of the stockholders of the Corporation
shall be held at the registered office of the Corporation, or at such
other place, within or without the State of Maryland, as may be
determined by the Board of Directors and as shall be designated in the
notice of said meeting, on such day during the month of November and
at such time as shall be specified by the Board of Directors, for the
purpose of electing directors and for the transaction of such other
business as may properly be brought before the meeting.
<PAGE> 1
EXHIBIT 2(D)
PACIFIC HORIZON FUNDS, INC.
AMENDMENT TO BY-LAWS
ADOPTED BY THE BOARD OF DIRECTORS
ON JANUARY 29, 1990
RESOLVED, that Article I, Section 2 of the By-Laws be, and the
same hereby is, amended and restated in its entirety as follows:
SECTION 2. Special Meetings. Special meetings of the
stockholders for any purpose or purposes, unless otherwise prescribed by
statute or by the Charter, may be held at any place, within or without the
State of Maryland, and may be called at any time by the Board of Directors or
by the President, and shall be called by the President or Secretary at the
request in writing of a majority of the Board or at the request in writing of
stockholders entitled to cast at least ten (10) percent of all the votes
entitled to be cast at such meeting. Such request shall state the purpose or
purposes of the proposed meeting and the matters proposed to be acted on at it;
provided, however, that unless requested by stockholders entitled to cast a
majority of all the votes entitled to be cast at the meeting, a special meeting
need not be called to consider any matter which is substantially the same as a
matter voted on at any special meeting of the stockholders held during the
preceding twelve (12) months.
<PAGE> 1
EXHIBIT 5(A)
INVESTMENT ADVISORY AGREEMENT
(Money Market Funds)
THIS AGREEMENT is made as of April 22, 1992 between PACIFIC
HORIZON FUNDS, INC., a Maryland corporation (herein called the "Company"), and
Bank of America National Trust and Savings Association (the "Adviser").
WHEREAS, the Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, Security Pacific National Bank currently furnishes
investment advisory services to the Company's money market funds pursuant to an
Investment Advisory Agreement dated as of April 22, 1992 (the "Current
Agreement"); and
WHEREAS, Security Pacific National Bank is this day merging
with the Adviser (the "Merger"); and
WHEREAS, the Company desires to retain the Adviser to furnish
investment advisory services to the Company following the Merger;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
(a) The Company hereby appoints the Adviser to
act as investment adviser to the following investment portfolios of the
Company: Prime Fund, Treasury Fund, Horizon Tax-Exempt Money Fund, California
Tax-Exempt Money Market Fund and Pacific Horizon Tax-Exempt Money Market Fund
(the "Initial Funds") for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
(b) In the event that the Company establishes one
or more investment portfolios other than the Initial Funds with respect to
which it desires to retain the Adviser to act as investment adviser hereunder,
it shall notify the Adviser in writing. If the Adviser is willing to render
such services under this Agreement it shall notify the Company in writing
whereupon such investment portfolio shall become a Fund hereunder and shall be
subject to the provisions of this Agreement to the same extent as the Initial
Funds except to the extent that said provisions (including those relating to
the compensation payable by the Fund to the Adviser) are modified with respect
to such Fund in writing by the Company and the Adviser at the time. The
Initial Funds
<PAGE> 2
and any additional Fund established hereunder in accordance with this paragraph
are sometimes collectively referred to herein as the "Funds" and individually
as a "Fund."
2. Services.
Subject to the supervision of the Company's Board of
Directors, the Adviser will provide a continuous investment program for each of
the Funds, including investment research and management with respect to all
securities and investments and cash equivalents in the Funds. The Adviser will
determine from time to time what securities and other investments will be
purchased, retained or sold by the Company with respect to each Fund. The
Adviser will provide the services under this Agreement in accordance with each
Fund's investment objective, policies and restrictions as stated in the Fund's
Prospectus, as from time to time amended, and resolutions of the Company's
Board of Directors. The Adviser further agrees that it:
(a) will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission and will in addition
conduct its activities under this Agreement in accordance with other applicable
law, including but not limited to banking law.
(b) will place all orders for the purchase and
sale of portfolio securities for the account of each Fund with brokers or
dealers selected by the Adviser. In executing portfolio transactions and
selecting brokers or dealers, the Adviser will use its best efforts to seek on
behalf of the Company and each Fund the best overall terms available. In
assessing the best overall terms available for any transaction the Adviser
shall consider all factors it deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting the
broker or dealer to execute a particular transaction, the Adviser may also
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to any Fund
and/or other accounts over which the Adviser or any affiliate of the Adviser
exercises investment discretion. The Adviser is authorized, subject to the
prior approval of the Company's Board of Directors, to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for any Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services
-2-
<PAGE> 3
provided by such broker or dealer--viewed in terms of that particular
transaction or in terms of the overall responsibilities of the Adviser to the
particular Fund and to the Company. In no instance will portfolio securities
be purchased from or sold to the Adviser or Concord Financial Group, Inc. or an
affiliated person of either acting as principal or as broker, except as
permitted by law. In executing portfolio transactions for any Fund the Adviser
may, to the extent permitted by applicable laws and regulations, but shall not
be obligated to, aggregate the securities to be sold or purchased with those of
other Funds and its other clients where such aggregation is not inconsistent
with the policies set forth in the Funds registration statement. In such
event, the Adviser will allocate the securities so purchased or sold, and the
expenses incurred in the transaction, in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the Funds and such
other clients.
(c) will maintain all books and records with
respect to the securities transactions of the Company's Funds, keep books of
account with respect to such Funds and furnish the Company's Board of Directors
such periodic special reports as the Board may request.
(d) will maintain a policy and practice of
conducting its investment advisory operations independently of its commercial
banking operations. When the Adviser makes investment recommendations for a
Fund, its investment advisory personnel will not inquire or take into
consideration whether the issuer of securities proposed for purchase or sale
for the Fund's account are customers of its commercial department. In dealing
with commercial customers, the Adviser's commercial department will not inquire
or take into consideration whether securities of those customers are held by
the Funds.
(e) will treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company and prior or present shareholders or those persons or entities who
respond to Concord Financial Group, Inc. inquiries concerning investment in the
Company, and will not use such records and information for any purpose other
than performance of its responsibilities and duties hereunder or under any
other agreement with the Company, except after prior notification to and
approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where the Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Company. Nothing contained herein, however, shall prohibit the Adviser from
advertising to or soliciting the public generally with respect to other
products or services, including, but not limited to, any advertising or
marketing via
-3-
<PAGE> 4
radio, television, newspapers, magazines or direct mail solicitation,
regardless of whether such advertisement or solicitation may coincidentally
include prior or present Company shareholders or those persons or entities who
have responded to Concord Financial Group, Inc. inquiries.
3. Services Not Exclusive. The Adviser will for all
purposes herein be deemed to be an independent contractor and will, unless
otherwise expressly provided herein or authorized by the Board of Directors
from time to time, have no authority to act for or represent the Company in any
way or otherwise be deemed its agent. The investment management services
furnished by the Adviser hereunder are not deemed exclusive, and the Adviser
will be free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby.
4. Books and Records. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that
all records which it maintains for the Company are the property of the Company
and further agrees to surrender promptly to the Company any such records upon
the Company's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
5. Expenses. During the term of this Agreement, the
Adviser will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Company.
6. Compensation. For the services provided and the
expenses assumed pursuant to this Agreement, the Company will pay the Adviser
and the Adviser will accept as full compensation therefor a fee, computed daily
and paid monthly (in arrears), based on the net assets of the Prime Fund,
Treasury Fund, Horizon Tax-Exempt Money Fund, California Tax-Exempt Money
Market Fund and Pacific Horizon Tax-Exempt Money Market Fund considered
separately on a per-Fund basis at the following annual rates: .10% of the
first $3 billion of each Fund's net assets, plus .09% of the next $2 billion of
each Fund's net assets, plus .08% of each Fund's net assets over $5 billion.
Such fee as is attributable to each Fund will be a separate charge to each such
Fund and will be the several (and not joint or joint and several) obligation of
each such Fund.
If in any fiscal year the aggregate expenses of any Fund (as
defined under the securities regulations of any state having jurisdiction over
such Fund) exceed the expense limitations of any such state, the Adviser will
reimburse the Fund for one- half of such excess expenses, or such greater
-4-
<PAGE> 5
portion thereof as it may agree upon with the Fund's administrator. The
obligation of the Adviser to reimburse any Fund hereunder is limited in any
fiscal year to the amount of its fee hereunder for such fiscal year with
respect to such Fund; provided, however, that notwithstanding the foregoing,
the Adviser will reimburse any Fund for such proportion of such excess expenses
regardless of the amount of fees paid to it during such fiscal year to the
extent that the securities regulations of any state having jurisdiction over
the Fund so require. Such expense reimbursement, if any, will be estimated and
accrued daily and paid on a monthly basis.
7. Limitation of Liability. The Adviser will not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Company in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or negligence on the part of the Adviser in the performance of its duties
or from reckless disregard by it of its obligations and duties under this
Agreement.
8. Duration and Termination. This Agreement will become
effective with respect to an Initial Fund on the date of the consummation of
the Merger of Security Pacific National Bank and the Adviser, provided that the
shareholders of the Fund have previously approved the Agreement in accordance
with the requirements of the 1940 Act. This Agreement will become effective
with respect to any additional Fund on the date of receipt by the Company of
notice from the Adviser in accordance with Section l(b) hereof that the Adviser
is willing to serve as investment adviser with respect to such Fund, provided
that this Agreement (as supplemented by the terms specified in any notice and
agreement pursuant to Section l(b) hereof) shall have been approved by the
shareholder(s) of the Fund in accordance with the requirements of the 1940 Act.
Unless sooner terminated as provided herein, this Agreement will continue in
effect until October 31, 1993. Thereafter, if not terminated, this Agreement
shall continue in effect as to a particular Fund for successive annual periods,
provided such continuance is specifically approved at least annually (a) by the
vote of a majority of those members of the Company's Board of Directors who are
not interested persons of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval, and (b) by the
Company's Board of Directors or by vote of a majority of the outstanding voting
securities of such Fund. Notwithstanding the foregoing, this Agreement may be
terminated as to any Fund at any time, without the payment of any penalty, by
the Company (by vote of the Company's Board of Directors or by vote of a
majority of the outstanding voting securities of such Fund), or by the Adviser,
on sixty days' written notice. This Agreement will immediately terminate in
the event of its
-5-
<PAGE> 6
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" will have the same
meaning as the meaning of such terms in the 1940 Act.)
9. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No amendment of this
Agreement will be effective as to a particular Fund until approved by vote of a
majority of the outstanding voting securities of such Fund.
10. Notices. Notices of any kind to be given to the
Adviser hereunder by the Company will be in writing and will be duly given if
mailed or delivered to the Adviser at 300 South Grand Avenue, Suite 2200, Los
Angeles, California 90071, Attention: Sandra Brown, or at such other address
or to such individual as will be so specified by the Adviser to the Company.
Notices of any kind to be given to the Company hereunder by the Adviser will be
in writing and will be duly given if mailed or delivered to the Company at 156
West 56th Street, Suite 1902, New York, New York 10019, Attention: William B.
Blundin (with a copy to one Wilshire Boulevard, Suite 2000, Los Angeles,
California 90071, Attention: Thomas M. Collins, President), or at such other
address or to such individual as will be so specified by the Company to the
Adviser.
11. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby. This Agreement will be binding upon and will inure to the
benefit of the parties hereto and their respective successors and will be
governed by New York law; provided that nothing herein will be construed in a
manner inconsistent with the 1940
-6-
<PAGE> 7
Act, the Investment Advisers Act of 1940 or any rule or regulation of the
Securities and Exchange Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
PACIFIC HORIZON FUNDS, INC.
By: /s/ Thomas M. Collins
---------------------------
Thomas M. Collins, President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ Peter S. Voss
----------------------
And: /s/ Debra McGinty-Poteet
---------------------------
-7-
<PAGE> 1
EXHIBIT 5(B)
INVESTMENT ADVISORY AGREEMENT
[Non-Money Market Funds]
THIS AGREEMENT is made as of the 22nd of April, 1992 between
PACIFIC HORIZON FUNDS, INC., a Maryland corporation (herein called the
"Company"), and Bank of America National Trust and Savings Association (the
"Adviser").
WHEREAS, the Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, Security Pacific National Bank currently furnishes
investment advisory services to the Company's non-money market funds pursuant
to an Investment Advisory Agreement dated as of the 22nd of April, 1992 (the
"Current Agreement"); and
WHEREAS, Security Pacific National Bank is this day merging
with the Adviser (the "Merger"); and
WHEREAS, the Company desires to retain the Adviser to
furnish investment advisory services to the Company following the Merger;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
(a) The Company hereby appoints the Adviser to
act as investment adviser to the following investment portfolios of the
Company: Aggressive Growth Fund, Capital Income Fund, U.S. Government
Securities Fund and California Tax-Exempt Bond Fund (the "Initial Funds") for
the period and on the terms set forth in this Agreement. The Adviser accepts
such appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
(b) In the event that the Company establishes one
or more investment portfolios other than the Initial Funds with respect to
which it desires to retain the Adviser to act as investment adviser hereunder,
it shall notify the Adviser in writing. If the Adviser is willing to render
such services under this Agreement it shall notify the Company in writing
whereupon such investment portfolio shall become a Fund hereunder and shall be
subject to the provisions of this Agreement to the same extent as the Initial
Funds except to the extent that said provisions (including those relating to
the compensation payable by the Fund
<PAGE> 2
to the Adviser) are modified with respect to such Fund in writing by the
Company and the Adviser at the time. The Initial Funds and any additional Fund
established hereunder in accordance with this paragraph are sometimes
collectively referred to herein as the "Funds" and individually as a "Fund."
2. Services.
Subject to the supervision of the Company's Board of
Directors, the Adviser will provide a continuous investment program for each of
the Funds, including investment research and management with respect to all
securities and investments and cash equivalents in the Funds. The Adviser will
determine from time to time what securities and other investments will be
purchased, retained or sold by the Company with respect to each Fund. The
Adviser will provide the services under this Agreement in accordance with each
Fund's investment objective, policies and restrictions as stated in the Fund's
Prospectus, as from time to time amended, and resolutions of the Company's
Board of Directors. The Adviser further agrees that it:
(a) will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission and will in addition
conduct its activities under this Agreement in accordance with other applicable
law, including but not limited to banking law.
(b) will place all orders for the purchase and
sale of portfolio securities for the account of each Fund with brokers or
dealers selected by the Adviser. In executing portfolio transactions and
selecting brokers or dealers, the Adviser will use its best efforts to seek on
behalf of the Company and each Fund the best overall terms available. In
assessing the best overall terms available for any transaction the Adviser
shall consider all factors it deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting the
broker or dealer to execute a particular transaction, the Adviser may also
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to any Fund
and/or other accounts over which the Adviser or any affiliate of the Adviser
exercises investment discretion. The Adviser is authorized, subject to the
prior approval of the Company's Board of Directors, to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for any Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Adviser
-2-
<PAGE> 3
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or dealer
- -- viewed in terms of that particular transaction or in terms of the overall
responsibilities of the Adviser to the particular Fund and to the Company. In
no instance will portfolio securities be purchased from or sold to the Adviser
or Concord Financial Group, Inc. or an affiliated person of either acting as
principal or as broker, except as permitted by law. In executing portfolio
transactions for any Fund the Adviser may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to, aggregate the
securities to be sold or purchased with those of other Funds and its other
clients where such aggregation is not inconsistent with the policies set forth
in the Funds' registration statement. In such event, the Adviser will allocate
the securities so purchased or sold, and the expenses incurred in the
transaction, in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the Funds and such other clients.
(c) will maintain all books and records with
respect to the securities transactions of the Company's Funds, keep books of
account with respect to such Funds and furnish the Company's Board of Directors
such periodic special reports as the Board may request.
(d) will maintain a policy and practice of
conducting its investment advisory operations independently of its commercial
banking operations. When the Adviser makes investment recommendations for a
Fund, its investment advisory personnel will not inquire or take into
consideration whether the issuer of securities proposed for purchase or sale
for the Fund's account are customers of its commercial department. In dealing
with commercial customers, the Adviser's commercial department will not inquire
or take into consideration whether securities of those customers are held by
the Funds.
(e) will treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company and prior or present shareholders or those persons or entities who
respond to Concord Financial Group, Inc. inquiries concerning investment in the
Company, and will not use such records and information for any purpose other
than performance of its responsibilities and duties hereunder or under any
other agreement with the Company except after prior notification to and
approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where the Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Company. Nothing contained herein, however, shall prohibit the Adviser from
advertising to or soliciting the
-3-
<PAGE> 4
public generally with respect to other products or services, including, but not
limited to, any advertising or marketing via radio, television, newspapers,
magazines or direct mail solicitation, regardless of whether such advertisement
or solicitation may coincidentally include prior or present Company
shareholders or those persons or entities who have responded to Concord
Financial Group, Inc. inquiries.
3. Services Not Exclusive. The Adviser will for all
purposes herein be deemed to be an independent contractor and will, unless
otherwise expressly provided herein or authorized by the Board of Directors
from time to time, have no authority to act for or represent the Company in any
way or otherwise be deemed its agent. The investment management services
furnished by the Adviser hereunder are not deemed exclusive, and the Adviser
will be free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby.
4. Books and Records. In compliance with the
requirements of Rule 3la-3 under the 1940 Act, the Adviser hereby agrees that
all records which it maintains for the Company are the property of the Company
and further agrees to surrender promptly to the Company any such records upon
the Company's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 3la-2 under the 1940 Act the records required to be
maintained by Rule 3la-1 under the 1940 Act.
5. Expenses. During the term of this Agreement, the
Adviser will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Company.
6. Compensation. For the services provided and the
expenses assumed pursuant to this Agreement, the Company will pay the Adviser
and the Adviser will accept as full compensation therefor a fee, computed daily
and paid monthly (in arrears), at an annual rate of .45% of the net assets of
the Capital Income Fund; .60% of the net assets of the Aggressive Growth Fund;
.35% of the net assets of the U.S. Government Securities Fund; and .40% of the
net assets of the California Tax-Exempt Bond Fund. Such fee as is attributable
to each Fund will be a separate charge to each such Fund and will be the
several (and not joint or joint and several) obligation of each such Fund.
If in any fiscal year the aggregate expenses of any Fund (as
defined under the securities regulations of any state having jurisdiction over
such Fund) exceed the expense limitations of any such state, the Adviser will
reimburse the Fund for a portion of such excess expenses equal to such excess
times the ratio of the fees otherwise payable with respect to
-4-
<PAGE> 5
such Fund to the Adviser hereunder to the aggregate fees otherwise payable with
respect to such Fund to the Adviser hereunder and to the Fund's Administrator
under its Administration Agreement with the Company. The obligation of the
Adviser to reimburse any Fund hereunder is limited in any fiscal year to the
amount of its fee hereunder for such fiscal year with respect to such Fund;
provided, however, that notwithstanding the foregoing, the Adviser will
reimburse any Fund for such proportion of such excess expenses regardless of
the amount of fees paid to it during such fiscal year to the extent that the
securities regulations of any state having jurisdiction over the Fund so
require. Such expense reimbursement, if any, will be estimated and accrued
daily and paid on a monthly basis.
7. Limitation of Liability. The Adviser will not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Company in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or negligence on the part of the Adviser in the performance of its duties
or from reckless disregard by it of its obligations and duties under this
Agreement.
8. Duration and Termination. This Agreement will become
effective with respect to an Initial Fund on the date of the consummation of
the Merger of Security Pacific National Bank and the Adviser, provided that the
shareholders of the Fund have previously approved the Agreement in accordance
with the requirements of the 1940 Act. This Agreement will become effective
with respect to any additional Fund on the date of receipt by the Company of
notice from the Adviser in accordance with Section 1(b) hereof that the Adviser
is willing to serve as investment adviser with respect to such Fund, provided
that this Agreement (as supplemented by the terms specified in any notice and
agreement pursuant to Section 1(b) hereof) shall have been approved by the
shareholder(s) of the Fund in accordance with the requirements of the 1940 Act.
Unless sooner terminated as provided herein, this Agreement will continue in
effect until October 31, 1993. Thereafter, if not terminated, this Agreement
shall continue in effect as to a particular Fund for successive annual periods,
provided such continuance is specifically approved at least annually (a) by the
vote of a majority of those members of the Company's Board of Directors who are
not interested persons of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval, and (b) by the
Company's Board of Directors or by vote of a majority of the outstanding voting
securities of such Fund. Notwithstanding the foregoing, this Agreement may be
terminated as to any Fund at any time, without the payment of any penalty, by
the Company (by vote of the Company's Board of Directors or by vote of a
majority of the outstanding voting securities of such
-5-
<PAGE> 6
Fund), or by the Adviser, on sixty days' written notice. This Agreement will
immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" will have the same meaning as the meaning
of such terms in the 1940 Act.)
9. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No amendment of this
Agreement will be effective as to a particular Fund until approved by vote of a
majority of the outstanding voting securities of such Fund.
10. Notices. Notices of any kind to be given to the
Adviser hereunder by the Company will be in writing and will be duly given if
mailed or delivered to the Adviser at 300 South Grand Avenue, Suite 2200, Los
Angeles, California 90071, Attention: Sandra Brown, or at such other address
or to such individual as will be so specified by the Adviser to the Company.
Notices of any kind to be given to the Company hereunder by the Adviser will be
in writing and will be duly given if mailed or delivered to the Company at 156
West 56th Street, 19th Floor, New York, New York 10019, Attention: William B.
Blundin (with a copy to one Wilshire Boulevard, Suite 2000, Los Angeles,
California 90071, Attention: Thomas M. Collins, President), or at such other
address or to such individual as will be so specified by the Company to the
Adviser.
11. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby. This Agreement will be binding upon and will inure to the
benefit of the parties hereto and their respective successors and will be
governed by New York law; provided that nothing herein will be construed in a
manner inconsistent with the 1940
-6-
<PAGE> 7
Act, the Investment Advisers Act of 1940 or any rule or regulation of the
Securities and Exchange Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
----------------------------
Thomas M. Collins, President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ Peter S. Voss
----------------------
And: /s/ Debra McGinty-Poteet
------------------------
-7-
<PAGE> 1
EXHIBIT 5(C)
ADDENDUM TO INVESTMENT ADVISORY AGREEMENT
This Addendum, dated as of the 1st day of March, 1993, is entered into
between PACIFIC HORIZON FUNDS, INC. (the "Company"), a Maryland corporation,
and Bank of America National Trust and Savings Association ("Bank of America").
WHEREAS, the Company and Bank of America have entered into an Investment
Advisory Agreement dated as of April 22, 1992 (the "Advisory Agreement"),
pursuant to which the Company appointed Bank of America to act as investment
adviser to the Company for its Prime Fund, Treasury Fund, Horizon Tax-Exempt
Money Fund, California Tax-Exempt Money Market Fund and Pacific Horizon
TaxExempt Money Market Fund;
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the event
the Company establishes one or more additional investment portfolios with
respect to which it desires to retain Bank of America to act as the investment
adviser under the Advisory Agreement, the Company shall so notify Bank of
America in writing and if Bank of America is willing to render such services it
shall notify the Company in writing, and the compensation to be paid to Bank of
America shall be that which is agreed to in writing by the Company and Bank of
America; and
WHEREAS, pursuant to Section 1(b) of the Advisory Agreement, the Company
has notified Bank of America that it has established the Prime Value Fund and
that it desires to retain Bank of America to act as the investment adviser
therefor, and Bank of America has notified the Company that it is willing to
serve as investment adviser for the Prime Value Fund;
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. APPOINTMENT. The Company hereby appoints Bank of America to act as
investment adviser to the Company for the Prime Value Fund for the period and
on the terms set forth in the Advisory Agreement. Bank of America hereby
accepts such appointment and agrees to render the services set forth in the
Advisory Agreement, for the compensation herein provided.
2. COMPENSATION. For the services provided and the expenses assumed
pursuant to the Advisory Agreement with respect to the Prime Value Fund, the
Company will pay Bank of America and Bank of America will accept as full
compensation therefor a fee, computed daily and paid monthly (in arrears),
based on the net assets of the Prime Value Fund at the following annual rates:
.10% of the first $7 billion of the Fund's net assets, plus .09% of the next $3
billion of the Fund's net assets, plus .08% of the
<PAGE> 2
Fund's net assets over $10 billion.
If in any fiscal year the aggregate expenses of the Prime Value Fund
(as defined under the securities regulations of any state having jurisdiction
over the Prime Value Fund) exceed the expense limitations of any such state,
Bank of America will reimburse the Prime Value Fund for one-half of such excess
expenses, or such greater portion thereof as it may agree upon with the Prime
Value Fund's administrator. The obligation of Bank of America to reimburse the
Prime Value Fund hereunder is limited in any fiscal year to the amount of its
fee hereunder for such fiscal year with respect to the Prime Value Fund;
provided, however, that notwithstanding the foregoing, Bank of America will
reimburse the Prime Value Fund for such proportion of such excess expenses
regardless of the amount of fees paid to it during such fiscal year to the
extent that the securities regulations of any state having jurisdiction over
the Prime Value Fund so require. Such expense reimbursement, if any, will be
estimated and accrued daily and paid on a monthly basis.
3. MISCELLANEOUS. Except to the extent supplemented hereby, the Advisory
Agreement shall remain unchanged and in full force and effect and is hereby
ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of the
date and year first above written.
PACIFIC HORIZON FUNDS, INC.
By: /s/ Thomas M. Collins
-------------------------
Title President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Debra McGinty-Poteet
---------------------------
Title Senior Vice
President
-2-
<PAGE> 1
EXHIBIT 5(D)
ADDENDUM TO INVESTMENT ADVISORY AGREEMENT
This Addendum, dated as of the 1st day of March, 1993, is entered into
between PACIFIC HORIZON FUNDS, INC. (the "Company"), a Maryland corporation,
and Bank of America National Trust and Savings Association ("Bank of America").
WHEREAS, the Company and Bank of America have entered into an
Investment Advisory Agreement dated as of April 22, 1992 (the "Advisory
Agreement"), pursuant to which the Company appointed Bank of America to act as
investment adviser to the Company for its Prime Fund, Treasury Fund, Horizon
Tax-Exempt Money Fund, California Tax-Exempt Money Market Fund and Pacific
Horizon Tax-Exempt Money Market Fund;
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the
event the Company establishes one or more additional investment portfolios with
respect to which it desires to retain Bank of America to act as the investment
adviser under the Advisory Agreement, the Company shall so notify Bank of
America in writing and if Bank of America is willing to render such services it
shall notify the Company in writing, and the compensation to be paid to Bank of
America shall be that which is agreed to in writing by the Company and Bank of
America; and
WHEREAS, pursuant to Section 1(b) of the Advisory Agreement, the
Company has notified Bank of America that it has established the Treasury Only
Fund and the Government Fund and that it desires to retain Bank of America to
act as the investment adviser therefor, and Bank of America has notified the
Company that it is willing to serve as investment adviser for the Treasury Only
Fund and the Government Fund (the "Funds");
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. APPOINTMENT. The Company hereby appoints Bank of America to
act as investment adviser to the Company for the Treasury Only Fund and the
Government Fund for the period and on the terms set forth in the Advisory
Agreement. Bank of America hereby accepts such appointment and agrees to
render the services set forth in the Advisory Agreement, for the compensation
herein provided.
2. COMPENSATION. For the services provided and the expenses
assumed pursuant to the Advisory Agreement with respect to the Treasury Only
Fund and Government Fund, the Company will pay Bank of America and Bank of
America will accept as full compensation therefor a fee, computed daily and
paid monthly (in arrears), based on the net assets of the Treasury Only Fund
and
<PAGE> 2
Government Fund considered separately on a per-Fund basis at the following
annual rates: .10% of the first $3 billion of each Fund's net assets, plus
.09% of the next $2 billion of each Fund's net assets, plus .08% of each Fund's
net assets over $5 billion. Such fee as is attributable to each Fund will be a
separate charge to each such Fund and will be the several (and not the joint
and several) obligation of each such Fund.
If in any fiscal year the aggregate expenses of any Fund (as defined
under the securities regulations of any state having jurisdiction over such
Fund) exceed the expense limitations of any such state, Bank of America will
reimburse the Fund for one-half of such excess expenses, or such greater
portion thereof as it may agree upon with the Fund's administrator. The
obligation of Bank of America to reimburse any Fund hereunder is limited in any
fiscal year to the amount of its fee hereunder for such fiscal year with
respect to such Fund; provided, however, that notwithstanding the foregoing,
Bank of America will reimburse any Fund for such proportion of such excess
expenses regardless of the amount of fees paid to it during such fiscal year to
the extent that the securities regulations of any state having jurisdiction
over the Fund so require. Such expense reimbursement, if any, will be
estimated and accrued daily and paid on a monthly basis.
3. MISCELLANEOUS. Except to the extent supplemented hereby,
the Advisory Agreement shall remain unchanged and in full force and effect and
is hereby ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of
the date and year first above written.
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
--------------------------
Title
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:/s/ Debra McGinty-Poteet
-----------------------------
Title
-2-
<PAGE> 1
EXHIBIT 5(E)
INVESTMENT ADVISORY AGREEMENT
[Pacific Horizon Capital Income Fund]
THIS AGREEMENT is made as of November 1, 1994 between PACIFIC
HORIZON FUNDS, INC., a Maryland corporation (herein called the "Company"), and
Bank of America National Trust and Savings Association (the "Adviser").
WHEREAS, the Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, the Adviser currently furnishes investment advisory
services to the Company's Capital Income Fund (the "Fund") pursuant to an
Interim Investment Advisory Agreement dated as of September 1, 1994 (the
"Interim Advisory Agreement"); and
WHEREAS, the Company desires to retain the Adviser to furnish
investment advisory services to the Fund;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Termination. The Interim Advisory Agreement is
terminated as it relates to the Fund effective as of the date hereof.
2. Appointment.
The Company hereby appoints the Adviser to act as
investment adviser to the Fund for the period and on the terms set forth in
this Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth on the terms herein provided. The Adviser may, in
its discretion, provide such services through its own employees or the
employees of one or more affiliated companies that are qualified to act as
investment adviser to the Company under applicable law and are under the common
control of BankAmerica Corporation provided (i) that all persons, when
providing services hereunder, are functioning as part of an organized group of
persons, and (ii) that such organized group of persons is managed at all times
by authorized officers of the Adviser.
3. Services.
<PAGE> 2
Subject to the supervision of the Company's Board of
Directors, the Adviser will provide a continuous investment program for the
Fund, including investment research and management with respect to all
securities and investments and cash equivalents in the Fund. The Adviser will
determine from time to time what securities and other investments will be
purchased, retained or sold by the Company with respect to the Fund. The
Adviser will provide the services under this Agreement in accordance with the
Fund's investment objective, policies and restrictions as stated in the Fund's
then current registration statement and resolutions of the Company's Board of
Directors. The Adviser further agrees that it:
(a) will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission and will in addition
conduct its activities under this Agreement in accordance with other applicable
law, including but not limited to banking law;
(b) will review, monitor and report to the Board of
Directors regarding the performance and investment procedures of any
Sub-Adviser (as defined in Section 4 of this Agreement);
(c) will assist and consult with any Sub-Adviser in
connection with the Fund's continuous investment program (as defined in Section
4 of this Agreement);
(d) will use the same skill and care in providing
services under this Agreement as it uses in providing services to fiduciary
accounts for which it has investment responsibilities;
(e) will place all orders for the purchase and
sale of portfolio securities for the account of the Fund with brokers or
dealers selected by the Adviser. In executing portfolio transactions and
selecting brokers or dealers, the Adviser will use its best efforts to seek on
behalf of the Fund the best overall terms available. In assessing the best
overall terms available for any transaction the Adviser shall consider all
factors it deems relevant, including the breadth of the market in the security,
the price of the security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. In evaluating the best
overall terms available, and in selecting the broker or dealer to execute a
particular transaction, the Adviser may also consider the brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Fund and/or other accounts
over which the Adviser or any affiliate of the Adviser exercises investment
discretion. The Adviser is authorized, subject to the prior approval of the
Company's Board of Directors, to pay to a broker or dealer who provides such
brokerage and research services a commission for
-2-
<PAGE> 3
executing a portfolio transaction for the Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer--viewed in terms of that
particular transaction or in terms of the overall responsibilities of the
Adviser to the Fund and to the Company. In no instance will portfolio
securities be purchased from or sold to the Adviser, any Sub-Adviser, Concord
Holding Corporation ("Concord"), Hambrecht and Quist or an affiliated person of
any of them acting as principal or as broker, except as permitted by law. In
executing portfolio transactions for the Fund the Adviser may, to the extent
permitted by applicable laws and regulations, but shall not be obligated to,
aggregate the securities to be sold or purchased with those of other investment
portfolios and its other clients where such aggregation is not inconsistent
with the policies set forth in the Company's registration statement. In such
event, the Adviser will allocate the securities so purchased or sold, and the
expenses incurred in the transaction, in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the Fund and such
other clients.
In performing the investment advisory services hereunder, the
Adviser is authorized to purchase, sell or otherwise deal with securities or
other instruments for which (a) Bank of America National Trust and Savings
Association, (b) any affiliate of Bank of America National Trust and Savings
Association, (c) an entity in which Bank of America National Trust and Savings
Association has a direct or indirect interest, or (d) another member of a
syndicate or other intermediary (where an entity referred to in (a), (b) or (c)
above was a member of the syndicate), has acted, now acts or in the future will
act as an underwriter, syndicate member, market-maker, dealer, broker or in any
other similar capacity, whether the purchase, sale or other dealing occurs
during the life of the syndicate or after the close of the syndicate, provided
such purchase, sale or dealing is permitted under the 1940 Act and the rules
thereunder. Insofar as permitted by law any rules of or under applicable law
prohibiting or restricting in any way an agent or fiduciary from dealing with
itself or from dealing with respect to any matter in which it may or does have
a personal interest shall not apply to the Adviser, to the extent its actions
are authorized under this paragraph.
(f) will maintain all books and records with
respect to the securities transactions of the Fund, keep books of account with
respect to the Fund and furnish the Company's Board of Directors such periodic
special reports as the Board may request.
-3-
<PAGE> 4
(g) will maintain a policy and practice of
conducting its investment advisory operations independently of its commercial
banking operations. When the Adviser makes investment recommendations for the
Fund, its investment advisory personnel will not inquire or take into
consideration whether the issuer of securities proposed for purchase or sale
for the Fund's account are customers of its commercial department. In dealing
with commercial customers, the Adviser's commercial department will not inquire
or take into consideration whether securities of those customers are held by
the Fund.
(h) will treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company and prior or present shareholders or those persons or entities who
respond to Concord inquiries concerning investment in the Company, and will not
use such records and information for any purpose other than performance of its
responsibilities and duties hereunder or under any other agreement with the
Company except after prior notification to and approval in writing by the
Company, which approval shall not be unreasonably withheld and may not be
withheld where the Adviser may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information
by duly constituted authorities, or when so requested by the Company. Nothing
contained herein, however, shall prohibit the Adviser from advertising to or
soliciting the public generally with respect to other products or services,
including, but not limited to, any advertising or marketing via radio,
television, newspapers, magazines or direct mail solicitation, regardless of
whether such advertisement or solicitation may coincidentally include prior or
present Company shareholders or those persons or entities who have responded to
Concord inquiries.
4. Sub-Adviser. It is understood that the Adviser may
from time to time employ or associate with itself such person or persons as the
Adviser believes to be fitted to assist in the performance of this Agreement
(each a "Sub-Adviser"); provided, however, that the compensation of such person
or persons shall be paid by the Adviser and that the Adviser shall be as fully
responsible to the Company for the acts and omissions of any such person as it
is for its own acts and omissions; and provided further, that the retention of
any Sub-Adviser shall be approved as may be required by the 1940 Act.
Additionally, in the event that any Sub-Adviser appointed hereunder is
terminated, the Adviser may provide investment advisory services pursuant to
this Agreement to the Fund without a Sub-Adviser and without further
shareholder approval.
5. Services Not Exclusive. The Adviser will for all
purposes herein be deemed to be an independent contractor and will, unless
otherwise expressly provided herein or authorized by the Board of Directors
from time to time, have no authority to
-4-
<PAGE> 5
act for or represent the Company in any way or otherwise be deemed its agent.
The investment management services furnished by the Adviser hereunder are not
deemed exclusive, and the Adviser will be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
6. Books and Records. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that
all records which it maintains for the Company are the property of the Company
and further agrees to surrender promptly to the Company any such records upon
the Company's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
7. Expenses. During the term of this Agreement, the
Adviser will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Company.
8. Compensation. For the services provided and the
expenses assumed pursuant to this Agreement, the Company will pay the Adviser
and the Adviser will accept as full compensation therefor a fee, computed daily
and paid monthly (in arrears), at the annual rate of .45% of the net assets of
the Fund.
If in any fiscal year the aggregate expenses of the Fund (as
defined under the securities regulations of any state having jurisdiction over
the Fund) exceed the expense limitations of any such state, the Adviser will
reimburse the Fund for a portion of such excess expenses equal to such excess
times the ratio of the fees otherwise payable with respect to the Fund to the
Adviser hereunder to the aggregate fees otherwise payable with respect to the
Fund to the Adviser hereunder and to the Fund's Administrator under its
Administration Agreement with the Company. The obligation of the Adviser to
reimburse the Fund hereunder is limited in any fiscal year to the amount of its
fee hereunder for such fiscal year with respect to the Fund; provided, however,
that notwithstanding the foregoing, the Adviser will reimburse the Fund of such
proportion of such excess expenses regardless of the amount of fees paid to it
during such fiscal year to the extent that the securities regulations of any
state having jurisdiction over the Fund so require. Such expense
reimbursement, if any, will be estimated and accrued daily and paid on a
monthly basis.
9. Limitation of Liability. Subject to the provisions
of Section 4 hereof concerning the Adviser's responsibility for the acts and
omissions of persons employed or associated with the Adviser, the Adviser will
not be liable for
-5-
<PAGE> 6
any error of judgment or mistake of law or for any loss suffered by the Company
in connection with the performance of this Agreement, except a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or negligence
on the part of the Adviser in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
10. Duration and Termination. This Agreement shall
become effective as of the date first above written and, unless sooner
terminated as provided herein, this Agreement will continue in effect until
October 31, 1995. Thereafter, if not terminated, this Agreement shall continue
in effect as to the Fund for successive annual periods, provided such
continuance is specifically approved at least annually (a) by the vote of a
majority of those members of the Company's Board of Directors who are not
interested persons of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Company's
Board of Directors or by vote of a majority of the outstanding voting
securities of the Fund. Notwithstanding the foregoing, this Agreement may be
terminated as to the Fund at any time, without the payment of any penalty, by
the Company (by vote of the Company's Board of Directors or by vote of a
majority of the outstanding voting securities of the Fund), or by the Adviser,
on sixty days' written notice. This Agreement will immediately terminate in
the event of its assignment. (As used in this Agreement, the terms "majority
of the outstanding voting securities," "interested persons" and "assignment"
shall have the same meaning as the meaning of such terms in the 1940 Act.)
11. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No amendment of this
Agreement will be effective as to the Fund until approved by vote of a majority
of the outstanding voting securities of the Fund.
12. Notices. Notices of any kind to be given to the
Adviser hereunder by the Company will be in writing and will be duly given if
mailed or delivered to the Adviser at 555 South Flower Street, 5th Floor, Los
Angeles, California 90071, Attention: Sandra Brown, or at such other address
or to such individual as will be so specified by the Adviser to the Company.
Notices of any kind to be given to the Company hereunder by the Adviser will be
in writing and will be duly given if mailed or delivered to the Company at 125
West 55th Street, New York, New York 10019, Attention: William B. Blundin
(with a copy to McDermott & Trayner, 225 South Lake Avenue, Suite 300,
Pasadena, California 91101-3005, Attention: Thomas M. Collins, President),
-6-
<PAGE> 7
or at such other address or to such individual as will be so specified by the
Company to the Adviser.
13. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby. This Agreement will be binding upon and will inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the internal laws, and not the laws of conflicts, of the State of
Maryland; provided that nothing herein will be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940 or any rule
or regulation of the Securities and Exchange Commission thereunder. This
Agreement may be executed in two or more parts which together shall constitute
a single Agreement. This Agreement may be executed in two or more parts which
together shall constitute a single Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
PACIFIC HORIZON FUNDS, INC.
By: /s/ Thomas M. Collins
----------------------------
Thomas M. Collins, President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Keith Wirtz
------------------
-7-
<PAGE> 1
EXHIBIT 6(A)
DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of this 7th day of
December, 1993 between PACIFIC HORIZON FUNDS, INC., a Maryland corporation
(herein called the "Company"), and CONCORD FINANCIAL GROUP, INC., a Delaware
corporation (herein called "CFG").
WHEREAS, the Company is an open-end, management investment
company and is so registered under the Investment Company Act of 1940; and
WHEREAS, the Company will offer and maintain the following
investment portfolios: Prime Fund, Treasury Fund, Treasury Only Fund,
Government Fund, Tax-Exempt Money Fund, California Tax-Exempt Money Market
Fund, Prime Value Fund, Aggressive Growth Fund, U.S. Government Securities
Fund, Capital Income Fund, California Tax-Exempt Bond Fund, Blue Chip Fund,
Flexible Bond Fund, Asset Allocation Fund, National Municipal Bond Fund,
Utilities Fund, Short-Term Government Fund, Corporate Bond Fund, Growth and
Income Fund, International Bond Fund and International Equity Fund
(individually a "Fund" and collectively the "Funds"); and
WHEREAS, pursuant to an Administration Agreement dated
November 13, 1989, as amended, Basic Administrative Services Agreement dated
November 13, 1989, as amended, and Special Management Services Agreement, dated
April 22, 1992, as amended, (collectively the "Management Agreements") between
the Company and Concord Holding Corporation ("Concord"), the Company has
retained Concord to provide administrative and management services to the
Funds; and
WHEREAS, the Company desires to retain CFG as Distributor for
the Funds to provide for the sale and Distribution of shares of common stock of
the Funds, each such share having a par value of $.001 per share (herein
collectively called "Shares"), and CFG is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein the parties hereto agree as follows:
I. DELIVERY OF DOCUMENTS
The Company has delivered to CFG copies of each of the
following documents and will deliver to it all future amendments and
supplements thereto, if any:
<PAGE> 2
(a) The Company's Charter and all amendments
thereto (such Charter, as presently in effect and as it shall from time to time
be amended, herein called the "Company's Charter");
(b) Bylaws of the Company (such Bylaws, as
presently in effect and as they shall from time to time be amended, herein
called the "Bylaws");
(c) Resolutions of the Board of Directors of the
Company authorizing the execution and delivery of this Agreement;
(d) Post-Effective Amendment No. 33 to the
Company's registration statement under the Securities Act of 1933, as amended
(the "1933 Act"), and the Investment Company Act of 1940, as amended (the "1940
Act"), on Form N-1A as filed with the Securities and Exchange Commission (the
"Commission") relating to the Shares, and all subsequent amendments thereto
(said registration statement, as presently in effect and as amended or
supplemented from time to time, is herein called the "Registration Statement");
(e) Notification of Registration of the Company
under the 1940 Act on Form N-8A as filed with the Commission; and
(f) Prospectuses and statements of additional
information of the Company and of each Fund (such prospectuses and statements
of additional information, as presently in effect and as they shall from time
to time be amended and supplemented, herein called individually the
"Prospectus" and collectively the "Prospectuses").
II. DISTRIBUTION
1. APPOINTMENT OF DISTRIBUTOR. The Company hereby
appoints CFG as Distributor of the Funds' Shares and CFG hereby accepts such
appointment and agrees to render the services and duties set forth in this
Section II.
2. SERVICES AND DUTIES.
(a) The Company agrees to sell through CFG, as
agent, from time to time during the term of this Agreement, Shares of the Funds
(whether authorized but unissued or treasury shares, in the Company's sole
discretion) upon the terms and at the current offering price as described in
the applicable Prospectus. CFG will act only on its own behalf as principal in
making agreements with selected dealers or others for the sale and redemption
of Shares, and shall sell Shares only at the offering price thereof as set
forth in the applicable Prospectus. CFG shall devote its best efforts to effect
sales of Shares of
-2-
<PAGE> 3
each of the Funds, but shall not be obligated to sell any certain number of
Shares.
(b) In all matters relating to the sale and
redemption of Shares CFG will act in conformity with the Company's Charter,
Bylaws and Prospectuses and with the instructions and directions of the Board
of Directors of the Company, and will conform to and comply with the
requirements of the 1933 Act, the 1940 Act, the regulations of the National
Association of Securities Dealers, Inc. and all other applicable federal or
state laws and regulations. In connection with such sales, CFG acknowledges
and agrees that it is not authorized to provide any information or make any
representations other than as contained in the Company's Registration Statement
and Prospectuses and any sales literature specifically approved by the Company.
(c) CFG will bear the cost of (i) printing and
distributing any Prospectus (including any supplement thereto), and (ii)
preparing, printing and distributing any literature, advertisement or material
which is primarily intended to result in the sale of the Shares; provided,
however, that CFG shall not be obligated to bear the expenses incurred by the
Company in connection with (1) the preparation and printing of any supplement
or amendment to any Registration Statement or Prospectus necessary for the
continued effective registration of the Shares under the 1933 Act or any state
securities laws; and (2) the printing and distribution of any Prospectus,
supplement or amendment thereto for existing shareholders of the Fund described
therein.
(d) All Shares of the Aggressive Growth, U.S.
Government Securities, Capital Income, California Tax- Exempt Bond, Blue Chip,
Flexible Bond, Asset Allocation, National Municipal Bond, Utilities, Corporate
Bond, Growth and Income, International Bond and International Equity Funds of
the Company offered for sale by CFG shall be offered for sale to the public at
a price per Share (the "offering price") equal to (i) their net asset value
(determined in the manner set forth in the Company's Charter and then current
Prospectuses) plus, except with respect to those classes of persons or
transactions set forth in the then current Prospectuses, (ii) a sales charge
which shall be the percentage of the offering price of such Shares as set forth
in the Company's then current Prospectuses. The offering price, if not an
exact multiple of one cent, shall be adjusted to the nearest cent. Concessions
by CFG to broker-dealers and other persons shall be set forth in either the
selling agreements between CFG and such broker-dealers and persons or, if such
concessions are described in the then current Prospectuses, shall be as so set
forth. No broker-dealer or other person who enters into a selling agreement
with CFG shall
-3-
<PAGE> 4
be authorized to act as agent for the Company in connection with the offering
or sale of its Shares to the public or otherwise.
(e) If any Shares sold by CFG under the terms of
this Agreement are redeemed or repurchased by the Company or by CFG as agent or
are tendered for redemption within seven business days after the date of
confirmation of the original purchase of said Shares, CFG shall forfeit the
amount above the net asset value received by it in respect of such Shares,
provided that the portion, if any, of such amount re-allowed by CFG to
broker-dealers or other persons shall be repayable to the Company only to the
extent recovered by CFG from the broker-dealer or other person concerned. CFG
shall include in the forms of agreement with such broker-dealers and other
persons a corresponding provision for the forfeiture by them of their
concession with respect to Shares sold by them or their principals and redeemed
or repurchased by the Company or by CFG as agent (or tendered for redemption)
within seven business days after the date of confirmation of such initial
purchases.
3. SALES AND REDEMPTIONS.
(a) The Company shall pay all costs and expenses
in connection with the registration of the Shares under the 1933 Act, and all
expenses in connection with maintaining facilities for the issue and transfer
of the Shares and for supplying information, prices and other data to be
furnished by the Company hereunder, and all expenses in connection with
preparing, printing and distributing the Prospectuses except as set forth in
subsection 2(c) of Section II hereof or in any other agreement entered into by
the Company.
(b) The Company shall execute all documents,
furnish all information and otherwise take all actions which may be reasonably
necessary in the discretion of the Company's officers in connection with the
qualification of the Shares for sale in such states as CFG may designate to the
Company and the Company may approve, and the Company shall pay all filing fees
which may be incurred in connection with such qualification. CFG shall pay all
expenses connected with its qualification as a dealer under state or federal
laws and, except as otherwise specifically provided in this Agreement, all
other expenses incurred by CFG in connection with the sale of the Shares as
contemplated in this Agreement. It is understood that certain shareholder
servicing expenses to be incurred in connection with the Shares may be paid as
provided in a Shareholder Service Plan adopted by the Company. The Distributor
agrees to be responsible for the operation of such Plan in accordance with the
terms thereof.
(c) The Company shall have the right to suspend
the sale of Shares of any Fund at any time in response to
-4-
<PAGE> 5
conditions in the securities markets or otherwise, and to suspend the
redemption of Shares of any Fund at any time as permitted by the 1940 Act or
the rules of the Commission ("Rules").
(d) The Company reserves the right to reject any
order for Shares, but will not do so arbitrarily or without reasonable cause.
III. LIMITATIONS OF LIABILITY
CFG shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Company or any Fund in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or negligence on its part in the performance of
its duties or from reckless disregard by it of its obligations and duties under
this Agreement.
IV. CONFIDENTIALITY
CFG will treat confidentially and as proprietary information
of the Company all records and other information relative to the Company and
the Funds and prior or present shareholders or those persons or entities who
respond to CFG'S inquiries concerning investment in the Company, and will not
use such records and information for any purpose other than the performance of
its responsibilities and duties hereunder or under any other agreement with the
Company, except after prior notification to and approval in writing by the
Company, which approval shall not be unreasonably withheld and may not be
withheld where CFG may be exposed to civil or criminal contempt proceedings for
failure to comply, when CFG is requested to divulge such information by duly
constituted authorities, or when CFG is so requested by the Company.
V. INDEMNIFICATION
1. COMPANY REPRESENTATIONS. The Company represents and
warrants to CFG that at all times the Registration Statement and Prospectuses
will in all material respects conform to the applicable requirements of the
1933 Act and the Rules and will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation or warranty
in this subsection shall apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company by
-5-
<PAGE> 6
or on behalf of and with respect to CFG expressly for use in the Registration
Statement or Prospectuses.
2. CFG REPRESENTATIONS. CFG represents and warrants to the
Company that it is duly organized as a Delaware corporation and is and at all
times will remain duly authorized and licensed to carry out its services as
contemplated herein.
3. COMPANY INDEMNIFICATION. The Company will indemnify,
defend and hold harmless CFG, its several officers and directors, and any
person who controls CFG within the meaning of Section 15 of the 1933 Act, from
and against any losses, claims, damages or liabilities, joint or several, to
which any of them may become subject under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectuses or in any application or other document executed by
or on behalf of the Company, or arise out of, or are based upon, information
furnished by or on behalf of the Company filed in any state in order to qualify
the Shares under the securities or blue sky laws thereof ("Blue Sky
Application"), or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
CFG, its several officers and directors, and any person who controls CFG within
the meaning of Section 15 of the 1933 Act, for any legal or other expenses
reasonably incurred by any of them in investigating, defending or preparing to
defend any such action, proceeding or claim; provided, however, that the
Company shall not be liable in any case to the extent that such loss, claim,
damage or liability arises out of, or is based upon, any untrue statement,
alleged untrue statement, or omission or alleged omission made in the
Registration Statement, the Prospectuses, any Blue Sky Application or any
application or other document executed by or on behalf of the Company in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of and with respect to CFG specifically for inclusion
therein.
The Company shall not indemnify any person pursuant to this
subsection 3 unless the court or other body before which the proceeding was
brought has rendered a final decision on the merits that such person was not
liable by reason of his willful misfeasance, bad faith or negligence in the
performance of his duties, or his reckless disregard of obligations and duties,
under this Agreement ("disabling conduct") or, in the absence of such a
decision, a reasonable determination (based upon a review of the facts) that
such person was not liable by reason of disabling conduct has been made by the
vote of a majority of a quorum of directors of the Company who are neither
"interested
-6-
<PAGE> 7
persons" of the Company (as defined in the 1940 Act) nor parties to the
proceeding, or by an independent legal counsel in a written opinion.
Each Fund shall advance attorneys' fees and other expenses
incurred by any person in defending any claim, demand, action or suit which is
the subject of a claim for indemnification pursuant to this subsection 3, so
long as: (a) such person shall undertake to repay all such advances unless it
is ultimately determined that he is entitled to indemnification hereunder; and
(b) such person shall provide security for such undertaking, or the Fund shall
be insured against losses arising by reason of any lawful advances, or a
majority of a quorum of the disinterested, non-party directors of the Company
(or an independent legal counsel in a written opinion) shall determine based on
a review of readily available facts (as opposed to a full trial-type inquiry)
that there is reason to believe that such person ultimately will be found
entitled to indemnification hereunder.
4. CFG INDEMNIFICATION. CFG will indemnify, defend and hold
harmless the Company, each Fund, the Company's several officers and directors
and any person who controls the Company or any Fund within the meaning of
Section 15 of the 1933 Act, from and against any losses, claims, damages or
liabilities, joint or several, to which any of them may become subject under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any breach of its representations and warranties in subsection 2
hereof or its agreements in subsection 2 of Section II hereof, or which arise
out of, or are based upon, any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement, the Prospectuses, any
Blue Sky Application or any application or other document executed by or on
behalf of the Company, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, which statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company or any
of its several officers and directors by or on behalf of and with respect to
CFG specifically for inclusion therein, and will reimburse the Company, each
Fund, the Company's several officers and directors, and any person who controls
the Company or any Fund within the meaning of Section 15 of the 1933 Act, for
any legal or other expenses reasonably incurred by any of them in
investigating, defending or preparing to defend any such action, proceeding or
claim.
5. GENERAL INDEMNITY PROVISIONS. No indemnifying party
shall be liable under its indemnity agreement contained in sub-section 3 or 4
hereof with respect to any claim made against such indemnifying party unless
the indemnified party shall have
-7-
<PAGE> 8
notified the indemnifying party in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the indemnified party (or after the
indemnified party shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any such claim shall
not relieve it from any liability which it may otherwise have to the
indemnified party. The indemnifying party will be entitled to participate at
its own expense in the defense or, if it so elects, to assume the defense of
any suit brought to enforce any such liability, and if the indemnifying party
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and reasonably satisfactory to the indemnified party. In the event the
indemnifying party elects to assume the defense of any such suit and retain
such counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by the indemnified party.
VI. DURATION AND TERMINATION
This Agreement shall become effective as of the date hereof
and, unless sooner terminated as provided herein, shall continue in effect with
respect to each Fund until October 31, 1994. Thereafter, if not terminated,
this Agreement shall continue automatically for successive terms of one year,
provided that such continuance is specifically approved at least annually (a)
by a vote of a majority of those members of the Board of Directors of the
Company who are not parties to this Agreement or "interested persons" of any
such party, cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the Board of Directors of the Company or by vote of a
"majority of the outstanding voting securities" of the Funds as to which the
Agreement is effective; provided, however, that this Agreement may be
terminated by the Company at any time, without the payment of any penalty, by
vote of a majority of the entire Board of Directors of the Company or by a vote
of a "majority of the outstanding voting securities" of such Funds on 60 days'
written notice to CFG, or by CFG at any time, without the payment of any
penalty, on 90 days' written notice to the Company. This Agreement will
automatically and immediately terminate in the event of its "assignment." (As
used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meanings
as such terms have in the 1940 Act.)
VII. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated except by an instrument in writing
-8-
<PAGE> 9
signed by the party against which an enforcement of the change, waiver,
discharge or termination is sought.
VIII. NOTICES
Notices of any kind to be given to the Company hereunder by
CFG shall be in writing and shall be duly given if mailed or delivered to the
Company at 225 South Lake Avenue, Suite 300, Pasadena, California 91101-3005,
Attention: Thomas M. Collins, President, with a copy to Suite 1100, 1345
Chestnut Street, Philadelphia, Pennsylvania 19107-3496, Attention: W. Bruce
McConnel, III, Secretary, or at such other address or to such individual as
shall be so specified by the Company to CFG. Notices of any kind to be given
to CFG hereunder by the Company shall be in writing and shall be duly given if
mailed or delivered to CFG at 125 West 55th Street, 11th Floor, New York, New
York 10019, Attention: Richard E. Stierwalt, Chief Executive Officer, or at
such other address or to such individual as shall be so specified by CFG to the
Company.
IX. MISCELLANEOUS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section VI hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by New York law; provided, however, that
nothing herein
-9-
<PAGE> 10
shall be construed in a manner inconsistent with the 1940 Act or any rule or
regulation of the Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
PACIFIC HORIZON FUNDS, INC.
By: /s/ Thomas M. Collins
------------------------
President
Attest: /s/ W. Bruce McConnel, III
--------------------------
Secretary
CONCORD FINANCIAL GROUP, INC.
By: /s/ Richard Stierwalt
------------------------
Chief Executive Officer
Attest: /s/ Mary Murgidichien
---------------------
Secretary
-10-
<PAGE> 1
EXHIBIT 6(B)
AGREEMENT RELATING TO
DISTRIBUTION AGREEMENT
This AGREEMENT, is made as of the 29th day of March, 1995 between
Pacific Horizon Funds, Inc., a Maryland corporation (the "Fund"), and Concord
Financial Group, Inc., a Delaware Corporation (the "Distributor").
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act") and has entered into a distribution agreement (the "Distribution
Agreement") with the Distributor pursuant to which the Distributor acts as
distributor for the Fund's shares, and
WHEREAS, the Distribution Agreement provides that it will
automatically terminate in the event of its assignment, as that term is defined
in the Investment Company Act of 1940 (the "1940 Act"), and
WHEREAS, the Distributor is a wholly-owned subsidiary of Concord
Holding Corporation ("Concord") and Concord has entered into a definitive
merger agreement with The BISYS Group, Inc. ("BISYS") pursuant to which a
subsidiary of BISYS will merge with and into Concord and Concord will become a
wholly-owned subsidiary of BISYS (the "Merger") on or about March 31, 1995 (the
actual date of the Merger to be referred to as the "Merger Date"), and
WHEREAS, the Merger will result in a change of control of Concord and
the Distributor that may be deemed to result in an assignment and termination
of the Distribution Agreement as that term is defined in the 1940 Act, and
WHEREAS, the Fund wishes to continue to retain the Distributor as the
distributor of the Fund's shares after the Merger Date on same terms and
conditions as existing prior to the Merger Date and the Distributor wishes to
continue to serve as distributor under those same terms.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the Parties hereto agree as follows:
1. Renewal and Reinstatement of Distribution Agreement.
The Parties hereby agree that, effective upon the termination of the
Distribution Agreement on the Merger Date, the Distribution Agreement shall be
automatically, and without need of further action, renewed and reinstated and
shall continue in
<PAGE> 2
effect under its current terms. The Parties further agree that the renewal and
reinstatement of the Distribution Agreement shall be evidenced by their
respective execution of this Agreement and that no further agreement or
documentation shall be required.
2. Other Matters
a. In the event the Merger is not consummated
within 120 calendar days of the date hereof, this Agreement shall become null
and void and therefore have no effect on the Distribution Agreement.
b. This Agreement may be executed in one or more
counterparts, each of which may be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
CONCORD FINANCIAL GROUP, INC.
By:/s/ Richard Stierwalt
-----------------------
PACIFIC HORIZON FUNDS, INC.
By: /s/ Thomas M. Collins
-----------------------
-2-
<PAGE> 1
EXHIBIT 6(C)
BROKER-DEALER AGREEMENT
(Fully Disclosed Basis)
Concord Financial Group, Inc.
156 West 56th Street 19th Fl.
New York, New York 10019
Ladies and Gentlemen:
We desire to enter into an Agreement with you for the sale of shares
of beneficial interest or common stock of open-end registered investment
companies (hereinafter referred to individually as a "Fund" and collectively as
the "Funds") of which you are the principal underwriter as such term is defined
in the Investment Company Act of 1940, as amended, and for which you are the
exclusive agent for the continuous distribution of shares pursuant to the terms
of a Distribution Agreement between you and each Fund. Unless the context
otherwise requires, as used herein the term "Prospectus" shall mean the
prospectus and related statement of additional information (the "Statement of
Additional Information") incorporated therein by reference (as amended and
supplemented of each of the respective Funds included in the then currently
effective registration statement (or post-effective amendment thereto) of each
such Fund, as filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Registration Statement").
In consideration for the mutual covenants contained herein, it is
hereby agreed that our respective rights and obligations shall be as follows:
1. In all sales of Fund shares to the public, we shall act as dealer for
our own account and in no transaction shall we have any authority to act as
agent for any Fund, for you or for any other dealer.
2. All orders for the purchase of any Fund shares shall be executed at
the then current public offering price per share (i.e., the net asset value per
share plus the applicable sales load, if any) and all orders for the redemption
of any Fund shares shall be executed at the net asset value per share, in each
case as described in the Prospectus of such Fund. The minimum initial purchase
order and minimum subsequent purchase order shall be as set forth in the
Prospectus of such Fund. All orders are subject to acceptance or rejection by
you at your sole discretion. Unless otherwise mutually agreed in writing, each
transaction shall be confirmed promptly in writing directly to the customer on
a fully disclosed basis and a copy of each confirmation shall be sent
simultaneously to us. You reserve the right, at your discretion and without
notice, to suspend the sale of shares or withdraw entirely the sale of shares
of any or all of the Funds.
3. In ordering shares of any fund, we shall rely solely and conclusively
on the representations contained in the Prospectus of such Fund. We agree that
we shall not offer or sell shares of any Fund except in compliance with all
applicable federal and state securities laws and the rules and regulations of
applicable regulatory agencies or authorities. In connection with offers to
sell and sales of shares of each Fund, we agree to deliver or cause to be
delivered to each person to whom any such offer or sale is made, at or prior to
time of such offer or sale, a copy of the Prospectus and, upon request, the
Statement of Additional Information of such Fund. We further agree to obtain
from each customer to whom we sell Fund shares any taxpayer identification
number certification required under Section 3406 of the Internal Revenue Code
of 1954, as amended (the "Code"), and the regulations promulgated thereunder,
and to provide you or your designee with timely written notice of any failure
to obtain such taxpayer identification number certification in order to enable
the implementation of any required backup withholding in accordance with
Section 3406 of the Code and the regulations thereunder. Unless otherwise
mutually agreed in writing, you shall deliver or cause to be delivered to each
customer who purchases shares of any Funds from or through us copies of all
annual and interim reports, proxy solicitation materials, and any other
information and materials relating to such Funds and prepared by or on behalf
of you, the Fund
<PAGE> 2
or its investment adviser, custodian, transfer agent or dividend disbursing
agent for distribution to each such customer. You agree to supply us with
copies of the Prospectus, Statement of Additional Information, annual reports,
interim reports, proxy solicitation materials and any such other information
and materials relating to each Fund in reasonable quantities upon request.
4. We shall not make any representations concerning any Fund shares other
than those contained in the Prospectus of such Fund or in any promotional
materials or sales literature furnished to us by you or the Fund. Except as
otherwise provided in Paragraph 3 of this Agreement, we shall not furnish or
cause to be furnished to any person or display or publish any information or
materials relating to any Fund (including, without limitation, promotional
materials and sales literature, advertisements, press releases, announcements,
statements, posters, signs or other similar material), except such information
and materials as may be furnished to us by you or the Fund, and such other
information and materials as may be approved in writing by you.
5. In determining the amount of any dealer reallowance payable to us
hereunder, you reserve the right to exclude any sales which you reasonably
determine are not made in accordance with the terms of the applicable Fund
Prospectuses and the provisions of this Agreement. Unless at the time of
transmitting an order we advise you to the contrary, the shares ordered will be
deemed to be the specified investor(s) total holdings of Fund shares.
6. (a) In the case of any Fund shares sold with a sales load,
customers may be entitled to a reduction in sales load on purchases made from a
Fund which utilizes a letter of intent ("Letter of Intent") in accordance with
such Fund(s) Prospectus. In such case, our dealer reallowance will be paid
based upon the reduced sales load, but adjustment to a higher dealer
reallowance will be made in accordance with the Prospectus of the applicable
Fund to reflect the investor(s) actual purchases if he should fail to fulfill
his Letter of Intent. The sales load and or dealer reallowance may be changed
at any time in your sole discretion upon written notice to us.
(b) Subject to and in accordance with the terms of the Prospectus of each
Fund sold with a sales load, a reduced sales load may be applicable with
respect to customer accounts through a right of accumulation under which
customers are permitted to purchase shares of a Fund at the then current public
offering price per share applicable to the total of (i) the dollar amount of
shares then being purchased plus (ii) an amount equal to the then current net
asset value or public offering price originally paid per share, whichever is
higher, of the customer(s) combined holdings of the shares of such Fund and of
any other open-end registered investment company as may be permitted by the
applicable Fund Prospectus. In such case, we agree to furnish to you if orders
are made by wire, or to the transfer agent as such term is defined in the
Prospectus of each Fund (the "Transfer Agent") if orders are made by mail,
sufficient information to permit your confirmation of qualification for a
reduced sales load; acceptance of the purchase order is subject to such
confirmation.
(c) With respect to Fund shares sold with a sales load, we agree to advise
you promptly at your request as to amounts of any and all sales by us
qualifying for a reduced sales load.
(d) Exchanges (i.e., the investment of the proceeds from the liquidation
of shares of one open-end registered Investment company distributed by Concord
Financial Group, Inc. or its affiliates in the shares of another open-end
registered investment company distributed by Concord Financial Group, Inc. or
its affiliates) shall, where available, be made subject to and in accordance
with the terms of each Fund Prospectus.
7. Subject to and in accordance with the terms of each Fund Prospectus
and the Service Plan, If any, adopted by resolution of the board of directors
or trustees and shareholders of any Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, we understand that you may pay to
certain financial institutions (which may include banks), securities dealers
and other industry professionals with which you have entered into a Service
Agreement in substantially the form annexed hereto as Appendix A (or such other
form as may be approved from time to time by the board of directors of trustees
or the Fund) such fees as may be determined by you in accordance with such
Service Agreement for shareholder and administrative services as described
therein.
<PAGE> 3
8. The procedures relating to all orders and the handling thereof will be
subject to the terms of the Prospectus of each Fund and your written
instructions to us from time to time. No conditional orders will be accepted.
We agree to place orders with you immediately for the same number of shares and
at the same price as any sales by us. We shall not withhold placing orders
received from customers so as to profit ourselves as a result of such
withholding by a change in the net asset value from that used in determining
the offering price to such customers, or otherwise; provided, however, that the
foregoing shall not prevent the purchase of shares of any Fund by us for our
own bona fide investment. We agree that: (a) we shall not effect any
transactions (including, without limitation, any purchases and redemptions) in
any Fund shares registered in the name of, or beneficially owned by, any
customer unless such customer has granted us full right, power and authority to
effect such transactions on his behalf and (b) you, each Fund, each Transfer
Agent and your and their respective officers, directors or trustees, agents,
employees and affiliates shall not be liable for, and shall be fully
indemnified and held harmless by us from and against, any and all claims,
demands, liabilities and expenses (including without limitation, reasonable
attorneys (fees) which may be incurred by you or any of the foregoing persons
entitled to indemnification from us hereunder arising out of or in connection
with the execution of any transactions in Fund shares registered in the name
of, or beneficially owned by, any customer in reliance upon any oral or written
instructions believed to be genuine and to have been given by or on behalf of
us.
9. (a) We agree to pay for purchase orders of any Fund shares from us
in accordance with the terms of the Prospectus of the applicable Fund. On or
before the settlement date of each purchase order for shares of any Fund, we
shall either (i) remit to an account designated by you with the Transfer Agent
an amount equal to the then current public offering price of the shares of such
Fund being purchased less our dealer reallowance, if any, with respect to such
purchase order as determined by you in accordance with the terms of the
applicable Fund Prospectus, or (ii) remit to an account designated by you with
the Transfer Agent an amount equal to the then current public offering price of
the shares of such Fund being purchased without deduction for our dealer
reallowance, if any, with respect to such purchase order as determined by you
in accordance with the terms of the applicable Fund Prospectus, in which case
our dealer reallowance, if any, shall be payable to us on at least a monthly
basis. If payment for any purchase order is not received in accordance with
the terms of the applicable Fund Prospectus, you reserve the right, without
notice, to cancel the sale and to hold us responsible for any loss sustained as
a result thereof.
(b) If any shares sold to us under the terms of this Agreement are sold
with a sales load and are redeemed for the account of the Fund or are tendered
for redemption within seven (7) days after confirmation of our purchase order
for such shares: (i) we shall forthwith refund to you the full dealer
reallowance received by us on the sale; and (ii) you shall forthwith pay to the
Fund your portion of the sales load on the sale which had been retained by you
and shall also pay to the Fund the amount refunded by us.
10. Certificates for shares sold to us hereunder shall only be issued in
accordance with the terms of each Fund Prospectus upon our customer(s) specific
request and, upon such request, shall be promptly delivered to us by the
Transfer Agent unless we make other arrangements. However, in making delivery
of such share certificates to us, the Transfer Agent shall have adequate time
to clear any checks drawn for the payment of Fund shares.
11. We hereby represent and warrant to you that:
(a) we are a corporation, partnership or other entity duly organized and
validly existing in good standing under the laws of the jurisdiction in which
we were organized;
(b) the execution and delivery of this Agreement and the performance of
the transactions contemplated hereby have been duly authorized by all necessary
action and all other authorization and approvals (if any) required for our
lawful execution and delivery of this Agreement and our performance hereunder
have been obtained; and
(c) upon execution and delivery by us, and assuming due and valid
execution and delivery by you, this Agreement will constitute a valid and
-3-
<PAGE> 4
binding agreement, enforceable against us in accordance with its terms.
12. We further represent and warrant to you that we are a member of the
NASD and, with respect to any sales in the United States, we agree to abide by
all of the rules and regulations of the NASD, including, without limitation,
its Rules of Fair Practice. We agree to comply with all applicable federal and
state laws, rules and regulations. You agree to inform us, upon our request,
as to the states in which you believe the shares of the Funds have qualified
for sale under, or are exempt from the requirements of, the respective
securities laws of such states, but you shall have no obligation or
responsibility as to our right to sell shares in any jurisdiction. We agree to
notify you immediately in the event of (a) our expulsion or suspension from the
NASD, or (b) our violation of any applicable federal or state law, rule or
regulation arising out of or in connection with this Agreement or which may
otherwise affect in any material way our ability to act as a dealer in
accordance with the terms of this Agreement. Our expulsion from the NASD will
automatically terminate this Agreement immediately without notice. Our
suspension from the NASD for violation of any applicable federal or state law,
rule or regulation will terminate this Agreement effective immediately upon
your written notice to us of termination.
13. (a) You agree to indemnify, defend and hold us, our several
officers and directors, and any person who controls us within the meaning of
Section 15 of the Securities Act of 1933, as amended, free and harmless from
and against any and all claims, demands, liabilities and expenses (including
the cost of investigating or defending such claims, demands or liabilities and
any counsel fees incurred in connection therewith) which we, our officers and
directors, or any such controlling person, may incur under the Securities Act
of 1933, as amended, or under common law or otherwise, arising out of or based
upon (i) any breach of any representation, warranty or covenant made by you
herein, or (ii) any failure by you to perform your obligations as set forth
herein, or (iii) any untrue statement, or alleged untrue statement of a
material fact contained in any Registration Statement or any Prospectus, or
arising out of or based upon any omission, or alleged omission, to state a
material fact required to be stated in either any Registration Statement or any
Prospectus, or necessary to make the statements in any thereof not misleading;
provided, however, that your agreement to indemnify us, our officers and
directors, and any such controlling person shall not be deemed to cover any
claims, demands, liabilities or expenses arising out of any untrue statement or
alleged untrue statement or omission or alleged omission made in any
Registration Statement or Prospectus in reliance upon and in conformity with
written information furnished to you or the Fund by us specifically for use in
the preparation thereof. Your agreement to indemnify us, our officers and
directors, and any such controlling person, as aforesaid, is expressly
conditioned upon your being notified of any action brought against our officers
or directors, or any such controlling person, such notification to be given by
letter or by telex, telegram or similar means of same day delivery received by
you at your address as specified in Paragraph 18 of this Agreement within seven
(7) days after the summons or other first legal process shall have been served.
The failure so to notify you of any such action shall not relieve you from any
liability which you may have to the person against whom such action is brought
by reason of any such breach, failure or untrue, or alleged untrue, statement
or omission, or alleged omission, otherwise than an account of your indemnity
agreement contained in this Paragraph 13(a). You will be entitled to assume
the defense of any suit brought to enforce any such claim, demand, liability or
expense. In the event that you elect to assume the defense of any such suit
and retain counsel, the defendant in such suit shall bear the fees and expenses
of any additional counsel retained by any of them; but in case you do not elect
to assume the defense of any such suit, you will reimburse us, our officers and
directors, or controlling persons named as defendants in such suit, for the
fees and expenses of any counsel retained by us or them. Your indemnification
agreement contained in this Paragraph 13(a) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of us,
our officers and directors, or any controlling person, and shall survive the
delivery of any Fund shares and termination of this Agreement. This agreement
of indemnity will inure exclusively to our benefit, to the benefit of our
several officers and directors, and their respective estates, and to the
benefit of any controlling persons and their successors.
-4-
<PAGE> 5
(b) We agree to indemnify, defend and hold you and your several officers
and directors, and each Fund and its several officers and directors or
trustees, and any person who controls you and/or each Fund within the meaning
of Section 15 of the Securities Act of 1933, as amended, free and harmless from
and against any and all claims, demands, liabilities and expenses (including
the cost of investigating or defending such claims, demands or liabilities and
any counsel fees incurred in connection therewith) which you and your several
officers and directors or the Fund and its officers and directors or trustees,
or any such controlling person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or based upon (i) any
breach of any representation, warranty or covenant made by us herein, or (ii)
any failure by us to perform our obligations as set forth herein, or (iii) any
untrue, or alleged untrue, statement of a material fact contained in the
information furnished in writing by us to you or any Fund specifically for use
in such Fund(s) Registration Statement or Prospectus, or used in the answers to
any of the items of the Registration Statement or in the corresponding
statements made in the Prospectus, or arising out of or based upon any
omission, or alleged omission to state a material fact in connection with such
information furnished in writing by us to you or the Fund and required to be
stated in such answers or necessary to make such information not misleading.
Our agreement to indemnify you and your officers and directors, and the Fund
and its officers and directors or trustees, and any such controlling person, as
aforesaid, is expressly conditioned upon our being notified of any action
brought against any person or entity entitled to indemnification hereunder,
such notification to be given by letter or by telex, telegram or similar means
of same day delivery received by us at our address as specified in Paragraph 18
of this Agreement within seven (7) days after the summons or other first legal
process shall have been served. We shall have the right to control the defense
of such action, with counsel of our own choosing satisfactory to you and the
Fund, if such action is based solely upon such alleged misstatement or omission
on our part and in any other event each person or entity entitled to
indemnification hereunder shall have the right to participate in the defense or
preparation of the defense of any such action. The failure so to notify us of
any such action shall not relieve us from any liability which we may have to
you or your officers and directors, or the Fund or its officers and directors
or trustees, or to any such controlling person, by reason of any such breach,
failure or untrue, or alleged untrue statement or omission, or alleged
omission, otherwise than on account of our indemnity agreement contained in
this Paragraph 13(b). Our indemnification agreements contained in Paragraph 8
above and in this Paragraph 13(b) shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any person
entitled to indemnification pursuant to Paragraph 8 above or this Paragraph
13(b), and shall survive the delivery of any Fund shares and termination of
this Agreement. Such agreements of indemnity will inure exclusively to the
benefit of the persons entitled to indemnification from us pursuant to this
Agreement and their respective estates, successors and assigns.
14. The names and addresses and other information concerning our customers
are and shall remain our sole property, and neither you nor your affiliates
shall use such names, addresses or other information for any purpose except in
connection with the performance of your duties and responsibilities hereunder
and except for servicing and informational mailings relating to the Funds.
Notwithstanding the foregoing, this Paragraph 14 shall not prohibit you or any
of your affiliates from utilizing for any purpose the names, addresses or other
information concerning any of our customers if such names, addresses or other
information is obtained in any manner other than from us pursuant to this
Agreement. The provisions of this Paragraph 14 shall survive the termination
of this Agreement.
15. We agree to serve as a service organization, in accordance with the
terms of the form of Service Agreement annexed hereto as Appendix A, for all of
our customers who purchase shares of any and all Funds whose Prospectuses
provide for these of service organizations. By executing this Agreement, each
of the parties hereto agrees to be bound by all terms, conditions, rights and
obligations set forth in the form of Service Agreement annexed hereto as
Appendix A and further agrees that such form of Service Agreement supersedes
any and all prior service agreements between the parties hereto.
16. By completing the Expedited Redemption Information Form annexed hereto
as Appendix B, we agree that you, each
-5-
<PAGE> 6
mutual fund with respect to which you permit us to exercise an expedited
redemption privilege, the transfer agent of each such fund, and your and their
respective officers, directors or trustees, agents, employees and affiliates
shall not be liable for and shall be fully indemnified and held harmless by us
from and against any and all claims, demands, liabilities and expenses
(including, without limitation, reasonable attorneys fees) arising out of or in
connection with any expedited redemption payments made in reliance upon the
information set forth in such Appendix B.
17. Neither this Agreement nor the performance of the services of the
respective parties hereunder shall be considered to constitute an exclusive
arrangement, or to create a partnership, association or joint venture between
you and us. Neither party hereto shall be, act as, or represent itself as, the
agent or representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of, or on behalf of, the other
party. This Agreement is not intended to, and shall not, create any rights
against either party hereto by any third party solely on account of this
Agreement. Neither party hereto shall use the name of the other party in any
manner without the other party's prior written consent, except as required by
any applicable federal or state law, rule or regulation, and except pursuant to
any promotional programs mutually agreed upon in writing by the parties hereto.
18. Except as otherwise specifically provided herein, all notices required
or permitted to be given pursuant to this Agreement shall be given in writing
and delivered by personal delivery or by postage prepaid, registered or
certified United States first class mail, return receipt requested, or by
telex, telegram or similar means of same day delivery (with a confirming copy
by mail as provided herein). Unless otherwise notified in writing, all notices
to you shall be given or sent to you at your offices, located at 156 West 56th
Street, 19th Floor, New York, New York 10019 and all notices to us shall be
given or sent to us at our address shown below.
19. This Agreement shall become effective only when accepted and signed by
you, and may be terminated at any time by either party hereto upon fifteen (15)
days prior written notice to the other party. All unfulfilled obligations,
duties and liabilities of either party to the other as of the date of
termination including, without limitation, all obligations of indemnification
of either to the other. This Agreement may be amended only by a written
instrument signed by both of the parties hereto and may not be assigned by
either party without the prior written consent of the other party. This
Agreement constitutes the entire agreement and understanding between the
parties hereto relating to the subject matter hereof and supersedes any and all
prior agreements between the parties hereto relating to the subject matter
hereof.
20. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York, without giving effect to principles
of conflicts of laws.
Very truly yours,
___________________________________
Name of Broker-Dealer
(Please Print or Type)
___________________________________
___________________________________
Address
Dated:_____________________________
By:________________________________
Authorized Dealer
NOTE:
Please sign and return both copies of this
Agreement to Concord Financial Group, Inc.
Upon acceptance a countersigned copy will
be returned to you for your files.
Accepted:
CONCORD FINANCIAL GROUP, INC.
Dated:_____________________________
By:________________________________
Authorized Dealer
-6-
<PAGE> 1
BANK AGREEMENT EXHIBIT 6(D)
(FULLY DISCLOSED BASIS)
Dreyfus Service Corporation
600 Madison Avenue
New York, New York 10022
Gentlemen:
We are a "bank" (as such term is defined in Section 3(a)(6) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")). We desire to make
available to our customers, under an agency relationship with our customers,
shares of beneficial interest or common stock of open-end registered investment
companies sponsored, managed, advised or administered by The Dreyfus Corporation
or its affiliates (hereinafter referred to individually as a "Fund" and
collectively as the "Funds"). You are the principal underwriter (as such term is
defined in the Investment Company Act of 1940, as amended) of the offering of
shares of the Funds and the exclusive agent for the continuous distribution of
such shares pursuant to the terms of a Distribution Agreement between you and
each Fund. Unless the context otherwise requires, as used herein the term
"Prospectus" shall mean the prospectus and related statement of additional
information incorporated therein by reference (as amended and supplemented) of
each of the respective Funds included in the then currently effective
registration statement (or post-effective amendment thereto) of each such Fund,
as filed with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended (the "Registration Statement").
In consideration for the mutual covenants contained herein, it is hereby agreed
that our respective rights and obligations shall be as follows:
1. With respect to any and all transactions in the shares
of any Fund pursuant to this Agreement, it is
understood and agreed in each case that: (a) we shall
be acting solely as agent for the account of our
customer; (b) each transaction shall be initiated
solely upon the order of our customer; (c) you shall
execute transactions only upon receiving instructions
from us acting as agent for our customer; (d) as
between us and our customer, our customer will have
full beneficial ownership of all Fund shares; and (e)
each transaction shall be for the account of our
customer and not for our account. Each transaction
shall be without recourse to us provided that we act in
accordance with the terms of this Agreement. We
represent and warrant to you that we will have full
right, power and authority to effect transactions
<PAGE> 2
(including, without limitation, any purchases and redemptions)
in fund shares on behalf of all customer accounts provided by
us to you or to any transfer agent as such term is defined in
the Prospectus of each Fund (the "Transfer Agent").
2. All orders for the purchase of any Fund shares shall be
executed at the then current public offering price per
share (i.e., the net asset value per share plus the
applicable sales load, if any) and all orders for the
redemption of any Fund shares shall be executed at the
net asset value per share, in each case as described in
the Prospectus of such Fund. The minimum initial
purchase order and minimum subsequent purchase order
shall be as set forth in the Prospectus of such Fund.
All orders are subject to acceptance or rejection by
you at your sole discretion. Unless otherwise mutually
agreed in writing, each transaction shall be promptly
confirmed in writing directly to the customer on a
fully disclosed basis and a copy of each confirmation
shall be sent simultaneously to us. You reserve the
right, at your discretion and without notice, to
suspend the sale of shares or withdraw entirely the
sale of shares of any or all of the Funds.
3. We agree that we shall not make shares of any Fund
available to our customers except in compliance with
all applicable federal and state laws and the rules and
regulations of applicable regulatory agencies or
authorities. We agree that we shall not purchase any
Fund shares, as agent for any customer, unless we
deliver or cause to be delivered to such customer, at
or prior to the time of such purchase, a copy of the
Prospectus of such Fund, or unless such customer has
acknowledged receipt of the Prospectus of such Fund.
We further agree to obtain from each customer for whom
we act as agent for the purchase of Fund shares any
taxpayer identification number certification required
under Section 3406 of the Internal Revenue Code of
1954, as amended (the "Code"), and the regulations
promulgated thereunder, and to provide you or your
designee with timely written notice of any failure to
obtain such taxpayer identification number
certification in order to enable the implementation of
any required backup withholding in accordance with
Section 3406 of the Code and the regulations
thereunder. Unless otherwise mutually agreed in
writing, you shall deliver or cause to be delivered to
each of the customers who purchases shares of any Funds
through us pursuant to this Agreement copies of all
annual and interim reports, proxy solicitation
materials and any other information and materials
-2-
<PAGE> 3
relating to such Funds and prepared by or on behalf of you,
the Fund or its investment adviser, custodian, transfer agent
or dividend disbursing agent for distribution to each such
customer. You agree to supply us with copies of the
Prospectus, annual reports, interim reports, proxy
solicitation materials and any such other information and
materials relating to each Fund in reasonable quantities upon
request.
4. We shall not make any representations concerning any
Fund shares other than those contained in the
Prospectus of such Fund or in any promotional materials
or sales literature furnished to us by you or the Fund.
We shall not provide any investment advice or research
services regarding the shares of any Fund or endorse or
recommend in any manner, directly or indirectly, the
shares of any Fund. We shall not make any unsolicited
mailings or other distributions of the Prospectus of
any Fund, or any promotional materials or sales
literature of any Fund. We shall not furnish or cause
to be furnished to any person or display or publish any
information or materials relating to any Fund
(including, without limitation, promotional materials
and sales literature, advertisements, press releases,
announcements, statements, posters, signs or other
similar material), except such information and
materials as may be furnished to us by you or the Fund,
and such other information and materials as may be
approved in writing by you.
5. In the case of purchases by us, as agent for our
customers, of Fund shares sold with a sales load, an
account fee shall be payable to us as hereinafter
provided in exchange for administrative services
performed on behalf of our customers in connection with
the initiation of customer accounts and subsequent
purchases of Fund shares for such customer accounts.
In determining the amount of any account fee payable to
us hereunder, you reserve the right to exclude any
accounts which you reasonably determine are not
initiated, and any subsequent purchases for any
accounts which you reasonably determine are not made,
in accordance with the terms of the applicable Fund
Prospectuses and the provisions of this Agreement.
Unless at the time of transmitting an order we advise
you to the contrary, the shares ordered will be deemed
to be the total holdings of the specified customer.
6. (a) In the case of any Fund shares sold with a sales
load, customers may be entitled to a reduction in sales
load on purchases made under a letter of intent
("Letter of Intent") in accordance with the Fund
-3-
<PAGE> 4
Prospectus. In such case, our account fee will be paid based
upon the reduced sales load, but an adjustment will be made as
described in the Prospectus of the applicable Fund to reflect
actual purchases of the customer if he should fail to fulfill
his Letter of Intent. The sales load and/or account fee may be
changed at any time in your sole discretion upon written
notice to us.
(b) Subject to and in accordance with the terms of the
Prospectus of each Fund sold with a sales load, a reduced
sales load may be applicable with respect to customer accounts
through a right of accumulation under which customers are
permitted to purchase shares of a Fund at the then current
public offering price per share applicable to the total of (i)
the dollar amount of shares then being purchased plus (ii) an
amount equal to the then current net asset value or public
offering price originally paid per share, whichever is higher,
of the customer's combined holdings of the shares of such Fund
and of any other open-end registered investment company as may
be permitted by the applicable Fund Prospectus. In such case,
we agree to furnish to you if orders are made by wire, or to
the Transfer Agent if orders are made by mail, sufficient
information to permit your confirmation of qualification for a
reduced sales load and acceptance of the purchase order is
subject to such confirmation.
(c) With respect to Fund shares sold with a sales load, we
agree to advise you promptly at your request as to amounts of
any and all purchases of Fund shares made by us, as agent for
our customers, qualifying for a reduced sales load.
(d) Exchanges (i.e., the investment of the proceeds from the
liquidation of shares of one open-end registered investment
company sponsored, managed, advised or administered by The
Dreyfus Corporation or its affiliates in the shares of another
open-end registered investment company sponsored, managed,
advised or administered by The Dreyfus Corporation or its
affiliates) shall, where available, be made subject to and in
accordance with the terms of each Fund Prospectus.
7. Subject to and in accordance with the terms of each Fund
Prospectus and the Service Plan, if any, adopted by resolution
of the board of directors or trustees and the shareholders of
any Fund pursuant to Rule 12b-1 under the Investment Company
Act of 1940, as amended, we understand that you may pay to
certain financial
-4-
<PAGE> 5
institutions (which may include banks), securities dealers and
other industry professionals with which you have entered into
a Service Agreement in substantially the form annexed hereto
as Appendix A (or such other form as may be approved from time
to time by the board of directors or trustees of the Fund)
such fees as may be determined by you in accordance with such
Service Agreement for shareholder and administrative services
as described therein.
8. The procedures relating to all orders and the handling thereof
will be subject to the terms of the Prospectus of each Fund
and your written instructions to us from time to time. No
conditional orders will be accepted.
9. (a) We agree to pay for purchase orders of any Fund
shares from us as agent for our customers in accordance
with the terms of the Prospectus of the applicable
Fund. On or before the settlement date of each
purchase order for shares of any Fund, we shall either
(i) remit to an account designated by you with the
Transfer Agent an amount equal to the then current
public offering price of the shares of such Fund being
purchased less our account fee, if any, with respect to
such purchase order as determined by you in accordance
with the terms of the applicable Fund Prospectus, or
(ii) remit to an account designated by you with the
Transfer Agent an amount equal to the then current
public offering price of the shares of such Fund being
purchased without deduction for our account fee, if
any, with respect to such purchase order as determined
by you in accordance with the terms of the applicable
Fund Prospectus, in which case our account fee, if any,
shall be payable to as by you on at least a monthly
basis. If payment for any purchase order is not
received in accordance with the terms of the applicable
Fund Prospectus, you reserve the right, without notice,
to cancel the sale and to hold us responsible for any
loss sustained as a result thereof.
(b) If any shares sold to us as agent for our customers under
the terms of this Agreement are sold with a sales load and are
redeemed for the account of the Fund or are tendered for
redemption within seven (7) days after confirmation of our
purchase order for such shares: (i) we shall forthwith refund
to you the full account fee received by us on the sale; and
(ii) you shall forthwith pay to the Fund your portion of the
sales load on the sale which had been retained by you and
shall also pay to the Fund the amount refunded by us.
-5-
<PAGE> 6
10. Certificates for shares sold to us as agent for our
customers hereunder shall only be issued in accordance
with the terms of each Fund Prospectus upon our
customers' specific request and, upon such request,
shall be promptly delivered to our customers by the
Transfer Agent unless other arrangements are made by
us. However, in making delivery of such share
certificates to our customers, the Transfer Agent shall
have adequate time to clear any checks drawn for the
payment of Fund shares.
11. We hereby represent and warrant to you that: (a) we
are a "bank" as such term is defined in Section 3(a)(6)
of the Exchange Act: (b) we are a duly organized and
validly existing "bank" in good standing under the laws
of the jurisdiction in which we were organized; (c) all
authorizations (if any) required for our lawful
execution of this Agreement and our performance
hereunder have been obtained; and (d) upon execution
and delivery by us and assuming due and valid execution
and delivery by you, this Agreement will constitute a
valid and binding agreement, enforceable against us in
accordance with its terms. We agree to give written
notice to you promptly in the event that we shall cease
to the a "bank" as such term is defined in Section 3(a)
(6) of the Exchange Act. In such event, this Agreement
shall be automatically terminated upon such written
notice.
12. You agree to inform us, upon our request, as to the states in
which you believe the shares of the Funds have been qualified
for sale under, or are exempt from the requirements of, the
respective securities laws of such states, but you shall have
no obligation or responsibility as to our right to make shares
of any Funds available to our customers in any jurisdiction.
13. (a) You agree to indemnify, defend and hold us, our
several officers and directors, and any person who
controls us within the meaning of Section 15 of the
Securities Act of 1933, as amended, free and harmless
from and against any and all claims, demands,
liabilities and expenses (including the cost of
investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection
therewith) which we, our officers and directors, or any
such controlling person, may incur under the Securities
Act of 1933, as amended, or under common law or
otherwise, arising out of or based upon (i) any breach
of any representation, warranty or covenant made by you
herein, or (ii) any failure by you to perform your
obligations as set forth herein, or (iii) any untrue
-6-
<PAGE> 7
statement, or alleged untrue statement, of a material fact
contained in any Registration Statement or any Prospectus, or
arising out of or based upon any omission, or alleged
omission, to state a material fact required to be stated in
either any Registration Statement or any Prospectus, or
necessary to make the statements in any thereof not
misleading; provided, however, that your agreement to
indemnify us, our officers and directors, and any such
controlling person shall not be deemed to cover any claims,
demands, liabilities or expenses arising out of any untrue
statement or alleged untrue statement or omission or alleged
omission made in any Registration Statement or Prospectus in
reliance upon and in conformity with written information
furnished to you or the Fund by us specifically for use in the
preparation thereof. Your agreement to indemnify us, our
officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon your being notified
of any action brought against our officers or directors, or
any such controlling person, such notification to be given by
letter or by telex, telegram or similar means of same day
delivery received by you at your address as specified in
Paragraph 18 of this Agreement within seven (7) days after the
summons or other first legal process shall have been served.
The failure so to notify you of any such action shall not
relieve you from any liability which you may have to the
person against whom such action is brought by reason of any
such breach, failure or untrue, or alleged untrue, statement
or omission, or alleged omission, otherwise than on account of
your indemnity agreement contained in this Paragraph 13(a).
You will be entitled to assume the defense of any suit brought
to enforce any such claim, demand, liability or expense. In
the event that you elect to assume the defense of any such
suit and retain counsel, the defendant or defendants in such
suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case you do not elect
to assume the defense of any such suit, you will reimburse us,
our officers and directors, or controlling persons named as
defendants in such suit, for the fees and expenses of any
counsel retained by us or them. Your indemnification agreement
contained in this Paragraph 13(a) shall remain operative and
in full force and effect regardless of any investigation made
by or on behalf of us, our officers and directors, or any
controlling person, and shall survive the delivery of any Fund
shares and termination of this Agreement. This agreement of
indemnity will inure exclusively to our benefit, to the
benefit of our several officers and directors, and their
respective estates, and to the
-7-
<PAGE> 8
benefit of any controlling persons and their
successors.
(b) We agree to indemnify, defend and hold you and your
several officers and directors, and each Fund and its several
officers and directors or trustees, and any person who
controls you and/or each Fund within the meaning of Section 15
of the Securities Act of 1933, as amended, free and harmless
from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending
such claims, demands or liabilities and any counsel fees
incurred in connection therewith) which you and your officers
and directors, or the Fund and its officers and directors or
trustees, or any such controlling person, may incur under the
Securities Act of 1933, as amended, or under common law or
otherwise, arising out of or based upon (i) any breach of any
representation, warranty or covenant made by us herein, or
(ii) any failure by us to perform our obligations as set forth
herein, or (iii) any untrue, or alleged untrue, statement of a
material fact contained in the information furnished in
writing by us to you or any Fund specifically for use in such
Fund's Registration Statement or Prospectus, or used in the
answers to any of the items of the Registration Statement or
in the corresponding statements made in the Prospectus, or
arising out of or based upon any omission, or alleged
omission, to state a material fact in connection with such
information furnished in writing by us to you or the Fund and
required to be stated in such answers or necessary to make
such information not misleading. Our agreement to indemnify
you and your officers and directors, and the Fund and its
officers and directors or trustees, and any such controlling
person, as aforesaid, is expressly conditioned upon our being
notified of any action brought against any person or entity
entitled to indemnification hereunder, such notification to be
given by letter or by telex, telegram or similar means of same
day delivery received by us at our address as specified in
Paragraph 18 of this Agreement within seven (7) days after the
summons or other first legal process shall have been served.
We shall have the right to control the defense of such action,
with counsel of our own choosing satisfactory to you and the
Fund, if such action is based solely upon such alleged
misstatement or omission on our part, and in any other event
each person or entity entitled to indemnification hereunder
shall have the right to participate in the defense or
preparation of the defense of any such action. The failure so
to notify us of any such action shall not relieve us from any
liability which we may
-8-
<PAGE> 9
have to you or your officers and directors, or the Fund or its
officers and directors or trustees, or to any such controlling
person, by reason or any such breach, failure or untrue, or
alleged untrue, statement or omission, or alleged omission,
otherwise than on account of our indemnity agreement contained
in this Paragraph 13(b). You, each Fund, each Transfer Agent,
The Dreyfus Corporation or any subsidiary or affiliate
thereof, and your and their respective officers, directors,
agents, and employees, shall not be liable for, and shall be
indemnified and held harmless by us against, any and all
claims, demands, liabilities, costs, and expenses (including,
without limitation, reasonable attorneys' fees) arising out of
or in connection with any actions or omissions in reliance
upon any oral or written instructions believed to be genuine
and to have been given by or on behalf of us. Our
indemnification agreement contained in this Paragraph 13(b)
shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any person
entitled to indemnification pursuant to this Paragraph 13(b),
and shall survive the delivery of any Fund shares and
termination of this Agreement. This agreement of indemnity
will inure exclusively to the benefit of the persons entitled
to indemnification hereunder and their respective estates,
successors and assigns.
14. The names and addresses and other information
concerning our customers are and shall remain our sole
property, and neither you nor your affiliates shall use
such names, addresses or other information for any
purpose except in connection with the performance of
your duties and responsibilities hereunder and except
for servicing and informational mailings relating to
the Funds. Notwithstanding the foregoing, this
Paragraph 14 shall not prohibit you or any or your
affiliates from utilizing for any purpose the names,
addresses or other information concerning any of our
customers if such names, addresses or other information
are obtained in any manner other than from us pursuant
to this Agreement. The provisions of this Paragraph 14
shall survive the termination of this Agreement.
15. We agree to serve as a service agent, in accordance
with the terms of the form of Service Agreement annexed
hereto as Appendix A, for all of our customers who
purchase shares of any and all Funds whose Prospectuses
provide for the use of service agents. By executing
this Agreement, each of the parties hereto agrees to be
bound by all terms, conditions, rights and obligations
set forth in the form of Service Agreement annexed
-9-
<PAGE> 10
hereto as Appendix A and further agrees that such form of
Service Agreement supersedes any and all prior service
agreements between the parties hereto.
16. By completing the Expedited Redemption Information Form
annexed hereto as Appendix B, we agree that you, each
mutual fund with respect to which you permit us to
exercise an expedited redemption privilege, the
transfer agent of each such fund, and your and their
respective officers, directors or trustees, agents,
employees and affiliates shall not be liable for and
shall be fully indemnified and held harmless by us from
and against any and all claims, demands, liabilities
and expenses (including, without limitation, reasonable
attorneys' fees) arising out of or in connection with
any expedited redemption payments made in reliance upon
the information set forth in such Appendix B.
17. Neither this Agreement nor the performance of the
services of the respective parties hereunder shall be
considered to constitute an exclusive arrangement, or
to create a partnership, association or joint venture
between you and us. Neither party hereto shall be, act
as, or represent itself as, the agent or representative
of the other, nor shall either party have the right or
authority to assume, create or incur any liability or
any obligation of any kind, express or implied, against
or in the name of, or on behalf of, the other party.
This Agreement is not intended to, and shall not,
create any rights against either party hereto by any
third party solely on account of this Agreement.
Neither party hereto shall use the name of the other
party in any manner without the other party's prior
written consent, except as required by any applicable
federal or state law, rule or regulation, and except
pursuant to any promotional programs mutually agreed
upon in writing by the parties hereto.
18. Except as otherwise specifically provided herein, all
notices required or permitted to be given pursuant to
this Agreement shall be given in writing and delivered
by personal delivery or by postage prepaid, registered
or certified United States first class mail, return
receipt requested, or by telex, telegram or similar
means of same day delivery (with a confirming copy by
mail as provided herein). Unless otherwise notified in
writing, all notices to You shall be given consent to
you at your offices, located at 600 Madison Avenue, New
York, New York 10022, and all notices to us shall be
given or sent to us at our address shown below.
-10-
<PAGE> 11
19. This Agreement shall become effective only when
accepted and signed by you, and may be terminated at
any time by either party hereto upon fifteen (15) days'
prior written notice to the other party. This
Agreement may be amended only by a written instrument
signed by both of the parties hereto and may not be
assigned by either party without the prior written
consent of the other party. This Agreement constitutes
the entire agreement and understanding between the
parties hereto relating to the subject matter hereof
and supersedes any and all prior agreements between the
parties hereto relating to the subject matter hereof.
20. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York,
without giving effect to principles of conflicts of laws.
Very truly yours,
----------------------------------------
Bank Name (Please Print or Type)
----------------------------------------
Address
----------------------------------------
Date: By:
-------------------- -------------------------------------
Authorized Signature
NOTE: Please sign and return both copies of this Agreement to
Dreyfus Service Corporation. Upon acceptance one
countersigned copy will be returned to you for your
files.
Accepted:
DREYFUS SERVICE CORPORATION
Date: By:
-------------------- -------------------------------------
Authorized Signature
-11-
<PAGE> 12
APPENDIX A TO BANK AGREEMENT
FORM OF SERVICE AGREEMENT
Dreyfus Service Corporation
600 Madison Avenue
New York, New York 10022
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders of, and
administering shareholder accounts in, certain mutual fund(s) sponsored,
managed, advised or administered by The Dreyfus Corporation or its affiliates
(hereinafter referred to individually as the "Fund" and collectively as the
"Funds"). You are the principal underwriter as defined in the Investment Company
Act of 1940, as amended (the "Act") and the exclusive agent for the continuous
distribution of shares of the Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative
services for our clients who own shares of the Funds
("clients"), which services may include, without
limitation: assisting clients in changing dividend
options, account designations and addresses; performing
sub-accounting; establishing and maintaining
shareholder accounts and records; processing purchase
and redemption transactions; providing periodic
statements and/or reports showing a client's account
balance and integrating such statements with those of
other transactions and balances in the client's other
accounts serviced by us; arranging for bank wires; and
providing such other information and services as you
reasonably may request, to the extent we are permitted
by applicable statute, rule or regulation. In this
regard, you recognize that we may be subject to the
provisions of the Glass-Steagall Act and other laws
governing, among other things, the conduct of
activities by Federally chartered and supervised banks
and other banking organizations. As such, we are
restricted in the activities we may undertake and for
which we may be paid and, therefore, intend to perform
only those activities as are consistent with our
statutory and regulatory obligations. We shall provide
to clients a schedule of the services we will provide
and of any fees that we may charge directly to them for
such services. We will act solely as agent for, upon
the order of, and for the account of, our clients.
A-1
<PAGE> 13
2. We shall provide such office space and equipment,
telephone facilities and personnel (which may be all or
any part of the space, equipment and facilities
currently used in our business, or all or any personnel
employed by us) as is necessary or beneficial for
providing information and services to each Fund's
shareholders, and to assist you in servicing accounts
of clients. We shall transmit promptly to clients all
communications sent to us for transmittal to clients by
or on behalf of you, any Fund, or any Fund's investment
adviser, custodian or transfer or dividend disbursing
agent.
3. We agree that neither we nor any of our employees or
agents are authorized to make any representation
concerning shares of any Fund, except those contained
in the then current Prospectus for such Fund, copies of
which will be supplied by you to us in reasonable
quantities upon request. We shall have no authority to
act as agent for the Funds or for you. You agree as a
condition of our entering into this Agreement that, to
the extent required by law, you shall have no recourse
against us with respect to the transactions
contemplated herein, provided that we shall have
complied with the terms of this Agreement.
4. You reserve the right, at your discretion and without
notice, to suspend the sale of shares or withdraw the
sale of shares of any or all of the Funds.
5. We acknowledge that this Agreement shall become
effective for a Fund only when approved by vote of a
majority of (i) the Fund's Board of Directors or
Trustees, as the case may be (collectively "Directors,"
individually "Director"), and (ii) the Directors who
are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial
interest in this Agreement, cast in person at a meeting
called for the purpose of voting on such approval.
This Paragraph 5 shall apply only to those Funds for
which such approval is required to enter into this
Service Agreement.
6. This Agreement shall continue until the last day of the
calendar year next following the date of execution, and
thereafter shall continue automatically for successive
annual periods ending on the last day of each calendar
year. For all Funds as to which Board approval of this
Agreement is required, such continuance must be
approved specifically at least annually by a vote of a
majority of (i) the Fund's Board of Directors and (ii)
Directors who are not "interested persons" (as defined
A-2
<PAGE> 14
in the Act) of the Fund and have no direct or indirect
financial interest in this Agreement, by vote cast in person
at a meeting called for the purpose of voting on such
approval. For any Fund as to which Board approval of this
Agreement is required, this Agreement is terminable without
penalty, at any time, by a majority of the Fund's Directors
who are not "interested persons" (as defined in the Act) and
have no direct or indirect financial interest in this
Agreement or upon not more than 60 days' written notice, by
vote of holders of a majority of the Fund's shares. As to all
Funds, this Agreement is terminable without penalty upon 15
days' notice by either party. In addition, you may, without
penalty, terminate this Agreement as to any or all Funds
immediately if the present investment adviser of such Fund(s)
ceases to serve the Fund(s) in such capacity, or if you cease
to act as distributor of such Fund(s). Notwithstanding
anything contained herein, if we fail to perform the
shareholder servicing and administrative functions
contemplated herein by you as to any or all of the Funds, this
Agreement shall be terminable effective upon receipt of notice
thereof by us. This Agreement also shall terminate
automatically in the event of its assignment (as defined in
the Act).
7. In consideration of the services and facilities
described herein, we shall be entitled to receive from
you, and you agree to pay to us, the fees described in
each Fund's Service Plan and Prospectus and related
Statement of Additional Information. We understand
that any payments pursuant to this Agreement shall be
paid only so long as this Agreement is in effect. We
agree that no Director, officer or shareholder of the
Fund shall be liable individually for any such
payments.
8. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the
right or authority to assume, create or incur any liability or
any obligation of any kind, express or implied, against or in
the name of or on behalf of the other party.
9. All notices required or permitted to be given pursuant
to this Agreement shall be given in writing and
delivered by personal delivery or by postage prepaid,
registered or certified United States first class mail,
return receipt requested, or by telex, telegram or
similar means of same day delivery (with a confirming
copy by mail as provided herein). Unless otherwise
notified in writing, all notices to you shall be given
or sent to you at Dreyfus Service Corporation, 885
A-3
<PAGE> 15
Third Avenue, New York, New York 10022, Attention: Daniel C.
Maclean, Secretary, and all notices to us shall be given or
sent to us at our address which shall be furnished to you in
writing on or before the effective date of this Agreement.
10. This Agreement shall be construed in accordance with the
internal laws of the State of New York, without giving effect
to principles of conflict of laws.
A-4
<PAGE> 16
APPENDIX B
TO BANK AGREEMENT
EXPEDITED REDEMPTION INFORMATION FORM
The following information is provided by the Bank or Firm identified
below which desires to exercise expedited redemption privileges with respect to
shares of certain mutual funds sponsored, managed, advised or administered by
The Dreyfus Corporation or its affiliates, which shares are registered in the
name of, or beneficially owned by, the customers of such Bank or Firm.
(PLEASE PRINT OR TYPE)
- -----------------------------------------------------------------
NAME OF BANK OR FIRM
- -----------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE
In order to speed payment, redemption proceeds shall be sent only to
the commercial bank identified below, for credit to customer accounts of the
above-named Bank or Firm.
- -----------------------------------------------------------------
NAME OF COMMERCIAL BANK TO RECEIVE ALL PAYMENTS ABA NUMBER
- -----------------------------------------------------------------
ACCOUNT NAME ACCOUNT NUMBER
- -----------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE
B-1
<PAGE> 1
EXHIBIT 7
PACIFIC HORIZON FUNDS, INC.
Board Guidelines on Significant Governance Issues
Approved March 9, 1995
1. Selection of New Director Candidates
The Board believes that it should be responsible, in fact as
well as procedure, for selecting its own members. The Board delegates the
screening process involved to its Nominating Committee consisting of those
directors who are not "interested persons" of the Pacific Horizon Funds, Inc.
(the "Company").
2. Board Membership Criteria
The Nominating Committee is responsible for reviewing with the
Board on a periodic basis the appropriate skills and characteristics desired of
Board members in the context of the current make-up of the Board. This
assessment should include issues of diversity, age and skills (e.g., an
understanding of the investment management or securities industries, etc.) --
all in the context of an assessment of the needs of the Board at the time.
3. Extending an Invitation to a Potential Director
An invitation to join the Board should be extended by the Board
itself, through a joint communication by the Chairman of the Nominating
Committee and the Chairman of the Board.
-1-
<PAGE> 2
4. Size of the Board; Composition
The Board presently has six members. It is the sense of the
Board that a size of six is about right. However, the Board recognizes a
somewhat larger size might be desirable in order to accommodate the availability
of an outstanding candidate(s). The Board believes that as a matter of policy, a
majority of its members should be persons who are not "interested persons" of
the Company or of a service provider ("outside" directors).
5. Term Limits; Retirement Age
The Board does not believe it should establish term limits or a
mandatory retirement age. While such limitations could help ensure that there
are fresh ideas and viewpoints available to the Board, they hold the
disadvantage of losing the contribution of directors who have been able to
develop, over a period of time, increasing insight into the Company and its
operations and who therefore provide an increasing contribution to the Board as
a whole.
In lieu of establishing term limits or a mandatory retirement
age, a director's continued service on the Board will be reviewed at three-year
intervals by those "outside" directors not subject to review at the time and
following consultation with all Board members and representatives of other
constituencies, as appropriate. This will allow for a regular assessment of each
member's contribution as well as an opportunity for a member to conveniently
confirm his/her desire to continue as a director.
6. Director Review Procedure
Those "outside" directors whose continued service on the Board
is not subject to review during a given year shall select one of their members
to
-2-
<PAGE> 3
meet confidentially with each director being reviewed, other Board members, and
appropriate representatives of the Company's investment adviser and distributor.
The purpose of these meetings is to assess the individual's desire to continue
as a Board member for a subsequent three-year period and his/her contribution to
the Board, not to target individual Board members.
The "outside" director asked to review the continued service of
another Board member is responsible to report to the "outside" directors of the
Board in executive session at the Board's October meeting concerning the sense
of these discussions and any recommendations as to areas in which a director's
contribution might be strengthened. It is anticipated that a director's decision
to continue in principle as a Board member for a subsequent three-year period
(or to resign) will be better informed as a result of this process.
The policy of reviewing a director's continued Board membership
at three-year intervals will apply to those present Board members who elect to
be subject to this policy and others who may be invited to join the Board in
future.
To allow the policy to be administered on a rotating basis,
those present members of the Board who elect to be subject to the policy will be
divided into three classes as equal in size as feasible and in order of
seniority of service on the Board. Directors in Classes 1, 2 and 3 will be first
reviewed during the Company's fiscal years ending February 28, 1996, 1997 and
1998, respectively (and thereafter upon subsequent three-year intervals).
-3-
<PAGE> 4
7. Vested Benefits for Service after February 28, 1994
Each present Board member who elects to be subject to the
foregoing policy concerning review of continued service (as well as future Board
members) shall be entitled to the following benefits following his/her death or
resignation as a director:
(a) Shares of any Fund of the Company may be purchased by a
retired director without any sales load;
(b) A retired director shall be designated "Director Emeritus"
and be welcome to attend social occasions arranged by the Board from time to
time; and
(c) A director who dies or resigns after five years of service
as a director shall be entitled to receive ten (10) annual payments each equal
to the greater of: (i) 50% of the annual director's retainer that was payable by
the Company during the year of his/her death or resignation or (ii) 50% of the
annual director's retainer then in effect for directors of the Company during
the year of such payment. Such payments shall begin on the first anniversary of
the director's date of death or resignation and shall continue each anniversary
date thereafter up to and including the tenth anniversary date. A director who
dies or resigns after nine years of service as a director shall be entitled to
receive ten (10) annual payments each equal to the greater of: (i) 100% of the
annual director's retainer that was payable by the Company during the year of
his/her death or resignation or (ii) 100% of the annual director's retainer then
in effect for directors of the Company during the year of such payment. Such
payments shall begin on the first anniversary of the director's date of death or
resignation and shall continue each anniversary date thereafter up to and
including the tenth anniversary date. Further, the amount payable each year to a
director who dies or resigns
-4-
<PAGE> 5
shall be increased by $1,000 for each year of service that the director provided
as Chairman of the Board.
A director's years of service for the purpose of calculating
the payments described above shall be based upon service as a director or
Chairman after February 28, 1994. The retirement benefit in which a director has
become vested may not be reduced by later Board action.
In lieu of receiving ten (10) annual payments and in full
satisfaction of such obligation, a director may elect, at the time and in the
manner set forth below, to receive substantially equivalent benefits through a
single-sum cash payment of the present value of such benefits paid by the
Company within 45 days of the death or resignation of the director. The present
value of such benefits shall be calculated (i) based on the retainer that was
payable by the Company during the year of the director's death or resignation
(and not on any retainer payable to directors thereafter), and (ii) using the
interest rate in effect as of the date of the director's death or resignation by
the Pension Benefit Guaranty Corporation (or any successor thereto) for valuing
immediate annuities under terminating defined benefit pension plans.
Unless made previously, a director's election to receive a
single sum shall be made in writing within the 30 calendar days after March 24,
1995, the date this retirement plan is approved and ratified in final form by
the Board. A new director's election shall be made in writing within the 30 days
after the date the individual is first elected as a director.
8. Discretionary Benefit for Service before March 1, 1994
The Board of Directors may, in its discretion and in
recognition of a director's period of service before March 1, 1994 as a director
and
-5-
<PAGE> 6
possibly as Chairman, authorize the Company to pay a retirement benefit
following the director's death or resignation (unless the director has completed
nine years of service for purposes of Section 7). Any such action shall be
approved by the Board and by a majority of the "outside" directors within 120
days following the director's death or resignation and may be authorized as a
single sum cash payment or as not more than ten (10) annual payments (beginning
the first anniversary of the director's date of death or resignation and
continuing for one or more anniversary date(s) thereafter).
9. Benefits Not Secured; No Priority
The obligation of the Company to pay benefits to a former
director shall be unsecured but shall be binding upon all successors in interest
to the Company. The payment of such benefits shall not have any priority or
preference over the lawful claims of the Company's creditors or shareholders.
The right to receive such payments shall not be assignable or transferable, in
whole or in part, by a director (or former director) other than by will, by the
laws of descent and distribution, or by the director's written designation of a
beneficiary.
Approved: March 9, 1995
Ratified: March 24, 1995
-6-
<PAGE> 1
EXHIBIT 8(A)
CUSTODY AGREEMENT
Agreement made as of this 3rd day of April, 1989, between
PACIFIC HORIZON FUNDS, INC., a Maryland corporation organized and existing under
the laws of the State of Maryland, having its principal office and place of
business at 156 West 56th Street, New York, New York 10019 (hereinafter called
the "Fund"), and THE BANK OF NEW YORK, a New York corporation authorized to do a
banking business, having its principal office and place of business at 48 Wall
Street, New York, New York 10015 (hereinafter called the "Custodian").
W I T N E S S E T H
that for and in consideration of the mutual promises hereinafter set forth the
Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
1. "Authorized Person" shall be deemed to include any person,
whether or not such person is an Officer or employee of the Fund, duly
authorized by the Board of Directors of the Fund to give Oral Instructions and
Written Instructions on behalf of the Fund and listed in the Certificate annexed
hereto as Appendix A or such other Certificate as may be received by the
Custodian from time to time.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its successor
or successors and its nominee or nominees.
3. "Call Option" shall mean an exchange traded option with respect
to Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and payment of the
exercise price, as specified therein, to purchase from the writer thereof the
specified underlying Securities.
4. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this
<PAGE> 2
Agreement to be given to the Custodian which is actually received by the
Custodian and signed on behalf of the Fund by any two Officers.
5. "Clearing Member" shall mean a registered broker/dealer which is a
clearing member under the rules of O.C.C. and a member of a national securities
exchange qualified to act as a custodian for an investment company, or any
broker-dealer reasonably believed by the Custodian to be such a clearing member.
6. "Collateral Account" shall mean a segregated account so denominated
which is specifically allocated to a Series and pledged to the Custodian as
security for, and in consideration of, the Custodian's issuance of (a) any Put
Option guarantee letter or similar document described in paragraph 8 of Article
V herein, or (b) any receipt described in Article V or VIII herein.
7. "Covered Call Option" shall mean an exchange traded option entitling
the holder, upon timely exercise and payment of the exercise price, as specified
therein, to purchase from the writer thereof the specified underlying Securities
(excluding Futures Contracts) which are owned by the writer thereof and subject
to appropriate restrictions.
8. "Depository" shall mean The Depository Trust Company ("DTC") a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term "Depository" shall
further mean and include any other person authorized to act as a depository
under the Investment Company Act of 1940, its successor or successors and its
nominee or nominees, specifically identified in a certified copy of a resolution
of the Fund's Board of Directors specifically approving deposits therein by the
Custodian.
9. "Futures Contract" shall mean a Foreign Futures Contract, an
Interest Rate Futures Contract, a Stock Index Futures Contracts or any other
futures contracts which are traded or which subsequently become available for
trading.
10. "Futures Contract option" shall mean an option with respect to a
Futures Contract.
11. "Interest Rate Futures Contract" shall mean the firm commitment to
buy or sell any fixed income securities for which there exists a public market,
including, without limitation, U.S. Treasury Bonds and Notes, Government
National Mortgage Association modified pass-through mortgaged backed securities,
3-month U.S. Treasury Bills, and 90-day commercial paper during a specified
month at an agreed upon price.
12. "Margin Account" shall mean a segregated account in the name of a
broker, dealer, futures commission merchant, or a
-2-
<PAGE> 3
Clearing Member, or in the name of the Fund for the benefit of a broker, dealer,
futures commission merchant, or Clearing Member, or otherwise, in accordance
with an agreement between the Fund, the Custodian and a broker, dealer, futures
commission merchant or a Clearing Member (a "Margin Account Agreement"),
separate and distinct from the custody account, in which certain Securities
and/or money of the Fund shall be deposited and withdrawn from time to time in
connection with such transactions as the Fund may from time to time determine.
Securities held in the Book-Entry System or the Depository shall be deemed to
have been deposited in, or withdrawn from, a Margin Account upon the Custodian's
effecting an appropriate entry in its books and records.
13. "Money Market Security" shall be deemed to include, without
limitation, certain Reverse Repurchase Agreements, debt obligations issued or
guaranteed as to interest and principal by the government of the United States
or agencies or instrumentalities thereof, any tax, bond or revenue anticipation
note issued by any state or municipal government or public authority, commercial
paper, certificates of deposit and bankers' acceptances, repurchase agreements
with respect to the same and bank time deposits, where the purchase and sale of
such securities normally requires settlement in federal funds on the same day as
such purchase or sale.
14. "O.C.C." shall mean the Options Clearing Corporation, a clearing
agency registered under Section 17A of the Securities Exchange Act of 1934, its
successor or successors, and its nominee or nominees.
15. "Officers" shall be deemed to include the President, any Vice
President, the Secretary, Directors, the Treasurer, the Controller, any
Assistant Secretary, Directors, any Assistant Treasurer, and any other person or
persons, whether or not any such other person is an officer of the Fund, duly
authorized by the Board of Directors of the Fund to execute any Certificate,
instruction, notice or other instrument on behalf of the Fund and listed in the
Certificate annexed hereto as Appendix B or such other Certificate as may be
received by the Custodian from time to time.
16. "Option" shall mean a Call Option, Covered Call Option, Stock Index
Option and/or a Profit Option.
17. "Oral Instructions" shall mean verbal instructions actually
received by the Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person.
18. "Put Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the
-3-
<PAGE> 4
holder, upon timely exercise and tender of the specified underlying Securities,
to sell such Securities to the writer thereof for the exercise price.
19. "Reverse Repurchase Agreement" shall mean an agreement pursuant to
which the Fund sells Securities and agrees to repurchase such Securities at a
prescribed or specified date and price.
20. "Security" shall be deemed to include, without limitation, Money
Market Securities, Call Options, Put Options, Stock Index Options, Index Futures
Contracts, Index Futures Contract Options, Financial Futures Contracts,
Financial Futures Contract Options, Reverse Repurchase Agreements, common stocks
and other securities having characteristics similar to common stocks, preferred
stocks, debt obligations issued by state or municipal governments and by public
authorities, (including, without limitation, general obligation bonds, revenue
bonds and industrial bonds and industrial development bonds), bonds, debentures,
notes, funding agreements, guaranteed investment contracts, mortgages or other
obligations, and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase, sell or subscribe for the same, or
evidencing or representing any other rights or interest therein, or any property
or assets.
21. "Senior Security Account" shall mean an account maintained and
specifically allocated to a Series under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the custody account in
which certain Securities and/or other assets of the Fund specifically allocated
to such Series shall be deposited and withdrawn from time to time in accordance
with Certificates received by the Custodian in connection with such transactions
as the Fund may from time to time determine.
22. "Series" shall mean the various portfolios, if any, of the Fund as
described from time to time in the current and effective prospectuses for the
Fund.
23. "Shares" shall mean the shares of the Fund, each of which is in the
case of a Fund having Series allocated to a particular Series.
24. "Index Futures Contract" shall mean a bilateral agreement pursuant
to which the parties agree to take or make delivery of an amount of cash equal
to a specified dollar amount times the difference between the value of a
particular stock or bond index at the close of the last business day of the
contract and the price at which the futures contract is originally struck.
-4-
<PAGE> 5
25. "Stock Index Option" shall mean an exchange traded option entitling
the holder, upon timely exercise, to receive an amount of cash determined by
reference to the difference between the exercise price and the value of the
index on the date of exercise.
26. "Written Instructions" shall mean written communications actually
received by the Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person by telex or any other such
system whereby the receiver of such communications is able to verify by codes or
otherwise with a reasonable degree of certainty the identity of the sender of
such communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custodian as custodian
of the Securities and moneys at any time owned by the Fund during the period of
this Agreement.
2. The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, the Fund will deliver or cause to be delivered to the Custodian
all Securities and all moneys owned by it, at any time during the period of this
Agreement, and shall specify with respect to such Securities and money the
Series to which the same are specifically allocated. The Custodian shall
segregate, keep and maintain the assets of the Series separate and apart. The
Custodian will not be responsible for any Securities and moneys not actually
received by it or any Sub-Custodian selected by it pursuant to paragraph 7 of
Article hereof. The Custodian will be entitled to reverse any credits made on
the Fund's behalf where such credits have been previously made and moneys are
not finally collected. The Fund shall deliver to the Custodian a certified
resolution of the Board of Directors of the Fund, substantially in the form of
Exhibit A hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis to deposit in the Book-Entry System all Securities
eligible for deposit therein, regardless of the Series to which the same are
specifically allocated and to utilize the Book-Entry System to the extent
possible in
-5-
<PAGE> 6
connection with its performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of Securities collateral. Prior to a
deposit of Securities specifically allocated to a Series in the Depository, the
Fund shall deliver to the Custodian a certified resolution of the Board of
Directors of the Fund, substantially in the form of Exhibit B hereto, approving,
authorizing and instructing the Custodian on a continuous and ongoing basis
until instructed to the contrary by a Certificate actually received by the
Custodian to deposit in the Depository all Securities specifically allocated to
such Series eligible for deposit therein, and to utilize the Depository to the
extent possible with respect to such Securities in connection with its
performance hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of Securities, and
deliveries and returns of Securities collateral. Securities and moneys deposited
in either the Book-Entry System or the Depository will be represented in
accounts which include only assets held by the Custodian for customers,
including, but not limited to, accounts in which the Custodian acts in a
fiduciary or representative capacity and will be specifically allocated on the
Custodian's books to the separate account for the applicable Series. Prior to
the Custodian's accepting, utilizing and acting with respect to Clearing Member
confirmations for Options and transactions in Options for a Series as provided
in this Agreement, the Custodian shall have received a certified resolution of
the Fund's Board of Directors, substantially in the form of Exhibit C hereto,
approving, authorizing and instructing the Custodian on a continuous and
on-going basis, until instructed to the contrary by a Certificate actually
received by the Custodian, to accept, utilize and act in accordance with such
confirmations as provided in this Agreement with respect to such Series.
2. The Custodian shall establish and maintain separate accounts,
in the name of each Series, and shall credit to the separate account for each
Series all moneys received by it for the account of the Fund with respect to
such Series. Money credited to a separate account for a Series shall be
disbursed by the Custodian only:
(a) As hereinafter provided;
(b) Pursuant to Certificates setting forth the name and address
of the person to whom the payment is to be made, the Series account from which
payment is to be made, and the purpose for which payment is to be made; or
(b) In payment of the fees and in reimbursement of the expenses
and liabilities of the Custodian attributable to such Series, as provided in
Article XII hereof.
-6-
<PAGE> 7
3. Promptly after the close of business on each day the Custodian shall
furnish the Fund with confirmations and a summary, on a per Series basis, of all
transfers to or from the account of the Fund for a Series, either hereunder or
with any co-custodian or sub-custodian appointed in accordance with this
Agreement during said day. Where Securities are transferred to the account of
the Fund for a Series, the Custodian shall also by book-entry or otherwise
identify as belonging to such Series a quantity of Securities in a fungible bulk
of Securities registered in the name of the Custodian (or its nominee) or shown
on the Custodian's account on the books of the Book-Entry System or the
Depository. At least monthly and from time to time, the Custodian shall furnish
the Fund with a detailed statement, on a per Series basis, of the Securities and
moneys held by the Custodian for the Fund.
4. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, all Securities held by the Custodian hereunder, which are issued
or issuable only in bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that form; all other
Securities held hereunder may be registered in the name of the Fund, in the name
of any duly appointed registered nominee of the Custodian as the Custodian may
from time to time determine, or in the name of the Book-Entry System or the
Depository or their successor or successors, or their nominee or nominees. The
Fund agrees to furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to register in the
name of its registered nominee or in the name of the Book-Entry System or the
Depository any Securities which it may hold hereunder and which may from time to
time be registered in the name of the Fund. The Custodian shall hold all such
Securities specifically allocated to a Series which are not held in the
Book-Entry System or in the Depository in a separate account in the name of such
Series physically segregated at all times from those of any other person or
persons.
5. Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Certificate, the Custodian by itself, or through
the use of the Book-Entry System or the Depository with respect to Securities
held hereunder and therein deposited, shall with respect to all Securities held
for the Fund hereunder in accordance with preceding paragraph 4:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount payable upon all
such Securities which are called, but only if either (i) the Custodian receives
a written notice of such call, or (ii) notice of such call appears in one or
more of the publications listed in Appendix C annexed hereto, which may be
amended at any
-7-
<PAGE> 8
time by the Custodian without consent but with prior notification to the Fund;
(c) Present for payment and collect the amount payable upon all
Securities which mature or otherwise become payable;
(d) Surrender Securities in temporary form for definitive
Securities;
(e) Execute, as custodian, any necessary declarations or
certificates of ownership under the Federal Income Tax Laws or the laws or
regulations of any other taxing authority now or hereafter in effect; and
(f) Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of a
Series, all rights and similar securities issued with respect to any Securities
held by the Custodian for such Series hereunder.
6. Upon receipt of a Certificate and not otherwise, the Custodian,
directly or through the use of the Book-Entry System or the Depository, shall:
(a) Execute and deliver to such persons as may be designated in
such Certificate proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities held by the
Custodian hereunder for the Series specified in such Certificate may be
exercised;
(b) Deliver any Securities held by the Custodian hereunder for
the Series specified in such Certificate in exchange for other Securities or
cash issued or paid in connection with the liquidation, reorganization,
refinancing merger, consolidation or recapitalization of any corporation, or the
exercise of any conversion privilege and receive and hold hereunder specifically
allocated to such Series any cash or other Securities received in exchange;
(c) Deliver any Securities held by the Custodian hereunder for
the Series specified in such Certificate to any protective committee,
reorganization committee or other person in connection with the reorganization,
refinancing, merger consolidation, recapitalization or sale of assets of any
corporation, and receive and hold hereunder specifically allocated to such
Series such certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery;
(d) Make such transfers or exchanges of the assets of the
Series specified in such Certificate, and take such other
-8-
<PAGE> 9
steps as shall be stated in such Certificate to be for the purpose of
effectuating any duly authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund; and
(e) Present for payment and collect the amount payable upon
Securities not described in preceding paragraph 5(b) of this Article which may
be called as specified in the Certificate.
7. Notwithstanding any provision elsewhere contained herein, the
Custodian shall not be required to obtain possession of any instrument or
certificate representing any Futures Contract, any Option, or any Futures
Contract Option until after it shall have determined, or shall have received a
Certificate from the Fund stating, that any such instruments or certificates are
available. The Fund shall deliver to the Custodian such a Certificate no later
than the business day preceding the availability of any such instrument or
certificate. Prior to such availability, the Custodian shall comply with Section
17(f) of the Investment Company Act of 1940, as amended, in connection with the
purchase, sale, settlement, closing out or writing of Futures Contracts,
Options, or Futures Contract Options by making payments or deliveries specified
in Certificates received by the Custodian in connection with any such purchase,
sale, writing, settlement or closing out upon its receipt from a broker, dealer,
or futures commission merchant of a statement or confirmation reasonably
believed by the Custodian to be in the form customarily used by brokers,
dealers, or future commission merchants with respect to such Futures Contracts,
Options, or Futures Contract Options, as the case may be, confirming that such
Security is held by such broker, dealer or futures commission merchant, in
book-entry form or otherwise, in the name of the Custodian (or any nominee of
the Custodian) as custodian for the Fund, provided, however, that payments to or
deliveries from the Margin Account shall be made in accordance with the terms
and conditions of the Margin Account Agreement. Whenever any such instruments or
certificates are available, the Custodian shall, notwithstanding any provision
in this Agreement to the contrary, make payment for any Futures Contract,
Option, or Futures Contract option for which such instruments or such
certificates are available only against the delivery to the Custodian of such
instrument or such certificate, and deliver any Future Contract, option or
Futures Contract Option for which such instruments or such certificates are
available only against receipt by the Custodian of payment therefor. Any such
instrument or certificate delivered to the Custodian shall be held by the
Custodian hereunder in accordance with, and subject to, the provisions of this
Agreement.
-9-
<PAGE> 10
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each purchase of Securities by the Fund, other than a
purchase of an Option, a Futures Contract, or a Futures Contract Option, the
Fund shall deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate, and (ii) with
respect to each purchase of Money Market Securities, a Certificate, Oral
Instructions or Written Instructions, specifying with respect to each such
purchase: (a) the Series to which such Securities are to be specifically
allocated; (b) the name of the issuer and the title of the Securities; (c) the
number of shares or the principal amount purchased and accrued interest, if any;
(d) the date of purchase and settlement; (e) the purchase price per unit; (f)
the total amount payable upon such purchase; (g) the name of the person from
whom or the broker through whom the purchase was made, and the name of the
clearing broker, if any; and (h) the name of the broker to whom payment is to be
made. The Custodian shall, upon receipt of Securities purchased by or for the
Fund, pay to the broker specified in the Certificate out of the moneys held for
the account of such Series the total amount payable upon such purchase, provided
that the same conforms to the total amount payable as set forth in such
Certificate, Oral Instructions or Written Instructions.
2. Promptly after each sale of Securities by the Fund, other than a
sale of any Option, Futures Contract, Futures Contract Option, or any Reverse
Repurchase Agreement, the Fund shall deliver to the Custodian (i) with respect
to each sale of Securities which are not Money Market Securities, a Certificate,
and (ii) with respect to each sale of Money Market Securities, a Certificate,
Oral Instructions or Written Instructions, specifying with respect to each such
sale: (a) the Series to which such Securities were specifically allocated; (b)
the name of the issuer and the title of the Security; (c) the number of shares
or principal amount sold, and accrued interest, if any; (d) the date of sale;
(e) the sale price per unit; (f) the total amount payable to the Fund upon such
sale; (g) the name of the broker through whom or the person to whom the sale was
made, and the name of the clearing broker, if any; and (h) the name of the
broker to whom the Securities are to be delivered. The Custodian shall deliver
the Securities specifically allocated to such Series to the broker specified in
the Certificate upon the total amount payable to the Fund upon such sale,
provided that the same conforms to the total amount payable as set forth in such
Certificate, Oral Instructions or Written Instructions.
-10-
<PAGE> 11
ARTICLE V
OPTIONS
1. Promptly after the purchase of any Option by the Fund, the Fund
shall deliver to the Custodian a Certificate specifying with respect to each
Option purchased: (a) the Series to which such Option is specifically allocated;
(b) the type of Option (put or call); (c) the name of the issuer and the title
and number of shares subject to such Option or, in the case of a Stock Index
Option, the stock index to which such Option relates and the number of Stock
Index Options purchased; (d) the expiration date; (e) the exercise price; (f)
the dates of purchase and settlement; (g) the total amount payable by the Fund
in connection with such purchase; (h) the name of the Clearing Member through
whom such Option was purchased; and (i) the name of the broker to whom payment
is to be made. The Custodian shall pay, upon receipt of a Clearing Member's
statement confirming the purchase of such Option held by such Clearing Member
for the account of the Custodian (or any duly appointed and registered nominee
of the Custodian) as custodian for the Fund, out of moneys held for the account
of the Series to which such Option is to be specifically allocated, the total
amount payable upon such purchase to the Clearing Member through whom the
purchase was made, provided that the same conforms to the total amount payable
as set forth in such Certificate.
2. Promptly after the sale of any Option purchased by the Fund pursuant
to paragraph 1 hereof, the Fund shall deliver to the Custodian a Certificate
specifying with respect to each such sale: (a) the Series to which such Option
was specifically allocated; (b) the type of Option (put or call); (c) the name
of the issuer and the title and number of shares subject to such Option or, in
the case of a Stock Index Option, the stock index to which such Option relates
and the number of Stock Index Options sold; (d) the date of sale; (e) the sale
price; (f) the date of settlement; (g) the total amount payable to the Fund upon
such sale; and (h) the name of the Clearing Member through whom the sale was
made. The Custodian shall consent to the delivery of the Option sold by the
Clearing Member which previously supplied the confirmation described in
preceding paragraph 1 of this Article with respect to such option against
payment to the Custodian of the total amount payable to the Fund, provided that
the same conforms to the total amount payable as set forth in such Certificate.
3. Promptly after the exercise by the Fund of any Call Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Call Option: (a) the
Series to which such Call Option was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the Call Option; (c)
-11-
<PAGE> 12
the expiration date; (d) the date of exercise and settlement; (e) the exercise
price per share; (f) the total amount to be paid by the Fund upon such exercise;
and (g) the name of the Clearing Member through whom such Call Option was
exercised. The Custodian shall, upon receipt of the Securities underlying the
Call Option which was exercised, pay out of the moneys held for the account of
the Series to which such Call Option was specifically allocated the total amount
payable to the Clearing Member through whom the Call Option was exercised,
provided that the same conforms to the total amount payable as set forth in such
Certificate.
4. Promptly after the exercise by the Fund of any Put Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Put Option: (a) the
Series to which such Put Option was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the Put Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the exercise price
per share; (f) the total amount to be paid to the Fund upon such exercise; and
(g) the name of the Clearing Member through whom such Put Option was exercised.
The Custodian shall, upon receipt of the amount payable upon the exercise of the
Put Option, deliver or direct the Depository to deliver the Securities
specifically allocated to such Series, provided the same conforms to the amount
payable to the Fund as set forth in such Certificate.
5. Promptly after the exercise by the Fund of any Stock Index Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to
the Custodian a Certificate specifying with respect to such Stock Index Option:
(a) the Series to which such Stock Index Option was specifically allocated; (b)
the type of Stock Index Option (put or call); (c) the number of options being
exercised; (d) the stock index to which such Option relates; (e) the expiration
date; (f) the exercise price; (g) the total amount to be received by the Fund in
connection with such exercise; and (h) the Clearing Member from whom such
payment is to be received.
6. Whenever the Fund writes a Covered Call Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Covered Call Option: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of shares for which
the Covered Call Option was written and which underlie the same; (c) the
expiration date; (d) the exercise price; (e) the premium to be received by the
Fund; (f) the date such Covered Call Option was written; and (g) the name of the
Clearing Member through whom the premium is to be received. The Custodian shall
deliver or cause to be delivered, in exchange for receipt of the premium
specified in the Certificate with respect to such Covered Call
-12-
<PAGE> 13
Option, such receipts as are required in accordance with the customs prevailing
among Clearing Members dealing in Covered Call options and shall impose, or
direct the Depository to impose, upon the underlying Securities specified in the
Certificate specifically allocated to such Series such restrictions as may be
required by such receipts. Notwithstanding the foregoing, the Custodian has the
right, upon prior written notification to the Fund at any time to refuse to
issue any receipts for Securities in the possession of the Custodian and not
deposited with the Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund and described in
the preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate instructing the Custodian to deliver, or
to direct the Depository to deliver, the Securities subject to such Covered Call
Option and specifying: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of shares subject
to the Covered Call Option; (c) the Clearing Member to whom the underlying
Securities are to be delivered; and (d) the total amount payable to the Fund
upon such delivery. Upon the return and/or cancellation of any receipts
delivered pursuant to paragraph 6 of this Article, the Custodian shall deliver,
or direct the Depository to deliver, the underlying Securities as specified in
the Certificate in exchange for the amount to be received as set forth in such
Certificate.
8. Whenever the Fund writes a Put Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Put
Option: (a) the Series for which such Put Option was written; (b) the name of
the issuer and the title and number of shares for which the Put Option is
written and which underlie the same; (c) the expiration date; (d) the exercise
price; (e) the premium to be received by the Fund; (f) the date such Put Option
is written; (g) the name of the Clearing Member through whom the premium is to
be received and to whom a Put Option guarantee letter is to be delivered; (h)
the amount of cash, and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the Senior Security
Account for such Series; and (i) the amount of cash and/or the amount and kind
of Securities specifically allocated to such Series to be deposited into the
Collateral Account for such Series. The Custodian shall, after making the
deposits into the Collateral Account specified in the Certificate, issue a Put
Option guarantee letter substantially in the form utilized by the Custodian on
the date hereof, and deliver the same to the Clearing Member specified in the
Certificate against receipt of the premium specified in said Certificate.
Notwithstanding the foregoing, the Custodian shall be under no obligation to
issue any Put option guarantee letter or similar document if it is unable to
make any of the representations contained therein.
-13-
<PAGE> 14
9. Whenever a Put Option written by the Fund and described in the
preceding paragraph is exercised, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Put option was
written; (b) the name of the issuer and title and number of shares subject to
the Put Option; (c) the Clearing Member from whom the underlying Securities are
to be received; (d) the total amount payable by the Fund upon such delivery; (e)
the amount of cash and/or the amount and kind of Securities specifically
allocated to such Series to be withdrawn from the Collateral Account for such
Series and (f) the amount of cash and/or the amount and kind of Securities,
specifically allocated to such Series, if any, to be withdrawn from the Senior
Security Account. Upon the return and/or cancellation of any Put Option
guarantee letter or similar document issued by the Custodian in connection with
such Put Option, and upon delivery of the Securities to be received by the Fund
from the Clearing Member, the Custodian shall pay out of the moneys held for the
account of the Series to which such Put Option was specifically allocated the
total amount payable to the Clearing Member specified in the Certificate as set
forth in such Certificate, and shall make the withdrawals specified in such
Certificate.
10. Whenever the Fund writes a Stock Index Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Stock Index option: (a) the Series for which such Stock Index Option was
written; (b) whether such Stock Index Option is a put or a call; (c) the number
of options written; (d) the stock index to which such option relates; (e) the
expiration date; (f) the exercise price; (g) the Clearing Member through whom
such Option was written; (h) the premium to be received by the Fund; (i) the
amount of cash and/or the amount and kind of Securities, if any, specifically
allocated to such Series to be deposited in the Senior Security Account for such
Series; (j) the amount of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the Collateral Account
for such Series; and (k) the amount of cash and/or the amount and kind of
Securities, if any, specifically allocated to such Series to be deposited in a
Margin Account, and the name in which such account is to be or has been
established. The Custodian shall, upon receipt of the premium specified in the
Certificate, make the deposits, if any, into the Senior Security Account
specified in the Certificate, and either (1) deliver such receipts, if any,
which the Custodian has specifically agreed to issue, which are in accordance
with the customs prevailing among Clearing Members in Stock Index Options and
make the deposits into the Collateral Account specified in the Certificate, or
(2) make the deposits into the Margin Account specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund and described in
the preceding paragraph of this Article is
-14-
<PAGE> 15
exercised, the Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Stock Index Option: (a) the Series for which
such Stock Index Option was written; (b) such information as may be necessary to
identify the Stock Index Option being exercised; (c) the Clearing Member through
whom such Stock Index option is being exercised; (d) the total amount payable
upon such exercise and whether such amount is to be paid by or to the Fund; (e)
the amount of cash and/or amount and kind of Securities, if any, to be withdrawn
from the Margin Account; and (f) the amount of cash and/or amount and kind of
Securities, if any, to be withdrawn from the Senior Security Account for such
Series; and the amount of cash and/or the amount and kind of Securities, if any,
to be withdrawn from the Collateral Account for such Series. Upon the return
and/or cancellation of the receipt, if any, delivered pursuant to the preceding
paragraph of this Article, the Custodian shall pay out of the moneys held for
the account of the Series to which such Stock Index Option was specifically
allocated to the Clearing Member specified in the Certificate the total amount
payable, if any, as specified therein.
12. Whenever the Fund purchases any Option identical to a previously
written Option described in paragraphs, 6, 8 or 10 of this Article in a
transaction expressly designated as a "Closing Purchase Transaction" in order to
liquidate its position as a writer of an option, the Fund shall promptly deliver
to the Custodian a Certificate specifying with respect to the Option being
purchased: (a) that the transaction is a Closing Purchase Transaction; (b) the
Series for which the Option was written; (c) the name of the issuer and the
title and number of shares subject to the Option, or, in the case of a Stock
Index option, the stock index to which such Option relates and the number of
Options held; (d) the exercise price; (e) the premium to be paid by the Fund;
(f) the expiration date; (g) the type of Option (put or call); (h) the date of
such purchase; (i) the name of the Clearing Member to whom the premium is to be
paid; and (j) the amount of cash and/or the amount and kind of Securities, if
any, to be withdrawn from the Collateral Account, a specified Margin Account, or
the Senior Security Account for such Series. Upon the Custodian's payment of the
premium and the return and/or cancellation of any receipt issued pursuant to
paragraphs 6, 8 or 10 of this Article with respect to the Option being
liquidated through the Closing Purchase Transaction, the Custodian shall remove,
or direct the Depository to remove, the previously imposed restrictions on the
Securities underlying the Option.
13. Upon the expiration, exercise or consummation of a Closing Purchase
Transaction with respect to, any Option purchased or written by the Fund and
described in this Article, the Custodian shall delete such option from the
statements delivered to the Fund pursuant to paragraph 3 Article III herein, and
upon the return and/or cancellation of any receipts issued by
-15-
<PAGE> 16
the Custodian, shall make such withdrawals from the Collateral Account, and the
Margin Account and/or the Senior Security Account as may be specified in a
Certificate received in connection with such expiration, exercise, or
consummation.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract, the Fund
shall deliver to the Custodian a Certificate specifying with respect to such
Futures Contract, (or with respect to any number of identical Futures
Contract(s)): (a) the Series for which the Futures Contract is being entered;
(b) the category of Futures Contract (the name of the underlying index or
financial instrument); (c) the number of identical Futures Contracts entered
into; (d) the delivery or settlement date of the Futures Contract(s); (e) the
date the Futures Contract(s) was (were) entered into and the maturity date; (f)
whether the Fund is buying (going long) or selling (going short) on such Futures
Contract(s); (g) the amount of cash and/or the amount and kind of Securities, if
any, to be deposited in the Senior Security Account for such Series; (h) the
name of the broker, dealer, or futures commission merchant through whom the
Futures Contract was entered into; and (i) the amount of fee or commission, if
any, to be paid and the name of the broker, dealer, or futures commission
merchant to whom such amount is to be paid. The Custodian shall make the
deposits, if any, to the Margin Account in accordance with the terms and
conditions of the Margin Account Agreement. The Custodian shall make payment out
of the moneys specifically allocated to such Series of the fee or commission, if
any, specified in the Certificate and deposit in the Senior Security Account for
such Series the amount of cash and/or the amount and kind of Securities
specified in said Certificate.
2. (a) Any variation margin payment or similar payment required to be
made by the Fund to a broker, dealer, or futures commission merchant with
respect to an outstanding Futures Contract, shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar payment from a broker,
dealer, or futures commission merchant to the Fund with respect to an
outstanding Futures Contract, shall be received and dealt with by the Custodian
in accordance with the terms and conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian hereunder is
retained by the Fund until delivery or settlement is made on such Futures
Contract, the Fund shall deliver to the Custodian a Certificate specifying: (a)
the Futures Contract and
-16-
<PAGE> 17
the Series to which the same relates; (b) with respect to an Index Futures
Contract, the total cash settlement amount to be paid or received, and with
respect to a Financial Futures Contract, the Securities and/or amount of cash to
be delivered or received; (c) the broker, dealer, or futures commission merchant
to or from whom payment or delivery is to be made or received; and (d) the
amount of cash and/or Securities to be withdrawn from the Senior Security
Account for such Series. The Custodian shall make the payment or delivery
specified in the Certificate, and delete such Futures Contract from the
statements delivered to the Fund pursuant to paragraph 3 of Article III herein.
4. Whenever the Fund shall enter into a Futures Contract to offset a
Futures Contract held by the Custodian hereunder, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the items of information required in a
Certificate described in paragraph 1 of this Article, and (b) the Futures
Contract being offset. The Custodian shall make payment out of the money
specifically allocated to such Series of the fee or commission, if any,
specified in the Certificate and delete the Futures Contract being offset from
the statements delivered to the Fund pursuant to paragraph 3 of Article III
herein, and make such withdrawals from the Senior Security Account for such
Series as may be specified in such Certificate. The withdrawals, if any, to be
made from the Margin Account shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract Option by the
Fund, the Fund shall promptly deliver to the Custodian a Certificate specifying
with respect to such Futures Contract Option: (a) the Series to which such
Option is specifically allocated; (b) the type of Futures Contract Option (put
or call); (c) the type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures Contract
Option purchased; (d) the expiration date; (e) the exercise price; (f) the dates
of purchase and settlement; (9) the amount of premium to be paid by the Fund
upon such purchase; (h) the name of the broker or futures commission merchant
through whom such option was purchased; and (i) the name of the broker, or
futures commission merchant, to whom payment is to be made. The Custodian shall
pay out of the moneys specifically allocated to such Series the total amount to
be paid upon such purchase to the broker or futures commissions merchant through
whom the purchase was made, provided that the same conforms to the amount set
forth in such Certificate.
-17-
<PAGE> 18
2. Promptly after the sale of any Futures Contract Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to each such sale: (a) Series to
which such Futures Contract Option was specifically allocated; (b) the type of
Future Contract Option (put or call); (c) the type of Futures Contract and such
other information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option; (d) the date of sale; (e) the sale
price; (f) the date of settlement; (g) the total amount payable to the Fund upon
such sale; and (h) the name of the broker or futures commission merchant through
whom the sale was made. The Custodian shall consent to the cancellation of the
Futures Contract Option being closed against payment to the Custodian of the
total amount payable to the Fund, provided the same conforms to the total amount
payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the Fund pursuant to
paragraph 1 is exercised by the Fund, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Futures
Contract Option was specifically allocated; (b) the particular Futures Contract
Option (put or call) being exercised; (c) the type of Futures Contract
underlying the Futures Contract Option; (d) the date of exercise; (e) the name
of the broker or futures commission merchant through whom the Futures Contract
Option is exercised; (f) the net total amount, if any, payable by the Fund; (g)
the amount, if any, to be received by the Fund; and (h) the amount of cash
and/or the amount and kind of Securities to be deposited in the Senior Security
Account for such Series. The Custodian shall make, out of the moneys and
Securities specifically allocated to such Series, the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
4. Whenever the Fund writes a Futures Contract Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Futures Contract Option: (a) the Series for which such Futures Contract Option
was written; (b) the type of Futures Contract Option (put or call); (c) the type
of Futures Contract and such other information as may be necessary to identify
the Futures Contract underlying the Futures Contract Option; (d) the expiration
date; (e) the exercise price; (f) the premium to be received by the Fund; (g)
the name of the broker or futures commission merchant through whom the premium
is to be received; and (h) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in the Senior Security Account for such
Series. The Custodian shall, upon receipt of the premium specified in the
Certificate, make out of the moneys and Securities specifically allocated to
such Series
-18-
<PAGE> 19
the deposits into the Senior Security Account, if any, as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
5. Whenever a Futures Contract option written by the Fund which is a
call is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which such Futures Contract Option was
specifically allocated; (b) the particular Futures Contract Option exercised;
(c) the type of Futures Contract underlying the Futures Contract Option; (d) the
name of the broker or futures commission merchant through whom such Futures
Contract Option was exercised; (e) the net total amount, if any, payable to the
Fund upon such exercise; (f) the net total amount, if any, payable by the Fund
upon such exercise; and (g) the amount of cash and/or the amount and kind of
Securities to be deposited in the Senior Security Account for such Series. The
Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in such Certificate make the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
6. Whenever a Futures Contract Option which is written by the Fund and
which is a put is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which such Option was specifically
allocated; (b) the particular Futures Contract Option exercised; (c) the type of
Futures Contract underlying such Futures Contract Option; (d) the name of the
broker or futures commission merchant through whom such Futures Contract Option
is exercised; (e) the net total amount, if any, payable to the Fund upon such
exercise; (f) the net total amount, if any, payable by the Fund upon such
exercise; and (g) the amount and kind of Securities and/or cash to be withdrawn
from or deposited in, the Senior Security Account for such Series, if any. The
Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in the Certificate, make out of the moneys and Securities
specifically allocated to such Series, the payments, if any, and the deposits,
if any, into the Senior Security Account as specified in the Certificate. The
deposits to and/or withdrawals from the Margin Account, if any, shall be made by
the Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
7. Whenever the Fund purchases any Futures Contract Option identical to
a previously written Futures Contract Option described in this Article in order
to liquidate its position as a writer of such Futures Contract Option, the Fund
shall promptly
-19-
<PAGE> 20
deliver to the Custodian a Certificate specifying with respect to the Futures
Contract Option being purchased: (a) the Series to which such option is
specifically allocated; (b) that the transaction is a closing transaction; (c)
the type of Future Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Option Contract; (d) the
exercise price; (e) the premium to be paid by the Fund; (f) the expiration date;
(g) the name of the broker or futures commission merchant to whom the premium is
to be paid; and (h) the amount of cash and/or the amount and kind of Securities,
if any, to be withdrawn from the Senior Security Account for such Series. The
Custodian shall effect the withdrawals from the Senior Security Account
specified in the Certificate. The withdrawals, if any, to be made from the
Margin Account shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
8. Upon the expiration, exercise, or consummation of a closing
transaction with respect to, any Futures Contract Option written or purchased by
the Fund and described in this Article, the Custodian shall (a) delete such
Futures Contract Option from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein and, (b) make such withdrawals from and/or in
the case of an exercise such deposits into the Senior Security Account as may be
specified in a Certificate. The deposits to and/or withdrawals from the Margin
Account, if any, shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
9. Futures Contracts acquired by the Fund through the exercise of a
Futures Contract Option described in this Article shall be subject to Article VI
hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after any short sales by any Series of the Fund, the Fund
shall promptly deliver to the Custodian a Certificate specifying: (a) the Series
for which such short sale was made; (b) the name of the issuer and the title of
the Security; (c) the number of shares or principal amount sold, and accrued
interest or dividends, if any; (d) the dates of the sale and settlement; (e) the
sale price per unit; (f) the total amount credited to the Fund upon such sale,
if any, (g) the amount of cash and/or the amount and kind of Securities, if any,
which are to be deposited in a Margin Account and the name in which such Margin
Account has been or is to be established; (h) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in a Senior Security
Account, and (i) the name of the broker through whom such short sale was made.
The Custodian
-20-
<PAGE> 21
shall upon its receipt of a statement from such broker confirming such sale and
that the total amount credited to the Fund upon such sale, if any, as specified
in the Certificate is held by such broker for the account of the Custodian (or
any nominee of the Custodian) as custodian of the Fund, issue a receipt or make
the deposits into the Margin Account and the Senior Security Account specified
in the Certificate.
2. In connection with the closing-out of any short sale, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to each
such closing out: (a) the Series for which such transaction is being made; (b)
the name of the issuer and the title of the Security; (c) the number of shares
or the principal amount, and accrued interest or dividends, if any, required to
effect such closing-out to be, delivered to the broker; (d) the dates of
closing-out and settlement; (e) the purchase price per unit; (f) the net total
amount payable to the Fund upon such closing-out; (g) the net total amount
payable to the broker upon such closing-out; (h) the amount of cash and the
amount and kind of Securities to be withdrawn, if any, from the Margin Account;
(i) the amount of cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Senior Security Account; and (j) the name of the broker
through whom the Fund is effecting such closing-out. The Custodian shall, upon
receipt of the net total amount payable to the Fund upon such closing-out, and
the return and/or cancellation of the receipts, if any, issued by the Custodian
with respect to the short sale being closed-out, pay out of the moneys held for
the account of the Fund to the broker the net total amount payable to the
broker, and make the withdrawals from the Margin Account and the Senior Security
Account, as the same are specified in the Certificate.
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase Agreement with
respect to Securities and money held by the Custodian hereunder, the Fund shall
deliver to the Custodian a Certificate or in the event such Reverse Repurchase
Agreement is a Money Market Security, a Certificate, Oral Instructions, or
Written Instructions specifying: (a) the Series for which the Reverse Repurchase
Agreement is entered; (b) the total amount payable to the Fund in connection
with such Reverse Repurchase Agreement and specifically allocated to such
Series; (c) the broker or dealer through or with whom the Reverse Repurchase
Agreement is entered; (d) the amount and kind of Securities to be delivered by
the Fund to such broker or dealer; (e) the date of such Reverse Repurchase
Agreement; and (f) the amount of cash and/or the amount and kind of Securities,
if any, specifically allocated to such Series to be deposited in a Senior
Security
-21-
<PAGE> 22
Account for such Series in connection with such Reverse Repurchase Agreement.
The Custodian shall, upon receipt of the total amount payable to the Fund
specified in the Certificate, Oral Instructions, or Written Instructions make
the delivery to the broker or dealer, and the deposits, if any, to the Senior
Security Account, specified in such Certificate, Oral Instructions, or Written
Instructions.
2. Upon the termination of a Reverse Repurchase Agreement described in
preceding paragraph 1 of this Article, the Fund shall promptly deliver a
Certificate or, in the event such Reverse Repurchase Agreement is a Money Market
Security, a Certificate, Oral Instructions, or Written Instructions to the
Custodian specifying: (a) the Reverse Repurchase Agreement being terminated and
the Series for which same was entered; (b) the total amount payable by the Fund
in connection with such termination; (c) the amount and kind of Securities to be
received by the Fund and specifically allocated to such Series in connection
with such termination; (d) the date of termination; (e) the name of the broker
or dealer with or through whom the Reverse Repurchase Agreement is to be
terminated; and (f) the amount of cash and/or the amount and kind of Securities
to be withdrawn from the Senior Securities Account for such Series. The
Custodian shall, upon receipt of the amount and kind of Securities to be
received by the Fund specified in the Certificate, Oral Instructions, or Written
Instructions, make the payment to the broker or dealer, and the withdrawals, if
any, from the Senior Security Account, specified in such Certificate, Oral
instructions, or Written Instructions.
ARTICLE X
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities specifically
allocated to a Series held by the Custodian hereunder, the Fund shall deliver or
cause to be delivered to the Custodian a Certificate specifying with respect to
each such loan: (a) the Series to which the loaned Securities are specifically
allocated; (b) the name of the issuer and the title of the Securities, (c) the
number of shares or the principal amount loaned, (d) the date of loan and
delivery, (e) the total amount to be delivered to the Custodian against the loan
of the Securities, including the amount of cash collateral and the premium, if
any, separately identified, and (f) the name of the broker, dealer, or financial
institution to which the loan was made. The Custodian shall deliver the
Securities thus designated to the broker, dealer or financial institution to
which the loan was made upon receipt of the total amount designated as to be
delivered against the loan of Securities. The Custodian may accept payment in
connection with a delivery otherwise than
-22-
<PAGE> 23
through the Book-Entry System or Depository only in the form of a certified or
bank cashier's check payable to the order of the Fund or the Custodian drawn on
New York Clearing House funds and may deliver Securities in accordance with the
customs prevailing among dealers in securities.
2. Promptly after each termination of the loan of Securities by the
Fund, the Fund shall deliver or cause to be delivered to the Custodian a
Certificate specifying with respect to each such loan termination and return of
Securities: (a) the Series to which the loaned Securities are specifically
allocated; (b) the name of the issuer and the title of the Securities to be
returned, (c) the number of shares or the principal amount to be returned, (d)
the date of termination, (e) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any offsetting credits
as described in said Certificate), and (f) the name of the broker, dealer, or
financial institution from which the Securities will be returned. The Custodian
shall receive all Securities returned from the broker, dealer, or financial
institution to which such Securities were loaned and upon receipt thereof shall
pay, out of the moneys held for the account of the Fund, the total amount
payable upon such return of Securities as set forth in the Certificate.
ARTICLE XI
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits to, or
withdrawals from, a Senior Security Account as specified in a Certificate
received by the Custodian. Such Certificate shall specify the Series for which
such deposit or withdrawal is to be made, and the amount of cash and/or the
amount and kind of Securities specifically allocated to such Series to be
deposited in, or withdrawn from, such Senior Security Account for such Series.
In the event that the Fund fails to specify in a Certificate the Series, the
name of the issuer, the title and the number of shares or the principal amount
of any particular Securities to be deposited by the Custodian into, or withdrawn
from, a Senior Securities Account, the Custodian shall be under no obligation to
make any such deposit or withdrawal and shall so notify the Fund.
2. The Custodian shall make deliveries or payments from a Margin
Account to the broker, dealer, futures commission merchant or Clearing Member in
whose name, or for whose benefit, the account was established as specified in
the Margin Account Agreement.
-23-
<PAGE> 24
3. Amounts received by the Custodian as payments or distributions with
respect to Securities deposited in any Margin Account shall be dealt with in
accordance with the terms and conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and security interest in
and to any property at any time held by the Custodian in any Collateral Account
described herein. In accordance with applicable law the Custodian may enforce
its lien and realize on any such property whenever the Custodian has made
payment or delivery pursuant to any Put Option guarantee letter or similar
document or any receipt issued by the Custodian. In the event the Custodian
should realize on any such property net proceeds which are less than the
Custodian's obligations under any Put Option guarantee letter or similar
document or any receipt, such deficiency shall be a debt owed the Custodian by
the Fund within the scope of Article XIV herein.
5. On each business day the Custodian shall furnish the Fund with a
statement with respect to each Margin Account in which money or Securities are
held specifying as of the close of business on the previous business day: (a)
the name of the Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The Custodian shall make
available upon request to any broker, dealer, or futures commission merchant
specified in the name of a Margin Account a copy of the statement furnished the
Fund with respect to such Margin Account.
6. Promptly after the close of business on each business day in which
cash and/or Securities are maintained in a Collateral Account for any Series,
the Custodian shall furnish the Fund with a statement with respect to such
Collateral Account specifying the amount of cash and/or the amount and kind of
Securities held therein. No later than the close of business next succeeding the
delivery to the Fund of such statement, the Fund shall furnish to the Custodian
a Certificate or Written Instructions specifying the then market value of the
Securities described in such statement. In the event such then market value is
indicated to be less than the Custodian's obligation with respect to any
outstanding Put Option guarantee letter or similar document, the Fund shall
promptly specify in a Certificate the additional cash and/or Securities to be
deposited in such Collateral Account to eliminate such deficiency.
ARTICLE XII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of the resolution of
the Board of Directors of the Fund, certified by
-24-
<PAGE> 25
the Secretary or any Assistant Secretary, either (i) setting forth with respect
to the Series specified therein the date of the declaration of a dividend or
distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined, the amount payable per
Share of such Series to the shareholders of record as of that date and the total
amount payable to the Dividend Agent and any subdividend agent or co-dividend
agent of the Fund on the payment date, or (ii) authorizing with respect to the
Series specified therein the declaration of dividends and distributions on a
daily basis and authorizing the Custodian to rely on Oral Instructions, Written
Instructions or a Certificate setting forth the date of the declaration of such
dividend or distribution, the date of payment thereof, the record date as of
which shareholders entitled to payment shall be determined, the amount payable
per Share of such Series to the shareholders of record as of that date and the
total amount payable to the Dividend Agent on the payment date.
2. Upon the payment date specified in such resolution, Oral
Instructions, Written Instructions or Certificate, as the case may be, the
Custodian shall pay out of the moneys held for the account of each Series the
total amount payable to the Dividend Agent, and any subdividend agent or
co-dividend agent of the Fund with respect to such Series.
ARTICLE XIII
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Shares, it shall deliver to the
Custodian a Certificate duly specifying:
(a) The Series, the number of Shares sold, trade date, and price;
and
(b) The amount of money to be received by the Custodian for the sale
of such Shares and specifically allocated to the separate account in the name of
such Series.
2. Upon receipt of such money from the Transfer Agent, the Custodian
shall credit such money to the separate account in the name of the Series for
which such money was received.
3. Upon issuance of any Shares of any Series described in the foregoing
provisions of this Article, the Custodian shall pay, out of the money held for
the account of such Series, all original issue or other taxes required to be
paid by the Fund in connection with such issuance upon the receipt of a
Certificate specifying the amount to be paid.
-25-
<PAGE> 26
4. Except as provided hereinafter, whenever the Fund desires the
Custodian to make payment out of the money held by the Custodian hereunder in
connection with a redemption of any Shares, it shall furnish to the Custodian a
Certificate specifying:
(a) The number and Series of Shares redeemed; and
(b) The amount to be paid for such Shares.
5. Upon receipt from the Transfer Agent of an advice setting forth the
Series and number of Shares received by the Transfer Agent for redemption and
that such Shares are in good form for redemption, the Custodian shall make
payment to the Transfer Agent out of the moneys held in the separate account in
the name of the Series the total amount specified in the Certificate issued
pursuant to the foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, the Custodian,
unless otherwise instructed by a Certificate, shall, upon receipt of an advice
from the Fund or its agent setting forth that the redemption is in good form for
redemption in accordance with the check redemption procedure, honor the check
presented as part of such check redemption privilege out of the moneys held in
the separate account of the Series of the Shares being redeemed.
ARTICLE XIV
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion advance funds on
behalf of any Series which results in an overdraft because the moneys held by
the Custodian in the separate account for such Series shall be insufficient to
pay the total amount payable upon a purchase of Securities specifically
allocated to such Series, as set forth in a Certificate, Oral Instructions, or
Written Instructions or which results in an overdraft in the separate account of
such Series for some other reason, or if the Fund is for any other reason
indebted to the Custodian with respect to a Series (except a borrowing for
investment or for temporary or emergency purposes using Securities as collateral
pursuant to a separate agreement and subject to the provisions of paragraph 2 of
this Article), such overdraft or indebtedness shall be deemed to be a loan made
by the Custodian to the Fund for such Series payable on demand and shall bear
interest from the date incurred at a rate per annum (based on a 360-day year for
the actual number of days involved) equal to 1/2% over
-26-
<PAGE> 27
Custodian's Fed Funds lending rate in effect from time to time, such rate to be
adjusted on the effective date of any change in such lending rate but in no
event to be less than 6% per annum. Any such overdraft or indebtedness shall be
reduced by an amount equal to the total of all amounts due the Fund with respect
to such Series which have not been collected by the Custodian on behalf of the
Fund when due because of the failure of the Custodian to make timely demand or
presentment for payment as provided herein. In addition, the Fund hereby agrees
that the Custodian shall have a continuing lien and security interest in and to
any property specifically allocated to such Series at any time held by it or any
third party acting in the Custodian's behalf, or in the Book-Entry System or the
Depository for the benefit of such Series, provided such lien and security
interest shall be limited to that property whose loan value, under Federal
Reserve Regulation U if applicable, does not exceed the amount of the
outstanding overdraft or indebtedness. The Fund authorizes the Custodian, in its
sole discretion, at any time to charge any such overdraft or indebtedness
together with interest due thereon against any balance of account standing to
such Series credit on the Custodian's books.
2. The Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the Custodian)
from which it borrows money for investment or for temporary or emergency
purposes using Securities held by the Custodian hereunder as collateral for such
borrowings, a notice or undertaking in the form currently employed by any such
bank setting forth the amount which such bank will loan to the Fund against
delivery of a stated amount of collateral. The Fund shall promptly deliver to
the Custodian a Certificate specifying with respect to each such borrowing: (a)
the Series to which such borrowing relates; (b) the name of the bank, (c) the
amount and terms of the borrowing, which may be set forth by incorporating by
reference an attached promissory note, duly endorsed by the Fund, or other loan
agreement, (d) the time and date, if known, on which the loan is to be entered
into, (e) the date on which the loan becomes due and payable, (f) the total
amount payable to the Fund on the borrowing date, (g) the market value of
Securities to be delivered as collateral for such loan, including the name of
the issuer, the title and the number of shares or the principal amount of any
particular Securities, and (h) a statement specifying whether such loan is for
investment purposes or for temporary or emergency purposes and that such loan is
in conformance with the Investment Company Act of 1940 and the Fund's
prospectuses. The Custodian shall deliver on the borrowing date specified in a
Certificate the specified collateral and the executed promissory note, if any,
against delivery by the lending bank of the total amount of the loan payable,
provided that the same conforms to the total amount payable as set forth in the
Certificate. The Custodian may, at the option of the lending bank, keep such
collateral in its
-27-
<PAGE> 28
possession, but such collateral shall be subject to all rights therein given the
lending bank by virtue of any promissory note or loan agreement. The Custodian
shall deliver such Securities as additional collateral as may be specified in a
Certificate to collateralize further any transaction described in this
paragraph. The Fund shall cause all Securities released from collateral status
to be returned directly to the Custodian, and the Custodian shall receive from
time to time such return of collateral as may be tendered to it. In the event
that the Fund fails to specify in a Certificate the Series, the name of the
issuer, the title and number of shares or the principal amount of any particular
Securities to be delivered as collateral by the Custodian, the Custodian shall
not be under any obligation to deliver any Securities.
ARTICLE XV
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, neither the Custodian nor its
nominee shall be liable for any loss or damage, including counsel fees,
resulting from its action or omission to act or otherwise, either hereunder or
under any Margin Account Agreement, except for any such loss or damage arising
out of its own negligence or willful misconduct. The Custodian may, with respect
to questions of law arising hereunder or under any Margin Account Agreement,
apply for and obtain the advice and opinion of counsel to the Fund, at the
Fund's expense, or of its own counsel, at its own expense, and shall be fully
protected with respect to anything done or omitted by it in good faith in
conformity with such advice or opinion. The Custodian shall be liable to the
Fund for any loss or damage resulting from the use of the Book-Entry System or
any Depository arising by reason of any negligence, misfeasance or willful
misconduct on the part of the Custodian or any of its employees or agents.
2. Without limiting the generality of the foregoing, the Custodian
shall be under no obligation to inquire into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased, sold, or
written by or for the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received therefor;
(b) The legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor;
(c) The legality of the declaration or payment of any dividend by
the Fund;
-28-
<PAGE> 29
(d) The legality of any borrowing by the Fund using Securities as
collateral;
(e) The legality of any loan of portfolio Securities, nor shall the
Custodian be under any duty or obligation to see to it that any cash collateral
delivered to it by a broker, dealer, or financial institution or held by it at
any time as a result of such loan of portfolio Securities of the Fund is
adequate collateral for the Fund against any loss it might sustain as a result
of such loan. The Custodian specifically, but not by way of limitation, shall
not be under any duty or obligation periodically to check or notify the Fund
that the amount of such cash collateral held by it for the Fund is sufficient
collateral for the Fund, but such duty or obligation shall be the sole
responsibility of the Fund. In addition, the Custodian shall be under no duty or
obligation to see that any broker, dealer or financial institution to which
portfolio Securities of the Fund are lent pursuant to Article XIV of this
Agreement makes payment to it of any dividends or interest which are payable to
or for the account of the Fund during the period of such loan or at the
termination of such loan, provided, however, that the Custodian shall promptly
notify the Fund in the event that such dividends or interest are not paid and
received when due; or
(f) The sufficiency or value of any amounts of money and/or
Securities held in any Margin Account, Senior Security Account, or Collateral
Account in connection with transactions by the Fund. In addition, the Custodian
shall be under no duty or obligation to see that any broker, dealer, futures
commission merchant or Clearing Member makes payment to the Fund of any
variation margin payment or similar payment which the Fund may be entitled to
receive from such broker, dealer, futures commission merchant or Clearing
Member, to see that any payment received by the Custodian from any broker,
dealer, futures commission merchant or Clearing Member is the amount the Fund is
entitled to receive, or to notify the Fund of the Custodian's receipt or
non-receipt of any such payment, provided that the Custodian is responsible for
verifying its receipt of payment against the amount specified in the
Certificates that are to be delivered to it hereunder.
3. The Custodian shall not be liable for, or considered to be the
Custodian of, any money, whether or not represented by any check, draft, or
other instrument for the payment of money, received by it on behalf of the Fund
until the Custodian actually receives and collects such money directly or by the
final crediting of the account representing the Fund's interest at the
Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and shall not be liable
for ascertaining or acting upon any calls, conversions, exchange, offers,
tenders, interest rate changes or
-29-
<PAGE> 30
similar matters relating to Securities held in the Depository, unless the
Custodian shall have actually received timely notice from the Depository or
notice of such event appears in one or more of the publications listed in
Appendix C hereto provided that the Custodian is able to determine from the
publications that such event directly affects Securities specifically allocated
to a Series and being held in this Depository. In no event shall the Custodian
have any responsibility or liability for the failure of the Depository to
collect, or for the late collection or late crediting by the Depository of any
amount payable upon Securities deposited in the Depository which may mature or
be redeemed, retired, called or otherwise become payable. However, upon receipt
of a Certificate from the Fund of an overdue amount on Securities held in the
Depository the Custodian shall make a claim against the Depository on behalf of
the Fund, except that the Custodian shall not be under any obligation to appear
in, prosecute or defend any action, suit or proceeding in respect to any
Securities held by the Depository which in its opinion may involve it in expense
or liability, unless indemnity satisfactory to it against all expense and
liability be furnished as often as may be required.
5. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Fund from the Transfer
Agent of the Fund nor to take any action to effect payment or distribution by
the Transfer Agent of the Fund of any amount paid by the Custodian to the
Transfer Agent of the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount, if payment is refused after due
demand or presentation, unless and until (i) it shall be directed to take such
action by a Certificate and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any such action.
7. The Custodian may appoint one or more banking institutions as
Depository or Depositories, as Sub-Custodian or Sub-Custodians, or as
Co-Custodian or Co-Custodians including, but not limited to, banking
institutions located in foreign countries, of Securities and moneys at any time
owned by the Fund, upon such terms and conditions as may be approved in a
Certificate or contained in an agreement executed by the Custodian, the Fund and
the appointed institution. The Custodian agrees that except as any such
Certificate or any such agreement may otherwise provide, the terms and
conditions shall include the Custodian assuming liability for the negligence,
bad faith or willful misconduct of any Sub-Custodian where such Sub-Custodian is
appointed at the request of the Custodian.
8. The Custodian shall not be under any duty or obligation (a) to
ascertain whether any Securities at any time delivered to,
-30-
<PAGE> 31
or held by it, for the account of the Fund and specifically allocated to a
Series are such as properly may be held by the Fund or such Series under the
provisions of its then current prospectus, or (b) to ascertain whether any
transactions by the Fund, whether or not involving the Custodian, are such
transactions as may properly be engaged in by the Fund.
9. The Custodian shall be entitled to receive and the Fund agrees to
pay to the Custodian all out-of-pocket expenses and such compensation as may be
agreed upon from time to time between the Custodian and the Fund. The Custodian
may charge such compensation and any expenses with respect to a Series incurred
by the Custodian in the performance of its duties pursuant to this agreement
against any money specifically allocated to such Series, provided the Custodian
has submitted an invoice to the fund's Administrator. The Fund agrees that the
Custodian has the right to automatically charge such compensation and expenses
against any money specifically allocated to such Series on the eleventh day
after the Fund's Administrator has received the invoice provided that the
Custodian has not received written notification from the Fund's Administrator
which specifically details any charges in dispute and the reasons for such
dispute. The Custodian agrees, provided it has received timely notification,
that it will not charge the disputed compensation and/or expenses against money
specifically allocated to such Series until it receives written notification
from the Fund's Administrator that the dispute has been resolved. Unless and
until the Fund instructs the Custodian by a Certificate to apportion any loss,
damage, liability or expense among the Series in a specified manner, the
Custodian shall also be entitled to charge against any money held by it for the
account of a Series such Series' pro rata share (based on such Series net asset
value at the time of the charge to the aggregate net asset value of all Series
at that time) of the amount of any loss, damage, liability or expense, including
counsel fees, for which it shall be entitled to reimbursement under the
provisions of this Agreement. The expenses for which the Custodian shall be
entitled to reimbursement hereunder shall include, but are not limited to, the
expenses of subcustodians and foreign branches of the Custodian incurred in
settling outside of New York City transactions involving the purchase and sale
of Securities of the Fund.
10. The Custodian shall be entitled to rely upon any Certificate,
notice or other instrument in writing received by the Custodian and reasonably
believed by the Custodian to be a Certificate. The Custodian shall be entitled
to rely upon any Oral Instructions and any Written Instructions actually
received by the Custodian hereinabove provided for. The Fund agrees to forward
to the Custodian a Certificate or facsimile thereof confirming such Oral
Instructions or Written Instructions in such manner so that such Certificate or
facsimile thereof is received
-31-
<PAGE> 32
by the Custodian, whether by hand delivery, telecopier or other similar device,
or otherwise, by the close of business of the same day that such Oral
Instructions or Written Instructions are given to the Custodian. The Fund agrees
that the fact that such confirming instructions are not received by the
Custodian shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the Fund. The Fund
agrees that the Custodian shall incur no liability to the Fund in acting upon
Oral Instructions or Written Instructions given to the Custodian hereunder
concerning such transactions provided such instructions reasonably appear to
have been received from an Authorized Person.
11. The Custodian shall be entitled to rely upon any instrument,
instruction or notice received by the Custodian and reasonably believed by the
Custodian to be given in accordance with the terms and conditions of any Margin
Account Agreement. Without limiting the generality of the foregoing, the
Custodian shall be under no duty to inquire into, and shall not be liable for,
the accuracy of any statements or representations contained in any such
instrument or other notice including, without limitation, any specification of
any amount to be paid to a broker, dealer, futures commission merchant or
Clearing Member.
12. The Custodian shall treat confidentially and as proprietary
information of the Fund records and other information relative to the Fund and
prior, present or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder. Notwithstanding the foregoing, the Custodian shall have the
right to disclose such records and other information to any Federal or State
authority with whom the Fund or its shares are registered, and the Custodian
shall further have the right to exhibit any such records and information to any
person whenever it receives an opinion from its counsel that there is a
reasonable likelihood that the Custodian will be held liable for the failure to
exhibit such records or information to such person, provided, however, that in
connection with any such disclosure the Custodian shall promptly notify the Fund
that such disclosure has been made or is to be made.
13. The books and records pertaining to the Fund which are in the
possession of the Custodian shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the Investment Company
Act of 1940, as amended, and other applicable securities laws and rules and
regulations. The Fund, or the Fund's authorized representatives, shall have
access to such books and records during the Custodian's normal business hours.
Upon the reasonable request of the Fund, copies of any such books and records
shall be provided by the Custodian to the Fund or the Fund's authorized
representative, and the Fund shall reimburse the Custodian its expenses of
providing such copies.
-32-
<PAGE> 33
Upon reasonable request of the Fund, the Custodian shall provide in hard copy or
on microfilm, whichever the Custodian elects, any records included in any such
delivery which are maintained by the Custodian on a computer disc, or are
similarly maintained, and the Fund shall reimburse the Custodian for its
expenses of providing such hard copy or microfilm.
14. The Custodian shall provide the Fund with any report obtained by
the Custodian on the system of internal accounting control of the Book-Entry
System, the Depository, or O.C.C., and with such reports on its own systems of
internal accounting control as the Fund may reasonably request from time to
time.
15. The Fund agrees to indemnify the Custodian against and save the
Custodian harmless from all liability, claims, losses and demands whatsoever,
including attorney's fees, howsoever arising or incurred because of or in
connection with the Custodian's payment or non-payment of checks pursuant to
paragraph 6 of Article XIII as part of any check redemption privilege program of
the Fund, except for any such liability, claim, loss and demand arising out of
the Custodian's own negligence or willful misconduct.
16. Subject to the foregoing provisions of this Agreement, the
Custodian may deliver and receive Securities, and receipts with respect to such
Securities, and arrange for payments to be made and received by the Custodian in
accordance with the customs prevailing from time to time among brokers or
dealers in such Securities.
17. The Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.
ARTICLE XVI
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving
to the other party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of giving of such
notice. In the event such notice is given by the Fund, it shall be accompanied
by a copy of a resolution of the Board of Directors of the Fund, certified by
the Secretary, or any Assistant Secretary; electing to terminate this Agreement
and designating a successor custodian or custodians, each of which shall be a
bank or trust company having not less than $2,000,000 aggregate capital, surplus
and undivided profits. In the event such notice
-33-
<PAGE> 34
is given by the Custodian, the Fund shall, on or before the termination date,
deliver to the Custodian a copy of a resolution of the Board of Directors of the
Fund, certified by the Secretary or any Assistant Secretary, designating a
successor custodian or custodians. In the absence of such designation by the
Fund, the Custodian may designate a successor custodian which shall be a bank or
trust company having not less than $2,000,000 aggregate capital, surplus and
undivided profits. Upon the date set forth in such notice this Agreement shall
terminate, and the Custodian shall upon receipt of a notice of acceptance by the
successor custodian on that date deliver directly to the successor custodian all
Securities and moneys then owned by the Fund and held by it as Custodian, after
deducting all fees, expenses and other amounts for the payment or reimbursement
of which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or the
Custodian in accordance with the preceding paragraph, the Fund shall upon the
date specified in the notice of termination of this Agreement and upon the
delivery by the Custodian of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Fund) and moneys then owned
by the Fund be deemed to be its own custodian and the Custodian shall thereby be
relieved of all duties and responsibilities pursuant to this Agreement, other
than the duty with respect to Securities held in the Book Entry System which
cannot be delivered to the Fund to hold such Securities hereunder in accordance
with this Agreement.
ARTICLE XVII
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by two of the
present Officers of the Fund under its seal, setting forth the names and the
signatures of the present Authorized Persons. The Fund agrees to furnish to the
Custodian a new Certificate in similar form in the event that any such present
Authorized Person ceases to be an Authorized Person or in the event that other
or additional Authorized Persons are elected or appointed. Until such new
Certificate shall be received, the Custodian shall be fully protected in acting
under the provisions of this Agreement upon Oral Instructions or signatures of
the present Authorized Persons as set forth in the last delivered Certificate.
2. Annexed hereto as Appendix B is a Certificate signed by two of the
present officers of the Fund under its seal, setting forth the names and the
signatures of the present Officers of the Fund. The Fund agrees to furnish to
the Custodian a new Certificate in similar form in the event any such present
Officer
-34-
<PAGE> 35
ceases to be an Officer of the Fund, or in the event that other or additional
Officers are elected or appointed. Until such new Certificate shall be received,
the Custodian shall be fully protected in acting under the provisions of this
Agreement upon the signatures of the Officers as set forth in the last delivered
Certificate.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at 90
Washington Street, New York, New York 10015, or at such other place as the
Custodian may from time to time designate in writing.
4. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at the address for the
Fund first above written, or at such other place as the Fund may from time to
time designate in writing.
5. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the same formality as this
Agreement and approved by a resolution of the Board of Directors of the Fund.
6. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of the Custodian, or by the Custodian without the written consent of the Fund,
authorized or approved by a resolution of the Fund's Board of Directors.
7. This Agreement shall be construed in accordance with the laws of the
State of New York.
8. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, thereunto
-35-
<PAGE> 36
duly authorized and their respective seals to be hereunto affixed, as of the day
and year first above written.
[SEAL] PACIFIC HORIZON FUNDS, INC.
By: /s/ Thomas M. Collins
-------------------------
Attest:
/s/ W. Bruce McConnel, III
- --------------------------
THE BANK OF NEW YORK
[SEAL] By: /s/ [signature illegible]
-------------------------
Attest:
/s/ Marjorie McLaughlin
- --------------------------
-36-
<PAGE> 37
CUSTODY AGREEMENT
APPENDIX A
I, William B. Blundin, Executive Vice President and I, James W.
Bernaiche, Assistant Secretary of PACIFIC HORIZON FUNDS, INC. a Maryland
Corporation (the "Fund"), do hereby certify that:
The following individuals have been duly authorized by the Board of
Trustees of the Fund in conformity with the Fund's Charter and By-Laws to give
Oral Instructions and Written Instructions on behalf of the Fund, and the
signatures set forth opposite their respective names are their true and correct
signatures.
For the Money Market and Government Money Market Funds the authorized
group comprises:
Name Signature
Hillary Elder /s/ Hillary Elder
----------------------
Kellie Connelly /s/ Kellie Connelly
----------------------
Marika Economos /s/ Marika Economos
----------------------
Ed Mraz /s/ Ed Mraz
----------------------
Penny Degnon /s/ Penny Degnon
----------------------
Martin G. Flanigan /s/ Martin G. Flanigan
----------------------
Richard Fabietti /s/ Richard Fabietti
----------------------
Valerie Kustas /s/ Valerie Kustas
----------------------
-37-
<PAGE> 38
Mei Eng /s/ Mei Eng
----------------------
For the Aggressive Growth Fund the authorized group comprises:
William H. Duncan /s/ William H. Duncan
----------------------
William Hensel /s/ William Hensel
----------------------
J. Michael Gaffney /s/ J. Michael Gaffney
----------------------
Penny Degnon /s/ Penny Degnon
----------------------
Martin G. Flanigan /s/ Martin G. Flanigan
----------------------
Richard Fabietti /s/ Richard Fabietti
----------------------
Valerie Kustas /s/ Valerie Kustas
----------------------
Mei Eng /s/ Mei Eng
----------------------
For the High Yield Bond Fund the Authorized group comprises:
Thomas E. Nugent /s/ Thomas E. Nugent
----------------------
James R. Miller /s/ James R. Miller
----------------------
J. Michael Gaffney /s/ J. Michael Gaffney
----------------------
Penny Degnon /s/ Penny Degnon
----------------------
-38-
<PAGE> 39
Martin G. Flanigan /s/ Martin G. Flanigan
----------------------
Richard Fabietti /s/ Richard Fabietti
----------------------
Valerie Kustas /s/ Valerie Kustas
----------------------
Mei Eng /s/ Mei Eng
----------------------
All signatures need not appear on the same copy of this document.
Pacific Horizon Funds, Inc.
By: /s/ William B. Blundin
-----------------------
William B. Blundin
Executive Vice President
By: /s/ James W. Bernaiche
------------------------
James W. Bernaiche
Assistant Secretary
-39-
<PAGE> 40
APPENDIX
B
I, William B. Blundin, Executive Vice President and I, James Bernaiche,
Acting Assistant Secretary of Pacific Horizon Funds, Inc., a Maryland
Corporation (the "Fund"), do hereby certify that:
The following individuals serve in the following positions with the
Fund and each has been duly elected or appointed by the Board of Directors of
the Fund to each such position and qualified therefore in conformity with the
Fund's Charter and By-Laws, and the signatures set forth opposite their
respective names are their true and correct signatures:
<TABLE>
<CAPTION>
Name Position Signature
<S> <C> <C>
Thomas M. Collins Chairman of the /s/ Thomas M. Collins
Board and President ------------------------
Douglas B. Fletcher Vice-Chairman of the /s/ Douglas B. Fletcher
Board ------------------------
William B. Blundin Executive Vice /s/ William B. Blundin
President ------------------------
Richard E. Stierwalt Treasurer /s/ Richard E. Stierwalt
------------------------
Richard A. Fabietti Assistant Treasurer /s/ Richard A. Fabietti
------------------------
James W. Bernaiche Acting Assistant /s/ James W. Bernaiche
Secretary ------------------------
</TABLE>
/s/ William B. Blundin
------------------------
William B. Blundin
Executive Vice President
/s/ James W. Bernaiche
------------------------
James W. Bernaiche
Assistant Secretary
-40-
<PAGE> 41
APPENDIX C
I, Conrad Demboski, an Assistant Vice President with THE BANK OF NEW
YORK do hereby designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
JJ Kenney Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
-41-
<PAGE> 42
EXHIBIT A
CERTIFICATION
The undersigned, James Bernaiche, hereby certifies that he is the duly elected
and acting Assistant Secretary of PACIFIC HORIZON FUNDS, INC., a Maryland
corporation (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Directors of the Fund at a meeting duly held on July
21, 1989, at which a quorum was at all times present and that such resolution
has not been modified or rescinded and is in full force and effect as of the
date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund dated as of
April 3, 1989 (the "Custody Agreement"), is authorized and instructed
on a continuous and ongoing basis to deposit in the Book-Entry System,
as defined in the Custody Agreement, all securities eligible for
deposit therein, regardless of the Series to which the same are
specifically allocated, and to utilize the Book-Entry System to the
extent possible in connection with its performance thereunder,
including, without limitation, in connection with settlements of
purchases and sales of securities, loans of securities, and deliveries
and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of PACIFIC
HORIZON FUNDS, INC., as of the 21st day of July, 1989.
/s/ James Bernaiche
-------------------
James Bernaiche
[SEAL]
-42-
<PAGE> 43
EXHIBIT B
CERTIFICATION
The undersigned, James Bernaiche, hereby certifies that he is the duly
elected and acting Assistant Secretary of PACIFIC HORIZON FUNDS, INC., a
Maryland corporation (the "Fund"), and further certifies that the following
resolution was adopted by the Board of Directors of the Fund at a meeting duly
held on July 21, 1989, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund dated as of
April 3, 1989 (the "Custody Agreement"), is authorized and instructed
on a continuous and ongoing basis until such time as it receives a
Certificate, as defined in the Custody Agreement, to the contrary to
deposit in the Depository, as defined in the Custody Agreement, all
securities eligible for deposit therein, regardless of the Series to
which the same are specifically allocated, and to utilize the
Depository to the extent possible in connection with its performance
thereunder, including, without limitation, in connection with
settlements of purchases and sales of securities, loans of securities,
and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of PACIFIC
HORIZON FUNDS, INC., as of the 21st day of July, 1989.
/s/ James Bernaiche
-------------------
James Bernaiche
(SEAL)
-43-
<PAGE> 44
EXHIBIT C
CERTIFICATION
The undersigned, James Bernaiche, hereby certifies that he is the duly
elected and acting Assistant Secretary of PACIFIC HORIZON FUNDS, INC., a
Maryland corporation (the "Fund"), and further certifies that the following
resolution was adopted by the Board of Directors of the Fund at a meeting duly
held on July 21, 1989, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund dated as of
April 3, 1989 (the "Custody Agreement"), is authorized and instructed
on a continuous and ongoing basis until such time as it receives a
Certificate, as defined in the Custody Agreement, to the contrary, to
accept, utilize and act with respect to Clearing Member confirmations
for Options and transaction in Options, regardless of the Series to
which the same are specifically allocated, as such terms are defined in
the Custody Agreement, as provided in the Custody Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of PACIFIC
HORIZON FUNDS, INC., as of the 21st day of July, 1989.
/s/ James Bernaiche
-------------------
James Bernaiche
[SEAL]
-44-
<PAGE> 1
EXHIBIT 8(B)
Amendment Number 1 to Custody Agreement
This Amendment Number 1 to Custody Agreement is dated March 30, 1990
("Amendment") and is made by Pacific Horizon Funds, Inc., a Maryland corporation
(hereinafter called the "Fund"), and The Bank of New York, a New York
corporation authorized to do a banking business, having its principal office and
place of business at 48 Wall Street, New York, New York 10015 (hereinafter
called the "Custodian").
W I T N E S S E T H :
WHEREAS, the Fund and the Custodian have executed a Custody Agreement
dated as of April 3, 1989 (referred to as the "Agreement"); and
WHEREAS, the Fund and the Custodian desire to make the following
amendment to the Agreement contained herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Custodian and the Fund do hereby covenant to
and agree as follows:
1) Article XIV of the Agreement is hereby clarified by adding after the
phrase "with respect to a Series" in the first sentence of paragraph 1 of the
following: "including any indebtedness to the Custodian under the Fund's Cash
Management and Related Services Agreement."
2) The parties agree that in the case of any conflict between the terms
of this Amendment and the Agreement, the terms of this Amendment shall prevail.
THE BANK OF NEW YORK
By /s/ Frederick Ricciardi
------------------------
Attest:
/s/ S. Grunston
- --------------------------
PACIFIC HORIZON FUNDS, INC.
By /s/ Thomas M. Collins
------------------------
Attest:
/s/ W. Bruce McConnel, III
- --------------------------
<PAGE> 1
EXHIBIT 8(C)
CUSTODIAN SERVICES AGREEMENT
This Agreement is made as of January 10, 1994 by and between PNC BANK,
NATIONAL ASSOCIATION, a national banking association ("PNC Bank"), and PACIFIC
HORIZON FUNDS, INC., a Maryland Corporation (the "Fund").
The Fund is registered as an open-end investment company under the
Investment Company Act of 1940, as amended (the "1940" Act). The Fund wishes to
retain PNC Bank to provide custodian services for the portfolios listed in
Appendix A, as amended from time to time (each a "Portfolio"), and PNC Bank
wishes to furnish custodian services, either directly or though an affiliate or
affiliates, as more fully described herein.
In consideration of the promises and mutual covenants herein contained,
the parties agree as follows:
1. Definitions.
(a) "Authorized Person". The term "Authorized Person"
shall mean any officer of the Fund and any other person, who is duly authorized
by the Fund's Governing Board, to give Oral and Written Instructions on behalf
of the Fund, provided, however, that if the Governing Board determines that Oral
Instructions or Written Instructions require the approval of more than one
person, the term "Authorized Person" shall mean such persons as are in
combination so authorized. Such persons are listed in the Certificate attached
hereto as the Authorized Persons Appendix as
<PAGE> 2
such appendix may be amended in writing by the Fund's Governing Board from time
to time.
(b) "Book-Entry System". The term "Book-Entry System"
shall mean the Federal Reserve Treasury book-entry system for United States and
federal agency securities, its successor or successors, and its nominee or
nominees and any book-entry system maintained by an exchange registered with the
SEC under the 1934 Act.
(c) "CFTC". The term "CFTC" shall mean the Commodities Futures
Trading Commission.
(d) "Governing Board". The term "Governing Board" shall
mean the Fund's Board of Directors, or, where duly authorized, a competent
committee thereof.
(e) "Oral Instructions". The term "Oral Instructions"
shall mean oral instructions received by PNC Bank from an Authorized Person or
from a person reasonably identified to PNC Bank as an Authorized Person.
(f) "PNC Bank". The term "PNC Bank" shall mean PNC
Bank, National Association or a subsidiary or affiliate of PNC Bank, National
Association.
(g) "SEC". The term "SEC" shall mean the Securities and
Exchange Commission.
(h) "Securities and Commodities Laws". The term
"Securities and Commodities Laws" shall mean the "1933 Act," which shall mean
the Securities Act of 1933, as amended, the "1934 Act," which shall mean the
Securities Exchange Act of 1934,
-2-
<PAGE> 3
as amended, the "1940 Act," which shall mean the Investment Company Act of 1940,
as amended and the "CEA," which shall mean the Commodities Exchange Act, as
amended.
(i) "Shares". The term "Shares" shall mean the shares of any
series or class of common stock of the Fund.
(j) "Property". The term "Property" shall mean:
(i) any and all securities and other investment items
which the Fund may from time to time deposit, or
cause to be deposited, with PNC Bank or which PNC
Bank may from time to time hold for the Fund;
(ii) All income in respect of any of such securities
or other investment items;
(iii) all proceeds of the sale of any of such
securities or investment items; and
(iv) all proceeds of the sale of securities issued by
the Fund, which are received by PNC Bank from
time to time, from or on behalf of the Fund.
(k) "Written Instructions". The term "Written Instructions"
shall mean written instructions signed by one or more Authorized Persons as
required by the Governing Board from time to time and received by PNC Bank. The
instructions may be delivered by hand, mail, tested telegram, cable, telex or
facsimile sending device.
2. Appointment. The Fund hereby appoints PNC Bank to provide custodian
services for the Portfolios, and PNC Bank accepts such appointment and agrees to
furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable,
will provide PNC Bank with the following:
-3-
<PAGE> 4
(a) certified or authenticated copies of the resolutions of
the Fund's Governing Board, approving the appointment of
PNC Bank or its affiliates to provide custodian services
for the Portfolios;
(b) a copy of the Fund's most recent effective registration
statement with respect to the Portfolios;
(c) a copy of the Fund's administration agreement; and
(d) certified or authenticated copies of any and all
amendments or supplements to the foregoing.
4. Compliance with Government Rules and Regulations.
PNC Bank undertakes to comply with all applicable requirements of the
Securities and Commodities Laws and any other laws, rules and regulations of
state and federal governmental authorities having jurisdiction with respect to
all duties to be performed by PNC Bank hereunder. Except as specifically set
forth herein, PNC Bank assumes no responsibility for such compliance by the
Fund.
5. Instructions. Unless otherwise provided in this Agreement or
by resolution of the Governing Board which has been submitted to PNC Bank, PNC
Bank shall act only upon Oral and Written Instructions. PNC Bank shall be
entitled to rely upon any Oral and Written Instructions. PNC Bank may assume
that any Oral or Written Instructions received hereunder are not in any way
inconsistent with the provisions of organizational documents of the Fund or of
any vote, resolution or proceeding of the Fund's Governing Board or any
committee thereof or of the Fund's shareholders.
-4-
<PAGE> 5
The Fund agrees to forward to PNC Bank Written Instructions confirming
Oral Instructions so that PNC Bank receives the Written Instructions by the
close of business on the same day that such Oral Instructions are received. The
fact that such confirming Written Instructions are not received by PNC Bank
shall in no way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions.
The Fund further agrees that PNC Bank shall incur no liability to the
Fund in acting upon Oral or Written Instructions.
6. Right to Receive Advice.
(a) Advice of the Fund. If PNC Bank is in doubt as to any
action it should or should not take, PNC Bank may request Oral or Written
Instructions from the Fund.
(b) Advice of Counsel. If PNC Bank shall be in doubt as to any
questions of law pertaining to any action it should or should not take, PNC Bank
may request advice at its own cost from such counsel of its own choosing (who
may be counsel for the Fund or PNC Bank, at the option of PNC Bank).
(c) Conflicting Advice. In the event of a conflict between Oral
or Written Instructions PNC Bank receives from the Fund, and the written advice
it receives from counsel, PNC Bank shall be entitled to rely upon and follow
such advice of counsel after notice to the Fund.
(d) Protection of PNC Bank. PNC Bank shall be protected in any
action it takes or does not take in reliance
-5-
<PAGE> 6
upon Oral or Written Instructions it receives from the Fund or written advice of
counsel.
Nothing in this paragraph shall be construed so as to impose an
obligation upon PNC Bank (i) to seek Oral or Written Instructions, or (ii) to
act in accordance with Oral or Written Instructions unless, under the terms of
other provisions of this Agreement, the same is a condition of PNC Bank's
properly taking or not taking such action.
Nothing in this subsection shall excuse PNC Bank when an action or
omission on the part of PNC Bank constitutes willful misfeasance, bad faith,
negligence or reckless disregard by PNC Bank of any duties or obligations under
this Agreement.
7. Records. The books and records pertaining to the Fund, which
are in the possession of PNC Bank, shall be the property of the Fund. Such books
and records shall be prepared and maintained as required by the 1940 Act and
other applicable securities laws, rules and regulations and shall, to the extent
practicable, be maintained separately for each Portfolio of the Fund. The Fund,
or the Fund's authorized representatives, shall have access to such books and
records at all times during PNC Bank's normal business hours. Upon the
reasonable request of the Fund, copies of any such books and records shall be
provided by PNC Bank to the Fund or to an authorized representative of the Fund,
at the Fund's expense.
8. Confidentiality. PNC Bank agrees to keep confidential and to treat
as proprietary information of the Fund all records
-6-
<PAGE> 7
of the Fund and information relative to the Fund and its shareholders (past,
present and potential), unless the release of such records or information is
otherwise authorized by the Governing Board. The Fund further agrees that,
should PNC Bank be required to provide such information or records to duly
constituted authorities (who may institute civil or criminal contempt
proceedings for failure to comply), PNC Bank shall not be required to seek the
Fund's consent prior to disclosing such information; provided that PNC Bank
gives the Fund prior written notice of the provision of such information and
records.
9. Cooperation with Accountants. PNC Bank shall cooperate with
the Fund's independent public accountants and shall take all reasonable action
in the performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the expression
of their opinion, as required by the Fund.
10. Disaster Recovery. As soon as reasonably possible, PNC Bank
shall at its expense enter into and shall maintain in effect with appropriate
parties one or more agreements making reasonable provision for emergency use of
electronic data processing equipment to the extent appropriate equipment is
available. In the event of equipment failures, PNC Bank shall, at no additional
expense to the Fund, take reasonable steps to minimize service interruptions but
shall have no liability with respect thereto.
11. Compensation. As compensation for custody services rendered by PNC
Bank during the term of this Agreement, the Fund
-7-
<PAGE> 8
will pay to PNC Bank a fee or fees as may be agreed to in writing from time to
time by the Fund and PNC Bank.
12. Indemnification . The Fund agrees to indemnify and hold
harmless PNC Bank and its nominees from all taxes, charges, expenses,
assessments, claims and liabilities (including, without limitation, liabilities
arising under the Securities and Commodities Laws, and any state and foreign
securities and blue sky laws, and amendments thereto), and expenses, including
(without limitation) reasonable attorneys' fees and disbursements, arising
directly or indirectly from any action which PNC Bank takes or does not take on
the direction of or in reliance on Oral or Written Instructions provided that
neither PNC Bank, nor any of its nominees, shall be indemnified against any
liability to the Fund or to its shareholders (or any expenses incident to such
liability) arising out of PNC Bank's or its nominees' own willful misfeasance,
bad faith, negligence or reckless disregard of its duties and obligations under
this Agreement or PNC Bank's own negligent failure to perform its duties under
this Agreement.
13. Responsibility of PNC Bank. PNC Bank shall be under no duty
to take any action on behalf of the Fund except as specifically set forth herein
or as may be specifically agreed to by PNC Bank, in writing. PNC Bank itself
shall perform all duties specified herein unless the Governing Board has
approved the performance of such duties by an affiliate of PNC Bank,
provided, that PNC Bank shall retain responsibility therefor as
-8-
<PAGE> 9
specified herein. PNC Bank shall be obligated to exercise care and diligence in
the performance of its duties hereunder and, shall be responsible for its own or
its affiliates' and nominees' own willful misfeasance, bad faith, negligence or
reckless disregard of its duties and obligations under this Agreement or PNC
Bank's own negligent failure to perform its duties under this Agreement.
Without limiting the generality of the foregoing or of any other
provision of this Agreement, PNC Bank, in connection with its duties under this
Agreement, shall not be under any duty or obligation to inquire into and shall
not be liable for (a) the validity or invalidity or authority or lack thereof of
any Oral or Written Instruction, notice or other instrument which conforms to
the applicable requirements of this Agreement, and which PNC Bank reasonably
believes to be genuine; or (b) delays or errors or loss of data occurring by
reason of circumstances beyond PNC Bank's control, including acts of civil or
military authority, national emergencies, fire, flood or catastrophe, acts of
God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
Notwithstanding anything in this Agreement to the contrary, PNC Bank
expressly disclaims all responsibility for consequential damages, including but
not limited to any that may result from performance or non-performance of any
duty or obligation whether express or implied in this Agreement and also
expressly disclaims
-9-
<PAGE> 10
any express or implied warranty of products or services provided in connection
with this Agreement.
14. Description of Services.
(a) Delivery of the Property. The Fund will deliver or
arrange for delivery to PNC Bank, all (except as otherwise determined by the
Governing Board) the Property it owns, including cash received as a result of
the distribution of its Shares, during the period that is set forth in this
Agreement. PNC Bank will not be responsible for such Property until actual
receipt.
(b) Receipt and Disbursement of Money. PNC Bank, acting
upon Written Instructions, shall open and maintain separate account(s) in the
Fund's name using all cash received from or for the account of the Fund, subject
to the terms of this Agreement. In addition, upon Written Instructions, PNC Bank
shall open and maintain separate custodial accounts for each separate series,
Portfolio or class of the Fund and shall hold in such account(s) all cash
received from or for the accounts of the Fund specifically designated to each
separate series, Portfolio or class.
PNC Bank shall make cash payments from or for the account of each
Portfolio of the Fund only for:
(i) purchases of securities in the name of the
Portfolios of the Fund or PNC Bank or PNC
Bank's nominee as provided in sub-paragraph
(j) and for which PNC Bank has received a
copy of the broker's or dealer's
confirmation or payee's invoice, as
appropriate;
-10-
<PAGE> 11
(ii) purchase or redemption of Shares of the
Fund delivered to PNC Bank;
(iii) payment of, subject to Written
Instructions, interest, taxes,
administration, accounting, distribution,
advisory, management fees or similar
expenses which are to be borne by the Fund;
(iv) payment to, subject to receipt of Written
Instructions, the Fund's transfer agent, as
agent for the Fund's shareholders, of an
amount equal to the amount of dividends and
distributions stated in the Written
Instructions to be distributed in cash by
the transfer agent to shareholders of the
applicable Portfolio, or, in lieu of paying
the Fund's transfer agent, PNC Bank may
arrange for the direct payment of cash
dividends and distributions to shareholders
in accordance with procedures mutually
agreed upon from time to time by and among
the Fund, PNC Bank and the Fund's transfer
agent;
(v) payments, upon receipt of Written
Instructions, in connection with the
conversion, exchange or surrender of
securities owned or subscribed to by the
Fund and held by or delivered to PNC Bank;
(vi) payments of the amounts of dividends
received with respect to securities sold
short;
(vii) payments made to a sub-custodian pursuant
to provisions in sub-paragraph (c) of this
Paragraph 14; and
(viii) payments, upon receipt of Written
Instructions, for other proper Fund
purposes.
PNC Bank is hereby authorized to endorse and collect all checks, drafts
or other orders for the payment of money received as custodian for the account
of the Fund.
-11-
<PAGE> 12
(c) Receipt and Withdrawal of Securities.
(i) PNC Bank shall hold all securities received
by it for the account of each Portfolio of
the Fund in a separate account that
physically segregates such securities from
those of any other persons, firms or
corporations. All such securities shall be
held or disposed of only upon Written
Instructions of the Fund pursuant to the
terms of this Agreement. PNC Bank shall
have no power or authority to assign,
hypothecate, pledge or otherwise dispose of
any such securities or investment items,
except upon the express terms of this
Agreement and upon Written Instructions,
accompanied by a certified resolution of
the Fund's Governing Board, authorizing the
transaction. In no case may any member of
the Governing Board, or any officer,
employee or agent of the Fund withdraw any
securities.
At PNC Bank's own expense and for its own
convenience, PNC Bank may enter into
subcustodian agreements with other United
States banks or trust companies to perform
duties described in this sub-paragraph (c).
Such bank or trust company shall have an
aggregate capital, surplus and undivided
profits, according to its last published
report, of at least one million dollars
($1,000,000), if it is a subsidiary or
affiliate of PNC Bank, or at least twenty
million dollars ($20,000,000) if such bank
or trust company is not a subsidiary or
affiliate of PNC Bank. In addition, such
bank or trust company must be qualified to
act as custodian and agree to comply with
the relevant provisions of the 1940 Act and
other applicable rules and regulations. Any
such arrangement will not be entered into
without prior written notice to the Fund.
PNC Bank shall remain responsible for the
performance of all of its duties as
described in this Agreement and shall hold
the Fund harmless from its own acts or
omissions, under the standards of care
provided for herein, or the acts and
omissions of any sub-custodian chosen by
-12-
<PAGE> 13
PNC Bank under the terms of this sub-paragraph (c).
(d) Transactions Requiring Instructions. Upon receipt of Oral
or Written Instructions and not otherwise, PNC Bank, directly or through the use
of the Book-Entry System, shall:
(i) deliver any securities held for a Portfolio
of the Fund against the receipt of payment
for the sale of such securities;
(ii) execute and deliver to such persons as may
be designated in such Oral or Written
Instructions, proxies, consents,
authorizations, and any other instruments
whereby the authority of the Fund as owner
of any securities on behalf of a Portfolio
may be exercised;
(iii) deliver any securities held for a Portfolio
of the Fund to the issuer thereof, or its
agent, when such securities are called,
redeemed, retired or otherwise become
payable; provided that, in any such case,
the cash or other consideration is to be
delivered to PNC Bank;
(iv) deliver any securities held for a Portfolio
of the Fund against receipt of other
securities or cash issued or paid in
connection with the liquidation,
reorganization, refinancing, tender offer,
merger, consolidation or recapitalization
of any corporation, or the exercise of any
conversion privilege;
(v) deliver any securities held for a Portfolio
of the Fund to any protective committee,
reorganization committee or other person in
connection with the reorganization,
refinancing, merger, consolidation,
recapitalization or sale of assets of any
corporation, and receive and hold under the
terms of this Agreement such certificates
of deposit, interim receipts or other
instruments or documents as may be issued
to it to evidence such delivery;
(vi) make such transfer or exchanges of the
assets of a Portfolio of the Fund and take
-13-
<PAGE> 14
such other steps as shall be stated in said
Oral or Written Instructions to be for the
purpose of effectuating a duly authorized
plan of liquidation, reorganization,
merger, consolidation or recapitalization
of the Fund;
(vii) release securities belonging to a Portfolio
of the Fund to any bank or trust company
for the purpose of a pledge or
hypothecation to secure any loan incurred
by a Portfolio of the Fund; provided,
however, that securities shall be released
only upon payment to PNC Bank of the monies
borrowed, except that in cases where
additional collateral is required to secure
a borrowing already made subject to proper
prior authorization, further securities may
be released for that purpose; and repay
such loan upon redelivery to it of the
securities pledged or hypothecated therefor
and upon surrender of the note or notes
evidencing the loan;
(viii) release and deliver securities owned by a
Portfolio of the Fund in connection with
any repurchase agreement entered into on
behalf of a Portfolio of the Fund, but only
on receipt of payment therefor; and pay out
moneys of a Portfolio of the Fund in
connection with such repurchase agreements,
but only upon the delivery of the
securities;
(ix) release and deliver or exchange securities
owned by a Portfolio of the Fund in
connection with any conversion of such
securities, pursuant to their terms, into
other securities;
(x) release and deliver securities owned by a
Portfolio of the Fund for the purpose of
redeeming in kind shares of the Fund upon
delivery thereof to PNC Bank; and
(xi) release and deliver or exchange securities
owned by a Portfolio of the Fund for other
corporate purposes.
(e) Use of Book-Entry System. The Fund shall deliver to PNC
Bank certified resolutions of the Fund's Governing Board
-14-
<PAGE> 15
approving, authorizing and instructing PNC Bank on a continuous and on-going
basis, to deposit in the Book-Entry System all securities belonging to each
Portfolio of the Fund eligible for deposit therein and to utilize the Book-Entry
System to the extent possible in connection with settlements of purchases and
sales of securities by each Portfolio of the Fund, and deliveries and returns of
securities loaned, subject to repurchase agreements or used as collateral in
connection with borrowings. PNC Bank shall continue to perform such duties until
it receives Written or Oral Instructions authorizing contrary actions(s).
To administer the Book-Entry System properly, the following provisions
shall apply:
(i) With respect to securities of the Fund
which are maintained in the Book-Entry
System, established pursuant to this
sub-paragraph (e) hereof, the records of
PNC Bank shall identify by Book-Entry or
otherwise those securities belonging to the
applicable Portfolio of the Fund. PNC Bank
shall furnish the Fund a detailed statement
of the Property held for each Portfolio of
the Fund under this Agreement at least
monthly and from time to time and upon
written request.
(ii) Securities and any cash of the Fund
deposited in the Book-Entry System will at
all times be segregated from any assets and
cash controlled by PNC Bank in other than a
fiduciary or custodian capacity but may be
commingled with other assets held in such
capacities. PNC Bank and its sub-custodian,
if any, will pay out money only upon
receipt of securities and will deliver
securities only upon the receipt of money.
(iii) All books and records maintained by PNC
Bank which relate to the Fund's
participation in the Book-Entry System will
at all times during PNC Bank's regular
-15-
<PAGE> 16
business hours be open to the inspection of
the Fund's duly authorized employees or
agents, and the Fund will be furnished with
all information in respect of the services
rendered to it as it may require.
(iv) PNC Bank will provide the Fund with copies
of any report obtained by PNC Bank on the
system of internal accounting control of
the Book-Entry System promptly after
receipt of such a report by PNC Bank.
PNC Bank will also provide the Fund with such reports on its own system
of internal control as the Fund may reasonably request from time to time.
(f) Registration of Securities. All Securities held for
the Fund which are issued or issuable only in bearer form, except such
securities held in the Book-Entry System, shall be held by PNC Bank in bearer
form; all other securities held for the Fund may be registered in the name of
the Fund; PNC Bank; the Book-Entry System; a sub-custodian; or any duly
appointed nominee(s) of the Fund, PNC Bank, the Book-Entry System or any
sub-custodian. The Fund reserves the right to instruct PNC Bank as to the method
of registration and safekeeping of the securities of the Fund. The Fund agrees
to furnish to PNC Bank appropriate instruments to enable PNC Bank to hold or
deliver in proper form for transfer, or to register in the name of its
registered nominee or the Book-Entry System, any securities which it may hold
for the account of the Fund and which may from time to time be registered in the
name of the Fund. PNC Bank shall hold all such securities which are not held in
the Book-Entry System in a separate account for each Portfolio of the Fund in
-16-
<PAGE> 17
the name of the applicable Portfolio of the Fund physically segregated at all
times from those of any other person or persons.
(g) Voting and Other Action. Neither PNC Bank nor its nominee
shall vote any of the securities held pursuant to this Agreement by or for the
account of a Portfolio of the Fund, except in accordance with Written
Instructions. PNC Bank, directly or through the use of the Book-Entry System,
shall execute in blank and promptly deliver all notices, proxies, and proxy
soliciting materials to the registered holder of such securities. If the
registered holder is not a Portfolio of the Fund then Written or Oral
Instructions must designate the person(s) who owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, PNC Bank is authorized to take the following
actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account
of each Portfolio of the Fund, all
income, dividends, distributions,
coupons, option premiums, other
payments and similar items, included
or to be included in the Property,
and, in addition, promptly advise the
Fund of such receipt and credit such
income, as collected, to the
applicable Portfolio's custodian
account;
(B) endorse and deposit for collection,
in the name of the applicable
Portfolio of the Fund, checks,
drafts, or other orders for the
payment of money on the same day as
received;
-17-
<PAGE> 18
(C) receive and hold for the account of
each Portfolio of the Fund all
securities received as a distribution
on the Portfolio securities as a
result of a stock dividend, share
split-up or reorganization,
recapitalization, readjustment or
other rearrangement or distribution
of rights or similar securities
issued with respect to any portfolio
securities belonging to the Portfolio
held by PNC Bank hereunder;
(D) present for payment and collect the
amount payable upon all securities
which may mature or be called,
redeemed, or retired, or otherwise
become payable on the date such
securities become payable; and
(E) take any action which may be
necessary and proper in connection
with the collection and receipt of
such income and other payments and
the endorsement for collection of
checks, drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
(A) PNC Bank is authorized to deliver or
cause to be delivered Property
against payment or other
consideration or written receipt
therefor in the following cases:
(1) for examination by a broker or dealer
selling for the account of a
Portfolio of the Fund in accordance
with street delivery custom;
(2) for the exchange of interim receipts
or temporary securities for
definitive securities; and
(3) for transfer of securities into the
name of a Portfolio of the Fund or
PNC Bank or nominee of either, or for
exchange of securities for a
different number of bonds,
certificates, or other evidence,
representing the same aggregate face
amount or number of units bearing the
same interest rate, maturity date and
call provisions, if
-18-
<PAGE> 19
any; provided that, in any such case,
the new securities are to be
delivered to PNC Bank.
(B) Unless and until PNC Bank receives
Oral or Written Instructions to the
contrary, PNC Bank shall:
(1) pay all income items held by it which
call for payment upon presentation
and hold the cash received by it upon
such payment for the account of the
applicable Portfolio of the Fund;
(2) collect interest and cash dividends
received, with notice to the Fund, to
the account of the applicable
Portfolio of the Fund;
(3) hold for the account of the
applicable Portfolio of the Fund all
stock dividends, rights and similar
securities issued with respect to any
securities held by PNC Bank; and
(4) execute as agent on behalf of the
applicable Portfolio of the Fund all
necessary ownership certificates
required by the Internal Revenue Code
or the Income Tax Regulations of the
United States Treasury Department or
under the laws of any State now or
hereafter in effect, inserting the
Portfolio's name on such certificate
as the owner of the securities
covered thereby, to the extent it may
lawfully do so.
(i) Segregated Accounts.
(i) PNC Bank shall upon receipt of Written or Oral
Instructions establish and maintain a
segregated accounts(s) on its records for and
on behalf of each Portfolio of the Fund. Such
account(s) may be used to transfer cash and
securities, including securities in the
Book-Entry System:
(A) for the purposes of compliance by the
Fund with the procedures required by
a securities or option exchange,
providing such procedures comply with
the 1940 Act
-19-
<PAGE> 20
and any regulations of the SEC
relating to the maintenance of
segregated accounts by registered
investment companies; and
(B) Upon receipt of Written Instructions,
for other proper corporate purposes.
(ii) PNC Bank shall arrange for the establishment
of IRA custodian accounts for such
shareholders holding shares through IRA
accounts, in accordance with the Prospectus,
the Internal Revenue Code (including
regulations), and with such other procedures
as are mutually agreed upon from time to time
by and among the Fund, PNC Bank and the Fund's
transfer agent.
(iii) PNC Bank may enter into separate custodial
agreements with various futures commission
merchants ("FCMs") that the Fund uses (each an
"FCM Agreement"), pursuant to which the Fund's
margin deposits in any transactions involving
futures contracts and options on futures
contracts will be held by PNC Bank in accounts
(each an "FCM Account") subject to the
disposition by the FCM involved in such
contracts in accordance with the customer
contact between FCM and the Fund Contract"),
SEC rules governing such segregated accounts,
CFTC rules and the rules of the applicable
commodities exchange. Such FCM Agreements
shall only be entered into upon receipt of
Written Instructions from the Fund which state
that (i) a customer agreement between the FCM
and the Fund has been entered into; and (ii)
the Fund is in compliance with all the rules
and regulations of the CFTC. Except as
otherwise determined by the Governing Board,
transfers of initial margin shall be made into
an FCM Account only upon Written Instructions;
transfers of premium and variation margin may
be made into an FCM Account pursuant to Oral
Instructions. Transfers of funds from an FCM
Account to the FCM for which PNC Bank holds
such an account may only occur upon
certification by the FCM to PNC Bank that
pursuant to the FCM Agreement and the FCM
Contract, all conditions precedent to its
right to give
-20-
<PAGE> 21
PNC Bank such instruction have been satisfied.
(j) Purchases of Securities. PNC Bank shall settle purchased
securities upon receipt of Oral or Written Instructions that specify:
(i) the name of the issuer and the title of the
securities, including CUSIP number if
applicable;
(ii) the number of shares or the principal amount
purchased and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the name of the person from whom or the broker
through whom the purchase was made; and
(vii) the Portfolio of the Fund to which such
purchase applies. PNC Bank shall upon receipt
of securities purchased by or for a Portfolio
of the Fund pay out of the moneys held for the
account of such Portfolio the total amount
payable to the person from whom or the broker
through whom the purchase was made, provided
that the same conforms to the total amount
payable as set forth in such Oral or Written
Instructions.
(k) Sales of Securities. PNC Bank shall sell securities upon
receipt of Oral Instructions from the Fund that specify:
(i) the name of the issuer and the title of the
security, including CUSIP number if
applicable;
(ii) the number of shares or principal amount sold,
and accrued interest, if any;
-21-
<PAGE> 22
(iii) the date of trade, settlement and sale;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such
sale;
(vi) the name of the broker through whom or the
person to whom the sale was made;
(vii) the location to which the security must be
delivered and delivery deadline, if any; and
(viii) the Portfolio of the Fund to which such sale
applies.
PNC Bank shall deliver the securities upon receipt of the total
amount payable to the Fund upon such sale, provided that the total amount
payable is the same as was set forth in the Oral or Written Instructions.
Subject to the foregoing, PNC Bank may accept payment in such form as shall be
satisfactory to it, and may deliver securities and arrange for payment in
accordance with the customs prevailing among dealers in securities.
(l) Reports.
(i) PNC Bank shall furnish the Fund the following
reports:
(A) such periodic and special reports as
the Fund may reasonably request;
(B) a monthly statement summarizing all
transactions and entries for the
account of each Portfolio of the
Fund, listing the portfolio
securities belonging to each
Portfolio of the Fund with the
adjusted average cost of each issue
and the market value at the end of
such month, and stating the cash
account of each Portfolio of the Fund
including disbursement;
(C) the reports to be furnished to the
Fund pursuant to Rule 17f-4; and
-22-
<PAGE> 23
(D) such other information as may be
agreed upon from time to time between
the Fund and PNC Bank.
(ii) PNC Bank shall transmit promptly to the Fund
any proxy statement, proxy material, notice of
a call or conversion or similar communication
received by it as custodian of the Property.
PNC Bank shall be under no other obligation to
inform the Fund as to such actions or events.
(m) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not the safekeeping
thereof upon receipt by PNC Bank) shall be at the sole risk of the Fund. If
payment is not received by PNC Bank within a reasonable time after proper
demands have been made, PNC Bank shall notify the Fund in writing, including
copies of all demand letters, any written responses, memoranda of all oral
responses and to telephonic demands thereto, and await instructions from the
Fund. PNC Bank shall not be obliged to take legal action for collection unless
and until reasonably indemnified to its satisfaction. PNC Bank shall also notify
the Fund as soon as reasonably practicable whenever income due on securities is
not collected in due course.
15. Duration and Termination. This Agreement shall continue
until terminated by the Fund or by PNC Bank on one hundred eighty (180) days'
prior written notice to the other party. In the event this Agreement is
terminated (pending appointment of a successor to PNC Bank or vote of the
shareholders of the Fund to dissolve or to function without a custodian of its
cash, securities or other property), PNC Bank
-23-
<PAGE> 24
shall not deliver cash, securities or other property of the Fund to the Fund. It
may deliver them to a bank or trust company of PNC Bank's own selection, having
an aggregate capital, surplus and undivided profits, as shown by its last
published report, of not less than twenty million dollars ($20,000,000), as a
custodian for the Fund to be held under terms similar to those of this
Agreement. PNC Bank shall not be required to make any such delivery or payment
until full payment shall have been made to PNC Bank of all of its fees,
compensation, costs and expenses.
16. Notices. All notices and other communications, including
Written Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notice shall be addressed (a) if to PNC Bank
at PNC Bank's address, Airport Business Center, International Court 2, 200
Stevens Drive, Lester, Pennsylvania 19113, marked for the attention of the
Custodian Services Department (or its successor) (b) if to the Fund, at the
address of the Fund at 125 W. 55th Street, New York, NY 10019 with copies to
Thomas M. Collins, Esq., Chairman, McDermott & Trayner, 225 South Lake Avenue,
Suite 300, Pasadena, CA 91101- 3005 and to W. Bruce McConnel, III, Esq.,
Secretary, Drinker Biddle & Reath, Philadelphia National Bank Building, 1345
Chestnut Street, Philadelphia, PA 19107; or (c) if to neither of the foregoing,
at such other address as shall have been notified to the sender of any such
Notice or other communication. If notice is sent by confirming telegram, cable,
telex or facsimile sending device, it shall be deemed to have
-24-
<PAGE> 25
been given immediately. If notice is sent by first-class mail, it shall be
deemed to have been given five days after it has been mailed. If notice is sent
by messenger, it shall be deemed to have been given on the day it is delivered.
17. Amendments. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
18. Assignment. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by the Fund
without the written consent of PNC Bank, or by PNC Bank without the written
consent of the Fund, authorized or approved by a resolution of the Fund's
Governing Board.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. No Limitation. Nothing contained in this Agreement shall be
construed in any way so as to limit any guaranty or obligations of any signing
party, as set forth in the letter agreement dated July 21, 1993 by and among
PFPC, Inc., Bank of
-25-
<PAGE> 26
America NTSA, Seattle-First National Bank and Concord Financial Group, Inc.
22. Miscellaneous. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the parties
may embody in one or more separate documents their agreement, if any, with
respect to delegated duties and/or Oral Instructions.
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
This Agreement shall be deemed to be a contract governed by
Pennsylvania law. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected
-26-
<PAGE> 27
thereby. This Agreement shall be binding and shall inure to the benefit of the
parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the
day and year first above written.
PNC BANK, NATIONAL ASSOCIATION
By: /s/ John Foster
--------------------------
Title: V.P.
PACIFIC HORIZON FUNDS, INC.
By: /s/ Richard Fabietti
--------------------------
Title: Treasurer
-27-
<PAGE> 28
APPENDIX A
Pacific Horizon Blue Chip Fund
Pacific Horizon Flexible Bond Fund
Pacific Horizon Asset Allocation Fund
Pacific Horizon National Municipal Bond Fund
Pacific Horizon Corporate Bond Fund
Pacific Horizon Utilities Fund
Pacific Horizon Growth and Income Fund
Pacific Horizon International Bond Fund
Pacific Horizon International Equity Fund
Pacific Horizon Short-Term Government Fund
-28-
<PAGE> 29
AUTHORIZED PERSONS
APPENDIX
Name (Typed) Signature
- ----------------------- ----------------------
- ----------------------- ----------------------
- ----------------------- ----------------------
- ----------------------- ----------------------
- ----------------------- ----------------------
- ----------------------- ----------------------
-29-
<PAGE> 30
January 10, 1994
PACIFIC HORIZON FUNDS, INC.
Re: Custodian Services Fees
Dear Sir/Madam:
This letter constitutes our agreement with respect to
compensation to be paid to PNC Bank, National Association ("PNC Bank") under the
terms of a Custodian Services Agreement dated January 10, 1994 between PNC Bank
and Pacific Horizon Funds, Inc. (the "Fund") as amended from time to time (the
"Agreement") relating to the portfolios of the Fund listed on Exhibit A attached
hereto (the "Portfolios"). Pursuant to paragraph 11 of the Agreement, the Fund
shall pay PNC Bank a monthly fee for each Portfolio of $100 for services to each
Portfolio including, but not limited to, recordkeeping and check issuance. The
Fund agrees to reimburse PNC Bank for its out-of-pocket expenses incurred on
behalf of the Portfolios, including, but not limited to postage, telephone,
telex, federal express, and outside independent pricing service charges,
confirmation fees, federal reserve wire fees and interest claims.
If the foregoing accurately sets forth our agreement and you
intend to be legally bound thereby, please execute a copy of this letter and
return it to us.
Very truly yours,
PNC BANK, NATIONAL ASSOCIATION
By: /s/ John Foster
--------------------------
Title: V.P.
Accepted:
PACIFIC HORIZON FUNDS, INC.
By: /s/ Richard Fabietti
-----------------------
Title: Treasurer
<PAGE> 31
EXHIBIT A
Portfolios
PACIFIC HORIZON BLUE CHIP FUND
PACIFIC HORIZON FLEXIBLE BOND FUND
PACIFIC HORIZON ASSET ALLOCATION FUND
PACIFIC HORIZON NATIONAL MUNICIPAL BOND FUND
PACIFIC HORIZON CORPORATE BOND FUND
PACIFIC HORIZON UTILITIES FUND
PACIFIC HORIZON GROWTH AND INCOME FUND
PACIFIC HORIZON INTERNATIONAL BOND FUND
PACIFIC HORIZON INTERNATIONAL EQUITY FUND
PACIFIC HORIZON SHORT-TERM GOVERNMENT FUND
And any other portfolios of the Fund, whether now existing or
hereafter created, for which the Fund has approved PNC Bank to provide custodian
services and for which PNC Bank provides custodian services.
<PAGE> 1
EXHIBIT 8(E)
SUBCUSTODIAN AGREEMENT
----------------------
Agreement made as of this 21st day of March, 1984, among SECURITY
PACIFIC NATIONAL BANK, a corporation organized and existing under the laws of
the United States, having Its principal office and place of business at 333
South Hope Street, Los Angeles, California (hereinafter called the
"Subcustodian"), THE BANK OF NEW YORK, a New York corporation authorized to do a
banking business, having its principal office and place of business at 48 Wall
Street, New York, New York 10015 (hereinafter called the "Custodian"), and
PACIFIC HORIZON FUNDS, INC., a corporation organized and existing under the laws
of the State of Maryland, having its principal office and place of business at
3550 Wilshire Blvd. (Suite 932), Los Angeles, California 90010 (hereinafter
called the "Fund").
W I T N E S S E T H:
that for and in consideration of the mutual promises hereinafter set forth the
Fund, the Custodian and the Subcustodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. "Authorized Person" shall be deemed to include the Treasurer, the
Controller or any other person, whether or not any such person is an Officer or
employee of the Fund, duly authorized by the Board of Directors of the Fund to
give Oral Instructions and Written Instructions on behalf of the Fund and listed
in the Certificate annexed hereto as Appendix A or such other Certificate as may
be received by the Subcustodian from time to time.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its
successor or successors and its nominee or nominees.
3. "Call Option" shall mean an exchange traded option entitling
the holder, upon timely exercise and payment of the
<PAGE> 2
exercise price, as specified therein, to purchase from the writer thereof the
specified underlying Securities (excluding Financial Futures Contracts and Stock
Index Futures Contracts).
4. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Subcustodian which is actually received by the Subcustodian and signed on
behalf of the Fund by any two Officers of the Fund.
5. "Covered Call Option" shall mean an exchange traded option entitling
the holder, upon timely exercise and payment of the exercise price, as specified
therein, to purchase from the writer thereof the specified underlying Securities
(excluding Financial Futures Contracts and Stock Index Futures Contracts) which
are owned by the writer thereof and subject to appropriate restrictions.
6. "Clearing Member" shall mean a registered broker-dealer which
is a clearing member under the rules of O.C.C. and a member of a national
securities exchange qualified to act as a custodian for an Investment company,
or any broker-dealer reasonably believed by the Subcustodian to be such a
clearing member.
7. "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees, provided the Subcustodian
has received a certified copy of a resolution of the Fund's Board of Directors
specifically approving deposits in DTC. The term "Depository" shall further mean
and include any other person authorized to act as a depository under the
Investment Company Act of 1940, its successor or successors and its nominee or
nominees, specifically identified in a certified copy of a resolution of the
Fund's Board of Directors specifically approving deposits therein by the
Subcustodian.
8. "Financial Futures Contract" shall mean the firm commitment
to buy or sell fixed income securities including U.S. Treasury Bills, U.S.
Treasury Notes, U.S. Treasury Bonds, Government National Mortgage Association
modified pass-through mortgage-backed securities and commercial paper, during a
specified month at an agreed up price.
9. "Futures Contract" shall mean a Financial Futures Contract
and/or a Stock Index Futures Contract.
10. "Margin Account" shall mean a segregated account in the name of a
broker, dealer, or futures commission merchant or in the name of the Fund for
the benefit of a broker, dealer, or futures commission merchant, as the case may
be, separate and distinct from the custody account, in which certain Securities
-2-
<PAGE> 3
and/or money of the Fund shall be deposited and withdrawn from time to time in
connection with the purchase or sale by the Fund of Futures Contracts.
Securities held in the Book-Entry System or the Depository shall be deemed to
have been deposited in, or withdrawn from, a Margin Account upon the
Subcustodian's effecting an appropriate entry in its books and records.
11. "Money Market Security" shall be deemed to include, without
limitation, certain Reverse Repurchase Agreements, debt obligations issued or
guaranteed as to interest and principal by the government of the United States
or agencies or instrumentalities thereof, any tax, bond or revenue anticipation
note issued by any state or municipal government or public authority, commercial
paper, certificates of deposit and bankers' acceptances, repurchase and reverse
repurchase agreements with respect to the same and bank time deposits, where the
purchase and sale of such securities normally requires settlement in federal
funds on the same day as such purchase or sale.
12. "O.C.C." shall mean the Options Clearing Corporation, a clearing
agency registered under Section 17A of the Securities Exchange Act of 1931, its
successor or successors and its nominee or nominees, provided the Subcustodian
has received a certified copy of a resolution of the Fund's Board of Directors
with respect to Clearing Member confirmations described in the last sentence of
paragraph 1 of Article III hereof.
13. "Officers" shall be deemed to include the President, any Vice
President, the Secretary, the Treasurer, the Controller, any Assistant
Secretary, any Assistant Treasurer or any other person or persons, whether or
not any such other person is an officer of the Fund, duly authorized by the
Board of Directors of the Fund to execute any Certificate, instruction, notice
or other instrument on behalf of the Fund and listed in the Certificate annexed
hereto as Appendix B or such other Certificate as may be received by the
Subcustodian from time to time.
14. "Option" shall mean a Call Option, Covered Call Option
and/or a Put Option.
15. "Put Option" shall mean an exchange traded option entitling the
holder, upon timely exercise and tender of the specified underlying Securities
(excluding Financial Futures Contracts and Stock Index Futures Contracts), to
sell such securities to the writer thereof for the exercise price.
16. "Oral Instructions" shall mean verbal instructions actually
received by the Subcustodian from an Authorized Person or from a person
reasonably believed by the Subcustodian to be an Authorized Person.
-3-
<PAGE> 4
17. "Reverse Repurchase Agreement" shall mean an agreement
pursuant to which the Fund sells Securities and agrees to repurchase such
Securities at a described or specified date and price.
18. "Security" shall be deemed to include, without limitation,
Money Market Securities, Call Options, Covered Call Options, Put Options,
Stock Index Futures Contracts, Financial Futures Contracts, Reverse Repurchase
Agreements, common stocks and other securities having characteristics similar to
common stocks, preferred stocks., debt obligations issued by state or municipal
governments and by public authorities, (including, without limitation, general
obligation bonds, revenue bonds and industrial bonds and industrial development
bonds), bonds, debentures, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments representing rights to
receive, purchase, sell or subscribe for the same, or evidencing or representing
any other rights or interest therein, or any property or assets.
19. "Senior Security Account" shall mean an account maintained and
specifically allocated to a Series under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the Custody Account in
which certain Securities and/or other assets of the Fund specifically allocated
to such Series shall be deposited and withdrawn from time to time in accordance
with Certificates received by the Subcustodian in connection with such
transactions as the Fund may from time to time determine.
20. "Series" shall mean the various portfolios of the Fund as
described from time to time in the Fund's current and effective prospectus.
21. "Shares" shall mean shares of capital stock of the Fund, each
of which is allocated to a particular Series.
22. "Stock Index Futures Contract" shall mean a bilateral
agreement pursuant to which the parties agree to take or make delivery of an
amount of cash equal to a specified dollar amount times the difference between
the value of a particular stock index at the close of the last business day of
the contract and the price at which the futures contract is originally struck.
23. "Written Instructions" shall mean written communications
actually received by the Subcustodian from an Authorized Person or from a
person reasonably believed by the Subcustodian to be an Authorized Person by
telex or any other such system whereby the receiver of such communications is
able to verify by codes or otherwise with a reasonable degree of certainty the
authenticity of the sender of such communication.
-4-
<PAGE> 5
ARTICLE II
APPOINTMENT OF SUBCUSTODIAN
1. The Fund and the Custodian hereby constitute and appoint the
Subcustodian as custodian of such Securities and money owned by the Fund as may
from time to time be received by the Subcustodian in connection with sales of
Shares, delivered to the Subcustodian by the Custodian, received by the
Subcustodian in connection with the purchase or sale of Securities by the Fund,
or received by the Subcustodian with respect to Securities of the Fund held
hereunder by the Subcustodian.
2. The Subcustodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as hereinafter
set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this Article,
the Fund will deliver or cause to be delivered to the Subcustodian all
Securities and all moneys owned by it, other than moneys or Securities held by
the Custodian any sub-custodian or co-custodian appointed in accordance with
this Agreement, at any time during the period of this Agreement, and shall
specify with respect to Securities and money delivered to the Subcustodian the
Series to which the same are specifically allocated. The Subcustodian shall
segregate, keep and maintain the assets of the Series separate and apart. The
Subcustodian will not be responsible for any Securities and moneys not actually
received by it. The Subcustodian will be entitled to reverse any credits made on
the Fund's behalf where such credits have been previously made and moneys are
not finally collected. The Fund shall deliver to the Subcustodian a certified
resolution of the Board of Directors of the Fund approving, authorizing and
instructing the Subcustodian on a continuous and on-going basis to deposit in
the Book-Entry System all Securities eligible for deposit therein, regardless of
the Series to which the same are specifically allocated, and to utilize the
Book-Entry System to the extent possible in connection with its performance
hereunder, including, without limitation, in connection with settlements of
purchases and sales of Securities, loans of Securities, and deliveries and
returns of Securities collateral, regardless of the Series to which the same are
specifically allocated. Prior to a deposit of Securities specifically allocated
to a Series in the Depository the Fund shall deliver to the Subcustodian a
certified resolution of the Board of Directors of
-5-
<PAGE> 6
the Fund approving, authorizing and instructing the Subcustodian on a continuous
and on-going basis until instructed to the contrary by a Certificate actually
received by the Subcustodian to deposit in the Depository all Securities
specifically allocated to such Series and eligible for deposit therein and to
utilize the Depository to the extent possible with respect to such Securities in
connection with its performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of Securities collateral. Securities and
moneys specifically allocated to a Series deposited in either the Book-Entry
System or the Depository will be represented in accounts which include only
assets held by the Subcustodian for customers, including, but not limited to,
accounts in which the Subcustodian acts in a fiduciary or representative
capacity and shall be specifically allocated on the Subcustodian's books to the
separate account for such Series. Prior to the Subcustodian's accepting,
utilizing, and acting with respect to Clearing Member confirmations for Options
and transactions in Options for a Series as provided in this Agreement, the
Subcustodian shall have received from the Fund a certified resolution of the
Board of Directors of the Fund approving, authorizing and instructing the
Subcustodian on a continuous and on-going basis, until instructed to the
contrary by a Certificate actually received by the Subcustodian, to accept,
utilize and act in accordance with such confirmations as provided in this
Agreement with respect to such Series.
2. The Subcustodian shall establish and maintain separate
accounts, in the name of each Series, and shall credit to the separate
account for each Series all moneys received by it for the account of the Fund
with respect to such Series. Money credited to a separate account for a Series
shall be disbursed by the Subcustodian only:
(a) In payment for Securities purchased for such
Series, as provided in Article IV hereof;
(b) In payment for Options purchased for such Series,
as provided in Article V hereof;
(c) In connection with Futures Contracts for such
Series, as provided in Article VI hereof;
(d) For deposit in a Margin Account with respect to
such Series, as provided in Article VI hereof;
(e) In connection with terminations of Reverse
Repurchase Agreements by such Series, as provided in Article VII
hereof;
-6-
<PAGE> 7
(f) In payment of dividends or distributions with
respect to Shares of such Series, as provided In Article VIII
hereof;
(g) In payment of original issue or other taxes with
respect to Shares of such Series, as provided in Article IX
hereof;
(h) In payment for Shares of such Series redeemed by
it, as provided in Article IX hereof;
(i) Pursuant to Certificates setting forth the name and
address of the person to whom the payment is to be made, the Series account from
which payment is to be made, and the purpose for which payment is to be made; or
(j) In payment of the fees and in reimbursement of the
expenses and liabilities of the Subcustodian attributable to such
Series, as provided in Article XII hereof.
3. Promptly after the close of business on each day the Subcustodian
shall furnish the Fund and the Custodian with confirmations and a summary, on a
per Series basis, of all transfers to or from the account of the Fund hereunder
during said day. Where Securities are transferred to the account of the Fund
hereunder for a Series, the Subcustodian shall also by book entry or otherwise
identify as belonging to such Series a quantity of Securities in a fungible bulk
of Securities registered in the name of the Subcustodian (or its nominee) or
shown on the Subcustodian's account on the books of the Book-Entry System or the
Depository or O.C.C. At least monthly and from time to time, the Subcustodian
shall furnish the Fund with a detailed statement on a per Series basis of the
Securities and moneys held by the Subcustodian for the Fund.
4. Except as otherwise provided in paragraph 7 of this Article, all
Securities held by the Subcustodian hereunder, which are issued or issuable only
in bearer form, except such Securities as are held in the Book-Entry System,
shall be held by the Subcustodian in that form; all other Securities held
hereunder may be registered in the name of the Fund, in the name of any duly
appointed registered nominee of the Subcustodian as the Subcustodian may from
time to time determine, or in the name of the Book-Entry System or the
Depository or their successor or successors, or their nominee or nominees. The
Fund agrees to furnish to the Subcustodian appropriate instruments to enable the
Subcustodian to hold or deliver in proper form for transfer, or to register in
the name of its registered nominee or in the name of the Book-Entry System or
the Depository any Securities which it may hold hereunder and which may from
time to time be registered in the name of the Fund. The Subcustodian shall hold
all such Securities which are specifically allocated to a Series
-7-
<PAGE> 8
not held in the Book-Entry System or in the Depository in a separate account in
the name of such Series physically segregated at all times from those of any
other person or persons.
5. Unless otherwise instructed to the contrary by a Certificate,
the Subcustodian by itself, or through the use of the Book-Entry System or the
Depository with respect to Securities held hereunder and therein deposited,
shall with respect to all Securities held by the Subcustodian hereunder:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount payable
upon all Securities which may mature or be called redeemed, or retired, or
otherwise become payable;
(c) Surrender Securities in temporary form for
definitive Securities;
(d) Execute, as Subcustodian, any necessary declarations or
certificates of ownership under the Federal Income Tax Laws or the laws or
regulations of any other taxing authority now or hereafter in effect; and
(e) Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of a
Series all rights and similar securities issued with respect to any Securities
held by the Subcustodian for such Series hereunder.
6. Upon receipt of a Certificate and not otherwise, the
Subcustodian, directly or through the use of the Book-Entry System or the
Depository shall:
(a) Execute and deliver to such persons as may be designated
in such Certificate proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities held by the
Subcustodian hereunder for the Series specified in such Certificate may be
exercised;
(b) Deliver any Securities held by the Subcustodian hereunder
for the Series specified in such Certificate in exchange for other Securities or
cash issued or paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege and receive and hold hereunder
specifically allocated to such Series any cash or other Securities received in
exchange;
(c) Deliver any Securities held by the Subcustodian
hereunder for the Series specified in such Certificate to any protective
committee, reorganization committee or other person in
-8-
<PAGE> 9
connection with the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and receive and hold
hereunder specifically allocated to such Series such certificates of deposit,
interim receipts or other instruments or documents as may be issued to it to
evidence such delivery; and
(d) Make such transfers or exchanges of the assets of the
Series specified in such Certificate and take such other steps as shall be
stated in such Certificate to be for the purpose of effectuating any duly
authorized plan of liquidation, reorganization, merger, consolidation or
recapitalization of the Fund.
7. Notwithstanding any provision elsewhere contained herein, the
Subcustodian shall not be required to obtain possession of any Futures Contract
or of any Option prior to its receipt of a Certificate stating with respect to
the type of Security specified therein that certificates for such Securities are
available. The Fund shall promptly deliver to the Subcustodian such a
Certificate with respect to each type of Futures Contract or Option for which
certificates are available no later than the date, if any, on which Certificates
become available. Prior to its receipt of such a Certificate, the Subcustodian
shall in connection with purchases and sales of Future Contracts, make payment
of amounts specified in Certificates received by the Custodian in connection
with such purchases and sales upon its receiving from a broker, dealer, or
futures commission merchant a statement or confirmation reasonably believed by
the Subcustodian to be in the form customarily used by brokers, dealers, or
future commission merchants with respect to such Futures Contracts confirming
that such Futures Contract is held by such broker, dealer or futures commission
merchant, in book-entry form or otherwise, in the name of the Subcustodian (or
any nominee of the Subcustodian) as custodian for the Fund. Prior to its receipt
of such a Certificate the Subcustodian shall accept, utilize, and act with
respect to Clearing Member confirmations, reasonably believed by the
Subcustodian to be in the form customarily used by Clearing Members, for Options
and transactions in Options for a Series as provided in this Agreement, provided
the Subcustodian has, received a certified resolution of the Board of Directors
of the Fund with respect to Clearing Member confirmations described in paragraph
1 of this Article which specifies such Series, and such resolution has not been
withdrawn by a Certificate. After the delivery to the Subcustodian of a
Certificate stating certificates are available for a specified type of Futures
Contract or Option, the provisions of this Agreement instructing the
Subcustodian to act upon receipt of a broker, dealer, or futures commission
merchant statement or confirmation shall cease to be of any further force and
effect with respect to transactions in the kind of Futures Contract or Options
specified
-9-
<PAGE> 10
in any such Certificate, except to the extent, if any, that such Certificate
otherwise provides.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
1. Promptly after each purchase of Securities by the Fund to be held by
the Subcustodian hereunder, other than a purchase of an Option or Futures
Contract, the Fund shall deliver to the Subcustodian and to the Custodian (I)
with respect to each purchase of Securities which are not Money Market
Securities, a Certificate, and (II) with respect to each purchase of Money
Market Securities, a Certificate, Oral Instructions or Written Instructions,
specifying with respect to each such purchase: (a) the Series to which the
purchased securities are to be specifically allocated, (b) the name of the
issuer and the title of the Securities, (c) the number of shares or the
principal amount purchased and accrued interest, if any, (d) the date of
purchase and settlement, (e) the purchase price per unit, (f) the total amount
payable upon such purchase, and (g) the name of the person from whom or the
broker through whom the purchase was made. The Subcustodian shall upon receipt
of Securities purchased by or for the Fund pay out of the moneys held for the
account of the Series to which such Securities are to be specifically allocated
the total amount payable to the person from whom or the broker through whom the
purchase was made, provided that the same conforms to the total amount payable
as set forth in such Certificate, Oral Instructions or Written Instructions.
2. Promptly after each sale by the Fund of Securities held by the
Subcustodian hereunder other than a sale of any Option, Futures Contract, or any
Reverse Repurchase Agreement, the Fund shall deliver to the Subcustodian and to
the Custodian (i) with respect to each sale of Securities which are not Money
Market Securities, a Certificate, and (ii) with respect to each sale of Money
Market Securities, a Certificate, Oral Instructions or Written Instructions,
specifying with respect to each such sale: (a) the Series to which such
Securities were specifically allocated, (b) the name of the issuer and the title
of the Security, (c) the number of shares or principal amount sold, and accrued
interest, if any, (d) the date of sale, (e) the sale price per unit, (f) the
total amount payable to the Fund upon such sale, and (g) the name of the broker
through whom or the person to whom the sale was made. The Subcustodian shall
deliver the Securities upon receipt of the total amount payable to the Fund upon
such sale, provided that the same conforms to the total amount payable as set
forth in such Certificate, Oral Instructions or Written Instructions.
-10-
<PAGE> 11
ARTICLE V
OPTIONS
1. Promptly after the purchase of any Option by the Fund, the Fund
shall deliver to the Subcustodian and to the Custodian a Certificate specifying
with respect to each Option purchased: (a) the Series to which the purchased
Option is to be specifically allocated; (b) the type of Option (put or call) (c)
the name of the issuer and the title and number of shares subject to such
Option; (d) the expiration date; (e) the exercise price; (f) the date of
purchase and settlement; (g) the premium to be paid by the Fund; and (h) the
name of the broker through whom such Option was purchased. The Subcustodian
shall pay, upon receipt of a Clearing Member's confirmation confirming the
purchase of the Option held by such Clearing Member for the account of the
Subcustodian (or any duly appointed and registered nominee of the Subcustodian)
as Subcustodian for the Fund, out of moneys held for the account of the Series
to which such Option is to be specifically allocated the premium payable to the
Clearing Member through whom the purchase was made, provided that the same
conforms to the total premium payable as set forth in such Certificate.
2. Promptly after the sale of any Option purchased by the Fund pursuant
to paragraph 1 hereof, the Fund shall deliver to the Subcustodian and to the
Custodian a Certificate specifying with respect to each such sale: (a) the
Series to which such Option was specifically allocated; (b) the type of Option
(put or call); (c) the name of the issuer and the title and number of shares
subject to such Option; (d) the date of sale; (e) the sale price; (f) the date
of settlement; (g) the total amount payable to the Fund upon such sale; and (h)
the name of the Clearing Member through whom the sale was made. The Subcustodian
shall consent to the delivery of the Option sold by the Clearing Member which
previously supplied the confirmation described in preceding paragraph 1 of this
Article with respect to such Option against payment to the Subcustodian of the
total amount payable to the Fund, provided that the same conforms to the total
amount payable as set forth in such Certificate.
3. Promptly after the exercise by the Fund of any Call Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Subcustodian and to the Custodian a Certificate specifying with respect to such
Call Option: (a) the Series to which such Call Option was specifically
allocated; (b) the name of the issuer and the title and number of shares subject
to the Call Option; (c) the expiration date; (d) the date of exercise and
settlement; (e) the exercise price per share; (f) the total amount to be paid
the Fund upon such exercise; and (g) the name of the Clearing Member through
whom such Call Option was
-11-
<PAGE> 12
exercised. The Subcustodian shall, upon receipt of the Securities underlying the
Call Option which was exercised, (i) pay out of the moneys held for the account
of the Series to which such Call Option was specifically allocated the total
amount payable to the Clearing Member through whom the Call Option was
exercised, provided that the same conforms to the total amount payable as set
forth in such Certificate, and (ii) delete the exercised Call Option from the
statements delivered to the Fund pursuant to paragraph 3 of Article III herein.
4. Promptly after the exercise by the Fund of any Put Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Subcustodian and to the Custodian a Certificate specifying with respect to such
Put Options: (a) the Series to which such Put Option was specifically allocated;
(b) the name of the issuer and the title and number of shares subject to the Put
Option; (c) the expiration date; (d) the date of exercise and settlement; (e)
the exercise price per share; (f) the total amount to be paid to the Fund upon
such exercise; and (g) the name of the Clearing Member through whom such Put
Option was exercised. The Subcustodian shall, upon receipt of the amount payable
upon the exercise of the Put Option (i) deliver or cause the Depository to
deliver, out of the account of the Series to which such Put Option was
allocated, the Securities which were subject to such Put Option, provided the
same conforms to the amount payable to the Fund as set forth in such
Certificate, and (ii) delete the exercised Put Option from the statements
delivered to the Fund pursuant to paragraph 3 of Article III herein.
5. Whenever the Fund writes a Covered Call Option with respect to
Securities held by the Subcustodian hereunder, the Fund shall promptly deliver
to the Subcustodian and to the Custodian a Certificate specifying with respect
to such Covered Call Option: (a) the Series for which such Covered Call Option
is written; (b) the name of the issuer and the title and number of shares for
which the Covered Call Option was written and which underlie the same; (c) the
expiration date; (d) the exercise price; (e) the premium to be received by the
Fund; (f) the date such Covered Call Option was written; and (g) the name of the
Clearing Member through whom the premium is to be received. The Subcustodian
shall deliver or cause to be delivered, in exchange for receipt of the premium
specified in the Certificate with respect to such Covered Call Option, such
receipts as are required in accordance with the customs prevailing among brokers
in Covered Call Options, and shall impose, or direct the Depository to impose,
upon the underlying Securities specified in the Certificate such restrictions as
may be required by such receipts. Notwithstanding the foregoing, the
Subcustodian has the right, upon prior written notification to the Fund, at any
time to refuse to issue any receipts for Securities, in the
-12-
<PAGE> 13
possession of the Subcustodian and not deposited with the Depository,
underlying a Covered Call Option.
6. Whenever a Covered Call Option written by the Fund and described in
the preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Subcustodian and to the Custodian a Certificate Instructing the
Subcustodian to deliver, or to direct the Depository to deliver, the Securities
subject to such Covered Call Option and specifying: (a) the Series for which
such Covered Call Option was written; (b) the name of the issuer and the title
and number of shares subject to the Covered Call Option; (c) the Clearing Member
to whom the underlying Securities are to be delivered; and (d) the total amount
payable to the Fund upon such delivery. Upon the return and/or cancellation of
any receipts delivered pursuant to paragraph 3 of this Article, the Subcustodian
shall deliver, or cause the Depository to deliver, the underlying Securities as
specified in the Certificate for the amount to be received as set forth in such
Certificate.
7. Whenever the Fund purchases any Option identical to a previously
written Covered Call Option described in paragraph 5 of this Article in a
transaction expressly designated as a "Closing Purchase Transaction" in order to
liquidate its position as a writer of a Option, the Fund shall promptly deliver
to the Subcustodian and to the Custodian a Certificate specifying with respect
to the Option being purchased: (a) the Series for which such purchase is being
made; (b) that the transaction is a Closing Purchase Transaction; (c) the name
of the issuer and the title and number of shares subject to the Covered Call
Option; (d) the exercise price; (e) the premium to be paid by the Fund; (f) the
expiration date; (g) the date of such purchase; and (h) the name of the Clearing
Member to whom the premium is to be paid. Upon the Subcustodian's payment of the
premium and the return and/or cancellation of any receipt issued pursuant to
paragraph 5 of this Article with respect to the Covered Call Option being
liquidated through the Closing Purchase Transaction, the Subcustodian shall (A)
remove, or direct the Depository to remove, the previously imposed restrictions
on the Securities underlying the Covered Call Option, and (B) and delete such
Option from statements delivered to the Fund by the Subcustodian pursuant to
paragraph 3 of Article III herein.
8. Upon the expiration of any Option purchased by the Fund pursuant to
paragraph 1 of this Article or any Covered Call Option written by the Fund and
described in paragraph 5 of this Article, the Subcustodian shall (a) delete such
Option from the statements delivered to the Fund and to the Custodian pursuant
to paragraph 3 of Article III herein and, if such expired Option was a Covered
Call Option written by the Fund, (b) free, or instruct the Depository to free,
the Securities underlying such Covered
-13-
<PAGE> 14
Call Option from the restrictions imposed by receipts issued in connection
therewith.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract to be held by
the Subcustodian hereunder, the Fund shall deliver to the Subcustodian and to
the Custodian a Certificate specifying with respect to such Futures Contract,
(or with respect to any number of identical Futures Contract(s)): (a) the Series
for which the contract is being entered; (b) the category of Futures Contract
(the name of the underlying stock index or financial instrument); (c) the number
of identical Futures Contracts entered into; (d) the delivery or settlement date
of the Futures Contract(s); (e) the date the Futures Contract(s) was (were)
entered into; (f) whether the Fund is buying (going long) or selling (going
short) on such Futures Contract(s); (g) the amount of cash and/or the amount and
kind of Securities, if any, to be deposited by the Subcustodian in a Margin
Account with respect to such Futures Contract and the name in which Margin
Account has been, or is to be, established; (h) the amount of cash and/or the
amount and kind of securities, if any, to be deposited in the Senior Security
Account for such Series; (i) the name of the broker, dealer, or futures
commission merchant through whom the Futures Contract was entered into; and (j)
the amount of fee or commission, if any, to be paid to the broker, dealer, or
futures commission merchant. The Subcustodian shall upon receipt of such
broker's, dealer's, or futures commission merchant statement confirming the
purchase (creation of a long position) or sale (creation of a short position) of
a Futures Contract(s) which is (are) held by such broker, dealer, or futures
commission merchant in the name of the Custodian (or of a duly appointed and
registered nominee of the Subcustodian) as custodian for the Fund, make payment
of the fee or commission, if any, specified in the Certificate and deposit in
such Margin Account and/or in the Senior Security Account for such Series the
amount of cash and/or the amount and kind of securities specified in said
Certificate.
2. The Fund shall, from time to time, make such additional deposits to,
or withdrawals from, a Margin Account and/or the Senior Security Account as
specified in a Certificate received by the Subcustodian. Such Certificate shall
specify the Series for which such deposit or withdrawal is to be made, and the
amount of cash and/or the amount and kind of Securities specifically allocated
to such Series to be deposited in, or withdrawn from, a specified Margin Account
for such Series or in the Senior Security Account for such Series. In the event
that the Fund fails to specify in a Certificate the Series, the name of the
issuer, the title and the number of shares or the principal
-14-
<PAGE> 15
amount of any particular Securities to be deposited by the Subcustodian in a
Margin Account or in a Senior Securities Account, the Subcustodian shall not be
under any obligation to make any such deposit and shall so notify the Fund.
3. The Subcustodian shall make deliveries or payments from a Margin
Account to the broker, dealer, or futures commission merchant in whose name, or
for whose benefit, the account was established only upon the receipt of either
(a) a Certificate specifying the broker, dealer, or futures commission merchant
to whom such payment or delivery is to be made, the amount of money and/or the
amount and kind of securities to be paid or delivered, and the date on which
such payment or delivery is to be made, or (b) a certification signed by an
officer or director of such broker, dealer, or futures commission merchant
stating that all conditions precedent to its right under its agreement with the
Fund to direct disposition of the assets held therein have been satisfied and
specifying the amount of money and/or the amount and kind of Securities to be
paid or delivered to such broker, dealer, or futures commission merchant and the
date of such payment. After receipt of such a Certificate or such a
certification, as the case may be, the Subcustodian shall make the payments
and/or deliveries to the broker, dealer, or futures commission merchant therein
specified.
4. Whenever a Futures Contract held by the Subcustodian hereunder is
retained by the Fund until delivery or settlement is made on such Futures
Contract, the Fund shall deliver to the Subcustodian and to the Custodian a
Certificate specifying: (a) the Futures Contract and the Series to which the
same relates; (b) with respect to a Stock Index Futures Contract, the total cash
settlement amount to be paid or received, and with respect to a Financial
Futures Contract, the Securities and/or amount of cash to be delivered or
received; (c) the broker, dealer, or futures commission merchant to or from whom
payment or delivery is to be made or received; and (d) the amount of cash and/or
Securities to be withdrawn from the related Margin Account and/or the Senior
Security Account. Upon the receipt of a broker's, dealer's, or futures
commission merchant's statement or confirmation reasonably believed by the
Subcustodian to be in the form customarily used by brokers, dealers, or futures
commission merchants confirming that the Futures Contract is being settled and
that the Funds position in such Futures Contract is thereby terminated, the
Subcustodian shall make the payment or delivery specified in the Certificate,
and delete such Futures Contract from the statements delivered to the Fund and
to the Custodian pursuant to paragraph 3 of Article III herein.
5. Whenever the Fund shall enter into a Futures Contract to
offset a Futures Contract held by the Subcustodian hereunder, the Fund shall
deliver to the Subcustodian and to the Custodian a Certificate specifying:
(a) the items of information required in
-15-
<PAGE> 16
a Certificate described in paragraph 1 of this Article, and (b) the Futures
Contract being offset. The Subcustodian shall, upon receipt of a broker's,
dealer's, or futures commission merchant's statement or confirmation reasonably
believed by the Subcustodian to be in the form customarily used by brokers,
dealers, or futures commission merchants confirming the offsetting transaction,
make payment of the fee or commission, if any, specified in the Certificate and
delete the Futures Contract being offset from the statements delivered to the
Fund and to the Custodian pursuant to paragraph 3 of Article III herein.
6. The Subcustodian shall accept cash and/or Securities tendered or
delivered by a broker, dealer, or futures commission merchant in connection with
any Futures Contract held by the Subcustodian hereunder when instructed to
accept such cash and/or Securities in a Certificate. Such Certificate shall
specify the Series to which such cash and/or Securities relate arid instruct the
Subcustodian where to deposit such cash and/or Securities.
7. Promptly after the close of business on each business day the
Subcustodian shall furnish the Fund and the Custodian with a statement with
respect to each Margin Account in which money or Securities are held specifying:
(a) the name of the Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The Subcustodian shall make
available upon request to any broker, dealer, or futures commission merchant
specified in the name of a Margin Account a copy of the statement furnished the
Fund with respect to such Margin Account.
ARTICLE VII
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase Agreement with
respect to Securities and money held by the Subcustodian hereunder, the Fund
shall deliver to the Subcustodian and to the Custodian a Certificate or in the
event such Reverse Repurchase Agreement is a Money Market Security, a
Certificate or Oral Instructions specifying: (a) the Series for which the
Reverse Repurchase Agreement is entered; (b) the total amount payable to the
Fund in connection with such Reverse Repurchase Agreement and specifically
allocated to such Series; (c) the broker or dealer through or with whom the
Reverse Repurchase Agreement is entered; (d) the amount and kind of securities
specifically allocated to such Series to be delivered by the Fund to such broker
or dealer; (e) the date of such Reverse Repurchase Agreement; and (f) the amount
of cash and/or the amount and kind of Securities, if any, specifically allocated
to such Series to be deposited In a Senior Security Account for such Series in
connection with such Reverse Repurchase Agreement.
-16-
<PAGE> 17
The Subcustodian shall, upon receipt of the total amount payable to the Fund
specified in the Certificate or Oral Instructions, make the delivery to the
broker or dealer, and the deposits, if any, to the Senior Security Account,
specified in the Certificate.
2. The Subcustodian shall from time to time make such deposits to or
withdrawals from the Senior Securities Account with respect to a Reverse
Repurchase Agreement described in preceding paragraph 1 of this Article VII as
may be specified in a Certificate received by the Subcustodian. Such Certificate
shall specify the Series for which the deposit or withdrawal is to be made and
the amount of cash and/or Securities specifically allocated to such Series to be
deposited in, or withdrawn from, the Senior Security Account for such Series.
3. Upon the termination of a Reverse Repurchase Agreement described in
preceding paragraph 1 of this Article, the Fund shall promptly deliver a
Certificate or in the event such Reverse Repurchase Agreement is a Money Market
Security, a Certificate or Oral Instruction to the Subcustodian and to the
Custodian specifying: (a) the Reverse Repurchase Agreement being terminated and
the Series for which the same was entered; (b) the total amount payable by the
Fund in connection with such termination; (c) the amount and kind of Securities
to be received by the Fund and specifically allocated to such Series in
connection with such termination; (d) the date of termination; (e) the name of
the broker or dealer with or through whom the Reverse Repurchase Agreement is to
be terminated; and (f) the amount of cash and/or the amount and kind of
Securities to be withdrawn from the Senior Securities Account for such Series.
The Subcustodian shall, upon receipt of the amount and kind of Securities to be
received by the Fund specified in the Certificate, or Oral Instructions, make
the payment to the broker or dealer, and the withdrawals, if any, from the
Senior Security Account, specified in the Certificate.
ARTICLE VIII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. In the event the Subcustodian is to pay the amount of any dividend
or distribution to the Dividend Agent or any subdividend agent or co-dividend
agent, the Fund shall furnish to the Subcustodian a copy of the resolution of
the Board of Directors, certified by the Secretary or any Assistant Secretary,
either (i) setting forth with respect to the Series specified therein the date
of the declaration of a dividend or distribution, the date of payment thereof,
the record date as of which shareholders entitled to payment shall be
determined, the amount payable per Share of such Series to the shareholders of
-17-
<PAGE> 18
record as of that date and the total amount payable to the Dividend Agent and
any sub-dividend agent or co-dividend agent of the Fund on the payment date, or
(ii) authorizing with respect to the Series specified therein the declaration of
dividends and distributions on a daily basis and authorizing the Subcustodian to
rely on Oral Instructions, Written Instructions or a Certificate setting forth
the date of the declaration of such dividend or distribution, the date of
payment thereof, the record date as of which shareholders entitled to payment
shall be determined, the amount payable per Share of such Series to the
shareholders of record as of that date and the total amount payable to the
Dividend Agent on the payment date.
2. Upon the payment date specified in such resolution, Oral
Instructions, Written Instructions or Certificate, as the case may be, the
Subcustodian shall pay out of the moneys held for the account of each Series
the total amount payable to the Dividend Agent, and any sub-dividend agent or
co-dividend agent of the Fund with respect to such Series.
ARTICLE IX
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund determines that the proceeds of any
sale of Shares are to be held by the Subcustodian, it shall
deliver to the Subcustodian a Certificate duly specifying:
(a) The Series, number of Shares sold, trade date, and
price; and
(b) The amount of money to be received by the Subcustodian for
the sale of such Shares and specifically allocated to the separate account in
the name of the Fund for such Series.
2. Upon receipt of such money from the Transfer Agent, the Subcustodian
shall credit such money to the separate account in the name of the Fund for the
Series for which such money was received.
3. Upon issuance of any Shares of any Series described in the foregoing
provisions of this Article, the Subcustodian shall pay, out of the money held
for the account of the Fund, all original issue or other taxes required to be
paid by the Fund in connection with such issuance upon the receipt of a
Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund desires the
Subcustodian to make payment out of the money held by the Subcustodian
hereunder in connection with a redemption of any
-18-
<PAGE> 19
shares of any Series, it shall furnish to the Subcustodian a Certificate
specifying:
(a) The number and Series of Shares redeemed; and
(b) The amount to be paid for such Shares.
5. Upon receipt from the Transfer Agent of an advice setting forth the
Series and number of Shares received by the Transfer Agent for redemption and
that such shares are in good form for redemption, the Subcustodian shall make
payment to the Transfer Agent out of the moneys held in the separate account in
the name of the Series the total amount specified in the Certificate issued
pursuant to the foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, the Subcustodian,
unless otherwise instructed by a Certificate, shall, upon receipt of an advice
from the Fund or its agent setting forth that the redemption is in good form for
redemption in accordance with the check redemption procedure, honor the check
presented as part of such check redemption privilege out of the money held in
the separate account in the name of the Series of the Shares being redeemed.
ARTICLE X
OVERDRAFTS OR INDEBTEDNESS
1. If the Subcustodian should In its sole discretion advance funds on
behalf of any Series which results in an overdraft because the moneys held by
the Subcustodian in the separate account for such Series shall be insufficient
to pay the total amount payable upon a purchase of Securities to be specifically
allocated to such Series, as set forth in a Certificate or Oral Instructions
issued pursuant to Articles V, VI, or VII or which results in an overdraft in
the separate account of such Series for some other reason, or if the Fund is for
any other reason indebted to the Subcustodian with respect to a Series (except a
borrowing for investment or for temporary or emergency purposes using Securities
as collateral pursuant to a separate agreement and subject to the provisions of
paragraph 2 of this Article X), such overdraft or indebtedness shall be deemed
to be an interest free loan made by the Subcustodian to the Fund for such Series
payable on demand. Any such overdraft or indebtedness shall be reduced by an
amount equal to the total or of all amounts due the Fund with respect to such
Series which have not been collected by the Subcustodian on behalf of the Fund
when due because of the failure of the Subcustodian to make
-19-
<PAGE> 20
timely demand or presentment for payment. In addition, the Fund hereby agrees
that the Subcustodian shall have a continuing lien and security interest in and
to any property specifically allocated to such Series at any time held by it for
the benefit of such Series or in which the Fund may have an interest which is
then in the Subcustodian's possession or control or in possession or control of
any third party acting in the Subcustodian's behalf. The Fund authorizes the
Subcustodian, in its sole discretion, at any time to charge any such overdraft
or indebtedness together with interest due thereon against any balance of
account standing to such Series' credit on the Subcustodian's books.
2. The Fund will cause to be delivered to the Subcustodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the
Subcustodian) from which it borrows money for investment or for temporary or
emergency purposes using Securities held by the Subcustodian hereunder as
collateral for such borrowings, a notice or undertaking in the form currently
employed by any such bank setting forth the amount which such bank will loan to
the Fund against delivery of a stated amount of collateral. The Fund shall
promptly deliver to the Subcustodian a Certificate specifying with respect to
each such borrowing: (a) the Series to which such Borrowing relates (b) the name
of the bank, (c) the amount and terms of the borrowing, which may be set forth
by incorporating by reference an attached promissory note, duly endorsed by the
Fund, or other loan agreement, (d) the time and date, if known, on which the
loan is to be entered into, (e) the date on which the loan becomes due and
payable, (f) the total amount payable to the Fund on the borrowing date, (g) the
market value of Securities specifically allocated to such to be delivered as
collateral for such loan, including the name of the issuer, the title and the
number of shares or the principal amount of any particular Securities, and (h) a
statement specifying whether such loan is for investment purposes or for
temporary or emergency purposes and that such loan is in conformance with the
Investment Company Act of 1940 and the Fund's prospectus. The Subcustodian shall
deliver on the borrowing date specified in a Certificate the specified
collateral and the executed promissory note, if any, against delivery by the
lending bank of the total amount of the loan payable, provided that the same
conforms to the total amount payable as set forth in the Certificate. The
Subcustodian may, at the option of the lending bank, keep such collateral in its
possession, but such collateral shall be subject to all rights therein given the
lending bank by virtue of any promissory note or loan agreement. The
Subcustodian shall deliver such Securities as additional collateral as may be
specified in a Certificate to collateralize further any transaction described in
this paragraph. The Fund shall cause all Securities released from collateral
status to be returned directly to the Subcustodian, and the Subcustodian shall
receive from time to
-20-
<PAGE> 21
time such return of collateral as may be tendered to it. In the event that the
Fund fails to specify in a Certificate the Series, the name of the issuer, the
title and number of shares or the principal amount of any particular Securities
to be delivered as collateral by the Subcustodian, the Subcustodian shall not be
under any obligation to deliver any Securities.
ARTICLE XI
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. If the Fund is permitted by the terms of its Articles of
Incorporation and as disclosed in its most recent and currently effective
prospectus to lend its portfolio Securities specifically allocated to a Series,
within 24 hours after each loan of portfolio Securities held by the Subcustodian
hereunder the Fund shall deliver or cause to be delivered to the Subcustodian a
Certificate specifying with respect to each such loan: (a) the name of the
issuer and the title of the Securities, (b) the number of shares or the
principal amount loaned, (c) the date of loan and delivery, (d) the total amount
to be delivered to the Subcustodian against the loan of the Securities,
including the amount of cash collateral and the premium, if any, separately
identified, (e) the name of the broker, dealer, or financial institution to
which the loan was made, and (f) the Series to which the loaned Securities are
specifically allocated. The Subcustodian shall deliver the Securities thus
designated to the broker, dealer or financial institution to which the loan was
made upon receipt of the total amount designated as to be delivered against the
loan of Securities. The Subcustodian may accept payment in connection with a
delivery otherwise than through the Book-Entry System or Depository only in the
form of a certified or bank cashier's check payable to the order of the Fund or
the Subcustodian drawn on New York Clearing House funds and may deliver
Securities in accordance with the customs prevailing among dealers in
securities.
2. Promptly after each termination of the loan of Securities by the
Fund, the Fund shall deliver or cause to be delivered to the Subcustodian a
Certificate specifying with respect to each such loan termination and return of
securities: (a) the name of the issuer and the title of the Securities to be
returned, (b) the number of shares or the principal amount to be returned, (c)
the date of termination, (d) the total amount to be delivered by the
Subcustodian (including the cash collateral for such Securities minus any
offsetting credits as described in said Certificate), (e) the name of the
broker, dealer, or financial institution from which the Securities will be
returned, and (f) the name of the Series to which the loaned Securities are
specifically allocated. The Subcustodian shall receive all
-21-
<PAGE> 22
Securities returned from the broker, dealer, or financial institution to which
such Securities were loaned and upon receipt thereof shall pay, out of the
moneys held for the account of the Fund, the total amount payable upon such
return of Securities as set forth in the Certificate.
ARTICLE XII
CONCERNING THE CUSTODIAN AND THE SUBCUSTODIAN
1. Except as hereinafter provided, neither the Subcustodian, the
Custodian, nor their respective nominees shall be liable for any loss or damage,
including counsel fees, resulting from its action or omission to act or
otherwise, except for any loss or damage arising out of their own respective
negligence or willful misconduct. The Subcustodian and the Custodian may, with
respect to questions of law, apply for and obtain the advice and opinion of
counsel to the Fund, at the expense of the Fund, or of its own respective
counsel, at its own expense, and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with such advice or
opinion. The Subcustodian shall be liable to the Fund for any loss or damage
resulting from the use of the Book-Entry System or any Depository arising by
reason of any negligence, misfeasance or willful misconduct on the part of the
Subcustodian or any of its employees or agents.
The Fund agrees (a) that the Custodian shall not be liable to the Fund
for any loss or damage to the Fund, including counsel fees, resulting from the
Subcustodian's action or omission to act or otherwise, whether or not a
custodian, and (b) that the Custodian shall have no duty or obligation to
supervise the Subcustodian.
2. Without limiting the generality of the foregoing, the Subcustodian
shall be under no obligation to inquire into, and shall not be liable for:
(a) The validity of the issue of any Securities
purchased, or any Covered Call Option written, by or for the Fund, the legality
of the purchase thereof, or the propriety of the amount paid therefor;
(b) The legality of the issue or sale of any Shares,
or the sufficiency of the amount to be received therefor;
(c) The legality of the redemption of any Shares, or
the propriety of the amount to be paid therefor;
(d) The legality of the declaration or payment of any
dividend by the Fund;
-22-
<PAGE> 23
(e) The legality of any borrowing by the Fund using
Securities as collateral;
(f) The legality of any loan of portfolio Securities pursuant
to Article XI of this Agreement, nor shall the Subcustodian be under any duty or
obligation to see to it that any cash collateral delivered to it by a broker,
dealer, or financial institution or held by it at any time as a result of such
loan of portfolio Securities of the Fund is adequate collateral for the Fund
against any loss it might sustain as a result of such loan. The Subcustodian
specifically, but not by way of limitation, shall not be under any duty or
obligation periodically to check or notify the Fund that the amount of such cash
collateral held by it for the Fund is sufficient collateral for the Fund, but
such duty or obligation shall be the sole responsibility of the Fund. In
addition, the Subcustodian shall be under no duty or obligation to see that any
broker, dealer or financial institution to which portfolio Securities of the
Fund are lent pursuant to Article XI of this Agreement makes payment to it of
any dividends or interest which are payable to or for the account of the Fund
during the period of such loan or at the termination of such loan, provided,
however, that the Subcustodian shall promptly notify the Fund in the event that
such dividends or interest are not paid and received when due; or
(g) The sufficiency or value of any amounts of money and/or
Securities held in any Margin Account or Senior Security Account in connection
with transactions by the Fund.
3. The Subcustodian shall not be liable for, or considered to be the
Subcustodian of, any money, whether or not represented by any check, draft, or
other instrument for the payment of money, received by it on behalf of the Fund
until the Subcustodian actually receives and collects such money directly or by
the final crediting of the account representing the Fund's interest at the
Book-Entry System or the Depository.
4. The Subcustodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Fund from the Transfer
Agent of the Fund nor to take any action to effect payment or distribution by
the Transfer Agent of the Fund of any amount paid by the Subcustodian to the
Transfer Agent of the Fund in accordance with this Agreement.
5. The Subcustodian shall not be under any duty or obligation to take
action to effect collection of any amount, if the Securities upon which such
amount is payable are in default, or if payment is refused after due demand or
presentation, unless and until (i) it shall be directed to take such action by a
Certificate and (ii) it shall be assured to its satisfaction of reimbursement of
its costs and expenses in connection with any such action.
-23-
<PAGE> 24
6. The Subcustodian may appoint one or more banking institutions as
Depository or Depositories, as Sub-Subcustodian or Sub-custodians, or as
Co-Custodian or Co-Custodians including, but not limited to, banking
institutions located in foreign countries, of Securities and moneys at any time
owned by the Fund, upon such terms and conditions as may be approved in a
Certificate or contained in an agreement executed by the Subcustodian, the Fund
and the appointed institution.
7. The Subcustodian shall not be under any duty or obligation to
ascertain whether any Securities at any time delivered to or held by it for the
account of the Fund and specifically allocated to a Series are such as properly
may be held by the Fund and allocated to such Series under the provisions of its
Articles of Incorporation and its then current prospectus.
8. The Subcustodian shall be entitled to receive and the Fund agrees to
pay to the Subcustodian such reimbursements of the Subcustodian's direct and
indirect costs and expenses incurred in rendering services hereunder at such
times, and in accordance with such terms and conditions, as the Fund and the
Subcustodian may agree upon from time to time. The Agreement between the
Subcustodian and the Fund may provide that the Subcustodian may charge the
amount of such reimbursements with respect to a Series against any moneys
specifically allocated to such Series, and may further provide for the method of
such allocation.
9. The Subcustodian shall be entitled to rely upon any Certificate,
notice or other instrument in writing received by the Subcustodian and
reasonably believed by the Subcustodian to be a Certificate. The Subcustodian
shall be entitled to rely upon any Oral Instructions and any Written
Instructions actually received by the Subcustodian pursuant to Articles IV, VII
or VIII hereof. The Fund agrees to forward to the Subcustodian a Certificate or
facsimile thereof confirming such Oral Instructions or Written Instructions in
such manner so that such Certificate or facsimile thereof is received by the
Subcustodian, whether by hand delivery, telecopier or other similar device, or
otherwise, by the close of business of the same day that such Oral Instructions
or Written Instructions are given to the Subcustodian. The Fund agrees that the
fact that such confirming instructions are not received by the Subcustodian
shall in no way affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Fund. The Fund agrees that the
Subcustodian shall incur no liability to the Fund in acting upon Oral
Instructions or Written Instructions given to the Subcustodian hereunder
concerning such transactions provided such instructions reasonably appear to
have been received from an Authorized Person.
-24-
<PAGE> 25
10. The Subcustodian shall be entitled to rely upon any instrument or
notice in writing received by the Subcustodian and reasonably believed by the
Subcustodian to be a certification described in paragraph 3 of Article VI
herein. Without limiting the generality of the foregoing, the Subcustodian shall
be under no duty to acquire into, and shall not be liable for, the accuracy of
any statements or representations contained in any such instrument or other
notice including, without limitation, any specification of any amount to be paid
to a broker, dealer, or futures commission merchant.
11. The Subcustodian shall treat confidentially and as proprietary
information of the Fund records and other information relative to the Fund and
prior, present or potential shareholders, and, except after prior notification
to, and approval in writing by, the Fund, which approval shall not be
unreasonably withheld, will not use such records and information for any purpose
other than performance of its responsibilities and duties hereunder.
Notwithstanding the foregoing, the Subcustodian shall have the right to disclose
such records and other information to any Federal or State authority with whom
the Fund or its shares of capital stock are registered, and the Subcustodian
shall further have the right to exhibit any such records and information to any
person whenever it receives an opinion from its counsel that there is a
reasonable likelihood that the Subcustodian will be held liable for the failure
to exhibit such records or information to such person, provided, however, that
in connection with any such disclosure the Subcustodian shall promptly notify
the Fund that such disclosure has been made or is to be made.
12. The books and records pertaining to the Fund which are in the
possession of the Subcustodian shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the Investment Company
Act of 1940, as amended, and other applicable securities laws and rules and
regulations. The Fund, or the Fund's authorized representatives, shall have
access to such books and records during the Subcustodian's normal business
hours. Upon the reasonable request of the Fund, copies of any such books and
records shall be provided by the Subcustodian to the Fund or the Fund's
authorized representative, and the Fund shall reimburse the Subcustodian its
expenses of providing such copies.
13. The Subcustodian shall provide the Fund with any report obtained by
the Subcustodian on the system of internal accounting control of the Book-Entry
System, the Depository, or O.C.C., and with such reports on its own systems of
internal accounting control as the Fund may reasonably request from time to
time.
14. The Fund agrees to fully indemnify and save harmless (a) the
Subcustodian from any and all liability, loss or damage
-25-
<PAGE> 26
whatsoever which may arise in connection with this Agreement, except for any
liability, loss, or damage arising out of its own bad faith, negligence, or
willful misconduct, and (b) the Custodian from any and all liability, loss or
damage whatsoever which may arise in connection with this Agreement, except for
any liability, loss or damage arising out of its own bad faith, negligence or
willful misconduct.
15. The Subcustodian agrees that, except to the extent indicated in
paragraph 8 of this Article, (a) it shall look solely to the Fund for payment of
all amounts to which the Subcustodian may from time to time be entitled
hereunder, including, without limitation, amounts to which it is entitled
pursuant to preceding paragraph 14 of this Article and (b) that the Custodian
shall not be liable to the Subcustodian for any liability, loss or damage
whatsoever resulting from or related to, this Agreement or the Subcustodian's
action or omission to act hereunder or otherwise.
16. Subject to the foregoing provisions of this Agreement, the
Subcustodian may deliver and receive Securities, and receipts with respect to
such Securities, and arrange for payments to be made and received by the
Subcustodian in accordance with the customs prevailing from time to time among
brokers or dealers in such Securities.
17. Neither the Subcustodian nor the Custodian shall have any duties or
responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement, and no covenant or obligation shall be
implied in this Agreement against the Subcustodian or the Custodian.
ARTICLE XIII
TERMINATION
Any one of the parties hereto may terminate this Agreement by giving to
the other two parties a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of
giving of such notice. In the event such notice is given by the Fund, it shall
be accompanied by a copy of a resolution of the Board of Directors of the Fund,
certified by the Secretary or any Assistant Secretary, electing to terminate
this Agreement. Upon the date set forth in any notice of termination, the
Subcustodian shall deliver to the Custodian all Securities and money held
hereunder by the Subcustodian.
-26-
<PAGE> 27
ARTICLE XIV
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by two of the
present Officers of the Fund under its corporate seal, setting forth the names
and the signatures of the present Authorized Persons. The Fund agrees to furnish
to the Subcustodian a new Certificate in similar form in the event that any such
present Authorized Person ceases to be an Authorized Person or in the event that
other or additional Authorized Persons are elected or appointed. Until such new
Certificate shall be received, the Subcustodian shall be fully protected in
acting under the provisions of this Agreement upon Oral Instructions or
signatures of the present Authorized Persons as set forth in the last delivered
Certificate.
2. Annexed hereto as Appendix B is a Certificate signed by two of the
present Officers of the Fund under its corporate seal, setting forth the names
and the signatures of the present Officers of the Fund. The Fund agrees to
furnish to the Subcustodian a new Certificate in similar form in the event any
such present Officer ceases to be an Officer of the Fund, or in the event that
other or additional Officers are elected or appointed. Until such new
Certificate shall be received, the Subcustodian shall be fully protected in
acting under the provisions of this Agreement upon the signatures of the
Officers as set forth in the last delivered Certificate.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to any party, shall be sufficiently given if
addressed to such party and mailed or delivered to it at its offices at the
address for such party first above written or at such other place as such party
may from time to time designate in writing.
4. This Agreement may not be amended or modified in any manner except
by a written agreement executed by all the parties with the same formality as
this Agreement and approved by a resolution of the Board of Directors of the
Fund.
5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by any party without the written consent
of the other parties hereto and authorized or approved by a resolution of the
Board of Directors of the Fund.
6. This Agreement shall be construed in accordance with the laws of
the State of New York.
-27-
<PAGE> 28
7. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
-28-
<PAGE> 29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate Officers, thereunto duly authorized and
their respective corporate seals to be hereunto affixed, as of the day and year
first above written.
Attest: SECURITY PACIFIC NATIONAL BANK
/S/ Ronald Fauntleroy By: /S/ Scott S. Johnson
- --------------------- ---------------------
Ronald Fauntleroy Scott S. Johnston
Senior Vice President Senior Vice President
Attest:
/S/ Ronald Fauntleroy By: /S/ Arthur E. Nicholas
- --------------------- ------------------------
Ronald Fauntleroy Arthur E. Nicholas
Senior Vice President First Vice President
THE BANK OF NEW YORK
By: /S/ Stephen E. Grunston
------------------------
Stephen E. Grunston
Vice President
Attest:
/S/ Lawrence Musso
- ------------------
Lawrence Musso
Assistant Vice President
PACIFIC HORIZON FUNDS, INC.
By: /S/ Thomas M. Collins
----------------------
Thomas M. Collins
President
Attest:
/S/ W. Bruce McConnel, III
- --------------------------
W. Bruce McConnel III
Secretary
-29-
<PAGE> 30
APPENDIX A
I, Thomas M. Collins, President and I, W. Bruce McConnel, III,
Secretary of PACIFIC HORIZON FUNDS, INC., a Maryland Corporation (the "Fund"),
do hereby certify that:
Any two of the following individuals have been duly authorized
by the Board of Directors of the Fund in conformity with the Fund's Articles of
Incorporation and By-Laws to direct The Bank of New York to issue bank checks on
behalf of the Fund, and the signatures set forth opposite their respective names
are their true and correct signatures.
NAME SIGNATURE
---- ---------
Thomas M. Collins /S/ Thomas M. Collins
--------------------------
John J. Pyburn /S/ John J. Pyburn
--------------------------
W. Bruce McConnel, III /S/ W. Bruce McConnel, III
--------------------------
Steven F. Newman /S/ Steven F. Newman
--------------------------
Ishmael Lopez /S/ Ishmael Lopez
--------------------------
Paul Casti /S/ Paul Casti
--------------------------
William Maeder /S/ William Maeder
--------------------------
Any two of the following individuals have been duly authorized
by the Board of Directors of the Fund in conformity with the Fund's Articles of
Incorporation and By-Laws to give Oral Instructions and Written Instructions and
Certificates on behalf of the Fund to direct The Bank of New York or Security
Pacific National Bank to receive or deliver portfolio securities on behalf and
for the benefit of the Fund, and the signatures set forth opposite their
respective names are their true and correct signatures.
<PAGE> 31
NAME SIGNATURE
---- ---------
Scott Johnston /S/ Scott Johnston
--------------------------
William Hensel /S/ William Hensel
--------------------------
James Caywood /S/ James Caywood
--------------------------
Cele DelRosario /S/ Cele Delrosario
--------------------------
Paul Casti /S/ Paul Casti
--------------------------
William Maeder /S/ William Maeder
--------------------------
Joseph Connolly /S/ Joseph Connolly
--------------------------
Maryann Mozer /S/ Maryann Mozer
--------------------------
Paul Molloy /S/ Paul Molloy
--------------------------
The following individuals have been duly authorized by the
Board of Directors of the Fund in conformity with the Fund's Articles of
Incorporation and By-Laws to be authorized signatories in respect of the Fund's
Blue Sky Account at The Bank of New York, provided that checks drawn on such
account may not exceed $500, and the signatures set forth opposite their
respective names are their true and correct signatures:
NAME SIGNATURE
---- ---------
Thomas M. Collins /S/ Thomas M. Collins
--------------------------
W. Bruce McConnel, III /S/ W. Bruce McConnel, III
--------------------------
John J. Pyburn /S/ John J. Pyburn
--------------------------
Christine Pavalos /S/ Christine Pavalos
--------------------------
Mark Jacobs /S/ Mark Jacobs
--------------------------
Daniel Maclean /S/ Daniel Maclean
/S/ Thomas M. Collins
---------------------
Thomas M. Collins
President
/S/ W. Bruce McConnel, III
--------------------------
W. Bruce McConnel, III
Secretary
<PAGE> 32
APPENDIX B
I, Thomas M. Collins, President and I, W. Bruce McConnel, III,
Secretary of PACIFIC HORIZON FUNDS, INC., a Maryland corporation (the "Fund"),
do hereby certify that:
The following individuals are Officers of the Fund as defined
in Article I hereof, subject to the limitations as to their authority provided
in Appendix A hereto, and the signatures set forth opposite their respective
names are their true and correct signatures:
NAME POSITION SIGNATURE
- ---- -------- ---------
Thomas M. Collins President and /S/ Thomas M. Collins
Treasurer ----------------------------
John J. Pyburn Controller /S/ John J. Pyburn
----------------------------
W. Bruce McConnel, III Secretary /S/ W. Bruce McConnel, III
----------------------------
Steven F. Newman Assistant /S/ Steven F. Newman
Secretary ----------------------------
Scott Johnston /S/ Scott Johnston
----------------------------
William Hensel /S/ William Hensel
----------------------------
James Caywood /S/ James Caywood
----------------------------
Cele DelRosario /S/ Cele Delrosario
----------------------------
Paul Casti /S/ Paul Casti
----------------------------
William Maeder /S/ William Maeder
----------------------------
Joseph Connolly /S/ Joseph Connolly
----------------------------
Maryann Mozer /S/ Maryann Mozer
----------------------------
Paul Molloy /S/ Paul Molloy
----------------------------
Ishmael Lopez /S/ Ishmael Lopez
----------------------------
<PAGE> 33
NAME POSITION SIGNATURE
- ---- -------- ---------
Christine Pavalos /S/ Christine Pavalos
---------------------
Mark Jacobs /S/ Mark Jacobs
---------------------
Daniel Maclean /S/ Daniel Maclean
---------------------
/S/ Thomas M. Collins
--------------------------
Thomas M. Collins
President
/S/ W. Bruce McConnel, III
--------------------------
W. Bruce McConnel, III
Secretary
<PAGE> 1
EXHIBIT 8(F)
SUB-CUSTODIAN AGREEMENT, made this 18th day of May, 1988
between THE BANK OF NEW YORK, a corporation organized and existing under the
laws of the State of New York and authorized to do a banking business, having
its principal office and place of business at 48 Wall Street, New York, New
York (hereinafter called the "Custodian"), and CITIBANK, N.A., a national bank
organized and existing under the laws of the United States, having its
principal office and place of business at 399 Park Avenue, New York, New York
(the "Sub-Custodian").
WHEREAS, the Custodian has been appointed and acts as
custodian for securities and cash balances of certain investment companies
registered under the Investment Company Act of 1940, as amended (the "1940
Act") and certain other customers of the Custodian (each a "Customer"); and
WHEREAS, certain Customers wish to maintain the custody of
certain of their securities and moneys in places outside of the United States
for the convenience of purchasing and selling such securities; and
WHEREAS, the Custodian wishes to appoint the Sub-Custodian as
its subcustodian to hold in certain Selected Foreign Sub- Custodians (as such
term is hereinafter defined) certain of the securities of various Customers and
the Sub-Custodian agrees to act as such subcustodian;
NOW, THEREFORE, the Custodian and Sub-Custodian, on behalf of
themselves and their respective successors and assigns, hereby agree as
follows:
ARTICLE I
APPOINTMENT OF SUB-CUSTODIAN
1. The Custodian hereby constitutes and appoints the
Sub-Custodian as subcustodian of such securities and moneys which may be
delivered to it by the Custodian from time to time.
2. The Sub-Custodian hereby accepts appointment as such
subcustodian and agrees to perform the duties thereof as hereinafter set forth.
ARTICLE II
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
<PAGE> 2
1. "Account" shall mean with respect to any particular
Customer a separate account on the books of the Sub-Custodian in the name of
the Custodian as custodian for such Customer wherein shall be identified the
securities and moneys owned by the Customer.
2. The term "Authorized Person" shall mean any officer
of the Custodian and any other person, whether or not any such person is an
officer or employee of the Custodian, duly authorized by the Custodian to give
oral instructions and/or written instructions on behalf of the Custodian, such
persons to be designated in a certificate which contains a specimen signature
of such person.
3. "Branch" shall mean each foreign branch office of the
Sub-Custodian listed on Schedule I hereto, as such Schedule may be amended from
time to time by execution of an updated Schedule I, each of which is a "bank"
as defined in Section 2(a)(5) of the 1940 Act.
4. The term "certificate" shall mean any notice,
instruction or other instrument in writing, authorized or required by this
Agreement to be given to the Sub-Custodian and signed on behalf of the
Custodian by an Authorized Person.
5. "Eligible Foreign Custodian" shall mean an "Eligible
Foreign Custodian" either as defined in Rule 17f-5 under the 1940 Act, or as
granted by an exemption pursuant to Section 6(c) under the 1940 Act, as listed
on Schedule II hereto as such Schedule may be amended from time to time by
execution of an updated Schedule II.
6. "Selected Foreign Sub-Custodian" shall mean with
respect to any particular Customer any Eligible Foreign Custodian and/or any
Branch named in a certificate as having been selected by the Customer specified
in such certificate.
7. The term "written instructions" shall mean written
communications from an Authorized Person by telex, telecopier, or any other
such system whereby the receiver of such communications is able to verify by
codes or otherwise with a reasonable degree of certainty the identity of the
sender of such communication. Written instructions shall include oral
instructions from any Authorized Person, provided such oral instructions are
confirmed in a writing delivered to the Sub-Custodian the same day.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. The Custodian will from time to time deliver or cause
to be delivered certain of the securities and monies owned by any particular
Customer to the Selected Foreign Sub-Custodians of such Customer.
-2-
<PAGE> 3
2. The Custodian hereby authorizes the Sub-Custodian and
each Selected Foreign Sub-Custodian with respect to a particular Customer on a
continuous and ongoing basis, until instructed to the contrary by a
certificate, to deposit in a securities depository which is a Selected Foreign
Sub-Custodian with respect to such Customer all securities of such Customer
eligible for deposit therein and to utilize such securities depository to the
extent possible in connection with settlements of purchases and sales of
securities and other deliveries and returns of securities. Where securities
are so deposited in a securities depository, the Selected Foreign Sub-Custodian
shall identify as belonging to the Sub-Custodian as agent for the appropriate
Customer a quantity of securities in a fungible bulk of securities shown on
such Selected Foreign Sub-Custodian's account on the books of such securities
depository. Securities and moneys deposited in a securities depository will be
represented in accounts which include only assets held by the Selected Foreign
Sub-Custodian for customers, including but not limited to, accounts in which
such Selected Foreign Sub-Custodian acts in a fiduciary or agency capacity.
The Selected Foreign Sub-Custodian shall hold securities of any particular
Customer which are not held in a securities depository physically segregated at
all times from those of any other Customer, account or person.
3. The Sub-Custodian, directly or through a Selected
Foreign Sub-Custodian, shall disburse moneys credited to an Account only:
(a) Pursuant to certificates or written
instructions in payment for securities purchased, as provided in Article IV
hereof; or
(b) Pursuant to certificates or written
instructions setting forth the name and address of the person to whom payment
is to be made, the amount to be paid, and the purpose for which payment is to
be made.
4. All securities identified in an Account which are
issued or issuable only in bearer form, shall be held by the Selected Foreign
Sub-Custodian in that form; all other securities identified in an Account may
be registered in the name of the Customer, or in the name of any duly appointed
nominee of the Selected Foreign Sub-Custodian. The Custodian shall furnish to
the Sub-Custodian appropriate instruments to enable the Selected Foreign
Sub-Custodian to hold or deliver in proper form for transfer, or to register in
nominee name, any securities which it may hold and which may from time to time
be registered in the name of such Customer. If at any time at the request of
the Custodian any securities identified in an Account shall be registered in
the name of the nominee of the Selected Foreign Sub-Custodian, the Custodian
agrees to reimburse, indemnify and hold harmless the Sub-Custodian and such
Selected Foreign Sub-Custodian, and its nominee
-3-
<PAGE> 4
or nominees from and against all liability, loss, claim, damage and expense to
the extent incurred by reason of the registration of such stocks and securities
in the name of its nominee. It is understood and agreed that the Selected
Foreign Sub-Custodian may require the transfer of any securities registered in
the name of its nominee before surrendering possession thereof. The
Sub-Custodian is authorized to charge to an Account all taxes and other
expenses in connection with such Account which are incidental to the transfer
of securities to or from the name of its nominee or nominees, or in lieu of
such charge, the Custodian will remit promptly on receipt of a bill for such
taxes and expenses.
5. The Sub-Custodian shall furnish the Custodian
promptly after the close of business on each day on which any Selected Foreign
Sub-Custodian has engaged in transactions for a Customer a statement
summarizing all transactions and entries for such Customer during said day; and
it shall, at least monthly and from time to time, deliver to the Custodian a
detailed statement of the securities and monies held for such Customer in all
Accounts maintained by it under this Agreement, specifying the Selected Foreign
Sub-Custodian holding such securities and moneys.
6. Unless otherwise instructed to the contrary by a
certificate, the Sub-Custodian shall, either directly or through a Selected
Foreign Sub-Custodian, with respect to all securities identified in an Account:
(a) Collect all income due and payable and advise
the Custodian as promptly as practicable of any income due but not paid;
(b) Present for payment and collect the amount
payable upon all securities which may mature or be called, redeemed, or
retired, or otherwise become payable and advise the Custodian as promptly as
practicable of any amounts due but not paid, whether upon maturity, call,
redemption, retirement or otherwise;
(c) Surrender securities in temporary form for
definitive securities;
(d) Execute, as subcustodian, any necessary
declaration or certificates of ownership under any local tax laws or
regulations now or hereafter in effect;
(e) Hold all stock dividends, rights and
similar securities issued with respect to securities held hereunder;
(f) Remit promptly to the Custodian all income
and dividends on securities when received by the Sub-Custodian;
-4-
<PAGE> 5
(g) Remit promptly to the Custodian all notices
of meetings of shareholders and proxies received relating to securities
identified in an Account; and
(h) Notify the Custodian promptly of the
declaration of any dividend or other distribution relating to securities
identified in an Account.
7. Upon receipt of a certificate and not otherwise, the
Sub-Custodian shall either directly or through a Selected Foreign
Sub-Custodian:
(a) Execute and deliver to such persons as may be
designated in such certificate proxies, consents, authorizations and any other
instruments whereby the authority of a Customer as owner of any securities may
be exercised;
(b) Deliver any securities credited to an Account
in exchange for other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any conversion
privilege;
(c) Deliver any securities credited to an Account
to any protective committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and receive and hold
under the terms of this Agreement such certificates of deposit, interim
receipts or other instruments or documents as may be issued to it to evidence
such delivery; and
(d) Make such transfers or exchanges of the
securities identified in an Account, and take such other steps, as shall be
stated in said certificate, for the purpose of effectuating any duly authorized
plan of liquidation, reorganization, merger, consolidation or recapitalization
of Customer.
8. It is agreed that the Sub-Custodian may act in
accordance with the prevailing customs and practices of jurisdictions where
subcustodial services are provided hereunder in connection with securities and
custody transactions, including, but not limited to, settlements of securities
transactions, provided that the Sub-Custodian gives notice to the Custodian of
the nature of such customs and practices.
9. The Sub-Custodian shall allow the independent public
accountants of the Custodian and any Customer whose securities are held
hereunder access to such records of the Sub-Custodian or confirmation of the
contents of such records as shall be required by such accountants in connection
with their examination of the
-5-
<PAGE> 6
books and records pertaining to the affairs of the Custodian or such Customer.
10. The Sub-Custodian shall upon receipt of a certificate
promptly deliver or cause to be delivered to the Custodian such securities and
money as may be specified in such certificate.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF CUSTOMERS
1. Promptly after each purchase of securities by a
Customer for which such Customer intends the Sub-Custodian, directly or through
any Selected Foreign Sub-Custodian, to act as subcustodian, the Custodian shall
deliver to the Sub-Custodian (i) with respect to each purchase of securities
which are not money market securities, a certificate, and (ii) with respect to
each purchase of money market securities a certificate or oral instructions
specifying with respect to each such purchase: (a) the name of the issuer and
the title of the securities, including CUSIP number or other similar securities
identification number, if any, (b) the number of shares or the principal amount
purchased and accrued interest, if any, (c) the date of purchase and date of
settlement, (d) the purchase price per unit, (e) the total amount payable upon
such purchase, (f) the name of the person from whom or the broker through whom
the purchase was made, and (g) the Selected Foreign Sub-Custodian where such
securities are to be delivered and held. The Sub-Custodian directly or through
any Selected Foreign Sub-Custodian shall receive securities purchased by a
Customer from the persons through or from whom the same were purchased, and
upon receipt thereof shall pay, out of the monies credited to such Customer's
Account, the total amount payable upon such purchase, provided that the same
conforms to the total amount payable shown on such certificate or such oral
instructions, as the case may be, with respect to such purchase.
2. Promptly after each sale of securities by a Customer,
the Custodian shall deliver to the Sub-Custodian (i) with respect to each sale
of securities which are not money market securities, a certificate, and (ii)
with respect to each sale of money market securities a certificate or oral
instructions specifying with respect to each such sale: (a) the name of the
issuer and the title of the security, including CUSIP number or other similar
securities identification number, if any, (b) the number of shares or principal
amount sold, and accrued interest, if any, (c) the date of sale, (d) the sale
price per unit, (e) the total amount payable upon such sale, (f) the name of
the broker through whom or the person to whom the sale was made, and (g) the
Selected Foreign Sub-Custodian from which such securities are to be delivered.
The Sub-Custodian shall directly or through any Selected Foreign Sub-Custodian
deliver the securities sold to the broker or other person named in such
certificate upon receipt of
-6-
<PAGE> 7
the total amount payable to the appropriate Customer upon such sale provided
that the same conforms to the total amount payable to the Customer as set forth
in such certificate or such oral instructions, as the case may be, with respect
to such sale.
ARTICLE V
SELECTED FOREIGN SUB-CUSTODIANS
1. The Sub-Custodian agrees and represents that with
respect to each Selected Foreign Sub-Custodian that is a Branch, first, that
such Branch is a bank as defined in Section 2(a)(5) of the 1940 Act, and,
second, that the Customer's securities and moneys held by such Branch: (a)
will be adequately insured; (b) will not be subject to any right, charge,
security interest, lien or claim of any kind in favor of the Selected Foreign
Sub-Custodian or its creditors, except a claim of payment for their safe
custody or administration; (c) beneficial ownership will be freely transferable
without the payment of money or value other than for safe custody or
administration; (d) adequate records will be maintained identifying the assets
as belonging to the Customer; and (e) the Custodian will receive periodic
reports with respect to the safekeeping of the Customer's assets, including,
but not necessarily limited to, notification of any transfer to or from an
Account.
2. The Sub-Custodian agrees and represents that with
respect to each Selected Foreign Sub-Custodian that is not a Branch, that such
Selected Foreign Sub-Custodian is an Eligible Foreign Sub-Custodian and that
all the securities and moneys of a Customer held by such Selected Foreign
Sub-Custodian will be held pursuant to and in accordance with the agreement
between the Sub-Custodian and such Selected Foreign Sub-Custodian previously
furnished by the Sub-Custodian to the Custodian. The Sub-Custodian further
agrees that such agreement shall not be amended on less than 90 days written
notice to the Custodian, which notice includes the form of amendment.
3. From time to time the Sub-Custodian shall furnish the
Custodian, for transmittal to the Customers, such information with respect to
the Selected Foreign Sub-Custodians as the Sub-Custodian generally makes
available to its customers.
4. The Sub-Custodian shall monitor the foreign custodial
arrangements of the Fund to ensure compliance with the requirements of Rule
17f-5 of the 1940 Act. The Sub-Custodian agrees to inform the Custodian of any
material changes in the circumstances surrounding the foreign custody
arrangements of its Customers.
-7-
<PAGE> 8
ARTICLE VI
CONCERNING THE SUB-CUSTODIAN
1. The Sub-Custodian shall hold each Customer and the
Custodian harmless from, and indemnify each Customer and the Custodian against,
any losses, actions, claims, demands, expenses and proceedings, including
counsel fees, that occur as a result of the failure of any Selected Foreign
Sub-Custodian other than a Selected Foreign Sub-Custodian which is a securities
depositary or clearing agency operating a system for the handling of securities
or equivalent book-entries, to exercise reasonable care with respect to the
safekeeping of moneys and securities of a Customer. The Custodian agrees to
indemnify and hold harmless the Sub-Custodian from and against any losses,
actions, claims, demands, expenses and proceedings, including counsel fees,
resulting from its action or omission to act or otherwise pursuant to this
Agreement, except those losses, actions, claims, demands, expenses and
proceedings arising out of the negligence or wilful misconduct of the
Sub-Custodian. The Sub-Custodian shall not be liable for any expense or damage
incurred by the Custodian, except such expense or damage that arises out of the
Sub-Custodian's negligence, wilful misconduct, or failure to act in accordance
with the terms of this Agreement. The Sub-Custodian may, with respect to
questions of law, apply for and obtain the advice and opinion of counsel to the
appropriate Customers, counsel to the Custodian or of its own counsel, at the
expense of such Customers, and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with such advice or
opinion.
2. Without limiting the generality of the foregoing,
neither the Sub-Custodian nor any Selected Foreign Sub-Custodian shall be under
any duty or obligation to inquire into, or be liable for:
(a) The validity of the issue of any securities
purchased by or for any Customer, the legality of the purchase thereof, or the
propriety of the amount paid therefor; or
(b) The legality of the sale of any securities by
or for any Customer, or the propriety of the amount for which the same are
sold.
3. Neither the Sub-Custodian nor any Selected Foreign
Sub-Custodian shall be liable for, or considered to be the custodian of, any
money represented by any check, draft, or other instrument for the payment of
money received by it on behalf of any Customer, until the Sub-Custodian or such
Selected Foreign Sub-Custodian actually receives such money.
4. Neither the Sub-Custodian nor any Selected Foreign
Sub-Custodian shall be under any duty or obligation to take action to effect
collection of any amount, if the securities upon which
-8-
<PAGE> 9
such amount is payable are in default, or if payment is refused after due
demand or presentation, unless and until (i) it shall be directed to take such
action by a certificate, and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses by the appropriate Customer or
Customers in connection with any such action.
5. Neither the Sub-Custodian nor any Selected Foreign
Sub-Custodian shall be under any duty or obligation to ascertain whether any
securities at any time delivered to or held by it in Accounts are such as may
properly be held by a Customer.
6. The Sub-Custodian shall be entitled to receive and
the Custodian agrees to pay such compensation as may be agreed upon from time
to time between the Custodian and the Sub-Custodian. The Sub-Custodian shall
also be entitled to receive and the Custodian agrees to pay the amount of any
loss, damage, liability or expense, including counsel fees, for which it shall
be entitled to reimbursement under the provisions of this Agreement.
7. The Sub-Custodian shall be entitled to rely upon any
certificate, notice or other instrument in writing received by the
Sub-Custodian and reasonably believed by it to be genuine. The Sub-Custodian
shall be entitled to rely upon any oral instructions received by the
Sub-Custodian pursuant to Article IV hereof with regard to the purchase and
sale of money market securities reasonably believed by the Sub-Custodian to be
genuine and to be sent by an Authorized Person.
8. It is understood and agreed that the Sub-Custodian is
not under any duty to supervise the investment of, or to advise or make any
recommendation to the Custodian or any of the Customers with respect to the
sale or other disposition of any securities at any time held hereunder or to
advise or recommend the purchase of any securities at any time.
9. Under the terms of this Agreement, neither the
Sub-Custodian nor any Selected Foreign Sub-Custodian assumes any duty of filing
any tax reports and returns, nor assumes any responsibility for the payment of
any taxes due on the income collected for the Accounts and on any transactions
which it may handle for the Accounts and in respect of the said Accounts,
except that the Sub-Custodian will cause each Selected Foreign Sub-Custodian to
withhold taxes due at the source on income collected for the Accounts and to
file any tax reports and returns required in connection with any such
withholdings.
ARTICLE VII
TERMINATION
1. Either of the parties hereto may terminate this
Agreement by giving to the other party a notice in writing from an
-9-
<PAGE> 10
authorized officer specifying the day of such termination, which shall be not
less than 180 days following the giving of such notice. The Custodian shall,
on or before the termination date, deliver to the Sub-Custodian a written
direction from an officer of the Custodian designating a successor
subcustodian, if any.
2. Upon the date set forth in such notice this Agreement
shall terminate, and the Sub-Custodian shall upon receipt of a notice of
acceptance by the successor subcustodian, if any, on that date deliver directly
to the successor subcustodian all securities and moneys then owned by the
Customers and held by it as subcustodian, after deducting all fees, expenses
and other amounts for the payment or reimbursement of which it shall then be
entitled. If no successor subcustodian shall have been appointed by the
custodian, the Sub-Custodian shall deliver all such securities and moneys to
the Custodian.
ARTICLE VIII
MISCELLANEOUS
1. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Sub-Custodian shall be
sufficiently given if addressed to the Sub-Custodian and received by it at its
offices at 111 Wall Street, New York, New York 10005: Attention: Global
Custody Operations. All notices shall be deemed received by the Sub-Custodian
on the date of posting of such notices.
2. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Custodian shall be
sufficiently given if addressed to the Custodian and received by it at its
offices at 90 Washington Street, New York, New York 10015 or at such other
place as the Custodian may from time to time designate in writing. All notices
shall be deemed received by the Custodian on the date of posting of such
notices.
3. This Agreement constitutes the valid and binding
agreement between the parties hereto and supersedes all prior agreements
between the parties relating to foreign subcustodial services provided by the
Sub-Custodian for the Custodian.
4. The parties hereto agree that the Sub-Custodian shall
have no obligation to take any action which is contrary to any law, order or
regulation of any jurisdiction where subcustodial services are provided
hereunder.
5. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties with the same
formality as this Agreement.
-10-
<PAGE> 11
6. This Agreement shall extend to and shall be binding
upon the parties hereto, and their respective successors and assigns.
7. This Agreement shall be construed in accordance with
the laws of the State of New York.
8. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but such
counterparts shall, together, constitute only one instrument.
9. At any time after the execution of this Agreement
securities and moneys of any customer of the Custodian now held under that
certain SUB-CUSTODIAN AGREEMENT dated November 1, 1985 between the Custodian
and the Sub-Custodian (the "Prior Agreement") shall upon the Sub-Custodian's
receipt of a certificate specifying such customer be held hereunder without the
execution of any document or agreement. The execution of this Agreement shall
neither amend, modify, or terminate the Prior Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective corporate officers, thereunder
duly authorized and their respective corporate seals to be hereunto affixed, as
the day and year first above written.
CITIBANK, N.A.
By: /s/ Carlos A. Salvatori
------------------------------
Title: Vice President
Attest:
/s/ William E. Wahba
- ---------------------
THE BANK OF NEW YORK
By: /s/ S. Grunston
---------------------
Title: Vice President
Attest:
/s/ [signature illegible]
- --------------------------
Vice President
-11-
<PAGE> 12
Schedule I
----------
Citibank Branches
-----------------
<TABLE>
<CAPTION>
Country Bank Name & Address Status
- ------- ------------------- ------
<S> <C> <C>
Argentina Citibank, N.A. Branch
Bartolome Mitre 502
Buenos Aires, Argentina
Brazil Citibank, N.A. Branch
Av. Nilo Pecanha 50-22 Andar
Rio de Janeiro, Brazil
Chile Citibank, N.A. Branch
Ahumada 40
Santiago, Chile
Hong Kong Citibank, N.A. Branch
Citicorp Centre
18 Whitfield Road, Causeway Bay
Hong Kong
Italy Citibank, N.A. Branch
Toro Bonaparte N. 16
Casella Postale 10932
20121, Milan, Italy
Japan Citibank, N.A. Branch
2-1 Ohtemachi 2-Chome
Chiyoda - ku, Tokyo, Japan
Korea Citibank, N.A. Branch
#1-1, 1-KA, Chongro, Chongro-ku
Seoul, Korea
Malaysia Citibank, N.A. Branch
28 Medan Pasar
Kuala Lumpur, Malaysia
Mexico Citibank, N.A. Branch
Paseo de la Reforma 390
Mexico, Mexico, D.F.
Netherlands Citibank, N.A. Branch
Herengracht 545-549, 1017 BW
Amsterdam, The Netherlands
</TABLE>
<PAGE> 13
Schedule I
----------
Citibank Branches
-----------------
<TABLE>
<CAPTION>
Country Bank Name & Address Status
- ------- ------------------- ------
<S> <C> <C>
Philippines Citibank, N.A. Branch
Citibank Center 8741 Paseo
de Roxas
Makati Metro, Manilla
Philippines
Singapore Citibank, N.A. Branch
UIC Building, 5 Shenton Way
Singapore 9008
Spain Citibank, N.A. Branch
Jose Ortega Y Gasset 29
28006, Madrid, Spain
Taiwan Citibank, N.A. Branch
742 Min Sheng East Road
Taipei, Taiwan
Thailand Citibank, N.A. Branch
127 South Sathorn Road
Bangkok, 10120, Thailand
United Kingdom Citibank, N.A.Branch Branch
11 Old Jewry
London, EC2, England
</TABLE>
<PAGE> 14
Schedule II
-----------
Eligible Foreign Custodians
---------------------------
<TABLE>
<CAPTION>
Country Bank Name & Address Status
- ------- ------------------- ------
<S> <C> <C>
Luxembourg Cedel, S.A. Depository
67 Boulevard Grande-Duchesse
Charlotte
L-1010, Luxembourg
Austria Citibank, N.A. Subsidiary
Postfach 90
Lothringers Trabe 7
A-1015 Vienna, Austria
Australia Citibank, Ltd. Subsidiary
35 Collins Street
Melbourne VIC 3000 Australia
France Citibank, S.A. Subsidiary
Citicenter
19 Le Palvis
Paris, France
Switzerland Citicorp Investment Bank Subsidiary
(Switzerland)
P.O. Box 244
CH-8021 Zurich, Switzerland
West Germany Citibank Aktiengesellschaft Subsidiary
Neue Mainzer Str.75
Postfach 110333
D-6000 Frankfurt/Main 11
West Germany
Austria Creditanstalt Bankverein Correspondent
Vienna 1, Schottengasse 6
Vienna, Austria
Australia ANZ Bank Correspondent
Collins Place
55 Collins Street
Melbourne VIC 3000 Australia
Belgium Generale De Banque Correspondent
Montagne du Parc 3, 1000
Brussels, Belgium
</TABLE>
<PAGE> 15
Schedule II
-----------
Eligible Foreign Custodians
---------------------------
<TABLE>
<CAPTION>
Country Bank Name & Address Status
- ------- ------------------- ------
<S> <C> <C>
Canada The Canada Trust Co. Correspondent
320 Bay Street
Toronto, Ontario M5H 2P6
Canada
Denmark Den Danske Bank Correspondent
12 Holmens Kanal
DK-1092
Copenhagen K, Denmark
Finland Kansailis-Osake-Pankki Correspondent
Aleksanterinkatu 42
SF-00100 Helsinki, Finland
France Banque Paribas Correspondent
3 Rue D'Antim
75002 Paris, France
Ireland Allied Irish Bank Correspondent
Bankcentre, P.O. Box 512
Ballsbridge, Dublin 4
Ireland
Italy Istituto Bancario Correspondent
San Paolo di Torino
Corsa Di Porta
Nuova 1 20121
Milan, Italy
New Zealand ANZ Nominees Ltd. Correspondent
215-229 Lambton Quay
Wellington 1, New Zealand
Norway Den Norske Creditbank Correspondent
Kirkegart 21
Oslo 1, Norway
South Africa First National Bank of Correspondent
South Africa, Ltd.
Diagonal Street
Johannesburg, 2001 South Africa
Spain Banco De Bilbao Correspondent
Paseo De La Castellana, No. 81
Madrid, Spain
</TABLE>
<PAGE> 16
Schedule II
-----------
Eligible Foreign Custodians
---------------------------
<TABLE>
<CAPTION>
Country Bank Name & Address Status
- ------- ------------------- ------
<S> <C> <C>
Sweden Skandinaviska Enskilda Banken Correspondent
Kungstradgardsgatan 8
Stockholm, Sweden
</TABLE>
<PAGE> 1
EXHIBIT 9(A)
BASIC ADMINISTRATIVE SERVICES AGREEMENT
---------------------------------------
This Agreement is made as of this 13th day of November, 1989
between PACIFIC HORIZON FUNDS, INC., a Maryland corporation (the "Company"),
and CONCORD HOLDING CORPORATION, a Delaware corporation ("Concord").
WHEREAS, the Company is an open-end management investment
company and is so registered under the Investment Company Act of 1940 ("1940
Act"); and
WHEREAS, the Company offers and maintains the following
investment portfolios: Prime Fund, Treasury Fund, Horizon Tax-Exempt Money
Fund, California Tax-Exempt Money Market Fund and Pacific Horizon Tax-Exempt
Money Market Fund (the "Funds"); and
WHEREAS, the Company offers for sale separate series of shares
of beneficial interest in each Fund (the "Shares"); and
WHEREAS, pursuant to a Distribution Agreement of even date
herewith (the "Distribution Agreement") between the Company and Concord
Financial Group, Inc. ("Concord Financial"), the Company has retained Concord
Financial as its Distributor to provide for the sale and distribution of the
Shares; and
WHEREAS, the Company desires to retain Concord as its
Administrator to provide basic administrative services for the benefit of all
classes of Shares in each of the Funds, and Concord is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties hereto agree as follows:
I. ADMINISTRATION
--------------
1. APPOINTMENT OF ADMINISTRATOR. The Company hereby
appoints Concord as Administrator of each Fund on the terms and for the period
set forth in this Agreement, and Concord hereby accepts such appointment and
agrees to perform the services and duties set forth in this Section I for the
compensation provided in this Section. The Company understands that Concord
now acts and will continue to act as administrator of various investment
companies and fiduciary of other managed accounts, and the Company has no
objection to Concord's so acting. In addition, it is understood that the
persons employed by Concord to assist in the performance of its duties
hereunder will not devote their full time to such services, and nothing herein
contained shall be
<PAGE> 2
deemed to limit or restrict the right of Concord or any affiliate of Concord to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
2. SERVICES AND DUTIES.
(a) Subject to the supervision and control of the
Company's Board of Directors, Concord will provide facilities, equipment and
personnel to carry out those administrative services that are for the benefit
of all series of Shares in each of the Funds, provided that such services will
not include those investment advisory functions which are to be performed by
the Company's Investment Adviser, the services of Concord Financial as
Distributor pursuant to the Distribution Agreement, those services to be
performed by The Bank of New York pursuant to the Company's Custody Agreement
and Transfer Agency Agreement and those services normally performed by the
Company's counsel and auditors.
(b) Concord's responsibilities include, without
limitation, the following services:
(i) Participation in the periodic
updating of the prospectuses and statements of additional information for the
Funds (the "Prospectuses") and accumulation of information for and, subject to
approval by the Company's Treasurer and legal counsel, coordination of the
preparation, filing, printing and dissemination of reports to the Funds'
shareholders and the Securities and Exchange Commission (the "Commission"),
including but not limited to annual reports and semi-annual reports on Form
N-SAR, notices pursuant to Rule 24f-2 and proxy materials;
(ii) Computation of each Fund's net asset
value per share on each business day and determination of the variance of each
Fund's amortized cost value per share from its market value per share;
(iii) Calculation of the expenses,
dividends and capital gain distributions of each Fund;
(iv) Payment of all expenses of
maintaining the offices of the Company, wherever located, and arrangement for
payment by the Company of all expenses payable by the Funds;
(v) Determination, after consultation
with legal counsel for the Company, of the jurisdictions in which Shares for
sale to institutional investors are to be registered or qualified for sale and,
in connection therewith, responsibility for the maintenance of the registration
or
-2-
<PAGE> 3
qualification of the Shares for sale under the securities laws of such
jurisdictions;
(vi) Provision of the services of persons
who may be appointed as officers of the Company by the Company's Board of
Directors;
(vii) Preparation and filing of the
Company's federal, state and local income tax returns;
(viii) Preparation and, subject to approval
of the Company's Treasurer, dissemination of the Company's and each Fund's
quarterly financial statements and schedules of investments to the Company's
directors, and preparation of such other reports relating to the business and
affairs of the Company and each Fund as the officers and directors of the
Company may from time to time reasonably request; and
(ix) Provision of internal legal and
accounting compliance services.
(c) In addition, Concord shall provide the
following services with respect to all shareholders in the Funds (regardless of
the class of Shares held) who have made a minimum initial purchase of at least
$500,000:
(i) Providing and supervising a facility
to receive purchase and redemption orders via toll-free IN-WATS telephone
lines;
(ii) Providing for the preparing,
supervising and mailing of confirmations for all purchase and redemption
orders;
(iii) Providing and supervising the
operation of an automated data processing system to process purchase and
redemption orders received by Concord (Concord assumes responsibility for the
accuracy of the data transmitted for processing or storage);
(iv) Overseeing the performance of The
Bank of New York under the Custody Agreement and Transfer Agency Agreement
including a review of all correspondence from the transfer agent to
shareholders for accuracy and timeliness in handling inquiries and review of
dividend checks, statements and purchase and redemption orders for proper
turn-around;
(v) Making available information
concerning each Fund to shareholders; distributing written communications to
each Fund's shareholders such as periodic listings of each Fund's portfolio
securities, annual and semi-
-3-
<PAGE> 4
annual reports, and Prospectuses and supplements thereto; and handling
shareholder problems and calls relating to administrative matters;
(vi) Providing and supervising the
services of employees ("relationship coordinators") whose principal
responsibility and function will be to preserve and strengthen each Fund's
relationships with its shareholders;
(vii) Assuring that persons are available
to transmit redemption requests to the Company's transfer agent as promptly as
practicable;
(viii) Assuring that persons are available
to transmit orders accepted for the purchase of Shares to the transfer agent of
the Company as promptly as practicable;
(ix) Preparing regular reports for
internal use and for distribution to the Company's Board of Directors
concerning shareholder activity; and
(x) Responding to shareholder inquiries
sent to the Company.
(d) Concord shall oversee the maintenance by The
Bank of New York of the books and records required under the 1940 Act in
connection with performance of the Custody Agreement and Transfer Agency
Agreement, and shall maintain (or oversee the maintenance by such other persons
as may from time to time be approved by the Company's Board of Directors) such
other books and records (other than those required to be maintained by the
Funds' investment adviser) as may be required by law or may be required for the
proper operation of the business and affairs of the Funds. In compliance with
the requirements of Rule 31a-3 under the 1940 Act, Concord agrees that all such
books and records which it maintains, or is responsible for maintaining, for
the Company and the Funds are the property of the Company and further agrees to
surrender promptly to the Company any of such books and records upon the
Company's request. Concord further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act said books and records required to
be maintained by Rule 31a-1 under said Act.
(e) In performing its services and duties
hereunder as Administrator for the Funds, Concord will act in conformity with
the Company's Charter, Bylaws and Prospectuses and with the instructions and
directions of the Board of Directors of the Company, and will conform to and
comply with the requirements of the 1940 Act and all other applicable federal
or state laws and regulations.
-4-
<PAGE> 5
3. SUBCONTRACTORS. It is understood that Concord may
from time to time employ or associate with itself such person or persons as
Concord may believe to be particularly fitted to assist in the performance of
this Agreement; provided, however, that the compensation of such person or
persons shall be paid by Concord and that Concord shall be as fully responsible
to the Company for the acts and omissions of any subcontractor as it is for its
own acts and omissions. Without limiting the generality of the foregoing, it
is understood that Concord intends to enter into an agreement with The Bank of
New York under which said institution will provide certain accounting,
bookkeeping, pricing and dividend and distribution calculation services with
respect to the Funds.
4. EXPENSES ASSUMED AS ADMINISTRATOR. Except as
otherwise stated in this subsection 4, Concord shall pay all expenses incurred
by it in performing its services and duties hereunder as Administrator
including the cost of any independent pricing service used in connection with
the Funds. Other expenses to be incurred in the operation of the Funds (other
than those borne by the Company's investment adviser) including taxes,
interest, brokerage fees and commissions, if any, fees of directors who are not
officers, directors, partners, employees or holders of 5 percent or more of the
outstanding voting securities of the Company's investment adviser or Concord or
any of their affiliates, Securities and Exchange Commission fees and state blue
sky registration and qualification fees, advisory fees, fees payable to
shareholder organizations, fees for special management services, charges of
custodians, transfer and dividend disbursing agents' fees, certain insurance
premiums, outside auditing and legal expenses, costs of maintaining corporate
existence, costs attributable to shareholder services, including without
limitation telephone and personnel expenses, costs of preparing and printing
Prospectuses, or any supplement or amendment thereto, necessary for the
continued effective registration of the Shares under the 1933 Act or state
securities laws, costs of printing and distributing any Prospectus, supplement
or amendment thereto for existing shareholders of the Fund described therein,
costs of shareholder reports and corporate meetings and any extraordinary
expenses will be borne by the Funds.
5. COMPENSATION. For the services provided and the
expenses assumed as Administrator pursuant to Section I of this Agreement, the
Company will pay Concord a fee, computed daily and payable monthly, based on
the net assets of the Prime Fund, Treasury Fund, Horizon Tax-Exempt Money Fund,
California Tax-Exempt Money Market Fund and Pacific Horizon Tax-Exempt Money
Market Fund considered separately on a per Fund basis at the following annual
rates: .10% of the first $3 billion of each Fund's net assets, plus .09% of the
next $2 billion of each Fund's net assets, plus .08% of each Fund's net assets
over $5 billion. Such fee as is attributable to each Fund shall be a
-5-
<PAGE> 6
separate charge to each such Fund and shall be the several (and not joint and
several) obligation of each such Fund. Notwithstanding anything to the
contrary herein, if in any fiscal year the aggregate expenses of any Fund (as
defined under the securities regulations of any state having jurisdiction over
such Fund) exceed the expense limitations of any such state, Concord will
reimburse the Fund for one-half of such excess expenses unless the Fund's
investment adviser reimburses the Fund for more than one-half of such excess
expenses, in which case Concord will reimburse the Fund for the difference
between the amount of such excess expenses less the amount of the investment
adviser's reimbursement to the Fund. The obligations of Concord to reimburse
any Fund hereunder is limited in any fiscal year to the amount of its fee
hereunder for such fiscal year with respect to such Fund; PROVIDED, HOWEVER,
that notwithstanding the foregoing, Concord shall reimburse any Fund for such
proportion of such excess expenses regardless of the amount of fees paid to it
during such fiscal year to the extent that the securities regulations of any
state having jurisdiction over the Fund so require. Such expense
reimbursement, if any, will be estimated and accrued daily and paid on a
monthly basis.
II. CONFIDENTIALITY
---------------
Concord will treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company and the Funds and prior or present shareholders or those persons or
entities who respond to Concord Financial's inquiries concerning investment in
the Company, and will not use such records and information for any purpose
other than performance of its responsibilities and duties hereunder or under
any other agreement with the Company, except after prior notification to and
approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where Concord may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Company.
III. LIMITATIONS OF LIABILITY
------------------------
Concord shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Company or by any Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. Any person, even though also an officer,
director, partner, employee or agent of Concord, who may be or become an
officer, director, employee or agent of the Company, shall be deemed, when
rendering services to the Company or to any Fund or acting on any business of
the Company or of any Fund
-6-
<PAGE> 7
(other than services or business in connection with Concord's duties as
Administrator hereunder or under any other agreement with the Company) to be
rendering such services to or acting solely for the Company or Fund and not as
an officer, director, partner, employee or agent or one under the control or
direction of Concord even though paid by Concord.
IV. DURATION AND TERMINATION
------------------------
This Agreement shall become effective with respect to a Fund
on the date it is approved by the shareholders of the Fund and, unless sooner
terminated as provided herein, shall continue until October 31, 1991.
Thereafter, if not terminated, this Agreement shall continue automatically as
to a particular Fund for successive terms of one year, provided that such
continuance is specifically approved at least annually (a) by a vote of a
majority of those members of the Board of Directors of the Company who are not
parties to this Agreement or "interested persons" of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Board of Directors of the Company or by vote of a "majority of the
outstanding voting securities" of such Fund; PROVIDED, HOWEVER, that this
Agreement may be terminated by the Company at any time with respect to any
Fund, without the payment of any penalty, by vote of a majority of the entire
Board of Directors of the Company or by a vote of a "majority of the
outstanding voting securities" of such Fund on 60 days' written notice to
Concord, or by Concord at any time, without the payment of any penalty, on 90
days' written notice to the Company. This Agreement will automatically and
immediately terminate in the event of its "assignment." (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person" and "assignment" shall have the same meaning as such terms
have in the 1940 Act.)
V. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which an enforcement of the change, waiver, discharge or
termination is sought.
VI. NOTICES
-------
Notices of any kind to be given to the Company hereunder by
Concord shall be in writing and shall be duly given if mailed or delivered to
the Company at one Wilshire Boulevard, Suite 2000, Los Angeles, California
90007, Attention: Thomas M. Collins, or at such other address or to such
individual as shall be so specified by the Company to Concord. Notices of any
kind to be given to Concord hereunder by the Company shall be in writing and
shall be duly given if mailed or delivered to Concord
-7-
<PAGE> 8
at 156 West 56th Street, Suite 1902, New York, New York 10019 Attention:
William B. Blundin, President, or at such other address or to such individual
as shall be so specified by Concord to the Company.
VII. MISCELLANEOUS
-------------
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section IV hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by New York law; provided, however, that
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation of the Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
----------------------------
President
Attest:/s/ W. Bruce McConnel, III
----------------------------
Secretary
CONCORD HOLDING CORPORATION
By:/s/ William B. Blundin
----------------------
President
Attest:/s/ [signature illegible]
-------------------------
Secretary
-8-
<PAGE> 1
EXHIBIT 9(B)
AMENDMENT NO. 1 TO
BASIC ADMINISTRATIVE SERVICES AGREEMENT
WHEREAS, Pacific Horizon Funds, Inc., a Maryland corporation (the
"Company"), and CONCORD HOLDING CORPORATION, a Delaware corporation
("Concord"), are parties to a Basic Administrative services Agreement dated as
of November 13, 1989 (the "Agreement") wherein Concord has agreed to provide
basic administrative services to the Company's Prime Fund, Treasury Fund,
Horizon Tax-Exempt Money Fund, California Tax- Exempt Money Market Fund and
Pacific Horizon Tax-Exempt Money Market Fund (sometimes referred to herein
collectively as the "Funds"); and
WHEREAS, the parties wish to amend the Agreement in certain respects;
NOW THEREFORE, the parties hereby agree, intending to be legally
bound, that effective immediately the Agreement is amended to read as follows:
1. The second sentence of Section I, subsection 3, is
hereby amended and restated in its entirety as follows: "Without
limiting the generality of the foregoing, it is understood that
Concord intends to enter into an agreement with The Bank of New York
under which said institution will provide certain accounting,
bookkeeping, pricing and dividend and distribution calculation
services with respect to the Funds at the expense of the Funds.
2. The first sentence of Section I, subsection 5, is
hereby amended and restated in its entirety as follows: "For the
services provided and the expenses assumed as Administrator pursuant
to Section I of this Agreement, the Company will pay Concord a fee,
computed daily and payable monthly, based on the net assets of the
Prime Fund, Treasury Fund, Horizon Tax-Exempt Money Fund, California
Tax-Exempt Money Market Fund and Pacific Horizon Tax-Exempt Money
Market Fund considered separately on a per-Fund basis at the following
annual rates: .10% of the first $7 billion of each Fund's net assets,
plus .09% of the next $3 billion of each Fund's net assets, plus .08%
of each Fund's net assets over $10 billion."
3. Section IV is hereby amended and restated in its
entirety as follows: "This Agreement shall become effective with
respect to a Fund on the date it is approved by the shareholder(s) of
the Fund and, unless sooner terminated as provided herein, shall
continue until October 31, 1992. Thereafter, this Agreement will be
automatically extended
<PAGE> 2
with respect to each Fund (i) for an additional period of two years
and (ii) thereafter for successive periods of one year, provided that
this Agreement is not sooner terminated as provided below. This
Agreement may be terminated by the Company at any time with respect to
any Fund, without the payment of any penalty, by vote of a majority of
the entire Board of Directors of the Company or by a vote of a
"majority of the outstanding voting securities" of such Fund on 60
days' written notice to Concord, or by Concord at any time, without
the payment of any penalty, on 60 days' written notice to the Company.
This Agreement will automatically and immediately terminate in the
event of its "assignment." (As used in this Agreement, the terms
"majority of the outstanding voting securities" and "assignment" shall
have the same meaning as such terms in the 1940 Act.)"
Except as expressly amended and modified hereby, all provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as
of the 1st day of November, 1991.
PACIFIC HORIZON FUNDS, INC.
Attest:/s/ W. Bruce McConnel, III By:/s/ Thomas M. Collins
-------------------------- ---------------------
Secretary President
CONCORD HOLDING CORPORATION
Attest:/s/ Suzanne M. Clark By:/s/ Richard E. Stierwalt
-------------------- ------------------------
-2-
<PAGE> 1
EXHIBIT 9(C)
AMENDMENT NO. 2 TO BASIC ADMINISTRATIVE SERVICES AGREEMENT
This Amendment No. 2, dated as of the 1st day of March, 1993, is
entered into between PACIFIC HORIZON FUNDS, INC. (the "company"), a Maryland
corporation, and Concord Holding Corporation, a Delaware corporation
("Concord").
WHEREAS, the Company and Concord have entered into a Basic
Administrative Services Agreement dated as of November 13, 1989 as amended by
Amendment No. 1 dated as of November 1, 1991 (the "Administration Agreement"),
pursuant to which the Company retained Concord as its Administrator to provide
basic administrative services for the benefit of all classes of Shares (as
defined in the Administration Agreement) in its Prime Fund, Treasury Fund,
Horizon Tax-Exempt Money Fund, California TaxExempt Money Market Fund and
Pacific Horizon Tax-Exempt Money Market Fund; and
WHEREAS, the Company has notified Concord that it has established a
Treasury Only Fund and Government Fund and that it desires to retain Concord to
act as the Administrator therefor, and Concord has notified the Company that it
is willing to serve as the Administrator for the Treasury Only Fund and
Government Fund (the "Funds");
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. APPOINTMENT. The Company hereby appoints Concord as
Administrator of the Treasury Only Fund and Government Fund for the period and
on the terms set forth in the Administration Agreement. Concord hereby accepts
such appointment and agrees to perform the services and duties set forth in the
Administration Agreement, for the compensation herein provided.
2. COMPENSATION. For the services provided and the expenses
assumed as Administrator pursuant to the Administration Agreement with respect
to the Treasury Only Fund and Government Fund, the Company will pay concord a
fee, computed daily and paid monthly, based on the net assets of the Treasury
Only Fund and Government Fund considered separately on a per-Fund basis at the
following annual rates: .10% of the first $7 billion of each Fund's net
assets, plus .09% of the next $3 billion of each Fund's net assets, plus .08%
of each Fund's net assets over $10 billion. Such fee as is attributable to
each Fund will be a separate charge to each such Fund and will be the several
(and not the joint and several) obligation of each such Fund.
<PAGE> 2
If in any fiscal year the aggregate expenses of any Fund (as defined
under the securities regulations of any state having jurisdiction over such
Fund) exceed the expense limitations of any such state, Concord will reimburse
the Fund for one-half of such excess expenses unless the Fund's investment
adviser reimburses the Fund for more than one-half of such excess expenses, in
which case Concord will reimburse the Fund for the difference between the
amount of such excess expenses less the amount of the investment adviser's
reimbursement to the Fund. The obligation of Concord to reimburse any Fund
hereunder is limited in any fiscal year to the amount of its fee hereunder for
such fiscal year with respect to such Fund; PROVIDED, HOWEVER, that
notwithstanding the foregoing, Concord shall reimburse any Fund for such
proportion of such excess expenses regardless of the amount of fees paid to it
during such fiscal year to the extent that the securities regulations of any
state having jurisdiction over the Fund so require. Such expense
reimbursement, if any, will be estimated and accrued daily and paid on a
monthly basis.
3. MISCELLANEOUS. Except to the extent amended hereby, the
Administration Agreement shall remain unchanged and in full force and effect
and is hereby ratified and confirmed in all respects as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 2
as of the date and year first above written.
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
---------------------
President
CONCORD HOLDING CORPORATION
By:/s/ Richard Stierwalt
---------------------
Chief Executive Officer
-2-
<PAGE> 1
EXHIBIT 9(D)
AMENDMENT NO. 3 TO BASIC ADMINISTRATIVE SERVICES AGREEMENT
This Amendment No. 3, dated as of the 1st day of March, 1993, is
entered into between PACIFIC HORIZON FUNDS, INC. (the "Company"), a Maryland
corporation, and Concord Holding Corporation, a Delaware corporation
("Concord").
WHEREAS, the Company and Concord have entered into a Basic
Administrative Services Agreement dated as of November 13, 1989 as amended by
Amendment No. 1 dated as of November 1, 1991 and Amendment No. 2 dated as of
March 1, 1993 (the "Administration Agreement"), pursuant to which the Company
retained Concord as its Administrator to provide basic administrative services
for the benefit of all classes of Shares (as defined in the Administration
Agreement) in its Prime Fund, Treasury Fund, Horizon Tax-Exempt Money Fund,
California Tax-Exempt Money Market Fund, Pacific Horizon Tax-Exempt Money
Market Fund, Government Fund and Treasury Only Fund; and
WHEREAS, the Company has notified Concord that it has established a
Prime Value Fund and that it desires to retain Concord to act as the
Administrator therefore, and Concord has notified the Company that it is
willing to serve as the Administrator for the Prime Value Fund (the "Fund");
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. APPOINTMENT. The Company hereby appoints Concord as
Administrator of the Prime Value Fund for the period and on the terms set forth
in the Administration Agreement. Concord hereby accepts such appointment and
agrees to perform the services and duties set forth in the Administration
Agreement, for the compensation herein provided.
2. COMPENSATION. For the services provided and the expenses
assumed as Administrator pursuant to the Administration Agreement with respect
to the Prime Value Fund, the Company will pay Concord a fee, computed daily and
paid monthly, based on the net assets of the Prime Value Fund at the following
annual rates: .10% of the first $7 billion of said Fund's net assets, plus
.09% of the next $3 billion of said Fund's net assets, plus .08% of said Fund's
net assets over $10 billion.
If in any fiscal year the aggregate expenses of the Prime Value Fund
(as defined under the securities regulations of any state having jurisdiction
over such Fund) exceed the expense limitations of any such state, Concord will
reimburse the Fund for one-half of such excess expenses unless the Fund's
investment
<PAGE> 2
adviser reimburses the Fund for more than one-half of such excess expenses, in
which case Concord will reimburse the Fund for the difference between the
amount of such excess expenses less the amount of the investment adviser's
reimbursement to the Fund. The obligation of Concord to reimburse the Prime
Value Fund hereunder is limited in any fiscal year to the amount of its fee
hereunder for such fiscal year with respect to the Fund; PROVIDED, HOWEVER,
that notwithstanding the foregoing, Concord shall reimburse such Fund for such
proportion of such excess expenses regardless of the amount of fees paid to it
during such fiscal year to the extent that the securities regulations of any
state having jurisdiction over the Fund so require. Such expense
reimbursement, if any, will be estimated and accrued daily and paid on a
monthly basis.
3. MISCELLANEOUS. Except to the extent amended hereby, the
Administration Agreement shall remain unchanged and in full force and effect
and is hereby ratified and confirmed in all respects as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 3
as of the date and year first above written.
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
---------------------
President
CONCORD HOLDING CORPORATION
By:/s/ William B. Blundin
----------------------
President
<PAGE> 1
EXHIBIT 9(E)
Amendment No. 4 to
Basic Administrative Services Agreement
---------------------------------------
WHEREAS, Pacific Horizon Funds, Inc., a Maryland corporation
(the "Company"), and CONCORD HOLDING CORPORATION, a Delaware corporation
("Concord"), are parties to a Basic Administrative Services Agreement dated as
of November 13, 1989, as amended (the "Agreement"), wherein Concord has agreed
to provide basic administrative services to the Company's Prime Fund, Treasury
Fund, Tax-Exempt Money Fund, California Tax-Exempt Money Market Fund,
Government Fund, Treasury Only Fund and Prime Value Fund (sometimes referred to
herein collectively as the "Funds"); and
WHEREAS, the parties wish to amend the Agreement in certain
respects;
NOW THEREFORE, the parties hereby agree, intending to be
legally bound, that effective immediately the Agreement is amended to read as
follows:
1) Section IV is hereby amended and restated in its
entirety as follows: "This Agreement shall become
effective November 1, 1993 and, unless sooner
terminated as provided herein, shall continue until
October 31, 1995. Thereafter, this Agreement will be
extended for successive two year periods ending on
October 31st of each year, provided each such
extension is specifically approved (a) by vote of a
majority of those members of the Fund's Board of
Directors who are not interested persons of any party
to this Agreement, cast in person at a meeting called
for the purpose of voting on such approval, and (b)
by the Company's Board of Directors or by vote of a
majority of the outstanding voting securities of such
Fund. This Agreement is terminable during any term
for cause at any time by the Fund's Board of
Directors, "cause" being defined and limited for this
purpose to mean willful misfeasance, bad faith or
negligence by Concord in the performance of its
duties or from reckless disregard by it of its
obligations and duties under this Agreement. The
Fund's Board of Directors may terminate this
Agreement at the end of any term without cause upon
60 days prior written notice to Concord. This
Agreement will immediately terminate in the event of
its assignment. (As used in this
<PAGE> 2
Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and
"assignment" have the same meanings as
such terms have in the 1940 Act.)
Except as expressly amended and modified hereby, all
provisions of the Agreement shall remain in full force and effect.
This agreement may be executed in one or more counterparts
and all such counterparts will constitute one and the same instrument.
IN WITNESS WHEREOF, intending to be legally bound, hereby, the
parties have executed this Amendment No. 4 as of the 1st day of November, 1993.
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
---------------------
President
CONCORD HOLDING CORPORATION
By:/s/ Richard Stierwalt
---------------------
Chief Executive Officer
-2-
<PAGE> 1
EXHIBIT 9(F)
AGREEMENT RELATING TO
BASIC ADMINISTRATIVE SERVICES AGREEMENT
This AGREEMENT, is made as of the 29th day of March, 1995
between Pacific Horizon Funds, Inc., a Maryland Corporation (the "Fund"), and
Concord Holding Corporation, a Delaware Corporation ("Concord").
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act") and has entered into a Basic Administrative Services Agreement ("Basic
Administrative Services Agreement") with Concord whereby Concord provides
certain basic administrative services to the Prime Fund, Treasury Fund,
Tax-Exempt Money Fund, California Tax-Exempt Money Market Fund, Government
Fund, Treasury Only Fund and Prime Value Fund, and
WHEREAS, the Basic Administrative Services Agreement provides
that it will automatically terminate in the event of its assignment, as that
term is defined in the Investment Company Act of 1940 (the "1940 Act"), and
WHEREAS, Concord has entered into a definitive merger
agreement with The BISYS Group, Inc. ("BISYS") pursuant to which a subsidiary
of BISYS will merge with and into Concord and Concord will become a
wholly-owned subsidiary of BISYS (the "Merger") on or about March 31, 1995 (the
actual date of the Merger to be referred to as the "Merger Date"), and
WHEREAS, the Merger will result in a change of control of
Concord that may be deemed to result in an assignment and termination of the
Basic Administrative Services Agreement as that term is defined in the 1940
Act, and
WHEREAS, the Fund wishes Concord to continue to perform basic
administrative services following the Merger on the same terms and conditions
as exist prior to the Merger Date and Concord wishes to continue to perform
such basic administrative services under those same terms.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the Parties hereto
agree as follows:
1. RENEWAL AND REINSTATEMENT OF BASIC ADMINISTRATIVE
SERVICES AGREEMENT. The Parties hereby agree that, effective upon the
termination of the Basic Administrative Services Agreement on the Merger Date,
the Basic Administrative Services Agreement shall be automatically, and without
need of further
<PAGE> 2
action, renewed and reinstated and shall continue in effect under its current
terms. The Parties further agree that the renewal and reinstatement of the
Basic Administrative Services Agreement shall be evidenced by their respective
execution of this Agreement and that no further agreement or documentation
shall be required.
2. OTHER MATTERS
a. In the event the Merger is not consummated
within 120 calendar days of the date hereof, this Agreement shall become null
and void and therefore have no effect on the Basic Administrative Services
Agreement.
b. This Agreement may be executed in one or more
counterparts, each of which may be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
CONCORD HOLDING
CORPORATION
By:/s/ Richard E. Stierwalt
------------------------
Richard Stierwalt
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
---------------------
Thomas M. Collins
-2-
<PAGE> 1
EXHIBIT 9(G)
SPECIAL MANAGEMENT SERVICES AGREEMENT
-------------------------------------
This Agreement is made as of this 22nd day of April, 1992
among PACIFIC HORIZON FUNDS, INC., a Maryland corporation (the "Company"),
CONCORD HOLDING CORPORATION, a Delaware corporation ("Concord"), and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Bank").
WHEREAS, the Company is an open-end management investment
company and is so registered under the Investment Company Act of 1940 (the
"1940 Act"); and
WHEREAS, the Company offers and maintains the following
investment portfolios: Prime Fund, Treasury Fund, California Tax- Exempt Money
Market Fund and Pacific Horizon Tax-Exempt Money Market Fund (the "Funds"); and
WHEREAS, Concord and Security Pacific National Bank currently
provide special services for the benefit of the series of shares known as
"Pacific Horizon Shares" in each of the Funds pursuant to a Special Management
Services Agreement dated as of 22 April, 1992 (the "Current Agreement"); and
WHEREAS, Security Pacific National Bank is this day merging
with the Bank (the "Merger"); and
WHEREAS, the Company desires to retain Concord and the Bank to
provide the aforesaid special services for "Pacific Horizon Shares" following
the Merger;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties hereto agree as follows:
I. SPECIAL SERVICES
----------------
1. APPOINTMENT. The Company hereby appoints Concord and
the Bank to provide the services described herein for the Pacific Horizon
Shares of each Fund on the terms and for the period set forth in this
Agreement, and Concord and the Bank hereby accept such appointment and agree to
perform such services and duties for the compensation provided in this Section
I.
2. SERVICES. Subject to the supervision and control of
the Company's Board of Directors, Concord and the Bank will provide the
following services on behalf of the Pacific Horizon Shares of each Fund:
<PAGE> 2
(i) Developing and monitoring the investor programs that
are offered from time to time in connection with Pacific Horizon Shares, which
may include individual retirement accounts and other ERISA options, automatic
deposit and withdrawal programs, check writing privileges, audio response
services, dividend options permitting payment in automated clearing house
funds, lock box facilities and direct deposit programs;
(ii) Providing dedicated facilities and equipment in La
Jolla to serve the needs of investors, including walk-in facilities, 800
numbers, electronic audio systems and communications systems to handle
shareholder inquiries, and in connection with such facilities to provide
full-time, on-site management personnel;
(iii) Developing and maintaining specialized systems for the
automatic investments of customers of the Bank, Concord and selected
broker/dealers, including any required interfaces between the Company's systems
and those of such other parties;
(iv) Monitoring services to other, non-sweep customers of
broker/dealers who have invested in Pacific Horizon Shares, including the
operation of telephone lines for daily quotations of yield; and
(v) Maintaining the registration or qualification of
Pacific Horizon Shares for sale under the securities laws of all states, unless
the Company determines that registration or qualification is unnecessary with
respect to a particular state or states. Payment of share registration fees
and any fees for qualifying or continuing the qualification of the Company
shall be made by the Company.
(b) Concord and the Bank will pay from their fees
under this Agreement (or from their other resources) the costs of other
specialized programs that are deemed desirable with respect to their own
customers who invest in Pacific Horizon Shares, including the operation of
arrangements to facilitate same-day share purchases by customers of the Bank
through the use of a joint repurchase agreement in accordance with the terms of
the exemptive order granted by the Securities and Exchange Commission (the
"Commission") to the Company. The Bank's and Concord's responsibilities in
connection with the operation of such joint repurchase agreement shall include,
without limitation, the processing of transaction activity, the accounting of
cash availability and the daily calculation of income adjustments attributable
to transactions.
(c) In addition, Concord and the Bank will
provide the following services with respect to holders of Pacific Horizon
Shares in the Funds who have made a minimum initial purchase of less than
$500,000:
-2-
<PAGE> 3
(i) Providing and supervising a facility to receive
purchase and redemption orders via toll-free IN-WATS telephone lines;
(ii) Providing for the preparing, supervising and mailing
of confirmations for all purchase and redemption orders;
(iii) Providing and supervising the operation of an
automated data processing system to process purchase and redemption orders
received by Concord (Concord assumes responsibility for the accuracy of the
data transmitted for processing or storage);
(iv) Overseeing the performance of the Funds' custodian
under the Custody Agreement and the Funds' transfer agent under the Transfer
Agency Agreement including a selective review of all correspondence from the
transfer agent to shareholders for accuracy and timeliness in handling
inquiries and review of dividend checks, statements and purchase and redemption
orders for proper turn-around;
(v) Making available information concerning each Fund to
shareholders; distributing written communications to each Fund's shareholders
such as periodic listings of each Fund's portfolio securities, annual and
semi-annual reports, and Prospectuses and supplements thereto; and handling
shareholder problems and calls relating to administrative matters;
(vi) Providing and supervising the services of employees
("relationship coordinators") whose principal responsibility and function shall
be to preserve and strengthen each Fund's relationships with its shareholders;
(vii) Assuring that persons are available to transmit
redemption requests to the Company's transfer agent as promptly as practicable;
(viii) Assuring that persons are available to transmit orders
accepted for the purchase of shares to the transfer agent of the Company as
promptly as practicable;
(ix) Preparing regular reports for internal use and for
distribution to the Company's Board of Directors concerning all shareholder
activity; and
(x) Responding to shareholder inquiries sent to the
Company.
(d) Concord and the Bank may make payments to
third parties for services provided in connection with the investments of their
customers in Pacific Horizon Shares, but
-3-
<PAGE> 4
such payments will be borne by Concord and the Bank and not by the Company.
(e) In performing their services and duties
hereunder, Concord and the Bank will act in conformity with the Company's
Charter, Bylaws and Prospectuses and with the instructions and directions of
the Board of Directors of the Company, and will conform to and comply with the
requirements of the 1940 Act and all other applicable federal or state laws and
regulations.
3. SUBCONTRACTORS. It is understood that Concord and
the Bank may from time to time employ or associate with themselves such person
or persons as they may believe to be particularly fitted to assist in the
performance of this Agreement; provided, however, that the compensation of such
person or persons shall be paid by Concord and the Bank and that Concord and
the Bank shall be as fully responsible to the Company for the acts and
omissions of any subcontractor as they are for their own acts and omissions.
4. EXPENSES ASSUMED UNDER THIS AGREEMENT. Concord and
the Bank shall pay all expenses incurred by them in performing their services
and duties hereunder.
5. COMPENSATION. For the services provided and the
expenses assumed pursuant to this Section I, the Company will pay Concord and
the Bank a fee, computed daily and payable monthly, at the annual rate of .32%
of the average net asset value of the Pacific Horizon Shares of each Fund that
are outstanding from time to time. Concord and the Bank hereby agree to waive
such portion of the fee payable to them hereunder as is necessary to assure
that the amount of such fee which is required to be accrued by the Company on
any day with respect to the Pacific Horizon Shares of any Fund does not exceed
the income to be accrued to such Horizon Shares on that day.
II. CONFIDENTIALITY
---------------
Concord and the Bank will treat confidentially and as
proprietary information of the Company all records and other information
relative to the Company and the Funds and prior or present shareholders or
those persons or entities who respond to Concord Financial Group, Inc.
inquiries concerning investment in the Funds, and will not use such records and
information for any purpose other than performance of their responsibilities
and duties hereunder or under any other agreement with the Company, except
after prior notification to and approval in writing by the Company, which
approval shall not be unreasonably withheld and may not be withheld where
Concord and the Bank may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted
-4-
<PAGE> 5
authorities, or when so requested by the Company. Nothing contained herein,
however, shall prohibit the Bank from advertising to or soliciting the public
generally with respect to other products or services, including, but not
limited to, any advertising or marketing via radio, television, newspapers,
magazines or direct mail solicitation, regardless of whether such advertisement
or solicitation may coincidentally include prior or present Company
shareholders or those persons or entities who have responded to Concord
Financial Group, Inc. inquiries.
III. LIMITATIONS OF LIABILITY
------------------------
Concord and the Bank shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Company or by any
Fund in connection with the matters to which this Agreement relates, except a
loss resulting from willful misfeasance, bad faith or negligence on their part
in the performance of their duties or from reckless disregard by them of their
obligations and duties under this Agreement.
IV. DURATION AND TERMINATION
------------------------
This Agreement shall become effective with respect to a Fund
on the date of the consummation of the Merger of Security Pacific National Bank
and the Bank, provided that the shareholders of the Fund have previously
approved the Agreement, and unless sooner terminated as provided herein, shall
continue until October 31, 1992. Thereafter, if not terminated, this Agreement
shall continue automatically as to a particular Fund for successive terms of
one year, provided that such continuance is specifically approved at least
annually (a) by a vote of a majority of those members of the Board of Directors
of the Company who are not "interested persons" of the Company and who have no
direct or indirect financial interest in the operation of this Agreement (the
"Disinterested Directors"), pursuant to a vote cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Board of
Directors of the Company or by vote of a majority of the outstanding Pacific
Horizon Shares of such Fund; provided, however, that this Agreement may be
terminated by the Company at any time with respect to any Fund, without the
payment of any penalty, by vote of a majority of the Disinterested Directors or
by a vote of a majority of the outstanding Pacific Horizon Shares of such Fund,
by Concord or by the Bank at any time, without the payment of any penalty, on
60 days' written notice to the other parties to the Agreement. This Agreement
will automatically and immediately terminate in the event of its assignment.
(As used in this Agreement, the terms "majority of the outstanding Pacific
Horizon Shares," "interested person" and "assignment" shall have the same
meaning as such terms have in the 1940 Act.)
-5-
<PAGE> 6
V. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which an enforcement of the change, waiver, discharge or
termination is sought; provided that any material amendment of the terms of
this Agreement (including any amendment to increase the compensation payable
under Section I hereof) shall become effective only upon approval by a majority
of the Company's Board of Directors, including a majority of the Disinterested
Directors, pursuant to a vote cast in person at a meeting called for the
purpose of voting on such approval.
VI. NOTICES
-------
Notices of any kind to be given to the Company hereunder by
Concord and the Bank shall be in writing and shall be duly given if mailed or
delivered to the Company at One Wilshire Boulevard, Suite 2000, Los Angeles,
California 90007, Attention: Thomas M. Collins, or at such other address or to
such individual as shall be so specified by the Company to Concord and the
Bank. Notices of any kind to be given to Concord and the Bank hereunder by the
Company shall be in writing and shall be duly given if mailed or delivered to
Concord at 156 West 56th Street, Suite 1902, New York, New York 10019
Attention: William B. Blundin, President, with a copy mailed or delivered to
the Bank at 300 South Grand Avenue, Suite 2200, Los Angeles, California 90071,
Attention: Sandra Brown, or at such other addresses or to such individuals as
shall be so specified by Concord or the Bank, respectively, to the Company.
VII. MISCELLANEOUS
-------------
1. CERTAIN REPRESENTATIONS. Concord and the Bank each
represents, warrants and agrees on behalf of itself that the compensation
payable to it hereunder, together with any other compensation payable to it in
connection with the investment of its customers' assets in the Funds, will be
disclosed by it to such customers, will be authorized by such customers and
will not result in an excessive fee to it.
2. BOARD REPORTS. Concord and the Bank shall provide
the Board of Directors of the Company, at least quarterly, with a written
report of all amounts expended pursuant to this Agreement and the purpose for
which the amounts were expended.
3. CONSTRUCTION. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected
-6-
<PAGE> 7
thereby. Subject to the provisions of Section IV hereof, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and shall be governed by New York law; provided, however,
that nothing herein shall be construed in a manner inconsistent with the 1940
Act or any rule or regulation of the Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
PACIFIC HORIZON FUNDS, INC.
By: /s/ Thomas M. Collins
----------------------------
Thomas M. Collins, President
CONCORD HOLDING CORPORATION
By: /s/ William B. Blundin
----------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Debra McGinty-Poteet
------------------------
Senior Vice President
And: /s/ Peter Voss
--------------
-7-
<PAGE> 1
Exhibit 9(H)
AMENDMENT NO. 1 TO
SPECIAL MANAGEMENT SERVICES AGREEMENT
-------------------------------------
WHEREAS, PACIFIC HORIZON FUNDS, INC., a Maryland corporation
(the "Company"), CONCORD HOLDING CORPORATION, a Delaware corporation
("Concord"), and SECURITY PACIFIC NATIONAL BANK, a national banking association
("Security Pacific"), are parties to a Special Management Services Agreement
dated as of November 13, 1989 (the "Agreement"); and
WHEREAS, the parties wish to amend the Agreement in certain
respects;
NOW THEREFORE, the undersigned hereby agree, intending to be
legally bound, that effective immediately, the Agreement is amended as follows:
1. Section I.2.(ii) is hereby amended to substitute the
words "La Jolla" for the words "Los Angeles."
2. Section I.2(c)(iv) is hereby amended and restated in
its entirety as follows: "Overseeing the performance
of The Bank of New York under the Custody Agreement
and American Transtech Inc. under the Transfer Agency
Agreement including a selective review of all
correspondence from the transfer agent to
shareholders for accuracy and timeliness in handling
inquiries and review of dividend checks, statements
and purchase and redemption orders for proper
turn-around."
Except as expressly amended and modified hereby, all
provisions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment
No. 1 as of the 19th day of October, 1990.
PACIFIC HORIZON FUNDS, INC.
Attest:/s/ James Bemaiche By:/s/ William B. Blundin
------------------ ----------------------
CONCORD HOLDING CORPORATION
Attest:/s/ Suzanne M. Clark By:/s/ Richard Stierwalt
-------------------- ---------------------
SECURITY PACIFIC NATIONAL BANK
Attest:/s/ [signature illegible] By:/s/ [signature illegible]
------------------------- --------------------------
<PAGE> 1
EXHIBIT 9(I)
AMENDMENT NO. 2 TO SPECIAL MANAGEMENT SERVICES AGREEMENT
This Amendment No. 2, dated as of the 1st day of March, 1993, is
entered into among PACIFIC HORIZON FUNDS, INC. (the "Company"), a Maryland
corporation, Concord Holding Corporation, a Delaware corporation ("Concord"),
and Bank of America National Trust and Savings Association (the "Bank").
WHEREAS, the Company, Concord and the Bank have entered into a Special
Management Services Agreement dated as of April 22, 1992 as amended by
Amendment No. 1 dated as of March 1, 1993 (the "Services Agreement"), pursuant
to which the Company appointed Concord and the Bank to provide special services
for the benefit of the series of shares known as "Pacific Horizon Shares" in
its Prime Fund, Treasury Fund, California Tax-Exempt Money Market Fund, Pacific
Horizon Tax-Exempt Money Market Fund, Government Fund and Treasury Only Fund;
and
WHEREAS, the Company has notified Concord and the Bank that it has
established a Prime Value Fund and that it desires to retain Concord and the
Bank to provide the aforesaid special services for "Pacific Horizon Shares" of
the Prime Value Fund (the "Fund"), and Concord and the Bank have notified the
Company that they are willing to provide such services;
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. APPOINTMENT. The Company hereby appoints Concord and the Bank
to provide the services described in the Services Agreement for the Pacific
Horizon Shares of the Prime Value Fund for the period and on the terms set
forth in the Services Agreement. Concord and the Bank hereby accept such
appointment and agree to perform the services and duties set forth in the
Services Agreement, for the compensation herein provided.
2. COMPENSATION. For the services provided and the expenses
assumed pursuant to the Services Agreement with respect to the Prime Value
Fund, the Company will pay Concord a fee, computed daily and paid monthly, at
the annual rate of .32% of the average net asset value of the Pacific Horizon
Shares of the Fund that are outstanding from time to time. Concord and the
Bank hereby agree to waive such portion of the fee payable to them hereunder as
is necessary to assure that the amount of such fee which is required to be
accrued by the Company on any day with respect to the Pacific Horizon Shares of
the Fund does not exceed the income to be accrued to such Pacific Horizon
Shares on that day.
<PAGE> 2
3. MISCELLANEOUS. Except to the extent amended hereby, the
Services Agreement shall remain unchanged and in full force and effect and is
hereby ratified and confirmed in all respects as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this
Amendment No. 2 as of the date and year first above written.
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
---------------------
President
CONCORD HOLDING CORPORATION
By:/s/ William B. Blundin
----------------------
President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:/s/ Debra McGinty-Poteet
------------------------
Senior Vice President
<PAGE> 1
EXHIBIT 9(J)
AMENDMENT NO. 3 TO SPECIAL MANAGEMENT SERVICES AGREEMENT
This Amendment No. 3, dated as of the 1st day of April, 1993, is
entered into among PACIFIC HORIZON FUNDS, INC. (the "Company"), a Maryland
corporation, Concord Holding Corporation, a Delaware corporation ("Concord"),
and Bank of America National Trust and Savings Association (the "Bank").
WHEREAS, the Company, Concord and the Bank have entered into a Special
Management Services Agreement dated as of April 22, 1992 as amended by
Amendment No. 1 dated as of March 1, 1993 and Amendment No. 2 dated as of March
1, 1993 (the "Services Agreement"), pursuant to which the Company appointed
Concord and the Bank to provide special services for the benefit of the series
of shares known as "Pacific Horizon Shares" in its Prime Fund, Treasury Fund,
California Tax-Exempt Money Market Fund, Pacific Horizon Tax-Exempt Money
Market Fund, Government Fund, Treasury Only Fund and Prime Value Fund; and
WHEREAS, the Company has notified Concord and the Bank that it has
established a series of "Pacific Horizon Shares" in its Horizon Tax-Exempt
Money Fund and that it desires to retain Concord and the Bank to provide the
aforesaid special services for the "Pacific Horizon Shares" of the Horizon
Tax-Exempt Money Fund (the "Fund"), and Concord and the Bank have notified the
Company that they are willing to provide such services;
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. APPOINTMENT. The Company hereby appoints Concord and the Bank
to provide the services described in the Services Agreement for the Pacific
Horizon Shares of the Horizon Tax-Exempt Money Fund for the period and on the
terms set forth in the Services Agreement. Concord and the Bank hereby accept
such appointment and agree to perform the services and duties set forth in the
Services Agreement, for the compensation herein provided.
2. COMPENSATION. For the services provided and the expenses
assumed pursuant to the Services Agreement with respect to the Horizon
Tax-Exempt Money Fund, the Company will pay Concord and the Bank a fee,
computed daily and paid monthly, at the annual rate of .32% of the average net
asset value of the Pacific Horizon Shares of the Fund that are outstanding from
time to time. Concord and the Bank hereby agree to waive such portion of the
fee payable to them hereunder as is necessary to assure that the amount of such
fee which is required to be accrued by the Company on any day with respect to
the Pacific Horizon Shares
<PAGE> 2
of the Fund does not exceed the income to be accrued to such Pacific Horizon
Shares on that day.
3. MISCELLANEOUS. Except to the extent amended hereby, the
Services Agreement shall remain unchanged and in full force and effect and is
hereby ratified and confirmed in all respects as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 3
as of the date and year first above written.
PACIFIC HORIZON FUNDS, INC.
By:/s/ William B. Blundin
----------------------
Executive Vice President
CONCORD HOLDING CORPORATION
By:/s/ William B. Blundin
----------------------
President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:/s/ Debra McGinty-Poteet
------------------------
Senior Vice President
-2-
<PAGE> 1
EXHIBIT 9(K)
AMENDMENT NO. 4 TO SPECIAL MANAGEMENT SERVICES AGREEMENT
This Amendment No. 4, dated as of the 15th day of July, 1993, is
entered into among PACIFIC HORIZON FUNDS, INC. (the "Company"), a Maryland
corporation, Concord Holding Corporation, a Delaware corporation ("Concord"),
and Bank of America National Trust and Savings Association (the "Bank").
WHEREAS, the Company, Concord and the Bank have entered into a Special
Management Services Agreement dated as of April 22, 1992 as amended by
Amendment No. 1 dated as of March 1, 1993, Amendment No. 2 dated as of March 1,
1993 and Amendment No. 3 dated as of April 1, 1993 (the "Services Agreement"),
pursuant to which the Company appointed Concord and the Bank to provide special
services for the benefit of the series of shares known as "Pacific Horizon
Shares" in its Prime Fund, Treasury Fund, California Tax-Exempt Money Market
Fund, Pacific Horizon Tax-Exempt Money Market Fund, Tax-Exempt Money Fund,
Government Fund, Treasury Only Fund and Prime Value Fund;
WHEREAS, the parties wish to amend the Services Agreement to provide
for a revised fee with respect to the California Tax-Exempt Money Market Fund;
and
WHEREAS, the Pacific Horizon Tax-Exempt Money Market Fund has been
reorganized into the Tax-Exempt Money Fund and therefore no longer exists as a
separate entity;
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Section I.5. of the Services Agreement is hereby amended and
restated in its entirety as follows: "COMPENSATION. For the services provided
and the expenses assumed pursuant to this Section I, the Company will pay
Concord and the Bank a fee, computed daily and paid monthly, at (i) the annual
rate of .32% of the average net asset value of the Pacific Horizon Shares of
the Prime Fund, Treasury Fund, Tax- Exempt Money Fund, Government Fund,
Treasury Only Fund and Prime Value Fund that are outstanding from time to time
and (ii) the annual rate of .35% of the average net asset value of the Pacific
Horizon Shares of the California Tax-Exempt Money Market Fund that are
outstanding from time to time. Concord and the Bank hereby agree to waive such
portion of the fee payable to them hereunder as is necessary to assure that the
amount of such fee which is required to be accrued by the Company on any day
with respect to the Pacific Horizon Shares of any Fund does not exceed the
income to be accrued to such Pacific Horizon Shares on that day."
<PAGE> 2
2. Except to the extent amended hereby, the Services Agreement
shall remain unchanged and in full force and effect and is hereby ratified and
confirmed in all respects as amended hereby.
3. This Amendment may be executed in one or more counterparts and
all such counterparts will constitute one and the same document.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 4
as of the date and year first above written.
PACIFIC HORIZON FUNDS, INC.
By:/s/ William B. Blundin
----------------------
Executive Vice President
CONCORD HOLDING CORPORATION
By:/s/ Richard Stierwalt
---------------------
Chief Executive Officer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:/s/ Debra McGinty-Poteet
------------------------
Senior Vice President
-2-
<PAGE> 1
EXHIBIT 9(L)
AGREEMENT RELATING TO
SPECIAL MANAGEMENT SERVICES AGREEMENT
This AGREEMENT, is made as of the 29th day of March, 1995 among
Pacific Horizon Funds, Inc., a Maryland Corporation, (the "Fund"), Bank of
America National Trust and Savings Association (the "Bank") and Concord Holding
Corporation, a Delaware Corporation ("Concord").
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and
WHEREAS, the Fund, the Bank and Concord have entered into a Special
Management Services Agreement ("Special Management Services Agreement")
pursuant to which Concord performs certain specified special services for the
benefit of the series of shares known as "Pacific Horizon Shares,"
WHEREAS, the Special Management Services Agreement provides that it
will automatically terminate in the event of its assignment, as that term is
defined in the Investment Company Act of 1940 (the "1940 Act"), and
WHEREAS, Concord has entered into a definitive merger agreement with
The BISYS Group, Inc. ("BISYS") pursuant to which a subsidiary of BISYS will
merge with and into Concord and Concord will become a wholly-owned subsidiary
of BISYS (the "Merger") on or about March 31, 1995 (the actual date of the
Merger to be referred to as the "Merger Date"), and
WHEREAS, the Merger will result in a change of control of Concord that
may be deemed to result in an assignment and termination of the Special
Management Services Agreement as that term is defined in the 1940 Act, and
WHEREAS, the Fund wishes Concord to continue to perform special
management services for the benefit of Pacific Horizon shares services
following the Merger on the same terms and conditions as exist prior to the
Merger Date and Concord wishes to continue to perform such special management
services under those same terms.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the Parties hereto agree as follows:
<PAGE> 2
1. RENEWAL OF SPECIAL MANAGEMENT SERVICES AGREEMENT.
The Parties hereby agree that, effective upon the termination of the Special
Management Services Agreement on the Merger Date, the Special management
Services Agreement shall be automatically, and without need of further action,
renewed and reinstated and shall continue in effect under its current terms.
The Parties further agree that the renewal and reinstatement of the Special
Management Services Agreement shall be evidenced by their respective execution
of this Agreement and that no further agreement or documentation shall be
required.
2. OTHER MATTERS
a. In the event the Merger is not consummated
within 120 calendar days of the date hereof, this Agreement shall become null
and void and therefore have no effect on the Special Management Services
Agreement shall continue to remain in full force and effect in accordance with
its current terms and conditions
b. This Agreement may be executed in one or more
counterparts, each of which may be deemed to be an original, but all of which
taken together shall constitute one and the same instrument
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
CONCORD HOLDING CORPORATION
By:/s/ Richard Stierwalt
---------------------
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
---------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:/s/ Debra McGinty-Poteet
------------------------
Debra McGinty-Poteet, SVP
-2-
<PAGE> 1
EXHIBIT 9(M)
ADMINISTRATION AGREEMENT
------------------------
[Non-Money Market Funds]
This Administration Agreement is made as of this 13th day of
November, 1989 between PACIFIC HORIZON FUNDS, INC., a Maryland corporation
(herein called the "Company"), and CONCORD HOLDING CORPORATION, a Delaware
corporation (herein called "Concord").
WHEREAS, the Company is a Maryland corporation which is an
open-end management investment company and is so registered under the
Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Company will offer and maintain the following
investment portfolios: High Yield Bond, Aggressive Growth, GNMA Extra,
Convertible Securities and California TaxExempt Bond Funds (individually a
"Fund" and collectively the "Funds"); and
WHEREAS, pursuant to a Distribution Agreement of even date
herewith (the "Distribution Agreement") between the Company and Concord
Financial Group, Inc. ("Concord Financial"), the Company has retained Concord
Financial as its Distributor to provide for the sale and distribution of shares
of common stock of each Fund, each such share having a par value of $.001
(herein collectively called "Shares"); and
WHEREAS, the Company desires to retain Concord as its
Administrator to provide it with administrative services for the Funds, and
Concord is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties hereto agree as follows:
I. ADMINISTRATION
--------------
1. APPOINTMENT OF ADMINISTRATOR. The Company hereby
appoints Concord as Administrator of each Fund on the terms and for the period
set forth in this Agreement and Concord hereby accepts such appointment and
agrees to perform the services and duties set forth in this Section I for the
compensation provided in this Section. The Company understands that Concord
now acts and will continue to act as administrator of various investment
companies and fiduciary of other managed accounts, and the Company has no
objection to Concord's so acting. In addition, it is understood that the
persons employed by Concord to assist in
-1-
<PAGE> 2
the performance of its duties hereunder will not devote their full time to such
services and nothing herein contained shall be deemed to limit or restrict the
right of Concord or any affiliate of Concord to engage in and devote time and
attention to other businesses or to render services of whatever kind or nature.
2. SERVICES AND DUTIES.
(A) Subject to the supervision and control of the
Company's Board of Directors, Concord will provide facilities, equipment,
statistical and research data, clerical, accounting and bookkeeping services,
internal auditing and legal services, and personnel to carry out all
administrative services required for operation of the business and affairs of
the Funds, other than those investment advisory functions which are to be
performed by the Company's Investment Adviser, the services of Concord
Financial as Distributor pursuant to the Distribution Agreement, those services
to be performed by The Bank of New York pursuant to the Company's Custody
Agreement and Transfer Agency Agreement and those services normally performed
by the Company's counsel and auditors. Concord's responsibilities include
without limitation the following services:
(1) Providing a facility to receive
purchase and redemption orders for Shares via toll-free
IN-WATS telephone lines;
(2) Providing for the preparing,
supervising and mailing of confirmations for all purchase and
redemption orders for Shares;
(3) Providing and supervising the
operation of an automated data processing system to process
purchase and redemption orders for Shares received by Concord
(Concord assumes responsibility for the accuracy of the data
transmitted for processing or storage);
(4) Overseeing the performance of The
Bank of New York under the Custody Agreement and Transfer
Agency Agreement with respect to the Funds;
(5) Making available information
concerning each Fund to its shareholders; distributing written
communications to each Fund's shareholders such as periodic
listings of each Fund's securities, annual and semi-annual
reports, and prospectuses and supplements thereto; and
handling shareholder problems and calls relating to
administrative matters; and
(6) Providing and supervising the
services of employees ("relationship coordinators") whose
-2-
<PAGE> 3
principal responsibility and function shall be to preserve and
strengthen each Fund's relationships with its shareholders.
(B) Concord shall assure that persons are
available to transmit redemption requests for Shares to the Company's transfer
agent as promptly as practicable.
(C) Concord shall assure that persons are
available to transmit orders accepted for the purchase of Shares to the
transfer agent of the Company as promptly as practicable.
(D) Concord shall participate in the periodic
updating of the Funds' prospectuses and statements of additional information
and shall accumulate information for and, subject to approval by the Company's
Treasurer and legal counsel, coordinate the preparation, filing, printing and
dissemination of reports to the Funds' shareholders and the Commission,
including but not limited to annual reports and semi-annual reports on Form
N-SAR, notices pursuant to Rule 24f-2 and proxy materials pertaining to the
Funds.
(E) Concord shall compute each Fund's net asset
value per share on each business day.
(F) Concord shall calculate dividends and capital
gain distributions to be paid to each Fund's shareholders in conformity with
subchapter M of the Internal Revenue Code.
(G) Concord shall pay all costs and expenses of
maintaining the offices of the Company, wherever located, and shall arrange for
payment by the Company of all expenses payable by the Company.
(H) Concord, after consultation with legal
counsel for the Company, shall determine the jurisdictions in which the Shares
shall be registered or qualified for sale and, in connection therewith, shall
be responsible for the maintenance of the registration or qualification of the
Shares for sale under the securities laws of any state. Payment of Share
registration fees and any fees for qualifying or continuing the qualification
of the Company shall be made by the Company.
(I) Concord shall provide the services of certain
persons who may be appointed as officers of the Company by the Company's Board
of Directors.
(J) Concord shall oversee the maintenance by The
Bank of New York of the books and records pertaining to the Funds required
under the 1940 Act in connection with the performance of the Custody Agreement
and Transfer Agency Agreement, and shall maintain such other books and records
with respect to the Funds
-3-
<PAGE> 4
(other than those required to be maintained by the Company's Investment
Adviser) as may be required by law or may be required for the proper operation
of the business and affairs of the Funds. Without limiting the foregoing,
Concord shall obtain from the Company's prior administrator all books and
records pertaining to the Funds that are required to be maintained under the
1940 Act and that are in the prior administrator's possession, and shall be
responsible for the proper maintenance of such records throughout the term of
this Agreement. In compliance with the requirements of Rule 31a-3 under the
1940 Act, Concord agrees that all such books and records which it maintains, or
is responsible for maintaining, for the Company and the Funds are the property
of the Company and further agrees to surrender promptly to the Company any of
such books and records upon the Company's request. Concord further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act said books
and records required to be maintained by Rule 31a-1 under said Act.
(K) Concord shall prepare the Funds' federal,
state and local income tax returns.
(L) Concord shall prepare and, subject to
approval of the Company's Treasurer, disseminate to the Company's directors
each Fund's quarterly financial statements and schedules of investments, and
shall prepare such other reports relating to the business and affairs of the
Funds (not otherwise appropriately prepared by the Company's Investment
Adviser, counsel or auditors) as the officers and directors of the Company may
from time to time reasonably request in connection with performance of their
duties.
(M) Concord shall assist The Bank of New York and
the Company's Investment Adviser, counsel and auditors as required to carry out
the business and operations of the Funds.
(N) In performing its duties as Administrator for
the Funds, Concord will act in conformity with the Company's Charter, By-laws,
prospectuses and statements of additional information, and the instructions and
directions of the Board of Directors of the Company. In addition, Concord will
conform to and comply with the requirements of the 1940 Act and all other
applicable federal or state laws and regulations.
3. SUBCONTRACTORS. It is understood that Concord may
from time to time employ or associate with itself such person or persons as
Concord may believe to be particularly fitted to assist in the performance of
this Agreement; provided, however, that the compensation of such person or
persons shall be paid by Concord and that Concord shall be as fully responsible
to the Company for the acts and omissions of any subcontractor as it is for its
own acts and omissions. Without limiting the generality
-4-
<PAGE> 5
of the foregoing, it is understood that Concord intends to enter into an
agreement with The Bank of New York under which said institution will provide
certain accounting, bookkeeping, pricing and dividend and distribution
calculation services with respect to the Funds.
4. EXPENSES ASSUMED AS ADMINISTRATOR. Except as
otherwise stated in this subsection 4, Concord shall pay all expenses incurred
by it in performing its services and duties hereunder as Administrator
including the cost of any independent pricing service used in connection with
the Funds. Other expenses to be incurred in the operation of the Funds (other
than those borne by the Company's Investment Adviser) including taxes,
interest, brokerage fees and commissions, if any, fees of directors who are not
officers, directors, partners, employees or holders of 5 percent or more of the
outstanding voting securities of the Company's Investment Adviser or Concord or
any of their affiliates, Securities and Exchange Commission fees and state blue
sky registration and qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
outside auditing and legal expenses, costs of maintaining corporate existence,
costs attributable to shareholder services, including without limitation
telephone and personnel expenses, costs of preparing and printing prospectuses
or any supplement or amendment thereto, necessary for the continued effective
registration of the Shares under federal or state securities laws, costs of
printing and distributing any prospectus, supplement or amendment thereto for
existing shareholders of the Fund described therein, costs of shareholders'
reports and corporate meetings and any extraordinary expenses will be borne by
the Funds. It is understood that certain advertising, marketing, shareholder
servicing, administration and/or distribution expenses to be incurred in
connection with the Shares may be paid by the Company as provided in any Plan
which may in the sole discretion of the Company be adopted in accordance with
Rule 12b-1 under the 1940 Act, and that such expenses will be paid apart from
any fees paid under this Agreement.
5. COMPENSATION. For the services provided and the
expenses assumed as Administrator pursuant to Section I of this Agreement, the
Company will pay Concord a fee, computed daily and payable monthly, at the
annual rate of .20 percent of the average net assets of the GNMA Extra Fund and
Convertible Securities Fund and .30 percent of the average net assets of the
High Yield Bond, Aggressive Growth and California Tax-Exempt Bond Funds. Such
fee as is attributable to each Fund shall be a separate (and not joint or joint
and several) obligation of each such Fund. Notwithstanding anything to the
contrary herein, if in any fiscal year the aggregate expenses of any Fund (as
defined under the securities regulations of any state having jurisdiction over
such Fund) exceed the expense limitations of any such state, the
-5-
<PAGE> 6
Company may deduct from the fees to be paid hereunder, or Concord will bear, to
the extent required by state law, that portion of such excess which bears the
same relation to the total of such excess as Concord's fee hereunder with
respect to such Fund bears to the total fees otherwise payable for the fiscal
year with respect to such Fund pursuant to this Agreement and the investment
advisory agreement then in effect for such Fund. Concord's obligation is not
limited to the amount of its fees hereunder. Such deduction or payment, if
any, will be estimated and accrued daily and paid on a monthly basis.
II. CONFIDENTIALITY
---------------
Concord will treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company and the Funds and prior or present shareholders or those persons or
entities who respond to Concord Financial's inquiries concerning investment in
the Company, and will not use such records and information for any purpose
other than performance of its responsibilities and duties hereunder or under
any other agreement with the Company, except after prior notification to and
approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where Concord may be exposed to civil or
criminal contempt proceedings for failure to comply, when Concord is requested
to divulge such information by duly constituted authorities, or when Concord is
so requested by the Company.
III. LIMITATIONS OF LIABILITY
------------------------
Concord shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Company or by any Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. Any person, even though also an officer,
director, partner, employee or agent of Concord, who may be or become an
officer, director, employee or agent of the Company, shall be deemed, when
rendering services to the Company or to any Fund, or acting on any business of
the Company or of any Fund (other than services or business in connection with
Concord's duties as Administrator hereunder or under any other agreement with
the Company) to be rendering such services to or acting solely for the Company
or Fund and not as an officer, director, partner, employee or agent or one
under the control or direction of Concord even though paid by Concord.
IV. DURATION AND TERMINATION
------------------------
This Agreement shall become effective with respect to a Fund
on the date it is approved by the shareholder(s) of the Fund
-6-
<PAGE> 7
and, unless sooner terminated as provided herein, shall continue until October
31, 1991. Thereafter, if not terminated, this Agreement shall continue
automatically as to a particular Fund for successive terms of one year,
provided that such continuance is specifically approved at least annually (a)
by a vote of a majority of those members of the Board of Directors of the
Company who are not parties to this Agreement or "interested persons" of any
such party, cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the Board of Directors of the Company or by vote of a
"majority of the outstanding voting securities" of such Fund; PROVIDED,
HOWEVER, that this Agreement may be terminated by the Company at any time with
respect to any Fund, without the payment of any penalty, by vote of a majority
of the entire Board of Directors of the Company or by a vote of a "majority of
the outstanding voting securities" of such Fund on 60 days' written notice to
Concord, or by Concord at any time, without the payment of any penalty, on 90
days' written notice to the Company. This Agreement will automatically and
immediately terminate in the event of its "assignment." (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person" and "assignment" shall have the same meaning as such terms
have in the 1940 Act.)
V. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which an enforcement of the change, waiver, discharge or
termination is sought.
VI. NOTICES
-------
Notices of any kind to be given to the Company hereunder by
Concord shall be in writing and shall be duly given if mailed or delivered to
the Company at One Wilshire Boulevard, Suite 2000, Los Angeles, California
90017, Attention: Thomas M. Collins, President, or at such other address or to
such individual as shall be so specified by the Company to Concord. Notices of
any kind to be given to Concord hereunder by the Company shall be in writing
and shall be duly given if mailed or delivered to Concord at 156 West 56th
Street, 19th Floor, New York, New York 10019, Attention: William B. Blundin,
President, or at such other address or to such individual as shall be so
specified by Concord to the Company.
VII. MISCELLANEOUS
-------------
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or
-7-
<PAGE> 8
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. Subject to the provisions of
Section IV hereof, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by New York law; PROVIDED, HOWEVER, that nothing herein shall be
construed in a manner inconsistent with the 1940 Act or any rule or regulation
of the Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
---------------------
President
Attest:/s/ W. Bruce McConnel, III
--------------------------
Secretary
CONCORD HOLDING CORPORATION
By:/s/ William B. Blundin
----------------------
President
Attest:/s/ Mary Murgidichien
---------------------
Secretary
-8-
<PAGE> 1
EXHIBIT 9(N)
AMENDMENT NO. 1 TO
ADMINISTRATION AGREEMENT
------------------------
WHEREAS, Pacific Horizon Funds, Inc., a Maryland corporation (the
"Company"), and CONCORD HOLDING CORPORATION, a Delaware corporation
("Concord"), are parties to an Administration Agreement dated as of November
13, 1989 (the "Agreement") wherein Concord has agreed to provide administrative
services to the Company's Aggressive Growth Fund, U.S. Government Securities
Fund, Capital Income Fund and California Tax-Exempt Bond Fund (sometimes
referred to herein collectively as the "Funds"); and
WHEREAS, the parties wish to amend the Agreement in certain respects;
NOW THEREFORE, the parties hereby agree, intending to be legally
bound, that effective immediately the Agreement is amended to read as follows:
1. The second sentence of Section I, subsection 3, is
hereby amended and restated in its entirety as follows: "Without
limiting the generality of the foregoing, it is understood that
Concord intends to enter into an agreement with The Bank of New York
under which said institution will provide certain accounting,
bookkeeping, pricing and dividend and distribution calculation
services with respect to the Funds at the expense of the Funds."
2. Section IV is hereby amended and restated in its
entirety as follows: "This Agreement shall become effective with
respect to a Fund on the date it is approved by the shareholder(s) of
the Fund and, unless sooner terminated as provided herein, shall
continue until October 31, 1992. Thereafter, this Agreement will be
automatically extended with respect to each Fund (i) for an additional
period of two years and (ii) thereafter for successive periods of one
year, provided that this Agreement is not sooner terminated as
provided below. This Agreement may be terminated by the Company at
any time with respect to any Fund, without the payment of any penalty,
by vote of a majority of the entire Board of Directors of the Company
or by a vote of a "majority of the outstanding voting securities" of
such Fund on 60 days' written notice to Concord, or by Concord at any
time, without the payment of any penalty, on 60 days' written notice
to the Company. This Agreement will automatically and immediately
terminate in the event of its "assignment". (As used in this
Agreement, the terms "majority of the outstanding voting securities"
and
<PAGE> 2
"assignment" shall have the same meaning as such terms in the 1940 Act.)"
Except as expressly amended and modified hereby, all provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as
of the 1st day of November, 1991.
PACIFIC HORIZON FUNDS, INC.
Attest:/s/ W. Bruce McConnel, III By:/s/ Thomas M. Collins
-------------------------- -----------------------
Secretary President
CONCORD HOLDING CORPORATION
Attest:/s/ Suzanne M. Clark By:/s/ Richard Stierwalt
-------------------- ---------------------
<PAGE> 1
EXHIBIT 9(O)
AMENDMENT NO. 2 TO ADMINISTRATION AGREEMENT
This Amendment No. 2, dated as of the 1st day of March, 1993
is entered into between PACIFIC HORIZON FUNDS, INC. (the "Company"), a Maryland
corporation, and Concord Holding Corporation, a Delaware corporation
("Concord").
WHEREAS, the Company and Concord have entered into an
Administration Agreement dated as of November 13, 1989 as amended by Amendment
No. 1 dated as of November 1, 1991 (the "Administration Agreement"), pursuant
to which the Company retained Concord as its Administrator to provide
administrative services for the Aggressive Growth Fund, Capital Income Fund,
U.S. Government Securities Fund and California Tax-Exempt Bond Fund; and
WHEREAS, the Company has notified Concord that it has
established an Equity Fund, Fixed Income Fund, Asset Allocation Fund and
Intermediate-Term Municipal Bond Fund and that it desires to retain Concord to
act as the Administrator therefor, and Concord has notified the Company that it
is willing to serve as the Administrator for the Equity Fund, Fixed Income
Fund, Asset Allocation Fund and Intermediate-Term Municipal Bond Fund (the
"Funds");
NOW THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. APPOINTMENT. The Company hereby appoints Concord as
Administrator of the Equity Fund, Fixed Income Fund, Asset Allocation Fund and
Intermediate-Term Municipal Bond Fund for the period and on the terms set forth
in the Administration Agreement. Concord hereby accepts such appointment and
agrees to perform the services and duties set forth in the Administration
Agreement, for the compensation herein provided.
2. COMPENSATION. For the services provided and the
expenses assumed as Administrator pursuant to the Administration Agreement with
respect to the Equity Fund, Fixed Income Fund, Asset Allocation Fund and
Intermediate-Term Municipal Bond Fund, the Company will pay Concord a fee,
computed daily and paid monthly, at the annual rate of .15% of each Fund's
average net assets. Such fee as is attributable to each Fund will be a
separate charge to each such Fund and will be the several (and not the joint
and several) obligation of each such Fund.
The parties understand that each Fund will seek to achieve its
investment objective by investing all of its assets in an open-end management
investment company (a "Portfolio")
<PAGE> 2
having the same investment objective as that of the Fund, and that Concord will
receive administration fees from the Portfolios. If in any fiscal year the
aggregate of the (i) pro rata share of the total expenses of a Portfolio that
are borne by a Fund (as such expenses are defined under the securities
regulations of any state having jurisdiction over such Fund), plus (ii) the
expenses borne by such Fund in connection with such Fund's own operations as a
registered investment company (as defined under such regulations), exceed the
expense limitations of any such state, Concord will reimburse the Fund for a
portion of such excess expenses equal to such excess times the ratio of (a) the
sum of the administration fees otherwise payable with respect to such Fund and
Portfolio to Concord hereunder and under Concord's administration agreement
with the Portfolio (the "Portfolio Administration Agreement"), to (b) the
aggregate of such administration fees otherwise payable with respect to such
Fund and Portfolio to Concord plus the advisory fees otherwise payable by the
Portfolio under its investment advisory agreement with Bank of America N.T.S.A.
The obligation of Concord to reimburse any Fund hereunder is limited in any
fiscal year to the amount of its fees hereunder and under the Portfolio
Administration Agreement for such fiscal year with respect to such Fund and the
Portfolio in which the Fund's assets are invested; provided, however, that
notwithstanding the foregoing, Concord will reimburse any Fund for such
proportion of such excess expenses regardless of the amount of fees paid to it
during such fiscal year to the extent that the securities regulations of any
state having jurisdiction over the Fund so require. Such expense
reimbursement, if any, will be estimated and accrued daily and paid on a
monthly basis.
3. MISCELLANEOUS. For purposes of the appointment under
this Amendment No. 2 with respect to the Fixed Income, Equity, Asset Allocation
and Intermediate-Term Municipal Bonds Funds, (a) the reference to "The Bank of
New York" in Part I, Sections 2(J) and 2(M) of the Administration Agreement
shall be changed to "PNC Bank, National Association and Supervised Service
Company, Inc." and (b) the reference to "The Bank of New York" in Part I,
Section 3, shall be changed to "PFPC, Inc." Except to the extent amended
hereby, the Administration Agreement shall remain unchanged and in full force
and effect and is hereby ratified and confirmed in all respects as amended
hereby.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the undersigned have executed this
Amendment No. 2 as of the date and year first above written.
PACIFIC HORIZON FUNDS, INC.
By: /s/ William B. Blundin
--------------------------
Executive Vice President
CONCORD HOLDING CORPORATION
By: /s/Richard Stierwalt
--------------------------
Chief Executive Officer
-3-
<PAGE> 1
EXHIBIT 9(P)
Amendment No. 3 to
Administration Agreement
------------------------
WHEREAS, Pacific Horizon Funds, Inc., a Maryland corporation
(the "Company"), and CONCORD HOLDING CORPORATION, a Delaware corporation
("Concord"), are parties to an Administration Agreement dated as of November
13, 1989, as amended (the "Agreement"), wherein Concord has agreed to provide
administrative services to the Company's Aggressive Growth Fund, U.S.
Government Securities Fund, Capital Income Fund, California Tax-Exempt Bond
Fund, Equity Fund, Fixed Income Fund, Asset Allocation Fund and National
Municipal Bond Fund (sometimes referred to herein collectively as the "Funds");
and
WHEREAS, the parties wish to amend the Agreement in certain
respects;
NOW THEREFORE, the parties hereby agree, intending to be
legally bound, that effective immediately the Agreement is amended to read as
follows:
1) Section IV is hereby amended and restated in
its entirety as follows: "This Agreement shall
become effective November 1, 1993 and, unless sooner
terminated as provided herein, shall continue until
October 31, 1995. Thereafter, this Agreement will be
extended for successive two year periods ending on
October 31st of each year, PROVIDED each such
extension is specifically approved (a) by vote of a
majority of those members of the Fund's Board of
Directors who are not interested persons of any party
to this Agreement, cast in person at a meeting called
for the purpose of voting on such approval, and (b)
by the Company's Board of Directors or by vote of a
majority of the outstanding voting securities of such
Fund. This Agreement is terminable during any term
for cause at any time by the Fund's Board of
Directors, "cause" being defined and limited for this
purpose to mean willful misfeasance, bad faith or
negligence by Concord in the performance of its
duties or from reckless disregard by it of its
obligations and duties under this Agreement." The
Fund's Board of Directors may terminate this
Agreement at the end of any term without cause upon
60 days prior written notice to Concord. This
Agreement will immediately terminate in the event of
its assignment. (As used in this Agreement, the
terms "majority of the outstanding
<PAGE> 2
"voting securities," "interested persons" and
"assignment" shall have the same meanings as such
terms have in the 1940 Act.)
Except as expressly amended and modified hereby, all
provisions of the Agreement shall remain in full force and effect.
This Agreement may be executed in one or more counterparts and
all such counterparts will constitute one and the same instrument.
IN WITNESS WHEREOF, intending to be legally bound, hereby, the
parties have executed this Amendment No. 3 as of the 1st day of November, 1993.
PACIFIC HORIZON FUNDS, INC.
By: /s/ Thomas M. Collins
----------------------
President
CONCORD HOLDING CORPORATION
By: /s/ Richard Stierwalt
----------------------
Chief Executive Officer
-2-
<PAGE> 1
EXHIBIT 9(Q)
AMENDMENT NO. 4 TO ADMINISTRATION AGREEMENT
This Amendment No. 4, dated as of the 7th day of December, 1993, is
entered into between PACIFIC HORIZON FUNDS, INC. (the "Company"), a Maryland
corporation, and Concord Holding Corporation, a Delaware corporation
("Concord").
WHEREAS, the Company and Concord have entered into an Administration
Agreement dated as of November 13, 1989, as amended (the "Administration
Agreement"), pursuant to which the Company retained Concord as its
Administrator to provide administrative services for the Aggressive Growth
Fund, Capital Income Fund, U.S. Government Securities Fund and California
Tax-Exempt Bond Fund; and
WHEREAS, the Company has notified Concord that it has or intends to
establish a Blue Chip Fund, Flexible Bond Fund, Asset Allocation Fund, National
Municipal Bond Fund, Utilities Fund, Growth and Income Fund, Corporate Bond
Fund, Short-Term Government Fund, International Bond and International Equity
Fund and that it desires to retain Concord to act as the Administrator
therefor, and Concord has notified the Company that it is willing to serve as
the Administrator for the Blue Chip Fund, Flexible Bond Fund, Asset Allocation
Fund, National Municipal Bond Fund, Utilities Fund, Growth and Income Fund,
Corporate Bond Fund, Short-Term Government Fund, International Bond Fund and
International Equity Fund (the "Funds");
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. APPOINTMENT. The Company hereby appoints Concord as
Administrator of the Funds for the period and on the terms set forth in the
Administration Agreement. Concord hereby accepts such appointment and agrees
to perform the services and duties set forth in the Administration Agreement,
for the compensation herein provided.
2. COMPENSATION. For the services provided and the expenses
assumed as Administrator pursuant to the Administration Agreement with respect
to the Funds, the Company will pay Concord a fee, computed daily and paid
monthly, at the annual rate of .15% of the Blue Chip, Flexible Bond, Asset
Allocation, National Municipal Bond, Utilities, Growth and Income, Corporate
Bond, International Equity and International Bond Fund's average daily net
assets. With respect to the Short-Term Government Fund, the Company will pay
Concord a fee, computed daily and paid monthly, at the annual rate of .05% of
that Fund's average daily net assets. Such fee as is attributable to each Fund
will be a
<PAGE> 2
separate charge to each such Fund and will be the several (and not the joint
and several) obligation of each such Fund.
The parties understand that each Fund will seek to achieve its
investment objective by investing all of its assets in an open-end management
investment company (a "Portfolio") having the same investment objective as that
of the Fund, and that Concord will receive administration fees from the
Portfolios. If in any fiscal year the aggregate of the (i) pro rata share of
the total expenses of a Portfolio that are borne by a Fund (as such expenses
are defined under the securities regulations of any state having jurisdiction
over such Fund), plus (ii) the expenses borne by such Fund in connection with
such Fund's own operations as a registered investment company (as defined under
such regulations), exceed the expense limitations of any such state, Concord
will reimburse the Fund for a portion of such excess expenses equal to such
excess times the ratio of (a) the sum of the administration fees otherwise
payable with respect to such Fund and Portfolio to Concord hereunder and under
Concord's administration agreement with the Portfolio (the "Portfolio
Administration Agreement"), to (b) the aggregate of such administration fees
otherwise payable with respect to such Fund and Portfolio to Concord plus the
advisory fees otherwise payable by the Portfolio under its investment advisory
agreement with The Bank of America N.T.S.A. The obligation of Concord to
reimburse any Fund hereunder is limited in any fiscal year to the amount of its
fees hereunder and under the Portfolio Administration Agreement for such fiscal
year with respect to such Fund and the Portfolio in which the Fund's assets are
invested; provided, however, that notwithstanding the foregoing, Concord will
reimburse any Fund for such proportion of such excess expenses regardless of
the amount of fees paid to it during such fiscal year to the extent that the
securities regulations of any state having jurisdiction over the Fund so
require. Such expense reimbursement, if any, will be estimated and accrued
daily and paid on a monthly basis.
3. MISCELLANEOUS. For purposes of the appointment under this
Amendment No. 4 with respect to the Funds, (a) the reference to "The Bank of
New York" in Part I, Sections 2(A), 2(J) and 2(M) of the Administration
Agreement shall be changed to "PNC Bank, National Association and Supervised
Service Company, Inc." and (b) the reference to "The Bank of New York" in Part
I, Section 3, shall be changed to "PFPC, Inc." Except to the extent amended
hereby, the Administration Agreement shall remain unchanged and in full force
and effect and is hereby ratified and confirmed in all respects as amended
hereby.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 4
as of the date and year first above written.
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
------------------------
President
CONCORD HOLDING CORPORATION
By:/s/ Richard Stiewalt
-----------------------
Chief Executive Officer
-3-
<PAGE> 1
EXHIBIT 9(R)
AGREEMENT RELATING TO
ADMINISTRATION AGREEMENT
This AGREEMENT, is made as of the 29th day of March, 1995
between Pacific Horizon Funds, Inc., a Maryland Corporation, (the "Fund"), and
Concord Holding Corporation, a Delaware Corporation ("Concord").
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act") and has entered into an administration agreement (the "Administration
Agreement"), dated November 13, 1989 with Concord pursuant to which Concord
acts as administrator for the Fund, and
WHEREAS, the Administration Agreement provides that it will
automatically terminate in the event of its assignment, as that term is defined
in the Investment Company Act of 1940 (the "1940 Act"), and
WHEREAS, Concord has entered into a definitive merger
agreement with The BISYS Group, Inc. ("BISYS") pursuant to which a subsidiary
of BISYS will merge with and into Concord and Concord will become a
wholly-owned subsidiary of BISYS (the "Merger") on or about March 31, 1995 (the
actual date of the Merger to be referred to as the "Merger Date"), and
WHEREAS, the Merger will result in a change of control of
Concord that may be deemed to result in an assignment and termination of the
Administration Agreement as that term is defined in the 1940 Act, and
WHEREAS, the Fund wishes to continue to retain Concord as
administrator of the Fund following the Merger on the same terms and conditions
as exist prior to the Merger Date and Concord wishes to continue to serve as
administrator under those same terms.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the Parties hereto
agree as follows:
4. RENEWAL AND REINSTATEMENT OF ADMINISTRATION
AGREEMENT. The Parties hereby agree that, effective upon the termination of
the Administration Agreement on the Merger Date, the Administration Agreement
shall be automatically, and without need of further action, renewed and
reinstated and shall continue in effect under its current terms. The Parties
further agree
<PAGE> 2
that the renewal and reinstatement of the Administration Agreement shall be
evidenced by their respective execution of this Agreement and that no further
agreement or documentation shall be required.
5. OTHER MATTERS.
a. In the event the Merger is not consummated
within 120 calendar days of the date hereof, this Agreement shall become null
and void and therefore have no effect on the Administration Agreement.
b. This Agreement may be executed in one or more
counterparts, each of which may be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
CONCORD HOLDING CORPORATION
By:/s/ Richard Stierwalt
------------------------
PACIFIC HORIZON FUNDS, INC.
By:/s/ Thomas M. Collins
------------------------
-2-
<PAGE> 1
EXHIBIT 9(S)
=====================================================
PACIFIC HORIZON FUNDS, INC.
AND
THE BANK OF NEW YORK
Cash Management and Related Services Agreement
Dated as of May 1, 1990
===================================================
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
<S> <C> <C>
PAGE
----
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1 "Account Available Balance" . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2 "Authorized Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 3 "Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4 "Calendar Month Earnings Credit" . . . . . . . . . . . . . . . . . . . . 2
Section 5 "Certificate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 6 "Chargeable Credits" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 7 "Chargeable Debits" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 8 "Daily Earnings" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 9 "Daily Earnings Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 10 "Daily Overdraft Charges" . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 11 "Federal Funds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 12 "Gross Calendar Month Earnings Credit" . . . . . . . . . . . . . . . . . 5
Section 13 "Monthly Overdraft Charges" . . . . . . . . . . . . . . . . . . . . . . . 5
Section 14 "Oral Instructions" . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 15 "Overdraft Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 16 "Series" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 17 "Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 18 "Shareholder" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 19 "Written Instructions" . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II APPOINTMENT OF BANK; ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III CASH MANAGEMENT SERVICES . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV OVERDRAFTS OR DISBURSEMENT . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V ACCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI CONCERNING THE BANK . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SCHEDULE A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SCHEDULE I, II, III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
-2-
<PAGE> 3
CASH MANAGEMENT AND RELATED SERVICES AGREEMENT, dated as of May 1,
1990 between Pacific Horizon Funds, Inc., a Maryland business corporation (the
"Fund"), and The Bank of New York, a New York corporation authorized to do a
banking business and having its principal offices at 48 Wall Street, New York,
New York 10286 (the "Bank").
W I T N E S S E T H:
That in consideration of the mutual agreements and covenants herein
contained, the Bank and the Fund hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
Whenever used in this Agreement, unless the context otherwise
requires, the following words shall have the meanings set forth below:
1. "Account Available Balance" shall mean with respect to an
Account for any given day during a calendar month a positive or negative dollar
amount equal to (A) if such day is a Business Day, the Account Available
Balance as of the close of the last preceding Business Day plus a positive or
negative dollar amount equal to the difference, if any, between the Chargeable
Credits with respect to such day and such Account and the Chargeable
<PAGE> 4
Debits with respect to such day and such Account, and (B) if such day is not a
Business Day, the Account Available Balance as of close of the last preceding
Business Day, except that both (A) and (B) shall be reduced by the United
States Federal Reserve reserve requirements then applicable to the Bank with
respect to such Account.
2. "Authorized Person" shall mean (A) any officer or employee of
the Fund or any other person duly authorized by corporate resolutions of the
Board of the Fund to give Oral and/or Written Instructions on behalf of the
Fund, such persons to be designated in a Certificate, substantially in the form
of Exhibit A, which contains a specimen signature of such person, and (B) any
person using the authenticator key, provided the Fund by the Bank, to send or
transmit any instruction or direction by any computer, video (CRT) terminal or
other on-line system.
3. "Business Day" shall mean any day on which the Federal Reserve
Bank of New York is open for business, except for any such day on which the
Bank is required by law or regulation to be closed, or elects to be closed.
4. "Calendar Month Earnings Credit" shall mean with respect to an
Account for any calendar month the dollar amount, whether positive or negative,
equal to the sum of the Gross Calendar Month Earnings Credit with respect to
such Account for
-2-
<PAGE> 5
such calendar month and the Monthly Overdraft Charges with respect to such
Account for such calendar month.
5. "Certificate" shall mean any original notice, instruction,
schedule or other instrument in writing, authorized or required by this
Agreement to be given to the Bank, which is actually received by the Bank and
signed on behalf of a Fund by an Authorized Person.
6. "Chargeable Credits" shall mean with respect to an Account for
any given day during a calendar month a positive amount of dollars equal to the
sum, if any, of (A) the aggregate dollar amount of Federal Funds credited to
such Account by the Bank in accordance with the then applicable availability
schedule of the Federal Reserve Bank of New York and (B) the aggregate dollar
amount of Bank internal transfers of Federal Funds to such Account.
7. "Chargeable Debits" shall mean with respect to an Account for
any given day during a calendar month a negative dollar amount equal to the
sum, if any, of (A) the aggregate dollar amount of Federal Funds relating to
such Account charged against the Bank by the Federal Reserve Bank of New York
on or as of such day and (B) the aggregate dollar amount of Bank internal
transfers from, or charges to, such Account.
-3-
<PAGE> 6
8. "Daily Earnings" shall mean with respect to an Account for any
day during a calendar month a positive dollar amount equal to the product of
(A) the positive Account Available Balance, if any, of such Account for such
day, multiplied by (B) the Daily Earnings Rate for such day. The Daily
Earnings with respect to an Account for any day during a calendar month on
which the Account Available Balance of such Account is negative shall be zero.
9. "Daily Earnings Rate" shall mean for any day during a calendar
month one three hundred and sixty-fifth of the 91 day U.S. Treasury Bill
discount rate of the Monday auction first preceding such day (whether or not
such day is a Monday, and whether or not such Monday auction was in the
immediately prior month) as such Monday auction 91 day U.S. Treasury Bill
discount rate is reported in The Wall Street Journal report of such Monday
auction.
10. "Daily Overdraft Charges" shall mean with respect to an
Account for any day during any calendar month a negative dollar amount equal to
the product, if any, of (A) the negative Account Available Balances, if any,
with respect to such Account for such day during such calendar month,
multiplied by (B) the Overdraft Rate.
-4-
<PAGE> 7
11. "Federal Funds" shall mean immediately available same day
funds.
12. "Gross Calendar Month Earnings Credit" shall mean with respect
to an Account for any calendar month a positive dollar amount equal to the
aggregate sum of the Daily Earnings of such Account for such calendar month.
13. "Monthly Overdraft Charges" shall mean with respect to an
Account for any calendar month a negative dollar amount equal to the aggregate
sum of the Daily Overdraft Charges with respect to such Account for such
calendar month which have not been previously paid to the Bank by the Series to
which such Account relates.
14. "Oral Instructions" shall mean verbal instructions actually
received by the Bank from an Authorized Person or from a person reasonably
believed by the Bank to be an Authorized Person.
15. "Overdraft Rate" shall mean with respect to an Account for any
calendar day during any calendar month a rate equal to one three hundred and
sixtieth of the sum of (A) one-half percent and (B) the greater of (i) the
prime commercial lending rate of The Bank of New York, as publicly announced to
be in effect from time to time, in effect on such calendar day, and (ii) 6%.
-5-
<PAGE> 8
16. "Series" shall mean the separate series of the Fund, within
the meaning of the Investment Company Act of 1940, as amended, listed on
Schedule A hereto, and such additions thereto, if any, as agreed upon in
writing by the Bank and the Fund.
17. "Shares" shall mean all or any part of each class of Horizon
Shares or Horizon Service Shares of each Series which are authorized and/or
issued from time to time.
18. "Shareholder" shall mean any record holder of any Shares, as
identified to the Bank from time to time pursuant to this Agreement.
19. "Written Instructions" shall mean written communications
actually received by the Bank from an Authorized Person or from a person
reasonably believed by the Bank to be an Authorized Person by letter,
memorandum, telegram, cable, telex, telecopy facsimile, computer, video (CRT)
terminal or other on-line system, or any other method whereby either the
receiver of such communication is able to verify by codes or otherwise with a
reasonable degree of certainty the identity of the sender of such
communication, or the sender is required to provide a password or other
identification code.
-6-
<PAGE> 9
ARTICLE II
APPOINTMENT OF BANK; ACCOUNTS
-----------------------------
1. The Fund hereby appoints the Bank as its agent for the term of
this Agreement to perform for Shares of each Series the cash management
services set forth herein and in Schedules I and II hereto (as such Schedules
may be amended or supplemented from time to time by mutual agreement). During
the term of this Agreement, the Fund shall not maintain with respect to the
Shares of any Series any account or arrangement with, or obtain services from,
any entity, if such account, arrangement or services are similar to the
Accounts, arrangements, or services provided for by this Agreement. The Bank
hereby accepts appointment as an agent for the Fund with respect to the Shares
of the Series and agrees to establish and maintain one or more separate
accounts with respect to each Series (herein each an "Account"; collectively
the "Accounts") in order to receive and disburse money for the purposes set
forth in this Agreement.
2. The Fund hereby represents and warrants to the Bank, which
representations and warranties shall be deemed to be continuing and to be
reaffirmed upon delivery to the Bank of any Oral or Written Instructions, that:
(a) It is duly organized and existing under the laws of
the jurisdiction of its organization, with full power to carry on its business
as now conducted, to enter into this Agreement and to perform its obligations
hereunder;
-7-
<PAGE> 10
(b) This Agreement has been duly authorized, executed and
delivered by the Fund in accordance with all requisite corporate action and
constitutes a valid and legally binding obligation of the Fund enforceable in
accordance with its terms except to the extent such enforcement may be limited
by general equity principles or bankruptcy principles; and
(c) It is conducting its business in substantial
compliance with all applicable laws and regulations, both state and federal,
and has obtained all regulatory licenses, approvals and consents necessary to
carry on its business as now conducted; there is no statute, regulation, rule,
order or judgment binding on it and no provision of its charter or by-laws, nor
of any mortgage, indenture, credit agreement or other contract binding on it or
affecting its property which would prohibit its execution or performance of
this Agreement.
3. The Fund hereby covenants that on each Business Day on which
either it intends to enter a reverse repurchase agreement and/or otherwise
borrow from a third party, or which next succeeds a Business Day on which at
the close of business the Fund had outstanding a reverse repurchase agreement
or such a borrowing, it shall prior to 9 a.m. advise the Bank, in writing, of
each such borrowing, shall specify the Series to which the same relates, and
shall not incur any indebtedness not so specified other than from the Bank.
-8-
<PAGE> 11
4. The Bank hereby represents and warrants to the Fund, which
representations and warranties shall be deemed to be continuing and to be
reaffirmed upon its acting in accordance with any oral or Written Instructions,
that:
(a) The Bank is duly organized and existing under the
laws of the jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to perform its
obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Bank in accordance with all requisite corporate action and
constitutes a valid and legally binding obligation of the Bank enforceable in
accordance with its terms, except to the extent such enforcement may be limited
by general equity principles or bankruptcy principles; and
(c) It is conducting its business in substantial
compliance with all applicable laws and regulations, both state and federal,
and has obtained all regulatory licenses, approvals and consents necessary to
carry on its business as now conducted; there is no statute, regulation, rule,
order or judgment binding on it and no provision of its charter or bylaws, nor
of any mortgage, indenture, credit agreement or other contract binding on it or
affecting its property which would prohibit its execution or performance of
this Agreement.
-9-
<PAGE> 12
5. The Fund shall provide the Bank with the following documents,
and receipt of the same by the Bank shall be a condition precedent to the
Bank's establishing any Accounts:
(a) a certified copy of a resolution of the board of
directors of the Fund appointing the Bank as its agent to act hereunder and
providing for the creation of the Accounts and the execution by the Fund of
this Agreement;
(b) an opinion of outside counsel to the Fund, in form
and substance reasonably satisfactory to the Bank, (A) that this Agreement is a
valid, binding and duly authorized and executed obligation of the Fund
enforceable against the Fund in accordance with its terms, subject to the
limitations imposed by bankruptcy, insolvency, moratorium, fraudulent
conveyance and other similar laws affecting the rights of creditors generally
and court decisions with respect thereto, and (B) that no statute, regulation,
rule, or order or published interpretation of the same by an authority
empowered to apply or enforce such statutes, regulations, rules or orders would
prohibit, or be contravened by, the Fund's execution or performance of this
Agreement or by the arrangements hereby contemplated;
(c) an opinion of outside counsel to the Fund, in form
and substance reasonably satisfactory to the Bank, that any advance of funds or
overdraft with respect to the Fund's Account
-10-
<PAGE> 13
for any Series as described in Article IV hereof, and the grant of the security
interest contained herein with respect to the same are consistent with all
applicable New York state and federal statutes, rules, regulations and
interpretations of the same applicable to the Fund, and create a perfected
security interest in favor of the Bank on assets held by the Bank in its
capacity as Custodian for such Series under the Fund's Custody Agreement.
ARTICLE III
CASH MANAGEMENT SERVICES
------------------------
1. The Fund may from time to time deliver or cause to be
delivered to the Bank for deposit in an Account with respect to a Series money
(a) for the purchase of Shares of such Series, (b) for payments by the Fund
arising out of Share redemptions of such Series, and (c) for payments of
dividends and other distributions by the Fund with respect to Shares of such
Series.
2. The Bank shall receive money for credit to an Account only:
(i) by personal presentment by the Fund, but not by a Shareholder of the Fund,
at the branch or branches in Manhattan identified from time to time by the Bank
to the Fund, provided such presentment is in accordance with the time frames
specified by the Bank to the Fund; (ii) by wire transfer to an account
maintained at the Federal Reserve Bank of New York as identified in writing by
the Bank to a Fund; (iii) by transfer from another
-11-
<PAGE> 14
Account maintained by the Fund with the Bank under this Agreement; and (iv) by
transfer from another account maintained by the Fund with the Bank, including
the Fund's custodian account under its Custody Agreement with the Bank as
Custodian; (v) by transfer to an account identified in writing by the Bank to a
Fund through the New York Automated Clearing House; and (vi) by transfer from
any other account maintained with the Bank.
All money received by the Bank shall be credited upon receipt, but subject to
final payment and receipt by the Bank of immediately available funds, and
receipt by the Bank of such forms, documents and information, including, but
not limited to, a specification of the Series to which such money relates, as
are required by the Bank from time to time and received in the appropriate time
frames. The Bank shall be entitled to reverse any credits previously made to a
Fund's Account where money is not finally collected or where a credit to such
Fund's Account was in error, and shall promptly advise the Fund of each such
reversal.
3. The Bank shall disburse money credited to an Account only
pursuant to Written Instructions to transfer funds to the Fund's account under
its Custody Agreement with the Bank as Custodian or through the Federal Reserve
Bank of New York or the New York Automated Clearing House. The Bank shall be
required to disburse money in accordance with the foregoing only insofar as
-12-
<PAGE> 15
such money is immediately available and on deposit with the Bank. All Written
Instructions directing the disbursement of money credited to an Account must
identify the Series and an account to which such money shall be transferred,
and include all other information reasonably required by the Bank from time to
time.
4. On each Business Day the Bank shall provide the Fund, in the
manner, and in accordance with the time frames, specified in Schedule I hereto,
the information with respect to the Accounts specified in Schedule I hereto.
ARTICLE IV
OVERDRAFTS OR DISBURSEMENT
--------------------------
If the Bank in its sole discretion advances funds, in connection with
this Agreement, or if there shall arise for whatever reason an overdraft or
other indebtedness in connection with any Account, such advancement of funds or
overdraft with respect to such Account shall be deemed a loan made by the Bank
to the Fund with respect to the Series to which such Account relates payable on
demand, and bearing interest from the date incurred at the Overdraft Rate, such
Overdraft Rate to be adjusted on the effective date of any change in the prime
commercial lending rate constituting a part thereof. The Fund hereby agrees
with respect to the Account(s) and any such advancement of funds or overdraft
that the Bank shall have a continuing lien and security interest in and to any
property at
-13-
<PAGE> 16
any time held by it for the benefit of the Fund that is specifically allocated
to the Series to which such Account relates either hereunder or under the
Fund's Custody Agreement with the Bank, or in which such Series may have an
interest which is then in the Bank's possession or control or in possession or
control of any third party acting in the Bank's behalf, including in its behalf
as Custodian under the Fund's Custody Agreement with the Bank, provided such
lien and security interest shall from time to time be limited to that property
whose value from time to time does not exceed the amount of such outstanding
advancement of funds or overdraft and interest thereon. The Fund authorizes
the Bank, in its sole discretion, at any time to charge any such overdraft or
indebtedness with respect to a Series, together with interest due thereon at
the Overdraft Rate, against any balance of accounts standing to the Fund's
credit that is specifically allocated to such Series on the books of the Bank,
including those books maintained by the Bank in its capacity as Custodian for
the Fund under its Custody Agreement with the Fund.
ARTICLE V
ACCESS
------
1. The Bank shall grant access to the Fund via computer, video
(CRT) terminals or other on-line systems (the "Access") between the Bank and
the Fund so that the Fund may thereby obtain direct on-line access to its
Accounts. Such access shall permit
-14-
<PAGE> 17
the Fund at the times mutually agreed upon by the Bank and the Fund (i) to
determine the Chargeable Debits and Chargeable Credits to its Accounts as of
each Business Day, and (ii) to instruct the Bank to disburse money in
accordance with Article III.
2. The Fund shall use Access and the services available thereby
only for the purposes set forth in Article III and shall not sell, lease or
otherwise provide, directly or indirectly, Access or any of such services or
any portion thereof to any other person or entity, provided, however, that the
Fund may provide Access and the services available thereby to any transfer
agent for the Fund previously identified to the Bank. The Fund shall obtain
and maintain at its own cost and expense all equipment and services, including,
but not limited to communications services, necessary for it to utilize Access
and receive the services thereby, and the Bank shall not be responsible for the
reliability or availability of any such equipment or any services used in
connection with such Access.
(a) The Fund acknowledges that all data bases made
available as part of, or through Access, and any proprietary data, processes,
information and documentation (other than any such which are or become part of
the public domain or are legally required to be made available to the public
and other than any data or other information relating to the Fund's
Shareholders and
-15-
<PAGE> 18
Share transactions covered by this Agreement) (collectively, the
"Information"), are the exclusive and confidential property of the Bank. The
Fund shall keep the Information confidential by using the same care and
discretion that the Fund uses with respect to its own confidential property and
trade secrets, and shall neither make nor permit any disclosure without the
express prior written consent of the Bank. Notwithstanding the foregoing, the
Fund or any transfer agent for the Fund shall have the right to disclose such
records and other information to any Federal or State authority with whom the
Fund or its Shares are registered, and the Fund or any transfer agent for the
Fund shall further have the right to exhibit any such records and information
to any person whenever it receives an opinion from its counsel that there is a
reasonable likelihood that the Fund or any transfer agent for the Fund will be
held liable for the failure to exhibit such records or information to such
person, provided, however, that in connection with any such disclosure the Fund
or any transfer agent for the Fund shall promptly notify the Bank that such
disclosure has been made or is to be made.
(b) Upon termination of this Agreement for any reason,
the Fund shall return to the Bank any and all copies of the Information (as
defined in (a) above and not including any data or other information relating
to the Fund's Shareholders and Share transactions) which are in the Fund's
possession or under its control, or distributed to third parties. The
provision of
-16-
<PAGE> 19
this Article shall not affect the copyright status of any of the Information
which may be copyrighted and shall apply to all Information whether or not
copyrighted.
3. The Bank reserves the right to modify the Access from time to
time without notice to the Fund, provided, however, that the Bank shall give
the Fund prior notice of any modification that would cause the Fund's use of
Access or the services available thereby to be interrupted. The Fund agrees
not to modify or attempt to modify Access without the Bank's prior written
consent. The Fund acknowledges that Access is the property of the Bank and,
accordingly, the Fund agrees that any modifications to Access, whether by the
Fund or the Bank and whether with or without the Bank's consent, shall become
the property of the Bank.
4. Neither the Bank nor any manufacturers and suppliers it
utilizes or the Fund utilizes in obtaining Access makes any warranties or
representations, express or implied, in fact or in law, including but not
limited to warranties of merchantability and fitness for a particular purpose.
Without limiting the generality of, and notwithstanding, the foregoing, the
Bank shall use reasonable efforts to promptly repair at its expense any bug or
defect in any software (other than operating system software) included in
Access upon being advised of such defect by the Fund.
-17-
<PAGE> 20
5. The Fund will, and will cause its officers and employees to,
treat the user and authorization codes, passwords and authentication keys
applicable to Access with extreme care. The Bank is hereby irrevocably
authorized to act in accordance with and rely on Written Instructions received
by it through Access. The Fund acknowledges that it is its sole responsibility
to assure that only authorized persons use Access, and that the Bank shall not
be responsible nor liable therefor.
6. (a) Except as otherwise specifically provided in Section
6(b)(1) and 6(b)(2), the Bank shall have no liability for any losses, damages,
injuries, claims, costs or expenses of the Fund caused by the Bank in
connection with the Fund's use of Access except for money damages suffered as
the direct result of the negligence of the Bank in an amount not exceeding, in
the aggregate for all such losses, damages, injuries, claims, costs and
expenses of the Fund arising during any three month period, three times the
average total monthly charges paid by a Fund to the Bank for Access and
services under this Agreement during the 12 months preceding the three month
period in question, or such lesser number of months as the Fund has received
Access if the Fund has not received 12 months of Access, provided however, that
the Bank shall have no liability under this Section 6(a) if a Fund fails to
comply with the provisions of Section 6(d).
-18-
<PAGE> 21
(b)(1) The Bank's sole liability (whether it acted with or
without negligence or with or without bad faith, willful misconduct or gross
negligence) for executing, misexecuting, or failing to execute, Written
Instructions as given by the Fund with respect to a transfer of funds after
such Written Instructions have been received by the Bank through Access and
duly acknowledged by the Bank shall, provided the Fund has complied with the
provisions of section 6(d), be (i) restoration of the principal amount
mistransferred but only to the extent that the Fund was damaged thereby, and
(ii) the lesser of (A) the Fund's actual pecuniary loss incurred by reason of
its loss of use of the mistransferred funds or the funds which were not
transferred, as the case may be, or (B) compensation for the loss of the use of
the mistransferred funds or the funds which were not transferred, as the case
may be, at a rate per annum equal to the average federal funds rate as computed
from the Federal Reserve Bank of New York's daily determination of the
effective rate for federal funds, for the period during which the Fund has lost
use of such funds. In no event shall the Bank have any liability for failing
to execute Written Instructions entered through Access unless such Written
Instructions are received by the Bank through the transfer module for the Fund.
For purposes of the preceding sentence, Written Instructions in the form of a
letter, memorandum, telegram, cable, telex or telecopy facsimile shall not be
deemed Written Instructions received through Access.
-19-
<PAGE> 22
(b)(2) The dollar limitations of Section 6(a) shall not
apply with respect to (i) any willful misconduct or bad faith by the Bank or
any Bank employee, nor to (ii) any losses or damages suffered by the Fund as a
result of the Bank's including in Access any software (other than operating
system software purchased from third parties believed by the Bank in good faith
to be entitled to sell the same) in violation of the patent or proprietary
rights of others.
(c) Without limiting the generality of the foregoing, it
is hereby agreed that in no event shall the Bank or any manufacturer or
supplier of its computer equipment, software or services available through
Access be responsible for any special, indirect, incidental or consequential
damages which the Fund may incur or experience arising out of or in connection
with Access and services hereunder, even if the Bank or such manufacturer or
supplier has been advised of the possibility of such damages nor shall the Bank
or any such manufacturer or supplier be liable for acts of God, machine or
computer breakdown or malfunction, interruption or malfunction of communication
facilities, labor difficulties or any other similar or dissimilar cause beyond
such person's reasonable control.
(d) The Fund directly or through its transfer agent shall
notify the Bank of any errors, omissions or interruptions in, or delay or
unavailability of, Access as promptly as
-20-
<PAGE> 23
practicable, and in any event within one Business Day after the earliest of (i)
discovery thereof by the Fund (ii) the date discovery should have occurred
through the exercise of reasonable care by the Fund, including, without
limitation, review of notices, and (iii) in the case of any error, the date of
the earliest notice to the Fund which reflects such error.
ARTICLE VI
CONCERNING THE BANK
-------------------
1. Notwithstanding any other provision elsewhere contained in
this Agreement, other than Section 6(b)(1) of Article V, the Bank shall not be
liable for any costs, expenses, damages, liabilities or claims (including
attorney's fees) incurred by the Fund, except those costs, expenses, damages,
liabilities or claims arising out of the Bank's own negligence, bad faith or
willful misconduct. All claims against the Bank hereunder shall be made by the
Fund as promptly as practicable, and in any event within 6 months from the date
discovery of the action or inaction on which such claim is based should have
occurred through the exercise of reasonable care by Fund, and shall include to
the extent reasonably practicable documentation evidencing such claim and loss.
2. The Bank shall have no obligation hereunder for costs,
expenses, damages, liabilities or claims, including attorney's fees, which are
sustained or incurred by reason of any action or
-21-
<PAGE> 24
inaction by the Federal Reserve wire transfer system or the New York Automated
Clearing House. Notwithstanding any other provision elsewhere contained in
this Agreement, in no event shall the Bank be liable to the Fund or any third
party for special, indirect or consequential damages, or lost profits or loss
of business, arising under or in connection with this Agreement, even if
previously informed of the possibility of such damages and regardless of the
form of action.
3. The Fund shall indemnify and exonerate, save and hold harmless
the Bank from and against any and all costs, expenses, damages, liabilities or
claims, including reasonable attorney's fees and expenses, which the Bank may
sustain or incur or which may be asserted against the Bank by reason of or as a
result of any action taken or omitted by the Bank in connection with its
performance under this Agreement, except as provided in Section 6(b)(1) of
Article V and those costs, expenses, damages, liabilities or claims arising out
of the Bank's own negligence, bad faith or wilful misconduct. This indemnity
shall be a continuing obligation of the Fund notwithstanding the termination of
this Agreement, or any Account. Provided, however, that in each instance where
indemnity by the Fund is provided for by this paragraph, the Bank shall give
the Fund notice, and reasonable opportunity to defend, any action, suit, or
claim giving rise to the Bank's right to indemnify by the Fund, in the name of
the Fund or the Bank or both; and provided further that the Bank will
-22-
<PAGE> 25
in no case confess any action, suit or claim or make any compromise in any case
in which the Fund will be asked to indemnify Bank without the Fund's prior
written consent.
4. For the purposes of this Agreement the Bank shall be
conclusively presumed to have performed hereunder without negligence with
respect to any instance of any particular duty or responsibility if it has
performed such duty or responsibility, after excluding any nonperformance
attributable to circumstances beyond the Bank's control as further described in
paragraph 8 of this Article, at a level equal to, or better than, the level of
performance of such duty or responsibility by those institutions providing
identical or similar services to identical or similar clients. The
determination of a level of performance of a duty or responsibility shall be
based on a significant period of time, not to be less than thirty (30) days.
5. Without limiting the generality of the foregoing, the Bank
shall in no event be under any obligation to inquire into, and shall not be
liable for:
(a) the due authority of any Authorized Person acting on
behalf of the Fund in connection with this Agreement;
(b) any disbursement directed by the Fund, regardless of
the purpose therefor;
-23-
<PAGE> 26
(c) any claims, liens, attachments, stays or stop orders
with respect to any such Shares, proceeds, or money;
(d) the propriety and/or legality of any transaction in
any Account;
(e) the purposes for which money is delivered to the Bank
for deposit in an Account;
(f) the purposes for which money is disbursed from an
Account; and
(g) the genuineness of any signature, including any
endorsement, on any check deposited in any Account, or whether such signature
is a forgery, other than the signature of the drawer of any check drawn on the
Bank.
6. Notwithstanding any other provision elsewhere contained in
this Agreement, the Fund agrees that the Bank's sole liability on late payments
shall be to pay an additional amount calculated at a rate per annum equal to
the average federal funds rate as computed from the Federal Reserve Bank of New
York's daily determination at the effective rate for federal funds for each day
until payment is made, but not to exceed in any event thirty (30) days.
-24-
<PAGE> 27
7. The Bank shall be entitled to rely upon any Written or Oral
Instructions received by the Bank. The Fund agrees to forward to the Bank
Written Instructions confirming Oral Instructions in such manner so that such
Written Instructions are received by the Bank by the close of business of the
same day that such Oral Instructions are given to the Bank. The Fund agrees
that the fact that such confirming Written Instructions are not timely received
or that contrary Written Instructions are received by the Bank shall in no way
affect the validity or enforceability of the transactions previously
authorized.
8. The Bank shall not be responsible or liable for any failure or
delay in the performance of its obligations under this Agreement arising out of
or caused, directly or indirectly, by circumstances beyond its control,
including without limitation, or by reason of acts of God, earthquakes, fires,
floods, wars, civil or military disturbances, sabotage, epidemics, riots,
interruptions or loss of transportation, mechanical breakdowns, interruption or
loss of communications, military authority, governmental actions, strikes or
inability to obtain material, equipment or transportation.
9. The Bank shall have no duties or responsibilities except such
duties and responsibilities as are specifically set forth in this Agreement and
Schedules I and II hereto. The Bank's duties and responsibilities hereunder
shall be performed
-25-
<PAGE> 28
in accordance with applicable laws, regulations and rules, including but not
limited to Federal Reserve Regulation CC and the Operating Rules of the New
York Automated, and the Bank shall have no obligation to take actions which in
the reasonable opinion of the Bank are either inconsistent with, or prejudice
or impair the Bank's rights under, any such laws, regulations and rules. No
covenant or obligation shall be implied in this Agreement against the Bank.
10. At any time the Bank may apply to an officer of the Fund for
Written Instructions with respect to any matter arising in connection with the
Bank's duties and obligations with respect to any Account, and the Bank shall
not be liable for any action taken or permitted by it in good faith in
accordance with such Written Instructions. Such application for Written
Instructions may, at the option of the Bank, set forth in writing any action
proposed to be taken or omitted by the Bank with respect to its duties or
obligations under this Agreement and the date on and/or after which such action
shall be taken, and the Bank shall not be liable for any action taken or
omitted in accordance with a proposal included in any such application on or
after the date specified therein (which shall be at least 5 days after the date
of such Fund's receipt of such application) unless, prior to taking or omitting
any such action, the Bank has received Written Instructions in response to such
application specifying the action to be taken or omitted. The Bank may apply
for and obtain
-26-
<PAGE> 29
the advice and opinion of counsel to the Fund or of its own counsel, at its own
expense, and shall be fully protected with respect to anything done or omitted
by it in good faith in conformity with such advice or opinion.
11. (a) The Bank may employ agents or attorneys-in-fact for
non-essential services (e.g., without limitation, messengers). The Bank shall
not be liable to the Fund for any loss or expense arising out of, or in
connection with, the actions or omissions to act of such agent or
attorney-in-fact so long as the Bank acts in good faith and without negligence
or wilful misconduct in the selection of such agent or attorney-in-fact. The
Bank shall have no liability or responsibility whatsoever if such agent or
attorney-in-fact shall have been selected by such Fund. Notwithstanding the
foregoing, nothing contained in this paragraph shall obligate the Bank to
employ any agent or attorney-in-fact.
(b) The Bank may delegate any of its duties or
obligations hereunder to any person or entity it selects provided that the Bank
shall be responsible for the actions or omissions to act of any such delegee as
if it itself had so acted or omitted to act. The Bank agrees that if it
delegates essential services that it will notify the Fund in writing of such
delegation.
-27-
<PAGE> 30
12. For its services hereunder, the Fund agrees to pay the Bank
(a) its out-of-pocket expenses, and (b) the monthly fees and compensation set
forth on Schedules I and II attached hereto, (c) any negative Calendar Month
Earnings Credits, and such other amounts as may be mutually agreed upon from
time to time. The Bank shall provide the Fund with a monthly activity analysis
detailing service volumes, and including average Account Available Balances and
average ledger balances, and all fees owing for such month. Such expenses,
fees, compensation and negative Calendar Month Earnings Credits as are
attributable to each Account shall be the separate charges of that Account and
the Series to which such Account relates and shall be the several (and not
joint or joint and several) obligation of each such Account and Series.
(a) The Bank shall submit periodic invoices specifying
with respect to each Account the amount of all out-of-pocket expenses, fees,
compensation and negative Calendar Month Earnings Credits which may be due and
payable hereunder. Amounts reflected on each such invoice shall be due and
payable thirty (30) days after the Fund's receipt of such invoice and
supporting documentation, and the Bank may charge against the Accounts the
amounts so specified if the same are not otherwise paid within such 30 day
period.
-28-
<PAGE> 31
(b) Such out-of-pocket expenses, fees and compensation do
not include costs relating to each Fund's Access, such as telephone, telex or
other communications charges. All such costs shall be borne and paid by the
Fund.
13. Any positive Calendar Month Earnings Credit for a calendar
month shall be applied only as follows and only in the specified order:
(a) First, applied against such compensation, fees, and
negative Calendar Month Earnings Credits, but not out-of-pocket expenses, paid
or payable by the Fund to the Bank under this Agreement for any prior month
within the same calendar quarter;
(b) Second, applied against such compensation and fees,
but not out-of-pocket expenses, payable by the Fund to the Bank under this
Agreement for such month;
(c) Third, applied against such compensation, fees, and
negative Calendar Month Earnings Credits, but not out-of-pocket expenses,
payable by the Fund to the Bank under this Agreement for any subsequent month
in the same calendar quarter.
(d) Except as provided in preceding clauses (a), (b), or
(c), in no event may any Calendar Month Earnings Credit be
-29-
<PAGE> 32
applied to any month other than the month in which it was earned. Nor may any
Calendar Month Earnings Credit be transferred to, or utilized by, any other
person or entity. The portion, if any, of any Calendar Month Earnings Credit
not used by a Fund may be carried, but only forward, and only to the next
succeeding calendar quarter, provided, however, that in no event may any
Calendar Month Earnings Credit, including those earned during the fourth
calendar quarter, be carried beyond the end of the calendar year in which
earned.
ARTICLE VII
TERMINATION
-----------
1. Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of
giving such notice.
2. If for any reason whatsoever at any time the Fund shall
terminate its Custody Agreement with the Bank as Custodian, this Agreement may
be terminated by the Rank sending a written notice to the Fund specifying a
date of termination which is on or after the date of such termination of such
Custody Agreement and at least 30 days after the date of such notice.
3. Upon any termination, the Bank's obligations, which shall
arise after, and not before, the Fund has paid to the Bank
-30-
<PAGE> 33
all out-of-pocket expenses, fees, compensation, negative Calendar Month
Earnings Credits and other amounts owed by such Fund to the Bank, shall be (i)
to deliver to the Fund such records, if any, as may be owned by such Fund, in
the form and manner kept by the Bank on such date of termination, and (ii) to
pay any funds held hereunder for the Fund to the Fund.
ARTICLE VIII
MISCELLANEOUS
-------------
1. The Fund agrees to furnish to the Bank a new Certificate in
the event that any present Authorized Person of such Fund ceases to be an
Authorized Person or in the event that any other Authorized Persons are
appointed and authorized. Until such new Certificate is received, the Bank
shall be fully protected in acting under the provisions of this Agreement upon
Oral or Written Instructions or signatures of the present Authorized Persons as
set forth in the last delivered Certificate.
2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Bank, shall be sufficiently given
if addressed to the Bank and received by it at its offices at 90 Washington
Street, 24th Floor, New York, New York 10005, ATTENTION: Fred Ricciardi, Vice
President, or at such other place as the Bank may from time to time designate
in writing with copies to its General Counsel.
-31-
<PAGE> 34
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund shall be sufficiently given
if addressed to the Fund and received by it at its offices at 156 West 56th
Street, Suite 1902, New York, New York 10019, or at such other place as the
Fund may from time to time designate in writing.
4. Each and every right granted to the Bank or the Fund hereunder
or under any other document delivered hereunder or in connection herewith, or
allowed it by law or equity, shall be cumulative and may be exercised from time
to time. No failure on the part of the Bank or the Fund to exercise, and no
delay in exercising, any right will operate as a waiver thereof, nor will any
single or partial exercise by the Bank or the Fund of any right preclude any
other or future exercise thereof or the exercise of any other right.
5. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unreasonable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations shall
not in any way be affected or impaired thereby, and if any provision is
inapplicable to any person or circumstances, it shall nevertheless remain
applicable to all other persons and circumstances.
-32-
<PAGE> 35
6. This Agreement may not be amended or modified in any manner
except by a written agreement executed by the Bank and the Fund to be bound
thereby, and, except in the case of an amendment to Schedules I and II hereto,
authorized or approved by a resolution of the Fund's board of directors.
7. This Agreement shall be construed in accordance with the laws
of the State of New York without giving effect to conflict of laws principles
thereof. Each party hereby consents to the jurisdiction of a state or federal
court situated in New York City, New York in connection with any dispute
arising hereunder and hereby waives its right to trial by jury.
8. The provisions of this Agreement are intended to benefit only
the Bank and the Fund and their respective permitted successors and assigns,
and no right shall be granted to any other person by virtue of this Agreement.
9. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by either party without the written
consent of the other and, if any such assignment is consented to by the Bank,
authorized or approved by a resolution of the Fund's board of directors.
-33-
<PAGE> 36
10. The Bank shall not charge interest under the Custody Agreement
with respect to any Chargeable Debits to the extent such Chargeable Debits are
included in the calculation hereunder of the Daily overdraft Charges.
11. The Bank shall treat confidentially and as proprietary
information of the Fund records and other information relative to the Fund's
prior and present Shareholders from time to time, and will not use such records
and information for purposes other than performance of its responsibilities and
duties hereunder. Notwithstanding the foregoing, the Bank shall have the right
to disclose such records and other information to any Federal or State
authority with whom the Fund or its Shares are registered, and the Bank shall
further have the right to exhibit any such records and information to any
person whenever it receives an opinion from its counsel that there is a
reasonable likelihood that the Bank will be held liable for the failure to
exhibit such records or information to such person, provided, however, that in
connection with any such disclosure the Bank shall promptly notify the Fund
that such disclosure has been made or is to be made.
12. The books and records pertaining to the Fund which are
specified on Schedule III hereto, which are in the possession of the Bank,
shall be the property of the Fund. Such books and records shall be prepared
and maintained as required by the
-34-
<PAGE> 37
Investment Company Act of 1940, as amended, and other applicable securities
laws and rules and regulations. The Fund, or the Fund's authorized
representatives, shall have access to such books and records promptly upon
request during the Bank's normal business hours. Upon the reasonable request
of the Fund, copies of any such books and records shall be provided by the Bank
to the Fund or the Fund's authorized representative, and the Fund shall
reimburse the Bank its expense of providing such copies. Upon reasonable
request of the Fund, the Bank shall provide in hard copy or on micro-film,
whichever the Bank elects, any records included in any such delivery which are
maintained, and the Fund shall reimburse the Bank for its expenses of providing
such hard copy or micro-film.
13. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
14. This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior written agreements, discussions and understandings of
every kind and nature between them relating to the subject matter hereof.
-35-
<PAGE> 38
15. This Agreement has been entered into by the Fund in order to
(i) hold in the separate Accounts described herein money belonging to investors
and Shareholders in connection with Share purchase and redemption transactions
and in connection with the payment of Shareholder dividends and distributions
payable by the Fund; and (ii) facilitate such transactions through the
establishment of the overdraft and order-entry procedures set forth herein.
The Fund contemplates that the only persons who will be authorized by the Fund
to give Written Instructions to the Bank for disbursement of money credited to
an Account for any purpose other than to transfer such money to the Fund's
account under the Custody Agreement will be employees of the Fund's transfer
agent, who will be acting in connection with the transfer agent's cash
disbursement responsibilities for the Fund. The Fund also expects that the
Bank will be instructed to transfer any net proceeds in the Accounts that are
payable to the Fund in connection with purchases of Shares to the Fund's
account under its Custody Agreement with the Bank on the same day said
purchases are executed.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective corporate officers,
-36-
<PAGE> 39
thereunto duly authorized, as of the day and year first above written.
PACIFIC HORIZON FUNDS, INC.
/s/ Thomas M. Collins
---------------------
By:Chairman of the Board
---------------------
Title: President
THE BANK OF NEW YORK
By:/s/ [signature illegible]
-------------------------
Title: Vice President
-37-
<PAGE> 40
SCHEDULE A
Pacific Horizon Funds, Inc. Treasury Fund
Horizon Shares (Class)
Horizon Service Shares (Class)
Pacific Horizon Funds, Inc. Prime Fund
Horizon Shares (Class)
Horizon Service Shares (Class)
Pacific Horizon Funds, Inc.
Tax Exempt Money Fund
Horizon Shares (Class)
Horizon Service Shares (Class)
Effective August 6, 1990:
Pacific Horizon Funds, Inc.
Pacific Horizon Shares (Class) of the Prime Fund
Treasury Fund
Tax-Exempt Money Market Fund
California Tax-Exempt Money Market Fund
<PAGE> 41
EXHIBIT A
I, Thomas M. Collins, President of Pacific Horizon Funds, Inc. (the
"Fund"), a Maryland corporation, do hereby certify that the following
individuals have been duly authorized by the Board of Directors of the Fund in
conformity with the Fund's Articles of Incorporation and By-Laws to give Oral
Instructions and Written Instructions on behalf of the Fund for purposes of the
Fund's Cash management and Related Services Agreement, and the signatures set
forth opposite their respective names are the signatures the Bank may rely
upon.
Name Signature
John Frangos /s/ John Frangos
- ------------ ----------------
Nancy E. Murphy /s/ Nancy E. Murphy
- --------------- -------------------
Scott Nadler /s/ Scott Nadler
- ------------ ----------------
/s/ Thomas M. Collins
---------------------
Thomas M. Collins, President
Dated: April 27, 1990
<PAGE> 42
SCHEDULE I
CASH MANAGEMENT SERVICES
I. INCOMING FED WIRES
------------------
. The Bank will provide the Transfer Agent with on-line access
to all incoming Fed Fund wires to an Account which will
include full message text as received by the Bank.
. Wires received with insufficient information for application
will be credited to a separate account for the benefit of all
Funds. The Bank will provide Transfer Agent on-line access to
these items on a daily basis on each Business Day and await
Written Instructions regarding the disposition of such Funds.
II. OUTGOING FED WIRES
------------------
. The Bank will send all wires with respect to which Written
Instructions are received by 3:30 p.m. New York time each
Business Day by the close of business that day.
. The Bank will use reasonable efforts to complete disbursements
via fed wire by 12:30 p.m. New York time provided Written
Instructions, including electronic transmissions, are received
by the Bank by 10:00 a.m. New York time each Business Day.
. The Bank will use reasonable efforts to complete disbursements
via fed wire by 3:30 p.m. New York time provided Written
Instructions, including electronic transmissions, are received
by the Bank by 1:00 p.m. New York time each Business Day.
. The Transfer Agent may send additional wires provided Written
Instructions are received by 4:00 p.m. New York time each
Business Day for transmission by the Bank on the same Business
Day.
III. ACH PROCESSING
--------------
A) PRE-NOTIFICATION
----------------
. The Bank will accept from Transfer Agent pre-notifications in
ACH format to be forwarded pursuant to ACH processing
guidelines, except that pre-notifications for the next
Business Day will not be
<PAGE> 43
sent unless received prior to the close of business on the prior
Business Day.
B) ACH CREDITS INITIATED BY FINANCIAL INSTITUTIONS ("DIRECT DEPOSIT")
------------------------------------------------------------------
. Credits would be received by the Bank and displayed on the
electronic Banking System on the Business Day on which they
are to be posted to the Account. The Account for each Fund
will be credited with immediately available funds on
settlement day.
C) ACH CREDITS INITIATED BY TRANSFER AGENT (SHAREHOLDER LIQUIDATIONS)
------------------------------------------------------------------
. Upon receipt of properly formatted ACH files from the Transfer
Agent by 6:30 p.m. on a Business Day the Bank will process ACH
credits by applicable NYACH deadlines for next Business Day
settlement and debit the appropriate Fund Account on
settlement date.
D) ACH DEBITS INITIATED BY TRANSFER AGENT (SHAREHOLDER PURCHASE)
-------------------------------------------------------------
. Upon receipt of properly formatted ACH Files from the Transfer
Agent by 6:30 p.m. on a Business Day the Bank will process ACH
debits by applicable NYACH deadlines for next Business Day
settlement and credit the appropriate Fund Account on
settlement date.
E) ACH RETURN ITEMS
----------------
. ACH return items will be transmitted to Transfer Agent on
Business Day of receipt. The Bank will debit/credit the
appropriate Fund Account on settlement date.
IV. ELECTRONIC BANKING SERVICES
---------------------------
. The Bank will make available information reporting and
transaction services on each Business Day as follows:
BALANCE REPORTING
-----------------
. Summary Report will provide prior Business Day balances and
information on total credits and total debits by type of
transaction.
. Detail Report will provide information on the individual
debits and credits.
-2-
<PAGE> 44
DYNAMIC INFORMATION REPORTING
-----------------------------
. The Bank can provide Transfer Agent with access to an on-line,
real time database containing intra-day balance information
for each Business Day. The detail report can provide selected
key information about each wire transfer, debit and credit, as
they are processed. The service will be available on each
Business Day and is currently available from 7:00 a.m. to
10:00 p.m. New York time, however, such time may be amended
from time to time by the Bank.
AUTOMATIC ADVICE
----------------
. The full text on all incoming and outgoing wire transfers on
each Business Day can be sent through on-line notification
advice for each transaction through a dedicated and
self-activating high speed terminal printer located at TA's
office.
ITEM STATUS REPORT
------------------
. This report shows current status of wire transfer payments
sent through the Bank's Money Transfer System on each Business
Day. Three Business Days of funds' transfer history can also
be provided.
DIRECT CUSTOMER INQUIRY
-----------------------
. This service provides direct on-line access to a history file
to retrieve the detail of incoming and outgoing wire transfers
that occurred during the most recent three month period.
Different search criteria may be used, e.g. - Transaction
Reference Number, Account/Amount/Date.
ELECTRONIC FUNDS TRANSFER INQUIRY
---------------------------------
. Transfer Agent can obtain same Business Day confirmation of
incoming debits and credits processed through the National
Automated Clearing House Association. A full description of
each transaction including addenda records is available.
-3-
<PAGE> 45
<TABLE>
<CAPTION>
SCHEDULE II
CASH MANAGEMENT SERVICE - FEES
<S> <C> <C>
CHECKING ACCOUNT SERVICES FEE COMMENTS
- ------------------------- --- --------
Monthly Maintenance $ 35.00 Checking Account
Deposit Ticket 1.10 Cash Letter/Deposit
Deposit Item .12 Uncoded Cash Letter Item
Deposited Item Returned 7.00 e.g. Cash Letter; OCR
Paid Check .17
Returned Check 15.00 Drawn on BNY
Certified Check 6.00
Stop Payment 20.00 Written/Oral
Internal Debit .50
Internal Credit .50
Special Statement Handling 6.00 Special Cutoff e.g. Weekly and/or Duplicate
FDIC Insurance per FDIC schedule Based on Avg. Monthly Ledger Bal (Current rate is 0.12%)
Check Microfilm Copy (Each) 7.50
Collection Item 40.00 e.g. Drawn on Foreign Bank; Domestic Note
Microfilm (Reel or Cassette) 25.00 Paid checks; reports, etc.
Microfiche 5.00 Lock Box/reports, etc.
Data Transmission 25.00 Redemption Checks; Paid Checks; OCR Detail; ACH Files, etc.
Excess Check Rejects .25 Rejects over 1.5% of Mo. Check Volume
SHAREHOLDER CHECK CLEARING SERVICES
- -----------------------------------
OCR Lock Box Processing
- -----------------------
- - Monthly Maintenance 125.00 Each Post Office Box
- - Lockbox Item .50 Remittance Document W/Check
- - Special Handling .75 Substitute Remittance Document
- - Hardcopy Reports 400.00 Monthly Charge
ACH PROCESSING
- --------------
Monthly Maintenance 125.00 Per Family of Funds
Debit/Credit Transaction .10 Incoming and/or Outgoing via Automated Clearing House (Fed
charges are out-of-pocket expenses)
Returned Debit/Credit 15.00 1 - 10 per month
25.00 11 - 21 per month
</TABLE>
<PAGE> 46
<TABLE>
<S> <C> <C>
REDEMPTION CHECK PROCESSING FEE COMMENTS
- --------------------------- --- --------
- - Check Item $ .25 Without Signature Verification
- - Check Item .50 With Signature Verification
- - Fine Sort .05 Each Check
- - Signature Capture 3.00 Per Document Captured to automated Signature System
- - Forgery Coverage 650.00 Per Fund
.50 Per Check Paid
MONEY TRANSFERS
- ---------------
Automated Outgoing Fed Funds/CHIPS
- - FAST Process 5.50
- - Operator Intervention 7.50
Automated Book to Book
- - FAST Process 5.00
- - Operator Intervention 7.50
incoming Fed Funds/CHIPS
- - FAST Process 4.00 Current Fed Charges are out-of-pocket expenses.
- - Operator Intervention 7.50
ACCOUNT RECONCILIATION SERVICES
- -------------------------------
FULL ACCOUNT RECONCILIATION
- ---------------------------
Monthly Maintenance 150.00/Acct. Assumes Mo. Cycle
Full ARP Paid Item .285 Includes Paid Check; History and Fine Sort
Additional Tape Input 30.00 Optional
Check Warehousing .01/check Maximum Seven Years
PARTIAL ACCOUNT RECONCILIATION
- ------------------------------
Monthly Maintenance 75.00/Acct. Assumes Mo. Cycle
Partial ARP Paid Item .215 Includes Paid Check, History and Fine Sort
ELECTRONIC BANKING SERVICES FEE COMMENTS
- --------------------------- --- --------
BALANCE REPORTING Prior Day Information
- -----------------
Per Access 4.50 Per Family of Funds
Per Summary/Detail Field .30
</TABLE>
-2-
<PAGE> 47
<TABLE>
<CAPTION>
TIME CRITICAL REPORTS
- ---------------------
DYNAMIC REPORT Intra-Day Balance/Detail
- --------------
<S> <C> <C>
Per Access 3.00 Per Family of Funds
Per Item .25
AUTOMATIC ADVICE Same Day Wire Status
- ----------------
Per Month 167.00 Per Account
Per Item N.Y.C. = .75
Metropolitan N.Y. = .80
Eastern U.S.A. = 1.15
Western U.S.A. = 1.35
ITEM STATUS REPORT Same Day Wire Status
- ------------------
Per Month 50.00 Per Family of Funds
DIRECT CUSTOMER INQUIRY
- -----------------------
ARP INQUIRY
- -----------
Per month 75.00 Per Family of Funds
Stop payment 6.00 on-line stops
Connect Time .375 Per minute
EFT INQUIRY
- -----------
Per month 75.00 Per Family of Funds
Connect Time .375 Per minute
DRAFT CHECK INQUIRY
- -------------------
Per month 75.00 Per Family of Funds
Connect Time .375 Per minute
</TABLE>
Note: Out-of-pocket expenses resulting from the delivery of services,
including but not limited to, courier, stationary and supplies,
research, Federal Reserve surcharges, postage expenses, etc. will be
charged in addition to the above fees.
-3-
<PAGE> 48
SCHEDULE III
BOOKS AND RECORDS
The Bank shall maintain no books or records pertaining to the Fund or
any Series which are property of the Fund or of any Series. In order to
facilitate the Fund's maintaining journals, the Bank shall provide the Transfer
Agent and the Administrator of the Fund with Daily and Monthly Account
Statements showing the amount of each debit and credit to each Account, the
opening and closing balance of each Account for the period covered by such
statement, and detailed information with respect to each wire payment and
receipt consisting of the name of the originating institution, beneficiary
information, and the wire reference number, but in each case involving a
receipt only to the extent, if any, the same was included in the wire by the
originating institution.
<PAGE> 1
EXHIBIT 9(T)
Pacific Horizon Funds, Inc.
125 West 55th Street
New York, New York 10019
The Bank of New York
110 Washington Street
New York, New York 10286
Re: Cash Management and Related Services Agreement
----------------------------------------------
Gentlemen:
As you are aware, The Bank of New York (the "Bank") currently
provides cash management and related services with respect to certain series of
shares of Pacific Horizon Funds, Inc. (the "Fund") pursuant to a Cash
Management and Related Services Agreement between the Bank and the Fund dated
as of May 1, 1990 (the "Agreement"). Effective as of June 21, 1993 it is
proposed that Schedule A to the Agreement be revised as attached hereto.
Kindly indicate your approval of the revised Schedule A attached hereto and
your acceptance of the appointment as the Fund's agent under the Agreement to
perform for the shares of each of the classes of shares set forth in the
revised Schedule A attached hereto the services set forth in the Agreement by
signing below.
Very truly yours,
PACIFIC HORIZON FUNDS, INC.
By: /s/ William B. Blundin
-------------------------------
Title: Executive Vice President
THE BANK OF NEW YORK
By: /s/ S. Grunston
------------------
Title: Vice President
------------------
Dated as of June 21, 1993
<PAGE> 2
SCHEDULE A
Pacific Horizon Funds, Inc. Treasury Fund
Horizon Shares (Class)
Horizon Service Shares (Class)
Pacific Horizon Funds, Inc. Prime Fund
Horizon Shares (Class)
Horizon Service Shares (Class)
Pacific Horizon Funds, Inc.
Tax-Exempt Money Fund
Horizon Shares (Class)
Horizon Service Shares (Class)
Effective August 6, 1990:
Pacific Horizon Funds, Inc.
Pacific Horizon Shares (Class) of the
Prime Fund
Treasury Fund
Tax-Exempt Money Market Fund
California Tax-Exempt Money Market Fund
Effective as of March 1, 1993:
Pacific Horizon Funds, Inc. Prime Value Fund
Pacific Horizon Shares (Class)
Pacific Horizon Funds, Inc. California Tax-Exempt Money Market Fund
Horizon Service Shares (Class)
Pacific Horizon Funds, Inc. Government Fund
Pacific Horizon Shares (Class)
Horizon Shares (Class)
Horizon Service Shares (Class)
Pacific Horizon Funds, Inc. Treasury Only Fund
Pacific Horizon Shares (Class)
Horizon Shares (Class)
Horizon Service Shares (Class)
<PAGE> 3
Effective as of June 21, 1993:
Pacific Horizon Funds, Inc. Tax-Exempt Money Fund
Pacific Horizon Shares (Class)
Pacific Horizon Funds, Inc. Prime Value Fund
Horizon Service Shares (Class)
-2-
<PAGE> 1
EXHIBIT 9(U)
ACCOUNTING SERVICES AGREEMENT
This Agreement is made as of January 10, 1994 by and between CONCORD
HOLDING CORPORATION ("Concord"), a Delaware corporation, PFPC INC. ("PFPC"), a
Delaware corporation, which is an indirect wholly-owned subsidiary of PNC Bank
Corp., and PACIFIC HORIZON FUNDS, INC. (the "Fund").
WHEREAS, Concord has entered into an Administration Agreement dated
November 13, 1989, as amended (the "Administration Agreement") to provide
administration services (including but not limited to fund accounting services)
to the Fund, which is an investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Administration Agreement provides that Concord may from time
to time employ or associate with itself such person or persons as it may
believe to be particularly fitted to assist in the performance of the
Administration Agreement;
WHEREAS, Concord desires to retain PFPC to provide fund accounting
services for the Portfolios of the Fund listed on Appendix A, as amended from
time to time (the "Portfolios"), and PFPC is willing to provide such services,
all as more fully set forth below;
WHEREAS, PFPC is experienced in providing fund accounting services to
investment companies and possesses facilities sufficient to provide such
services; and
<PAGE> 2
WHEREAS, the Board of Directors of the Fund has approved the
appointment of PFPC to provide fund accounting services on behalf of the Fund
for the Portfolios.
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, the parties agree as follows:
1. DEFINITIONS.
(a) "AUTHORIZED PERSON". The term "Authorized Person" shall
mean any officer of the Fund and any other person, who is duly authorized by
the Fund's Governing Board, to give oral and Written Instructions on behalf of
the Fund, provided, however, that if the Governing Board determines that Oral
Instructions or Written Instructions require the approval of more than one
person, the term "Authorized Person" shall mean such persons as are in
combination so authorized. Such persons are listed in the Certificate attached
hereto as the Authorized Persons Appendix to each Services Attachment to this
Agreement. If PFPC provides more than one service hereunder, the Fund's
designation of Authorized Persons may vary by service.
(b) "CFTC". The term "CFTC" shall mean the Commodities
Futures Trading Commission.
(c) "GOVERNING BOARD". The Term "Governing Board" shall
mean the Fund's Board of Directors, or, where duly authorized, a competent
committee thereof.
(d) "ORAL INSTRUCTIONS". The term "Oral Instructions"
shall mean oral instructions received by PFPC from an Authorized
2
<PAGE> 3
Person or from a person reasonably identified to PFPC as an Authorized Person.
(e) "SEC". The term "SEC" shall mean the Securities and
Exchange Commission.
(f) "SECURITIES AND COMMIDITIES LAWS". The term
"Securities and Commodities Laws" shall mean the "1933 Act" which shall mean
the Securities Act of 1933, the "1934 Act" which shall mean the Securities
Exchange Act of 1934, the "1940 Act" which shall mean the Investment Company
Act of 1940, and the "CEA" which shall mean the Commodities Exchange Act, in
each case as amended.
(g) "SHARES". The terms "Shares" shall mean the shares
of any series or class of common stock of the Fund.
(h) "WRITTEN INSTRUCTIONS". The term "Written
Instructions" shall mean written instructions signed by one or more Authorized
Persons as required by the Governing Board from time to time and received by
PFPC. The instructions may be delivered by hand, mail, tested telegram, cable,
telex or facsimile sending device.
2. APPOINTMENT. Concord hereby appoints PFPC to provide fund
accounting services for the Portfolios, in accordance with the terms set forth
in this Agreement. PFPC accepts such appointment and agrees to furnish such
services.
3. DELIVERY OF DOCUMENTS. Concord has provided or, where
applicable, will provide PFPC with the following:
3
<PAGE> 4
(a) certified or authenticated copies of the resolutions of
the Fund's Governing Board, approving the appointment of PFPC or its affiliates
to provide fund accounting services for the Portfolios;
(b) a copy of the Fund's most recent effective
registration statement for the Portfolios;
(c) a copy of the Administration Agreement; and
(d) certified or authenticated copies of any and all
amendments or supplements to the foregoing.
4. COMPLIANCE WITH GOVERNMENT RULES AND REGULATIONS.
PFPC undertakes to comply with all applicable requirements of the
Securities and Commodities Laws and any other laws, rules and regulations of
state and federal governmental authorities having jurisdiction with respect to
all duties to be performed by PFPC hereunder. Except as specifically set forth
herein, PFPC assumes no responsibility for such compliance by the Fund.
5. INSTRUCTIONS. Unless otherwise provided in this Agreement or
by resolution of the Governing Board which has been submitted to PFPC, PFPC
shall act only upon Oral and Written Instructions.
PFPC shall be entitled to rely upon any Oral and Written Instructions.
PFPC may assume that any Oral or Written Instruction received hereunder is not
in any way inconsistent with the provisions of organizational documents or this
Agreement or of any vote, resolution or proceeding of the Fund's Governing
Board or any committee thereof or of the Fund's shareholders.
4
<PAGE> 5
Concord shall forward, or shall cause the Fund to forward, to PFPC
Written Instructions confirming Oral Instructions so that PFPC receives the
Written Instructions by the close of business on the same day that such Oral
Instructions are received. The fact that such confirming Written Instructions
are not received by PFPC shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral Instructions. PFPC
shall incur no liability to Concord or to the Fund in acting upon Oral or
Written Instructions.
6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PFPC is in doubt as to any
action it should or should not take, PFPC may request Oral or Written
Instructions.
(b) ADVICE OF COUNSEL. If PFPC shall be in doubt as to
any questions of law pertaining to any action it should or should not take,
PFPC may request advice at its own cost from such counsel of its own choosing
(who may be counsel for the Fund or PFPC, at the option of PFPC).
(c) CONFLICTING ADVICE. In the event of a conflict
between Oral or Written Instructions PFPC receives from the Fund, and the
written advice it receives from counsel, PFPC shall be entitled to rely upon
and follow such advice of counsel after notice to the Fund.
(d) PROTECTION OF PFPC. PFPC shall be protected in any
action it takes or does not take in reasonable reliance upon
5
<PAGE> 6
Oral or Written Instructions it receives from the Fund or written advice of
counsel.
Nothing in this paragraph shall be construed so as to impose an
obligation upon PFPC (i) to seek Oral or Written Instructions, or (ii) to act
in accordance with such Oral or Written Instructions unless, under the terms of
other provisions of this Agreement, the same is a condition of PFPC's properly
taking or not taking such action.
Nothing in this sub-section shall excuse PFPC when an action or
omission on the part of PFPC constitutes willful misfeasance, bad faith,
negligence or reckless disregard by PFPC of any duties or obligations under
this Agreement.
7. RECORDS. The books and records pertaining to the Fund, which
are in the possession of PFPC, shall be the property of the Fund. Concord, the
Fund or the Fund's Authorized Persons, shall have access to such books and
records at all times during PFPC's normal business hours. Upon the reasonable
request of Concord or the Fund, copies of any such books and records shall be
provided by PFPC to Concord or the Fund or to an Authorized Person of the Fund,
at the expense of the requesting party. Consistent with Treasury regulation
Section 1.864-2 (c)(2)(iii)(5), such books and records shall be maintained at
an office located in Ireland for any Portfolio identified in writing by Concord
or the Fund to PFPC.
PFPC shall keep the following records:
6
<PAGE> 7
(a) all above-referenced books and records with respect
to the Fund's books of account;
(b) records of the Fund's securities transactions.
PFPC shall preserve any such books and records in accordance with the
requirements of Rule 3la-2 under the 1940 Act.
8. COMFIDENTIALITY. PFPC agrees to keep confidential and to treat as
proprietary information of the Fund all records of the Fund and information
relative to the Fund and its shareholders (past, present and potential), unless
the release of such records or information is otherwise authorized by the
Governing Board. Should PFPC be required to provide such information or
records to duly constituted authorities (who may institute civil or criminal
contempt proceedings for failure to comply), PFPC shall not be required to
seek the Fund's consent prior to disclosing such information but shall be
required to give Concord and the Fund prior written notice of PFPC's intent to
disclose such information.
9. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the
Fund's independent public accountants and shall provide account analyses,
fiscal year summaries, and other audit-related schedules. PFPC shall take all
reasonable action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such accountants for
the expression of their opinion, as such may be required by the Fund from time
to time.
7
<PAGE> 8
10. DISASTER RECOVERY. As soon as reasonably possible, PFPC shall
at its expense enter into and shall maintain in effect with appropriate parties
one or more agreements making reasonable provision of emergency use of
electronic data processing equipment to the extent appropriate equipment is
available. In the event of equipment failures, PFPC shall, at no additional
expense to the Fund, take reasonable steps to minimize service interruptions
but shall have no liability with respect thereto.
11. COMPENSATION. As compensation for services rendered by PFPC
during the term of this Agreement, the Fund will pay to PFPC a fee or fees as
may be approved by Concord in writing and consistent with resolutions adopted
by the Fund's Governing Board.
12. INDEMNIFICATION. Concord agrees to indemnify and hold
harmless PFPC and its nominees from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, liabilities arising
under the Securities and Commodities Laws and any state and foreign securities
and blue sky laws, and amendments thereto), and expenses, including (without
limitation) attorneys' fees and disbursements, arising directly or indirectly
from any action which PFPC takes or does not take (i) at the request or on the
direction of or in reliance on the advice of Concord or the Fund or (ii) upon
Oral or Written Instructions, provided that neither PFPC, nor any of its
nominees, shall be indemnified against any liability to Concord, to the Fund or
to its shareholders (or any expenses incident to
8
<PAGE> 9
such liability) arising out of PFPC's own willful misfeasance, negligence or
reckless disregard of its duties and obligations under this Agreement.
13. RESPONSIBILITY OF PFPC. PFPC shall be under no duty to take
any action on behalf of Concord or the Fund except as specifically set forth
herein or as may be specifically agreed to by PFPC, in writing. PFPC shall be
obligated to exercise care and diligence in the performance of its duties
hereunder and shall be responsible for failure to perform its duties under this
Agreement arising out of PFPC's negligence. Notwithstanding the foregoing,
PFPC shall not be responsible for losses beyond its control, provided that PFPC
has acted in accordance with the standard of care set forth above; and provided
further that PFPC shall only be responsible for that portion of losses or
damages suffered by the Fund that are attributable to the negligence of PFPC.
Without limiting the generality of the foregoing or of any other
provision of this Agreement, PFPC, in connection with its duties under this
Agreement, shall not be liable for (a) the validity or invalidity or authority
or lack thereof of any Oral or Written Instruction, notice or other instrument
which conforms to the applicable requirements of this Agreement, and which PFPC
reasonably believes to be genuine; or (b) delays or errors or loss of data
occurring by reason of circumstances beyond PFPC's control, including acts of
civil or military authority, national emergencies, labor difficulties, fire,
flood or catastrophe, acts
9
<PAGE> 10
of God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
PFPC acknowledges that the performance of this Agreement is for the
benefit of the Fund, that PFPC shall be directly liable and responsible to the
Fund and to Concord for the performance of its obligations hereunder, and
that either the Fund or Concord may therefore enforce, in its own name and
for itself such liability, and responsibility against PFPC.
Notwithstanding anything in this Agreement to the contrary, PFPC
expressly disclaims all responsibility for consequential damages, including but
not limited to any that may result from performance or nonperformance of any
duty or obligation whether expressed or implied in this Agreement and also
expressly disclaims any express or implied warranty of products or services
provided in connection with the Agreement.
14. DESCRIPTION OF ACCOUNTING SERVICES.
(a) Services on a Continuing Basis. PFPC will perform
the following accounting functions if requested by Concord or the Fund:
(i) Journalize the Fund's investment, capital
share and income and expense activities;
(ii) Verify investment buy/sell trade tickets
when received from the Fund's investment
advisor and transmit trades to the Fund's
custodian for proper settlement;
10
<PAGE> 11
(iii) Maintain individual ledgers for investment
securities in both U.S. dollars and foreign
currency terms;
(iv) Maintain historical tax lots for each
security and foreign currency;
(v) Reconcile cash and investment balances of
the Fund with the custodian, and provide the
Fund's investment advisor with the beginning
cash balance available for investment
purposes in both U.S. dollar and foreign
currency terms;
(vi) Update the cash availability throughout the
day as required by the Fund's advisor;
(vii) Post to and prepare the Fund's Statement of
Assets and Liabilities and the Statement of
Operations in U.S. dollar terms;
(viii) Calculate various contractual expenses (e.g.,
advisory and custody fees);
(ix) Record expense accruals as provided by Fund
management;
(x) Record all disbursements from the Fund upon
Written Instructions;
(xi) Calculate capital gains and losses and
foreign exchange gains and losses;
(xii) Determine the Fund's net income in both U.S.
dollar and foreign currency terms;
11
<PAGE> 12
(xiii) Obtain security market quotes and foreign
exchange rates from independent pricing
services approved by the Fund's Governing
Board, or if such quotes are unavailable,
then obtain them from the Advisor or as
otherwise directed by resolution of the
Governing Board, and in either case calculate
the market value of the Fund's investments in
both U.S. dollar and foreign currency terms;
(xiv) Transmit or mail a copy of the daily
portfolio valuation and any other required
reports to the Advisor and Concord;
(xv) Compute the net asset value of the Fund in
U.S. dollars and the dividend rate per share;
(xvi) As appropriate, compute the Fund's yields,
total return, expense ratios, portfolio
turnover rate, and, if required, portfolio
average dollar-weighted maturity; and
(xvii) Prepare a monthly financial statement in U.S.
dollars, which will include the following
items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
12
<PAGE> 13
Schedule of Capital Gains and
Losses.
(xviii) Provide certain financial information
necessary to facilitate the preparation of
the Fund's annual U.S. Federal income tax
returns;
(b) Consistent with Treasury regulation Section
1.8642(c)(2)(iii)(5), (6), (7) and (8), the accounting functions performed by
PFPC shall be performed at an office located in Ireland for any Portfolio
identified in writing by Concord or the Fund to PFPC.
15. DURATION AND TERMINATION. This Agreement shall continue until
terminated by Concord, by the Fund or by PFPC on one hundred eighty (180) days
prior written notice to the other parties to the agreement.
16. NOTICES. All notices and other communications, including
Written Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. If notice is sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been given
immediately. If notice is sent by first-class mail, it shall be deemed to have
been given three days after it has been mailed. If notice is sent by
messenger, it shall be deemed to have been given on the day it is delivered.
Notices shall be addressed (a) if to PFPC at PFPC's address, 103 Bellevue
Parkway, Wilmington, Delaware 19809; (b) if to Concord, at Concord's address,
125 W. 55th Street, New York, New York 10019; (b) if to the Fund at 125
13
<PAGE> 14
W. 55th Street, New York, New York 10019, with copies to Thomas M. Collins,
Esq., Chairman, McDermott & Trayner, 225 South Lake Avenue, Suite 300,
Pasadena, CA 91101-3005 and to W. Bruce McConnel, III, Esq., Secretary, Drinker
Biddle & Reath, Philadelphia National Bank Building, 1345 Chestnut Street,
Philadelphia, PA 19107; or (d) if to none of the foregoing, at such other
address as shall have been notified to the sender of any such Notice or other
communication.
17. DELEGATION. PFPC may delegate any or all of its duties under
this Agreement to any offshore affiliate for Portfolios identified in writing
by Concord or the Fund to PFPC, provided that PFPC shall retain responsibility
therefore as specified herein.
18. AMENDMENTS. This Agreement, or any term thereof, may be
changed or waived only by written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
19. ASSIGNMENT. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by Concord
without the written consent of PFPC, or by PFPC without the written consent of
Concord and of the Fund, authorized or approved by a resolution of the Fund's
Governing Board.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but
14
<PAGE> 15
all of which together shall constitute one and the same instrument.
21. FURTHER ACTIONS. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
22. NO LIMITATION. Nothing contained in this Agreement shall be
construed in any way so as to limit the obligations of any signing party as set
forth in the letter agreement dated July 21, 1993 by and among PFPC, Bank of
America NTSA, Seattle-First National Bank and Concord Financial Group, Inc.
23. MISCELLANEOUS. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the parties
may embody with the approval of the Fund in one or more separate documents
their agreement, if any, with respect to delegated duties and/or Oral
Instructions. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
This Agreement shall be deemed to be a contract made in Delaware and
governed by Delaware law. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
and
15
<PAGE> 16
shall inure to the benefit of the parties hereto and their respective
successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below on the day and year first above
written.
CONCORD HOLDING CORPORATION
By:/s/ Richard Stierwalt
-----------------------
Chief Executive Officer
PFPC INC.
By:/s/ Stephen M. Wynne
-----------------------
Executive Vice President
PACIFIC HORIZON FUNDS, INC.
By:/s/ Richard A. Fabietti
------------------------
Treasurer
16
<PAGE> 17
APPENDIX A
Pacific Horizon Blue Chip Fund
Pacific Horizon Flexible Bond Fund
Pacific Horizon Asset Allocation Fund
Pacific Horizon National Municipal Bond Fund
Pacific Horizon Corporate Bond Fund
Pacific Horizon Utilities Fund
Pacific Horizon Growth and Income Fund
Pacific Horizon International Bond Fund
Pacific Horizon International Equity Fund
Pacific Horizon Short-Term Government Fund
17
<PAGE> 18
AUTHORIZED PERSONS
APPENDIX
Name (Typed) Signature
_________________________ _________________________
_________________________ _________________________
_________________________ _________________________
_________________________ _________________________
_________________________ _________________________
_________________________ _________________________
18
<PAGE> 1
EXHIBIT 11(a)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the reference
to our Firm under the caption "Counsel" in the Statement of Additional
Information that is included in Post-Effective Amendment No. 45 to the
Registration Statement (No. 2-81110) on Form N-1A under the Securities Act of
1933 and the Investment Company Act of 1940, as amended, of Pacific Horizon
Funds, Inc. This consent does not constitute a consent under section 7 of the
Securities Act of 1933, and in consenting to the use of our name and the
references to our Firm under such caption we have not certified any part of the
Registration Statement and do not otherwise come within the categories of
persons whose consent is required under said section 7 or the rules and
regulations of the Securities and Exchange Commission thereunder.
/s/Drinker Biddle & Reath
-------------------------
DRINKER BIDDLE & REATH
Philadelphia, Pennsylvania
February 20, 1996
<PAGE> 1
EXHIBIT 11(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Statement of Additional Information constituting part of this Post-Effective
Amendment No. 45 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated April 21, 1995, relating to the financial
statements and financial highlights appearing in the February 28, 1995 Annual
Report to Shareholders of the Pacific Horizon Prime Fund (one of the portfolios
constituting the Pacific Horizon Funds, Inc.), which is also incorporated by
reference into the Registration Statement. We also consent to the reference to
us under the heading "Financial Highlights" in the Prospectus and under the
headings "Independent Accountants" and "Financial Statements and Experts" in
the Statement of Additional Information.
/s/Price Waterhouse LLP
- -----------------------
Price Waterhouse LLP
New York, New York
February 20, 1996
<PAGE> 1
EXHIBIT 13(A)
PURCHASE AGREEMENT
------------------
Pacific Horizon Funds, Inc. (the "Fund"), a Maryland corporation, and The
Dreyfus Corporation ("Dreyfus"), a New York corporation, hereby agree with each
other as follows:
1. The Fund hereby offers Dreyfus and Dreyfus hereby purchases 25,000
shares of Class A Common Stock (par value $.001 per share) of the Fund and
25,000 shares of Class B Common Stock (par value $.001 per share) of the Fund,
at a price of $1.00 per share; 1852 shares of Class C Common Stock (par value
$.001 per share) of the Fund, at a price of $13.50 per share; and 2174 shares
of Class D Common stock (par value $.001 per share) of the Fund, at a price of
$11.50 per share (such shares being hereinafter sometimes collectively known as
"Initial Shares"). Dreyfus hereby acknowledges receipt of one certificate
representing 25,000 shares of the Fund's Class A Common Stock, one certificate
representing 25,000 shares of the Fund's Class B Common Stock, one certificate
representing 1852 shares of the Fund's Class C Common Stock, and one
certificate representing 2174 shares of the Fund's Class D Common Stock, and
the Fund hereby acknowledges receipt from Dreyfus of funds in the amount of
$100,003 in full payment for the Initial Shares.
2. Dreyfus represents and warrants to the Fund that the Initial Shares are
being acquired for investment purposes and not with a view to the distribution
thereof and acknowledges that the certificates for the Initial Shares will be
legended to so reflect.
3. Dreyfus agrees that if any Initial Shares of any Class are redeemed by
any holder thereof prior to the end of the period over which the costs incurred
by the Fund in connection with its organization, registration and the initial
public offering of its shares and allocated to such Class are being amortized,
Dreyfus will pay to the Fund an amount equal to the number resulting from
multiplying the total unamortized organizational expenses allocated to such
Class by a fraction, the numerator of which is equal to the number of Initial
Shares of such Class redeemed and the denominator of which is equal to the
aggregate number of Initial Shares of such Class outstanding at the time of
such redemption, to the extent that the Fund has not otherwise been paid such
amount and for so long as it is the administrative position of the Staff of the
Securities and Exchange Commission to require such reimbursement.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 23rd day of March 1984.
(SEAL)
ATTEST: PACIFIC HORIZON FUNDS, INC.
/s/ Steven F. Newman BY:/s/ W. Bruce McConnel, III
- -------------------- --------------------------
Steven F. Newman W. Bruce McConnel, III
Assistant Secretary Secretary
(SEAL)
ATTEST: THE DREYFUS CORPORATION
/s/ Christine Pavalos BY:/s/ Daniel C. Maclean
- --------------------- ---------------------
Christine Pavalos Daniel C. Maclean
Assistant Secretary Vice President and General Counsel
-2-
<PAGE> 1
EXHIBIT 13(B)
PURCHASE AGREEMENT
------------------
Pacific Horizon Funds, Inc. (the "Fund"), a Maryland corporation, and
Hambrecht & Quist Group, Inc. ("H&Q"), a California corporation, hereby agree,
with each other as follows:
1. The Fund hereby offers H&Q and H&Q hereby purchases shares of Class A
Common Stock (par value $.001 per share) of the Fund in the aggregate amount of
$5,323 at a price of $1.00 per share; shares of Class B Common Stock (par value
$.001 per share) of the Fund in the aggregate amount of $5,201, at a price of
$1.00 per share; shares of Class C Common Stock (par value $.001 per share) of
the Fund in the aggregate amount of $25,000, at a price per share equal to the
net asset value per share of such Class as of the date of the purchase of such
shares by H&Q; and shares of Class D Common Stock (par value $.001 per share)
of the Fund in the aggregate amount of $25,000, at a price per share equal to
the net asset value per share of such Class as of the date of the purchase of
such shares by H&Q (such shares being hereinafter sometimes collectively known
as the "Purchased Shares"). H&Q hereby acknowledges receipt of certificates
representing the respective Classes of Purchased Shares and the Fund hereby
acknowledges receipt from H&Q of funds in the amount of $60,524 in full payment
for the Purchased Shares.
2. H&Q represents and warrants to the Fund that the Purchased Shares are
being acquired for investment purposes and not with a view to the distribution
thereof and acknowledges that the certificates for the Purchased Shares will be
legended to so reflect.
3. H&Q agrees that if any Purchased Shares of any Class are redeemed by any
holder thereof prior to the end of the period over which the costs incurred by
the Fund in connection with its organization, registration and the initial
public offering of its shares and allocated to such Class are being amortized,
H&Q will pay to the Fund an amount equal to the number resulting from
multiplying the total unamortized organizational expenses allocated to such
Class by a fraction, the numerator of which is equal to the number of Purchased
Shares of such Class redeemed and the denominator of which is equal to the
aggregate number of Purchased Shares of such Class outstanding at the time of
such redemption, to the extent that the Fund has not otherwise been paid such
amount and for so long as it is the administrative
<PAGE> 2
position of the Staff of the Securities and Exchange Commission to require such
reimbursement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 31 day of March , 1988.
------ ------------
(SEAL)
ATTEST: PACIFIC HORIZON FUNDS, INC.
/s/ W. Bruce McConnel, III BY: /s/ Thomas M. Collins
- -------------------------- ----------------------
(SEAL)
ATTEST: HAMBRECHT & QUIST GROUP, INC.
/s/ Sally Sexton BY: /s/ [signature illegible]
- ---------------- --------------------------
-2-
<PAGE> 1
EXHIBIT 13(C)
February 19, 1987
The Horizon Funds
277 Park Avenue
38th Floor
New York, NY 10172
Gentlemen:
In connection with your sale to us today of ten (10) shares of
beneficial interest in The Horizon Funds (the "Shares") (representing two (2)
shares of The Horizon Prime Fund, two (2) shares of The Horizon Treasury Fund,
two (2) shares of The Horizon Intermediate Government Fund, two (2) shares of
The Horizon Intermediate Tax-Exempt Fund and two (2) shares of The Horizon
Tax-Exempt Money Fund), we understand that: (i) the Shares have not been
registered under the Securities Act of 1933, as amended (the "1933 Act"); (ii)
your sale of the Shares to us is made in reliance on such sale being exempt
under Section 4(2) of the 1933 Act as not involving any public offering; and
(iii) in part, your reliance on such exemption is predicated on our
representation, which we hereby confirm, that we are acquiring the Shares for
investment for our own account as the sole beneficial owner thereof, and not
with a view to or in connection with any resale or distribution of the Shares
or of any interest therein. We hereby agree that we will not sell, assign or
transfer the Shares or any interest therein, except upon repurchase or
redemption by The Horizon Funds, unless and until the Shares have been
registered under the 1933 Act or you have received an opinion of your counsel
indicating to your satisfaction that said sale, assignment or transfer will not
violate the provisions of the 1933 Act or any rules or regulations promulgated
thereunder.
This letter is intended to take effect as an instrument under seal,
shall be construed under the laws of the Commonwealth of Massachusetts, and is
delivered at Boston, Massachusetts, as of the date above written.
THE CONCORD FINANCIAL GROUP, INC.
By: /s/ William B. Blundin
-----------------------
Title: President
---------------------
<PAGE> 1
EXHIBIT 13(D)
PURCHASE AGREEMENT
------------------
Pacific Horizon Tax-Exempt Money Market Portfolio, Inc. (the
"Fund"), a Maryland corporation, and Hambrecht & Quist Group, Inc. ("H&Q"), a
California corporation, hereby agree with each other as follows:
1. The Fund hereby offers H&Q and H&Q hereby purchases
59,124 shares of Class A Common Stock (par value $.001 per share) of the Fund
at a price of $1.00 per share (such shares being hereinafter the "Purchased
Shares"). H&Q hereby acknowledges receipt of one certificate representing
59,124 shares of the Fund's Class A Common Stock and the Fund hereby
acknowledges receipt from H&Q of funds in the amount of $59,124 in full payment
for the Purchased Shares.
2. H&Q represents and warrants to the Fund that the
Purchased Shares are being acquired for investment purposes and not with a view
to the distribution thereof and acknowledges that the certificate for the
Purchased Shares will be legended to so reflect.
3. H&Q agrees that if any Purchased Shares are redeemed
by any holder thereof prior to the end of the period over which the costs
incurred by the Fund in connection with it organization, registration and the
initial public offering of its shares are being amortized, H&Q will pay to the
Fund an amount equal to the number resulting from multiplying the total
unamortized organizational expenses by a fraction, the numerator of which is
equal to the number of Purchased Shares redeemed and the denominator of which
is equal to the aggregate number of Purchased Shares outstanding at the time of
such redemption, to the extent that the Fund has not otherwise been paid such
amount and for so long as it is the administrative positions of the Staff of
the Securities and Exchange Commission to require such reimbursement.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the 31st day of March, 1988.
(SEAL)
PACIFIC HORIZON TAX-EXEMPT
MONEY MARKET PORTFOLIO, INC.
ATTEST:
/s/ W. Bruce McConnel, III BY: /s/ Thomas M. Collins
- --------------------------- -------------------------
(SEAL)
ATTEST: HAMBRECHT & QUIST GROUP, INC.
/s/ Sally Sexton BY: /s/ [signature illegible]
- --------------------------- -------------------------
-2-
<PAGE> 1
EXHIBIT 13(E)
PURCHASE AGREEMENT
------------------
Pacific Horizon Tax-Exempt Money Market Fund, Inc. (the "Money Market
Fund"), a Maryland corporation, and Pacific Horizon Tax-Exempt Funds, Inc. (the
"Fund"), a Maryland corporation hereby agree with each other as follows:
1. The Money Market Fund hereby offers the Fund and the Fund hereby
purchases one share of Class A Common Stock (par value $.001 per share) of the
Money Market Fund at a price of $1.00 per share (such share being hereinafter
sometimes known as "Initial Share"). The Fund hereby acknowledges receipt of
one certificate representing one share of the Money Market Fund's Class A
Common Stock and the Money Market Fund hereby acknowledges receipt from the
Fund of funds in the amount of $1.00 in full payment for the Initial Share.
2. The Fund represents and warrants to the Fund that the Initial Share is
being acquired for investment purposes and not with a view to the distribution
thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 4th day of September, 1984.
(SEAL)
<TABLE>
<CAPTION>
<S> <C>
ATTEST: PACIFIC HORIZON TAX-EXEMPT MONEY MARKET FUND, INC.
/s/ W. Bruce McConnel, III BY:/s/ Thomas M. Collins
- -------------------------- -----------------------
W. Bruce McConnel, III Thomas M. Collins
Secretary President and Treasurer
(SEAL) PACIFIC HORIZON TAX-EXEMPT FUNDS, INC.
/s/ W. Bruce McConnel, III BY:/s/ Thomas M. Collins
- -------------------------- -----------------------
W. Bruce McConnel, III Thomas M. Collins
Secretary President and Treasurer
</TABLE>
<PAGE> 1
EXHIBIT 13(F)
PURCHASE AGREEMENT
------------------
Pacific Horizon Tax-Exempt Money Market Fund, Inc. (the "Fund"), a Maryland
corporation, and The Dreyfus Corporation ("Dreyfus"), a New York corporation,
hereby agree with each other as follows:
1. The Fund hereby offers Dreyfus and Dreyfus hereby purchases 99,999
shares of Class A Common Stock (par value $.001 per share) of the Fund.
Dreyfus hereby acknowledges receipt of one certificate representing 99,999
shares of the Fund's Class A Common Stock, and the Fund hereby acknowledges
receipt from Dreyfus of funds in the amount of $99,999 in full payment for the
shares purchased hereunder.
2. Dreyfus represents and warrants to the Fund that the shares purchased
hereunder are being acquired for investment purposes and not with a view to the
distribution thereof and acknowledges that the certificates for the shares
purchased hereunder will be legended to so reflect.
3. Dreyfus agrees that if any of the shares purchased hereunder or the one
(1) share of the Fund's Common Stock acquired by Pacific Horizon Tax-Exempt
Funds, Inc. (collectively, "Initial Shares") are redeemed by any holder thereof
prior to the end of the period over which the costs incurred by the Fund in
connection with its organization, registration and the initial public offering
of its shares are being amortized, Dreyfus will pay to the Fund an amount equal
to the number resulting from multiplying the total unamortized organizational
expenses by a fraction, the numerator of which is equal to the number of
Initial Shares redeemed and the denominator of which is equal to the aggregate
number of Initial Shares outstanding at the time of such redemption, to the
extent that the Fund has not otherwise been paid such amount and for so long as
it is the administrative position of the Staff of the Securities and Exchange
Commission to require such reimbursement.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 27th day of September, 1984.
(SEAL)
ATTEST: PACIFIC HORIZON TAX-EXEMPT
MONEY MARKET FUND, INC.
/s/ Steven F. Newman BY:/s/ W. Bruce McConnel, III
- -------------------- --------------------------
Steven F. Newman W. Bruce McConnel, III
Assistant Secretary Secretary
(SEAL)
ATTEST: THE DREYFUS CORPORATION
/s/ Christine Pavalos BY:/s/ Daniel C. Maclean
- --------------------- ---------------------
Christine Pavalos Daniel C. Maclean
Assistant Secretary Vice President and
General Counsel
-2-
<PAGE> 1
EXHIBIT 13(G)
PURCHASE AGREEMENT
------------------
Pacific Horizon California Tax-Exempt Bond Portfolio, Inc. (the "Fund"), a
Maryland corporation, and Hambrecht & Quist Group, Inc. ("H&Q), a California
corporation, hereby agree with each other as follows:
1. The Fund hereby offers H&Q and H&Q hereby purchases shares of Class B
Common Stock (par value $.001 per share) of the Fund in the aggregate amount of
$50,000 at a price per share equal to the Fund's net asset value per share as
of the date of the purchase of such shares by H&Q (such shares being
hereinafter the "Purchased Shares"). H&Q hereby acknowledges receipt of one
certificate representing the Purchased Shares and the Fund hereby acknowledges
receipt from H&O of funds in the amount of $50,000 in full payment for the
Purchased Shares.
2. H&Q represents and warrants to the Fund that the Purchased Shares are
being acquired for investment purposes and not with a view to the distribution
thereof and acknowledges that the certificate for the Purchased Shares will be
legended to so reflect.
3. H&Q agrees that if any Purchased Shares are redeemed by any holder
thereof prior to the end of the period over which the costs incurred by the
Fund in connection with its organization, registration and the initial public
offering of its shares are being amortized, H&Q will pay to the Fund an amount
equal to the number resulting from multiplying the total unamortized
organizational expenses by a fraction, the numerator of which is equal to the
number of Purchased Shares redeemed and the denominator of which is equal to
the aggregate number of Purchased Shares outstanding at the time of such
redemption, to the extent that the Fund has not otherwise been paid such amount
and for so long as it is the administrative position of the Staff of the
Securities and Exchange Commission to require such reimbursement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
31st day of March, 1988.
(SEAL) PACIFIC HORIZON CALIFORNIA
TAX-EXEMPT BOND PORTFOLIO, INC.
ATTEST:
/s/ W. Bruce McConnel, III BY: /s/ Thomas M. Collins
- ---------------------------- ----------------------------
(SEAL)
ATTEST: HAMBRECHT & QUIST GROUP, INC.
/s/ Sally Sexton BY:/s/ [signature illegible]
- ------------------- ----------------------------
PHTRANS:70603_1.WP5
<PAGE> 1
EXHIBIT 13(H)
PURCHASE AGREEMENT
------------------
Pacific Horizon Tax-Exempt Funds, Inc. (the "Fund"), a Maryland corporation,
and The Dreyfus Corporation ("Dreyfus"), a New York corporation, hereby agree
with each other as follows:
1. The Fund hereby offers Dreyfus and Dreyfus hereby purchases 50,000
shares of Class A Common Stock (par value $.001 per share) of the Fund at a
price of $1.00 per share and 4,000 shares of Class B Common Stock (par value
$.001 per share) of the Fund at a price of $12.50 per share (such shares being
hereinafter sometimes collectively known as "Initial Shares"). Dreyfus hereby
acknowledges receipt of one certificate representing 50,000 shares of the
Fund's Class A Common Stock and one certificate representing 4,000 shares of
the Fund's Class B Common Stock, and the Fund hereby acknowledges receipt from
Dreyfus of funds in the amount of $100,000 in full payment for the Initial
Shares.
2. Dreyfus represents and warrants to the Fund that the Initial Shares are
being acquired for investment purposes and not with a view to the distribution
thereof and acknowledges that the certificates for the Initial Shares will be
legended to so reflect.
3. Dreyfus agrees that if any Initial Shares of any Class are redeemed by
any holder thereof prior to the end of the period over which the costs incurred
by the Fund in connection with its organization, registration and the initial
public offering of its shares and allocated to such Class are being amortized,
Dreyfus will pay to the Fund an amount equal to the number resulting from
multiplying the total unamortized organizational expenses allocated to such
Class by a fraction, the numerator of which is equal to the number of Initial
Shares of such Class redeemed and the denominator of which is equal to the
aggregate number of Initial Shares of such Class outstanding at the time of
such redemption, to the extent that the Fund has not otherwise been paid such
amount and for so long as it is the administrative position of the Staff of the
Securities and Exchange Commission to require such reimbursement.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 21st day of March 1984.
(SEAL)
ATTEST: PACIFIC HORIZON TAX-EXEMPT
FUNDS, INC.
/s/ Steven F. Newman BY:/s/ W. Bruce McConnel, III
- -------------------- --------------------------
Steven F. Newman W. Bruce McConnel, III
Assistant Secretary Secretary
(SEAL)
ATTEST: THE DREYFUS CORPORATION
/s/ Christine Pavalos BY:/s/ Daniel C. Maclean
Christine Pavalos Daniel C. Maclean
Assistant Secretary Vice President and
General Counsel
-2-
<PAGE> 1
EXHIBIT 13(I)
PURCHASE AGREEMENT
------------------
Pacific Horizon Tax-Exempt Money Market Fund, Inc. (the "Money Market
Fund"), a Maryland corporation, and Pacific Horizon Tax-Exempt Funds, Inc. (the
"Fund"), a Maryland corporation hereby agree with each other as follows:
1. The Money Market Fund hereby offers the Fund and the Fund hereby
purchases one share of Class A Common Stock (par value $.001 per share) of the
Money Market Fund at a price of $1.00 per share (such share being hereinafter
sometimes known as "Initial Share"). The Fund hereby acknowledges receipt of
one certificate representing one share of the Money Market Fund's Class A
Common Stock and the Money Market Fund hereby acknowledges receipt from the
Fund of funds in the amount of $1.00 in full payment for the Initial Share.
2. The Fund represents and warrants to the Fund that the Initial Share is
being acquired for investment purposes and not with a view to the distribution
thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 4th day of September, 1984.
(SEAL)
<TABLE>
<CAPTION>
<S> <C>
ATTEST: PACIFIC HORIZON TAX-EXEMPT MONEY MARKET FUND, INC.
/s/ W. Bruce McConnel, III BY:/s/ Thomas M. Collins
- -------------------------- -----------------------
W. Bruce McConnel, III Thomas M. Collins
Secretary President and Treasurer
(SEAL) PACIFIC HORIZON TAX-EXEMPT FUNDS, INC.
/s/ W. Bruce McConnel, III BY:/s/ Thomas M. Collins
- -------------------------- -----------------------
W. Bruce McConnel, III Thomas M. Collins
Secretary President and Treasurer
</TABLE>
<PAGE> 1
EXHIBIT 13(J)
February 19, 1987
The Horizon Retail Funds
277 Park Avenue
38th Floor
New York, NY 10172
Gentlemen:
In connection with your sale to us today of ten (10) shares of beneficial
interest in The Horizon Retail Funds (the "Shares") (representing ten (10)
shares of The Horizon Retail Fund), we understand that: (i) the Shares have
not been registered under the Securities Act of 1933, as amended (the "1933
Act"); (ii) your sale of the Shares to us is made in reliance on such sale
being exempt under Section 4(2) of the 1933 Act as not involving any public
offering; and (iii) in part, your reliance on such exemption is predicated on
our representation, which we hereby confirm, that we are acquiring the Shares
for investment for our own account as the sole beneficial owner thereof, and
not with a view to or in connection with any resale or distribution of the
Share or of any interest therein. We hereby agree that we will not sell,
assign or transfer the Shares or any interest therein, except upon repurchase
or redemption by The Horizon Retail Funds, unless and until the Shares have
been registered under the 1933 Act or you have received an opinion of your
counsel indicating to your satisfaction that said sale, assignment or transfer
will not violate the provisions of the 1933 Act or any rules or regulations
promulgated thereunder.
This letter is intended to take effect as an instrument under seal, shall be
construed under the laws of the Commonwealth of Massachusetts, and is delivered
at Boston, Massachusetts, as of the date above written.
THE CONCORD FINANCIAL GROUP, INC.
By: /s/ William B. Blundin
-----------------------------
Title: President
--------------------------
<PAGE> 1
EXHIBIT 14(A)
<TABLE>
<CAPTION>
INDIVIDUAL
RETIREMENT
ACCOUNT
<S> <C>
Custodial Agreement
Disclosure Statement
IRA Application
IRA Transfer/Rollover Request Form
PACIFIC HORIZON FUNDS
THE PACIFIC HORIZON FUNDS
7863 Girard Avenue, Suite 306
La Jolla, CA 92037 PACIFIC HORIZON FUNDS
1-800-332-3863
</TABLE>
<PAGE> 2
PACIFIC HORIZON FUNDS
INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT
This Disclosure Statement contains information concerning certain legal and
financial aspects of the Pacific Horizon Funds Individual Retirement Account
(the "Pacific Horizon IRA" or the "IRA"). Pacific Horizon Funds, Inc. is the
"Sponsor" and Bank of America National Trust & Savings Association ("Bank of
America") is the "Custodian" of the Pacific Horizon IRA. This Disclosure
Statement should be read in conjunction with the Pacific Horizon IRA Custodial
Agreement.
While this Disclosure Statement sets forth certain restrictions and
limitations to which individual retirement accounts in general and the Pacific
Horizon IRA in particular are subject, it does not restate the specific terms
of the Pacific Horizon IRA itself. IN THE EVENT OF ANY CONFLICT BETWEEN THE
PROVISIONS OF THIS DISCLOSURE STATEMENT AND THE TERMS OF THE PACIFIC HORIZON
IRA CUSTODIAL AGREEMENT, THE LATTER SHALL CONTROL.
Internal Revenue Service regulations require that you be given this
Disclosure Statement to make certain that you fully understand the nature of an
individual retirement account. Please read this Disclosure Statement
carefully.
-1-
<PAGE> 3
A. OPERATION AND TAX TREATMENT OF THE PACIFIC HORIZON IRA
QUESTIONS & ANSWERS
1. WHAT IS A PACIFIC HORIZON IRA?
A Pacific Horizon IRA is a custodial account which allows you, if you are an
eligible individual described in Question 3, to save for your retirement
more rapidly than is possible with investments that are not tax-differed.
More rapid saving is possible because, if an IRA is qualified under the
Internal Revenue Code (the "Code"), (i) contributions to it (except for
rollover contributions and direct transfers discussed in Question 10) may be
deductible from your gross income for the taxable year for which you make
the contribution, and (ii) an IRA, including earnings, is generally exempt
from taxation until distributions from it occur.
2. HOW WILL MY IRA GROW?
The value of your Pacific Horizon IRA may increase or decrease as a result
of the investment performance of the Fund(s) in which your contributions
are invested. Thus, the rate of growth of your IRA cannot be guaranteed or
reasonably projected.
Fund shares are not bank deposits, are not insured by the Federal Deposit
Insurance Corporation, are not guaranteed by Bank of America, and are not
otherwise obligations of Bank of America.
3. WHO IS ELIGIBLE TO CONTRIBUTE?
You may make a contribution to a Pacific Horizon IRA only if you do not
attain age 70 1/2 before the close of your taxable year for which the
contribution is made (except in the case of contributions for your
nonworking spouse under the age of 70 1/2 -- see Question 5; or in the case
of rollover or direct transfer contributions -- see Question 10). The fact
that you are covered under any other type of retirement plan will not
prevent you from making contributions to an IRA.
4. WHAT AMOUNT MAY I CONTRIBUTE?
You may generally contribute to your Pacific Horizon IRA up to the lesser of
(i) $2,000 or (ii) 100% of your compensation for any taxable year.
"Compensation" includes salaries, wages, professional fees, self-employment
income (reduced by contributions to certain pension plans which are
deductible in computing adjusted gross income), and other
-2-
<PAGE> 4
income for personal services includable in your gross income. Compensation
does not include any amount received as a pension or annuity and does not
include any amount received as deferred compensation. Income from property,
such as dividends, interest, and rent also does not qualify as compensation.
Compensation does include any amounts includable in gross income with
respect to a divorce or separation instrument described in section
71(b)(2)(A) of the Code. Except for rollover contributions and direct
transfers as described in Question 10, and simplified employee pension plan
("SEP") contributions as described in Question 23, contributions may not be
accepted from you or on your behalf if they exceed $2,000 for any taxable
year.
If a husband and wife each receive compensation, as defined in the preceding
paragraph, during a taxable year and are otherwise eligible to contribute to
an IRA, each may establish his or her own Pacific Horizon IRA. The
percentage and dollar limitations of the preceding paragraph and the
deduction limitations described in Question 7 are applicable to the separate
compensation of each spouse.
For special contribution and deduction information relating to an IRA
established for the benefit of a nonworking spouse, see Question 5.
There is a $750 per fund minimum initial investment required for your
Pacific Horizon IRA ($250 per fund for a Pacific Horizon IRA established
for nonworking spouse).
5. CAN MY NONWORKING SPOUSE HAVE AN IRA?
If you are an eligible individual described in Question 3, file a joint
federal income tax return with your spouse for a taxable year, and your
spouse has no compensation (as described in Question 4) or elects to be
treated as having no compensation for such taxable year, you may make
contributions to a separate Pacific Horizon IRA for that year on behalf or
your spouse as well as to your own IRA. The overall contribution on behalf
or both you and your spouse for any year may not exceed the lesser of:
(i) Your compensation for the taxable year, or
(ii) $2,250.
In no event, however, may the contribution to either your IRA or your
spouse's IRA exceed $2,000.
There is no requirement that the contributions be divided equally between
the IRA of your nonworking spouse and your IRA. If you have attained age
70 1/2 before the close of the taxable year, you may nevertheless contribute
to a
-3-
<PAGE> 5
separate IRA for your nonworking spouse, provided the nonworking spouse is
under age 70 1/2.
6. WHEN MUST MY CONTRIBUTION BE MADE?
Contributions to your Pacific Horizon IRA for a particular taxable year may
be made up until the initial date you are required to file your federal
income tax return for that year (April 15, if you figure your taxes on a
calendar-year basis). (For the time to make SEP contributions, see Question
23.)
7. TO WHAT EXTENT MAY CONTRIBUTIONS BE DEDUCTED?
As discussed in Question 3, if neither you nor your spouse is an active
participant in a retirement plan (see (a) below), you may make a
contribution of up to the lesser of $2,000 (or $2,250 in the case of a
spousal IRA - see Question 5) or 100% of compensation and take a deduction
for the entire amount contributed. If you or your spouse is an active
participant but your combined adjusted gross income ("AGI") is at or below a
certain level (see (b) below), you may also make a fully deductible
contribution. If, however, you or your spouse is an active participant and
your combined AGI is above the specified level, the amount of the deductible
contribution you may make to an IRA is phased down and eventually
eliminated.
(a) Active Participant. You are an "active participant" for a year
if you are covered by a retirement plan. You are covered by a "retirement
plan" for a year if your employer or union has a retirement plan under which
money is added to your account or if you are eligible to earn retirement
credits. For example, if you are covered under a profit-sharing plan,
certain government plans, a salary reduction arrangement (such as a tax
sheltered annuity arrangement or a 401(k) plan), a SEP or a plan which
promises you a retirement benefit which is based upon the number of years of
service you have with the employer, you are likely to be an active
participant. Your Form W-2 for the year should indicate your participation
status.
You are an active participant for a year even if you aren't yet vested in
your retirement benefit. Also, if you make required contributions or
voluntary employee contributions to a retirement plan, you are an active
participant. In certain plans you may be an active participant even if you
were only with the employer for part of the year.
You are not considered an active participant if you are covered in a plan
only because of your service as (i) an Armed Forces Reservist for less than
90 days of active
-4-
<PAGE> 6
service, or (ii) a volunteer firefighter covered for firefighting service
by a government plan. Of course, if you are also covered in any other
plan, these exceptions do not apply.
If you and your spouse live apart at all times during a taxable year and
file separate returns for the taxable year, you and your spouse will not be
treated as married for purposes of these rules.
(b) Adjusted Gross Income ("AGI"). If you are an active participant
you must look at your AGI for the year (if you and your spouse file a joint
tax return, use your combined AGI) to determine whether you can make a
deductible contribution to a Pacific Horizon IRA. Your tax return will show
you how to calculate your AGI for this purpose. If you are at or below a
certain AGI level, called the "threshold level," you are treated as if you
were not an active participant and can make a deductible contribution under
the same rules as a person who is not an active participant.
If you are single, your threshold level is $25,000. The threshold level if
you are married and file a joint tax return is $40,000, and if you are
married but file a separate tax return, the threshold level is $0.
If your AGI is less than $10,000 above your threshold level, you will still
be able to make a deductible contribution but it will be limited in amount.
The amount by which your AGI exceeds your threshold level (AGI -
threshold-level) is called your "excess AGI." The maximum allowable
deduction is $2,000 (or $2,250 for a spousal IRA). You can estimate your
deduction limit using the Estimated Deduction Table on pages 17, 18, 19 and
20, or calculate it as follows (your deduction limit may be slightly higher
if you use this formula rather than the Table):
$10,000 - Excess AGI
-------------------- Maximum Deduction
$10,000 X Allowable = Limit
Deduction
Round up the result to the next highest $10 level. For example, if the
result is $1,525, round it up to $1,530. If the final result is below $200
but above zero, your deduction limit is $200. Your deduction limit cannot,
in any event, exceed 100% of your compensation.
(c) Nondeductible Contributions to IRAs. Even if you are above the
threshold level and thus may not make a deductible contribution of $2,000
($2,250 for a spousal IRA), you may still contribute up to the lesser of
100% of compensation or $2,000 to a Pacific Horizon IRA ($2,250 for
-5-
<PAGE> 7
a spousal IRA). The amount of your contribution which is not deductible
will be a nondeductible contribution to the IRA. You may also choose to
make a contribution nondeductible even if you could have deducted part or
all of the contribution. Interest or other earnings on your IRA
contribution, whether from deductible or nondeductible contributions,
will not be taxed until taken out of your IRA and distributed to you.
If you make a nondeductible contribution to an IRA, you must report the
amount of the nondeductible contribution to the IRS as a part of your tax
return for the year. You are responsible for identifying and tracking all
nondeductible contributions to your IRA.
You may make a $2,000 contribution at any time during the year, if your
compensation for the year will be at least $2,000, without having to know
how much will be deductible. When you fill out your tax return, you may
then figure out how much is deductible.
You may withdraw an IRA contribution made for a year any time before the due
date for filing your federal income tax return for that year (including
extensions). If you do so, you must also withdraw earnings attributable to
that portion and report the earnings as income for the year for which the
contribution was made (but see Question 13 about distributions before age 59
1/2). If some portion of your contribution is not deductible, you may
decide either to withdraw the nondeductible amount, or leave it in the
IRA and designate that portion as a nondeductible contribution on your tax
return.
8. HOW WILL MY CONTRIBUTIONS BE INVESTED AND HELD?
Contributions to your Pacific Horizon IRA are held in a custodial account
for your exclusive benefit and that of your beneficiaries. Your IRA will be
identified as your property and will not be commingled with the property of
any other investor except in a common trust fund or common investment fund.
The Custodian will invest the funds in your IRA, in accordance with your
direction, in shares of one or more of the investment portfolios of Pacific
Horizon Funds, Inc.
No part of the Funds held in an IRA may be invested in life insurance
contracts or in collectibles (i.e., any work of art, rug, antique, metal,
gem, stamp, coin - other than certain gold and silver coins minted by the
United States or coins issued under the laws of any state, alcoholic
beverage, or other type of tangible personal property specified by the IRS).
-6-
<PAGE> 8
9. AM I VESTED IN MY CONTRIBUTIONS?
The funds in your Pacific Horizon IRA are nonforfeitable, except that
applicable taxes, expenses, and fees may reduce your funds.
10. CAN I ROLL OVER CONTRIBUTIONS AND/OR DIRECTLY TRANSFER CONTRIBUTIONS TO AN
IRA?
(a) Rollover Contributions from One IRA to Another. You may
generally move assets from another IRA (including an individual retirement
annuity) to your Pacific Horizon IRA or from your Pacific Horizon IRA to
another IRA without incurring federal income tax at the time of
distribution to you. Such a tax-free move is called a "rollover
contribution." You may elect not to have federal income tax withheld on
the rollover contribution at the time of the rollover (see Question 15).
You may make a rollover contribution from one IRA to another IRA only if
you have made no other rollover contribution from the IRA to another
within a one-year period, measured from the date of distribution to the
date of the next distribution. This rule applies to each separate IRA you
own. You may roll over all or any portion of the money or other property
distributed from an IRA. However, the amount to be rolled over must be
reinvested, within 60 days of the date it is received, in another IRA.
The limitations on contributions the Custodian may accept for any taxable
year on your behalf does not apply to rollovers from one IRA to another.
A beneficiary other than your surviving spouse is prohibited by law from
rolling over his or her beneficiary interest in your IRA to another IRA.
Of course, if your beneficiary is your surviving spouse and he or she
elects to treat his or her interest in your IRA as his or her own IRA (see
Question 16(b)), he or she may make a rollover contribution as described
in the previous paragraph.
(b) Direct Transfers from One IRA to Another. The IRS has ruled that
the funds in an IRA may be moved to another IRA more frequently than the
limitation on the frequency of rollover contributions described above (once
a year), provided that the funds are transferred directly from the trustee
or may make a rollover contributions described above (once a year),
provided that the funds are transferred directly from the trustee or
custodian of the first IRA to the trustee or custodian of the IRA
established in its place, so that the funds are at no time within the
control or use of the IRA owner. The limitations on contributions the
Custodian may accept for any taxable year on your behalf do not apply to
direct transfer from one IRA to another.
-7-
<PAGE> 9
As a Pacific Horizon IRA owner, you may at any time request the Custodian
to transfer the assets in your IRA directly to the trustee or custodian of
another IRA established or maintained by you, provided that the other
trustee or custodian has indicated its willingness to accept the direct
transfer in a written communication addressed to the Custodian. Federal
income tax will not be withheld on the direct transfer at the time of the
direct transfer.
A beneficiary other than your surviving spouse is prohibited by law from
transferring his or her beneficiary interest in your IRA to another IRA.
Of course, if your beneficiary is your surviving spouse and he or she
elects to treat his or her interest in your IRA as his or her own IRA (see
Question 16(b)), he or she may request the Custodian to transfer assets as
described in the previous paragraph.
(c) Qualifying Rollover Distributions from Certain Employer
Retirement Plans to an IRA. All or any part of an "eligible rollover
distribution" from certain employer retirement plans may be moved to a
Pacific Horizon IRA and qualify for tax-free rollover treatment for
federal income tax purposes. Generally, an "eligible rollover
distribution" is a distribution of all or any portion of your benefit in a
qualified plan or a tax-sheltered annuity arrangement other than (i)
payments made in the form of a joint and survivor annuity, a life annuity
or installments over a period of 10 or more years, (ii) required minimum
payments made because you have attained age 70 1/2, or (iii) payments or
portions of payments which are a return of nondeductible employee
contributions.
There are two methods of rolling over an eligible rollover distribution to
an IRA: direct rollovers and regular rollovers. In a direct rollover,
you tell your employer's or former employer's plan not to pay the eligible
rollover distribution to you, but rather to pay the distribution
directly to the trustee or custodian of your IRA (or to give you a check
payable to the IRA trustee or custodian which you then deliver to the
trustee or custodian). The advantage of a direct rollover is that federal
income tax (under the 20% income tax withholding requirement described
below) will not be withheld from the amount of your eligible rollover
distribution which is directly rolled over.
In a regular rollover, the distribution from your employer's or former
employer's plan is paid to you; the check is not payable to the trustee or
custodian of your IRA. Unlike a direct rollover, your employer or former
employer must withhold federal income tax in the amount of 20% of your
eligible rollover distribution at the time of your distribution even
though you reinvest the distribution into
-8-
<PAGE> 10
an IRA within 60 days. If you receive property other than cash in an
eligible rollover distribution, you may sell the property and roll over
the cash received, provided it is not in excess of the value of the
property received in the distribution. No portion of the gain or loss on
the sale will be recognized for federal income tax purposes, provided the
entire amount of the proceeds of the sale (less the portion of the
proceeds consisting of nondeductible employee contributions, if any) is
included in the rollover. The amount of the eligible rollover
distribution which you wish to qualify for tax-free rollover treatment for
federal income tax purposes must be reinvested into an IRA within 60 days
of your receipt or the distribution. Therefore, if you receive an
eligible rollover distribution of $1,000, and you want the entire $1,000
distribution to be excluded from your income for federal income tax
purposes, you must find other money to replace the $200 which was
automatically withheld at the time of the distribution. The $200 which was
withheld will offset other tax liabilities for the year.
With certain exceptions, any cash or other property received in the
distribution which is not rolled over will be taxed for federal income tax
purposes as ordinary income in the year it is received.
(d) Rollover from IRA to Certain Employer Retirement Plans. If you
have set up a rollover (also called "conduit") IRA, you may be able to
roll over funds from it into certain employer retirement plans if (i) the
original source of the conduit IRA was from a qualified plan, qualified
annuity or tax-sheltered annuity; (ii) your conduit IRA contains only the
money from your original distribution, plus earnings to date; (iii) the
employer retirement plan allows such contributions; and (iv) your original
distribution was not made to you from your spouse's plan as a result of
your spouse's death.
If your conduit IRA meets the requirements outlined above, you have 60
days from the receipt of funds from the IRA to complete the rollover to
the employer retirement plan. All or any part of the balance to your
credit in your conduit IRA may be distributed to you; you may then roll
over to the employer retirement plan all or any part of the distribution.
You may elect not to have federal income tax withheld on the rollover
at the time of the rollover (see Question 15). Of course, any part not
rolled over will generally be taxed for federal income tax purposes as
ordinary income in the year it is received.
If your original distribution came from a tax-sheltered annuity, you
may roll over the funds only to another tax-sheltered annuity.
-9-
<PAGE> 11
(e) Separate Accounting for Certain Rollover Contributions and Direct
Transfers. Any rollover contribution or direct transfer consisting of
funds which you have derived, directly or through another IRA, from an
employer retirement plan should be held in a separate Pacific Horizon IRA
which consists only of that rollover contribution or direct transfer and
the earnings thereon.
(f) No Rollover or Transfer of Required Distributions. You may not
run over or transfer any assets attributable to a required minimum
distribution (see Questions 14 and 16) without potential adverse tax
consequences.
11. WHAT HAPPENS IF I MAKE AN EXCESS CONTRIBUTION TO AN IRA?
An excess contribution is a contribution to an IRA in excess of the
maximum contribution amount or maximum amount permitted to be rolled over
into an IRA for that taxable year. Excess contributions are
subject under the Code to an annual federal excise tax of 6% of the amount
of the excess contribution until it is eliminated. However, you can
eliminate this excess in any one or more of the following three ways:
(a) Excess Contributions Distributed Before Federal Income Tax Return
Due Date. Excess contributions withdrawn from an IRA, together with all
earnings thereon, prior to the time for filing your federal income tax
return for such taxable year (including extensions) will not be subject to
the 6% federal excise tax, regardless of the total amount of the
contributions made during the taxable year. The earnings distributed must
be included in gross income for the taxable year in which the excess
contribution was made.
(b) Excess Contributions Distributed After Federal Income Tax Return
Due Date. If a distribution from an IRA takes place after the due date
for filing your federal income tax return (including extensions), the
entire distribution will be subject to the 6% federal excise tax, federal
income tax, and, if you have not reached age 59 1/2, will also be subject
to a 10% additional federal income tax on premature distributions.
However, you may receive a distribution of your excess contributions
without being required to include the amount of the distribution in your
gross income or to pay the 10% additional federal income tax (but you will
still be subject to the 6% federal excise tax for the year of
contribution), provided that you have taken no federal income tax
deduction for the amount of the excess contribution distributed, and the
total contribution, including the excess contribution, for the taxable
year in which the excess contribution was made, did not exceed $2,250.
-10-
<PAGE> 12
You may also withdraw the portion of an excess rollover contribution
(without any dollar limitation) caused by your having reasonably relied
on certain incorrect information required to be furnished to you by the
plan, trust, or institution making the distribution which was the subject
of the rollover.
(c) Elimination of Excess Contribution by Undercontribution in
Subsequent Years. You may reduce or eliminate an excess contribution in
later taxable years for which you are eligible to contribute to an IRA if
you do not make the maximum allowable contribution for retirement savings
in the later year. Thus, if you contribute less than the maximum
contribution allowed for any year after the excess contribution was made,
the difference between the maximum contribution allowable and the amount
claimed can be used to reduce or eliminate the excess contribution. The
amount of the excess contribution so used will also reduce or eliminate
the amount subject to the 6% federal excise tax for the year in which so
used.
12. HOW ARE WITHDRAWALS AND DISTRIBUTIONS TAXED?
Distributions from your Pacific Horizon IRA may be in the form of a single
payment or in monthly, quarterly, or annual payments over a period certain
not extending beyond your life expectancy or the joint life and last
survivor expectancy of you and your designated beneficiary. Any
distribution instruction must specify the reason for the distribution; for
example, a premature distribution (i.e., a distribution before age 59
1/2), a rollover, a distribution on account of disability or death, a
normal distribution (i.e., a distribution at age 59 1/2 or over), a return
of excess contributions, etc.
Distributions are, for federal income tax purposes, taxed in full to you
or your beneficiaries at ordinary income tax rates unless you have made
nondeductible contributions. A single sum distribution from your IRA is
not eligible for special five- or ten-year income averaging or capital
gains treatment Sometimes available for lump sum distributions from
certain employer retirement plans.
Because nondeductible IRA contributions are made using income which has
already been taxed (that is, they are not deductible contributions), the
portion of the IRA distributions consisting of nondeductible contributions
will not be taxed again when received by you. If you make any
nondeductible IRA contributions, each distribution from your IRA will
consist of a nontaxable portion (return of nondeductible contributions)
and a taxable portion (return of deductible contributions, if any, and
account earnings).
-11-
<PAGE> 13
Thus, you may not take a distribution which is entirely tax-free.
The following formula is used to determine the nontaxable portion of
your distributions for a taxable year:
Remaining
Nondeductible Total Nontaxable
Contributions X Distributions = Distributions
------------------
Year-end total IRA (for the year) (for the year)
Account Balances
To figure the year-end total IRA account balance, you treat all of
your IRAs (including those IRAs at other institutions) as a single
IRA, including SEP-IRAs, rollover IRAs and transfer IRAs. You also
add back the distributions taken during the year.
13. WHAT IS A PREMATURE DISTRIBUTION?
A Pacific Horizon IRA is intended to provide income to you when you
retire. For this reason, the law imposes certain restrictions on your
right to withdraw this money before your retirement. Funds generally
cannot be withdrawn from your IRA without adverse tax consequences
prior to the date on which you attain age 59 1/2. Any distributions
prior to that time (except those described in Questions 10, 11, and
16), including amounts considered to have been distributed as a result
of prohibited transactions or the use of part or all of the IRA as
security for a loan (see Questions 21 and 22), are considered to be
premature distributions.
If you receive a premature distribution, the amount received is
includable in your gross income subject to federal income tax in the
taxable year of receipt (except to the extent the amount received is a
return of your nondeductible contributions--see Question 12). In
addition, your federal income tax liability for that taxable year is
increased by an amount equal to 10% of the premature distribution
includable in your gross income.
No additional taxes, however, apply in the case of distributions after
you die, become disabled, or attain age 59 1/2. Also, no additional
taxes apply if you receive substantially equal periodic payments over
your life expectancy (or the joint life expectancy of you and your
beneficiary), even if the payments begin before you attain age 59 1/2.
-12-
<PAGE> 14
14. WHAT IF I DO NOT RECEIVE THE MINIMUM REQUIRED AMOUNTS, OR RECEIVE
EXCESS DISTRIBUTIONS, FROM MY IRA?
(a) Insufficient Amounts. The Code requires that you begin
to take distributions from your Pacific Horizon IRA on or before April
1 of the calendar year following the calendar year in which you attain
age 70 1/2. The Code further requires that no less than a minimum
distribution be made each year. This minimum distribution is based on
your life expectancy or the joint life expectancy of you and your
designated beneficiary and is computed under annuity tables published
by the IRS. In determining the amount of the minimum distribution
from your IRA for any year, any amounts withdrawn from your IRA for
the purpose of making a rollover or transfer to another IRA will be
considered as part of your IRA for such year.
In order to insure that the minimum amount required to be distributed
after you reach age 70 1/2 or after you die is in fact paid out to you
or your beneficiary, a 50% federal excise tax will be imposed on the
difference between the amount of the distribution actually made and
the amount that should have been distributed, except that the IRS may
waive the penalty if it finds that the minimum requirement has not
been met because of a reasonable error and appropriate steps are being
taken to correct the error.
The minimum requirement discussed above applies to each of your IRAs.
However, under current IRS rules, the total minimum distributions from
all of your IRAs may be taken from the IRA(s) of your choice.
(b) Excess Distributions. A 15% federal excise tax will
generally apply to the extent your annual distributions exceed the
greater of $150,000 or $112,500 (indexed for inflation). However,
special rules are applied when calculating excess distributions. This
tax is reduced by any payment of the 10% penalty tax on premature
distributions (see Question 13). All retirement plan distributions,
including distributions from IRAs, are totalled to determine whether
excess annual distributions have been paid.
15. WILL FEDERAL INCOME TAX BE WITHHELD FROM DISTRIBUTIONS TO ME?
Federal income tax will be withheld on any distributions you receive
from your IRA unless you elect not to have tax withheld. Generally,
tax will be withheld at the rate of 10% of each distribution. Notice
of your right to elect not to have federal income tax withheld will be
given at the time you request a withdrawal from your IRA. When
-13-
<PAGE> 15
distributions from your IRA have begun and are being made on an
annual, quarterly, or monthly basis, you will be provided with notice
of your right to elect not to have tax withheld prior to the beginning
of each calendar year to which the notice relates.
16. HOW WILL FUNDS BE DISTRIBUTED TO MY BENEFICIARY WHEN I DIE?
(a) General Rule. If you die before the entire fund has been
distributed, the remaining funds in your Pacific Horizon IRA must be
distributed in a single sum or installments to your designated
beneficiary by December 31 of the fifth year after the year of your
death, except that (i) if distributions commenced to you before your
death over a fixed period of time permitted by the Code and
regulations thereunder, distribution may continue over the unexpired
portion of that period, even if it is longer than five years, or (ii)
if distributions commence to your designated beneficiary by December
31 of the year after the year of your death and the payments are to be
made over a period not exceeding your beneficiary's life expectancy,
payments may be made over that period, even if it is longer than five
years. If your designated beneficiary is your surviving spouse, the
distributions in (ii) in the preceding sentence do not have to begin
until the later of December 31 of the year after the year of your
death, or December 31 of the year you would have attained age 70 1/2.
(b) Exception. The distributions discussed in paragraph
(a) above need not be made if your designated beneficiary is your
surviving spouse and he or she elects to treat his or her interest in
your Pacific Horizon IRA as his or her own IRA. If your beneficiary
is your surviving spouse and he or she makes this election or is
deemed to have made this election, your beneficiary will become
subject to all the terms, conditions, and restrictions of the IRA
which are applicable to you. Thus, withdrawals prior to age 59 1/2
may be subject to adverse tax consequences (see Questions 12 and 13),
distributions must commence on or before age 70 1/2 (see Question 14)
and additional contributions may be made on a tax-deductible basis
(see Questions 4, 5, 7, and 23).
(c) Penalty Taxes. See Question 14.
17. WHAT ARE THE FEDERAL ESTATE AND GIFT TAX CONSEQUENCES FOR MY IRA?
(a) Gift Tax Consequences. Your designation of a
beneficiary to receive distributions from your IRA upon your death
will not be considered a transfer of property for federal gift tax
purposes.
-14-
<PAGE> 16
(b) Estate Tax Consequences. Generally amounts remaining in
your IRA after your death will be includable in your gross estate for
federal estate tax purposes. However, there is an unlimited federal
estate tax marital deduction that is applicable when your spouse is
your designated beneficiary. In other cases, a unified credit against
federal estate and gift taxes is available.
18. HAS THE INTERNAL REVENUE SERVICE APPROVED THE IRA?
The Pacific Horizon IRA was last approved by the IRS (Letter Serial
Number D101204b) (see pages 21 and 22) on December 21, 1990. The
Pacific Horizon IRA, as revised in 1993, has been filed with the IRS
for approval. IRS approval will be an opinion only as to the form of
the Pacific Horizon IRA, and will not represent any opinion by the IRS
as to the merits of a Pacific Horizon IRA.
19. WHAT REPORTS MUST I MAKE TO THE INTERNAL REVENUE SERVICE?
(a) You are not required to file Form 5329 (Return for
Individual Retirement Arrangement Taxes) with the IRS unless you owe
one of the penalty taxes for premature distributions, excess
contributions, or underdistribution.
(b) You are required to file Form 8606 (Nondeductible IRA
Contributions . . . ) for any year for which you choose to make
nondeductible contributions.
20. WHAT ARE THE CUSTODIAN'S CHARGES?
The Custodian currently charges an acceptance fee of $10 per IRA
application, and an annual maintenance fee of $10 for each Fund in
which your Pacific Horizon IRA is invested.
Of course, shares of the Fund(s) in which your IRA is invested will be
affected by management fees and other expenses of the Fund(s). These
matters are discussed in the prospectus(es) which you received prior
to, or along with, this pamphlet.
21. WHAT IF I USE MY IRA AS SECURITY?
If you use all or any portion of your IRA as security for a loan, and
even if such transaction is not a "prohibited transaction" (as
described in section 4975 of the Code), the amount so used is
nevertheless considered to be distributed to you and must be included
in your gross income if a before-tax amount. In addition, if you have
not attained age 59 1/2, you will have to pay an additional federal
income tax equal to 10% of the amount considered distributed to you
included in your gross income.
-15-
<PAGE> 17
22. WHAT IF I AM INVOLVED IN A PROHIBITED TRANSACTION?
If you (or your beneficiary) engage in a so-called "prohibited
transaction" (as described in section 4975 of the Code) (e.g.,
borrowing money from your IRA) with respect to your IRA, your IRA will
lose its exemption from tax as of the first day of the year in which
the prohibited transaction occurs. In this event you must include the
entire before-tax amount in your IRA in your gross income for federal
income tax purposes in the taxable year in which you (or your
beneficiary) engaged in the prohibited transaction and, if you have
not reached age 59 1/2, you must also pay a 10% additional federal
income tax on the amount included in your gross income.
23. CAN I PARTICIPATE IN A SEP-IRA?
An employer who adopts a SEP may make contributions on behalf of its
employees to their separate Pacific Horizon IRAs. If your employer
has adopted a SEP, your employer may make SEP contributions directly
to your IRA each year in an amount up to the lesser of $30,000 or 15%
of your compensation (13.043% of your net earnings before the
contribution if you are self-employed). Of course, you must meet the
eligibility requirements of your employer's SEP in order to be
entitled to contributions. Your employer can tell you what the
eligibility requirements are.
(a) Contributions After Age 70 1/2. Your employer may
make contributions on your behalf to your IRA through a SEP even after
you have attained age 70 1/2.
(b) Excess Contributions. If your employer makes SEP
contributions to your IRA in excess of the applicable limits, you may
be subject to the 6% excise tax on excess contributions discussed in
Question 11.
(c) Active Participant. As discussed in Question 7, you
will generally be considered an active participant in a retirement
plan for a year if you are covered by your employer's SEP in that
year. As an active participant the amount of deductible contributions
you may make to the IRA may be limited as discussed in Question 7.
(d) Time of Contribution. Your employer's contributions
to your IRA for a particular taxable year of your employer may be made
up until the date your employer is required to file the federal income
tax return for that year (including extensions of that date). The
contribution will be deductible for your employer's taxable year with
or within which the calendar year ends (if the SEP is maintained on
the basis of the calendar year), or for your
-16-
<PAGE> 18
employer's taxable year (if the SEP is maintained on the basis of your
employer's taxable year).
24. WHERE CAN I OBTAIN FURTHER INFORMATION ABOUT IRAS?
Further information concerning IRAs may be obtained from any District
Office of the IRS.
________________________________________________________________________________
B. RIGHT OF REVOCATION
If you establish a Pacific Horizon IRA, you may revoke it by notifying
the transfer agent in writing by first class mail, postmarked within seven days
after the date you established your Pacific Horizon IRA. Such notice must be
sent to the following address:
Pacific Horizon Funds
c/o Supervised Service Company, Inc.
P.O. Box 419955
Kansas City, MO 64141-6955
In the event of revocation, all contributions made under the Pacific Horizon
IRA will be returned to you, without adjustment for administrative expenses or
for fluctuation in market value.
________________________________________________________________________________
C. QUALIFIED TAX ADVICE
The preceding is a general description of the manner in which IRAs are
taxed under the Internal Revenue Code. Because of the unfavorable tax
consequences which could result from improper establishment or use of a Pacific
Horizon IRA, you should consult with an attorney or other qualified tax
adviser. Neither Bank of America, nor Pacific Horizon Funds, Inc., nor any
fund gives tax or other legal advice or assumes any liability for tax or other
consequences to investors, their spouses, their beneficiaries, or any other
parties arising from a Pacific Horizon IRA.
________________________________________________________________________________
D. ESTIMATED DEDUCTION TABLE
If your maximum allowable deduction is $2,000, use this table to
estimate the amount of your contribution which will be deductible. (See page
__ for formula.)
-17-
<PAGE> 19
<TABLE>
<CAPTION>
EXCESS DEDUCTIBLE EXCESS DEDUCTIBLE
AGI* CONTRIBUTION AGI* CONTRIBUTION
- ------ ------------ ------ ------------
<S> <C> <C> <C>
$ 0 $2,000 $2,250 $1,550
50 1,990 2,300 1,540
100 1,980 2,350 1,530
150 1,970 2,400 1,520
200 1,960 2,450 1,510
250 1,950 2,500 1,500
300 1,940 2,550 1,490
350 1,930 2,600 1,480
400 1,920 2,650 1,470
450 1,910 2,700 1,460
500 1,900 2,750 1,450
550 1,890 2,800 1,440
600 1,880 2,850 1,430
650 1,870 2,900 1,420
700 1,860 2,950 1,410
750 1,850 3,000 1,400
800 1,840 3,050 1,390
850 1,830 3,100 1,380
900 1,820 3,150 1,370
950 1,810 3,200 1,360
1,000 1,800 3,250 1,350
1,050 1,790 3,300 1,340
1,100 1,780 3,350 1,330
1,150 1,770 3,400 1,320
1,200 1,760 3,450 1,310
1,250 1,750 3,500 1,300
1,300 1,740 3,550 1,290
1,350 1,730 3,600 1,280
1,400 1,720 3,650 1,270
1,450 1,710 3,700 1,260
1,500 1,700 3,750 1,250
1,550 1,690 3,800 1,240
1,600 1,690 3,850 1,230
1,650 1,670 3,900 1,220
1,700 1,660 3,950 1,210
1,750 1,650 4,000 1,200
1,800 1,640 4,050 1,190
1,850 1,630 4,100 1,180
1,900 1,620 4,150 1,170
1,950 1,610 4,200 1,160
2,000 1,600 4,250 1,150
2,050 1,590 4,300 1,140
2,100 1,580 4,350 1,130
2,150 1,570 4,400 1,120
2,200 1,560 4,450 1,110
</TABLE>
______________________________
(continued on following page)
-18-
<PAGE> 20
<TABLE>
<CAPTION>
Excess Deductible Excess Deductible
AGI* Contribution AGI* Contribution
------ ------------ ------ ------------
<S> <C> <C> <C>
$4,500 $1,100 $6,750 $ 650
4,550 1,090 6,800 640
4,600 1,080 6,850 630
4,650 1,070 6,900 620
4,700 1,060 6,950 610
4,750 1,050 7,000 600
4,800 1,040 7,050 590
4,850 1,030 7,100 580
4,900 1,020 7,150 570
4,950 1,010 7,200 560
5,000 1,000 7,250 550
5,050 990 7,300 540
5,100 980 7,350 530
5,150 970 7,400 520
5,200 960 7,450 510
5,250 950 7,500 500
5,300 940 7,550 490
5,350 930 7,600 480
5,400 920 7,650 470
5,450 910 7,700 460
5,500 900 7,750 450
5,550 890 7,800 440
5,600 880 7,850 430
5,650 870 7,900 420
5,700 860 7,950 410
5,750 850 8,000 300
5,800 840 8,050 390
5,850 830 8,100 380
5,900 820 8,150 370
5,950 810 8,200 360
6,000 800 8,250 350
6,050 790 8,300 340
6,100 780 8,350 330
6,150 770 8,400 320
6,200 760 8,450 310
6,250 750 8,500 300
6,300 740 8,550 290
6,350 730 8,600 280
6,400 720 8,650 270
6,450 710 8,700 260
6,500 700 8,750 250
6,550 690 8,800 240
6,600 680 8,850 230
6,650 670 8,900 220
6,700 660 8,950 210
</TABLE>
______________________________
(continued on following page)
-19-
<PAGE> 21
<TABLE>
<CAPTION>
Excess Deductible Excess Deductible
AGI* Contribution AGI* Contribution
- ------ ------------ ------ ------------
<S> <C> <C> <C>
$9,000 $ 200 $9,500 $ 200
9,050 200 9,550 200
9,100 200 9,600 200
9,150 200 9,650 200
9,200 200 9,700 200
9,250 200 9,750 200
9,300 200 9,800 200
9,350 200 9,850 200
9,400 200 9,900 200
9,450 200 9,950 200
<FN>
- ---------------------------
* Excess AGI = Your AGI minus your threshold level: If you are single,
your threshold level is $25,000. If you are married, your threshold
level is $40,000. If you are married and file a separate tax form,
your Excess AGI = your AGI.
</TABLE>
Internal Revenue Service
Sponsor Name: Pacific Horizon Funds, Inc.
Plan Description: IRA Custodial Account
FFN: 50151210000-001 Case: 90701019
Letter Serial No: D101204b
December 21, 1990
Dear Applicant:
In our oopinion, the amendment to the form of the prototype trust, custodial
account or annuity contract identified above does not adversely affect its
acceptability under section 408 of the Internal Revenue Code, as amended by The
Tax Reform Act of 1986.
Each individual who adopts this approved plan will be considered to have a
retirement savings program that satisfies the requirements of Code section 408,
provided they follow the terms of the program and do not engage in certain
transactions specified in Code section 408(e). Please provide a copy of this
letter to each person affected.
The Internal Revenue Service has not evaluated the merits of this savings
program and does not guarantee contributions or
-20-
<PAGE> 22
investments made under the savings program. Furthermore, this letter does not
express any opinion as to the applicability of Code section 4975, regarding
prohibited transactions.
Code section 408(i) and related regulations require that the trustee, custodian
or issuer of a contract provide a disclosure statement to each participant in
this program as specified in the regulations. Publication 590, Tax Information
on Individual Retirement Arrangements, gives information about the items to be
disclosed.
The trustee, custodian or issuer of a contract is also required to provide each
adopting individual with annual reports of savings program transactions.
Your program may have to be amended to include or revise provisions in order to
comply with future changes in the law or regulations.
If you have any questions concerning IRS processing of this case, call us at
the above telephone number. Please refer to the Letter Serial Number and File
Folder Number shown in the heading of this letter. Please provide those
adopting this plan with your phone number, and advise them to contact your
office if they have any questions about the operation of this plan.
You should keep this letter as a permanent record. Please notify us if you
terminate the form of this Plan.
Sincerely yours,
/s/ John Swieca
--------------------------------
John Swieca
Chief, Employee Plans
Qualifications Branch
PACIFIC HORIZON FUNDS
INDIVIDUAL RETIREMENT ACCOUNT
CUSTODIAL AGREEMENT
An Individual Retirement Account (the "IRA") is hereby established by
the person named in the accompanying Application upon the following terms and
conditions and in accordance with the Internal Revenue Code of 1986, as amended
(the "Code"). The
-21-
<PAGE> 23
information contained in the Application shall be part of this IRA as if set
forth herein.
Pacific Horizon Funds, Inc. a "regulated investment company," as
defined in section 851 of the Code, is the sponsor of this IRA.
________________________________________________________________________________
ARTICLE I. DEFINITIONS
Whenever used in this IRA, the following terms shall have the meanings
set forth below:
1.1 "Code" means the Internal Revenue Code of 1986, as amended.
1.2 "Compensation" means wages, salaries, professional fees, or
other amounts derived from or received for personal services actually rendered
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips, and bonuses) and includes earned income as defined in section
401 (c) (2) of the Code (reduced by the deduction the self-employed individual
takes for contributions to a self-employed retirement plan). For purposes of
this definition, section 401(c)(2) of the Code shall be applied as if the term
"trade or business" for purposes of section 1402 of the Code included service
described in section 1402(c)(6) of the Code (concerning members of certain
religious faiths). Compensation does not include amounts derived from or
received as earnings or profits from property (including, but not limited to,
interest and dividends) or amounts not includable in gross income.
Compensation also does not include any amount received as a pension, annuity,
or deferred compensation. Compensation shall include any amount includable in
the individual's gross income under section 71 of the Code with respect to a
divorce or separation instrument described in section 71(b)(2)(A) of the Code.
1.3 "Custodian" means Bank of America National Trust & Savings
Association.
1.4 "Direct Transfer" means a transfer of assets for the benefit
of an Investor from a trustee or custodian of a trust or custodial account
maintained as an individual retirement account or from an insurance company's
contract maintained as an individual retirement annuity.
1.5 "Disability" means the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected
-22-
<PAGE> 24
to result in death or to be of long-continued and indefinite duration.
1.6 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
1.7 "Fund" means an investment portfolio managed by Pacific
Horizon.
1.8 "Inherited IRA" means an IRA maintained for an Investor's
beneficiary other than the Investor's surviving spouse.
1.9 "Investor" means the individual who signed the Application and
for whom, or for whose Nonworking Spouse, an IRA has been established.
1.10 "Nonworking Spouse" means any person who has no Compensation
(determined without regard to section 911 of the Code) for the taxable year or
who elects to be treated as having no Compensation, and who is the spouse of an
individual who files a joint return for the taxable year with such person.
1.11 "Pacific Horizon" means Pacific Horizon Funds, Inc., a
Maryland corporation and an investment company registered under the Investment
Company Act of 1940, as amended, authorized to issue shares in separate
investment portfolios.
1.12 "Rollover Contribution" means a rollover contribution as
described in section 402(c), 403(a)(4), 403(a)(5), 403(b)(8), or 408(d)(3) of
the Code and regulations thereunder.
1.13 "SEP Contribution" means a contribution made under a
simplified employee pension as defined in section 408(k) of the Code.
1.14 "Shares" means common stock of a Fund which Pacific Horizon
has agreed to offer to Investors through the IRA.
________________________________________________________________________________
ARTICLE II. ELIGIBILITY
2.1 Eligibility. Any person who receives Compensation during a
taxable year is eligible to establish an IRA for such taxable year. In
addition, any person making a Rollover Contribution or a Direct Transfer may
establish an IRA. An otherwise eligible person may not establish an IRA for
the taxable year in which he or she attains age 70 1/2 or in any later taxable
year (unless making a SEP Contribution, a Rollover Contribution or a Direct
Transfer or establishing an IRA for his or her Nonworking Spouse who is under
age 70 1/2).
-23-
<PAGE> 25
________________________________________________________________________________
ARTICLE III. PARTICIPATION
3.1 Application. An Investor who wishes to establish an IRA may
do so by signing the Application and mailing it to the address indicated.
3.2 IRA for Nonworking Spouse. An Investor may establish a
separate IRA for his or her Nonworking Spouse to which contributions may be
made within the limitations set forth in Article IV. A Nonworking Spouse for
whom such separate IRA is established shall be considered the sole owner of all
amounts contributed thereto and the earnings thereon and shall have the right
to direct the time and manner of distribution under Article VI. When any
provision of this IRA gives the Investor a right, option, or privilege with
respect to his or her IRA, or imposes any duty, risk, or limitation of
liability on the Investor, such provision shall be deemed to extend to the
Nonworking Spouse as to his or her separate IRA.
________________________________________________________________________________
ARTICLE IV. CONTRIBUTIONS
4.1 Amount and Type of Contributions.
(a) For any taxable year in which the Investor does not
make a contribution on behalf of his or her Nonworking Spouse under the
provisions of Section 4.2, the Investor may contribute cash to his or her IRA
for such taxable year in an amount not in excess of (i) the lesser of 100
percent of the Investor's Compensation for such taxable year or $2,000 plus
(ii) any permitted SEP Contribution plus (iii) any Rollover Contribution or
Direct Transfer. SEP Contributions shall not exceed the lesser of $30,000 or
15 percent of the Investor's Compensation for any taxable year of the Investor.
(b) The Custodian, Pacific Horizon, and the funds are not
responsible for determining the amount an Investor may contribute. However,
the Investor may not contribute more than $2,000 plus any permitted SEP
Contribution made on the Investor's behalf for any taxable year plus any
Rollover Contribution or Direct Transfer.
(c) The Investor may generally make a Rollover
Contribution or Direct Transfer. However, no Rollover Contribution or Direct
Transfer may be made to or from an Inherited IRA. Unless the Custodian is
directed otherwise by the Investor, any Rollover Contribution or Direct
Transfer and the earnings thereon shall be held by the Custodian in a separate
IRA for the Investor. The Custodian, by accepting a Rollover
-24-
<PAGE> 26
Contribution or a Direct Transfer, does not accept responsibility for the tax
results of the rollover or transfer, the responsibility for which rests with
the Investor who directs or consents to such a rollover or transfer.
(d) If for a taxable year the Investor contributes an
amount in excess of the amount he or she is permitted to contribute, such
excess contribution (including any income attributable to such excess
contribution) shall, upon the written request of the Investor (or, after death,
his or her legal representative), be paid to him or her by the Custodian on or
before the day on which such Investor's federal income tax return for such
taxable year is due (including extensions of such day), provided no deduction
has been allowed under section 219 of the Code with respect to such excess
contribution. Subject to the application of penalties imposed by law, an
excess contribution shall be paid to the Investor by the Custodian after the
day on which such Investor's federal income tax return for such taxable year is
due (including extensions of such day) (excluding any income attributable to
such excess contribution), upon the written request of the Investor in
accordance with section 408(d)(5) of the Code.
4.2 Contributions to IRA for Nonworking Spouse. An Investor may
contribute cash to his or her IRA and also to his or her Nonworking Spouse's
separate IRA. Aggregate contributions to the two separate IRAs under this
Section 4.2 for a taxable year may not exceed $2,250, and contributions to
either of the separate IRAs may not exceed $2,000.
4.3 Nonforfeitability. The interest of the Investor in his or her
IRA shall be nonforfeitable at all times but shall be subject to the fees,
expenses, and charges described in Section 7.6.
________________________________________________________________________________
ARTICLE V. INVESTMENT OF CONTRIBUTIONS
5.1 Investments. Except as provided in Section 5.2, all
contributions made by the Investor shall be used by the Custodian to purchase
Shares, as directed by the Investor. All dividends and capital gains paid by a
Fund attributable to Shares held in the IRA shall be reinvested in additional
Shares of that Fund. The Investor may direct the Custodian to redeem all or
any number of Shares of a particular Fund and reinvest the proceeds in one or
more other Funds. The assets of the IRA shall not be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5) of the Code).
-25-
<PAGE> 27
5.2 Purchase of Shares; Prospectus. The Investor shall not direct
the Custodian to purchase shares in any of the Funds unless he or she shall
have received the prospectus(es) for the Fund(s) in which the Investor directs
the Custodian to invest his or her IRA; and, by giving such directions to the
Custodian, the Investor shall be deemed to have acknowledged receipt thereof.
The Custodian shall be responsible for executing such instructions promptly;
provided, however, that the Custodian shall not be obligated to invest any
portion of the Investor's initial contribution to his or her IRA until seven
calendar days shall have elapsed from the date of acceptance of the Application
by the Custodian.
5.3 Prohibited Investments. Contributions may not in any event be
used for the purchase of life insurance or "collectibles" (as defined in
section 408(m) of the Code).
5.4 Exclusive Benefit Rule. Under no circumstances shall any part
of the assets in the IRA be used for, or diverted to, purposes other than for
the exclusive benefit of the Investor and/or his or her beneficiary.
________________________________________________________________________________
ARTICLE VI. DISTRIBUTIONS
6.1 General Minimum Distribution Rule. Notwithstanding any
provision of this IRA to the contrary, the distribution of an Investor's
interest shall be made in accordance with the minimum distribution requirements
of section 408(a)(6) or 408(b)(3) of the Code and the regulations thereunder,
including the incidental death benefit provisions of Prop. Treas. Reg. Section
1.401 (a) (9)-2 or any successor thereto, all of which are herein incorporated
by reference.
6.2 Before-Death Minimum Distribution Rules.
(a) The Investor's entire interest in the IRA must be
distributed, or begin to be distributed by the Investor's required beginning
date, the April 1 following the calendar year in which the Investor attains age
70 1/2. For each succeeding year, a distribution must be made on or before
December 31. By the required beginning date, the Investor may elect to have
the balance in the IRA distributed in one of the following forms:
(1) A single sum payment;
(2) Equal or substantially equal payments over a
specified period that may be longer than the Investor's life
expectancy;
-26-
<PAGE> 28
(3) Equal or substantially equal payments over a
specified period that may not be longer than the joint life
and last survivor expectancy of the Investor and his or her
designated beneficiary.
(b) If the Investor fails to elect any of the methods of
distribution described in subsection (a) above on or before April 1 of the
calendar year following the calendar year in which he or she attains age 70
1/2, the Custodian may, but is not required to, distribute the Investor's
entire interest on or before such date by a single sum payment.
6.3 After-Death Minimum Distribution Rules.
(a) If the Investor dies before his or her entire
interest is distributed, the entire remaining interest will be distributed as
follows:
(1) If the Investor dies on or after
distributions have begun under Section 6.2, the entire remaining
interest must be distributed at least as rapidly as provided under
Section 6.2 (subject to the last sentence of Section 6.7).
(2) If the Investor dies before distributions
have begun under Section 6.2, the entire remaining interest must be
distributed as elected by the Investor, or, if the Investor has not so
elected, as elected by the beneficiary or beneficiaries, as follows:
(A) By December 31st of the year
containing the fifth anniversary of the Investor's
death; or
(B) In equal or substantially equal
payments, over a specified period that may not be
longer than the life expectancy of the designated
beneficiary or beneficiaries, starting by December
31st of the year following the year of the Investor's
death. If, however, the beneficiary is the
Investor's surviving spouse, then this distribution
is not required to begin before December 31st of the
year in which the Investor would have attained age 70
1/2.
If the beneficiary does not make arrangements for distribution
before the date in subparagraph (A) above, the Custodian may, but is
not required to, distribute the entire balance in the IRA to the
beneficiary in a single sum payment on or before that date.
-27-
<PAGE> 29
(b) Notwithstanding subsection (a) above, if the Investor
designates his or her spouse as beneficiary and the spouse elects to treat the
IRA as the spouse's own IRA, then the remaining portion of such interest shall
be subject to the distribution rules of this Article VI treating the spouse as
the Investor. The spouse shall be deemed to have made such an election if the
spouse makes a regular contribution to the IRA, makes a rollover Contribution
or Direct Transfer to or from the IRA, or fails to elect any of the
distribution methods described in Section 6.2(a).
6.4 Life Expectancies. Unless otherwise elected by the Investor
prior to the commencement of distributions under Section 6.2 or, if applicable,
by the surviving spouse where the Investor dies before distributions have
commenced, life expectancies of an Investor or spouse beneficiary shall be
recalculated annually for purposes of distributions under Sections 6.2 and 6.3.
An election not to recalculate shall be irrevocable and shall apply to all
subsequent years. The life expectancy of a nonspouse beneficiary shall not be
recalculated.
6.5 Two or More IRAs. An individual may satisfy the minimum
distribution requirements under sections 408(a)(6) and 408(b)(3) of the Code by
receiving a distribution from one IRA that is equal to the amount required to
satisfy the minimum distribution requirements for two or more IRAs. For this
purpose, if an Investor has two or more IRAs, he or she may use the "alternate
method" described in Notice 88-38, 1988- 1 C.B. 524, to satisfy the minimum
distribution requirements described above.
6.6 Surviving Spouse as Beneficiary. For purposes of Section
6.3(a), if the Investor's designated beneficiary is his or her surviving
spouse, and if the surviving spouse dies before distributions to the surviving
spouse begin, then Section 6.3(a) shall be applied as if the surviving spouse
were the Investor.
6.7 Calculation of Minimum Annual Payment. If the Investor or his
or her designated beneficiary elects to receive distributions in installment
payments under Section 6.2 or 6.3, the minimum annual payment shall be
determined by dividing the entire balance in the IRA, as of the close of
business on December 31 of the preceding year, by the lesser of (i) the life
expectancy of the Investor (or the joint life and last survivor expectancy of
the Investor and his or her designated beneficiary, or the life expectancy of
the designated beneficiary, whichever applies) or (ii) if the Investor's spouse
is not the designated beneficiary, the applicable divisor determined from the
table set forth in Prop. Treas. Reg. Section 1.401(a)(9)-2 Q&A 4 or any
successor thereto. In the case of distributions under Section 6.2(a), the
initial life expectancy (or initial joint life and last survivor
-28-
<PAGE> 30
expectancy) shall be determined using the attained age of the Investor and the
designated beneficiary (if applicable) as of their birthdays in the year the
Investor attains age 70 1/2. In the case of distributions under Section 6.3,
the initial life expectancy shall be determined using the attained age of the
designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence and without regard to Prop. Treas. Reg.
Section 1.401(c)(9)-2 or any successor thereto.
6.8 Non-Spouse as Beneficiary.
(a) If the designated beneficiary is a trust, references
to "designated beneficiary" and "beneficiary" in this IRA shall, for purposes
of making a determination based upon age or life expectancy, refer to the
person having a beneficial interest in the trust whose life expectancy is the
shortest at the time the determination is made. For all other purposes,
including the receipt of distributions and the exercise of powers with respect
to the IRA, such terms shall refer to the trustee of the trust.
(b) If the Investor dies before his or her entire
interest has been distributed, and if his or her designated beneficiary is
other than the surviving spouse, no additional cash contributions, SEP
Contributions, Rollover Contributions or Direct Transfers may be accepted in
the IRA.
6.9 Designated Beneficiary. The Investor's designated beneficiary
shall be the person or persons or other legal entity named as beneficiary(ies)
on the Application or, if no designation is made, the estate of the Investor.
6.10 Distribution Upon Request. Distribution to an Investor of his
or her interest in his or her IRA may be made at any time upon the request of
the Investor.
6.11 Investor to Direct Distributions. The Investor shall direct
the Custodian as to all distributions to the Investor to be made under this
Article VI. Such instructions must be communicated to the Custodian no later
than 60 days prior to the date on which such amount is to be distributed.
Neither the Custodian, nor Pacific Horizon, nor any Fund shall have any
liability to the Investor, to the Investor's surviving spouse, or to any
designated beneficiary for any taxes or penalties imposed under the Code or for
any other damages resulting from the applicable individual's receipt of, or
failure to receive, distributions in accordance with the rules provided above.
6.12 Transfers Pursuant to Divorce Decree. An Investor may
transfer part or all of his or her interest in the IRA to his or her former
spouse pursuant to a divorce decree or under a written
-29-
<PAGE> 31
instrument incident to such divorce, as provided in section 408(d)(6) of the
Code. Any interest so transferred shall be treated as an IRA of the former
spouse and such spouse shall thereupon be treated as the Investor for all
purposes of this IRA.
________________________________________________________________________________
ARTICLE VII. ADMINISTRATION
7.1 Powers of Custodian. Except as otherwise provided in this
IRA, the Custodian shall exercise as agent on behalf of the Investor, his or
her surviving spouse, and any beneficiary any and all powers such persons
themselves could exercise as an owner of the property held, including, but not
limited to, the following powers:
(a) To receive contributions pursuant to the provisions
of this IRA;
(b) To hold, invest, and reinvest such contributions
in Shares;
(c) To register any property held by the Custodian in its
own name, or in nominee or bearer form that will pass delivery;
(d) To make distributions from the IRA in cash or in
Shares pursuant to the provisions of this IRA; and
(e) To hire an agent or agents and delegate any of its
powers and duties hereunder to the agent(s) but remaining fully responsible for
the exercise of any such powers or the performance of any such duties by the
agent(s).
7.2 Proxies, Etc. The Custodian shall mail to the investor all
proxies, proxy soliciting materials, and periodic reports or other
communications (including all prospectuses that the Fund(s) regularly send to
existing shareholders) that may come into the Custodian's possession by reason
of its custody of Shares. It is intended that the Investor shall vote all
proxies, notwithstanding the fact that the Custodian may be the registered
owner of the Shares. The Custodian shall have no further liability or
responsibility with respect to the voting of the Shares.
7.3 Accounts. The Custodian shall maintain separate records for
the interest of each Investor's IRA and shall keep accurate and detailed
account of the IRA's receipts, investments, and disbursements. As soon as
practicable after December 31 of each year, and whenever required by ERISA or
the Code or regulations thereunder, the Custodian shall file with the
-30-
<PAGE> 32
Investor a written report of the Custodian's transactions relating to the IRA
during the period from the last previous accounting, and shall file such other
reports with the Internal Revenue Service as may be required. The Investor
agrees to provide the Custodian with any information necessary for the
Custodian to prepare any such reports.
Unless the Investor sends the Custodian written objection to a report
within 60 days after its receipt, the Investor shall be deemed to have approved
such report and, in such case, the Custodian, Pacific Horizon, and all Funds
shall be forever released and discharged with respect to all matters included
therein.
7.4 Standard of Care. The Custodian shall use ordinary care and
reasonable diligence in the performance of its duties as Custodian. The
Custodian shall not be liable for a mistake in judgment, for any action taken
in good faith, or for any loss that is not a result of its negligence or
willful misconduct.
7.5 No Investment Responsibility. The Custodian shall be under no
duty to make suggestions to the Investor with respect to the retention or
disposition of any contributions or assets held in the IRA.
7.6 Expenses, Taxes, and Fees. The Custodian shall pay out of the
IRA (if not otherwise paid by the Investor) expenses of administration, any
taxes, and its fees for maintaining the IRA as described in the Disclosure
Statement which follows this IRA. The Custodian may sell Shares and use the
proceeds of sale to pay the foregoing expenses, taxes, and fees.
7.7 Resignation or Removal of Custodian. (a) The Custodian may
resign upon written notice to that effect delivered to the Investor and Pacific
Horizon, such resignation to be effective the 30th day following the mailing to
the Investor of such notice. The Investor may remove the Custodian upon 30
days' written notice to that effect to the Custodian. Upon such resignation or
removal, the Investor shall forthwith appoint a successor custodian which
satisfies the requirements of section 408(h) of the Code. Upon receipt by the
Custodian of written acceptance by the successor custodian or such appointment,
the Custodian shall deliver the assets of the IRA to the successor custodian.
In the event the Investor fails to appoint a successor custodian which has
accepted its appointment within 30 days of the mailing of the notice of
resignation or removal, Pacific Horizon may appoint a successor custodian;
provided, however, that in the event no successor custodian has accepted its
appointment within 60 days of the notice of resignation or removal, the
Custodian reserves the right to terminate the IRA and pay the proceeds to the
Investor.
-31-
<PAGE> 33
(b) The Investor and Custodian agree that Pacific Horizon
as the sponsor of this IRA may at any time remove the Custodian upon 30 days'
written notice and appoint a successor custodian. On or after such date, the
Custodian shall deliver the assets of the IRA to the successor custodian.
(c) Notwithstanding the foregoing, the Custodian may
reserve such assets of the IRA as it may deem necessary for the payments
described in Section 7.6. Any balance of such reserve remaining after all such
payments shall be paid over to the successor custodian, or, if the Investor has
failed to appoint a successor custodian as provided in subsection (a) above to
the Investor.
(d) The provisions of this IRA shall apply to any
successor custodian from the effective date of its appointment as such with the
same force and effect as if such successor were the initial custodian
hereunder.
________________________________________________________________________________
ARTICLE VIII. PACIFIC HORIZON FUNDS, INC.
8.1 Powers of Pacific Horizon. The Investor delegates to Pacific
Horizon the power (i) to establish the Custodian's fees, and (ii) to amend this
IRA as provided in Article IX. The powers herein delegated to Pacific Horizon
shall be exercised by the officer thereof as Pacific Horizon may designate from
time to time, and shall be exercised only when similarly exercised with respect
to all other Investors adopting this form of IRA.
8.2 Liability of Pacific Horizon. Neither Pacific Horizon nor any
officer, director, board, committee, or employee of Pacific Horizon shall incur
any liability of any nature to the Investor, his or her spouse or beneficiary,
or any other person in connection with any act done or omitted to be done in
good faith in the exercise of any power or authority herein delegated to
Pacific Horizon.
8.3 Resignation of Pacific Horizon. If Pacific Horizon shall
hereafter determine that it is no longer desirable for it to continue to
exercise any of the powers hereby delegated, it may relieve itself of any
further responsibilities hereunder by notice in writing to the Investor and the
Custodian at least 60 days prior to the date on which Pacific Horizon proposes
to discontinue the exercise of the powers delegated to it.
________________________________________________________________________________
ARTICLE IX. AMENDMENT AND TERMINATION
9.1 Amendment. The Investor delegates to Pacific Horizon the
power to amend this IRA unilaterally (except the power to
-32-
<PAGE> 34
amend the Application). The Investor may amend his or her elections on the
Application by submitting to Pacific Horizon a copy of such amended
Application.
9.2 Limitations on Amendment. No amendment shall be effective if
it would cause or permit (i) any part of the IRA to be diverted to any purpose
that is not for the exclusive benefit of the Investor and his or her
beneficiary, (ii) the Investor to be deprived or any portion of his or her
interest in the IRA, unless such action is taken in order to satisfy
qualification requirements under the Code; or (iii) the imposition of an
additional duty on Pacific Horizon without its written consent.
9.3 Termination of IRA. This IRA may be terminated at any time by
the Investor by delivering to the Custodian a written notice of termination.
In addition, in the event that either (i) all of the funds available for
investment hereunder are liquidated or otherwise terminated or (ii) the sponsor
of this IRA ceases to act as such without a successor assuming the duties of
the sponsor, the IRA shall be terminated and the assets thereof shall be
delivered to the Investor unless prior to such payment the Investor provides
written instructions to the Custodian to transfer such proceeds to the trustee
or custodian of another individual retirement account or annuity.
-33-
<PAGE> 1
EXHIBIT 14(B)
APPOINTMENT OF SUCCESSOR CUSTODIAN
Pacific Horizon Funds, Inc., a Maryland corporation and a regulated
investment company as defined in Section 851 of the Internal Revenue Code of
1986 (the "Company"), originally appointed The Bank of New York, a New York
corporation, as custodian (the "original Custodian") of the individual
retirement accounts (the "Accounts") sponsored by the Company under the Pacific
Horizon Fund Individual Retirement Plan, Custodial Agreement and related
documentation (the "Custodial Agreement").
Pursuant to the provisions of said Custodial Agreement, the original
Custodian has been replaced as the Custodian thereunder and the Company has
appointed Security Pacific National Bank, a national banking association, as
successor Custodian. Such resignation and appointment shall become effective
at the close of business on August 3, 1990, the date Security Pacific National
Bank accepts its appointment to act as such successor Custodian for the
Accounts. Thereupon the original Custodian shall transfer and deliver to
Security Pacific National Bank the Accounts and their assets. The Company
hereby certifies that it has directed the original Custodian to transfer all of
the Accounts and their assets now held by the original Custodian.
Upon acceptance by Security Pacific National Bank of its appointment
as successor Custodian, the Company shall (1) amend the Custodial Agreement to
reflect such appointment, and (2)
<PAGE> 2
cause the holders of the Accounts to be notified of such appointment.
Security Pacific National Bank as the successor Custodian hereunder
shall succeed to all of the powers, rights, discretions, obligations and
immunities of such original Custodian; provided, however, that Security Pacific
National Bank as the successor Custodian shall not be liable or responsible for
anything done or omitted in the administration of the Accounts prior to the
date it shall become such successor Custodian, nor have any duty or
responsibility to inquire into or take any action with respect to any acts
performed or omitted by the original Custodian prior to Security Pacific
National Bank becoming the successor Custodian hereunder.
PACIFIC HORIZON FUNDS, INC.
By/s/ Thomas M. Collins
---------------------
Its President
---------------------
Dated: July 31, 1990
-2-
<PAGE> 3
ACCEPTANCE BY SUCCESSOR CUSTODIAN
Security Pacific National Bank, a national banking association, hereby
accepts its appointment as successor Custodian following fulfillment of the
conditions referred to in the foregoing Appointment of Successor Custodian.
SECURITY PACIFIC NATIONAL BANK
By /s/ C. R. Cooper
------------------------
Its First Vice President
-----------------------
Effective at the Close of Business on August 3, 1990
-3-
<PAGE> 1
EXHIBIT 15(A)
PACIFIC HORIZON FUNDS, INC.
SHAREHOLDER SERVICE PLAN
I. Introduction
It has been proposed that Pacific Horizon Funds, Inc. (the "Company") pay
for expenses incurred in connection with the provisions of shareholder services
with respect to the shares of its Aggressive Growth, U.S. Government
Securities, Capital Income, Blue Chip, Flexible Bond, Asset Allocation,
California Tax-Exempt Bond, National Municipal Bond, Utilities, Short-Term
Government, Corporate Bond, Growth and Income, International Bond and
International Equity Funds (collectively the "Funds" and individually a
"Fund"), and that a written plan describing all material aspects of the
proposed financing be adopted by the Company.
In particular, it has been proposed that the Funds bear: (a) expenses
incurred in connection with non-distribution shareholder service provided by
the distributor of the Company (the "Distributor") to Service Organizations
and/or the beneficial owners of Fund shares; (b) periodic payments made to
Service Organizations for the provision of support services to the beneficial
owners of Fund shares; and (c) expenses incurred in implementing and operating
this Plan. Under this proposal, payments would be made by the Company to the
Distributor to the extent described below.
The Board of Directors in considering whether the Company should implement
this Plan, has requested and evaluated such information as it deemed necessary
to an informed determination as to whether a written plan should be implemented
and has considered such pertinent factors as it deemed necessary to form the
basis for a decision to use assets of the Funds for such purposes.
In voting to approve the implementation of this Plan, the Directors have
concluded, in the exercise of their reasonable business judgment and in light
of their respective fiduciary duties, that there is a reasonable likelihood
that the Plan will benefit the Funds and their shareholders.
II. Financing
The material aspects of the financing by the Company of shareholder
servicing expenses incurred in connection with shares of the Funds are as
follows:
<PAGE> 2
The Funds will pay the Distributor for expenses incurred in connection with
non-distribution shareholder services provided by the Distributor to Service
Organizations and/or the beneficial owners of Fund shares, including but not
limited to shareholder servicing provided by the Distributor at facilities
dedicated for Fund use, provided that such shareholder servicing is not
duplicative of the servicing otherwise provided on behalf of the Funds.
In addition, the Funds will pay the Distributor for fees to Service
organizations (which may include the Distributor itself) for the provision of
support services to persons who are the beneficial owners of Fund shares
("Clients"). Such services may include: (a) establishing and maintaining
accounts and records relating to Clients that invest in Fund shares; (b)
processing dividend and distribution payments from the Funds on behalf of
Clients; (c) providing information periodically to Clients regarding their
positions in Fund shares; (d) arranging for bank wires; (e) responding to
Client inquiries concerning their investments in Fund shares; (f) providing the
information to the Funds necessary for accounting and subaccounting; (g) if
required by law, forwarding shareholder communications from the Funds (such as
proxies, shareholder reports, annual and semi-annual financial statements and
dividend, distribution and tax notices) for Clients; (h) assisting in
processing exchange and redemption requests from Clients; (i) assisting Clients
in changing dividends options, account designations and addresses; and (j)
providing such other similar services as the Distributor may reasonably
request.
While this Plan is in effect the Distributor will be paid for such
shareholder servicing expenses that are incurred in connection with shares of
the Funds on a monthly basis, at an annual rate of up to but not more than .25
of 1 percent of each Fund's average daily net assets during such month. These
monthly payments to the Distributor shall be made in accordance with, and
subject to, the conditions set forth in Part III of this Plan.
III. Other Provisions
(a) The monthly payments to the Distributor under Part II of this Plan
shall be made in accordance with, and subject to, the following conditions:
(1) the calculation of a Fund's average daily net assets will not include
those assets held in accounts opened via a transfer of assets from trust
and agency accounts of Bank of America National Trust and Savings
Association;
(2) if in any month the Distributor expends or is due more monies that
can be immediately paid under
-2-
<PAGE> 3
Part II, due to the percentage limitation noted therein, the unpaid amount
shall be carried forward from month to month while this Plan is in effect
until such time, if ever, when it can be paid in accordance with the
provisions of Part II;
(3) if in any month the Distributor does not expend the entire amount
then available under Part II, and assuming that no unpaid amounts have
been carried forward and remain unpaid under such Part, then the amount
not expended shall be considered a credit and may be drawn upon from month
to month by the Distributor to permit payment under Part II when necessary
in the future (i.e., carried back);
(4) payments made out of or charged against the assets of a particular
Fund must be in payment for shareholder servicing expenses incurred on
behalf of such Fund; and
(5) payments made pursuant to Part II must be for the shareholder
servicing expenses described therein.
Notwithstanding any provisions of items (2) and (3) above, however, no
amounts payable or credit due pursuant to this Plan for any fiscal year may be
carried over for payment or utilized as a credit, as the case may be, beyond
the end of such year. In addition, any amount being carried forward during any
given year will be extinguished in the event this Plan is terminated in that
year.
Payment to a Service Organization under Part II shall be subject to
compliance by the Service Organization with the terms of an agreement between
the Service Organization and the Distributor. If an investor in a Fund ceases
to be a client of a Service Organization that has entered into an agreement
with the Distributor, but continues to hold shares of the Fund, the Distributor
will be entitled to receive similar payments in respect to the shareholder
servicing provided with respect to such investor.
(b) For the purpose of determining the amounts payable under this Plan,
the value of a Fund's net assets shall be computed in the manner specified in
the Fund's prospectus as then in effect for the computation of the value of the
Fund's net assets.
(c) The Distributor shall provide the Board of Directors, at least
quarterly, with a written report of all amounts expended pursuant to Part II of
this Plan. The report shall state the purpose for which the amounts were
expended.
-3-
<PAGE> 4
(d) This plan shall continue until October 31, 1994, unless earlier
terminated in accordance with its terms, and thereafter shall continue
automatically for successive annual periods, provided such continuance is
approved by a majority of the Board of Directors, including a majority of the
Directors who are not "interested persons" (as defined in the Act) of the
Company and who have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection with this Plan
(the "Disinterested Directors"), pursuant to a vote cast in person at a meeting
called for the purpose of voting on the continuance of the Plan.
(e) This Plan may be amended at any time by the Board of Directors
provided that any material amendments of the terms of this Plan shall become
effective only upon approval as provided in paragraph (d) hereof.
(f) This Plan is terminable, as to any Fund, without penalty at any time
by (i) vote of a majority of the Disinterested Directors, or (ii) vote of a
majority of the outstanding voting securities of such Fund.
(g) The Company's Board of Directors has adopted this Plan as of December
7, 1993.
-4-
<PAGE> 1
EXHIBIT 15(B)
PACIFIC HORIZON FUNDS, INC.
SHAREHOLDER SERVICES PLAN
SECTION 1.
Upon the recommendation of Concord Holding Corporation ("Concord"), the
administrator of Pacific Horizon Funds, Inc. (the "Company"), any officer of
the Company is authorized to execute and deliver, in the name and on behalf of
the Company, written agreements based on the form attached hereto as Appendix A
or any other form duly approved by the Board of Directors ("Agreements") with
securities dealers, financial institutions and other industry professionals
that are shareholders or dealers of record or which have a servicing
relationship ("Shareholder Organizations") with the beneficial owners of
Horizon Service Shares of the Company's Prime Fund, Treasury Fund, Treasury
Only Fund, Government Fund, Horizon Tax-Exempt Money Fund, California
Tax-Exempt Money Market Fund or Prime Value Fund (the "Funds"). Pursuant to
such Agreements, Shareholder Organizations shall provide support services as
set forth therein to their clients who beneficially own Horizon Service Shares
of the Funds in consideration of a fee, computed monthly in the manner set
forth in the Agreements, at an annual rate of up to .25% of the average daily
net asset value of the Horizon Service Shares beneficially owned by such
clients. Concord, Bank of America National Trust and Savings Association and
their affiliates are eligible to become Shareholder Organizations and to
receive fees under this Plan. All expenses incurred by a Fund in connection
with the Agreements and the implementation of this Plan shall be borne entirely
by the holders of Horizon Service Shares of the particular Fund involved.
SECTION 2.
Concord shall monitor the arrangements pertaining to the Company's Agreements
with Shareholder Organizations. Concord shall not, however, be obliged by this
Plan to recommend, and the Company shall not be obliged to execute, any
Agreement with any qualifying Shareholder Organization.
SECTION 3.
So long as this Plan is in effect, Concord shall provide to the Company's
Board of Directors, and the Directors shall review at least quarterly, a
written report of the amounts expended pursuant to this Plan and the purposes
for which such expenditures were made.
<PAGE> 2
SECTION 4.
Unless sooner terminated, this Plan shall continue until July 21, 1990 and
thereafter shall continue automatically for successive annual periods provided
such continuance is approved at least annually by a majority of the Board of
Directors, including a majority of the Directors who are not "interested
persons," as defined in the Investment Company Act of 1940, of the Company and
have no direct or indirect financial interest in the operation of this Plan or
in any Agreement related to this Plan (the "Disinterested Directors").
SECTION 5.
This Plan may be amended at any time with respect to any Fund by the Board of
Directors, provided that any material amendment of the terms of this Plan shall
become effective only upon the approvals set forth in Section 4.
SECTION 6.
THIS Plan is terminable at any time with respect to any Fund by vote of a
majority of the Disinterested Directors.
SECTION 7.
While this Plan is in effect, the selection and nomination of those Directors
who are not "interested persons" (as defined in the Investment Company Act of
1940) of the Company shall be committed to the discretion of such
non-interested Directors.
SECTION 8.
This plan shall be effective as of July 21, 1989.
<PAGE> 1
EXHIBIT 15(C)
SHAREHOLDER SERVICING AGREEMENT
With Respect to Shares of the
Aggressive Growth, U.S. Government Securities,
Capital Income, Equity, Fixed Income, Asset Allocation
and California Tax-Exempt Bond Funds
of
PACIFIC HORIZON FUNDS, INC.
Concord Financial Group, Inc.
125 West 55th Street, 11th Floor
New York, New York 10019
Gentlemen:
We wish to enter into this Shareholder Servicing Agreement ("Agreement") with
you concerning the provision of support services to our clients ("Clients") who
may from time to time beneficially own Shares of the Aggressive Growth, U.S.
Government Securities, Capital Income, Equity, Fixed Income, Asset Allocation
and California Tax-Exempt Bond Funds (collectively the "Funds") of Pacific
Horizon Funds, Inc. (the "Company") of which you are the principal underwriter
as defined in the Investment Company Act of 1940 (the "Act") and the exclusive
agent for the continuous distribution of said Shares. Shares of the seven
Funds named above are hereinafter referred to collectively as "Shares."
The terms and conditions of this Agreement are as follows:
Section 1. We agree to provide the following support services to Clients who
may from time to time acquire and beneficially own Shares(1): (i) establishing
and maintaining accounts and records relating to Clients that invest in Shares;
(ii) processing dividend and distribution payments from the Funds on behalf of
Clients; (iii) providing information periodically to Clients regarding their
positions in Shares; (iv) arranging for bank wires; (v) responding to Client
inquiries concerning their investments in Shares; (vi) providing the
information to the Funds necessary for accounting or subaccounting; (vii) if
required by law, forwarding shareholder communications from the Funds (such as
proxies, shareholder reports, annual and semiannual financial statements and
dividend, distribution and tax notices) to Clients; (viii) assisting in
processing exchange and
____________________
(1) Services may be modified or omitted in the particular case
and items relettered or renumbered.
<PAGE> 2
redemption requests from Clients; (ix) assisting Clients in changing dividend
options, account designations and addresses; and (x) providing such other
similar services as you may reasonably request to the extent we are permitted
to do so under applicable statutes, rules and regulations.
Section 2. We will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in our business, or any personnel employed by us) as
may be reasonably necessary or beneficial in order to provide the
aforementioned services and assistance to Clients.
Section 3. Neither we nor any of our officers, employees or agents are
authorized to make any representations concerning you or the Shares except
those contained in the Funds' applicable prospectuses and statements of
additional information for the Shares, copies of which will be supplied by you
to us, or in such supplemental literature or advertising as may be authorized
by you in writing.
Section 4. For all purposes of this Agreement we will be deemed to be an
independent contractor, and will have no authority to act as agent for you or
the Funds in any matter or in any respect. We and our employees will, upon
request, be available during normal business hours to consult with you or your
designees concerning the performance of our responsibilities under this
Agreement. We will not engage in activities pursuant to this Agreement which
constitute acting as a broker or dealer under state law unless we have obtained
the licenses required by such law.
Section 5. In consideration of the services and facilities provided by us
hereunder, you will pay to us, and we will accept as full payment therefor, a
fee at the annual rate of ____ of 1% of the average daily net asset value of
the Shares beneficially owned by our Clients for whom we are the dealer of
record or holder of record or with whom we have a servicing relationship (the
"Clients' Shares"). Said fee will be computed daily and payable monthly. For
purposes of determining the fee payable under this Section 5, the average daily
net asset value of the Clients' Shares will be computed in the manner specified
in the Funds' Registration Statement (as the same is in effect from time to
time) in connection with the computation of the net asset value of the
particular Shares involved for purposes of purchases and redemptions. The fee
rate stated above may be prospectively increased or decreased by you, in your
sole discretion, at any time upon notice to us. Further, you may, in your
discretion and without notice, suspend or withdraw the sale of Shares,
including the sale of Shares for the account of any Client or Clients.
-2-
<PAGE> 3
Section 6. We acknowledge that you will provide to the Funds' Board of
Directors, and the Board of Directors will review, at least quarterly, a
written report of the amounts expended pursuant to this Agreement and the
purposes for which such expenditures were made. In connection with such
reviews, we will furnish you or your designees with such information as you or
they may reasonably request (including, without limitation, periodic
certifications confirming the provision to Clients of the services described
herein), and will otherwise cooperate with you and your designees (including,
without limitation, any auditors designated by you), in connection with the
preparation of reports to the Funds' Board of Directors concerning this
Agreement and the monies paid or payable by you pursuant hereto, as well as any
other reports or filings that may be required by law.
Section 7. You may enter into other similar Agreements with any other person
or persons without our consent.
Section 8. We hereby represent, warrant and agree that the compensation
payable to us hereunder, together with any other compensation payable to us by
our Clients in connection with the investment of their assets in Shares of the
Funds, will be disclosed by us to our Clients, will be authorized by our
Clients and will not result in an excessive or unreasonable fee to us. We
hereby further represent, warrant and agree that in no event will any of the
services provided by us hereunder be primarily intended to result in the sale
of Shares.
Section 9. This Agreement will become effective on the date a fully executed
copy of this Agreement is received by you or your designee. Unless sooner
terminated, this Agreement will continue until October 31, 1993, and thereafter
will continue automatically for successive annual periods provided such
continuance is specifically approved at least annually by the Funds in the
manner described in Section 12. This Agreement is terminable with respect to
any class of Shares, without penalty, at any time by the Funds (which
termination may be by a vote of a majority of the Disinterested Directors as
defined in Section 12 or by vote of the holders of a majority of the
outstanding Shares of such class) or by us or you upon notice to the other
party hereto. This Agreement will also terminate automatically in the event of
its assignment (as defined in the Act).
Section 10. All notices and other communications to either you or us will be
duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunications device to the appropriate address stated herein, or to such
other address as either party shall so provide the other.
-3-
<PAGE> 4
Section 11. This Agreement will be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of conflict
of laws.
Section 12. This Agreement has been approved by vote of a majority of (a)
the Funds' Board of Directors and (b) those Directors of the Funds who are not
"interested persons" (as defined in the Act) of the Funds and have no direct or
indirect financial interest in the operation of the Shareholder Service Plan
adopted by the Funds regarding the provision of support services in connection
with the Shares or in any agreement related thereto cast in person at a meeting
called for the purpose of voting on such approval ("Disinterested Directors").
Very truly yours,
_________________________________
Service Organization Name
(Please Print or Type)
_________________________________
Address
_________________________________
City State Zip Code
Date:__________________ By:______________________________
Authorized Signature
NOTE: Please return both signed copies of this Agreement to Concord Financial
Group, Inc. Upon acceptance one countersigned copy will be returned for your
files.
Accepted:
CONCORD FINANCIAL GROUP, INC.
Date:___________________ By:__________________________
-4-
<PAGE> 5
PACIFIC HORIZON FUNDS, INC.
AUTHORIZATION
The following person or persons represent(s) and warrant(s) that he (they) are
fully authorized to purchase or redeem shares on behalf of the beneficial
owners.
_____________________________ ____________________________
Name Signature
_____________________________ ____________________________
Title Date
_____________________________ ____________________________
Name Signature
_____________________________ ____________________________
Title Date
_____________________________ ____________________________
Name Signature
_____________________________ ____________________________
Title Date
_____________________________ ____________________________
Name Signature
_____________________________ ____________________________
Title Date
-5-
<PAGE> 1
EXHIBIT 15(D)
SHAREHOLDER SERVICE AGREEMENT
With Respect to Horizon Service Shares of
PACIFIC HORIZON FUNDS, INC.
125 W. 55th Street, 11th Floor
New York, New York 10019
Ladies and Gentlemen:
We wish to enter into this Shareholder Service Agreement with you concerning
the provision of support services to your clients ("Clients") who may from time
to time beneficially own Horizon Service Shares of our Prime, Treasury,
Treasury Only, Government, Horizon Tax-Exempt Money, or California Tax-Exempt
Money Market or Prime Value Funds (the "Funds"). The terms and conditions of
this Agreement are as follows:*
1. You agree to provide the following support services to Clients who
may from time to time beneficially own Horizon Service Shares: (i)
aggregating and processing purchase and redemption requests for Horizon
Service Shares from Clients and placing net purchase and redemption orders
with our distributor; (ii) providing Clients with a service that invests
the assets of their accounts in Horizon Service Shares pursuant to specific
or pre-authorized instructions; (iii) processing dividend payments from us
on behalf of Clients; (iv) providing information periodically to Clients
showing their positions in Horizon Service Shares; (v) arranging for bank
wires; (vi) responding to Client inquiries relating to the services
performed by you; (vii) providing subaccounting with respect to Horizon
Service Shares beneficially owned by Clients or the information to us
necessary for subaccounting; (viii) if required by law, forwarding
shareholder communications from us (such as proxies, shareholder reports,
annual and semiannual financial statements and dividend, distribution and
tax notices) to Clients; (ix) forwarding to Clients proxy statements and
proxies containing any proposals regarding this Agreement or the
Shareholder Services Plan related hereto; and (x) providing such other
similar services as we may reasonably request to the extent you are
permitted to do so under applicable statutes, rules or regulations.
2. We recognize that you may be subject to the provisions of the
Glass-Steagall Act and other laws
____________________
* Services may be modified or omitted in the particular case and items
renumbered.
<PAGE> 2
governing, among other things, the conduct of activities by Federally
chartered and supervised banks and other banking organizations. As such,
you are restricted in the activities you may undertake and for which you
may be paid and, therefore, you will perform only those activities which
are consistent with your statutory and regulatory obligations. You will
act solely as agent for, upon the order of, and for the account of, your
Clients.
3. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by
you) as may be reasonably necessary or beneficial in order to provide such
services to Clients.
4. Neither you nor any of your officers, employees or agents are
authorized to make any representations concerning us or Horizon Service
Shares except those contained in our then current prospectuses for such
shares, copies of which will be supplied by us to you, or in such
supplemental literature or advertising as may be authorized by us in
writing.
5. For all purposes of this Agreement you will be deemed to be an
independent contractor, and will have no authority to act as agent for us
in any matter or in any respect. By your written acceptance of this
Agreement, you agree to and do release, indemnify and hold us harmless from
and against any and all direct or indirect liabilities or losses resulting
from requests, directions, actions or inactions of or by you or your
officers, employees or agents regarding your responsibilities hereunder or
the purchase, redemption, transfer or registration of Horizon Service
Shares by or on behalf of Clients. You and your employees will, upon
request, be available during normal business hours to consult with us or
our designees concerning the performance of your responsibilities under
this Agreement.
6. In consideration of the services and facilities provided by you
hereunder, we will pay to you, and you will accept as full payment
therefor, a fee at the annual rate of .25 of 1% of the average daily net
asset value of the Horizon Service Shares beneficially owned by your
Clients for whom you are the dealer of record or holder of record or with
whom you have a servicing relationship (the "Clients Shares"), which fee
will be computed daily and payable monthly. By your written acceptance of
this Agreement, you agree to and do waive such portion of the fee payable
under this Section 6 as is necessary to assure that the amount of such fee
which is required to be accrued on any day with respect to your Clients
does not exceed the income to be
-2-
<PAGE> 3
accrued to your Clients Shares on that day. For purposes of determining
the fees payable under this Section 6, the average daily net asset value of
the Clients Shares will be computed in the manner specified in our
registration statement (as the same is in effect from time to time) in
connection with the computation of the net asset value of Horizon Service
Shares for purposes of purchases and redemptions. The fee rate stated
above may be prospectively increased or decreased by us, in our sole
discretion, at any time upon notice to you. Further we may, in our
discretion and without notice, suspend or withdraw the sale of Service
Shares, including the sale of such shares to you for the account of any
Client or Clients.
7. Any person authorized to direct the disposition of monies paid or
payable by us pursuant to this Agreement will provide to our Board of
Directors, and our Directors will review, at least quarterly, a written
report of the amounts so expended and the purposes for which such
expenditures were made. In addition, you will furnish us or our designees
with such information as we or they may reasonably request (including,
without limitation, periodic certifications confirming the provision to
Clients of the services described herein), and will otherwise cooperate
with us and our designees (including, without limitation, any auditors
designated by us), in connection with the preparation of reports to our
Board of Directors concerning this Agreement and the monies paid or payable
by us pursuant hereto, as well as any other reports or filings that may be
required by law. You will be responsible for promptly reporting to us and
our Board of Directors any potential or existing conflicts with respect to
the investments of your customers in the Funds.
8. We may enter into other similar Shareholder Service Agreements with
any other person or persons without your consent.
9. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) in no event will any of the services provided
by you hereunder be primarily intended to result in the sale of any shares
issued by us: (ii) the compensation payable to you hereunder, together
with any other compensation payable to you by Clients in connection with
the investment of their assets in the Funds, will be disclosed by you to
your Clients, will be authorized by your Clients and will not result in an
excessive or unreasonable fee to you; (iii) you will not advertise or
otherwise promote your Client accounts primarily as a means of investing in
Horizon Service Shares or establish or maintain Client accounts for the
primary purpose of investing in Horizon Service Shares; (iv) in the event
an
-3-
<PAGE> 4
issue pertaining to this Agreement or our Shareholder Services Plan related
hereto is submitted for shareholder approval, you will vote any Horizon
Service Shares held for your own account in the same proportion as the vote
of the Horizon Service Shares held for your Clients' benefit: and (v) you
will not engage in activities pursuant to this Agreement which constitute
acting as a broker or dealer under state law unless you have obtained the
licenses required by such law.
10. This Agreement will become effective on the date a fully executed
copy of this Agreement is received by us or our designee. Unless sooner
terminated, this Agreement will continue until October 31, 1990, and
thereafter will continue automatically for successive annual periods ending
on October 31 provided such continuance is specifically approved at least
annually by us in the manner described in Section 13. This Agreement is
terminable with respect to the Horizon Service Shares of any Fund without
penalty, at any time by us (which termination may be by vote of a majority
of our Disinterested Directors as defined in Section 13) or by you upon
notice to the other party hereto.
11. All notices and other communications to either you or us will be
duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunications device to the appropriate address shown above, or to
such other address as either party shall so provide the other.
12. This Agreement shall be construed in accordance with the laws of
the internal laws of New York without giving effect to principles of
conflict of laws, and is non-assignable by the parties hereto.
13. This Agreement has been approved by vote of a majority of (i) our
Board of Directors and (ii) those Directors who are not "interested
persons" (as defined in the Investment Company Act of 1940) of us and have
no direct or indirect financial interest in the operation of the
Shareholder Services Plan adopted by us regarding the provision of support
services to the beneficial owners of Horizon Service Shares or in any
agreements related thereto ("Disinterested Directors"), cast in person at a
meeting called for the purpose of voting on such approval.
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us at the address first stated above.
(SIGNATURE LINES OMITTED)
-4-
<PAGE> 1
EXHIBIT 15(e)
SHAREHOLDER SERVICING AGREEMENT
With Respect to Shares
of the
PACIFIC HORIZON FUNDS, INC.
Concord Financial Group, Inc.
125 W. 55th Street, 11th Floor
New York, New York 10019
Ladies and Gentlemen:
<TABLE>
<CAPTION>
<S> <C>
We wish to enter into this Shareholder Servicing employees will, upon request, be available during
Agreement ("Agreement") with you concerning the normal business hours to consult with you or your
provision of support services to our clients designees concerning the performance of our
("Clients") who may from time to time beneficially responsibilities under this Agreement. We will
own Shares of the current and future non Money not engage in activities pursuant to this
Market Funds (collectively the "Funds") of the Agreement which constitute acting as a broker or
Pacific Horizon Funds, Inc. (the "Company") that dealer under state law unless we have obtained the
are covered by the Company's Shareholder Servicing licenses required by such law.
Plan as amended from time to time of which you are
the principal underwriter as defined in the 5. In consideration of the services and
Investment Company Act of 1940 (the "Act") and the facilities provided by us hereunder, you will pay
exclusive agent for the continuous distribution of to us, and we will accept as full payment thereof,
said Shares. Shares of the Funds above are a fee at the annual rate of .25 of 1% of the
hereinafter referred to collectively as "Shares". average daily net asset value of the Shares
beneficially owned by our Clients for whom we are
The terms and conditions of this Agreement are as the dealer of record or holder of record or with
follows: whom we have a servicing relationship (the
"Clients' Shares"). Said fee will be computed
1. We agree to provide the following support daily and payable monthly. For purposes of
services to Clients who may from time to time determining the fee payable under Paragraph 5, the
acquire and beneficially own Shares1: (i) average daily net asset value of the Clients'
establishing and maintaining accounts and records Shares will be computed in the manner specified in
relating to clients that invest in Shares; (ii) the Funds' Registration Statement (as the same is
processing dividend and distribution payments from in effect from time to time) in connection with
the Funds on behalf of Clients; (iii) providing the computation of the net asset value of the
information periodically to Clients regarding particular Shares involved for purposes of
their positions in Shares; (iv) arranging for bank purchases and redemptions. The fee rate stated
wires; (v) responding to Client inquiries above may be prospectively increased or decreased
concerning their investments in Shares; (vi) by you, in your sole discretion, at any time upon
providing the information to the Funds necessary notice to us. Further, you may, in your
for accounting or subaccounting; (vii) if required discretion and without notice, suspend or withdraw
by law, forwarding shareholder communications from the sale of Shares, including the sale of Shares
the Funds (such as proxies, shareholder reports, for the account of any Client or Clients.
annual and semi-annual financial statements and
dividend, distribution and tax notices) to 6. We acknowledge that you will provide to the
Clients; (viii) assisting in processing exchange Funds' Board of Directors, and the Board of
and redemption requests from Clients; (ix) Directors will review, at least quarterly, a
assisting Clients in changing dividend options, written report of the amounts expended pursuant to
accounts designations and addresses and (x) this Agreement and the purposes for which such
providing such other similar services as you may expenditures were made. In connection with such
reasonably request to the extent we are permitted reviews, we will furnish you or your designs with
to do so under applicable statutes, rules and such information as you or they may reasonably
regulations. request (including, without limitation, periodic
certifications confirming the provision to Clients
2. We will provide such office space and of the services describe herein), and will
equipment, telephone facilities and personnel otherwise cooperate with you and your designee
(which may be any part of the space, equipment and (including, without limitation, any auditors
facilities currently used in our business, or any designated by you), in connection with the
personnel employed by us) as may be reasonably preparation of reports to the Funds' Board of
necessary or beneficial in order to provide the Directors concerning this Agreement and the monies
aforementioned services and assistance to Clients. paid or payable by you pursuant hereto, as well as
any other reports or filings that may be required
3. Neither we nor any of our officers, employees by law.
or agents are authorized to make any
representations concerning you or the Shares 7. You may enter into other similar Agreements
except those contained in the Funds' applicable with any other person or persons without our
prospectuses and statements of additional consent.
information for the Shares, copies of which will
be supplied by you to us, or in such supplemental 8. We hereby represent, warrant and agree that
literature or advertising as may be authorized by the compensation payable to us hereunder, together
you in writing. with any other compensation payable to us by our
Clients in connection with the investment of their
4. For all purposes of this Agreement we will be assets in Shares of the Funds, will be disclosed
deemed to be an independent contractor, and will by us to our Clients, will authorized by our
have no authority to act as agent for you or the Clients and will not result in an excessive or
Funds in any matter or in any respect. We and our unreasonable fee to us, We hereby further
represent, warrant and agree that in no event will
<FN>
______________________
1 Services may be modified or omitted in the particular case and items
relettered or renumbered. PHTRANS:70058_1.WP5
</TABLE>
<PAGE> 2
any of the services provided by us hereunder
primarily intended to result in the sale of
Shares.
9. This Agreement will become effective on the
date a fully executed copy of this Agreement is
received by you or your designee. Unless soon
terminated, this Agreement will continue until
October 31, 1993, an thereafter will continue
automatically for successive annual period
provided such continuance is specifically approved
at least annually the Funds in the manner
described in Paragraph 12. This Agreement is
terminable with respect to any class of Shares,
without penalty, at a time by the Funds (which
termination may be by a vote of a majority of the
Disinterested Directors as deemed in Paragraph 12
or by vote of the holders of a majority of the
outstanding Shares of such class) or by us you
upon notice to the other party hereto. This
Agreement will at terminate automatically in the
event of its assignment (as deemed in the Act).
10. All notices and other communications to
either you or us will be duly given if mailed,
telegraphed, telexed or transmitted by similar
telecommunications device to the appropriate
address stated herein, or such other address as
either party shall so provide the other.
11. This Agreement will be construed in
accordance with the internal laws of the State of
New York, without giving effect to principles of
conflict of laws.
12. This Agreement has been approved by vote of
a majority of (a) the Funds' Board of Directors
and (b) those Directors of the Funds who are not
"interest persons" (as defined in the Act) of the
Funds and have no direct or indirect financial
interest in the operation of the Shareholder
Service Plan adopted by the Funds regarding the
provision of support services in connection with
the Shares or in any agreement related thereto
cast in person at a meeting called for the purpose
of voting on such approval ("Disinterested
Directors").
-2-
<PAGE> 3
Very truly yours,
_________________________________________________________________
Service Organization Name (Please Print or Type)
_________________________________________________________________
Address
_________________________________________________________________
City State Zip Code
Dated:___________________________________________________________
By:______________________________________________________________
Authorized Signature
NOTE:
Please return both signed copies of this Agreement to Concord Financial Group,
Inc. Upon acceptance one countersigned copy will be returned for your files.
Accepted
Concord Financial Group, Inc.
Dated:___________________________________________________________
By:______________________________________________________________
Authorized Signature
-3-
<PAGE> 4
PACIFIC HORIZON FUNDS INC.
AUTHORIZATION
The following person or persons represent(s) and warrant(s) that he (they) are
fully authorized to purchase or redeem shares on behalf of the beneficial
owners.
______________________________ ______________________________
Name Signature
______________________________ ______________________________
Title Date
______________________________ ______________________________
Name Signature
______________________________ ______________________________
Title Date
______________________________ ______________________________
Name Signature
______________________________ ______________________________
Title Date
______________________________ ______________________________
Name Signature
______________________________ ______________________________
Title Date
<PAGE> 1
EXHIBIT 15(f)
Adopted January 30, 1996
PACIFIC HORIZON FUNDS, INC.
DISTRIBUTION AND SERVICES PLAN
This Distribution and Services Plan (the "Plan") has been
adopted by the Board of Directors of Pacific Horizon Funds, Inc. (the
"Company") in connection with the Class A - Special Series 3 Shares of the
Treasury Fund, Class B-Special Series 3 Shares of the Prime Fund (collectively
with the Class A-Special Series 3 Shares of the Treasury Fund, the "S Shares")
and Class B- Special Series 4 Shares of the Prime Fund (the "X Shares")(all
such shares collectively called "Shares" and such funds the "Funds"), in
conformance with Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "1940 Act").
Section 1. Expenses. The Company may incur expenses under
the Plan in an amount not to exceed: 1.00% annually of the average daily net
assets of a Fund's outstanding S Shares; and .55% annually of the average daily
net assets of a Fund's outstanding X Shares.
Section 2. Distribution Payments. The Company may pay the
distributor of the Company (the "Distributor") (or any other person) a fee (a
"Distribution Fee"): of up to .75 % annually of the average daily net assets of
a Fund's outstanding S Shares; and of up to .30% annually of the average daily
net assets of a Fund's outstanding X Shares. Such Distribution Fee shall be
calculated and accrued daily, paid monthly and shall be in consideration for
distribution services and the assumption of related expenses (including the
payment of commissions and transaction fees) in conjunction with the offering
and sale of Shares of the Funds. In determining the amounts payable on behalf
of a Fund under the Plan, the net asset value of such Shares shall be computed
in the manner specified in the Company's then current Prospectuses and
Statement of Additional Information describing such Shares.
Section 3. Distribution Expenses and Activities Covered by
Plan. Payments to the Distributor under Section 2 shall be used by the
Distributor to cover expenses and activities primarily intended to result in
the sale of Shares, including the payment of commissions and transaction fees.
Such expenses and activities may include but are not limited to: (a) direct
out-of- pocket promotional expenses incurred by the Distributor in advertising
and marketing Shares; (b) expenses incurred in connection with preparing,
printing, mailing, and distributing or
<PAGE> 2
publishing advertisements and sales literature; (c) expenses incurred in
connection with printing and mailing Prospectuses and Statements of Additional
Information to other than current shareholders; (d) periodic payments or
commissions to one or more securities dealers, brokers, financial institutions
or other industry professionals, such as investment advisors, accountants, and
estate planning firms, including any of the Company's service providers
(severally, "a Distribution Organization") with respect to a Fund's Shares
beneficially owned by customers for whom the Distribution Organization is the
Distribution Organization of record or holder of record of such Shares; (e) the
direct or indirect cost of financing the payments or expenses included in (a)
and (d) above; or (f) for such other services as may be construed by any court
or governmental agency or commission, including the Securities and Exchange
Commission (the "Commission"), to constitute distribution services under the
1940 Act or rules and regulations thereunder. Such distribution services shall
be provided pursuant to a distribution and administrative servicing agreement
("Distribution and Administrative Servicing Agreement"). Any organization
providing distribution assistance may also become a service organization (as
defined in Section 4) and receive administrative servicing fees pursuant to a
Distribution and Administrative Servicing Agreement under this Plan.
Section 4. Administrative Services Covered by Plan. The
Company may also pay securities dealers, brokers, financial institutions or
other industry professionals, such as investment advisors, accountants, and
estate planning firms, including any of the Company's service providers
(severally, a "Service Organization") for administrative support services
provided with respect to its customers' Shares. Such administrative support
services shall be provided pursuant to a Distribution and Administrative
Servicing Agreement.
Section 5. Administrative Servicing Fees Covered by Plan.
Fees paid to a Service Organization shall be in consideration for the
administrative support services provided pursuant to its Administrative
Servicing Agreement and may be paid at an annual rate of up to .25% of the
average daily net assets of a Fund's outstanding Shares owned of record or
beneficially by that Service Organization's customers for whom such Service
Organization is the dealer of record or holder of record or with whom it has a
servicing relationship. Such fees shall be calculated and accrued daily, paid
monthly, and computed in the manner set forth in the Distribution and
Administrative Servicing Agreement.
Section 6. Expenses Allocated, Compliance. Amounts paid by a
Fund must be for distribution and/or shareholder administrative support
services rendered for or on behalf of the holders of the Fund's Shares.
However, joint distribution
-2-
<PAGE> 3
financing with respect to such Shares (which may involve other investment funds
or companies that are affiliated persons of the Company or affiliated persons
of the Distributor) shall be permitted in accordance with applicable
regulations of the Commission as in effect from time to time.
Section 7. Reports to Company. So long as this Plan is in
effect, the Distributor shall provide the Company's Board of Directors, and the
Directors shall review, at least quarterly, a written report of the amounts
expended pursuant to the Plan and the purposes for which such expenditures were
made.
Section 8. Approval of Plan. This Plan will become effective
with respect to a particular Fund's Shares (a) on the date the public offering
of such shares commences after the approval by written consent of the sole
shareholder of outstanding Shares of that Fund, and (b) upon the approval by a
majority of the Board of Directors, including a majority of those directors who
are not "interested persons" (as defined in the 1940 Act) of the Company and
who have no direct or indirect financial interest in the operation of the Plan
or in any agreements entered into in connection with the Plan (the
"Disinterested Directors"), pursuant to a vote cast in person at a meeting
called for the purpose of voting on the approval of the Plan.
Section 9. Continuance of Plan. Unless sooner terminated in
accordance with the terms hereof, this Plan shall continue until October 31,
1996, and thereafter, shall continue in effect for so long as its continuance
is specifically approved at least annually by the Company's Board of Directors
in the manner described in Section 8(b) hereof.
Section 10. Amendments. This Plan may be amended at any time
by the Board of Directors provided that (a) any amendment to increase
materially the costs which the Shares of a Fund may bear for distribution
pursuant to the Plan shall be effective only upon approval by a vote of a
majority of the outstanding Shares affected by such matter, and (b) any
material amendments of the terms of the Plan shall become effective only upon
approval in the manner described in Section 8(b) hereof.
Section 11. Termination. This Plan, as to any Fund or any
Class of any Fund, is terminable without penalty at any time by (a) a vote of a
majority of the Disinterested Directors, or (b) a vote of a majority of such
outstanding Shares of such Class.
Section 12. Selection/Nomination of Directors. While this
Plan is in effect, the selection and nomination of those Disinterested
Directors shall be committed to the discretion of such Disinterested Directors.
-3-
<PAGE> 4
Section 13. Miscellaneous. The captions in this Agreement
are included for convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their construction or effect.
-4-
<PAGE> 5
Approved January 30, 1996
PACIFIC HORIZON FUNDS, INC.
(the "Company")
DISTRIBUTION AND ADMINISTRATIVE SERVICING AGREEMENT
to
DISTRIBUTION AND SERVICES PLAN
Ladies and Gentlemen:
We wish to enter into this Distribution and Administrative Servicing Agreement
("Agreement") with you concerning the provision of distribution and
administrative support services to your customers ("Clients") who may from time
to time be the record or beneficial owners of "S" and/or "X" shares (such
shares referred to herein as the "Shares") of one or more of the Company's
investment portfolios (individually, a "Fund" and collectively, the "Funds"),
which are listed on Appendix A.
The terms and conditions of this Agreement are as follows:
Section 1. You agree to provide reasonable assistance in connection with the
distribution of Shares to Clients as reasonably requested from time to time by
us and the following administrative support services to your Clients who may
from time to time own of record or beneficially a Fund's Shares: (i) processing
dividend and distribution payments from a Fund on behalf of Clients; (ii)
providing information periodically to your Clients showing their positions in
the Shares; (iii) arranging for bank wires; (iv) responding to routine Client
inquiries concerning their investment in Shares; (v) providing the information
to the Funds necessary for accounting or subaccounting; (vi) if required by law,
forwarding shareholder communications from a Fund (such as proxies, shareholder
reports, annual and semi-annual financial statements and dividend, distribution
and tax notices) to Clients; (vii) aggregating and processing purchase,
exchange, and redemption requests from Clients and placing net purchase,
exchange, and redemption orders for your customers; (viii) providing customers
with a service that invests the assets of their accounts in the Shares pursuant
to specific or pre-authorized instructions; (ix) establishing and maintaining
accounts and records relating to Clients that invest in Shares; (x) assisting
customers in changing dividend options, account designations and addresses; and
(xi) other similar services we may reasonably request to the extent you are
permitted to so under applicable law.
<PAGE> 6
Section 2. You will provide such office space and equipment, telephone and
personnel (which may be any part of the space, equipment and facilities
currently used in your business, or any personnel employed by you) as may be
reasonably necessary or beneficial in order to provide the aforementioned
services to Clients.
Section 3. Neither you nor any of your officers, employees or agents are
authorized to make any representations concerning us, a Fund, or its Shares
except those contained in our then current prospectus for such Shares, copies
of which will be supplied by us to you, or in such supplemental literature or
advertising as may be authorized by us in writing.
Section 4. For all purposes of this Agreement you will be deemed to be an
independent contractor, and will have no authority to act as agent for us in
any matter or in any respect. You will not engage in activities pursuant to
this Agreement which constitute acting as a broker or dealer under state law
unless you have obtained the licenses required by law. You and your employees
will, upon request, be available during normal business hours to consult with
us or our designees concerning the performance of your responsibilities under
this Agreement.
Section 5. In consideration of the services and facilities provided by you
hereunder, we will pay to you, and you will accept as full payment therefore, a
fee at the annual rate of up to 1.00% and .55% of the average daily net assets
of the particular Fund's outstanding S and X Shares, respectively, owned of
record or beneficially by your Clients from time to time for whom you are the
dealer of record or holder of record or with whom you have a servicing
relationship ("Clients' Shares"). Said fee will be computed daily and payable
monthly. For purposes of determining the fees payable under this Section 5, the
average daily net asset value of the Clients' Shares will be computed in the
manner specified in our then current Registration Statement in connection with
the computation of the net asset value of the particular Fund's Shares for
purposes of purchases and redemptions. The fee rate stated above may be
prospectively increased or decreased by us, in our sole discretion, at any time
upon notice to you. Further, we may, in our discretion and without notice,
suspend or withdraw the sale of Shares, including the sale of such Shares to
you for the account of any Client(s).
Section 6. You acknowledge that you will provide to the Funds' Board of
Directors, at least quarterly, a written report of the amounts expended
pursuant to this Agreement and the purposes for which such expenditures were
made. In connection with such revenues, you will furnish us or our designees
with such information as we or they may reasonably request (including, without
limitation, periodic certifications confirming the provision to Clients of some
or all of the services described.
<PAGE> 7
herein), and will otherwise cooperate with us and our designees (including,
without limitation, any auditors designated by us), in connection with the
preparation of reports to the Funds' Board of Directors concerning this
Agreement and the monies paid or payable by us pursuant hereto, as well as any
other reports or filings that may be required by law.
Section 7. We may enter into other similar Servicing Agreements with any other
person or persons without your consent.
Section 8. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) the compensation payable to you hereunder and the
receipt of such compensation by you hereunder, together with any other
compensation you receive from Clients in connection with the investment of
their assets in Shares of the Funds, is permissible under applicable law, will
be disclosed to your Clients, will be authorized by your Clients and will not
be excessive or unreasonable.
Section 9. This Agreement will become effective on the date a fully executed
copy of this Agreement is received by us or our designee. Unless sooner
terminated, this Agreement will continue until October 31, 1996, and thereafter
will continue automatically for successive annual periods provided such
continuance is specifically approved at least annually by the Funds in the
manner described in Section 12 hereof. This Agreement is terminable with
respect to any Class of Shares, without penalty, at any time by the Funds
(which termination may be by vote of a majority of our Disinterested Directors
as defined in Section 12 hereof or by vote of the holders of a majority of the
outstanding Shares of such Class) or by you upon notice to the other party
hereto. This Agreement will terminate in the event of its assignment (as
defined in the Investment Company Act of 1940 (the "Act")).
Section 10. All notices and other communications to either you or us will be
duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunications device to the appropriate address shown above.
Section 11. This Agreement will be construed in accordance with the laws of
the State of New York without giving effect to principles of conflict of laws.
Section 12. This Agreement has been approved by vote of a majority of (i) a
Company's Board of Directors and (ii) those Directors who are not "interested
persons" (as defined in the Act) of the Company and have no direct or indirect
financial interest in the operation of the Distribution and Services Plan
adopted by us regarding the provision of administrative support services to the
record or beneficial owners of Shares or in any agreements related thereto
("Disinterested Directors"), cast in
-3-
<PAGE> 8
person at a meeting called for the purpose of voting on such approval.
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us, Concord Financial Group, Inc., 125 W. 55th Street, New York,
New York 10019.
Very truly yours,
CONCORD FINANCIAL GROUP, INC.
By:_________________________________________________
Authorized Officer
Accepted and Agreed to:
____________________________________________________
Name of Organization
By:_________________________________________________
Authorized Officer
Date:__________________________________
____________________________________________________
Taxpayer Identification Number
____________________________________________________
Account Number
____________________________________________________
Dealer Code
-4-
<PAGE> 9
APPENDIX A
Please check the appropriate boxes to indicate the Funds of the Company
for which you wish to act as a service organization with respect to the Shares:
/ / Treasury Fund- S Shares (Class A -- Special Series 3)
/ / Prime Fund- S Shares (Class B -- Special Series 3)
/ / Prime Fund- X Shares (Class B -- Special Series 4)
________________________________________________
(Service Organization Name)
By:_____________________________________________
_____________________________________________
Authorized Officer
Dated:__________________________________________
A-1
<PAGE> 1
EXHIBIT 15(g)
PACIFIC HORIZON FUNDS, INC.
ADMINISTRATIVE SERVICES PLAN
SECTION 1.
Upon the recommendation of Concord Holding Corporation ("Concord"),
the administrator of Pacific Horizon Funds, Inc. (the "Company"), any officer
of the Company is authorized to execute and deliver, in the name and on behalf
of the Company, written agreements based on the form attached hereto as
Appendix A or any other form duly approved by the Board of Directors
("Agreements") with securities dealers, financial institutions and other
industry professionals that are shareholders or dealers of record or which have
a servicing relationship ("Shareholder Organizations") with the beneficial
owners of the various classes of shares (each a "Class") of the portfolios of
the Company (each a "Money Market Fund") listed in Exhibit 1 hereto, as amended
from time to time. Pursuant to such Agreements, Shareholder Organizations
shall provide support services as set forth therein to their clients who
beneficially own shares of the particular Class of the particular Money Market
Fund in consideration of a fee, computed monthly in the manner set forth in the
Agreements, at the particular annual rate set forth in Exhibit 1, such rate
being a percentage of the average daily net asset value of the shares of the
particular Class of the particular Money Market Fund beneficially owned by such
clients. Concord, Bank of America National Trust and Savings Association and
their affiliates are eligible to become Shareholder Organizations and to
receive fees under this Plan. All expenses incurred by a particular Money
Market Fund in connection with the Agreements and the implementation of this
Plan shall be borne entirely by the holders of the particular Class of the
particular Money Market Fund involved.
SECTION 2.
Concord shall monitor the arrangements pertaining to the Company's
Agreements with Shareholder Organizations. Concord shall not, however, be
obliged by this Plan to recommend, and the Company shall not be obliged to
execute, any Agreement with any qualifying Shareholder Organization.
SECTION 3.
So long as this Plan is in effect, Concord shall provide to the
Company's Board of Directors, and the Directors shall review at least
quarterly, a written report of the amounts expended
<PAGE> 2
pursuant to this Plan and the purposes for which such expenditures were made.
SECTION 4.
Unless sooner terminated, this Plan shall continue until October 31,
1996 and thereafter shall continue automatically for successive annual periods
provided such continuance is approved at least annually by a majority of the
Board of Directors, including a majority of the Directors who are not
"interested persons," as defined in the Investment Company Act of 1940, of the
Company and have no direct or indirect financial interest in the operation of
this Plan or in any Agreement related to this Plan (the "Disinterested
Directors").
SECTION 5.
This Plan may be amended at any time with respect to any Money Market
Fund or any class of such Money Market Fund by the Board of Directors, provided
that any material amendment of the terms of this Plan shall become effective
only upon the approvals set forth in Section 4.
SECTION 6.
This Plan is terminable at any time with respect to any Money Market
Fund or any class of such Money Market Fund by vote of a majority of the
Disinterested Directors.
SECTION 7.
While this Plan is in effect, the selection and nomination of those
Directors who are no "interested persons" (as defined in the Investment Company
Act of 1940) of the Company shall be committed to the discretion of such
non-interested Directors.
SECTION 8.
This Plan shall be effective as of January 30, 1996.
-2-
<PAGE> 3
EXHIBIT 1
<TABLE>
<CAPTION>
Administrative
Servicing Fee
(expressed as a
percentage of
average daily assets
of shares
beneficially owned
by clients of
Class of particular
Name of Money Market Fund Shares Shareholder Organization)
- ------------------------- -------- -------------------------
<S> <C> <C>
Prime Fund Pacific Horizon .32%
Treasury Fund Pacific Horizon .32%
Treasury Only Fund Pacific Horizon .32%
Government Fund Pacific Horizon .32%
Tax-Exempt Fund Pacific Horizon .32%
California Tax-Exempt Fund Pacific Horizon .35%
</TABLE>
-3-
<PAGE> 4
APPENDIX A
FORM OF
ADMINISTRATIVE SERVICE AGREEMENT
PACIFIC HORIZON FUNDS, INC.
(the "Company")
125 W. 55th Street, 11th Floor
New York, New York 10019
Ladies and Gentlemen:
We wish to enter into this Administrative Service Agreement with you
concerning the provision of support services to your clients ("Clients") who
may from time to time beneficially own shares of any of the various classes
(each a "Class") of the various portfolios of the Company (each a "Money Market
Fund") listed on Exhibit 1 hereto, as amended from time to time. The terms and
conditions of this Agreement are as follows:*
1. You agree to provide the following support services to Clients
who may from time to time beneficially own shares of a particular Class of a
particular Fund: (i) aggregating and processing purchase and redemption
requests for shares from Clients and placing net purchase and redemption orders
with our distributor; (ii) providing Clients with a service that invests the
assets of their accounts in such shares pursuant to specific or pre-authorized
instructions; (iii) processing dividend payments from us on behalf of Clients;
(iv) providing statements periodically to Clients showing their positions in
such shares; (v) providing subaccounting with respect to Shares beneficially
owned by Clients or the information to us necessary for subaccounting; (vi) if
required by law, forwarding shareholder communications from us (such as
proxies, shareholder reports, annual and semi-annual financial statements and
dividend, distribution and tax notices) to Clients; (vii) forwarding to Clients
proxy statements and proxies containing any proposals regarding this Agreement
or the Shareholder Services Plan related hereto; (viii) developing and
monitoring investor programs offered from time to time; (ix) providing
dedicated walk-in and telephone facilities to handle Client inquires and serve
Client needs; (x) providing and maintaining specialized systems for the
automatic investments of Clients; (xi) maintaining the registration or
qualification of a Class for sale under state securities laws; (xii) paying for
the operation of arrangements that facilitate same-day purchases by Clients;
(xiii) assuming the expense of payments made to third parties for services
provided in connection with the investments of their customers in
- -------------------------
* Services may be modified or omitted in the particular case and items
renumbered.
-4-
<PAGE> 5
a Class; and (xiv) providing various other services (such as the provision of a
facility to receive purchase and redemption orders) for shareholders who have
made a minimum initial investment of less than $500,000 and (xv) providing such
other similar services as we may reasonably request to the extent you are
permitted to do so under applicable statutes, rules or regulations.
2. We recognize that you may be subject to the provisions of the
Glass-Steagall Act and other laws governing, among other things, the conduct of
activities by Federally chartered and supervised banks and other banking
organizations. As such, you are restricted in the activities you may undertake
and for which you may be paid and, therefore, you will perform only those
activities which are consistent with your statutory and regulatory obligations.
You will act solely as agent for, upon the order of, and for the account of
your Clients.
3. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by you)
as my be reasonably necessary or beneficial in order to provide such services
to Clients.
4. Neither you nor any of your officers, employees or agents are
authorized to make any representations concerning us or such shares except
those contained in our then current prospectuses for such shares, copies of
which will be supplied by us to your, or in such supplemental literature or
advertising as may be authorized by us in writing.
5. For all purposes of this Agreement you will be deemed to be an
independent contractor, and will have no authority to act as agent for us in
any matter or in any respect. By your written acceptance of this Agreement,
you agree to and do release, indemnify and hold us harmless from and against
any and all direct or indirect liabilities or losses resulting from requests,
directions, actions or inactions of or by you or your officers, employees or
agents regarding your responsibilities hereunder or the purchase, redemption,
transfer or registration of such shares by or on behalf of Clients. You and
your employees will, upon request, be available during normal business hours to
consult with us or our designees concerning the performance of your
responsibilities under this Agreement.
6. In consideration of the services and facilities provided by
you hereunder, we will pay to you, and you will accept as full payment
therefor, a fee at the particular annual rate set forth in Exhibit 1, such rate
being a percentage of the average daily net asset value of the shares of the
particular Class of the particular Money Market Fund beneficially owned by your
Clients for whom you are the dealer of record or holder of
-5-
<PAGE> 6
record or with whom you have a servicing relationship (the "Clients Shares"),
which fee will be computed daily and payable monthly. By your written
acceptance of this Agreement, you agree to and do waive such portion of the fee
payable under this Section 6 as is necessary to assure that the amount of such
fee which is required to be accrued on any day with respect to your Clients
does not exceed the income to be accrued to your Clients Shares on that day.
For purposes of determining the fees payable under this Section 6, the average
daily net asset value of the Clients Shares will be computed in the manner
specified in our registration statement (as the same is in effect from time to
time) in connection with the computation of the net asset value of the
particular Class of the particular Money Market Fund for purposes of purchases
and redemptions. The fee rate stated above may be prospectively increased or
decreased by us, in our sole discretion, at any time upon notice to you.
Further, we may, in our discretion and without notice, suspend or withdraw the
sale of any particular Money Market Fund or any particular Class of a
particular Money Market Fund, including the sale of such Money Market Fund or
such Class of such Money Market Fund to you for the account of any Client or
Clients.
7. Any person authorized to direct the disposition of monies paid
or payable by us pursuant to this Agreement will provide to our Board of
Directors, and our Directors will review, at least quarterly, a written report
of the amounts so expended and the purposes for which such expenditures were
made. In addition, you will furnish us or our designees with such information
as we or they may reasonably request (including, without limitation, periodic
certifications confirming the provision to Clients of the services described
herein), and will otherwise cooperate with us and our designees (including,
without limitation, any auditors designated by us), in connection with the
preparation of reports to our Board of Directors concerning this Agreement and
the monies paid or payable by us pursuant hereto, as well as any other reports
or filings that may be required by law. You will be responsible for promptly
reporting to us and our Board of Directors any potential or existing conflicts
with respect to the investments of your customers in any particular Money
Market Fund or any particular Class of a particular Money Market Fund.
8. We may enter into other similar Shareholder Service Agreements
with any other person or persons without your consent.
9. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) in no event will any of the services provided by
you hereunder be primarily intended to result in the sale of any shares of any
particular Class of a particular Money Market Fund issued by us; (ii) the
compensation payable to you hereunder, together with any other compensation
payable to you by Clients in connection with the investment of
-6-
<PAGE> 7
their assets in any particular Class of a particular Money Market Fund will be
disclosed by you to your Clients, will be authorized by your Clients and will
not result in an excessive or unreasonable fee to you; (iii) you will not
advertise or otherwise promote your Client accounts primarily as a means of
investing in any particular Class of a particular Money Market Fund or
establish or maintain Client accounts for the primary purpose of investing in
such Class of such Money Market Fund; (iv) in the event an issue pertaining to
this Agreement or our Shareholder Services Plan related hereto is submitted for
shareholder approval, you will vote shares of the particular Class of the
particular Money Market Fund held for your own account in the same proportion
as the vote of shares of the particular Class of the particular Money Market
Fund held for your Clients' benefit; and (v) you will not engage in activities
pursuant to this Agreement which constitute acting as a broker or dealer under
state law unless you have obtained the licenses required by such law.
10. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by us or our designee. Unless
sooner terminated, this Agreement will continue until October 31, 199_, and
thereafter will continue automatically for successive annual periods ending on
October 31, provided such continuance is specifically approved at least
annually by us in the manner described in Section 13. This Agreement is
terminable with respect to any Money Market Fund or any Class of any Money
Market Fund without penalty, at any time by us (which termination may be by
vote of a majority of our Disinterested Directors as defined in Section 13) or
by you upon notice to the other party hereto.
11. All notices and other communications to either you or us will
be duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunications device to the appropriate address shown above, or to such
other address as either party shall so provide the other.
12. This Agreement shall be construed in accordance with the laws
of the internal laws of New York without giving effect to principles of
conflict of laws, and is non-assignable by the parties hereto.
13. This Agreement has been approved by vote of a majority of (i)
our Board of Directors and (ii) those Directors who are not "interested
persons" (as defined in the Investment Company Act of 1940) of us and have no
direct or indirect financial interest in the operation of the Shareholder
Services Plan adopted by us regarding the provision of support services to the
beneficial owners of shares of any Class of any Money Market Fund or in any
agreements related thereto ("Disinterested Directors"),
-7-
<PAGE> 8
cast in person at a meeting called for the purpose of voting on such approval.
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us at the address first stated above.
[SIGNATURE LINES OMITTED]
-8-
<PAGE> 9
EXHIBIT 1
<TABLE>
<CAPTION>
Administrative
Servicing Fee
(expressed as a
percentage of
average daily assets
of shares
beneficially owned
by clients of
Class of particular
Name of Money Market Fund Shares Shareholder Organization)
- ------------------------- -------- -------------------------
<S> <C> <C>
Prime Fund Pacific Horizon .32%
Treasury Fund Pacific Horizon .32%
Treasury Only Fund Pacific Horizon .32%
Government Fund Pacific Horizon .32%
Tax-Exempt Fund Pacific Horizon .32%
California Tax-Exempt Fund Pacific Horizon .35%
</TABLE>
-9-
<PAGE> 1
EXHIBIT 16(A)
----------Dividend Rates - Horizon Shares----------
<TABLE>
<CAPTION>
California
Tax-Exempt Tax-Exempt Tax-Exempt
Date Prime Fund Treasury Fund Money Fund Money Fund Money Market Fund
---- ---------- ------------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
26-Feb-91 $0.000182 $0.000173 $0.000110
27-Feb-91 0.000181 0.000171 0.000108
26-Feb-91 0.000181 0.000172 0.000106
25-Feb-91 0.000182 0.000171 N/A 0.000107 N/A
24-Feb-91 0.000182 0.000174 0.000107
23-Feb-91 0.000182 0.000174 0.000107
22-Feb-91 0.000182 0.000174 0.000107
_________ _________ _________ _________ _________
Total Dividends for 7 Day
Period . . . . . . . . $0.001273 $0.001209 $0.000000 $0.000751 $0.000000
Divided by: Number of
Days in Period . . . . 7 7 7 7 7
Multiplied by: Number of
Days in Year . . . . . 365 365 365 365 365
Divided by: Offering
Price per Share $1.00 $1.00 $1.00 $1.00 $1.00
_________ _________ _________ _________ _________
7 Day Yield . . . . . . . 6.64% 6.31% 0.00% 3.92% 0.00%
==== ==== ==== ==== ====
7 Day Yield . . . . . . . 6.64% 6.31% 0.00% 3.92% 0.00%
Divided by: Number of 7
Day Periods in Year . . 52.142857 52.142857 52.142857 52.142857 52.142857
Plus 1 . . . . . . . . . 1 1 1 1 1
--------- --------- --------- --------- ---------
1.00127259 1.00120921 1 1.00075120 1
Raised to the Power of
the Number of 7 Day
Periods in a Year . . . 52.142857 52.142857 52.142857 52.142857 52.142857
_________ _________ _________ _________ _________
1.068563 1.065042 1.000000 1.039932 1.000000
--------- --------- --------- --------- ---------
Effective 7 Day Yield . . 6.86% 6.50% 0.00% 3.99% 0.00%
==== ==== ==== ==== ====
</TABLE>
<PAGE> 2
----------Dividend Rates - Horizon Shares----------
<TABLE>
<CAPTION>
California
Tax-Exempt Tax-Exempt Tax-Exempt
Date Prime Fund Treasury Fund Money Fund Money Fund Money Market Fund
---- ---------- ------------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
28-Feb-91 $0.000180 $0.000171 $0.000103 $0.000102
27-Feb-91 0.000179 0.000170 0.000102 0.000101
26-Feb-91 0.000179 0.000170 0.000099 0.000099
25-Feb-91 0.000180 0.000170 0.000099 N/A 0.000100
24-Feb-91 0.000180 0.000172 0.000100 0.000098
23-Feb-91 0.000180 0.000172 0.000100 0.000098
22-Feb-91 0.000180 0.000172 0.000100 0.000098
_________ _________ _________ _________ _________
Total Dividends for 7
Day Period . . . . . . $0.001259 $0.001196 $0.000703 $0.000000 $0.000696
Divided by: Number of
Days in Period . . . . 7 7 7 7 7
Multiplied by: Number of
Days in Year . . . . . 365 365 365 365 365
Divided by Offering Price
per Share . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_________ _________ _________ _________ _________
7 Day Yield . . . . . . . 6.57% 6.24% 3.67% 0.00% 3.63%
==== ==== ==== ==== ====
7 Day Yield . . . . . . . 6.57% 6.24% 3.67% 0.00% 3.63%
Divided by: Number of 7
Day Periods in Year . . 52.142857 52.142857 52.142857 52.142857 52.142857
Plus 1 . . . . . . . . . 1 1 1 1 1
--------- --------- --------- --------- ---------
1.00125916 1.00119579 1.00070308 1 1.00069641
Raised to the Power of
the Number of 7 Day
Periods in a Year . . . 52.142857 52.142857 52.142857 52.142857 52.142857
_________ _________ _________ _________ _________
1.067816 1.064297 1.037328 1.000000 1.036967
--------- --------- --------- --------- ---------
Effective 7 Day Yield . . 6.78% 6.43% 3.73% 0.00% 3.70%
==== ==== ==== ==== ====
</TABLE>
-2-
<PAGE> 3
----------Dividend Rates - Horizon Shares----------
<TABLE>
<CAPTION>
California
Tax-Exempt Tax-Exempt Tax-Exempt
Date Prime Fund Treasury Fund Money Fund Money Fund Money Market Fund
---- ---------- ------------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
28-Feb-91 $0.000188 $0.000180 $0.000117
27-Feb-91 0.000188 0.000178 0.000115
26-Feb-91 0.000188 0.000179 0.000113
25-Feb-91 0.000189 0.000178 N/A 0.000114 N/A
24-Feb-91 0.000189 0.000180 0.000114
23-Feb-91 0.000189 0.000180 0.000114
22-Feb-91 0.000189 0.000180 0.000114
_________ _________ _________ _________ _________
Total Dividends for 7
Day Period . . . . . . $0.001321 $0.001257 $0.000000 $0.000799 $0.000000
Divided by: Number of
Days in Period . . . . 7 7 7 7 7
Multiplied by: Number of
Days in Year . . . . . 365 365 365 365 365
Divided by: Offering
Price per Share . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_________ _________ _________ _________ _________
7 Day Yield . . . . . . . 6.89% 6.56% 0.00% 4.17% 0.00%
==== ==== ==== ==== ====
7 Day Yield . . . . . . . 6.89% 6.56% 0.00% 4.17% 0.00%
Divided by: Number of 7
Day Periods in Year . . 52.142857 52.142857 52.142857 52.142857 52.142857
Plus 1 . . . . . . . . . 1 1 1 1 1
--------- --------- --------- --------- ---------
1.00132053 1.00125716 1 1.00079914 1
Raised to the Power of
the Number of 7 Day
Periods in a Year . . . 52.142857 52.142857 52.142857 52.142857 52.142857
_________ _________ _________ _________ _________
1.071234 1.067704 1.000000 1.042533 1.000000
--------- --------- --------- --------- ---------
Effective 7 Day Yield . . 7.12% 6.77% 0.00% 4.25% 0.00%
==== ==== ==== ==== ====
</TABLE>
-3-
<PAGE> 4
PACIFIC HORIZON AGGRESSIVE GROWTH PORTFOLIO, INC.
Calculation of Total Returns
<TABLE>
<CAPTION>
Inception Average
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual
Date Invested Price Shares Factor Amount NAV Shares Value Return Return
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
03/31/84 $1,000.00 $6.06 165.017 0.00 $5.79 0.000 $ 955.45 -4.46%
04/30/84 165.017 0.00 7.02 0.000 1,158.42 15.84%
05/31/84 165.017 0.00 7.07 0.000 1,166.67 16.67%
06/30/84 165.017 0.00 7.12 0.000 1,174.92 17.49%
07/31/84 165.017 0.00 7.10 0.000 1,171.62 17.16%
08/31/84 165.017 0.00 8.40 0.000 1,386.14 38.61%
09/30/84 165.017 0.00 8.18 0.000 1,349.83 34.98%
10/31/84 165.017 0.00 8.16 0.000 1,346.53 34.65%
11/30/84 165.017 0.00 7.64 0.000 1,260.73 26.07%
12/31/84 165.017 0.00 7.76 0.000 1,280.53 28.05%
01/31/85 165.017 0.00 8.56 0.000 1,412.54 41.25%
02/38/85 165.017 0.00 8.97 0.000 1,480.20 48.02%
03/31/85 165.017 0.00 8.95 0.000 1,476.90 47.69% 47.69%
04/30/85 165.017 0.00 9.03 0.000 1,490.18 49.01% 44.56%
05/23/85 165.017 0.0325 5.36 9.39 0.571 1,554.87 55.49% 47.02%
05/31/85 165.588 0.00 9.44 0.000 1,563.15 56.31% 46.63%
06/30/85 165.588 0.00 9.73 0.000 1,611.17 61.12% 46.49%
07/31/85 165.588 0.00 9.76 0.000 1,616.14 61.61% 43.30%
08/31/85 165.588 0.00 9.60 0.000 1,589.64 58.96% 38.63%
09/30/85 165.588 0.00 8.97 0.000 1,485.32 48.53% 30.15%
<CAPTION>
5-year 3-year 12
Offering Avg. Avg. month
Price 5-year Annual 3-year Annual Period Y-T-D
Date Value Return Return Return Return Return Return
---- ----- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
03/31/84 $1,000.47
04/30/84 1,213.00
05/31/84 1,221.64
06/30/84 1,230.28
07/31/84 1,226.82
08/31/84 1,451.45
09/30/84 1,413.44
10/31/84 1,409.98
11/30/84 1,320.13
12/31/84 1,340.87
01/31/85 1,479.10
02/38/85 1,549.95
03/31/85 1,546.49 47.62%
04/30/85 1,560.31 22.84%
05/23/85 1,628.13 27.28%
05/31/85 1,636.80 27.06%
06/30/85 1,687.09 30.96%
07/31/85 1,692.29 31.73%
08/31/85 1,664.55 9.52%
09/30/85 1,555.31 5.09%
</TABLE>
-4-
<PAGE> 5
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/31/85 165.588 0.00 9.41 0.000 1,558.18 55.82% 32.26%
11/30/85 165.588 0.00 10.13 0.000 1,677.40 67.74% 36.34%
12/31/85 165.588 0.00 10.63 0.000 1,760.20 76.02% 38.05%
01/31/86 165.588 0.00 11.43 0.000 1,892.67 89.27% 41.49%
02/28/86 165.588 0.00 12.42 0.000 2,056.60 105.66% 45.72%
03/31/86 165.588 0.00 12.89 0.000 2,134.42 113.44% 46.10%
04/10/86 165.588 0.0265 4.39 13.46 0.326 2,233.20 123.32% 48.63%
04/30/86 165.914 0.00 13.25 0.000 2,198.36 119.84% 45.98%
05/31/86 165.914 0.00 14.54 0.000 2,412.38 141.24% 50.13%
06/30/86 165.914 0.00 15.25 0.000 2,530.18 153.02% 51.09%
07/31/86 165.914 0.00 13.11 0.000 2,175.13 117.51% 39.50%
08/31/86 165.914 0.00 13.50 0.000 2,239.83 123.98% 39.56%
09/30/86 165.914 0.00 12.44 0.000 2,063.97 106.40% 33.60%
10/31/86 165.914 0.00 12.89 0.000 2,138.63 113.86% 34.17%
11/30/86 165.914 0.00 13.11 0.000 2,175.13 117.51% 33.80%
12/31/86 165.914 0.00 12.74 0.000 2,113.74 111.37% 31.24%
01/31/87 165.914 0.00 15.66 0.000 2,598.21 159.82% 39.99%
02/28/87 165.914 0.00 17.67 0.000 2,931.69 193.17% 44.62%
03/31/87 165.914 0.00 17.75 0.000 2,944.97 104.50% 43.34%
04/30/87 165.914 0.00 18.10 0.000 3,003.04 200.30% 42.87%
05/31/87 165.914 0.00 18.23 0.000 3,024.61 202.46% 41.83%
06/29/87 165.914 0.018 2.99 17.26 0.173 2,866.66 186.67% 38.32%
06/30/87 166.087 0.00 17.37 0.000 2,884.93 188.49% 38.55%
07/31/87 166.087 0.00 18.17 0.000 3,017.79 201.78% 39.27%
08/31/87 166.087 0.00 17.91 0.000 2,974.61 197.46% 37.55%
09/30/87 166.087 0.00 17.83 0.000 2,961.33 196.13% 36.35%
<S> <C> <C> <C> <C> <C> <C> <C>
10/31/85 1,631.60 10.51%
11/30/85 1,756.44 27.06%
12/31/85 1,843.14 31.27%
01/31/86 1,981.85 27.96%
02/28/86 2,153.51 32.69%
03/31/86 2,235.00 38.02%
04/10/86 2,338.43 43.12%
04/30/86 2,301.94 40.89%
05/31/86 2,526.06 48.17%
06/30/86 2,649.41 54.48%
07/31/86 2,277.62 28.93%
08/31/86 2,345.38 32.36%
09/30/86 2,161.22 24.00%
10/31/86 2,239.40 37.50%
11/30/86 2,277.62 33.31%
12/31/86 2,213.34 14.68%
01/31/87 2,720.64 31.10%
02/28/87 3,069.84 35.14%
03/31/87 3,083.74 31.77%
04/30/87 3,144.54 28.42%
05/31/87 3,167.13 31.39%
06/29/87 3,001.73 13.48%
06/30/87 3,020.86 6.89%
07/31/87 3,159.99 32.50%
08/31/87 3,114.78 26.83%
09/30/87 3,100.86 37.02%
</TABLE>
-5-
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/31/87 166.087 0.00 14.10 0.000 2,341.82 134.18% 26.78%
11/30/87 166.087 0.00 13.25 0.000 2,200.65 120.06% 23.99%
12/22/87 166.087 0.965 160.27 13.07 12.263 2,331.03 133.10% 25.48%
12/31/87 178.349 0.00 13.27 0.000 2,366.70 136.67% 25.80%
01/31/88 178.349 0.00 12.99 0.000 2,316.76 131.68% 24.47%
02/29/88 178.349 0.00 13.41 0.000 2,391.67 139.17% 24.93%
03/31/88 178.349 0.00 13.09 0.000 2,334.59 133.46% 23.59%
04/30/88 178.349 0.00 13.28 0.000 2,368.48 136.85% 23.50%
05/31/88 178.349 0.00 12.96 0.000 2,311.41 131.14% 22.25%
06/30/88 178.349 0.00 14.09 0.000 2,512.94 151.29% 24.20%
07/31/88 178.349 0.00 13.53 0.000 2,413.07 141.31% 22.52%
08/31/88 178.349 0.00 12.62 0.000 2,250.77 125.08% 20.14%
09/30/88 178.349 0.00 13.25 0.000 2,363.13 136.31% 21.04%
10/31/88 178.349 0.00 13.19 0.000 2,352.43 135.24% 20.49%
11/30/88 178.349 0.00 12.89 0.000 2,298.92 129.89% 19.51%
12/31/88 178.349 0.00 13.32 0.000 2,375.61 137.56% 19.95%
01/31/89 178.349 0.00 14.19 0.000 2,530.78 153.08% 21.14%
02/28/89 178.349 0.00 14.49 0.000 2,584.28 158.43% 21.30%
03/31/89 178.349 0.00 14.50 0.000 2,586.07 158.61% 20.92%
04/30/89 178.349 0.00 15.56 0.000 2,775.12 177.51% 22.23%
05/31/89 178.349 0.00 16.96 0.000 3,024.81 202.48% 23.87%
06/30/89 178.349 0.00 16.36 0.000 2,917.80 191.78% 22.62%
07/31/89 178.349 0.00 17.45 0.000 3,112.20 211.22% 23.70%
08/31/89 178.349 0.00 18.25 0.000 3,254.88 225.49% 24.32%
09/30/89 178.349 0.00 19.21 0.000 3,426.09 242.61% 25.07%
10/31/89 178.349 0.00 18.35 0.000 3,272.71 227.27% 23.63%
<S> <C> <C> <C> <C> <C> <C> <C>
10/31/87 2,452.17 4.57%
11/30/87 2,304.34 -3.38%
12/22/87 2,440.87 5.32%
12/31/87 2,478.22 6.93%
01/31/88 2,425.93 -14.84%
02/29/88 2,504.36 -22.09%
03/31/88 2,444.60 -24.29%
04/30/88 2,480.06 -24.68%
05/31/88 2,420.32 -27.02%
06/30/88 2,631.35 -16.28%
07/31/88 2,526.77 -20.12%
08/31/88 2,356.83 -28.77%
09/30/88 2,474.48 -24.13%
10/31/88 2,463.28 -24.14%
11/30/88 2,407.25 -6.25%
12/31/88 2,487.55 -4.14%
01/31/89 2,650.03 4.32% 1.74%
02/28/89 2,706.06 3.19% 3.89%
03/31/89 2,707.92 158.49% 20.90% 5.79% 3.96%
04/30/89 2,905.88 128.78% 17.99% 11.90% 11.56%
05/31/89 3,167.34 147.60% 19.87% 24.98% 21.60%
06/30/89 3,055.28 137.17% 18.84% 10.89% 17.30%
07/31/89 3,258.84 153.68% 20.45% 23.17% 25.11%
08/31/89 3,408.25 124.25% 17.52% 38.10% 30.85%
09/30/89 3,587.53 142.39% 19.36% 38.46% 37.73%
10/31/89 3,426.92 132.11% 18.33% 32.86% 31.56%
</TABLE>
-6-
<PAGE> 7
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11/30/89 178.349 0.00 18.21 0.000 3,247.74 224.77% 23.09%
12/31/89 178.349 0.00 18.28 0.000 3,260.23 226.02% 22.79%
01/31/90 178.349 0.00 16.32 0.000 2,910.66 191.07% 20.07%
02/28/90 178.349 0.00 17.17 0.000 3,062.26 206.23% 20.82%
03/31/90 178.349 0.00 18.20 0.000 3,245.96 224.60% 21.67%
04/30/90 178.349 0.00 18.12 0.000 3,231.69 223.17% 21.26%
05/31/90 178.349 0.00 20.95 0.000 3,736.42 273.64% 23.82%
06/30/90 178.349 0.00 20.93 0.000 3,732.85 273.29% 23.45%
07/31/90 178.349 0.00 20.05 0.000 3,575.91 257.59% 22.27%
08/31/90 178.349 0.00 17.75 0.000 3,165.70 216.57% 19.66%
09/30/90 178.349 0.00 16.61 0.000 2.962.38 196.24% 18.17%
10/31/90 178.349 0.00 15.89 0.000 2,833.97 183.40% 17.13%
11/30/90 178.349 0.00 18.24 0.000 3,253.09 225.31% 19.34%
12/28/90 178.349 0.8178 145.85 18.14 8.040 3,381.11 238.11% 19.79%
12/31/90 186.390 0.00 18.38 0.000 3,425.85 242.58% 19.99%
01/31/91 186.390 0.00 20.12 0.000 3,750.16 275.90% 21.31%
02/28/91 186.390 0.00 22.51 0.000 4,195.64 319.56% 23.03%
<S> <C> <C> <C> <C> <C> <C> <C>
11/30/89 3,400.78 146.02% 19.72% 34.92% 30.56%
12/31/89 3,413.85 143.14% 19.43% 31.06% 31.06%
01/31/90 3,047.81 96.79% 14.49% 9.84% -14.74%
02/28/90 3,206.55 97.57% 14.58% 13.16% -10.30%
03/31/90 3,398.91 109.89% 15.97% 19.87% -4.92%
04/30/90 3,383.97 107.12% 15.67% 11.21% -5.34%
05/31/90 3,912.48 128.28% 17.94% 17.97% 9.45%
06/30/90 3,908.75 121.26% 17.20% 22.18% 9.34%
07/31/90 3,744.40 111.31% 16.13% 9.73% 4.75%
08/31/90 3,314.87 90.18% 13.71% -7.12% -7.27%
09/30/90 3,101.97 90.47% 13.75% -17.43% -13.22%
10/31/90 2,967.51 73.69% 11.67% 15.57% 4.94% -17.30% -16.99%
11/30/90 3,406.38 85.21% 13.11% 41.17% 12.17% -4.34% -4.71%
12/28/90 3,540.43 83.44% 12.92% 38.52% 11.40% -0.96% -0.96%
12/31/90 3,587.27 85.87% 13.19% 38.24% 11.39% 0.35% 0.35%
01/31/91 3,926.07 89.23% 13.60% 54.59% 15.61% 25.04% 4.54%
02/28/91 4,393.34 94.83% 14.26% 67.53% 18.77% 30.85% 16.96%
</TABLE>
-7-
<PAGE> 8
PACIFIC HORIZON CALIFORNIA TAX-EXEMPT BOND PORTFOLIO, INC.
Calculation of Total Returns
<TABLE>
<CAPTION>
Inception Average
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual
Date Invested Price Shares Factor Amount NAV Shares Value Return Return
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
03/31/84 $1,000.00 $13.09 76.400 $0.001605 0.12 $12.50 0.010 $955.12 -4.49%
04/30/84 76.410 0.092879 7.10 12.43 0.571 956.87 -4.31%
05/31/84 76.961 0.096856 7.46 11.49 0.649 891.96 -10.80%
06/30/84 77.630 0.090237 7.01 11.40 0.614 891.98 -10.80%
07/31/84 78.244 0.096128 7.52 11.73 0.641 925.33 -7.47%
08/31/84 78.885 0.090627 7.15 11.82 0.605 939.57 -6.04%
09/30/84 79.490 0.080381 6.39 11.65 0.548 932.45 -6.75%
10/31/84 80.039 0.102363 8.19 11.80 0.694 952.65 -4.74%
11/30/84 80.733 0.091038 7.35 11.82 0.622 961.61 -3.84%
12/31/84 81.355 0.095731 7.79 11.99 0.650 983.23 -1.68%
01/31/85 82.004 0.094083 7.72 12.56 0.614 1,037.69 3.77%
02/28/85 82.619 0.086297 7.13 12.25 0.582 1,019.21 1.92%
03/31/85 83.201 0.084811 7.06 12.28 0.575 1,028.76 2.88% 2.88%
04/30/85 83.775 0.091452 7.66 12.52 0.612 1,056.53 5.65% 5.21%
05/31/85 84.387 0.089699 7.57 12.90 0.587 1,096.16 9.62% 8.18%
06/30/85 84.974 0.080850 6.87 12.90 0.533 1,103.03 10.30% 8.17%
07/31/85 85.507 0.092443 7.90 12.87 0.614 1,108.37 10.84% 8.02%
08/31/85 86.121 0.084723 7.30 12.81 0.570 1,110.50 11.05% 7.67%
09/30/85 86.690 0.088444 7.67 12.53 0.612 1,093.90 9.39% 6.16%
10/31/85 87.302 0.088073 7.69 12.69 0.606 1,115.55 11.56% 7.14%
11/30/85 87.908 0.081748 7.19 12.87 0.558 1,138.56 13.86% 8.09%
<CAPTION>
5-year 3-year 12
Offering Avg. Avg. month
Price 5-year Annual 3-year Annual Period Y-T-D
Date Value Return Return Return Return Return Return
---- ----- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
03/31/84 $1,000.13
04/30/84 1,001.96
05/31/84 933.99
06/30/84 934.01
07/31/84 968.93
08/31/84 983.85
09/30/84 976.39
10/31/84 997.54
11/30/84 1,006.93
12/31/84 1,029.56
01/31/85 1,086.59
02/28/85 1,067.23
03/31/85 1,077.24 2.86%
04/30/85 1,106.31 5.45%
05/31/85 1,147.82 17.36%
06/30/85 1,155.01 18.10%
07/31/85 1,160.60 14.39%
08/31/85 1,162.83 12.87%
09/30/85 1,145.44 12.04%
10/31/85 1,168.12 11.83%
11/30/85 1,192.21 13.07%
</TABLE>
-8-
<PAGE> 9
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/85 88.466 0.091197 8.07 13.07 0.617 1,164.32 16.43% 9.06%
01/31/86 89.084 0.088450 7.88 13.62 0.579 1,221.20 22.12% 11.48%
02/28/86 89.662 0.077620 6.96 14.13 0.493 1,273.89 27.39% 13.47%
03/31/86 90.155 0.084187 7.59 14.12 0.538 1,280.58 28.06% 13.16%
04/30/86 90.692 0.081049 7.35 14.03 0.524 1,279.76 27.98% 12.58%
05/31/86 91.216 0.080942 7.38 13.71 0.539 1,257.96 25.80% 11.17%
06/30/86 91.755 0.083104 7.63 13.77 0.554 1,271.09 27.11% 11.25%
07/31/86 92.309 0.081616 7.53 13.78 0.547 1,279.55 27.95% 11.14%
08/31/86 92.855 0.074843 6.95 14.30 0.486 1,334.78 33.48% 12.68%
09/30/86 93.341 0.084498 7.89 14.13 0.558 1,326.80 32.68% 11.97%
10/31/86 93.899 0.078211 7.34 14.35 0.512 1,354.80 35.48% 12.46%
11/30/86 94.411 0.071795 6.78 14.52 0.467 1,377.63 37.76% 12.76%
12/31/86 94.878 0.086148 8.17 14.45 0.566 1,379.16 37.92% 12.38%
01/31/87 95.444 0.078301 7.47 14.72 0.508 1,412.40 41.24% 12.94%
02/28/87 95.951 0.073257 7.03 14.74 0.477 1,421.35 42.14% 12.82%
03/31/87 96.428 0.082534 7.96 14.60 0.545 1,415.81 41.58% 12.29%
04/30/87 96.973 0.078738 7.64 13.63 0.560 1,329.38 32.94% 9.68%
05/31/87 97.534 0.075985 7.41 13.30 0.553 1,313.39 34.34% 8.99%
06/30/87 98.087 0.061484 7.99 13.53 0.591 1,335.11 33.51% 9.30%
07/31/87 98.678 0.077779 7.68 13.61 0.564 1,350.68 35.07% 9.43%
08/31/87 99.242 0.078943 7.83 13.60 0.576 1,357.52 35.75% 9.35%
09/30/87 99.818 0.077131 7.70 12.93 0.595 1,298.34 29.83% 7.74%
10/31/87 100.413 0.076262 7.66 12.96 0.591 1,309.01 30.90% 7.80%
11/30/87 101.004 0.078891 7.97 13.14 0.606 1,335.16 33.52% 8.20%
12/31/87 101.610 0.079332 8.06 13.31 0.606 1,360.50 36.05% 8.55%
01/31/88 102.216 0.073686 7.53 13.68 0.551 1,405.85 40.58% 9.28%
<S> <C> <C> <C> <C> <C> <C> <C>
12/31/85 1,219.19 13.09%
01/31/86 1,278.74 12.39%
02/28/86 1,333.91 19.36%
03/31/86 1,340.92 18.88%
04/30/86 1,340.07 15.68%
05/31/86 1,317.23 9.60%
06/30/86 1,330.98 10.05%
07/31/86 1,339.84 10.25%
08/31/86 1,397.68 14.79%
09/30/86 1,389.32 15.83%
10/31/86 1,418.64 15.98%
11/30/86 1,442.54 15.55%
12/31/86 1,444.15 13.12%
01/31/87 1,478.96 10.45%
02/28/87 1,488.33 6.56%
03/31/87 1,482.52 5.59%
04/30/87 1,392.02 -0.80%
05/31/87 1,375.27 -0.29%
06/30/87 1,398.02 0.31%
07/31/87 1,414.32 0.81%
08/31/87 1,421.49 -2.87%
09/30/87 1,359.52 -6.55%
10/31/87 1,370.69 -7.73%
11/30/87 1,398.08 -7.44%
12/31/87 1,424.60 -5.79%
01/31/88 1,472.09 -4.94%
</TABLE>
-9-
<PAGE> 10
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
02/29/88 102.767 0.069539 7.15 13.73 0.520 1,418.13 41.81% 9.33%
03/31/88 103.287 0.072042 7.44 13.40 0.555 1,391.49 39.15% 8.60%
04/30/88 103.842 0.082639 8.58 13.42 0.639 1,402.15 40.21% 8.63%
05/31/88 104.482 0.078621 8.21 13.36 0.615 1,404.09 40.41% 8.48%
06/30/88 105.097 0.076402 8.03 13.43 0.598 1,419.48 41.95% 8.59%
07/31/88 105.695 0.073256 7.74 13.41 0.577 1,425.11 42.51% 8.51%
08/31/88 106.272 0.083894 8.92 13.36 0.667 1,428.71 42.87% 8.40%
09/30/88 106.939 0.075714 8.10 13.52 0.599 1,453.92 45.39% 8.66%
10/31/88 107.538 0.078356 8.43 13.63 0.618 1,474.17 47.42% 8.82%
11/30/88 108.157 0.077355 8.37 13.40 0.624 1,457.66 45.77% 8.40%
12/31/88 108.781 0.078467 8.54 13.51 0.632 1,478.17 47.82% 8.56%
01/31/89 109.413 0.083677 9.16 13.63 0.672 1,500.45 50.05% 8.74%
02/28/89 110.084 0.073494 8.09 13.44 0.602 1,487.62 48.76% 8.41%
03/31/89 110.686 0.081241 8.99 13.33 0.675 1,484.44 48.44% 8.22%
04/30/89 111.361 0.072882 8.12 13.55 0.599 1,517.06 51.71% 8.54%
05/31/89 111.960 0.085252 9.54 13.70 0.697 1,543.40 54.34% 8.76%
06/30/89 112.657 0.076770 8.65 13.79 0.627 1,562.18 56.22% 8.86%
07/31/89 113.284 0.078914 8.94 13.87 0.645 1,580.19 58.02% 8.95%
08/31/89 113.928 0.078863 8.98 13.64 0.659 1,562.97 56.30% 8.59%
09/30/89 114.587 0.074075 8.49 13.56 0.626 1,562.29 56.23% 8.44%
10/31/89 115.213 0.080611 9.29 13.65 0.680 1,581.94 58.19% 8.55%
11/30/89 115.893 0.074368 8.62 13.79 0.625 1,606.79 60.68% 8.72%
12/31/89 116.518 0.080406 9.37 13.79 0.679 1,616.16 61.62% 8.70%
01/31/90 117.198 0.078172 9.16 13.61 0.673 1,604.22 60.42% 8.43%
02/28/90 117.871 0.069276 8.17 13.68 0.597 1,620.64 62.06% 8.50%
03/31/90 118.468 0.076142 9.02 13.62 0.662 1,622.55 62.26% 8.40%
<S> <C> <C> <C> <C> <C> <C> <C>
02/29/88 1,484.96 -4.72%
03/31/88 1,457.06 -6.14%
04/30/88 1,468.22 0.73%
05/31/88 1,470.25 2.10%
06/30/88 1,486.37 1.53%
07/31/88 1,492.26 0.76%
08/31/88 1,496.03 0.51%
09/30/88 1,522.43 6.94%
10/31/88 1,543.64 7.55%
11/30/88 1,526.35 4.26%
12/31/88 1,547.82 3.76%
01/31/89 1,571.15 1.93% -3.06%
02/28/89 1,557.72 0.18% -3.89%
03/31/89 1,554.39 48.43% 8.21% 1.88% -4.09%
04/30/89 1,588.54 51.41% 8.65% 3.33% -1.99%
05/31/89 1,616.12 65.25% 10.56% 4.97% -0.29%
06/30/89 1,635.79 67.25% 10.83% 5.10% 0.93%
07/31/89 1,654.64 63.09% 10.27% 5.89% 2.09%
08/31/89 1,636.61 58.86% 9.69% 4.47% 0.98%
09/30/89 1,635.90 60.01% 9.85% 2.62% 0.93%
10/31/89 1,656.49 58.58% 9.66% 2.48% 2.20%
11/30/89 1,682.50 59.75% 9.79% 5.27% 3.81%
12/31/89 1,692.31 56.98% 9.43% 4.42% 4.42%
01/31/90 1,679.81 47.64% 8.10% 2.10% -5.21%
02/28/90 1,697.01 51.85% 8.71% 4.04% -4.24%
03/31/90 1,699.01 50.62% 8.53% 4.39% -4.12%
</TABLE>
-10-
<PAGE> 11
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
04/30/90 119.130 0.078490 9.35 13.35 0.700 1,599.74 59.97% 8.03%
05/31/90 119.831 0.077891 9.33 13.62 0.685 1,641.43 64.14% 8.36%
06/30/90 120.516 0.072338 8.72 13.67 0.638 1,656.17 65.62% 8.40%
07/31/90 121.154 0.079277 9.60 13.81 0.695 1,682.74 68.27% 8.56%
08/31/90 121.849 0.075456 9.19 13.43 0.685 1,645.63 64.56% 8.07%
09/30/90 122.534 0.067953 8.33 13.32 0.625 1,640.47 64.05% 7.91%
10/31/90 123.159 0.079836 9.83 13.54 0.726 1,677.40 67.74% 8.17%
11/30/90 123.885 0.072240 8.95 13.73 0.652 1,709.89 70.99% 8.37%
12/31/90 124.537 0.074356 9.26 13.71 0.675 1,716.66 71.67% 8.33%
01/31/91 125.212 0.075050 9.40 13.81 0.680 1,738.58 73.86% 8.42%
02/28/91 125.093 0.067581 8.51 13.80 0.617 1,745.83 74.58% 8.39%
<S> <C> <C> <C> <C> <C> <C> <C>
04/30/90 1,675.12 44.60% 7.65% 0.70% -5.47%
05/31/90 1,718.77 43.00% 7.41% 1.57% -3.01%
06/30/90 1,734.21 43.39% 7.47% 1.25% -2.14%
07/31/90 1,762.03 44.99% 7.71% 1.70% -0.57%
08/31/90 1,723.17 41.52% 7.19% 0.55% -2.76%
09/30/90 1,717.77 43.22% 7.44% 0.28% -3.06%
10/31/90 1,756.44 43.60% 7.50% 22.38% 6.96% 1.26% -0.88%
11/30/90 1,790.45 43.42% 7.47% 22.30% 6.93% 1.63% 1.04%
12/31/90 1,797.55 40.80% 7.08% 20.50% 6.41% 1.44% 1.44%
01/31/91 1,820.50 35.96% 6.33% 18.10% 5.70% 3.50% -3.28%
02/28/91 1,828.09 30.88% 5.53% 17.57% 5.54% 2.88% -2.88%
</TABLE>
-11-
<PAGE> 12
PACIFIC HORIZON GNMA EXTRA FUND
Calculation of Total Returns
_____________________________
<TABLE>
<CAPTION>
Inception Average
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual
Date Invested Price Shares Factor Amount NAV Shares Value Return Return
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
01/07/88 0 $1,000.00 $10.00 100.000 0.000000000 0.00 9.55 0.000 955.00 -4.50%
01/31/88 100.000 0.054710534 5.47 9.79 0.559 984.47 -1.55% -21.18%
02/29/88 100.559 0.068878000 6.93 9.82 0.705 994.41 -0.56% -3.78%
03/31/88 101.264 0.073419000 7.43 9.66 0.770 985.65 -1.44% -6.09%
04/30/88 102.034 0.070612900 7.20 9.57 0.753 983.67 -1.63% -5.14%
05/31/88 102.787 0.066584750 6.84 9.47 0.723 980.23 -1.98% -4.90%
06/30/88 103.509 0.075614532 7.83 9.64 0.812 1,005.66 0.57% 1.18%
07/31/88 104.321 0.070346947 7.34 9.58 0.766 1,806.74 0.67% 1.20%
08/31/88 105.087 0.079576902 8.36 9.50 0.880 1,006.69 0.67% 1.03%
09/30/88 105.968 0.073070905 7.74 9.65 0.802 1,030.33 3.03% 4.17%
10/31/88 106.770 0.071742 7.66 9.76 0.785 1,049.74 4.97% 6.13%
11/30/88 107.555 0.070888 7.62 9.56 0.798 1,035.85 3.58% 4.00%
12/31/88 108.352 0.069460 7.53 9.45 0.796 1,031.46 3.15% 3.20%
01/31/89 109.149 0.070983 7.75 9.49 0.816 1,043.57 4.36% 4.07%
02/28/89 109.965 0.072219 7.94 9.36 0.848 1,037.22 3.72% 3.24%
03/31/89 110.814 0.071650 7.94 9.29 0.855 1,037.40 3.74% 3.03%
04/30/89 111.668 0.071574 7.99 9.39 0.851 1,056.56 5.66% 4.28%
05/31/89 112.519 0.073096 8.22 9.56 0.868 1,083.91 8.39% 5.94%
06/30/89 113.380 0.073537 8.34 9.72 0.858 1,110.39 11.04% 7.33%
07/31/89 114.238 0.073593 8.41 9.78 0.860 1,125.65 12.57% 7.86%
08/31/89 115.097 0.072401 8.33 9.62 0.866 1,115.57 11.56% 6.86%
3-year
Offering 12 month Year to Avg.
Price Period Date 3-Year Annual
Value Return Return Return Return
----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
01/07/88 1,000.00
01/31/88 1,030.86 N/A
02/29/88 1,041.27 N/A
03/31/88 1,032.09 N/A
04/30/88 1,030.02 N/A
05/31/88 1,026.42 N/A
06/30/88 1,053.04 N/A
07/31/88 1,054.17 N/A
08/31/88 1,054.13 N/A
09/30/88 1,078.88 N/A
10/31/88 1,099.20 N/A
11/30/88 1,084.66 N/A
12/31/88 1,080.06 N/A
01/31/89 1,092.74 N/A -3.38%
02/28/89 1,086.09 N/A -3.97%
03/31/89 1,086.28 0.51% -3.95%
04/30/89 1,106.34 2.58% -2.18%
05/31/89 1,134.99 5.60% 0.36%
06/30/89 1,162.71 5.45% 2.81%
07/31/89 1,178.69 6.78% 4.22%
08/31/89 1,168.13 5.83% 3.29%
</TABLE>
-12-
<PAGE> 13
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
09/30/89 115.963 0.072541 8.41 9.60 0.876 1,121.66 12.17% 6.86%
10/31/89 116.840 0.073047 8.53 9.72 0.878 1,144.22 14.42% 7.70%
11/30/89 117.718 0.073097 8.60 9.75 0.883 1,156.35 15.64% 7.95%
12/31/89 118.600 0.072688 8.61 9.74 0.884 1,163.78 16.38% 7.95%
01/31/90 119.484 0.072385 8.65 9.60 0.901 1,155.70 15.57% 7.25%
02/28/90 120.385 0.073075 8.80 9.59 0.917 1,163.29 16.33% 7.31%
03/31/90 121.303 0.073244 8.88 9.54 0.931 1,166.11 16.61% 7.13%
04/30/90 122.234 0.073211 8.95 9.39 0.953 1,156.73 15.67% 6.50%
05/31/90 123.187 0.074765 9.21 9.59 0.960 1,190.57 19.06% 7.55%
06/30/90 124.147 0.073519 9.13 9.65 0.946 1,207.15 20.71% 7.89%
07/31/90 125.093 0.073351 9.18 9.74 0.942 1,227.58 22.76% 8.32%
08/31/90 126.035 0.073461 9.26 9.62 0.962 1,221.72 22.17% 7.85%
09/30/90 126.998 0.072214 9.17 9.61 0.954 1,229.62 22.96% 7.86%
10/31/90 127.952 0.072118 9.23 9.62 0.959 1,240.13 24.01% 7.94%
11/30/90 128.911 0.072594 9.36 9.75 0.960 1,266.24 26.62% 8.48%
12/31/90 129.871 0.072037 9.36 9.81 0.954 1,283.39 28.34% 8.72%
01/31/91 130.825 0.073012 9.55 9.88 0.967 1,302.10 30.21% 8.98%
02/28/91 131.792 0.070657 9.31 9.88 0.943 1,311.41 31.14% 9.00%
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
09/30/89 1,174.51 3.97% 3.85%
10/31/89 1,198.13 4.10% 5.94%
11/30/89 1,210.84 6.61% 7.06%
12/31/89 1,218.62 7.75% 7.75%
01/31/90 1,210.16 5.76% -5.16%
02/28/90 1,218.11 7.11% -4.54%
03/31/90 1,221.06 7.35% -4.31%
04/30/90 1,211.23 4.55% -5.08%
05/31/90 1,246.67 4.90% -2.30%
06/30/90 1,264.03 3.82% -0.94%
07/31/90 1,285.43 4.15% 0.74%
08/31/90 1,279.29 4.59% 0.25%
09/30/90 1,287.56 4.69% 0.90%
10/31/90 1,298.56 3.50% 1.77%
11/30/90 1,325.91 4.58% 3.91%
12/31/90 1,343.86 5.32% 5.32%
01/31/91 1,363.46 7.60% -3.11% 26.31% 8.09%
02/28/91 1,373.21 7.66% -2.41% 25.94% 7.99%
</TABLE>
-13-
<PAGE> 14
PACIFIC HORIZON CONVERTIBLE SECURITIES FUND
Calculation of Total Returns
________________________________________
<TABLE>
<CAPTION>
Inception Average
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual
Date Invested Price Shares Factor Amount NAV Shares Value Return Return
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
09/15/87 $1,000.00 $10.00 100.000 $0.00 $9.55 0.000 $955 -4.50%
09/30/87 100.000 0.00 9.57 0.000 957.00 -4.30% -65.68%
10/31/87 100.000 0.00 8.26 0.000 826.00 -17.40% -78.06%
11/30/87 100.000 0.00 7.98 0.000 798.00 -20.20% -66.17%
12/01/87 100.000 0.09800 9.80 7.87 1.245 796.80 -20.32% -65.93%
12/22/87 101.245 0.04200 4.25 8.24 0.516 838.51 -16.15% -48.11%
12/31/87 101.761 0.00 8.26 0.000 840.55 -15.95% -44.71%
01/31/88 101.761 0.00 8.48 0.000 862.94 -13.71% -32.29%
02/29/88 101.761 0.00 8.85 0.000 900.59 -9.94% -20.46%
03/04/88 101.761 0.04700 4.78 8.89 0.538 909.44 -9.06% -18.34%
03/31/88 102.299 0.00 8.89 0.000 909.44 -9.06% -16.05%
04/30/88 102.299 0.00 8.98 0.000 918.65 -8.14% -12.70%
05/31/88 102.299 0.00 8.89 0.000 909.44 -9.06% -12.52%
06/03/88 102.299 0.13300 13.61 8.91 1.527 925.09 -7.49% -10.28%
06/30/88 103.826 0.00 9.17 0.000 952.09 -4.79% -6.01%
07/31/88 103.826 0.00 9.14 0.000 948.97 -5.10% -5.80%
08/31/88 103.826 0.00 8.99 0.000 933.40 -6.66% -6.92%
09/01/88 103.826 0.16200 16.82 8.83 1.905 933.61 -6.64% -6.88%
09/30/88 105.731 0.00 9.05 0.000 956.87 -4.31% -4.14%
10/31/88 105.731 0.00 9.05 0.000 956.87 -4.31% -3.83%
11/30/88 105.731 0.00 9.04 0.000 955.81 -4.42% -3.66%
<CAPTION>
Year 3-year
Offering 12 month to Avg.
Price Period Date 3-Year Annual
Date Value Return Return Return Return
---- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
09/15/87 $1,000.00
09/30/87 1,002.09
10/31/87 864.92
11/30/87 835.60
12/01/87 834.35
12/22/87 878.02
12/31/87 880.16
01/31/88 903.60
02/29/88 943.02
03/04/88 952.29
03/31/88 952.29
04/30/88 961.93
05/31/88 952.29
06/03/88 968.68
06/30/88 996.95
07/31/88 993.69
08/31/88 977.38
09/01/88 977.60
09/30/88 1,001.96 -4.51%
10/31/88 1,001.96 10.63%
11/30/88 1,000.85 14.39%
</TABLE>
-14-
<PAGE> 15
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/01/88 105.731 0.14700 15.54 8.92 1.742 958.66 -4.13% -3.42%
12/23/88 107.474 0.05400 5.80 8.9 0.652 962.32 -3.77% -2.97%
12/31/88 108.126 0.00 8.96 0.000 968.81 -3.12% -2.42%
01/31/89 108.126 0.00 9.38 0.000 1,014.22 1.42% 1.03%
02/28/89 108.126 0.00 9.47 0.000 1,023.95 2.40% 1.64%
03/01/89 108.126 0.10100 10.92 9.36 1.167 1,022.98 2.30% 1.57%
03/31/89 109.292 0.00 9.45 0.000 1,032.81 3.28% 2.12%
04/30/89 109.292 0.00 9.89 0.000 1,080.90 8.09% 4.90%
05/31/89 109.292 0.00 10.26 0.000 1,121.34 12.13% 6.93%
06/01/89 109.292 0.156000 17.05 10.22 1.668 1,134.02 13.40% 7.62%
06/30/89 110.961 0.00 10.40 0.000 1,153.99 15.40% 8.32%
07/31/89 110.961 0.00 10.62 0.000 1,178.40 17.84% 9.14%
08/31/89 110.961 0.00 10.88 0.000 1,207.25 20.73% 10.08%
09/01/89 110.961 0.093000 10.32 10.80 0.955 1,208.69 20.87% 10.13%
09/30/89 111.916 0.00 10.92 0.000 1,222.12 22.21% 10.31%
10/31/89 111.916 0.00 10.69 0.000 1,196.38 19.64% 8.79%
11/30/89 111.916 0.00 10.81 0.000 1,209.81 20.98% 9.00%
12/01/89 111.916 0.589000 65.92 10.33 6.381 1,222.01 22.20% 9.48%
12/27/89 118.297 0.282000 33.36 10.04 3.323 1,221.07 22.11% 9.13%
12/31/89 121.620 0.00 10.19 0.000 1,239.31 23.93% 9.80%
01/09/90 121.620 0.244400 29.72 9.95 2.987 1,239.84 23.98% 9.71%
01/31/90 124.607 0.00 9.59 0.000 1,194.99 19.50% 7.77%
02/28/90 124.607 0.00 9.83 0.000 1,224.89 22.49% 8.60%
03/01/90 124.607 0.074600 9.30 9.77 0.951 1,226.71 22.67% 8.66%
03/31/90 125.559 0.00 9.99 0.000 1,254.33 25.43% 9.32%
04/30/90 125.559 0.00 9.70 0.000 1,217.92 21.79% 7.80%
<S> <C> <C> <C> <C> <C>
12/01/88 1,003.84 14.90%
12/23/88 1,007.66
12/31/88 1,014.46 10.07%
01/31/89 1,062.01 12.24% -0.02%
02/28/89 1,072.20 8.58% 0.94%
03/01/89 1,071.18
03/31/89 1,081.48 8.46% 1.81%
04/30/89 1,131.83 12.37% 6.55%
05/31/89 1,174.18 17.75% 10.54%
06/01/89 1,187.45 13.75% 11.79%
06/30/89 1,208.37 15.75% 13.75%
07/31/89 1,233.93 18.59% 16.16%
08/31/89 1,264.14 23.52% 19.00%
09/01/89 1,265.65 23.64% 19.15%
09/30/89 1,279.71 21.97% 20.47%
10/31/89 1,252.76 19.40% 17.93%
11/30/89 1,266.82 20.88% 19.26%
12/01/89 1,279.59 21.73% 20.46%
12/27/89 1,278.60 21.18% 20.37%
12/31/89 1,297.71 22.16% 22.16%
01/09/90 1,298.27 0.00% -4.46%
01/31/90 1,251.29 12.52% -7.92%
02/28/90 1,282.61 14.24% -5.61%
03/01/90 1,284.51 14.52% -5.47%
03/31/90 1,313.44 15.98% -3.34%
04/30/90 1,275.31 7.61% -6.15%
</TABLE>
-15-
<PAGE> 16
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
05/31/90 125.559 0.00 10.55 0.000 1,324.65 32.46% 10.93%
06/01/90 125.559 0.154000 19.34 10.39 1.861 1,323.89 32.39% 10.90%
06/30/90 127.420 0.00 10.44 0.000 1,330.26 33.03% 10.76%
07/31/90 127.420 0.00 10.32 0.000 1,314.97 31.50% 9.99%
08/31/90 127.420 0.00 9.62 0.000 1,225.78 22.58% 7.12%
09/28/90 127.420 0.168200 21.43 8.99 2.384 1,166.94 16.69% 5.21%
09/30/90 129.804 0.00 8.99 0.000 1,166.94 16.69% 5.20%
10/31/90 129.804 0.00 8.58 0.000 1,113.72 11.37% 3.50%
11/30/90 129.804 0.00 8.85 0.000 1,148.77 14.88% 4.41%
12/31/90 129.804 0.146300 18.99 8.99 2.112 1,185.93 18.59% 5.31%
01/31/91 131.916 0.00 9.52 0.000 1,255.84 25.58% 6.97%
02/28/91 131.916 0.00 10.23 0.000 1,349.50 34.95% 9.06%
<S> <C> <C> <C> <C> <C>
05/31/90 1,387.06 12.81% 2.08%
06/01/90 1,386.28 11.49% 2.02%
06/30/90 1,392.95 10.09% 2.51%
07/31/90 1,376.94 6.57% 1.33%
08/31/90 1,283.54 -3.03% -5.54%
09/28/90 1,221.92 -7.80% -10.08%
09/30/90 1,221.92 -8.81% -10.08%
10/31/90 1,166.20 -11.10% -14.18%
11/30/90 1,202.90 -9.32% -11.48%
12/31/90 1,241.81 -8.61% -8.61%
01/31/91 1,315.02 0.36% 1.13% 38.98% 11.59%
02/28/91 1,413.09 5.22% 8.67% 43.10% 12.69%
</TABLE>
-16-
<PAGE> 1
EXHIBIT 16(B)
PACIFIC HORIZON FUNDS - PRIME VALUE FUND
Calculation of Yields on Money Market Funds
As of June 15, 1993
<TABLE>
<CAPTION>
Date
------ ----------
<S> <C>
15-Jun-93 $0.000087
14-Jun-93 0 .000087
13-Jun-93 0 .000085
12-Jun-93 0 .000085
11-Jun-93 0 .000085
10-Jun-93 0 .000086
09-Jun-93 0 .000087
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Total Dividends for
7 Day Period . . . . . . . . . . . . . . . . $0.000601
Dividend by: Number
of Days in Period . . . . . . . . . . . . . . 7
Multiplied by: Number
of Days in Year . . . . . . . . . . . . . . . 365
Dividend by: Offering
Price per Share . . . . . . . . . . . . . . . $1.00
----------
7 Day Yield . . . . . . . . . . . . . . . . . . . . 3.14%
====
***************************************************
7 Day Yield . . . . . . . . . . . . . . . . . . . . 3.14%
Dividend by: Number of 7
Day Periods in Year . . . . . . . . . . . . . 52.142857
Plus 1 . . . . . . . . . . . . . . . . . . . . . . 1
----------
1.00060145
Raised to the Power of
the Number of 7 Day
Periods in a Year . . . . . . . . . . . . . . 52.142857
----------
1.031849
----------
Effective 7 Day Yield 3.18%
====
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
Dividend Rates
FIRST CASH FUNDS FIRST FUNDS OF AMERICA
Government Treasury
Gov't Treasury Money Money
Date Portfolio Portfolio Fund Fund
-------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C>
28-Feb-93 $0.000085 $0.000075 $0.000078 $0.000070
27-Feb-93 0.000085 0.000075 0 .000078 0.000070
26-Feb-93 0.000085 0.000075 0 .000078 0.000070
25-Feb-93 0.000081 0.000075 0 .000073 0.000070
24-Feb-93 0.000081 0.000075 0 .000073 0.000070
23-Feb-93 0.000081 0.000075 0 .000073 0.000070
22-Feb-93 0.000082 0.000075 0 .000074 0.000070
--------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Total Dividends for
7 Day Period . . . . . . . . $0.000581 $0.000526 $0.000527 $0.000487
Dividend by: Number
of Days in Period . . . . . . 7 7 7 7
Multiplied by: Number
of Days in Year . . . . . . . 365 365 365 365
Dividend by: Offering
Price per Share . . . . . . . $1.00 $1.00 $1.00 $1.00
--------- --------- --------- ---------
7 Day Yield . . . . . . . . . . 3.03% 2.74% 2.75% 2.54%
==== ==== ==== ====
******************************************************************************
7 Day Yield . . . . . . . . . . 3.03% 2.74% 2.75% 2.54%
==== ==== ==== ====
Dividend by: Number of 7
Day Periods in Year . . . . . 52.142857 52.142857 52.142857 52.142857
Plus 1 . . . . . . . . . . . . 1 1 1 1
---------- ---------- ---------- ----------
1.00058120 1.00052640 1.00052659 1.00048745
Raised to the Power of
the Number of 7 Day
Periods in a Year . . . . . . 52.142857 52.142857 52.142857 52.142857
---------- ---------- ---------- ----------
1.030761 1.027821 1.027831 1.025737
---------- ---------- ---------- ----------
Effective 7 Day Yield 3.08% 2.78% 2.78% 2.57%
==== ==== ==== ====
</TABLE>
<PAGE> 1
EXHIBIT 16(C)
CORPORATE BOND FUND
<PAGE> 2
Bunker Hill Bunker Hill/Corporate Bond Fund with load
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
<TABLE>
<CAPTION>
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
Bunker Hill Bunker Hill/Corporate Bond Fund with load
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
24/10/73 24/10/73 $10,000.00 L22.89* 436.872 0.00 0.00 0.000 L9,550.00 L10,000.00
30/11/73 30/11/73 23.09* 436.872 0.00 0.00 0.000 9,633.44 10,087.37
31/12/73 31/12/73 23.28* 436.872 0.00 0.00 0.000 9,712.71 10,170.38
31/01/74 31/01/74 23.32* 436.872 0.00 0.00 0.000 9,729.40 10,187.86
20/02/74 20/02/74 22.875 23.35* 436.872 0.16 69.90 2.994 9,808.67 10,270.86
28/02/74 28/02/74 23.625 439.866 0.00 0.00 0.000 9,924.19 10,391.82
15/03/74 15/03/74 22.875 23.10* 439.866 0.16 70.38 3.047 9,770.87 10,231.27
31/03/74 31/03/74 22.375 442.912 0.00 0.00 0.000 9,464.20 9,910.16
15/04/74 15/04/74 22.875 442.912 0.16 70.87 3.098 9,743.37 10,202.48
30/04/74 30/04/74 22.125 446.010 0.00 0.00 0.000 9,423.92 9,867.98
15/05/74 l5/05/74 22.125 446.010 0.16 71.36 3.225 9,492.07 9,939.34
31/05/74 31/05/74 21.875 449.236 0.00 0.00 0.000 9,384.81 9,827.03
14/06/74 14/06/74 21.875 449.236 0.16 71.88 3.286 9,453.46 9,898.91
30/06/74 30/06/74 20.875 452.521 0.00 0.00 0.000 9,021.30 9,446.38
15/07/74 15/07/74 20.125 452.521 0.16 72.40 3.598 8,766.32 9,179.40
31/07/74 31/07/74 20.625 456.119 0.00 0.00 0.000 8,984.12 9,407.46
15/08/74 15/08/74 18.875 19.99* 456.119 0.16 72.98 3.651 8,777.21 9,190.80
31/08/74 31/08/74 17.375 459.770 0.00 0.00 0.000 7,629.02 7,988.50
16/09/74 16/09/74 18.375 19.25* 459.770 0.16 73.56 3.821 8,522.55 8,924.13
30/09/74 30/09/74 18.875 463.591 0.00 0.00 0.000 8,356.52 8,750.29
16/10/74 16/10/74 20.875 463.591 0.16 74.17 3.553 9,312.82 9,751.64
16/10/74 16/10/74 20.875 467.145 0.06 28.03 1.343 9,339.59 9,779.67
31/10/74 31/10/74 20.125 468.487 0.00 0.00 0.000 9,004.03 9,428.31
15/11/74 15/11/74 21.625 468.487 0.16 74.96 3.466 9,746.73 10,206.00
30/11/74 30/11/74 20.875 471.954 0.00 0.00 0.000 9,408.69 9,852.03
16/12/74 16/12/74 20.875 471.954 0.16 75.51 3.617 9,480.80 9,927.54
31/12/74 31/12/74 19.625 475.571 0.00 0.00 0.000 8,913.09 9,333.08
15/01/75 15/01/75 20.50 20.66* 475.571 0.16 76.09 3.683 9,455.82 9,901.39
31/01/75 31/01/75 20.50 479.254 0.00 0.00 0.000 9,382.59 9,824.71
14/02/75 14/02/75 21.625 479.254 0.16 76.68 3.546 9,970.72 10,440.55
28/02/75 28/02/75 21.75 482.800 0.00 0.00 0.000 10,028.36 10,500.90
14/03/75 14/03/75 21.00 21.05* 482.800 0.16 77.25 3.670 9,779.38 10,240.19
31/03/75 31/03/75 19.75 486.470 0.00 0.00 0.000 9,175.43 9,607.78
15/04/75 15/04/75 18.875 20.57* 486.470 0.16 77.84 3.784 9,630.71 10,084.52
30/04/75 30/04/75 19.00 490.254 0.00 0.00 0.000 8,895.65 9,314.82
15/05/75 15/05/75 19.75 20.64* 490.254 0.16 78.44 3.800 9,738.40 10,197.27
31/05/75 31/05/75 19.625 494.054 0.00 0.00 0.000 9,259.50 9,695.81
<FN>
L = Pound
</TABLE>
-2-
<PAGE> 3
<TABLE>
<CAPTION>
Bunker Hill Bunker Hill/Corporate Bond Fund with load
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Bunker Hill Bunker Hill/Corporate Bond Fund
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16/06/75 16/06/75 20.625 L21.20* 494.054 0.16 79.05 3.729 L10,078.11 L10,552.99
30/06/75 30/06/75 20.375 497.783 0.00 0.00 0.000 9,685.92 10,142.32
15/07/75 15/07/75 20.00 21.06* 497.783 0.155 77.16 3.664 10,085.24 10,560.46
31/07/75 31/07/75 19.625 501.446 0.00 0.00 0.000 9,398.04 9,840.88
14/08/75 14/08/75 18.8125 20.78* 501.446 0.155 77.72 3.740 10,025.38 10,497.78
31/08/75 31/08/75 18.875 505.187 0.00 0.00 0.000 9,106.31 9,535.40
15/09/75 15/09/75 18.875 20.50* 505.187 0.155 78.30 3.820 9,965.07 10,434.63
30/09/75 30/09/75 19.125 509.006 0.00 0.00 0.000 9,296.68 9,734.75
15/10/75 15/10/75 19.375 20.55* 509.006 0.155 78.90 3.839 10,064.72 10,538.98
31/10/75 31/10/75 20.00 512.846 0.00 0.00 0.000 9,795.35 10,256.91
15/11/75 15/11/75 19.875 20.91* 512.846 0.155 79.49 3.802 10,316.95 10,803.09
30/11/75 30/11/75 19.50 516.647 0.00 0.00 0.000 9,621.26 10,074.62
15/12/75 15/12/75 19.75 20.79* 516.647 0.155 80.08 3.852 10,334.22 10,821.18
31/12/75 31/12/75 19.75 520.499 0.00 0.00 0.000 9,817.26 10,279.86
15/01/76 15/01/76 20.75 21.48* 520.499 0.155 80.68 3.756 10,754.25 11,261.00
31/01/76 31/01/76 21.00 524.255 0.00 0.00 0.000 10,513.93 11,009.35
13/02/76 13/02/76 21.125 21.87* 524.255 0.155 81.26 3.716 11,027.11 11,546.72
29/02/76 29/02/76 21.00 527.971 0.00 0.00 0.000 10,588.45 11,087.38
15/03/76 15/03/76 20.50 22.03* 527.971 0.155 81.84 3.715 11,185.94 11,713.03
31/03/76 31/03/76 20.00 531.685 0.00 0.00 0.000 10,155.19 10,633.71
15/04/76 15/04/76 21.25 22.39* 531.685 0.155 82.41 3.681 11,447.44 11,986.84
30/04/76 30/04/76 20.375 535.366 0.00 0.00 0.000 10,417.22 10,908.08
14/05/76 14/05/76 20.75 22.03* 535.366 0.155 82.98 3.767 11,342.63 11,877.09
31/05/76 31/05/76 20.125 539.133 0.00 0.00 0.000 10,361.79 10,850.05
15/06/76 15/06/76 20.50 22.04* 539.133 0.155 83.57 3.792 11,427.58 11,966.05
30/06/76 30/06/76 20.75 542.924 0.00 0.00 0.000 10,758.72 11,265.68
15/07/76 15/07/76 21.125 22.21* 542.924 0.155 84.15 3.789 11,596.09 12,142.50
31/07/76 31/07/76 21.00 546.713 0.00 0.00 0.000 10,964.33 11,480.98
13/08/76 13/08/76 20.875 22.42* 546.713 0.155 84.74 3.780 11,786.66 12,342.05
31/08/76 31/08/76 20.875 550.493 0.16 0.00 0.000 10,974.42 11,491.54
15/09/76 15/09/76 20.125 22.63* 550.493 0.155 85.33 3.770 11,978.55 12,542.98
30/09/76 30/09/76 21.00 554.263 0.00 0.00 0.000 11,115.75 11,639.53
15/10/76 15/10/76 21.125 21.94* 554.263 0.155 85.91 3.916 11,695.36 12,246.45
31/10/76 31/10/76 21.25 558.179 0.00 0.00 0.000 11,327.55 11,861.31
12/11/76 12/11/76 21.375 21.88* 558.179 0.155 86.52 3.954 11,746.00 12,299.48
30/11/76 30/11/76 21.75 562.133 0.00 0.00 0.000 11,676.21 12,226.40
15/12/76 15/12/76 21.875 22.10* 562.133 0.155 87.13 3.943 11,947.32 12,510.28
<FN>
L = Pound
</TABLE>
-3-
<PAGE> 4
<TABLE>
<CAPTION>
Bunker Hill Bunker Hill/Corporate Bond Fund with load
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
Bunker Hill Bunker Hill/Corporate Bond Fund
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31/12/76 31/12/76 L22.25 566.076 0.00 0.00 0.000 L12,028.41 L12,595.19
14/01/77 14/01/77 22.00 22.05* 566.076 0.155 87.74 3.979 12,004.08 12,569.72
31/01/77 31/01/77 22.25 570.055 0.00 0.00 0.000 12,112.96 12,683.73
14/02/77 14/02/77 21.375 21.89* 570.055 0.155 88.36 4.036 12,001.36 12,566.87
28/02/77 28/02/77 21.625 574.092 0.00 0.00 0.000 11,856.07 12,414.73
15/03/77 15/03/77 22.00 574.092 0.155 88.98 4.045 12,146.64 12,719.00
31/03/77 31/03/77 21.50 578.136 0.00 0.00 0.000 11,870.58 12,429.93
18/04/77 18/04/77 21.375 22.07* 578.136 0.155 89.61 4.060 12,270.87 12,849.08
30/04/77 30/04/77 22.00 582.197 0.00 0.00 0.000 12,231.95 12,808.33
16/05/77 16/05/77 21.625 22.10* 582.197 0.155 90.24 4.083 12,373.73 12,956.79
31/05/77 31/05/77 20.75 586.280 0.00 0.00 0.000 11,617.87 12,165.31
15/06/77 15/06/77 21.875 22.31* 586.280 0.155 90.87 4.073 12,578.09 13,170.78
30/06/77 30/06/77 21.50 590.353 0.00 0.00 0.000 12,121.43 12,692.59
18/07/77 18/07/77 22.25 22.50* 590.353 0.155 91.50 4.067 12,772.60 13,374.45
31/07/77 31/07/77 22.25 594.420 0.00 0.00 0.000 12,630.68 13,225.85
15/08/77 15/08/77 22.75 594.420 0.155 92.14 4.050 13,002.51 13,615.19
31/08/77 31/08/77 21.75 598.470 0.00 0.00 0.000 12,430.97 13,016.72
15/09/77 15/09/77 22.375 22.59* 598.470 0.155 92.76 4.106 12,999.65 13,612.20
30/09/77 30/09/77 22.25 602.576 0.00 0.00 0.000 12,803.99 13,407.32
17/10/77 17/10/77 22.25 22.34* 602.576 0.155 93.40 4.181 12,944.98 13,554.95
31/10/77 31/10/77 21.75 606.757 0.00 0.00 0.000 12,603.10 13,196.97
15/11/77 15/11/77 22.375 606.757 0.155 94.05 4.203 13,055.08 13,670.24
30/11/77 30/11/77 21.125 610.960 0.00 0.00 0.000 12,325.74 12,906.54
15/12/77 15/12/77 21.50 22.23* 610.960 0.155 94.70 4.260 13,060.91 13,676.35
31/12/77 31/12/77 20.875 615.220 0.00 0.00 0.000 12,264.80 12,842.72
16/01/78 16/01/78 21.125 21.89* 615.220 0.155 95.36 4.356 12,952.22 13,562.53
31/01/78 31/01/78 20.50 619.577 0.00 0.00 0.000 12,129.76 12,701.32
15/02/78 15/02/78 21.00 21.89* 619.577 0.155 96.03 4.387 13,043.93 13,658.57
28/02/78 28/02/78 20.625 623.964 0.00 0.00 0.000 12,290.14 12,869.25
15/03/78 15/03/78 20.625 21.94* 623.964 0.155 96.71 4.408 13,166.09 13,786.48
31/03/78 31/03/78 20.75 628.372 0.00 0.00 0.000 12,451.97 13,038.72
17/04/78 17/04/78 21.125 21.81* 628.372 0.155 97.40 4.466 13,181.09 13,802.19
30/04/78 30/04/78 21.125 632.838 0.00 0.00 0.000 12,767.10 13,368.69
15/05/78 15/05/78 20.50 21.65* 632.838 0.155 98.09 4.531 13,178.07 13,799.02
31/05/78 31/05/78 19.625 637.368 0.00 0.00 0.000 11,945.48 12,508.35
15/06/78 15/06/78 20.125 21.34* 637.368 0.155 98.79 4.629 13,083.72 13,700.23
30/06/78 30/06/78 20.00 641.998 0.00 0.00 0.000 12,262.16 12,839.95
<FN>
L = POUND
</TABLE>
-4-
<PAGE> 5
<TABLE>
<CAPTION>
Bunker Hill Bunker Hill/Corporate Bond Fund with load
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
Bunker Hill Bunker Hill/Corporate Bond Fund
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
17/07/78 17/07/78 20.125 L21.20* 641.998 0.155 99.51 4.694 L13,092.92 L13,709.86
31/07/78 31/07/78 20.25 646.692 0.00 0.00 0.000 12,506.21 13,095.50
15/08/78 15/08/78 21.00 21.69* 646.692 0.155 100.24 4.621 13,491.26 14,126.98
31/08/78 31/08/78 20.625 651.313 0.00 0.00 0.000 12,828.83 13,433.33
18/09/78 18/09/78 20.25 22.00* 651.313 0.155 100.95 4.589 13,780.50 14,429.84
30/09/78 30/09/78 19.75 655.902 0.00 0.00 0.000 12,371.13 12,954.06
16/10/78 16/10/78 19.875 21.62* 655.902 0.155 101.66 4.702 13,639.56 14,282.26
31/10/78 31/10/78 19.00 660.604 0.00 0.00 0.000 11,986.66 12,551.48
15/11/78 15/11/78 18.50 21.03* 660.604 0.155 102.39 4.869 13,365.13 13,994.90
30/11/78 30/11/78 18.25 665.473 0.00 0.00 0.000 11,598.36 12,144.88
18/12/78 18/12/78 18.375 20.94* 665.473 0.155 103.15 4.926 13,406.44 14,038.15
31/12/78 31/12/78 17.75 670.399 0.00 0.00 0.000 11,364.10 11,899.58
15/01/79 15/01/79 19.125 20.70* 670.399 0.155 103.91 5.020 13,352.02 13,981.17
31/01/79 31/01/79 19.50 675.419 0.00 0.00 0.000 12,577.99 13,170.67
15/02/79 15/02/79 19.00 20.88* 675.419 0.155 104.69 5.014 13,568.10 14,207.43
28/02/79 28/02/79 19.125 680.433 0.00 0.00 0.000 12,427.68 13,013.28
19/03/79 19/03/79 19.125 20.72* 680.433 0.155 105.47 5.090 13,564.85 14,204.03
31/03/79 31/03/79 18.375 685.523 0.00 0.00 0.000 12,029.64 12,596.48
16/04/79 16/04/79 18.50 20.74* 685.523 0.155 106.26 5.123 13,679.42 14,324.00
30/04/79 30/04/79 18.00 690.646 0.00 0.00 0.000 11,872.21 12,643.63
31/05/79 31/05/79 18.00 690.646 0.00 0.00 0.000 11,872.21 12,431.63
30/06/79 30/06/79 18.50 690.646 0.00 0.00 0.000 12,201.99 12,776.95
31/07/79 31/07/79 19.00 690.646 0.00 0.00 0.000 12,531.77 13,122.27
15/08/79 15/08/79 18.50 21.07* 690.646 0.475 328.06 15.570 14,210.37 14,879.97
31/08/79 31/08/79 18.00 706.216 0.00 0.00 0.000 12,139.85 12,711.89
30/09/79 30/09/79 17.875 706.216 0.00 0.00 0.000 12,055.55 12,623.61
31/10/79 31/19/79 16.50 706.216 0.00 0.00 0.000 11,128.20 11,652.56
15/11/79 15/11/79 17.00 19.05* 706.216 0.48 338.98 17.794 13,171.74 13,792.40
30/11/79 30/11/79 16.875 724.010 0.00 0.00 0.000 11,667.88 12,217.67
31/12/79 31/12/79 16.125 724.010 0.00 0.00 0.000 11,149.31 11,674.67
31/01/80 31/01/80 15.625 724.010 0.00 0.00 0.000 10,803.59 11,312.66
15/02/80 15/02/80 15.125 17.98* 724.010 0.49 354.77 19.731 12,770.71 13,372.47
29/02/80 29/02/80 14.75 743.741 0.00 0.00 0.000 10,476.53 10,970.19
31/03/80 31/03/80 14.875 743.741 0.00 0.00 0.000 10,565.31 11,063.15
30/04/80 30/04/80 17.00 743.741 0.00 0.00 0.000 12,074.64 12,643.60
15/05/80 15/05/80 17.50 19.29* 743.741 0.51 379.31 19.663 14,063.41 14,726.08
31/05/80 31/05/80 17.375 763.405 0.00 0.00 0.000 12,667.27 13,264.16
<FN>
L = POUND
</TABLE>
-5-
<PAGE> 6
<TABLE>
<CAPTION>
Bunker Hill Bunker Hill/Corporate Bond Fund with load
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
Bunker Hill Bunker Hill/Corporate Bond Fund
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30/06/80 30/06/80 L17.50 763.405 0.00 0.00 0.000 L12,758.40 L13,359.59
31/07/80 31/07/80 16.625 763.405 0.00 0.00 0.000 12,120.48 12,691.61
15/08/80 15/08/80 16.875 18.60* 763.405 0.51 389.34 20.932 13,932.18 14,588.67
31/08/80 31/08/80 17.00 784.337 0.00 0.00 0.000 12,733.71 13,333.73
30/09/80 30/09/80 16.375 784.337 0.00 0.00 0.000 12,265.56 12,843.52
31/10/80 31/10/80 15.125 784.337 0.00 0.00 0.000 11,329.26 11,863.10
17/11/80 17/11/80 16.00 17.30* 784.337 0.53 415.70 24.029 13,355.41 13,984.73
30/11/80 30/11/80 15.00 808.366 0.00 0.00 0.000 11,579.84 12,125.49
31/12/80 31/12/80 15.125 808.366 0.00 0.00 0.000 11,676.34 12,226.53
31/01/81 31/01/81 15.875 808.366 0.00 0.00 0.000 12,255.33 12,832.81
17/02/81 17/02/81 15.125 16.30* 808.366 0.53 428.43 26.284 12,992.58 13,604.80
28/02/81 28/02/81 15.125 834.650 0.00 0.00 0.000 12,056.00 12,624.08
31/03/81 31/03/81 15.25 834.650 0.00 0.00 0.000 12,155.63 12,728.41
30/04/81 30/04/81 15.00 834.650 0.00 0.00 0.000 11,956.36 12,519.75
15/05/81 15/05/81 14.875 15.76* 834.650 0.54 450.71 28.598 12,992.58 13,604.80
31/05/81 31/05/81 14.875 863.248 0.00 0.00 0.000 12,262.98 12,840.82
30/06/81 30/06/81 15.75 863.248 0.00 0.00 0.000 12,984.34 13,596.16
31/07/81 31/07/81 14.875 863.248 0.00 0.00 0.000 12,262.98 12,840.82
17/08/81 17/08/81 15.00 15.36* 863.248 0.54 466.15 30.349 13,108.00 13,725.65
31/08/81 31/08/81 14.50 893.597 0.00 0.00 0.000 12,374.09 12,957.16
30/09/81 30/09/81 14.375 893.597 0.00 0.00 0.000 12,267.41 12,845.46
31/10/81 31/10/81 14.50 893.597 0.00 0.00 0.000 12,374.09 12,957.16
16/11/81 16/11/81 15.25 16.09* 893.597 0.54 482.54 29.990 14,191.80 14,860.52
30/11/81 30/11/81 15.50 923.587 0.00 0.00 0.000 13,671.40 14,315.60
31/12/81 31/12/81 14.625 923.587 0.00 0.00 0.000 12,899.63 13,507.46
31/01/82 31/01/82 14.875 923.587 0.00 0.00 0.000 13,120.13 13,738.36
16/02/82 16/02/82 14.50 14.96* 923.587 0.54 498.74 33.338 13,671.40 14,315.60
28/02/82 28/02/82 15.625 956.925 0.00 0.00 0.000 14,279.12 14,951.96
31/03/82 31/03/82 14.50 956.925 0.00 0.00 0.000 13,251.02 13,875.42
30/04/82 30/04/82 15.00 956.925 0.00 0.00 0.000 13,707.95 14,353.88
17/05/82 17/05/82 16.375 956.925 0.54 516.74 31.557 15,458.00 16,186.39
31/05/82 31/05/82 16.75 988.482 0.00 0.00 0.000 15,812.00 16,557.07
30/06/82 30/06/82 15.50 988.482 0.00 0.00 0.000 14,632.00 15,321.47
31/07/82 31/07/82 15.125 988.482 0.00 0.00 0.000 14,278.00 14,950.79
16/08/82 16/08/82 16.00 16.05* 988.482 0.54 533.78 33.257 15,660.96 16,398.91
31/08/82 31/08/82 17.25 1,021.739 0.00 0.00 0.000 16,831.88 17,625.00
30/09/82 30/09/82 17.01* 1,021.739 0.00 0.00 0.000 16,597.69 17,379.78
<FN>
L = POUND
</TABLE>
-6-
<PAGE> 7
<TABLE>
<CAPTION>
Bunker Hill Bunker Hill/Corporate Bond Fund with load
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
Bunker Hill Bunker Hill/Corporate Bond Fund
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31/10/82 31/10/82 L17.375 1,021.739 0.00 0.00 0.000 L16,953.85 L17,752.72
15/11/82 15/11/82 17.875 18.51 1,021.739 0.54 551.74 29.808 18,588.25 19,464.13
30/11/82 30/11/82 17.875 1,051.547 0.00 0.00 0.000 17,950.56 18,796.40
31/12/82 31/12/82 17.625 1,051.547 0.00 0.00 0.000 17,699.51 18,533.51
31/01/83 31/01/83 17.875 1,051.547 0.00 0.00 0.000 17,950.56 18,796.40
14/02/83 14/02/83 17.875 18.36 1.051.547 0.54 567.84 30.928 18,979.90 19,874.24
28/02/83 28/02/83 18.125 1,082.475 0.00 0.00 0.000 18,736.96 19,619.85
31/03/83 31/03/83 18.25 1,082.475 0.00 0.00 0.000 18,866.18 19,755.16
30/04/83 30/04/83 18.50 1,082.475 0.00 0.00 0.000 19,124.62 20,025.78
16/05/83 16/05/83 18.50 19.41 1,082.475 0.54 584.54 30.115 20,623.58 21,595.37
31/05/83 31/05/83 18.50 1,112.590 0.00 0.00 0.000 19,656.68 20,582.91
30/06/83 30/06/83 16.75 1,112.590 0.00 0.00 0.000 17,797.27 18,635.88
31/07/83 31/07/83 17.25 1,112.590 0.00 0.00 0.000 18,328.53 19,192.18
15/08/83 15/08/83 16.875 17.38 1,112.590 0.54 600.80 34.568 19,040.42 19,937.61
31/08/83 31/08/83 17.00 1,147.158 0.00 0.00 0.000 18,624.12 19,501.69
30/09/83 30/09/83 17.50 1,147.158 0.00 0.00 0.000 19,171.88 20,075.27
31/10/83 31/10/83 17.50 1,147.158 0.00 0.00 0.000 19,171.88 20,075.27
15/11/83 15/11/83 17.625 1,147.158 0.54 619.47 35.147 19,900.42 20,838.13
30/11/83 30/11/83 17.50 1,182.305 0.00 0.00 0.000 19,759.28 20,690.34
31/12/83 31/12/83 17.00 1,182.305 0.00 0.00 0.000 19,194.73 20,099.19
31/01/84 31/01/84 17.25 1,182.305 0.00 0.00 0.000 19,477.00 20,394.77
13/02/84 13/02/84 17.50 1,182.305 0.54 638.44 36.483 20,368.99 21,328.79
29/02/84 29/02/84 17.50 1,218.788 0.00 0.00 0.000 20,368.99 21,328.79
31/03/84 31/03/84 16.625 1,218.788 0.00 0.00 0.000 19,350.54 20,262.35
30/04/84 30/04/84 16.00 1,218.788 0.00 0.00 0.000 18,623.08 19,500.61
14/05/84 14/05/84 16.125 1,218.788 0.54 658.15 40.815 19,397.10 20,311.10
31/05/84 31/05/84 15.875 1,259.603 0.00 0.00 0.000 19,096.37 19,996.20
30/06/84 30/06/84 15.875 1,259.603 0.00 0.00 0.000 19,096.37 19,996.20
31/07/84 31/07/84 16.00 1,259.603 0.00 0.00 0.000 19,246.74 20,153.65
13/08/84 13/08/84 16.50 1,259.603 0.54 680.19 41.223 20,497.77 21,463.64
31/08/84 31/08/84 16.25 1,300.826 0.00 0.00 0.000 20,187.20 21,138.43
30/09/84 30/09/84 16.25 1,300.826 0.00 0.00 0.000 20,187.20 21,138.43
31/10/54 31/10/84 16.875 1,300.826 0.00 0.00 0.000 20,963.63 21,951.45
12/11/84 12/11/84 17.00 1,300.826 0.54 702.45 41.320 21,789.75 22,816.50
30/11/84 30/11/84 17.00 1,342.147 0.00 0.00 0.000 21,789.75 22,816.50
31/12/84 31/12/84 16.75 1,342.147 0.00 0.00 0.000 21,469.32 22,480.96
31/01/85 31/01/85 17.75 1,342.147 0.00 0.00 0.000 22,751.07 23,823.11
<FN>
L = POUND
</TABLE>
-7-
<PAGE> 8
<TABLE>
<CAPTION>
Bunker Hill Bunker Hill/Corporate Bond Fund with load
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
Bunker Hill Bunker Hill/Corporate Bond Fund
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
14/02/85 14/02/85 L17.25 1,342.147 0.54 724.76 42.015 L22,802.34 L23,876.79
28/02/85 28/02/85 17.25 1,384.162 0.00 0.00 0.000 22,802.34 23,876.79
31/03/85 31/03/85 17.25 1,384.162 0.00 0.00 0.000 22,802.34 23,876.79
30/04/85 30/04/85 18.25 1,384.162 0.00 0.00 0.000 24,124.21 25,260.95
13/05/85 13/05/85 18.50 1,384.162 0.54 747.45 40.403 25,168.49 26,354.44
31/05/85 31/05/85 19.375 1,424.564 0.00 0.00 0.000 26,358.89 27,600.94
30/06/85 30/06/85 18.50 1,424.564 0.00 0.00 0.000 25,168.49 26,354.44
31/07/85 31/07/85 18.625 1,424.564 0.00 0.00 0.000 25,338.55 26,532.51
12/08/85 12/08/85 18.50 1,424.564 0.54 769.26 41.582 25,903.14 27,123.71
31/08/85 31/08/85 18.50 1,466.146 0.00 0.00 0.000 25,903.14 27,123.71
30/09/85 30/09/85 18.125 1,466.146 0.00 0.00 0.000 25,378.08 26,573.90
31/10/85 31/10/85 18.50 1,466.146 0.00 0.00 0.000 25,903.14 27,123.71
14/11/85 14/11/85 19.00 1,466.146 0.54 791.72 41.669 27,359.32 28,648.50
30/11/85 30/11/85 19.50 1,507.816 0.00 0.00 0.000 28,079.30 29,402.41
31/12/85 31/12/85 19.75 1,507.816 0.00 0.00 0.000 28,439.29 29,779.36
31/01/86 31/01/86 19.875 1,507.816 0.00 0.00 0.000 28,619.29 29,967.84
14/02/86 14/02/86 20.00 1,507.816 0.54 814.22 40.711 29,576.86 30,970.54
28/02/86 28/02/86 20.125 1,548.527 0.00 0.00 0.000 29,761.72 31,164.10
31/03/86 31/03/86 21.625 1,548.527 0.00 0.00 0.000 31,979.98 33,486.89
30/04/86 30/04/86 21.875 1,548.527 0.00 0.00 0.000 32,349.69 33,874.02
13/05/86 13/05/86 22.25 1,548.527 0.54 836.20 37.582 33,702.83 35,290.92
31/05/86 31/05/86 21.875 1,586.109 0.00 0.00 0.000 33,134.81 34,696.13
30/06/86 30/06/86 21.75 1,586.109 0.00 0.00 0.000 32,945.47 34,497.87
31/07/86 31/07/86 21.875 1,586.109 0.00 0.00 0.000 33,134.81 34,696.13
08/08/86 08/08/86 22.125 1,586.109 0.54 856.50 38.712 34,331.45 35,949.16
31/08/86 31/08/86 23.00 1,624.821 0.00 0.00 0.000 35,689.19 37,370.88
30/09/86 30/09/86 22.50 1,624.821 0.00 0.00 0.000 34,913.34 36,558.47
31/10/86 31/10/86 22.625 1,624.821 0.00 0.00 0.000 35,107.30 36,761.57
07/11/86 07/11/86 22.875 1,624.821 0.54 877.40 38.356 36,333.15 38,045.18
30/11/86 30/11/86 22.625 1,663.177 0.00 0.00 0.000 35,936.06 37,629.38
31/12/86 31/12/86 22.50 1,663.177 0.00 0.00 0.000 35,737.52 37,421.49
31/01/87 31/01/87 22.75 1,663.177 0.00 0.00 0.000 36,134.60 37,837.28
13/02/87 13/02/87 22.625 1,663.177 0.54 898.12 39.696 36,793.76 38,527.50
28/02/87 28/02/87 22.875 1,702.873 0.00 0.00 0.000 37,200.32 38,953.22
31/03/87 31/03/87 21.50 1,702.873 0.00 0.00 0.000 34,964.24 36,611.77
30/04/87 30/04/87 19.625 1,702.873 0.00 0.00 0.000 31,915.03 33,418.88
31/05/87 31/05/87 19.625 1,702.873 0.00 0.00 0.000 31,915.03 33,418.88
<FN>
L = POUND
</TABLE>
-8-
<PAGE> 9
<TABLE>
<CAPTION>
Bunker Hill Bunker Hill/Corporate Bond Fund with load
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
Bunker Hill Bunker Hill/Corporate Bond Fund
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/06/87 12/06/87 L19.875 1,702.873 0.54 919.55 46.267 L33,199.76 L34,764.15
30/06/87 30/06/87 19.50 1,749.140 0.00 0.00 0.000 32,573.35 34,108.22
31/07/87 31/07/87 20.00 1,749.140 0.00 0.00 0.000 33,408.57 34,982.79
31/08/87 31/08/87 20.00 1,749.140 0.00 0.00 0,000 33,408.57 34,982.79
11/09/87 11/09/87 20.00 1,749.140 0.54 944.54 47.227 34,310.60 35,927.33
30/09/87 30/09/87 19.125 1,796.366 0.00 0.00 0.000 32,809.51 34,355.51
31/10/87 31/10/87 19.875 1,796.366 0.00 0.00 0.000 34,096.16 35,702.78
30/11/87 30/11/87 19.75 1,796.366 0.00 0.00 0.000 33,881.72 35,478.24
11/12/87 11/12/87 20.00 1,796.366 0.54 970.04 48.502 35,236.99 36,897.37
31/12/87 31/12/87 19.00 1,844.868 0.00 0.00 0.000 33,475.14 35,052.50
15/01/88 15/01/88 19.50 1,844.868 0.69 1,272.96 65.280 35,571.74 37,247.89
31/01/88 31/01/88 19.375 1,910.148 0.00 0.00 0.000 35,343.71 37,009.12
29/02/88 29/02/88 19.375 1,910.148 0.00 0.00 0.000 35,343.71 37,009.12
31/03/88 31/03/88 19.00 1,910.148 0.00 0.00 0.000 34,659.64 36,292.82
15/04/88 15/04/88 17.50 17.78* 1,910.148 0.44 840.47 47.270 33,236.77 34,802.90
30/04/88 30/04/88 17.125 1,957.419 0.00 0.00 0.000 32,012.36 33,520.79
31/05/88 31/05/88 16.875 1,957.419 0.00 0.00 0.000 31,545.02 33,031.44
30/06/88 30/06/88 17.375 1,957.419 0.00 0.00 0.000 32,479.69 34,010.15
15/07/88 15/07/88 17.25 17.63* 1,957.419 0.44 861.26 48.852 33,778.88 35,370.55
31/07/88 31/07/88 17.00 2,006.271 0.00 0.00 0.000 32,571.81 34,106.60
31/08/88 31/08/88 17.25 2,006.271 0.00 0.00 0.000 33,050.80 34,608.17
30/09/88 30/09/88 17.125 2,006.271 0.00 0.00 0.000 32,811.30 34,357.39
14/10/88 14/10/88 17.00 17.74* 2,006.271 0.44 882.76 49.761 34,832.67 36,474.00
31/10/88 31/10/88 17.125 2,056.032 0.00 0.00 0.000 33,625.11 35,209.54
30/11/88 30/11/88 16.625 2,056.032 0.00 0.00 0.000 32,643.36 34,181.53
31/12/88 31/12/88 15.875 2,056.032 0.00 0.00 0.000 31,170.73 32,639.50
13/01/89 13/01/89 16.375 17.36* 2,056.032 0.55 1,130.82 65.139 35,166.47 36,823.53
31/01/89 31/01/89 16.50 2,121.171 0.00 0.00 0.000 33,424.35 34,999.32
28/02/89 28/02/89 16.625 2,121.171 0.00 0.00 0.000 33,677.57 35,264.47
31/03/89 31/03/89 15.75 2,121.171 0.00 0.00 0.000 31,905.06 33,408.44
14/04/89 14/04/89 16.125 17.01* 2,121.171 0.44 933.32 54.869 35,163.71 36,820.64
30/04/89 30/04/89 15.625 2,176.040 0.00 0.00 0.000 32,470.59 34,000.62
31/05/89 31/05/89 17.125 2,176.040 0.00 0.00 0.000 35,587.77 37,264.68
30/06/89 30/06/89 17.00 2,176.040 0.00 0.00 0.000 35,328.00 36,992.67
14/07/89 14/07/89 17.625 2,176.040 0.44 957.46 54.324 37,541.20 39,310.15
31/07/89 31/07/89 17.875 2,230.363 0.00 0.00 0.000 38,073.70 39,867.75
31/08/89 31/08/89 17.00 2,230.363 0.00 0.00 0.000 36,209.95 37,916.18
<FN>
L = POUND
</TABLE>
-9-
<PAGE> 10
<TABLE>
<CAPTION>
Bunker Hill Bunker Hill/Corporate Bond Fund
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30/09/89 30/09/89 L17.375 2,230.363 0.00 0.00 0.000 L37,008.70 L38,752.56
13/10/89 13/10/89 17.50 2,230.363 0.44 981.36 56.078 38,212.15 40,012.72
31/10/89 31/10/89 17.375 2,286.441 0.00 0.00 0.000 37,939.20 39,726.91
30/11/89 30/11/89 17.625 2,286.441 0.00 0.00 0.000 38,485.09 40,298.52
31/12/89 31/12/89 17.25 2,286.441 0.00 0.00 0.000 37,666.26 39,441.11
19/01/90 19/01/90 17.00 2,286.441 0.67 1,531.92 90.113 38,583.35 40,401.41
31/01/90 31/01/90 17.50 2,376.554 0.00 0.00 0.000 39,718.16 41,589.69
28/02/90 28/02/90 17.375 2,376.554 0.00 0.00 0.000 39,434.45 41,292.62
31/03/90 31/03/90 16.50 2,376.554 0.00 0.00 0.000 37,448.55 39,213.14
13/04/90 13/04/90 16.375 2,376.554 0.44 1,045.68 63.859 38,163.47 39,961.75
30/04/90 30/04/90 16.00 2,440.412 0.00 0.00 0.000 37,289.50 39,046.60
31/05/90 31/05/90 15.625 2,440.412 0.00 0.00 0.000 36,415.53 38,131.44
30/06/90 30/06/90 14.50 2,440.412 0.00 0.00 0.000 33,793.61 35,385.98
13/07/90 13/07/90 15.125 15.29* 2,440.412 0.41 1,000.57 65.439 36,590.32 38,314.47
31/07/90 31/07/90 14.125 2,505.852 0.00 0.00 0.000 33,802.37 35,395.16
31/08/90 31/08/90 13.75 2,505.852 0.00 0.00 0.000 32,904.97 34,455.46
30/09/90 30/09/90 13.125 2,505.852 0.00 0.00 0.000 31,409.29 32,889.30
12/10/90 12/10/90 13.50 14.66* 2,505.852 0.41 1,027.40 70.082 36,063.84 37,763.19
31/10/90 31/10/90 13.00 2,575.934 0.00 0.00 0.000 31,980.22 33,487.14
30/11/90 30/11/90 13.625 2,575.934 0.00 0.00 0.000 33,517.73 35,097.09
31/12/90 31/12/90 13.00 2,575.934 0.00 0.00 0.000 31,980.22 33,487.14
11/01/91 11/01/91 13.75 14.64* 2,575.934 0.54 1,391.00 95.014 37,343.05 39,102.67
31/01/91 31/01/91 13.75 2,670.948 0.00 0.00 0.000 35,072.88 36,725.53
28/02/91 28/02/91 15.125 2,670.948 0.00 0.00 0.000 38,580.17 40,398.08
31/03/91 31/03/91 14.75 2,670.948 0.00 0.00 0.000 37,623.63 39,396.48
12/04/91 12/04/91 15.125 2,670.948 0.41 1,095.09 72.403 39,625.98 41,493.17
30/04/91 30/04/91 14.625 2,743.350 0.00 0.00 0.000 38,316.03 40,121.49
31/05/91 31/05/91 15.125 2,743.350 0.00 0.00 0.000 39,625.98 41,493.17
30/06/91 30/06/91 15.375 2,743.350 0.00 0.00 0.000 40,280.95 42,179.01
12/07/91 12/07/91 15.75 2,743.350 0.41 1,124.77 71.414 42,337.57 44,332.54
31/07/91 31/07/91 15.125 2,814.764 0.00 0.00 0.000 40,657.51 42,573.31
31/08/91 31/08/91 15.25 2,814.764 0.00 0.00 0.000 40,993.52 42,925.15
30/09/91 30/09/91 15.875 2,814.764 0.00 0.00 0.000 42,673.59 44,684.38
11/10/91 11/10/91 15.50 2,814.764 0.41 1,154.05 74.455 41,665.55 43,628.85
<FN>
L = POUND
</TABLE>
-10-
<PAGE> 11
<TABLE>
<CAPTION>
Bunker Hill Bunker Hill/Corporate Bond Fund with load
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
Bunker Hill Bunker Hill/Corporate Bond Fund
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10/01/92 10/01/92 L15.875 2,889.219 0.45 1,300.15 81.899 L45,044.01 L47,166.51
31/01/92 31/01/92 16.00 2,971.118 0.00 0.00 0.000 45,398.69 47,537.89
28/02/92 28/02/92 15.875 2,971.118 0.00 0.00 0.000 45,044.01 47,166.51
31/03/92 31/03/92 15.75 2,971.118 0.00 0.00 0.000 44,689.34 46,795.12
10/04/92 10/04/92 15.625 2,971.118 0.38 1,129.03 72.258 45,412.88 47,552.75
30/04/92 30/04/92 16.00 3,043.376 0.00 0.00 0.000 46,502.79 48,694.02
31/05/92 31/05/92 16.375 3,043.376 0.00 0.00 0.000 47,592.69 49,835.28
30/06/92 30/06/92 16.00 3,043.376 0.00 0.00 0.000 46,502.79 48,694.02
10/07/92 10/07/92 16.00 3,043.376 0.36 1,095.62 68.476 47,549.10 49,789.63
31/07/92 31/07/92 16.625 3,111.852 0.00 0.00 0.000 49,406.49 51,734.54
31/08/92 31/08/92 16.625 3,111.852 0.00 0.00 0.000 49,406.49 51,734.54
30/09/92 30/09/92 16.00 3,111.852 0.00 0.00 0.000 47,549.10 49,789.63
10/10/92 10/10/92 16.25 3,111.852 0.34 1,058.03 65.110 49,302.47 51,625.62
31/10/92 31/10/92 15.50 3,176.962 0.00 0.00 0.000 47,026.97 49,242.90
30/11/92 30/11/92 15.375 3,176.962 0.00 0.00 0.000 46,647.72 48,845.78
31/12/92 31/12/92 15.25 3,176.962 0.00 0.00 0.000 46,268.47 48,448.66
12/01/93 12/01/93 15.375 15.80* 3,176.962 0.34 1,080.17 68.365 48,968.73 51,276.16
31/01/93 31/01/93 15.25 3,245.327 0.00 0.00 0.000 47,264.12 49,491.23
28/02/93 28/02/93 15.875 3,245.327 0.00 0.00 0.000 49,201.18 51,519.56
31/03/93 31/03/93 16.125 3,245.327 0.00 0.00 0.000 49,976.00 52,330.89
19/04/93 19/04/93 16.125 16.47* 3,245.327 0.34 1,103.41 66.995 52,099.01 54,553.94
30/04/93 30/04/93 16.125 3,312.322 0.00 0.00 0.000 51,007.68 53,411.19
31/05/93 31/05/93 16.00 3,312.322 0.00 0.00 0.000 50,612.28 52,997.15
30/06/93 30/06/93 15.75 3,312.322 0.00 0.00 0.000 49,821.46 52,169.07
19/07/93 19/07/93 16.125 16.72* 3,312.322 0.33 1,093.07 65.375 53,933.71 56,475.09
31/07/93 31/07/93 16.125 3,377.696 0.00 0.00 0.000 52,014.41 54,465.36
31/08/93 31/08/93 16.125 3,377.696 0.00 0.00 0.000 52,014.41 54,465.36
30/09/93 30/09/93 16.00 3,377.696 0.00 0.00 0.000 51,611.20 54,043.14
15/10/93 15/10/93 16.50 17.27* 3,377.696 0.33 1,114.64 64.542 56,772.32 59,447.46
31/10/93 31/10/93 16.125 3,442.238 0.00 0.00 0.000 53,008.32 55,506.10
30/11/93 30/11/93 16.00 3,442.238 0.00 0.00 0.000 52,597.40 55,075.82
31/12/93 31/12/93 15.25 16.68* 3,442.238 0.30 1,032.67 61.911 55,818.99 58,449.21
31/01/94 31/01/94 16.00 3,504.149 0.00 0.00 0.000 53,543.40 56,066.39
28/02/94 28/02/94 15.875 3,504.149 0.00 0.00 0.000 53,125.09 55,628.37
31/03/94 31/03/94 15.125 3,504.149 0.00 0.00 0.000 50,615.25 53,000.26
11/04/94 11/04/94 15.125 15.39* 3,504.149 0.43 1,506.78 97.907 52,941.04 55,435.64
22/04/94 22/04/94 15.125 3,602.056 0.00 0.00 0.000 52,029.45 54,481.10
<FN>
L = POUND
</TABLE>
-11-
<PAGE> 12
<TABLE>
<CAPTION>
Bunker Hill Bunker Hill/Corporate Bond Fund
Calculation Calculation of Total Returns
From Inception From Inception To Present
- -------------- -------------------------------
NAV*/ Offering
Amount Market Beginning Div. Div. Reinv. Total Price
Date Date Invested Price Shares Factor Amount Shares Value Value
- ---- ---- -------- ------ --------- ------ ------ ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30/04/94 30/04/94 L15.31 3,602.056 0.024881 89.62 5.854 L52,751.43 L55,237.10
31/05/94 31/05/94 15.09 3,607.910 0.107734 388.69 25.758 52,364.61 54,832.05
30/06/94 30/06/94 15.04 3,633.668 0.101334 368.21 24.482 52,542.75 55,018.58
31/07/94 31/07/94 15.17 3,658.151 0.103624 379.07 24.988 53,358.92 55,873.22
31/08/94 31/08/94 15.21 3,683.139 0.101694 374.55 24.625 53,857.32 56,395.09
30/09/94 30/09/94 14.86 3,707.764 0.096181 356.62 23.998 52,958.56 55,453.99
31/10/94 31/10/94 14.72 3,731.763 0.098705 368.34 25.023 52,811.40 55,299.89
30/11/94 30/11/94 14.61 3,756.786 0.089798 337.35 23.090 52,738.92 55,224.00
31/12/94 31/12/94 14.61 3,779.877 0.091589 346.20 23.696 53,069.53 55,570.19
31/01/95 31/01/95 14.76 3,803.572 0.088723 337.47 22.864 53,936.68 56,478.19
28/02/95 28/02/95 15.03 3,826.436 0.079593 304.56 20.263 55,214.18 57,815.89
<FN>
L = POUND
</TABLE>
-12-
<PAGE> 13
<TABLE>
<CAPTION>
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C>
24/10/73 -3.67% -3.67%
30/11/73 -3.71% -2.87%
31/12/73 -4.34% -2.71%
31/01/74
20/02/74
28/02/74 -2.59% -0.76%
15/03/74
31/03/74 -8.93% -5.36%
15/04/74
30/04/74 -4.91% -5.76%
15/05/74
31/05/74 -4.90% -6.15%
14/06/74
30/06/74 -8.20% -9.79%
15/07/74
31/07/74 -4.89% -10.16%
15/08/74
31/08/74 -18.90% -23.71%
16/09/74
30/09/74 4.61% -16.43%
16/10/74
16/10/74
31/10/74 2.90% -9.96%
15/11/74
30/11/74 -0.21% -5.91%
16/12/74
31/12/74 -12.36% -9.53% -10.87%
15/01/75
31/01/75 -7.90% 0.53% -6.17%
14/02/75
28/02/75 -3.50% 2.07% 0.28%
14/03/75
31/03/75 -7.41% -12.62% -8.25%
15/04/75
30/04/75 -9.85% -7.41% -11.04%
15/05/75
31/05/75 -5.78% -0.59% -7.41%
</TABLE>
-13-
<PAGE> 14
<TABLE>
<CAPTION>
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann.
Date Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
16/06/75
30/06/75 2.54% -0.10% -3.14%
15/07/75 -0.10% -7.34% -6.02%
31/07/75
14/08/75 13.99% -7.46% -8.94%
31/08/75
15/09/75
30/09/75 6.24% -2.50% -7.03%
15/10/75
31/10/75 3.89% 0.62% -2.05%
15/11/75
30/11/75 -2.34% -6.20% -3.79%
15/12/75
31/12/75 5.19% -2.55% -1.83%
15/01/76
31/01/76 7.02% 2.28% 5.14%
13/02/76
29/02/76 0.83% -3.82% 5.88%
15/03/76
31/03/76 5.70% -8.41% 1.55%
15/04/76
30/04/76 11.83% -2.04% 4.17%
14/05/76
31/05/76 6.87% -5.01% 3.62%
15/06/76
30/06/76 6.08% -0.84% 7.59%
15/07/76
31/07/76 11.42% -2.67% 9.64%
13/08/76
31/08/76 15.09% -4.41% 9.74%
15/09/76
30/09/76 14.19% -3.27% 11.16%
15/10/76
31/10/76 10.44% -2.68% 13.28%
12/11/76
30/11/76 15.90% -1.56% 15.75% 16.76%
15/12/76
</TABLE>
-14-
<PAGE> 15
<TABLE>
<CAPTION>
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann.
Date Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
31/12/76 17.01% -1.62% 18.27% 20.28%
14/01/77
31/01/77 10.02% -3.83% 18.90% 21.13%
14/02/77
28/02/77 6.93% -6.53% 14.09% 18.56%
15/03/77
31/03/77 11.63% -4.38% 19.78% 18.71%
18/04/77
30/04/77 12.14% -1.59% 23.96% 22.32%
16/05/77
31/05/77 7.08% -9.29% 18.22% 16.18%
15/06/77
30/06/77 7.60% -0.36% 28.32% 21.21%
18/07/77
31/07/77 10.01% -0.49% 34.26% 26.31%
15/08/77
31/08/77 8.17% -6.01% 55.61% 24.31%
15/09/77
30/09/77 10.00% -1.63% 46.33% 28.04%
17/10/77
31/10/77 6.25% -6.00% 33.67% 26.03%
15/11/77
30/11/77 0.81% -6.60% 25.11% 23.26%
15/12/77
31/12/77 -2.62% -4.97% 31.41% 22.65%
16/01/78
31/01/78 -4.37% -5.55% 23.46% 21.30%
15/02/78
28/02/78 -1.00% -3.24% 17.04% 22.90%
15/03/78
31/03/78 0.18% -3.24% 29.60% 24.52%
17/04/78
30/04/78 -0.32% -2.08% 37.06% 27.67%
15/05/78
31/05/78 -1.81% -10.65% 23.20% 19.45%
15/06/78
30/06/78 -3.39% -1.97% 20.90% 22.62%
</TABLE>
-15-
<PAGE> 16
<TABLE>
<CAPTION>
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann.
Date Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
17/07/78
31/07/78 -5.44% -2.60% 27.08% 25.06%
15/08/78
31/08/78 -1.441% -2.04% 34.54% 28.29%
18/09/78
30/09/78 -7.73% -7.91% 27.08% 23.71%
16/10/78
31/10/78 -9.17% -7.47% 16.86% 19.87%
15/11/78
30/11/78 14.98% -10.14% -7.59% 15.12% 15.98%
18/12/78
31/12/78 11.74% -11.51% -6.43% 10.55% 13.64%
15/01/79
31/01/79 23.46% -0.97% 5.70% 14.25% 25.78%
15/02/79
28/02/79 19.59% -3.43% -5.64% 12.09% 24.28%
19/03/79
31/03/79 21.39% -7.74% -7.56% 13.13% 20.30%
16/04/79
30/04/79 20.31% -11.19% -5.75% 8.84% 18.72%
31/05/79 20.81% -5.09% -4.50% 9.42% 18.72%
30/06/79 29.17% -10.94% -1.85% 8.31% 22.02%
31/07/79 33.21% -2.40% -1.92% 9.15% 25.32%
15/08/79
31/08/79 51.97% -9.63% -7.49% 5.64% 21.40%
30/09/79 37.77% -6.94% -5.16% 3.57% 20.56%
31/10/79 18.03% -11.34% -11.85% -6.18% 11.28%
15/11/79
30/11/79 18.43% -3.93% 0.13% -4.57% 16.68%
31/12/79 19.46% -6.31% -8.74% -11.48% 11.49%
31/01/80 9.96% -17.97% -7.46% -14.82% 8.04%
15/02/80
29/02/80 -0.23% -19.49% -7.39% -15.61% 4.77%
31/03/80 9.97% -16.12% -3.69% -15.00% 5.65%
30/04/80 29.63% -2.87% 9.14% -5.73% 20.75%
15/05/80
31/05/80 30.65% 1.90% 0.19% 4.13% 26.67%
</TABLE>
-16-
<PAGE> 17
<TABLE>
<CAPTION>
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann.
Date Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
30/06/80 25.79% -0.15% -3.81% 0.52% 27.58%
31/07/80 23.16% -7.63% -9.27% -8.36% 21.20%
15/08/80
31/08/80 33.54% 0.17% 0.33% -2.17% 27.34%
30/09/80 26.00% -2.84% -8.01% -8.52% 22.66%
31/10/80 10.45% -2.77% -11.79% -14.15% 13.29%
17/11/80
30/11/80 14.94% -5.22% -2.39% -10.28% 15.80%
31/12/80 13.58% 0.01% -3.70% -9.08% 16.76%
31/01/81 11.32% 8.33% 0.24% -3.51% 22.55%
17/02/81
28/02/81 8.74% 9.90% -6.05% -6.32% 20.56%
31/03/81 14.31% 9.87% -3.71% -6.77% 21.56%
30/04/81 9.61% -5.44% -6.07% -10.56% 19.56%
15/05/81
31/05/81 13.02% -7.55% -2.05% -1.96% 22.63%
30/06/81 15.26% -2.81% 1.12% 1.12% 29.84%
31/07/81 6.81% -3.38% -9.81% -6.36% 22.63%
17/08/81
31/08/81 7.68% -7.20% -3.63% -7.89% 23.74%
30/09/81 5.39% -4.49% -5.32% -5.30% 22.67%
31/10/81 4.32% 4.31% -3.67% -1.41% 23.74%
16/11/81
30/11/81 11.82% 12.75% 5.51% 12.57% 36.71%
31/12/81 2.42% 5.51% -9.89% 8.40% 29.00%
31/01/82 3.44% 2.24% -2.87% -0.38% 31.20%
16/02/82
28/02/82 15.02% 13.11% 3.94% 9.73% 42.79%
31/03/82 6.61% 4.11% -11.38% 5.20% 32.51%
30/04/82 7.02% 9.49% -1.21% 10.27% 37.08%
17/05/82
31/05/82 29.98% 23.14% 10.16% 27.19% 58.12%
30/06/82 15.28% 7.62% -11.63% 14.52% 46.32%
31/07/82 7.96% 11.19% -6.81% 8.81% 42.78%
16/08/82
31/08/82 29.31% 29.90% 12.58% 32.41% 68.32%
30/09/82 23.80% 29.21% -5.83% 31.48% 65.98%
</TABLE>
-17-
<PAGE> 18
<TABLE>
<CAPTION>
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann.
Date Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
31/10/82 28.47% 30.85% -2.45% 45.49% 69.54%
15/11/82
30/11/82 39.08% 25.39% 1.11% 46.92% 79.51%
31/12/82 37.82% 31.04% -5.84% 51.61% 77.00%
31/01/83 41.33% 30.66% -3.15% 58.68% 79.51%
14/02/83
28/02/83 45.59% 25.31% -0.32% 70.80% 87.37%
31/03/83 44.69% 35.97% -3.84% 70.53% 88.66%
30/04/83 43.06% 33.24% -3.19% 51.26% 91.25%
16/05/83
31/05/83 57.15% 18.72% -1.84% 48.19% 96.57%
30/06/83 38.61% 16.16% -13.53% 33.22% 77.97%
31/07/83 39.96% 22.59% -1.65% 44.41% 83.29%
15/08/83
31/08/83 38.64% 5.67% -2.96% 39.68% 86.24%
30/09/83 48.00% 10.31% -1.69% 49.27% 91.72%
31/10/83 52.75% 7.99% -4.50% 61.61% 91.72%
15/11/83
30/11/83 95.88% 62.70% 5.12% -1.57% 62.96% 97.59%
31/12/83 88.73% 61.31% 3.57% -7.23% 56.99% 91.95%
31/01/84 91.18% 47.88% 3.62% -3.10% 51.78% 94.77%
13/02/84
29/02/84 96.01% 56.52% 3.82% -0.13% 61.35% 103.69%
31/03/84 95.26% 53.62% -2.05% -9.27% 52.03% 93.51%
30/04/84 88.72% 49.80% -7.00% -8.09% 48.75% 86.23%
14/05/84
31/05/84 94.32% 53.61% -7.22% -2.07% 48.72% 90.96%
30/06/84 102.16% 49.46% 2.47% -4.50% 40.45% 90.96%
31/07/84 104.59% 46.67% 0.28% -3.75% 49.89% 92.47%
13/08/84
31/08/84 152.70% 58.81% 3.52% 0.17% 55.80% 101.87%
30/09/84 130.70% 59.92% 0.56% -4.50% 57.15% 101.87%
31/10/84 122.35% 79.91% 4.43% -0.83% 61.79% 109.64%
12/11/84
30/11/84 121.17% 78.35% 5.31% -0.74% 52.21% 117.90%
31/12/84 130.03% 83.90% 6.82% -5.90% 58.94% 114.69%
31/01/85 131.57% ***** 11.55% 1.20% 65.60% 127.51%
</TABLE>
-18-
<PAGE> 19
<TABLE>
<CAPTION>
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann.
Date Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
14/02/85
28/02/85 117.15% ***** 6.91% -4.28% 52.50% 128.02%
31/03/85 137.33% ***** 12.54% -4.50% 64.34% 128.02%
30/04/85 158.99% 90.80% 23.71% 1.04% 68.07% 141.24%
13/05/85
31/05/85 171.86% 98.72% 31.82% 4.35% 59.20% 163.59%
30/06/85 148.15% 88.39% 25.87% -8.81% 64.27% 151.68%
31/07/85 157.48% 99.65% 25.73% -3.85% 69.48% 153.39%
12/08/85
31/08/85 171.65% 94.27% 22.54% -2.37% 46.97% 159.03%
30/09/85 160.70% 97.59% 20.06% -6.44% 46.02% 153.78%
31/10/85 152.54% ***** 18.00% -2.52% 45.91% 159.03%
14/11/85
30/11/85 178.71% ***** 23.07% 3.52% 49.39% 180.79%
31/12/85 176.65% ***** 26.50% -3.28% 53.45% 184.39%
31/01/86 159.95% ***** 20.13% -3.90% 52.26% 186.19%
14/02/86
28/02/86 168.43% ***** 24.65% -0.69% 51.69% 197.62%
31/03/86 200.74% ***** 33.94% 2.62% 61.88% 219.80%
30/04/86 196.57% ***** 28.06% -3.40% 61.54% 223.50%
13/05/86
31/05/86 205.39% ***** 20.05% -2.18% 60.98% 231.35%
30/06/86 192.44% ***** 25.01% -5.05% 76.79% 229.45%
31/07/86 188.61% ***** 24.88% -3.95% 72.65% 231.35%
08/08/86
31/08/86 210.57% ***** 31.58% 2.86% 83.01% 256.89%
30/09/86 199.95% ***** 31.38% -6.58% 73.91% 249.13%
31/10/86 195.98% ***** 29.43% -3.97% 74.88% 251.07%
07/11/86
30/11/86 193.92% ***** 22.22% -2.25% 73.69% 259.36%
31/12/86 183.74% ***** 20.01% -5.03% 77.81% 257.38%
31/01/87 184.89% ***** 20.58% -3.44% 77.18% 261.35%
13/02/87
28/02/87 199.65% ***** 19.37% -1.68% 74.41% 272.00%
31/03/87 181.29% ***** 4.41% -10.24% 72.56% 249.64%
30/04/87 149.17% ***** -5.78% -12.83% 63.66% 219.15%
31/05/87 162.34% 92.76% -9.57% -4.50% 59.61% 219.15%
</TABLE>
-19-
<PAGE> 20
<TABLE>
<CAPTION>
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann.
Date Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
12/06/87
30/06/87 156.63% ***** -5.58% -2.53% 62.90% 225.73%
31/07/87 152.60% ***** -3.71% -2.05% 65.77% 234.09%
31/08/87 156.66% 89.55% -7.07% -4.50% 58.05% 234.09%
11/09/87
30/09/87 144.71% 88.78% -10.25% -6.21% 55.21% 228.10%
31/10/87 158.36% 92.06% -7.25% -0.75% 55.33% 240.96%
30/11/87 162.52% 80.26% -10.94% -5.10% 48.50% 238.82%
11/12/87
31/12/87 160.65% 80.62% -10.55% -5.65% 48.90% 234.75%
15/01/88
31/01/88 178.27% 88.03% -6.59% 0.83% 48.36% 253.44%
29/02/88 174.64% 80.14% -9.27% -4.50% 48.03% 253.44%
31/03/88 165.82% 73.08% -5,33% -6.35% 45.16% 246.60%
15/04/88
30/04/88 139.46% 59.86% -4.21% -11.79% 26.73% 220.12%
31/05/88 152.19% 53.26% -5.61% -5.89% 14.29% 215.45%
30/06/88 152.96% 74.29% -4.77% -1.67% 23.24% 224.80%
15/07/88
31/07/88 148.73% 69.71% -6.89% -4.23% 22.76% 225.72%
31/08/88 146.04% 69.48% -5.52% -3.10% 21.85% 230.51%
30/09/88 153.29% 63.44% -8.67% -5.19% 23.47% 228.11%
14/10/88
31/10/88 167.90% 67.50% -5.82% -2.13% 23.97% 236.25%
30/11/88 168.78% 57.77% -7.99% -7.29% 11.02% 226.43%
31/12/88 161.95% 55.08% -11.07% -8.81% 4.67% 211.71%
13/01/89
31/01/89 153.78% 63.89% -9.69% 2.40% 11.53% 234.24%
28/02/89 158.79% 57.90% -9.00% -3.78% 8.07% 236.78%
31/03/89 153.29% 57.46% -12.09% -9.53% -4.72% 219.05%
14/04/89
30/04/89 157.78% 66.51% -6.70% -2.81% -4.14% 224.71%
31/05/89 186.27% 77.97% 6.17% 4.67% 2.57% 255.88%
30/06/89 176.50% 75.29% 6.95% -5.20% 2.41% 253.28%
14/07/89
31/07/89 190.15% 88.92% 7.64% 2.92% 9.73% 280.74%
31/08/89 184.85% 71.30% 6.17% -9.17% -3.11% 262.10%
</TABLE>
-20-
<PAGE> 21
<TABLE>
<CAPTION>
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann.
Date Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
30/09/89 193.17% 75.08% 7.72% -2.39% 1.23% 270.09%
13/10/89
31/10/89 225.59% 72.83% 7.75% -2.10% 3.20% 279.39%
30/11/89 215.00% 68.67% 12.59% -3.13% 2.27% 284.85%
31/12/89 222.63% 67.55% 15.40% -6.53% 0.65% 276.66%
19/01/90
31/01/90 251.09% 66.72% 13.48% 0.70% 4.97% 297.18%
28/02/90 259.47% 65.16% 11.82% -5.18% 1.24% 294.34%
31/03/90 238.50% 56.84% 12.09% -9.31% 2.29% 274.49%
13/04/90
30/04/90 194.93% 47.62% 9.67% -4.91% 11.58% 272.90%
31/05/90 174.54% 31.94% -2.28% -6.74% 8.97% 264.16%
30/06/90 152.95% 28.23% -8.65% -11.38% -0.92% 237.94%
13/07/90
31/07/90 166.34% 27.40% -15.21% -4.48% -3.37% 238.02%
31/08/90 146.78% 21.31% -13.22% -7.04% -5.94% 229.05%
30/09/90 144.55% 18.20% -18.95% -8.84% -8.58% 214.09%
12/10/90
31/10/90 169.58% 17.91% -19.50% -2.76% -10.43% 219.80%
30/11/90 176.42% 14.00% -16.83% 0.09% -5.53% 235.18%
31/12/90 161.56% 7.39% -18.92% -8.88% -8.76% 219.80%
11/01/91
31/01/91 173.31% 17.04% -15.67% 4.74% -5.23% 250.73%
28/02/91 205.61% 23.80% -6.57% 5.05% 4.25% 285.80%
31/03/91 195.59% 12.35% -4.05% -6.87% 3.67% 276.24%
12/04/91
30/04/91 206.04% 13.11% -1.87% -2.74% 14.31% 283.16%
31/05/91 208.59% 14.21% 3.92% -1.24% 19.96% 296.26%
30/06/91 196.27% 16.76% 13.83% -2.92% 18.44% 302.81%
12/07/91
31/07/91 216.63% 17.18% 14.87% -3.61% 19.21% 306.58%
31/08/91 216.38% 9.69% 18.98% -3.71% 18.45% 309.94%
30/09/91 232.21% 16.73% 29.75% -0.59% 24.20% 326.74%
11/10/91
31/10/91 ------ ----- ----- ----- -----
</TABLE>
-21-
<PAGE> 22
<TABLE>
<CAPTION>
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann.
Date Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/01/92
31/01/92 230.45% 19.98% 23.62% -0.23% 29.71% 353.99%
28/02/92 201.26% 15.64% 11.50% -5.25% 27.73% 350.44%
31/03/92 222.08% 22.06% 13.43% -5.25% 33.77% 346.891%
10/04/92
30/04/92 223.97% 39.15% 15.90% -0.62% 36.77% 365.03%
31/05/92 187.45% 42.41% 14.70% -2.26% 27.72% 375.93%
30/06/92 203.51% 36.34% 10.25% -6.69% 25.71% 365.03%
10/07/92
31/07/92 230.46% 41.23% 16.05% 1.46% 23.93% 354.06%
31/08/92 180.32% 41.23% 15.10% -4.50% 30.30% 394.06%
30/09/92 173.59% 38.40% 6.41% -8.09% 22.70% 375.49%
10/10/92
31/10/92 164.90% 31.72% 4.17% -5.55% 18.38% 370.27%
30/11/92 148.17% 31.48% 4.16% -5.27% 15.76% 366.48%
31/12/92 149.65% 32.00% 1.68% -5.28% 17.31% 362.68%
12/01/93
31/01/93 151.45% 27.71% -0.58% -2.44% 13.64% 372.64%
28/02/93 150.77% 32.94% 4.31% -0.59% 19.15% 392.01%
31/03/93 152.98% 37.70% 6.80% -3.00% 27.45% 399.76%
19/04/93
30/04/93 154.71% 9.79% 52.17% 8.75% 4.75% -2.53% 30.63% 9.31% 410.08% 8.70%
31/05/93 145.89% 9.41% 53.22% 8.90% 1.56% -5.24% 32.73% 9.89% 406.12% 8.62%
30/06/93 167.34% 10.32% 46.49% 7.93% 2.32% -5.99% 40.79% 12.07% 398.21% 8.49%
19/07/93
31/07/93 171.02% 10.48% 52.51% 8.80% 0.54% -0.30% 46.95% 13.68% 420.14% 8.69%
31/08/93 166.72% 10.30% 50.30% 8.48% 0.54% -4.50% 50.96% 14.70% 420.14% 8.65%
30/09/93 157.09% 9.89% 50.22% 8.47% 3.66% -5.24% 56.92% 16.19% 416.11% 8.58%
15/10/93
31/10/93 164.05% 10.19% 50.55% 8.52% 7.65% -1.91% 58.29% 16.53% 430.08% 8.68%
30/11/93 154.21% 9.77% 53.88% 9.00% 7.68% -5.24% 49.86% 14.42% 425.97% 8.60%
31/12/93 177.72% 10.74% 71.02% 11.32% 15.21% 1.35% 66.69% 18.55% 458.19% 8.89%
31/01/94 162.53% 10.12% 52.98% 8.87% 8.19% -8.39% 45.79% 13.38% 435.43% 8.62%
28/02/94 149.08% 9.51% 50.65% 8.54% 3.12% -5.25% 31.50% 9.55% 431.25% 8.55%
31/03/94 149.80% 9.58% 51.50% 8.66% -3.28% -9.01% 25.29% 7.58% 406.15% 8.25%
11/04/94 -2.96%
22/04/94 -2.59%
</TABLE>
-22-
<PAGE> 23
<TABLE>
<CAPTION>
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann. YTD
Date Return Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Bunker Hill
Calculation
From Incep
- -----------
Inc. To
10-Year 5-Year 3-Year Date
10-Year Average Average Average Inc. To Average
Aggregate Annual 5-year Annual 1-year Monthly 3-year Ann. Date Ann.
Date Return Return Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30/04/94 170.51% 10.46% 55.15% 9.18% -1.24% -0.47% 31.48% 9.54% 427.51% 8.44%
31/05/94 161.87% 10.10% 40.52% 7.04% -1.19% -5.20% 26.20% 8.06% 423.65% 8.36%
30/06/94 162.76% 10.14% 42.04% 7.27% 0.72% -4.18% 24.57% 7.59% 425.43% 8.35%
31/07/94 164.76% 10.22% 33.84% 6.00% -2.03% -3.02% 25.33% 7.81% 433.59% 8.39%
31/08/94 154.78% 9.80% 42.04% 7.27% -1.12% -3.61% 25.47% 7.85% 438.57% 8.40%
30/09/94 150.53% 9.61% 36.66% 6.44% -2.01% -6.09% 18.52% 5.82% 429.59% 8.28%
31/10/94 140.58% 9.17% 32.94% 5.86% -4.85% -4.77% 16.98% 5.36% 428.11% 8.23% -9.65%
30/11/94 131.14% 8.73% 30.87% 5.53% -4.24% -4.63% 17.77% 5.60% 427.39% 8.19% -9.77%
31/12/94 136.06% 8.96% 34.55% 6.11% -9.20% -3.90% 16.62% 5.25% 430.70% 8.19% -9.20% -4.30%
31/01/95 126.40% 8.51% 29.69% 5.33% -3.80% -2.94% 13.46% 4.30% 439.37% 8.24% -2.94%
28/02/95 131.25% 8.74% 33.71% 5.98% -0.74% -2.24% 17.06% 5.39% 452.14% 8.33% -0.64%
</TABLE>
-23-
<PAGE> 24
FLEXIBLE BOND FUND
-24-
<PAGE> 25
<TABLE>
<CAPTION>
PACIFIC HORIZON FLEXIBLE BOND FUND
Calculation of Total Returns
- ----------------------------------
Inception
to date
Inception Ave. Offering
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual Price
Date Invested Price Shares Factor Amount NAV Shares Value Return Return Value
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
24/01/94 L10,000.00 L10.47 955.110 0.00 L10.00 0.000 L9,551.10 -4.49% L10,001.15
31/01/94 955.110 0.019517 18.64 10.02 1.860 9,588.84 -4.11% 10,040.67
28/02/94 956.970 0.060759 58.14 9.81 5.927 9,446.02 -5.54% 9,891.12
31/03/94 962.897 0.045872 44.17 9.63 4.587 9,316.87 -6.83% 9,755.88
30/04/94 967.484 0.040730 39.41 9.52 4.139 9,249.85 -7.50% 9,685.71
31/05/94 971.623 0.042901 41.68 9.48 4.397 9,252.67 -7.47% 9,688.66
30/06/94 976.020 0.046855 45.73 9.44 4.844 9,259.36 -7.41% 9,695.67
31/07/94 980.865 0.050199 49.24 9.51 5.178 9,377.26 -6.23% 9,819.12
31/08/94 986.042 0.048825 48.14 9.48 5.078 9,395.82 -6.04% 9,838.56
30/09/94 991.121 0.049354 48.92 9.38 5.215 9,345.63 -6.54% 9,786.00
31/10/94 996.336 0.053111 52.92 9.33 5.672 9,348.73 -6.51% 9,789.24
30/11/94 1,002.007 0.047935 48.03 9.25 5.193 9,316.60 -6.83% 9,755.60
31/12/94 1,007.200 0.055054 55.45 9.23 6.008 9,351.90 -6.48% 9,792.57
31/01/95 1,013.207 0.053670 54.38 9.31 5.841 9,487.34 -5.13% -5.03% 9,934.39
28/02/95 1,019.048 0.050313 51.27 9.43 5.437 9,660.90 -3.39% -3.10% 10,116.12
</TABLE>
<TABLE>
<CAPTION>
5-year 3-year
Ave. Ave. 12-month
5-year Annual 3-year Annual Period Y-T-D 1-Month Quarterly
Date Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
24/01/94
31/01/94
28/02/94
31/03/94 -5.81%
30/04/94 -5.19%
31/05/94 -4.47%
30/06/94 -4.43% -5.09%
31/07/94 -3.28%
31/08/94 -4.31%
30/09/94 -5.01% -3.61%
31/10/94 -4.47%
30/11/94 -4.83%
31/12/94 -4.14% -4.44%
31/01/95 -5.51% -3.12% -3.12%
28/02/95 -2.33% -1.34% -2.75%
<FN>
L = POUND
</TABLE>
-25-
<PAGE> 26
<TABLE>
<CAPTION>
PACIFIC HORIZON FLEXIBLE BOND FUND
Calculation of Total Returns
Without Sales Load
- ----------------------------------
Inception
to date
Inception Ave. Offering
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual Price
Date Invested Price Shares Factor Amount NAV Shares Value Return Return Value
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
24/01/94 L10,000.00 L10.47 955.110 0.00 L10.00 0.000 L9,551.10 0.00% L10,001.15
31/01/94 955.110 0.019517 18.64 10.02 1.860 9,588.84 0.40% 10,040.67
28/02/94 956.970 0.060759 58.14 9.81 5.927 9,446.02 -1.10% 9,891.12
31/03/94 962.897 0.045872 44.17 9.63 4.587 9,316.87 -2.45% 9,755.88
30/04/94 967.484 0.040730 39.41 9.52 4.139 9,249.85 -3.15% 9,685.71
31/05/94 971.623 0.042901 41.68 9.48 4.397 9,252.67 -3.12% 9,688.66
30/06/94 976.020 0.046855 45.73 9.44 4.844 9,259.36 -3.05% 9,695.67
31/07/94 980.065 0.050199 49.24 9.51 5.178 9,377.26 -1.82% 9,819.12
31/08/94 486.042 0.048825 48.14 9.48 5.078 9,395.82 -1.63% 9,838.56
30/09/94 991.121 0.049354 48.92 9.38 5.215 9,345.63 -2.15% 9,786.00
31/10/94 996.336 0.053111 52.92 9.33 5.672 9,348.73 -2.12% 9,789.24
30/11/94 1,002.007 0.047935 48.03 9.25 5.193 9,316.60 -2.46% 9,755.60
31/12/94 1,007.200 0.055054 55.45 9.23 6.008 9,351.90 -2.09% 9,792.57
31/01/95 1,013.207 0.053670 54.38 9.31 5.841 9,487.34 -0.67% -0.66% 9,934.39
28/02/95 1,019.048 0.050313 51.27 9.43 5.437 9,660.90 1.15% 1.05% 10,116.12
</TABLE>
<TABLE>
<CAPTION>
5-year 3-year
Ave. Ave. 12-month
5-year Annual 3-year Annual Period Y-T-D 1-Month Quarterly
Date Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
24/01/94
31/01/94
28/02/94
31/03/94 -1.37%
30/04/94 -0.72%
31/05/94 0.03%
30/06/94 0.07% -0.62%
31/07/94 1.27%
31/08/94 0.20%
30/09/94 -0.53% 0.93%
31/10/94 0.03%
30/11/94 -0.34%
31/12/94 0.38% 0.07%
31/01/95 -1.06% 1.45% 1.45%
28/02/95 2.27% 3.30% 1.83%
</TABLE>
-26-
<PAGE> 27
BLUE CHIP FUND
-27-
<PAGE> 28
<TABLE>
<CAPTION>
PACIFIC HORIZON BLUE CHIP FUND
Calculation of Total Returns
- ------------------------------
Inception
to date
Inception Ave. Offering
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual Price
Date Invested Price Shares Factor Amount NAV Shares Value Return Return Value
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
13/01/94 L10,000.00 L15.71 636.667 0.00 L15.00 0.000 L9,550.00 -4.50% L10,000.00
31/01/94 636.667 0.00 15.25 0.000 9,709.17 -2.91% 10,166.67
28/02/94 636.667 0.00 14.97 0.000 9,530.90 -4.69% 9,980.00
31/03/94 636.667 0.035050 22.32 14.32 1.558 9,139.38 -8.61% 9,570.03
30/04/94 638.225 0.000000 0.00 14.44 0.000 9,215.97 -7.84% 9,650.23
31/05/94 638.225 0.000000 0.00 14.62 0.000 9,330.85 -6.69% 9,770.52
30/06194 638.225 0.061863 39.48 14.23 2.775 9,121.42 -8.79% 9,551.23
31/07194 641.000 0.000000 0.00 14.76 0.000 9,461.15 -5.39% 9,906.97
31/08/94 641.000 0.000000 0.00 15.40 0.000 9,871.39 -1.29% 10,336.54
30/09/94 641.000 0.086057 55.16 14.90 3.702 9,606.06 -3.94% 10,058.70
31/10/94 644.702 0.000000 0.00 15.26 0.000 9,838.15 -1.62% 10,301.73
30/11/94 644.702 0.000000 0.00 14.75 0.000 9,509.35 -4.91% 9,957.44
31/12/94 644.702 0.090435 58.30 14.82 3.934 9,612.78 -3.87% 10,065.74
31/01/95 648.636 0.000000 0.00 15.12 0.000 9,807.37 -1.93% -1.84% 10,269.50
28/02/95 648.636 0.000000 0.00 15.81 0.000 10,254.93 2.55% 2.26% 10,738.15
</TABLE>
<TABLE>
<CAPTION>
5-year 3-year
Ave. Ave. 12-month
5-year Annual 3-year Annual Period Y-T-D 1-Month Quarterly
Date Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
13/01/94
31/01/94
28/02/94
31/03/94 -8.42%
30/04/94 -3.70%
31/05/94 -3.31%
30/06194 -6.64% -4.69%
31/07194 -0.94%
31/08/94 -0.36%
30/09/94 -7.07% 0.57%
31/10/94 -2.19%
30/11/94 -7.69%
31/12/94 -3.46% -4.43%
31/01/95 -3.53% -2.57% -2.57%
28/02/95 2.75% 1.88% -0.14%
<FN>
L=Pound
</TABLE>
-28-
<PAGE> 29
<TABLE>
<CAPTION>
PACIFIC HORIZON BLUE CHIP FUND
Calculation of Total Returns
Without Sales Load
- ------------------------------
Inception
to date
Inception Ave. Offering
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual Price
Date Invested Price Shares Factor Amount NAV Shares Value Return Return Value
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
13/01/94 L10,000.00 L15.71 636.667 0.00 L15.00 0.000 L9,550.00 0.00% L10,000.00
31/01/94 636.667 0.00 15.25 0.000 9,709.17 1.67% 39.82% 10,166.67
28/02/94 636.667 0.00 14.97 0.000 9,530.90 -0.20% -1.58% 9,980.00
31/03/94 636.667 0.035050 22.32 14.32 1.558 9,139.38 4.30% -18.81% 9,570.03
30/04/94 638.225 0.000000 0.00 14.44 0.000 9,215.97 -3.50% -11.44% 9,650.23
31/05/94 638.225 0.000000 0.00 14.62 0.000 9,330.85 -2.29% -5.96% 9,770.52
30/06/94 638.225 0.061863 39.48 14.23 2.775 9,121.42 -4.49% -9.49% 9,551.23
31/07/94 641.000 0.000000 0.00 14.76 0.000 9,461.15 -0.93% -1.70% 9,906.97
31/08/94 641.000 0.000000 0.00 15.40 0.000 9,871.39 3.37% 5.39% 10,336.54
30/09/94 641.000 0.086057 55.16 14.90 3.702 9,606.06 0.59% 0.82% 10,058.70
31/10/94 644.702 0.000000 0.00 15.26 0.000 9,838.15 3.02% 3.80% 10,301.73
30/11/94 644.702 0.000000 0.00 14.75 0.000 9,509.35 -0.43% -0.48% 9,957.44
31/12/94 644.702 0.090435 58.30 14.82 3.934 9,612.78 0.66% 0.68% 10,065.74
31/01/95 648.636 0.000000 0.00 15.12 0.000 9,807.37 2.70% 2.57% 10,269.50
28/02/95 648.636 0.000000 0.00 15.81 0.000 10,254.93 7.38% 6.53% 10,738.15
</TABLE>
[FN]
L = POUND
[/FN]
<TABLE>
<CAPTION>
5-year 3-year
Ave. Ave. 12-month
5-year Annual 3-year Annual Period Y-T-D 1-Month Quarterly
Date Return Return Return Return Return Return Return Return
---- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
13/01/94
31/01/94
28/02/94
31/03/94 -4.11%
30/04/94 0.84%
31/05/94 1.25%
30/06/94 -2.24% -0.20%
31/07/94 3.72%
31/08/94 4.34%
30/09/94 -2.69% 5.31%
31/10/94 2.42%
30/11/94 -3.34%
31/12/94 1.09% 0.07%
31/01/95 1.01% 2.02% 2.02%
28/02/95 7.60% 6.68% 4.56%
</TABLE>
[FN]
L = Pound
[/FN]
-29-
<PAGE> 30
ASSET ALLOCATION FUND
-30-
<PAGE> 31
<TABLE>
<CAPTION>
PACIFIC HORIZON ASSET ALLOCATION FUND
Calculation of Total Returns
- -------------------------------------
With sales load
Inception
to date
Inception Ave. Offering
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual Price
Date Invested Price Shares Factor Amount NAV Shares Value Return Return Value
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
18/01/94 L10,000.00 L15.71 636.537 0.00 L15.00 0.000 L9,548.06 -4.52% 9,997.97
31/01/94 636.537 0.00 15.15 0.000 9,643.54 -3.56% 10,097.95
28/02/94 636.537 0.00 14.84 0.000 9,446.21 -5.54% 9,891.32
31/03/94 636.537 0.055370 35.25 14.39 2.449 9,195.02 -8.05% 9,628.29
30/04/94 638.987 0.00 14.31 0.000 9,143.90 -8.56% 9,574.76
31/05/94 638.987 0.00 14.41 0.000 9,207.80 -7.92% 9,641.67
30/06/94 638.987 0.084723 54.14 14.12 3.834 9,076.63 -9.23% 9,504.32
31/07/94 642.821 0.00 14.52 0.000 9,333.75 -6.66% 9,773.57
31/08/94 642.821 0.00 14.91 0.000 9,584.45 -4.16% 10,036.08
30/09/94 642.821 0.121679 78.22 14.48 5.402 9,386.26 -6.14% 9,828.54
31/10/94 648.222 0.00 14.67 0.000 9,509.42 -4.91% 9,957.51
30/11/94 648.222 0.00 14.35 0.000 9,301.99 -6.98% 9,740.30
31/12/94 648.222 0.147043 95.32 14.35 6.642 9,397.31 -6.03% 9,840.11
31/01/95 654.865 0.00 14.63 0.000 9,580.67 -4.19% -4.05% 10,032.11
28/02/95 654.865 0.00 15.15 0.000 9,921.20 -0.79% -0.71% 10,388.69
</TABLE>
[FN]
L = Pound
[/FN]
<TABLE>
<CAPTION>
12-month
Period Y-T-D Quarterly Monthly
Date Return Return Return Return
---- ------ ------ ------ ------
<S> <C> <C> <C> <C>
18/01/94
31/01/94 -3.55%
28/02/94 -6.45%
31/03/94 -8.03% -7.04%
30/04/94 -5.03%
31/05/94 -3.83%
30/06/94 -5.73% -5.86%
31/07/94 -1.79%
31/08/94 -1.93%
30/09/94 -1.24% -6.47%
31/10/94 -3.25%
30/11/94 -6.58%
31/12/94 -4.39% -3.52%
31/01/95 -5.12% -2.64% -2.64%
28/02/95 0.30% 0.82% -1.11%
</TABLE>
[FN]
L = Pound
[/FN]
-31-
<PAGE> 32
<TABLE>
<CAPTION>
PACIFIC HORIZON ASSET ALLOCATION FUND
Calculation of Total Returns
Without Sales Load
- -------------------------------------
Inception
to date
Inception Ave. Offering
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual Price
Date Invested Price Shares Factor Amount NAV Shares Value Return Return Value
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
18-Jan-94 10,000.00 15.71 636.537 0.00 15.00 0.000 9,548.06 0.00% 9,997.97
31-Jan-94 636.537 0.00 15.15 0.000 9,643.54 1.00% 32.23% 10,097.95
28-Feb-94 636.537 0.00 14.84 0.000 9,446.21 -1.07% -9.11% 9,891.32
31-Mar-94 636.537 0.055370 35.25 14.39 2.449 9,195.02 -3.70% -17.39% 9,628.29
30-Apr-94 638.987 0.00 14.31 0.000 9,143.90 -4.23% -14.34% 9,574.76
31-May-94 638.987 0.00 14.41 0.000 9,207.80 -3.56% -9.48% 9,641.67
30-Jun-94 638.987 0.084723 54.14 14.12 3.834 9,076.63 -4.94% -10.72% 9,504.32
31-Jul-94 642.821 0.00 14.52 0.000 9,333.75 -2.24% -4.18% 9,773.57
31-Aug-94 642.821 0.00 14.91 0.000 9,584.45 0.38% 0.62% 10,036.08
30-Sep-94 642.821 0.121679 78.22 14.48 5.402 9,386.26 -1.69% -2.42% 9,828.54
31-Oct-94 648.222 0.00 14.67 0.000 9,509.42 -0.40% -0.52% 9,957.51
30-Nov-94 648.222 0.00 14.35 0.000 9,301.99 -2.58% -2.97% 9,740.30
31-Dec-94 648.222 0.147043 95.32 14.35 6.642 9,397.31 -1.58% -1.66% 9,840.11
31-Jan-95 654.865 0.00 14.63 0.000 9,580.67 0.34% 0.33% 10,032.11
28-Feb-95 654.865 0.00 15.15 0.000 9,921.20 3.91% 3.51% 10,388.69
</TABLE>
<TABLE>
<CAPTION>
12-month 6-Month
Period Y-T-D Quarterly Monthly Period
Date Return Return Return Return Return
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
18-Jan-94
31-Jan-94 1.00%
28-Feb-94 -2.05%
31-Mar-94 -3.70% -2.66%
30-Apr-94 -0.56%
31-May-94 0.70%
30-Jun-94 -1.29% -1.42%
31-Jul-94 2.83%
31-Aug-94 2.69% 1.46%
30-Sep-94 3.41% -2.07%
31-Oct-94 1.31%
30-Nov-94 -2.18%
31-Dec-94 0.12% 1.02%
31-Jan-95 -0.65% 1.95% 1.95%
28-Feb-95 5.03% 5.57% 3.55% 3.51%
</TABLE>
-32-
<PAGE> 33
NATIONAL MUNICIPAL BOND FUND
-33-
<PAGE> 34
30 DAY SEC YIELD CALCULATION
FOR THE 34 DAY PERIOD:
01/30/95 TO 02/28/96
PACIFIC HORIZON NATIONAL MUNICIPAL BOND FEEDER
A-Interest and dividend earned during the period
B-Expenses accrued during the period
C-Average Fund shares outstanding during the period
D-Maximum offering price/share on the last day of the period
ACTUALS:
A- 11,545.92 Income for the period
B- 0.00 Expenses - last 30 days
C- 264,180.9152 Average Shares
D- 10.09 NAV
A-B
YIELD = 2 [ (-------- + 1 )(POWER OF 6) - 1 ]
CD
11,545.92 - 0.00
YIELD = 2 [ (--------------------- + 1 )(POWER OF 6) - 1 ]
264,180.9152 X 10.09
YIELD = 6.4439%
-34-
<PAGE> 35
<TABLE>
<CAPTION>
PACIFIC HORIZON NATIONAL MUNICIPAL BOND FUND
Calculation of Total Returns
- --------------------------------------------
With sales load
Inception Average Offering
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual Price
Date Invested Price Shares Factor Amount NAV Shares Value Return Return Value
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
01/28/94 $10,000.00 $10.47 955.110 $0.000000 0.00 $10.00 0.000 $9,551.10 -4.49% $10,001.15
01/31/94 955.110 0.000000 0.00 10.02 0.000 9,670.20 -4.30% 10,021.15
02/28/94 955.110 0.009608 9.18 9.89 0.928 9,455.21 -5.45% 9,900.75
03/31/94 958.038 0.037280 35.65 9.59 3.741 9,146.69 -8.53% 9,577.69
04/30/94 959.779 0.037818 36.30 9.56 3.797 9,211.78 -7.88% 9,646.84
06/31/94 963.676 0.040411 38.94 9.61 4.052 9,298.90 -7.01% 9,737.07
06/30/94 967.627 0.040880 38.56 9.50 4.164 9,232.02 -7.68% 9,667.03
07/31/94 971.791 0.042718 41.51 9.61 4.320 9,380.43 -6.20% 9,822.44
08/31/94 976.111 0.043584 42.54 9.60 4.432 9,413.21 -5.87% 9,856.76
09/30/94 980.542 0.043292 42.45 9.43 4.502 9,288.96 -7.11% 9,726.66
10/31/94 985.044 0.043366 42.72 9.21 4.638 9,114.97 -8.85% 9,544.47
11/30/94 989.682 0.041391 40.96 9.00 4.552 8,948.10 -10.52% 9,389.74
12/31/94 894.234 0.044361 44.11 9.18 4.804 9,171.17 -8.29% 9,503.32
01/31/95 999.038 0.044966 44.94 9.42 4.771 9,455.88 -5.44% -5.40% 9,901.45
02/28/95 1,003.809 0.041453 41.61 9.64 4.317 9,716.33 -2.82% -2.80% 10,176.26
03/31/95 1,008.126 0.047478 47.86 9.70 4.934 9,526.68 -1.78% -1.48% 10,289.72
04/30/95 1,013.080 0.047030 47.64 9.66 4.932 9,833.81 -1.68% -1.33% 10,297.15
05/31/95 1,017.992 0.048057 48.02 9.93 4.927 10,157.59 -1.68% 1.18% 10,636.21
</TABLE>
<TABLE>
<CAPTION>
12-Month
Period Y-T-D Quarterly Monthly 6-Month
Date Return Return Return Return Return
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
01/28/94
01/31/94 -4.31%
02/28/94 -5.65%
03/31/94 -8.54% -7.62%
04/30/94 -3.82%
06/31/94 -3.60%
06/30/94 -3.61% -6.19%
07/31/94 -2.95%
08/31/94 -4.17% -0.44%
09/30/94 -3.91% -5.78%
10/31/94 -6.29%
11/30/94 -6.25%
12/31/94 -5.71% -2.12%
01/31/95 -5.64% -1.54% -1.34% 0.80%
02/28/95 -1.64% 1.20% -1.85%
03/31/95 2.60% 2.33% 2.33% -3.44%
04/30/95 1.96% 2.40% -4.43%
05/31/95 4.32% 5.77% -1.36%
</TABLE>
-35-
<PAGE> 36
<TABLE>
<CAPTION>
PACIFIC HORIZON NATIONAL MUNICIPAL BOND FUND
Calculation of Total Returns
Without Sales Load
- --------------------------------------------
Inception Average Offering
Amount Off. Beginning Div. Div. Reinvested Total to Date Annual Price
Date Invested Price Shares Factor Amount NAV Shares Value Return Return Value
---- -------- ----- ------ ------ ------ --- ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
01/28/94 $10,000.00 $10.47 955.110 $0.000000 0.00 $10.00 0.000 $9,551.10 0.00% $10,001.15
01/31/94 955.110 0.000000 0.00 10.02 0.000 9,570.20 0.20% 10,021.15
02/28/94 955.110 0.009608 9.18 9.89 0.928 9,455.21 -1.00% 9,900.75
03/31/94 956.038 0.037290 35.05 9.53 3.741 9,146.69 -4.23% 9,577.69
04/30/94 959.779 0.037818 36.30 9.56 3.797 9,211.78 -3.55% 9,845.84
05/31/94 983.575 0.040411 38.94 9.61 4.062 9,298.90 -2.64% 9,737.07
06/30/94 967.627 0.040880 39.56 9.50 4.184 9,232.02 -3.34% 9,667.03
07/31/94 971.791 0.042718 41.51 9.51 4.320 8,350.43 -1.79% 9,822.44
08/31/94 976.111 0.043584 42.54 9.50 4.432 9,413.21 -1.44% 9,868.78
09/30/94 980.642 0.043292 42.45 9.43 4.502 9,288.96 -2.74% 9,726.66
10/31/94 935.044 0.048866 42.72 9.21 4.638 9,114.97 -4.57% 9,544.47
11/30/94 989.682 0.041391 40.98 9.00 4.552 8,948.10 -6.31% 9,369.74
12/31/94 994.234 0.044361 44.11 9.18 4.804 9,171.17 -3.98% 9,503.32
01/31/95 999.038 0.044833 44.94 9.42 4.771 9,455.88 -1.00% -0.99% 9,901.45
02/28/95 1,003.809 0.041453 41.61 9.64 4.317 9,718.33 1.76% 1.61% 10,176.27
03/31/95 1,006.126 0.047478 47.86 9.70 4.934 8,826.68 2.89% 2.48% 10,289.72
04/30/95 1,013.060 0.047090 47.64 9.86 4.832 9,833.61 2.96% 2.36% 10,297.18
06/31/95 1.017.992 0.048057 48.92 9.83 4.927 10,157.59 8.95% 4.71% 10,638.22
</TABLE>
<TABLE>
<CAPTION>
12-Month
Period Y-T-D Quarterly Monthy 6-Month
Date Return Return Return Return Return
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
01/28/94
01/31/94 0.20%
02/28/94 -1.20%
03/31/94 -4.23% -8.26%
04/30/94 0.71%
05/31/94 0.95%
06/30/94 0.93% -0.72%
07/31/94 1.61%
08/31/94 0.35% -0.44%
09/30/94 0.82% -1.32%
10/31/94 -1.87%
11/30/94 -1.83%
12/31/94 -1.27% 2.49%
01/31/95 -1.19% 3.10% 3.10%
02/28/95 2.78% 5.97% 2.78% 3.24%
03/31/95 7.48% 7.16% 7.15% 1.11%
04/30/95 8.75% 7.23% 0.07%
06/31/95 9.23% 10.76% - 3.29%
</TABLE>
-36-
<PAGE> 1
[ARTICLE] 6
[CIK] 0000711663
[NAME] PRIME FUND PACIFIC HORIZON SHARES
[SERIES]
[NUMBER] 2
[NAME] PACIFIC HORIZON SHARES
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] FEB-28-1996
[PERIOD-START] MAR-01-1994
[PERIOD-END] AUG-31-1995
[INVESTMENTS-AT-COST] 4851917439
[INVESTMENTS-AT-VALUE] 4851917439
[RECEIVABLES] 9370151
[ASSETS-OTHER] 130577
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 4861418167
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 111476198
[TOTAL-LIABILITIES] 111476198
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 4752701286
[SHARES-COMMON-STOCK] 4752917294
[SHARES-COMMON-PRIOR] 2617606297
[ACCUMULATED-NII-CURRENT] 1297567
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 4056884
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 4749941969
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 95586299
[OTHER-INCOME] 0
[EXPENSES-NET] 7253168
[NET-INVESTMENT-INCOME] 88333131
[REALIZED-GAINS-CURRENT] (1110049)
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 87223082
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 88019508
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 12197520811
[NUMBER-OF-SHARES-REDEEMED] 10096709924
[SHARES-REINVESTED] 34500110
[NET-CHANGE-IN-ASSETS] 2134514571
[ACCUMULATED-NII-PRIOR] 983944
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 2946835
[GROSS-ADVISORY-FEES] 1565958
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 7253168
[AVERAGE-NET-ASSETS] 3682684684
[PER-SHARE-NAV-BEGIN] 1
[PER-SHARE-NII] .028
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] .028
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 1
[EXPENSE-RATIO] .56
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<PAGE> 2
[ARTICLE] 6
[CIK] 0000711663
[NAME] PACIFIC HORIZON SHARES
[SERIES]
[NUMBER] 2
[NAME] PRIME FUND PACIFIC HORIZON SHARES
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] FEB-28-1995
[PERIOD-START] MAR-01-1994
[PERIOD-END] FEB-28-1995
[INVESTMENTS-AT-COST] 2624226474
[INVESTMENTS-AT-VALUE] 2624226474
[RECEIVABLES] 6338971
[ASSETS-OTHER] 132764
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 2630698209
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 15270811
[TOTAL-LIABILITIES] 15270811
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 2617390289
[SHARES-COMMON-STOCK] 2617606297
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 983944
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 2946835
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 2615427398
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 150199956
[OTHER-INCOME] 0
[EXPENSES-NET] 11429555
[NET-INVESTMENT-INCOME] 138770401
[REALIZED-GAINS-CURRENT] (70528584)
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 68241817
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 22779590840
[NUMBER-OF-SHARES-REDEEMED] 26110723254
[SHARES-REINVESTED] 44544475
[NET-CHANGE-IN-ASSETS] 3279041585
[ACCUMULATED-NII-PRIOR] 320883
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 9830128
[GROSS-ADVISORY-FEES] 3250830
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 13299415
[AVERAGE-NET-ASSETS] 4254948191
[PER-SHARE-NAV-BEGIN] 1
[PER-SHARE-NII] .042
[PER-SHARE-GAIN-APPREC] (.023)
[PER-SHARE-DIVIDEND] .042
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] .023<F1>
[PER-SHARE-NAV-END] 1
[EXPENSE-RATIO] .51
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<FN>
<F1>INCREASE DUE TO VOLUNTARY CAPITAL CONTRIBUTION FROM INVESTMENT ADVISOR (NOTE 1)
</FN>
</TABLE>
<PAGE> 1
EXHIBIT 18
PACIFIC HORIZON FUNDS, INC.
(THE "COMPANY")
AMENDED AND RESTATED PLAN PURSUANT TO RULE 18f-3
FOR OPERATION OF A MULTI-CLASS SYSTEM
I. INTRODUCTION
On February 23, 1995, the Securities and Exchange Commission
(the "Commission") adopted Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"), which permits the creation and operation of a
multi-class distribution structure without the need to obtain an exemptive
order under Section 18 of the 1940 Act. Rule 18f-3, which became effective on
April 3, 1995, requires an investment company to file with the Commission a
written plan specifying all of the differences among classes, including the
various services offered to shareholders, different distribution arrangements
for each class, methods for allocating expenses relating to those differences
and any conversion features or exchange privileges. Currently, the Company
operates a multi-class distribution structure pursuant to an exemptive order
granted by the Commission on November 17, 1989. On April 27, 1995, the Board
of Directors of the Company authorized the Company to operate its current
multi-class distribution structure in compliance with Rule 18f-3.
II. ATTRIBUTES OF CLASSES
A. Generally
MONEY MARKET FUNDS
The Company is authorized to offer four classes of shares --
Pacific Horizon Shares, Horizon Shares, Horizon Service Shares, and Class S
Shares -- in the Treasury, Treasury Only, Government, Tax-Exempt Money and
California Tax-Exempt Money Market Funds (each a "Fund," collectively, the
"Money Market Funds") and five classes of shares -- Pacific Horizon Shares,
Horizon Shares, Horizon Service Shares, Class S Shares and Class X Shares-- in
the Prime Fund.
NON-MONEY MARKET FUNDS
The Company is also authorized to offer two classes of shares
- -- Class A Shares and Class B Shares -- in the Aggressive Growth, Capital
Income, U.S. Government Securities, California Tax-Exempt Bond, Corporate Bond,
Blue Chip, Asset Allocation, Flexible Bond, National Municipal Bond, Utilities,
Short-Term Government, Growth and Income, International Bond and
<PAGE> 2
International Equity Funds (each a "Fund," collectively, the "Non-Money Market
Funds".
ALL FUNDS
In general, shares of each class shall be identical except for
different expense variables (which will result in different returns for each
series), certain related rights, certain distribution and shareholder services
and certain sales charges. More particularly, the Pacific Horizon Shares,
Horizon Shares, and Horizon Service Shares of the Money Market Funds and Class
A Shares and Class B Shares of the Non-Money Market Funds shall represent
interests in the same portfolio of investments of the particular Fund, and
shall be identical in all respects, except for: (a) the impact of expenses
assessed to the Pacific Horizon Shares, Horizon Service Shares and Class A
Shares pursuant to the Shareholder Services Plan or Administrative Services
Plan adopted for such class, expenses assessed to Class S Shares, Class X
Shares and Class B Shares pursuant to the Distribution and Services Plan
adopted for such class, the sales charges imposed on Class A shares and Class B
Shares and any other incremental expenses subsequently identified that should
be properly allocated to one class so long as any subsequent changes in expense
allocations are reviewed and approved by a vote of the Board of Directors,
including a majority of the independent directors; (b) the fact that a class
shall vote separately on matters which pertain to the Shareholder Services
Plan, the Administrative Services Plan or Distribution and Services Plan
adopted for that class and any matter submitted to shareholders relating to
such class's expenses; and (c) the different exchange privileges and sales
charges of the class of shares; (d) the designation of each class of shares of
the particular Fund; and (e) the different shareholder services relating to a
class of shares.
B. Distribution and Servicing Arrangements, Expenses and Sales Charges
1. Money Market Funds
PACIFIC HORIZON SHARES
Pacific Horizon Shares are currently available for purchase by
individuals directly from the Company's distributor, by clients of Bank of
America National Trust and Savings Assoc., N.A., ("Bank of America") through
their qualified trust and agency accounts and by clients of certain
institutions such as banks or broker-dealers ("Service Organizations").
Pacific Horizon Shares shall not initially be subject to a sales charge (except
as provided below) but shall initially be subject to a servicing fee payable
pursuant to the Administrative Services Plan adopted for that class which shall
not initially exceed .32%
- 2 -
<PAGE> 3
(on an annual basis) of the average daily net asset value of Pacific Horizon
Shares (other than Pacific Horizon shares of the California Tax-Exempt Money
Market Fund) beneficially owned by customers of shareholder organizations
providing such shareholder services ("Shareholder Organizations") and .35% (on
an annual basis) of the average daily net asset value of Pacific Horizon Shares
of the California Tax-Exempt Money Market Fund beneficially owned by customers
of Shareholder Organizations.
The services provided by Shareholder Organizations may
initially include the following: (i) aggregating and processing purchase and
redemption requests from customers for Pacific Horizon Shares and placing net
purchase and redemption orders with the distributor; (ii) providing customers
with a service that invests the assets of their accounts in Pacific Horizon
Shares pursuant to specific or preauthorized instructions; (iii) processing
dividend payments from a Fund on behalf of customers; (iv) providing statements
periodically to customers regarding their position in Pacific Horizon Shares;
(v) arranging for bank wires; (vi) providing sub-accounting with respect to
Pacific Horizon Shares beneficially owned by customers or the information
necessary for sub-accounting; (vii) forwarding shareholder communications from
a Fund to customers; (viii) developing and monitoring the investor programs
offered from time to time; (ix) providing dedicated walk-in and telephone
facilities to handle shareholder inquires and serve investor needs; (x)
providing and maintaining specialized systems for the automatic investments of
customers of Bank of America, Concord Holding Corporation and selected
broker/dealers; (xi) maintaining the registration or qualification of the
Fund's shares for sale under state securities laws; (xii) paying for the
operation of arrangements that facilitate same-day purchases by customers of
Bank of America through the use of a joint repurchase agreement; (xiii)
assuming the expense of payments made to third parties for services provided in
connection with the investments of their customers in shares; (xiv) providing
various services (such as the provision of a facility to receive purchase and
redemption orders) for shareholders who have made a minimum initial investment
of less than $500,000; and (xv) other similar services if requested by a Fund.
Pacific Horizon Shares of the Prime Fund acquired through
exchange of shares ("B Shares") of Time Horizon Funds offered with a contingent
deferred sales charge ("CDSC") will be subject to a maximum CDSC of up to 5%
upon redemption in accordance with the prospectus for B Shares of Time Horizon
Funds. For purposes of computing the CDSC, the length of time of ownership
will be measured from the date of the original purchase of B Shares and will
not include any period of ownership of the Pacific Horizon Shares of the Prime
Fund.
- 3 -
<PAGE> 4
HORIZON SHARES
Horizon Shares (other than Horizon shares of the California
Tax-Exempt Money Market Fund) are currently offered to institutional investors
and shall not be available for purchase by individuals directly. Horizon
Shares are not currently subject to a sales charge or a fee payable pursuant to
a Shareholder Services Plan.
HORIZON SERVICE SHARES
Horizon Service Shares are currently offered to institutional
investors such as Bank of America or the Company's administrator (also referred
to as "Shareholder Organizations"), who are compensated by the Money Market
Funds for providing shareholder services pursuant to a Shareholder Services
Agreement to their customers who are the beneficial owners of the Horizon
Service Shares. Horizon Service Shares are not available for purchase by
individuals directly. Horizon Service Shares are not currently subject to a
sales charge but shall be subject to a shareholder servicing fee payable
pursuant to a Shareholder Services Plan adopted for that class which shall not
initially exceed .25% (on an annualized basis) of the average daily net asset
value of the Horizon Service Shares beneficially owned by the customers of
Shareholder Organizations.
The services provided by Shareholder Organizations may
initially include the following: (i) aggregating and processing purchase and
redemption requests from customers for Horizon Service Shares and placing net
purchase and redemption orders with the distributor; (ii) providing customers
with a service that invests the assets of their accounts in Horizon Service
Shares pursuant to specific or preauthorized instructions; (iii) processing
dividend payments from a Fund on behalf of customers; (iv) providing
information periodically to customers regarding their position in Horizon
Service Shares; (v) arranging for bank wires; (vi) responding to customer
inquiries regarding services performed by the Shareholder Organizations; (vii)
providing sub-accounting with respect to Horizon Service Shares beneficially
owned by customers or the information necessary for sub-accounting; (viii)
forwarding shareholder communications from a Fund to customers; and (ix) other
similar services if requested by a Fund.
CLASS S SHARES
Class S Shares are currently available only to qualified
retail customers who purchase such shares through a Sweep Account offered by
Bank of America. Class S Shares shall not initially be subject to a sales
charge. Class S Shares also shall initially be subject to distribution and
administrative servicing fee payable pursuant to the Distribution and Services
- 4 -
<PAGE> 5
Plan adopted for that class which shall not initially exceed 1.00% of the
average daily net asset value of outstanding Class S Shares. Services provided
pursuant to this Distribution and Services Plan are described under Class B
Shares below.
CLASS X SHARES
Class X Shares are currently available only to qualified
retail customers who purchase such shares through a Sweep Account offered by
Bank of America. Class X Shares shall not initially be subject to a sales
charge. Class X Shares also shall initially be subject to a distribution and
administrative servicing fee payable pursuant to the Distribution and Services
Plan adopted for that class which shall not initially exceed 0.55% of the
average daily net asset value of outstanding Class X Shares. Services provided
pursuant to this Distribution and Services Plan are described under Class B
Shares below.
2. Non-Money Market Funds
CLASS A SHARES
Class A Shares are currently offered to the general public and
shall initially be subject to a front-end sales charge which shall not
initially exceed 4.50% of the offering price of Class A Shares. There is no
front-end sales charge imposed on single purchases of Class A Shares in excess
of $1 million by customers of Bank of America Investment Services, Inc.
("BAIS"). A 1.00% CDSC is applicable to customers of BAIS who purchase Class A
Shares of a Non-Money Market Fund in excess of $1 million without a front-end
sales charge and redeem such shares within one year of purchase. Class A
Shares are also currently subject to a fee payable pursuant to a Shareholder
Service Plan which currently does not initially exceed .25% (on an annual
basis) of the average daily net asset value of the Class A Shares.
Services provided under the Shareholder Service Plan adopted
for the class currently include expenses incurred in connection with
shareholder services provided by the distributor and payments to banks or
broker-dealers, that have entered into a selling and/or servicing agreement
with the distributor ("Service Organizations") for support services for the
beneficial owners of Class A Shares, such as establishing and maintaining
accounts and records relating to the Service Organization's clients who invest
in Class A Shares; assisting those clients in processing exchange and
redemption requests and in changing dividend options and account designations;
and responding to inquiries from clients concerning their investments.
- 5 -
<PAGE> 6
CLASS B SHARES
Class B Shares of the Non-Money Market Funds shall initially
be offered to the general public and may be offered through broker-dealers or
other organizations acting on behalf of their customers. Class B Shares shall
be subject to a CDSC which initially shall be payable on certain share
redemptions made within six years of the purchase date at a rate which shall
not initially exceed 5.00% of the lower of (1) the net asset value of the
redeemed shares or (2) the original purchase price of the redeemed shares.
Class B Shares are also currently subject to (i) a fee payable pursuant to a
Distribution and Services Plan which currently does not initially exceed 1.00%
(on an annual basis) of the average daily net asset value of the Class B
Shares.
Services provided under the Distribution and Services Plan
adopted for the class currently may include distribution and/or: (i) processing
dividend and distribution payments from a Fund on behalf of customers; (ii)
providing information periodically to customers showing their positions in the
Shares; (iii) arranging for bank wires.
C. Conversion Features
1. Money Market Funds
The Company does not currently offer a conversion feature to
holders of Pacific Horizon Shares, Horizon Shares, Horizon Service Shares,
Class S Shares or Class X Shares.
2. Non-Money Market Funds
CLASS A SHARES
The Company does not currently offer a conversion feature to
holders of Class A Shares.
CLASS B SHARES
Class B Shares acquired by purchase currently convert
automatically into Class A Shares, based on relative net asset value, eight
years after the beginning of the calendar month in which the shares were
purchased.
Class B Shares acquired through reinvestment of dividends or
distributions currently will convert automatically into Class A Shares at the
earlier of eight years after the beginning of the calendar month in which the
reinvestment occurred or the date of conversion of the most recently purchased
- 6 -
<PAGE> 7
Class B Shares that were not acquired through reinvestment of dividends or
distributions.
D. Shareholder Services
1. Exchange Privileges
Money Market Funds
Only holders of Pacific Horizon Shares are currently permitted
to exchange their shares in a Fund for like Shares of another Fund of the
Company or for like shares of any Time Horizon Fund provided, however, that
Pacific Horizon Shares of the Prime Fund acquired through an exchange of B
Shares of an investment portfolio of Time Horizon Funds may only be exchanged
for B Shares of an investment portfolio of Time Horizon Funds and, provided
further that such other shares may legally be sold in the state of the
investor's residence. When Pacific Horizon Shares are exchanged for Pacific
Horizon Shares of another Fund which are sold with a sales load, the applicable
sales load, shall be deducted.
B Shares of Time Horizon Funds offered with a CDSC may be
exchanged for Pacific Horizon Shares of the Prime Fund. Such exchange-acquired
Pacific Horizon Shares of the Prime Fund will be subject to a CDSC upon
redemption in accordance with the prospectus for B Shares of Time Horizon
Funds.
Non-Money Market Funds
CLASS A SHARES
Holders of Class A Shares are currently permitted to exchange
their shares for Class A Shares of other Non-Money Market Funds, for Pacific
Horizon Shares of the Money Market Funds or for like shares of any Time Horizon
Fund. Holders of Class A Shares who purchased their shares with a front-end
sales charge generally shall be permitted to exchange their shares without
paying an additional front-end sales charge on shares acquired through the
exchange. Customers of BAIS who purchase Class A Shares of a Fund in excess of
$1 million without a front-end sales charge, exchange their shares for Shares
of another Pacific Horizon Fund or for like shares of any Time Horizon Fund and
redeem such shares within one year of their initial purchase will be subject to
a 1.00% CDSC.
CLASS B SHARES
Holders of Class B Shares shall initially be permitted to
exchange their shares for Class B Shares of other Funds of the
- 7 -
<PAGE> 8
Company or for like shares of any Time Horizon Fund without paying a CDSC at
the time the exchange is made.
2. Individual Retirement Accounts ("IRAs")
Money Market Funds
Currently, the Company only makes IRAs, including IRAs set up
under a Simplified Employee Pension Plan and IRA "Rollover Accounts," available
to holders of Pacific Horizon Shares in each Money Market Fund other than the
California Tax-Exempt Money Market Fund and the Tax-Exempt Money Fund.
Non-Money Market Funds
The Company currently makes IRAs available to holders of Class
A Shares and to holders of Class B Shares.
3. Automatic Investment Program
Money Market Funds
Only holders of Pacific Horizon Shares of each Money Market
Fund currently have an automatic investment plan whereby a shareholder may
purchase Pacific Horizon Shares of a Money market Fund t regular intervals
selected by the investor.
Non-Money Market Funds
CLASS A SHARES
Holders of Class A Shares currently have an automatic
investment plan whereby, a shareholder may purchase Class A Shares of a Fund at
regular intervals selected by the investor.
CLASS B SHARES
Holders of Class B Shares shall initially have an automatic
investment plan whereby, in general, a shareholder may purchase Class B Shares
of a Fund at regular intervals selected by the investor.
4. Direct Deposit Program
Money Market Funds
Only holders of Pacific Horizon Shares currently have a direct
deposit program whereby a shareholder who receives payments from the federal
government may purchase Pacific Horizon
- 8 -
<PAGE> 9
Shares by having these payments automatically deposited into his or her Fund
account.
Non-Money Market Funds
CLASS A SHARES
Holders of Class A Shares currently have a direct deposit
program whereby a shareholder who receives payments from the federal government
may purchase Class A Shares of a Fund by having these payments automatically
deposited into his or her Fund Account.
CLASS B SHARES
Holders of Class B Shares shall initially have a direct
deposit program whereby a shareholder who receives payments from the federal
government may purchase Class B Shares of a Fund by having these payments
automatically deposited into his or her Fund Account.
5. Automatic Withdrawal Plan
Money Market Funds
Only holders of Pacific Horizon Shares currently have an
automatic withdrawal plan whereby a shareholder may request withdrawal of a
certain dollar amount on a monthly, quarterly, semi-annual or annual basis.
Non-Money Market Funds
CLASS A SHARES
Holders of Class A Shares currently have an automatic
withdrawal plan whereby a shareholder may request withdrawal of a certain
dollar amount on a monthly, quarterly, semi-annual or annual basis.
CLASS B SHARES
Holders of Class Shares shall initially have an automatic
withdrawal plan whereby a shareholder may request withdrawals of a certain
dollar amount on a monthly, quarterly, semi-annual or annual basis.
- 9 -
<PAGE> 10
E. Methodology for Allocating Expenses Between Classes
Expenses of each Fund will be apportioned to each class of
shares depending upon the nature of the expense item.
Specifically, before determining the daily dividend rates and
yields, the following expense items shall be calculated as follows:
1. General Operating Expenses
Operating expenses which are attributable to all classes of
shares ("operating expenses") will be allocated among the classes of shares
based on their net asset value at the end of the day. Operating expenses will
include fees paid to Bank of America under the Investment Advisory Agreement,
fees paid to Concord Holding Corporation under the Basic Administrative
Services Agreement and all other expenses such as custody fees, transfer agent
fees and audit fees, except those specifically listed below.
2. Class-Specific Expenses
SHAREHOLDER SERVICES FEES
In addition to their respective pro-rata share of operating
expenses, Horizon Service Shares shall initially bear a shareholder services
fee which is calculated at an annual rate not to exceed .25% of the average
daily net asset value of such outstanding shares at the end of the day,
Pacific Horizon Shares shall initially bear an administrative services fee
which is presently calculated at an annual rate not to exceed .32% (.35% for
the California Tax-Exempt Money Fund) of the average daily net asset value of
such outstanding shares at the end of the day, and Class A Shares shall
initially bear a shareholder services fee which is calculated at an annual rate
not to exceed .25% of the average daily net asset value of such outstanding
shares at the end of the day.
DISTRIBUTION AND SERVICES FEES
In addition to their respective pro-rata share of operating
expenses, Class B Shares shall initially bear a distribution and shareholder
services fee which is presently calculated at an annual rate not to exceed .75%
and .25%, respectively, of the average daily net asset value of such
outstanding shares at the end of the day, Class S Shares shall initially bear a
distribution and shareholder services fee which is calculated at an annual rate
not to exceed .75% and .25%, respectively, of the average daily net asset value
of such
- 10 -
<PAGE> 11
outstanding shares at the end of the day and Class X Shares shall initially
bear a distribution and shareholder services fee which is presently calculated
at an annual rate not to exceed .55% and .25%, respectively of the average
daily net asset value of such outstanding shares at the end of the day.
Approved: January 30, 1996
- 11 -
<PAGE> 1
PACIFIC HORIZON PRIME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATING
ASSIGNED BY PRINCIPAL
N.R.S.R.O. MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- ---------------------------------- ------------ ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 100.3%
COMMERCIAL PAPER -- 27.9%
DOMESTIC -- 22.0%
AUTOMOBILES -- 1.9%
Ford Motor Credit Co. ........... A1/P1 6.15%(b) 5/15/95 $ 50,000 $ 49,359,375
--------------
BANKING -- 1.9%
Abbey National North America..... A1+/P1 6.05%(b) 4/18/95 50,000 49,596,667
--------------
BROKERAGE -- 3.8%
Merrill Lynch & Co., Inc.,
Monthly Variable Rate (final
maturity date 7/28/95)(a)...... A1+/P1 6.058% 3/28/95 100,000 100,000,000
--------------
CONGLOMERATES -- 3.8%
General Electric Capital Corp.... A1+/P1 6.25%(b) 5/16/95 100,000 98,680,555
--------------
FINANCE COMPANIES -- 4.9%
Asset Securitization Cooperative
Corp.*++....................... A1+/P1 6.08%(b) 5/15/95 50,000 49,366,667
Ciesco, LP....................... A1+/P1 6.10%(b) 3/20/95 30,000 29,903,416
Countrywide Funding Corp......... A1/F1 6.05%(b) 3/09/95 50,000 49,932,779
--------------
129,202,862
--------------
LEASING -- 2.0%
Hertz Corp....................... A1/P1 6.20%(b) 6/21/95 25,000 24,517,778
Hertz Corp....................... A1/P1 6.09%(b) 5/09/95 29,000 28,661,497
--------------
53,179,275
--------------
PHARMACEUTICALS -- 1.2%
American Home Food Products
Inc.++......................... D1/P1 6.03%(b) 3/27/95 30,100 29,968,914
--------------
PHOTOGRAPHIC PRODUCTS -- 1.0%
Fuji Photo Film Finance USA,
Inc. .......................... A1+/P1 5.95%(b) 3/16/95 26,950 26,883,186
--------------
TELECOMMUNICATIONS -- 1.5%
AT&T Corp........................ A1+/P1 6.12%(b) 3/24/95 38,900 38,747,901
--------------
575,618,735
--------------
FOREIGN -- 5.9%
AGRICULTURE -- 1.5%
Wool International............... A1+/P1 6.13%(b) 3/30/95 40,000 39,802,478
--------------
</TABLE>
- ---------------
See Notes to Financial Statements.
9
<PAGE> 2
<TABLE>
<CAPTION>
RATING
ASSIGNED BY PRINCIPAL
N.R.S.R.O. MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- ---------------------------------- ------------ ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
AUTOMOBILES -- 1.9%
Renault Credit Internationale
S.A. Banque.................... F1/P1 6.15%(b) 4/18/95 $ 50,000 $ 49,590,000
--------------
OIL AND GAS -- 0.8%
Total Compagnie Francaise........ A1+/P1 5.90%(b) 3/01/95 20,000 20,000,000
--------------
PUBLISHING -- 1.7%
Reed Elsevier, Inc.*++........... A1+/P1 6.16%(b) 5/04/95 45,000 44,507,200
--------------
153,899,678
--------------
Total Commercial Paper
(amortized cost $729,518,413).... 729,518,413
--------------
BANK NOTES -- 15.3%
Bank One, Milwaukee N.A.,
Daily Variable Rate (final
maturity date 1/31/96)(a).... A1+/P1 6.37% 3/01/95 100,000 100,000,000
Comerica Bank, Detroit, MI,
Weekly Variable Rate (final
maturity date 10/27/95)(a)... A1/P1 6.02% 3/07/95 100,000 99,942,663
FCC National Bank,
Daily Variable Rate (final
maturity date 1/12/96)(a).... A1/P1 6.17% 3/01/95 50,000 50,000,000
First National Bank of Boston.... D1/P1 6.18% 5/11/95 50,000 50,000,000
Huntington National Bank,
Columbus, Daily Variable
Rate (final maturity date
1/12/96)(a).................... A1/P1 6.15% 3/01/95 50,000 49,982,340
PNC Bank, Delaware,
Weekly Variable Rate (final
maturity date 5/09/95)(a).... A1/P1 6.01% 3/07/95 50,000 49,993,303
--------------
Total Bank Notes
(amortized cost $399,918,306).... 399,918,306
--------------
MASTER NOTES -- 9.2%
Goldman Sachs Group L.P. Daily
Variable Rate (final maturity
date 11/03/95)(a).............. A1+/P1 6.275% 3/01/95 120,000 120,000,000
Morgan Stanley Group, Inc. Daily
Variable Rate (final maturity
date 7/13/95)(a)............... A1+/P1 6.275% 3/01/95 120,000 120,000,000
--------------
Total Master Notes
(amortized cost $240,000,000).... 240,000,000
--------------
CORPORATE OBLIGATIONS -- 5.7%
BROKERAGE -- 3.8%
Bear Stearns Co., Inc., Series B,
Monthly Variable Rate (final
maturity date 2/02/96)(a)...... A1/P1 6.225% 3/03/95 100,000 100,000,000
--------------
</TABLE>
- ---------------
See Notes to Financial Statements.
10
<PAGE> 3
<TABLE>
<CAPTION>
RATING
ASSIGNED BY PRINCIPAL
N.R.S.R.O. MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- ---------------------------------- ------------ ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
FINANCE COMPANIES -- 1.9%
Ciesco L.P.,
Monthly Variable Rate (final
maturity date 8/11/95)++(a).... A1+/P1 6.039% 3/10/95 $ 50,000 $ 49,993,301
--------------
Total Corporate Obligations
(amortized cost $149,993,301).... 149,993,301
--------------
CERTIFICATES OF DEPOSIT -- 5.5%
U.S. BRANCHES OF FOREIGN
BANKS -- 5.5%
ABN-AMRO Bank, N.V., New York.... A1+/P1 6.35% 6/01/95 20,000 20,000,834
Banque Nationale de Paris, New
York........................... A1+/P1 6.15% 3/06/95 50,000 50,000,069
Banque Paribas, New York......... A1/P1 6.55% 5/22/95 25,000 25,012,970
Commerzbank A.G., New York....... A1+/P1 6.12% 3/06/95 50,000 50,000,137
--------------
Total Certificates of Deposit
(amortized cost $145,014,010).... 145,014,010
--------------
U.S. GOVERNMENT AGENCY
NOTES -- 3.6%
Federal Farm Credit Bank,
Daily Variable Rate (final
maturity date 5/06/96)(a).... A1+/P1! 6.30% 3/01/95 50,000 49,970,438
Federal Home Loan Bank,
Daily Variable Rate (final
maturity date 5/17/95)(a).... A1+/P1! 6.25% 3/01/95 45,000 44,998,006
--------------
Total U.S. Government Agency Notes
(amortized cost $94,968,444)..... 94,968,444
--------------
Total Investments in Securities
(amortized cost
$1,759,412,474).................. 1,759,412,474
--------------
REPURCHASE AGREEMENTS -- 33.1%
Repurchase agreement with BT
Securities, Inc., dated
2/28/95, with a maturity value
of $120,020,067.
(See Footnote A)............... 6.02% 3/01/95 120,000 120,000,000
Repurchase agreement with C.S.
First Boston Corp., dated
2/28/95, with a maturity value
of $35,006,028.
(See Footnote B)............... 6.20% 3/01/95 35,000 35,000,000
Repurchase agreement with First
Chicago Capital Markets, dated
2/28/95, with a maturity value
of $120,020,267.
(See Footnote C)............... 6.08% 3/01/95 120,000 120,000,000
</TABLE>
- ---------------
See Notes to Financial Statements.
11
<PAGE> 4
<TABLE>
<CAPTION>
RATING
ASSIGNED BY PRINCIPAL
N.R.S.R.O. MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- ---------------------------------- ------------ ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Repurchase agreement with Goldman
Sachs and Co., dated 2/28/95,
with a maturity value of
$120,020,167.
(See Footnote D)............... 6.05% 3/01/95 $ 120,000 $ 120,000,000
Repurchase agreement with HSBC
Securities, Inc., dated
2/28/95, with a maturity value
of $120,019,890.
(See Footnote E)............... 6.00% 3/01/95 120,000 120,000,000
Repurchase agreement with J.P.
Morgan, Inc., dated 2/28/95,
with a maturity value of
$120,020,167.
(See Footnote F)............... 6.05% 3/01/95 120,000 120,000,000
Repurchase agreement with Nomura
Securities International, dated
2/28/95, with a maturity value
of $109,832,516.
(See Footnote G)............... 6.07% 3/01/95 109,814 109,814,000
Repurchase agreement with
Prudential Securities, Inc.,
dated 2/28/95, with a maturity
value of $120,020,667.
(See Footnote H)............... 6.20% 3/01/95 $ 120,000 $ 120,000,000
--------------
Total Repurchase Agreements
(amortized cost $864,814,000).... 864,814,000
--------------
TOTAL INVESTMENTS (AMORTIZED COST
$2,624,226,474) -- 100.3%........ 2,624,226,474
Liabilities in excess of other
assets -- (0.3%)................. (8,799,076)
--------------
NET ASSETS -- 100%................ $2,615,427,398
================
</TABLE>
- ---------------
<TABLE>
<S> <C> <C>
N.R.S.R.O. -- Nationally Recognized Statistical Rating Organization. Rating agencies that are
included within the N.R.S.R.O. category are: S&P, Moody's, Fitch Investor
Services, Duff & Phelps and IBCA.
A1 -- Highest rating assigned by S&P and IBCA.
P1 -- Highest rating assigned by Moody's.
F1 -- Highest rating assigned by Fitch Investor Services.
D1 -- Highest rating assigned by Duff & Phelps.
</TABLE>
! Implied short-term rating
* Illiquid security.
(a) Variable rate security. Interest rates are stated as of February 28, 1995.
Maturity date reflects the later of the next interest rate change date or
the next put date.
(b) Effective yield.
++ Private placement security.
(footnotes continue on next page)
See Notes to Financial Statements.
12
<PAGE> 5
(footnotes continued from previous page)
<TABLE>
<S> <C> <C>
Footnote A -- Collateralized by $125,970,000 U.S. Treasury Notes, with various coupon rates and
maturities ranging from 7/31/96 through 5/31/98; with an aggregate value of
$122,403,135.
Footnote B -- Collateralized by $27,195,000 U.S. Treasury Bond, 11.875%, due 11/15/03; with a
value of $36,069,384.
Footnote C -- Collateralized by $123,830,000 U.S. Treasury Bill, due 5/11/95; with a value of
$122,401,003.
Footnote D -- Collateralized by $17,601,000 U.S. Treasury Bills, with maturities ranging from
3/02/95 through 1/11/96, $48,600,000 U.S. Treasury Bonds, with various coupon
rates and maturities ranging from 6/15/00 through 11/15/22 and $49,473,000 U.S.
Treasury Notes, with various coupon rates and maturities ranging from 4/15/95
through 2/15/05; with an aggregate value of $122,400,826.
Footnote E -- Collateralized by $50,000,000 U.S. Treasury Bond, 9.875%, due 11/15/15 and
$59,750,000 U.S. Treasury Notes, with various coupon rates and maturities ranging
from 5/15/97 through 11/30/97; with an aggregate value of $122,626,150.
Footnote F -- Collateralized by $121,091,000 U.S. Treasury Notes, with various coupon rates and
maturities ranging from 2/29/96 through 5/15/97; with an aggregate value of
$122,525,546.
Footnote G -- Collateralized by $21,485,000 U.S. Treasury Bonds, with various coupon rates and
maturities ranging from 11/15/21 through 2/15/25 and $88,246,000 U.S. Treasury
Notes, with various coupon rates and maturities ranging from 9/30/95 through
8/15/02; with an aggregate value of $112,029,300.
Footnote H -- Collateralized by $122,925,000 Federal National Mortgage Association Discount
Notes, due 3/01/95; with an aggregate value of $122,900,415.
</TABLE>
See Notes to Financial Statements.
13
<PAGE> 6
PACIFIC HORIZON TREASURY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION RATE DATE (000) (NOTE 2)
- ------------------------------------------------- ----- -------- --------- --------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 95.0%
U.S. TREASURY OBLIGATIONS -- 46.9%
U.S. TREASURY NOTES -- 12.2%
U.S. Treasury Note.............................. 5.875% 5/15/95 $ 115,000 $ 114,906,106
U.S. Treasury Note.............................. 4.125% 5/31/95 75,000 74,641,300
U.S. Treasury Note.............................. 4.250% 7/31/95 50,000 49,567,057
--------------
239,114,463
--------------
U.S. TREASURY BILLS -- 34.7%
U.S. Treasury Bill.............................. 5.94%* 4/13/95 225,000 223,455,882
U.S. Treasury Bill.............................. 6.00%* 4/27/95 190,000 188,242,975
U.S. Treasury Bill.............................. 6.04%* 5/04/95 150,000 148,437,333
U.S. Treasury Bill.............................. 6.35%* 8/10/95 125,000 121,578,875
--------------
681,715,065
--------------
Total U.S. Treasury Obligations
(amortized cost $920,829,528)................... 920,829,528
--------------
REPURCHASE AGREEMENTS -- 48.1%
Repurchase agreement with Barclays De Zoete Wedd
Securities, Inc., dated 2/28/95,
with a maturity value of $95,016,044.
(See Footnote A).............................. 6.08% 3/01/95 95,000 95,000,000
Repurchase agreement with C.S. First Boston
Corp., dated 2/28/95, with a maturity value of
$95,015,965. (See Footnote B)................. 6.05% 3/01/95 95,000 95,000,000
Repurchase agreement with First Chicago Capital
Markets, dated 2/28/95, with a maturity value
of $95,016,044. (See Footnote C).............. 6.08% 3/01/95 95,000 95,000,000
Repurchase agreement with First National Bank of
Chicago, dated 2/28/95, with a maturity value
of $20,087,392. (See Footnote D).............. 6.08% 3/01/95 20,084 20,084,000
Repurchase agreement with Goldman Sachs and Co.,
dated 2/28/95, with a maturity value of
$95,015,965. (See Footnote E)................. 6.05% 3/01/95 95,000 95,000,000
Repurchase agreement with HSBC Securities, Inc.,
dated 2/28/95, with a maturity value of
$70,011,667. (See Footnote F)................. 6.00% 3/01/95 70,000 70,000,000
Repurchase agreement with JP Morgan Securities,
Inc., dated 2/28/95, with a maturity value of
$95,015,965. (See Footnote G)................. 6.05% 3/01/95 95,000 95,000,000
Repurchase agreement with Merrill Lynch
Government Securities, Inc., dated 2/28/95,
with a maturity value of $95,015,965.
(See Footnote H).............................. 6.05% 3/01/95 95,000 95,000,000
Repurchase agreement with Nomura Securities
International, Inc., dated 2/28/95, with
a maturity value of $95,016,018.
(See Footnote I).............................. 6.07% 3/01/95 95,000 95,000,000
</TABLE>
- ---------------
See Notes to Financial Statements.
14
<PAGE> 7
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION RATE DATE (000) (NOTE 2)
- ------------------------------------------------- ----- -------- --------- --------------
<S> <C> <C> <C> <C>
Repurchase agreement with Prudential Securities,
Inc., dated 2/28/95, with a maturity value of
$95,015,965. (See Footnote J)................. 6.05% 3/01/95 $ 95,000 $ 95,000,000
Repurchase agreement with Smith Barney, Inc.,
dated 2/28/95, with a maturity value of
$95,015,965. (See Footnote K)................. 6.05% 3/01/95 95,000 95,000,000
--------------
Total Repurchase Agreements
(amortized cost $945,084,000)................... 945,084,000
--------------
TOTAL INVESTMENTS (AMORTIZED COST
$1,865,913,528) -- 95.0%........................ 1,865,913,528
Other assets in excess of liabilities -- 5.0%.... 99,142,322
--------------
NET ASSETS -- 100%............................... $1,965,055,850
================
</TABLE>
- ---------------
* Effective yield.
Footnote A -- Collateralized by $54,739,000 U.S. Treasury Notes with various
coupon rates and maturities ranging from 2/15/96 through 5/15/04, $3,228,000
U.S. Treasury Bond, 10.75%, due 8/15/05, $30,915,000 U.S. Treasury Bills with
maturities ranging from 3/30/95 through 6/01/95 and $43,215,000 U.S. Treasury
Strips with maturities ranging from 8/15/01 through 8/15/23; with an aggregate
value of $96,900,510.
Footnote B -- Collateralized by $91,705,000 U.S. Treasury Notes with various
coupon rates and maturities ranging from 2/15/99 through 2/15/00; with an
aggregate value of $97,395,926.
Footnote C -- Collateralized by $98,222,000 U.S. Treasury Bills with maturities
ranging from 5/18/95 through 5/25/95; with an aggregate value of $96,902,614.
Footnote D -- Collateralized by $11,936,000 U.S. Treasury Notes with various
coupon rates and maturities ranging from 4/30/95 through 2/15/05, $4,000,000
U.S. Treasury Bonds with various coupon rates and maturities ranging from
11/15/24 through 2/15/25 and $4,640,000 U.S. Treasury Bills with maturities
ranging from 12/14/95 through 1/11/96; with an aggregate value of $20,488,334.
Footnote E -- Collateralized by $17,680,000 U.S. Treasury Notes with various
coupon rates and maturities ranging from 5/15/95 through 8/31/97, $52,840,000
U.S. Treasury Bonds with various coupon rates and maturities ranging from
5/15/95 through 11/15/15 and $13,742,000 U.S. Treasury Bills with maturities
ranging from 5/25/95 through 9/21/95; with an aggregate value of $96,901,021.
Footnote F -- Collateralized by $69,710,000 U.S. Treasury Notes with various
coupon rates and maturities ranging from 5/31/96 through 7/31/96; with an
aggregate value of $71,480,938.
Footnote G -- Collateralized by $101,876,000 U.S. Treasury Notes with various
coupon rates and maturities ranging from 5/31/97 through 11/30/98; with an
aggregate value of $96,901,795.
Footnote H -- Collateralized by $102,345,000 U.S. Treasury Bill, due 1/11/96,
with a value of $96,902,292.
Footnote I -- Collateralized by $57,288,000 U.S. Treasury Notes with various
coupon rates and maturities ranging from 1/31/96 through 8/15/01, $31,125,000
U.S. Treasury Bond, 8.875%, due 8/15/17 and $1,937,000 U.S. Treasury Bill, due
2/08/96; with an aggregate value of $96,900,368.
Footnote J -- Collateralized by $95,579,000 U.S. Treasury Notes with various
coupon rates and maturities ranging from 12/31/96 through 8/15/03; with an
aggregate value of $96,900,469.
Footnote K -- Collateralized by $10,000,000 U.S. Treasury Note, 6.875%, due
8/31/99 and $301,900,000 U.S. Treasury STRIPS with maturities ranging from
8/15/95 through 5/15/20; with an aggregate value of $96,900,557.
See Notes to Financial Statements.
15
<PAGE> 8
PACIFIC HORIZON GOVERNMENT FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS!
S&P/ PRINCIPAL
MOODY'S MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- --------------------------------------- --------- ------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 100.2%
U.S. GOVERNMENT AGENCY NOTES -- 53.0%
Federal Farm Credit Bank,
Discount Note....................... A1+/P1... 5.88%** 3/16/95 $ 18,000 $ 17,956,875
Federal Home Loan Bank,
Discount Note....................... A1+/P1... 6.18%** 4/06/95 16,500 16,400,670
Federal Home Loan Bank,
Discount Note....................... A1+/P1... 5.98%** 3/22/95 25,000 24,914,833
Federal Home Loan Mortgage Corp.,
Discount Note....................... A1+/P1... 6.18%** 4/18/95 26,925 26,710,310
Federal Home Loan Mortgage Corp.,
Discount Note....................... A1+/P1... 6.17%** 5/02/95 56,500 55,916,167
Federal Home Loan Mortgage Corp.,
Discount Note....................... A1+/P1... 6.17%** 5/12/95 19,125 18,895,882
Federal Home Loan Mortgage Corp.,
Discount Note....................... A1+/P1... 6.16%** 4/05/95 15,000 14,912,500
Federal Home Loan Mortgage Corp.,
Discount Note....................... A1+/P1... 6.11%** 5/01/95 36,307 35,940,955
Federal Home Loan Mortgage Corp.,
Discount Note....................... A1+/P1... 6.07%** 4/18/95 10,000 9,920,264
Federal National Mortgage Association,
Daily Variable Rate (final maturity
date 1/26/96)*...................... A1+/P1 5.90% 3/01/95 20,000 19,989,118
Federal National Mortgage Association,
Discount Note....................... A1+/P1 6.18%** 4/17/95 25,400 25,202,677
Federal National Mortgage Association,
Discount Note....................... A1+/P1 6.17%** 4/03/95 25,000 24,862,042
Federal National Mortgage Association,
Discount Note....................... A1+/P1 6.17%** 4/20/95 50,000 49,584,028
Federal National Mortgage Association,
Discount Note....................... A1+/P1 6.08%** 4/17/95 30,000 29,766,941
Federal National Mortgage Association,
Monthly Variable Rate (final
maturity date 10/30/95)*............ A1+/P1 5.936% 3/30/95 20,000 19,991,848
Federal National Mortgage Association,
Weekly Variable Rate (final maturity
date 2/16/96) *..................... A1+/P1 6.01% 3/07/95 25,000 25,000,000
Student Loan Marketing Association,
Monthly Variable Rate (final
maturity date 12/01/95)*............ A1+/P1 5.893% 3/01/95 40,000 39,958,911
Student Loan Marketing Association,
Series AX, Weekly Variable Rate
(final maturity date 3/27/95)*...... A1+/P1 6.51% 3/07/95 10,000 10,003,516
------------
Total U.S. Government Agency Notes
(amortized cost $465,927,537)......... 465,927,537
------------
U.S. GOVERNMENT AGENCY GUARANTEE
NOTES -- 6.3%
Fidelity Federal Bank
(LOC -- Federal Home Loan Bank, San
Francisco).......................... A1+/P1... 6.13%** 3/01/95 40,000 40,000,000
</TABLE>
- ---------------
See Notes to Financial Statements.
16
<PAGE> 9
<TABLE>
<CAPTION>
RATINGS!
S&P/ PRINCIPAL
MOODY'S MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- --------------------------------------- --------- ------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
Nebraska Higher Education Loan
Program, Inc., Weekly Variable Rate
(LOC -- Student Loan Marketing
Association) (final maturity date
3/15/95)*........................... A1+/P1 6.16% 3/07/95 $ 15,000 $ 15,000,000
------------
Total U.S. Government Agency Guarantee
Notes (amortized cost $55,000,000).... 55,000,000
------------
Total Investments in Securities
(amortized cost $520,927,537)......... 520,927,537
------------
REPURCHASE AGREEMENTS -- 40.9%
Repurchase agreement with BT
Securities, Inc., dated 2/28/95,
with a maturity value of
$40,006,689.
(See Footnote A).................... 6.02% 3/01/95 40,000 40,000,000
Repurchase agreement with Barclays de
Zoete Wedd Securities, Inc., dated
2/28/95, with a maturity value of
$40,006,756. (See Footnote B)....... 6.08% 3/01/95 40,000 40,000,000
Repurchase agreement with First
Chicago Capital Markets, Inc., dated
2/28/95, with a maturity value of
$40,006,756. (See Footnote C)....... 6.08% 3/01/95 40,000 40,000,000
Repurchase agreement with Goldman
Sachs and Co., dated 2/28/95, with a
maturity value of $40,006,722.
(See Footnote D).................... 6.05% 3/01/95 40,000 40,000,000
Repurchase agreement with JP Morgan
Securities, Inc., dated 2/28/95,
with a maturity value of
$40,006,722.
(See Footnote E).................... 6.05% 3/01/95 40,000 40,000,000
Repurchase agreement with Merrill
Lynch Government Securities, Inc.,
dated 2/28/95, with a maturity value
of $40,006,722. (See Footnote F).... 6.05% 3/01/95 40,000 40,000,000
Repurchase agreement with Nomura
Securities International, Inc.,
dated 2/28/95, with a maturity value
of $79,312,371. (See Footnote G).... 6.07% 3/01/95 79,299 79,299,000
Repurchase agreement with Smith
Barney, Inc., dated 2/28/95, with a
maturity value of $40,006,722.
(See Footnote H).................... 6.05% 3/01/95 40,000 40,000,000
------------
Total Repurchase Agreements (amortized
cost $359,299,000).................... 359,299,000
------------
TOTAL INVESTMENTS (AMORTIZED COST
$880,226,537) -- 100.2%............... 880,226,537
Liabilities in excess of other
assets -- (0.2%)...................... (1,304,827)
------------
NET ASSETS -- 100%..................... $878,921,710
==============
</TABLE>
(footnotes on following page)
- ---------------
See Notes to Financial Statements.
17
<PAGE> 10
(footnotes from previous page)
- ---------------
Note: S&P and Moody's ratings have been used for consistency. Portfolio
securities may be rated by other services as well.
! Implied Short-Term Rating.
LOC -- Letter of credit.
* Variable rate security. Interest rates stated are as of February 28, 1995.
Maturity date reflects the later of the next rate change date or the next put
date.
** Effective yield.
<TABLE>
<S> <C> <C>
Footnote A -- Collateralized by $39,690,000 U.S. Treasury Note, 8.00%, due 1/15/97; with a value
of $40,801,320.
Footnote B -- Collateralized by $41,122,000 U.S. Treasury Bill, due 6/22/95 and $450,000 Federal
Farm Credit Consolidated Systemwide Bond, 6.76%, due 2/28/96; with an aggregate
value of $40,800,668.
Footnote C -- Collateralized by $41,296,000 U.S. Treasury Bills with maturities ranging from
5/11/95 through 5/18/95; with an aggregate value of $40,800,258.
Footnote D -- Collateralized by $18,402,000 U.S. Treasury Notes with various coupon rates and
maturities ranging from 5/15/95 through 1/15/99, $12,270,000 U.S. Treasury Bonds
with various coupon rates and maturities ranging from 2/15/07 through 8/15/14 and
$8,169,000 U.S. Treasury Bill, due 6/08/95; with an aggregate value of $40,800,983.
Footnote E -- Collateralized by $41,265,000 U.S. Treasury Bill, due 5/04/95; with a value of
$40,800,769.
Footnote F -- Collateralized by $43,095,000 U.S. Treasury Bill, due 1/11/96; with a value of
$40,803,208.
Footnote G -- Collateralized by $74,140,000 U.S. Treasury Notes with various coupon rates and
maturities ranging from 5/31/96 through 2/15/05 and $8,250,000 U.S. Treasury Bill,
due 7/27/95; with an aggregate value of $80,885,861.
Footnote H -- Collateralized by $114,303,000 U.S. Treasury STRIPS with maturities ranging from
2/15/08 through 5/15/09; with an aggregate value of $40,800,027.
</TABLE>
See Notes to Financial Statements.
18
<PAGE> 11
PACIFIC HORIZON TREASURY ONLY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION RATE DATE (000) (NOTE 2)
- ------------------------------------------------------ ----- -------- -------- ------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 99.4%
U.S. TREASURY OBLIGATIONS -- 99.4%
U.S. TREASURY NOTES -- 31.5%
U.S. Treasury Note................................... 3.875% 3/31/95 $ 11,235 $ 11,221,834
U.S. Treasury Note................................... 8.375% 4/15/95 47,505 47,632,191
U.S. Treasury Note................................... 5.875% 5/15/95 2,915 2,914,383
U.S. Treasury Note................................... 4.125% 5/31/95 28,100 27,965,221
------------
89,733,629
------------
U.S. TREASURY BILLS -- 67.9%
U.S. Treasury Bill................................... 5.30%* 3/02/95 8,498 8,496,772
U.S. Treasury Bill................................... 5.58%* 3/09/95 32,088 32,049,129
U.S. Treasury Bill................................... 5.28%* 3/23/95 34,941 34,830,360
U.S. Treasury Bill................................... 5.30%* 3/30/95 12,408 12,358,285
U.S. Treasury Bill................................... 5.65%* 4/06/95 45,943 45,688,312
U.S. Treasury Bill................................... 5.57%* 4/13/95 11,885 11,807,632
U.S. Treasury Bill................................... 5.80%* 4/20/95 20,215 20,055,711
U.S. Treasury Bill................................... 5.98%* 4/27/95 8,250 8,174,237
U.S. Treasury Bill................................... 5.95%* 5/11/95 20,000 19,771,814
------------
193,232,252
------------
TOTAL INVESTMENTS
(AMORTIZED COST $282,965,881) -- 99.4%............... 282,965,881
Other assets in excess of liabilities -- 0.6%......... 1,734,865
------------
NET ASSETS -- 100%.................................... $284,700,746
==============
</TABLE>
- ---------------
* Effective yield.
See Notes to Financial Statements.
19
<PAGE> 12
HORIZON TAX-EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- --------------------------------------- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
SHORT-TERM TAX-EXEMPT
INVESTMENTS -- 98.0%
ALABAMA -- 1.4%
Port City Medical Clinic Board Revenue
Bond, Mobile Infirmary Association, VMIG1/A1
Ser. 1992-A......................... A1/A+ 4.25% 6/23/95 $ 6,475 $ 6,475,000
------------
ARIZONA -- 3.6%
Maricopa County, Pollution Control
Revenue Bond, Southern California
Edison Co., Palo Verde Proj., Ser. P1/A1
E................................... A1/A 4.30% 5/12/95 1,600 1,600,000
Salt River Proj., Arizona Agriculture
Impt. & Power Dist., Ser. C
(LC -- Banque Nationale De Paris) VMIG1/Aa
(final maturity date 1/01/09)*...... NR/AA 4.15% 3/07/95 14,840 14,840,000
------------
16,440,000
------------
CALIFORNIA -- 9.8%
California Pollution Control Revenue
Bond, Southern California Edison,
Ser. A (final maturity date VMIG1/A2
2/28/08)*........................... A1+/A+ 4.00% 3/01/95 4,000 4,000,000
California Revenue Anticipation Notes,
Ser. B (final maturity date MIG1/NR
6/28/95)*........................... SP1+/NR 4.14% 3/07/95 7,000 7,000,000
California State General Obligation
Bond, Ser. B (LC -- International
Nederlanden Funding, New York) VMIG1/Aa2
(final maturity date 11/01/08)*..... A/NR 4.10% 3/07/95 5,000 5,000,000
Los Angeles County, Metropolitan
Transportation Auth., Union Station
Gateway, Tax and Revenue
Anticipation Notes, Ser. A (FSA
Insured) (final maturity date VMIG1/Aaa
7/01/25)*........................... NR/AAA 4.15% 3/07/95 8,000 8,000,000
Los Angeles County, Unified School
District, Tax and Revenue MIG1/NR
Anticipation Notes.................. SP1+/NR 4.50% 7/10/95 10,000 10,032,545
Newport Beach Hospital Revenue Bond,
Hoag Memorial Presbyterian Hospital VMIG1/A1
(final maturity date 10/01/22)*..... A1+/AA 3.75% 3/01/95 900 900,000
San Francisco City & County, Tax and MIG1/NR
Revenue Anticipation Notes.......... SP1+/NR 4.25% 7/15/95 10,000 10,021,455
------------
44,954,000
------------
COLORADO -- 2.1%
Arapahoe County, Capital Improvement
TRFD Highway Revenue Bond, Ser. D
(LC -- Union Bank of Switzerland) NR/NR
(final maturity date 8/31/26)*...... A1+/AAA 4.45% 8/31/95 7,000 7,000,000
</TABLE>
- ---------------
See Notes to Financial Statements.
20
<PAGE> 13
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- --------------------------------------- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Arapahoe County, Capital Improvement
TRFD Highway Revenue Bond, Ser. G NR/NR
(final maturity date 8/31/26)*...... SP1+/NR 4.45% 8/31/95 $ 2,500 $ 2,500,000
------------
9,500,000
------------
DISTRICT OF COLUMBIA -- 1.7%
District of Columbia, General
Obligation Bond, Ser. A-4
(LC -- Toronto Dominion Bank) (final VMIG1/Aa2
maturity date 10/01/07)*............ A1+/AA 4.40% 3/01/95 6,500 6,500,000
District of Columbia, General
Obligation Bond, Ser. B (LC -- Union
Bank of Switzerland) (final maturity VMIG1/Aaa
date 6/01/03)*...................... A1+/AAA 4.50% 3/01/95 1,300 1,300,000
------------
7,800,000
------------
FLORIDA -- 8.6%
Florida State Board of Education,
Capital Outlay (final maturity date NR/Aa
6/01/23)*........................... NR/AA 4.30% 6/01/95 10,500 10,500,000
St. Lucie County, Pollution Control
Rev., Florida Power & Light Co. VMIG1/A2
Proj., Ser. 1994 A.................. A1/A+ 4.20% 4/17/95 2,000 2,000,000
St. Lucie County, Pollution Control
Rev., Florida Power & Light Co. VMIG1/A2
Proj., Ser. 1994 A.................. A1/A+ 3.95% 4/06/95 15,000 15,000,000
St. Lucie County, Pollution Control
Rev., Florida Power & Light Co. VMIG1/A2
Proj., Ser. 1994 B.................. A1/A+ 4.20% 4/17/95 7,000 7,000,000
St. Lucie County, Pollution Control
Rev., Florida Power & Light Co. VMIG1/A2
Proj., Ser. 1994 B.................. A1/A+ 3.95% 3/01/95 5,000 5,000,000
------------
39,500,000
------------
HAWAII -- 2.0%
Hawaii State General Obligation Bonds,
Ser. CC (LC -- Banque Nationale De
Paris) (final maturity date VMIG1/Aa
2/01/02)*........................... NR/AA 4.15% 3/07/95 8,920 8,920,000
------------
ILLINOIS -- 11.0%
Chicago O'Hare International Airport,
American Airlines, Ser. C
(LC -- Societe Generale) (final VMIG1/Aa2
maturity date 1/01/18)*............. A1+/AA 4.00% 3/07/95 5,600 5,600,000
Chicago O'Hare International Airport,
American Airlines, Ser. C
(LC -- Sanwa Bank, Ltd.) (final P1/Aa3
maturity date 12/01/17)*............ NR/NR 3.95% 3/01/95 6,900 6,900,000
Chicago O'Hare International Airport,
American Airlines, Ser. D
(LC -- Sanwa Bank, Ltd.) (final P1/Aa3
maturity date 12/01/17)*............ NR/NR 3.95% 3/01/95 7,500 7,500,000
Illinois Health Facility Auth.,
Elmhurst Memorial Hospital, Ser. B VMIG1/A1
(final maturity date 1/01/20)*...... NR/NR 3.80% 3/01/95 5,175 5,175,000
</TABLE>
- ---------------
See Notes to Financial Statements.
21
<PAGE> 14
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- --------------------------------------- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Illinois Health Facility Auth.,
Franciscan Sisters Health (final VMIG1/A
maturity date 1/01/18)*............. NR/NR 3.80% 3/01/95 $ 4,880 $ 4,880,000
Illinois Housing Development Auth.
rev., Homeowner Mortgage, Ser. C-1 VMIG1/Aa
(final maturity date 8/01/26)*...... SP1+/NR 4.00% 5/01/95 8,290 8,290,000
Illinois State Development Finance
Authority, Pollution Control Rev.,
Illinois Power Co. Proj., Ser. A
(LC -- Canadian Imperial Bank of VMIG1/Aa3
Commerce)........................... A1+/AA- 4.00% 4/07/95 2,000 2,000,000
Illinois State General Obligation MIG1/NR
Certificates........................ SP1+/NR 4.75% 6/15/95 10,000 10,019,413
------------
50,364,413
------------
INDIANA -- 1.9%
Mt. Vernon City, Pollution Control &
Solid Waste Disposal Revenue Bond,
General Electric Co. Proj., Ser. P1/Aaa
1989 A.............................. A1+/AAA 4.15% 4/07/95 4,950 4,950,000
Mt. Vernon City, Pollution Control &
Solid Waste Disposal Revenue Bond,
General Electric Co. Proj., Ser. P1/Aaa
1989 A.............................. A1+/AAA 3.80% 3/24/95 3,690 3,690,000
------------
8,640,000
------------
KANSAS -- 0.2%
Burlington County Pollution Control
Rev., Kansas City Electric Power
Corp., Ser. 1985C-1 (LC -- Societe P1/Aa3
Generale)........................... A1+/AA- 4.20% 4/17/95 1,015 1,015,000
------------
KENTUCKY -- 1.6%
Boone County, Industrial Development
Auth., Square D Co. Proj., Ser. A
(LC -- Societe Generale) (final NR/NR
maturity date 3/01/03)*............. A1+/AA 4.10% 3/07/95 1,000 1,000,000
Trimble County, Pollution Control
Rev., Louisville Gas & Electric Co., VMIG1/Aa2
Ser. A.............................. A1+/AA 3.75% 3/07/95 6,285 6,285,000
------------
7,285,000
------------
LOUISIANA -- 2.5%
Louisiana State General Obligation
Bonds, Tax Exempt Eagle Trust, Ser.
1994 (AMBAC Insured) (final maturity NR/NR
date 5/01/09)*...................... A1/AA 4.24% 3/07/95 11,600 11,600,000
------------
MARYLAND -- 7.0%
Maryland State Community Dev. Admin.,
Department of Housing and Community
Dev., Single Family Housing Prog., VMIG1/Aa
Second Ser. (MHF Pool Ins.)**....... NR/NR 3.30% 3/30/95 4,700 4,700,000
</TABLE>
- ---------------
See Notes to Financial Statements.
22
<PAGE> 15
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- --------------------------------------- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Maryland State Health & Higher
Educational Facility Revenue Bonds,
Ser. A (LC -- First National Bank of
Chicago) (final maturity date VMIG1/A1
4/01/35)*........................... NR/NR 4.35% 3/07/95 $ 27,200 $ 27,200,000
------------
31,900,000
------------
MASSACHUSETTS -- 2.1%
Massachusetts State Ind. Finance
Agency, Pollution Control Rev., New VMIG1/A1
England Power Co. Proj., Ser. 1992.. A1/A+ 4.05% 4/05/95 8,700 8,700,000
Massachusetts State Water Resource NR/Aaa
Authority, Ser. A................... NR/AAA 6.70% 4/01/95 1,110 1,112,380
------------
9,812,380
------------
MICHIGAN -- 0.5%
Northville Development Corp., Thrifty
Proj. (LC -- Bankers Trust) (final P1/A1
maturity date 5/01/14)*............. A1/A+ 4.375% 3/07/95 2,400 2,400,000
------------
MISSOURI -- 0.6%
Columbia Missouri Special Obligation
Revenue Bonds, Ser. A (LC -- Toronto
Dominion Bank) (final maturity date VMIG1/Aa2
6/01/08)*........................... NR/NR 4.00% 3/07/95 2,600 2,600,000
------------
NEVADA -- 3.8%
Clarke County, Nevada Airport Imp.
Rev., Ser. A (MBIA Insured) (final VMIG1/Aaa
maturity date 7/01/12)*............. A1+/AAA 3.95% 3/07/95 6,700 6,700,000
Clarke County, Nevada Airport Imp.
Rev., Ser. A-1 (LC -- Toronto
Dominion Bank) (final maturity date VMIG1/Aa2
7/01/25)*........................... A1+/AA+ 4.00% 3/07/95 7,500 7,500,000
Nevada Housing Division, Multi-Unit
Park Vista Apartments, Ser. A
(LC -- Sumitomo Trust & Bank,
California) (final maturity date NR/NR
10/01/10)*.......................... A1/A+ 4.10% 3/07/95 3,200 3,200,000
------------
17,400,000
------------
NEW YORK -- 5.9%
New York City General Obligation
Bonds, Subser. A-8 (LC -- Sanwa
Bank, Ltd., Chicago) (final maturity VMIG1/Aa3
date 8/01/17)*...................... A1+/AA- 4.05% 3/01/95 2,000 2,000,000
New York City Revenue Anticipation MIG1/NR
Notes, Ser. A....................... SP1/NR 4.50% 4/12/95 10,000 10,009,155
New York City Revenue Anticipation MIG1/NR
Notes, Ser. B....................... SP1/NR 4.75% 6/30/95 5,000 5,012,347
New York City Water Eagle Trust, Ser.
94C-2 (MBIA Insured) (final maturity NR/NR
date 6/15/18)*...................... A1/AA 4.24% 3/07/95 10,000 10,000,000
------------
27,021,502
------------
OHIO -- 4.8%
Montgomery County, Miami Valley P1/A1
Hospital, Ser. B (LC -- Fuji Bank).. A1/A+ 3.75% 3/01/95 9,525 9,525,000
</TABLE>
- ---------------
See Notes to Financial Statements.
23
<PAGE> 16
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- --------------------------------------- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Montgomery County, Miami Valley P1/A1
Hospital, Ser. C (LC -- Fuji Bank).. A1/A+ 3.85% 3/02/95 $ 6,625 $ 6,625,000
Student Loan Funding Corp.,
Cincinnati, Ser. 1983A (LC -- Fuji
Bank) (final maturity date VMIG1/A1
12/29/98)*.......................... NR/NR 4.00% 3/07/95 6,000 6,000,000
------------
22,150,000
------------
OREGON -- 0.3%
Multinomah County, Oregon School
District No 1J, Portland, Tax MIG1/NR
Anticipation Notes.................. SP1+/NR 3.75% 6/29/95 1,500 1,500,714
------------
PENNSYLVANIA -- 10.9%
Allegheny County, Industrial
Development Authority, Pollution
Control Rev., Duquesne Light Co.,
Ser. A (LC -- Canadian Imperial Bank
of Commerce) (final maturity date P1/NR
9/01/11)*........................... A1+/AA- 4.75% 9/01/95 7,500 7,500,000
Allegheny County, Tender Option
Certificates, Custodial Receipt
Med., Ser. BT-63 (AMBAC Insured) VMIG1/Aaa
(final maturity date (9/01/04)*..... NR/AAA 4.10% 3/07/95 3,000 3,000,000
Delaware County, Industrial Dev.
Authority, Solid Waste Rev., Scott
Paper Co., Ser. A (LC -- Fuji Bank) P1/A1
(final maturity date 12/01/18)*..... A1/A+ 4.10% 3/07/95 3,100 3,100,000
Delaware Valley, Regional Fin.
Authority, Ser. B (LC -- Marine
Midland Bank, Hong Kong and Shanghai
Bank) (final maturity date VMIG1/A3
12/01/20)*.......................... A2/A- 4.10% 3/07/95 6,000 6,000,000
Delaware Valley, Regional Fin.
Authority Ser. D (LC -- Marine
Midland Bank, Hong Kong and Shanghai
Bank) (final maturity date VMIG1/A3
12/01/20)*.......................... A2/A- 4.10% 3/07/95 21,900 21,900,000
Emmaus General Authority Revenue Bond,
Subser. E-4 (LC -- Canadian Imperial
Bank of Commerce) (final maturity NR/NR
date 3/01/24)*...................... SP1/A1+ 4.05% 3/07/95 1,000 1,000,000
Pennsylvania State, Tax Anticipation MIG1/NR
Notes, First Ser. .................. SP1+/NR 5.00% 6/30/95 7,500 7,525,396
------------
50,025,396
------------
TENNESSEE -- 1.2%
Rutherford County, Industrial
Development Authority, Square D Co.
Proj. (LC -- Societe Generale) NR/NR
(final maturity date 4/01/17)*...... A1+/AA 4.10% 3/07/95 5,600 5,600,000
------------
TEXAS -- 2.8%
Austin County, Industrial Development
Corp., Justin Industries Inc. Proj.
(LC -- Citibank, New York) (final P1/A2
maturity date 12/01/14)*............ NR/NR 4.05% 3/07/95 3,300 3,300,000
</TABLE>
- ---------------
See Notes to Financial Statements.
24
<PAGE> 17
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- --------------------------------------- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Grapevine Industrial Devel. Corp.
Revenue Bond, American Airlines,
Ser. B-2 (LC -- Morgan Guaranty
Trust) (final maturity date P1/Aa1
12/01/24)*.......................... NR/NR 3.90% 3/01/95 $ 3,200 $ 3,200,000
Texas Department of Housing &
Community Affairs, Single Family NR/NR
Housing (FGIC Insured).............. A1+/NR 4.50% 4/03/95 1,150 1,149,993
West Side Calhoun County Development
Corp., Pollution Control Rev., Sohio
Chemical Co. Proj. (final maturity P1/A1
date 12/01/15)*..................... A1+/AA- 3.75% 3/01/95 5,200 5,200,000
------------
12,849,993
------------
UTAH -- 3.3%
Intermountain Power Supply Agency VMIG1/Aa
Revenue Bond, Ser. F................ A1+/AA- 4.20% 4/17/95 1,000 1,000,000
Intermountain Power Supply Agency VMIG1/A1
Revenue Bond, Ser. F................ A1/AA- 4.00% 4/07/95 2,700 2,700,000
Utah State Housing Finance Agency,
Single Family Mortgage, Issue C VMIG1/Aa
(final maturity date 1/01/27)*...... NR/NR 4.10% 3/07/95 1,300 1,300,000
Utah State Housing Finance Agency,
Single Family Mortgage, Issue D VMIG1/Aa
(final maturity date 7/01/16)*...... NR/NR 4.10% 3/07/95 9,900 9,900,000
------------
14,900,000
------------
WASHINGTON -- 4.5%
Port Woodland, Washington Industrial
Devel. Corp., Columbia River
Carbonates (LC -- Swiss Bank, NY) NR/NR
(final maturity date 9/30/95)*...... NR/NR 3.85% 3/01/95 1,000 1,000,000
Washington State General Aa/NR
Obligation Bond..................... NR/AA 8.00% 10/01/95 3,000 3,060,565
Washington State Healthcare Facility
Authority, Sisters of Providence,
Ser. B (final maturity date VMIG1/A1
10/01/05)*.......................... A1+/AA- 3.95% 3/01/95 1,400 1,400,000
Washington State Healthcare Facility
Authority, Sisters of Providence,
Ser. C (final maturity date VMIG1/A1
10/01/05)*.......................... A1+/AA- 3.95% 3/01/95 3,800 3,800,000
Washington State Public Power Supply
Sys., Nuclear Proj. No. 1, Ser. 1A-2
(LC -- Industrial Bank of Japan,
Ltd.) (final maturity date VMIG1/A1
7/01/17)*........................... A1+/AA- 4.05% 3/07/95 1,800 1,800,000
Washington State, Ser. R-94A
(LC -- Banque Francaise) (final VMIG1/Aa
maturity date 8/01/02)*............. A1+/AA 4.15% 3/07/95 9,370 9,370,000
------------
20,430,565
------------
WISCONSIN -- 3.9%
Milwaukee County, Revenue Anticipation MIG1/NR
Notes............................... NR/NR 4.25% 6/30/95 15,000 15,033,620
</TABLE>
- ---------------
See Notes to Financial Statements.
25
<PAGE> 18
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- --------------------------------------- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Wisconsin State Health Facility
Authority, Franciscan Health Care,
Ser. A-2 (LC -- Toronto Dominion
Bank) (final maturity date VMIG1/Aa2
1/01/16)*........................... A1+/AA+ 3.80% 3/07/95 $ 3,000 $ 3,000,000
------------
18,033,620
------------
TOTAL INVESTMENTS (AMORTIZED
COST $449,117,583) -- 98.0%........... 449,117,583
Other assets in excess of
liabilities -- 2.0%................... 9,305,119
------------
NET ASSETS -- 100.0%................... $458,422,702
==============
</TABLE>
- ---------------
AMBAC -- American Municipal Bond Assurance Corporation.
FGIC -- Financial Guaranty Insurance Company.
FSA -- Financial Securities Association.
LC -- Letter of credit.
MBIA -- Municipal Bond Insurance Association.
NR -- No rating available.
+ The ratings provided consist of short-term and long-term ratings for both
Moody's and S&P. The first row consists of the short-term/long-term Moody's
ratings and the second row consists of short-term/long-term S&P ratings.
* Variable rate security. Interest rates stated are as of February 28, 1995.
Maturity date reflects the later of the next rate change date or the next
put date.
** Maturity date reflects the next put date.
See Notes to Financial Statements.
26
<PAGE> 19
PACIFIC HORIZON
CALIFORNIA TAX-EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- ------------------------------------ ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
SHORT-TERM TAX-EXEMPT
INVESTMENTS -- 99.3%
CALIFORNIA -- 99.3%
Anaheim Certificates of
Participation, 1993 Refund Project
(AMBAC Insured) (LC -- Ind. Bank of
Japan Ltd.) (final maturity date VMIG1/A
8/01/19)*.......................... A1/AAA 3.90% 3/07/95 $ 8,300 $ 8,300,000
California Alternative Energy Source
Financing Auth., Cogeneration Rev. P1/Aaa
(final maturity date 10/01/20)*.... A1+/AAA 3.95% 3/07/95 3,500 3,500,000
California General Obligation
(LC -- International Nederlanden,
NY) (final maturity date VMIG1/Aa2
11/01/08)*......................... A/NR 4.10% 3/01/95 5,200 5,200,000
California General Obligation Bond, NR/Aaa
Ser. 92A-2 (FGIC Insured).......... NR/AAA 4.10% 5/01/95 10,000 10,000,000
California General Obligation,
Various Purpose Certificates of
Participation (MBIA Insured) (final
maturity P1/Aaa
date 2/01/06)*..................... A1+/AAA 4.19% 3/07/95 10,000 10,000,000
California Health Facs. Finance
Auth., St. Francis Memorial
Hospital (LC -- Ind. Bank of Japan
Ltd.) (final maturity NR/NR
date 11/01/19)*.................... NR/NR 3.75% 3/01/95 4,625 4,625,000
California Health Facs. Finance
Auth., St. Joseph's Health Syst.,
Series A (final maturity VMIG1/Aa
date 7/01/13)*..................... A1+/AA 3.70% 3/01/95 1,505 1,505,000
California Health Facs. Finance
Auth., St. Joseph's Health Syst.,
Series B (final maturity VMIG1/Aa
date 7/01/09)*..................... A1+/AA 3.70% 3/01/95 1,300 1,300,000
California Housing Finance Auth.,
Multi-Unit Rent Housing Rev. (MBIA
Insured) (final maturity date VMIG1/Aa
8/01/16)*.......................... A1+/AAA 4.20% 5/01/95 5,000 5,000,000
California Pollution Control Finance
Auth., Chevron USA Proj., P1/Aa2
Ser. 84-B*......................... NR/AA 3.70% 6/15/95 1,000 1,000,000
California Pollution Control Finance
Auth., Dow Chemical, Commercial P1/Aa2
Paper.............................. A1+/AAA 3.95% 5/22/95 1,000 1,000,000
California Pollution Control Finance
Auth., Dow Chemical, Commercial P1/Aa2
Paper.............................. A1+/AAA 3.85% 3/09/95 1,000 1,000,000
</TABLE>
- ---------------
See Notes to Financial Statements.
27
<PAGE> 20
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- ------------------------------------ ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
California Pollution Control Finance
Auth., Occidental Geothermal
(LC -- ABN-AMRO Bank) (final NR/NR
maturity date 9/01/13)*............ A1+/AA- 3.75% 3/07/95 $ 2,100 $ 2,100,000
California Pollution Control Finance
Auth., Pacific Gas & Electric, P1/Aa2
Commercial Paper................... A1+/AAA 4.25% 5/12/95 10,000 10,000,000
California Pollution Control Finance
Auth., Pacific Gas & Electric,
Commercial Paper P1/Aa2
(LC -- Swiss Bank)................. A1+/AAA 4.05% 4/03/95 5,000 5,000,000
California Pollution Control Finance
Auth., Pacific Gas & Electric, P1/Aa2
Commercial Paper................... A1+/AAA 3.90% 4/13/95 3,000 3,000,000
California Pollution Control Finance
Auth., Solid Waste Disposal Revenue
Bond, Shell Oil (final maturity VMIG1/Aa2
date 10/01/24)*.................... NR/NR 3.95% 3/01/95 3,500 3,500,000
California Pollution Control Finance
Auth., So. Cal. Edison, Commercial P1/Aa2
Paper.............................. A1+/AAA 4.10% 3/29/95 2,000 2,000,000
California Pollution Control Finance
Auth., So. Cal. Edison, Commercial P1/Aa2
Paper.............................. A1+/AAA 4.20% 5/11/95 3,600 3,600,000
California Pollution Control Finance
Auth., So. Cal. Edison, Commercial P1/Aa2
Paper.............................. A1+/AAA 4.00% 3/09/95 2,900 2,900,000
California Pollution Control Finance
Auth., So. Cal. Edison, Commercial P1/Aa2
Paper.............................. A1+/AAA 3.95% 5/25/95 4,000 4,000,000
California Pollution Control Finance
Auth., So. Cal. Edison, Series A VMIG1/A2
(final maturity date 2/28/08)*..... A/A1 4.00% 3/01/95 1,300 1,300,000
California Pollution Control Finance
Auth., So. Cal. Edison, Series B VMIG1/A2
(final maturity date 2/28/08)*..... A/A1 4.00% 3/01/95 1,200 1,200,000
California Pollution Control Finance
Auth., So. Cal. Edison, Series C VMIG1/A2
(final maturity date 2/28/08)*..... A/A1 4.00% 3/01/95 500 500,000
California Pollution Control Finance
Auth., So. Cal. Edison, Series D VMIG1/A2
(final maturity date 2/28/08)*..... A/A1 4.00% 3/01/95 2,700 2,700,000
California Revenue Anticipation
Notes, Libor Index FRN (final MIG1/NR
maturity date 6/28/95)*............ SP1+/NR 4.365% 3/01/95 9,000 9,000,000
California Revenue Anticipation MIG1/NR
Notes, Ser. A...................... SP1/NR 5.00% 6/28/95 7,730 7,752,515
California Revenue Anticipation
Notes, Ser. B (final maturity date MIG1/NR
6/28/95)*.......................... SP1+/NR 4.14% 3/07/95 8,500 8,498,544
California Statewide Comm. Dev.
Auth., Certificates of
Participation, St. Joseph's Health VMIG1/Aa
(final maturity date 7/01/24)*..... A1+/AA 3.70% 3/01/95 2,000 2,000,000
</TABLE>
- ---------------
See Notes to Financial Statements.
28
<PAGE> 21
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- ------------------------------------ ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
California Statewide Comm. Dev.
Auth., Certificates of
Participation, Uni Health (AMBAC
Insured) (final maturity date VMIG1/Aa
8/04/00)*.......................... A1/AAA 4.10% 3/07/95 $ 3,000 $ 3,000,000
California Statewide Comm. Dev.
Auth., Solid Waste Facilities Rev.
Bonds (AMT) (final maturity date NR/NR
12/15/24)*......................... A1/AAA 3.95% 3/01/95 5,000 5,000,000
P1/Aa2
Chula Vista, Commercial Paper....... A1+/AAA 4.15% 3/30/95 3,000 3,000,000
Chula Vista Industrial Development
Rev., San Diego Gas and Electric
Co., Ser. B (AMT) (final maturity VMIG1/A1
date 12/01/27)*.................... A1/A+ 4.05% 3/07/95 11,000 11,000,000
Intercomm. Hosp. Finance Auth.
Certificates of Participation
(Prerefunded 8/1/95 at 103) (final NR/NR
maturity date 8/01/15)............. NR/AAA 9.75% 5/05/95 4,000 4,204,229
Kern County, Board of Education, Tax NR/NR
and Revenue Anticipation Notes..... SP1+/NR 4.25% 6/30/95 10,000 10,017,560
Long Beach Memorial Health Facs.
Rev., Memorial Health Services VMIG1/A1
(final maturity date 10/01/16)*.... A1+/AA- 3.90% 3/07/95 1,400 1,400,000
Los Angeles Certificates of
Participation, Simon Wiesenthal
Ctr., Series S (LC -- National
Australia Bank) (final maturity VMIG1/A
date 6/01/95)*..................... NR/NR 3.95% 3/07/95 2,700 2,700,000
Los Angeles County Tax and Revenue VMIG1/NR
Anticipation Notes................. A1+/NR 4.50% 6/30/95 6,750 6,750,610
Los Angeles County Tax and Revenue VMIG1/NR
Anticipation Notes................. A1+/NR 4.50% 7/10/95 5,800 5,818,071
Los Angeles County Tax and Revenue
Commercial Paper (LC -- National P1/Aa2
Westminister)...................... A1+/AAA 4.10% 5/10/95 3,800 3,800,000
Los Angeles County Transportation
Comm., Sales Tax Rev., Ser. A VMIG1/Aa
(final maturity date 7/01/12)*..... A1+/AAA 3.70% 3/07/95 10,500 10,500,000
Los Angeles County Transportation
Comm., Sales Tax Rev., Ser. A, VMIG1/Aa
Commercial Paper................... A1+/NR 3.85% 3/07/95 5,000 5,000,000
Newport Beach Health Facility, Hoag
Memorial Hospital (final maturity VMIG1/A1
date 10/01/22)*.................... A1/AA 3.75% 3/01/95 2,755 2,755,000
Orange County Improvement Bond,
Dist. 88-1 (LC -- Industrial Bank
of Japan and Fuji Bank) (final VMIG1/A1
maturity date 9/02/18)*............ A1+/A+ 4.20% 3/01/95 9,000 9,000,000
Orange County Tax and Revenue
Anticipation Notes, Ser. B*
(LC -- Bank of America) (final NR/NR
maturity date 8/10/95)++........... SP3/NR 4.24% 3/01/95 4,500 4,500,000
</TABLE>
- ---------------
See Notes to Financial Statements.
29
<PAGE> 22
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- ------------------------------------ ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Pico Rivera Redevelopment Agency,
Crossroads Plaza Project
(LC -- Wachovia Bank, Atlanta) NR/NR
(final maturity date 12/01/10)*.... A1/AA+ 3.75% 3/07/95 $ 1,600 $ 1,600,000
Riverside, California P1/Aa2
Transportation, Commercial Paper... A1+/AAA 3.80% 3/08/95 5,000 5,000,000
San Diego County, P1/Aa2
Commercial Paper................... A1+/AAA 3.90% 3/03/95 4,000 4,000,000
San Diego County Regional
Transmission, Sales Tax Rev., Ser.
A (FGIC Insured) (final maturity VMIG1/Aaa
date 4/01/08)*..................... A1+/AAA 3.90% 3/07/95 10,000 10,000,000
San Diego Housing Auth.,
La Cima Apartments, Ser. K
(LC -- Daiwa Bank, Ltd.) (final VMIG2/A3
maturity date 12/01/08)*........... NR/NR 4.50% 3/07/95 5,000 5,000,000
San Diego Housing Auth., Multifamily
Housing (LC -- Citibank, NY) (final VMIG1/A2
maturity date 12/01/08)*........... A2/NR 3.90% 3/07/95 4,000 4,000,000
San Francisco City and County,
Multifamily Housing
(LC -- Citibank, NY) (final NR/NR
maturity date 6/01/06)*............ A+/A1 3.75% 3/07/95 1,700 1,700,000
San Francisco City and County Tax MIG1/NR
and Revenue Anticipation Notes..... SP1+/NR 4.25% 7/15/95 5,000 5,010,727
San Joaquin County Trans. Auth.,
Sales Tax Revenue (LC -- Sumitomo
Bank, LTD) (final maturity date VMIG1/A1
4/01/11)*.......................... A+/A1 3.90% 3/07/95 2,200 2,200,000
Santa Clara Electric Rev.,
Ser. A (LC -- National Westminster
Bank, PLC) (final maturity date VMIG1/A2
7/01/10)*.......................... NR/NR 3.80% 3/07/95 1,000 1,000,000
Simi Valley Multifamily Housing
Rev., Cochran Street Project, Issue NR/NR
A (final maturity date 2/15/08)*... NR/NR 3.95% 3/07/95 4,000 4,000,000
Southern California Public Power
Auth., Power Project Rev. (final VMIG1/Aa
maturity date 7/01/04)*............ NR/NR 4.10% 3/07/95 6,500 6,500,000
Southern California Public Power
Auth., Trans. Proj. Rev.
(LC -- Swiss Bank) (final maturity VMIG1/Aaa
date 7/01/19)*..................... A1+/AAA 3.70% 3/07/95 9,600 9,600,000
</TABLE>
- ---------------
See Notes to Financial Statements.
30
<PAGE> 23
<TABLE>
<CAPTION>
RATINGS+
MOODY'S/ PRINCIPAL
S&P MATURITY AMOUNT VALUE
DESCRIPTION (UNAUDITED) RATE DATE (000) (NOTE 2)
- ------------------------------------ ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Vallejo Industrial Development
Auth., Meyer Cookmare Ind., Ser. A
(LC -- Mitsubishi Bank Ltd.) (AMT) NR/NR
(final maturity date 12/01/23)*.... A1+/AA 4.35% 3/07/95 $ 3,300 $ 3,300,000
------------
TOTAL INVESTMENTS (AMORTIZED COST
$272,837,256) -- 99.3%............. 272,837,256
Other assets in excess of
liabilities -- 0.7%................ 1,808,189
------------
NET ASSETS -- 100.0%................ $274,645,445
==============
</TABLE>
- ---------------
LC -- Letter of credit.
AMT -- Subject to Alternative Minimum Tax.
AMBAC -- American Municipal Bond Assurance Corporation.
FGIC -- Financial Guaranty Insurance Company.
FRN -- Floating rate note.
MBIA -- Municipal Bond Insurance Association.
* Variable rate security. Interest rates stated are as of February 28, 1995.
Maturity date reflects the later of the next rate change date or the next put
date.
+ The ratings provided consist of short-term and long-term ratings for both
Moody's and S&P. The first row consists of the short-term/long-term Moody's
ratings and the second row consists of short-term/long-term S&P ratings.
++ The Portfolio's investment adviser issued a letter of credit for this
security, the market value of which was $675,000 at February 28, 1995. See
Note 3 to Financial Statements.
See Notes to Financial Statements.
31
<PAGE> 24
PACIFIC HORIZON FUNDS, INC.
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRIME
FUND
--------------
<S> <C>
ASSETS
Investments in securities, at value (amortized cost
$1,759,412,474, $920,829,528, $520,927,537, $282,965,881,
$449,117,583 and $272,162,256, respectively).................. $1,759,412,474
Repurchase agreements (amortized cost $864,814,000,
$945,084,000, $359,299,000, $0, $0 and $0, respectively)...... 864,814,000
Cash............................................................ --
Receivable for investment securities sold....................... --
Receivable for portfolio shares sold............................ --
Interest receivable............................................. 6,338,971
Deferred organization costs and prepaid expenses................ 132,764
--------------
Total assets...................................................... 2,630,698,209
--------------
LIABILITIES
Advisory fees payable........................................... 200,830
Administration fees payable..................................... 200,830
Special management services fees payable (Pacific Horizon
Shares)....................................................... 261,931
Service Organization fees payable (Horizon Service Shares)...... 164,506
Dividends payable............................................... 6,834,382
Due to custodian................................................ 479,832
Payable for portfolio shares redeemed........................... 6,409,566
Payable for investment securities purchased..................... --
Accrued legal fees.............................................. 5,087
Other accrued expenses.......................................... 713,847
--------------
Total liabilities................................................. 15,270,811
--------------
NET ASSETS........................................................ $2,615,427,398
==============
Shares Outstanding ($0.001 par value)
Pacific Horizon Shares.......................................... 1,130,071,352
Horizon Shares.................................................. 622,973,633
Horizon Service Shares.......................................... 864,561,312
--------------
Total Shares Outstanding.......................................... 2,617,606,297
==============
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE.... $1.00
----
----
COMPOSITION OF NET ASSETS:
Shares of common stock, at par.................................. $ 2,617,606
Additional paid-in capital...................................... 2,614,772,683
Accumulated undistributed net investment income................. 983,944
Accumulated net realized losses................................. (2,946,835)
Unrealized depreciation of investments.......................... --
--------------
NET ASSETS, FEBRUARY 28, 1995..................................... $2,615,427,398
==============
</TABLE>
- ---------------
See Notes to Financial Statements.
32
<PAGE> 25
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA
TREASURY TAX-EXEMPT TAX-EXEMPT
TREASURY GOVERNMENT ONLY MONEY MONEY MARKET
FUND FUND FUND FUND FUND
-------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$ 920,829,528 $520,927,537 $282,965,881 $449,117,583 $272,837,256
945,084,000 359,299,000 -- -- --
94,972,531 -- 5,857 4,421,069 --
-- -- -- 12,112,644 4,011,008
9,098,217 -- -- -- --
3,099,077 1,296,432 2,016,082 3,679,790 2,095,853
116,768 213,286 147,196 32,543 21,751
-------------- ------------ ------------ ------------ ------------
1,973,200,121 881,736,255 285,135,016 469,363,629 278,965,868
-------------- ------------ ------------ ------------ ------------
150,574 -- 24,539 36,970 21,067
150,574 16,666 24,539 36,970 21,067
276,993 85,116 22,531 9,500 46,857
63,741 50,250 39,178 7,877 17,400
7,440,151 2,466,041 252,415 1,066,553 61,052
-- 93,908 -- -- 4,064,019
-- -- -- -- --
-- -- -- 9,711,008 --
4,640 4,821 4,769 4,709 5,703
57,598 97,743 66,299 67,340 83,258
-------------- ------------ ------------ ------------ ------------
8,144,271 2,814,545 434,270 10,940,927 4,320,423
-------------- ------------ ------------ ------------ ------------
$1,965,055,850 $878,921,710 $284,700,746 $458,422,702 $274,645,445
============== ============ ============ ============ ============
1,132,768,968 355,202,069 90,373,860 37,463,587 186,654,642
468,922,381 235,532,896 -- 381,910,056 --
363,911,318 289,114,358 194,441,752 39,168,103 88,008,624
-------------- ------------ ------------ ------------ ------------
1,965,602,667 879,849,323 284,815,612 458,541,746 274,663,266
============== ============ ============ ============ ============
$1.00 $1.00 $1.00 $1.00 $1.00
---- ---- ---- ---- ----
---- ---- ---- ---- ----
$ 1,965,603 $ 879,849 $ 284,816 $ 458,542 $ 274,663
1,962,661,377 878,969,474 284,530,796 458,083,204 274,999,483
667,877 148,038 -- -- 62,301
(239,007) (1,075,651) (114,866) (119,044) (16,002)
-- -- -- -- (675,000)
-------------- ------------ ------------ ------------ ------------
$1,965,055,850 $878,921,710 $284,700,746 $458,422,702 $274,645,445
============== ============ ============ ============ ============
</TABLE>
33
<PAGE> 26
PACIFIC HORIZON FUNDS, INC.
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRIME
FUND
------------
<S> <C>
INVESTMENT INCOME
Interest........................................................ $150,199,956
------------
Expenses
Advisory fees................................................... 3,250,830
Administration fees............................................. 3,315,268
Special management services fees
(Pacific Horizon Shares)...................................... 3,464,984
Service Organization fees
(Horizon Service Shares)...................................... 2,115,780
Custodian fees and expenses..................................... 301,640
Transfer agent fees and expenses................................ 295,181
Registration fees............................................... 143,892
Insurance expense............................................... 131,123
Membership fees................................................. 90,323
Audit fees...................................................... 57,443
Legal fees...................................................... 48,539
Reports to shareholders......................................... 43,521
Directors' fees................................................. 23,318
Amortization of organization costs.............................. --
Other expenses.................................................. 17,573
------------
13,299,415
Less: Fee waivers and expense reimbursements...................... (1,869,860)
------------
11,429,555
------------
Net Investment Income............................................. 138,770,401
REALIZED (LOSS) GAIN ON INVESTMENTS
Net realized (loss) gain on securities transactions............. (70,528,584)
Net change in unrealized depreciation of investments............ --
------------
Net realized (loss) gain on investments........................... (70,528,584)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $ 68,241,817
============
</TABLE>
- ---------------
See Notes to Financial Statements.
34
<PAGE> 27
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA
TAX-EXEMPT
TREASURY TAX-EXEMPT MONEY
TREASURY GOVERNMENT ONLY MONEY MARKET
FUND FUND FUND FUND FUND
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
$97,394,843 $31,025,824 $13,378,512 $15,869,219 $9,295,308
----------- ----------- ----------- ----------- ----------
2,140,125 649,374 301,618 513,567 301,964
2,140,125 649,374 301,618 513,567 301,964
3,830,002 774,259 191,572 135,034 639,503
989,269 590,188 604,380 103,606 255,299
326,857 147,722 77,719 100,521 78,788
56,762 83,054 64,178 75,450 66,926
91,034 -- 24,880 52,871 --
73,454 17,535 10,027 14,952 9,749
40,447 -- 1,284 3,989 2,209
44,754 27,481 32,013 45,198 53,534
23,875 27,770 20,951 42,790 22,480
30,000 28,114 28,792 51,019 24,283
22,408 23,093 22,179 21,538 23,388
-- -- 26,543 -- 5,106
13,963 6,567 8,926 23,892 4,492
----------- ----------- ----------- ----------- ----------
9,823,075 3,024,531 1,716,680 1,697,994 1,789,685
-- (513,473) (16,626) (23,222) --
----------- ----------- ----------- ----------- ----------
9,823,075 2,511,058 1,700,054 1,674,772 1,789,685
----------- ----------- ----------- ----------- ----------
87,571,768 28,514,766 11,678,458 14,194,447 7,505,623
505,457 (6,104,207) (48,264) (29,085) 31,226
-- -- -- -- (675,000)
----------- ----------- ----------- ----------- ----------
505,457 (6,104,207) (48,264) (29,085) (643,774)
----------- ----------- ----------- ----------- ----------
$88,077,225 $22,410,559 $11,630,194 $14,165,362 $6,861,849
=========== =========== =========== =========== ==========
</TABLE>
35
<PAGE> 28
PACIFIC HORIZON FUNDS, INC.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRIME FUND
--------------------------------------
YEAR ENDED
--------------------------------------
FEBRUARY 28, FEBRUARY 28,
1995 1994
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income............................ $ 138,770,401 $ 426,788,773
Net realized (loss) gain on securities
transactions................................... (70,528,584) (9,624,856)
---------------- -----------------
Net increase in net assets resulting from
operations....................................... 68,241,817 417,163,917
---------------- -----------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT
INCOME
Pacific Horizon Shares........................... (45,136,378) (33,987,808)
Horizon Shares................................... (56,633,687) (368,842,704)
Horizon Service Shares........................... (36,337,275) (23,826,386)
---------------- -----------------
Total dividends to shareholders from net
investment income................................ (138,107,340) (426,656,898)
---------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED
GAINS
Pacific Horizon Shares........................... -- (28,939)
Horizon Shares................................... -- (240,001)
Horizon Service Shares........................... -- (19,780)
---------------- -----------------
Total distributions to shareholders from net
realized gains................................... -- (288,720)
---------------- -----------------
PORTFOLIO SHARE TRANSACTIONS
(at $1.00 per share) (Note 5)
Net proceeds from shares subscribed.............. 22,779,590,840 127,421,725,627
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions.................................. 44,544,475 57,806,131
Cost of shares redeemed.......................... (26,110,723,254) (133,660,879,565)
---------------- -----------------
Net (decrease) increase in net assets from
Portfolio share transactions................... (3,286,587,939) (6,181,347,807)
---------------- -----------------
Increase due to capital contribution from
investment advisor (Note 3).................... 77,411,877 --
---------------- -----------------
TOTAL (DECREASE) INCREASE......................... (3,279,041,585) (6,191,129,508)
NET ASSETS
Beginning of year................................ 5,894,468,983 12,085,598,491
---------------- -----------------
End of year (Including undistributed net
investment income of $983,944 and $320,883,
respectively, for the Prime Fund, $667,877 and
$667,877, respectively, for the Treasury Fund,
and $148,038 and $0, respectively, for the
Government Fund)............................... $ 2,615,427,398 $ 5,894,468,983
=============== ================
</TABLE>
- ---------------
See Notes to Financial Statements.
36
<PAGE> 29
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY FUND GOVERNMENT FUND
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED
----------------------------------- -----------------------------------
FEBRUARY 28, FEBRUARY 28, FEBRUARY 28, FEBRUARY 28,
1995 1994 1995 1994
--------------- --------------- --------------- ---------------
<S> <C> <C> <C>
$ 87,571,768 $ 73,382,362 $ 28,514,766 $ 27,035,580
505,457 (613,607) (6,104,207) (471,444)
--------------- --------------- --------------- ---------------
88,077,225 72,768,755 22,410,559 26,564,136
--------------- --------------- --------------- ---------------
(47,797,370) (43,438,611) (10,270,344) (3,676,002)
(23,889,473) (16,671,193) (7,955,039) (12,774,440)
(15,884,925) (13,272,558) (10,141,345) (10,585,138)
--------------- --------------- --------------- ---------------
(87,571,768) (73,382,362) (28,366,728) (27,035,580)
--------------- --------------- --------------- ---------------
-- -- -- --
-- -- -- --
-- -- -- --
--------------- --------------- --------------- ---------------
-- -- -- --
--------------- --------------- --------------- ---------------
8,879,909,861 12,103,081,433 5,672,050,494 6,629,378,510
9,576,672 7,176,901 9,946,142 10,124,130
(9,531,263,412) (12,228,498,572) (5,652,649,134) (5,789,000,819)
--------------- --------------- --------------- ---------------
(641,776,879) (118,240,238) 29,347,502 850,501,821
--------------- --------------- --------------- ---------------
-- -- 5,500,000 --
--------------- --------------- --------------- ---------------
(641,271,422) (118,853,845) 28,891,333 850,030,377
2,606,327,272 2,725,181,117 850,030,377 --
--------------- --------------- --------------- ---------------
$ 1,965,055,850 $ 2,606,327,272 $ 878,921,710 $ 850,030,377
============== ============== ============== ==============
</TABLE>
37
<PAGE> 30
PACIFIC HORIZON FUNDS, INC.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY ONLY FUND
----------------------------------
YEAR ENDED
----------------------------------
FEBRUARY 28, FEBRUARY 28,
1995 1994
--------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income................................. $ 11,678,458 $ 5,237,768
Net realized (loss) gain on securities transactions... (48,264) (66,602)
Net change in unrealized depreciation of
investments......................................... -- --
--------------- --------------
Net increase in net assets resulting from
operations.......................................... 11,630,194 5,171,166
--------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT
INCOME
Pacific Horizon Shares................................ (2,335,606) (1,701,974)
Horizon Shares........................................ -- --
Horizon Service Shares................................ (9,342,852) (3,535,794)
--------------- --------------
Total dividends to shareholders from net investment
income................................................ (11,678,458) (5,237,768)
--------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS
Pacific Horizon Shares................................ -- --
Horizon Shares........................................ -- --
Horizon Service Shares................................ -- --
--------------- --------------
Total distributions to shareholders from net realized
gains................................................. -- --
--------------- --------------
PORTFOLIO SHARE TRANSACTIONS
(at $1.00 per share) (Note 5)
Net proceeds from shares subscribed................... 1,440,503,813 1,310,804,062
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions......... 9,877,274 4,117,763
Cost of shares redeemed............................... (1,509,340,461) (971,146,839)
--------------- --------------
Net (decrease) increase in net assets from Portfolio
share transactions.................................. (58,959,374) 343,774,986
--------------- --------------
Increase due to capital contribution from
investment advisor (Note 3)......................... -- --
--------------- --------------
TOTAL (DECREASE) INCREASE.............................. (59,007,638) 343,708,384
NET ASSETS
Beginning of year..................................... 343,708,384 --
--------------- --------------
End of year (Including undistributed net investment
income of $62,301 and $62,301, respectively, for the
California Tax-Exempt Money Market Fund)............ $ 284,700,746 $ 343,708,384
============== =============
</TABLE>
- ---------------
See Notes to Financial Statements.
38
<PAGE> 31
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA TAX-EXEMPT
TAX-EXEMPT MONEY FUND MONEY MARKET FUND
----------------------------------- -------------------------------
YEAR ENDED YEAR ENDED
----------------------------------- -------------------------------
FEBRUARY 28, FEBRUARY 28, FEBRUARY 28, FEBRUARY 28,
1995 1994 1995 1994
--------------- --------------- ------------- -------------
<S> <C> <C> <C>
$ 14,194,447 $ 10,932,468 $ 7,505,623 $ 5,585,153
(29,085) (75,030) 31,226 (5,858)
-- -- (675,000) --
--------------- --------------- ------------- -------------
14,165,362 10,857,438 6,861,849 5,579,295
--------------- --------------- ------------- -------------
(1,041,419) (559,450) (4,948,021) (3,258,550)
(12,086,919) (9,443,879) -- --
(1,066,109) (929,139) (2,557,602) (2,326,603)
--------------- --------------- ------------- -------------
(14,194,447) (10,932,468) (7,505,623) (5,585,153)
--------------- --------------- ------------- -------------
-- (483) -- --
-- (5,706) -- --
-- (652) -- --
--------------- --------------- ------------- -------------
-- (6,841) -- --
--------------- --------------- ------------- -------------
2,768,641,200 2,445,465,664 826,241,285 1,015,146,224
2,002,123 1,173,533 6,810,381 5,326,222
(2,924,830,407) (2,267,453,580) (885,907,562) (821,444,729)
--------------- --------------- ------------- -------------
(154,187,084) 179,185,617 (52,855,896) 199,027,717
--------------- --------------- ------------- -------------
-- -- 675,000 --
--------------- --------------- ------------- -------------
(154,216,169) 179,103,746 (52,824,670) 199,021,859
612,638,871 433,535,125 327,470,115 128,448,256
--------------- --------------- ------------- -------------
$ 458,422,702 $ 612,638,871 $ 274,645,445 $ 327,470,115
============== ============== ============ ============
</TABLE>
39
<PAGE> 32
PACIFIC HORIZON FUNDS, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 -- GENERAL
Pacific Horizon Funds, Inc. (the "Fund"), a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended (the "Act"), as
an open-end management investment company. At February 28, 1995, the Fund
operated as a series company comprising sixteen portfolios. The accompanying
financial statements and notes are those of the Pacific Horizon Prime Fund (the
"Prime Fund"), Pacific Horizon Treasury Fund (the "Treasury Fund"), Pacific
Horizon Government Fund (the "Government Fund"), Pacific Horizon Treasury Only
Fund (the "Treasury Only Fund"), Horizon Tax-Exempt Money Fund (the "Tax-Exempt
Fund") and Pacific Horizon California Tax-Exempt Money Market Fund (the
"California Tax-Exempt Fund") (collectively, the "Portfolios") only.
On March 1, 1993, the First Funds of America -- Money Market Fund (the
"Money Market Fund") and the First Cash Funds of America -- Money Market
Portfolio (the "Money Market Portfolio") were reorganized with the Prime Fund,
in a tax-free reorganization. In addition, the First Funds of America -- Eagle
California Tax-Free Money Fund (the "Eagle Fund") and the First Cash Funds of
America -- California Tax-Free Portfolio (the "Tax-Free Portfolio") were
reorganized with the California Tax-Exempt Fund, in a tax-free reorganization.
Pursuant to the terms of the reorganization, the Money Market Fund and the Money
Market Portfolio transferred all of their assets and liabilities to the Prime
Fund in exchange for Pacific Horizon Shares and Horizon Service Shares,
respectively, of the Prime Fund with a value equivalent to the net value of the
assets and liabilities so transferred, and the Eagle Fund and the Tax-Free
Portfolio transferred all of their assets and liabilities to the California
Tax-Exempt Fund in exchange for Pacific Horizon Shares and Horizon Service
Shares, respectively, of the California Tax-Exempt Fund with a value equivalent
to the net value of the assets and liabilities so transferred. In connection
with the reorganization, the Money Market Fund's shareholders received
111,317,819 Pacific Horizon Shares of the Prime Fund, the Money Market
Portfolio's shareholders received 117,295,030 Horizon Service Shares of the
Prime Fund, the Eagle Fund's shareholders received 38,542,853 Pacific Horizon
Shares of the California Tax-Exempt Fund and the Tax-Free Portfolio's
shareholders received 122,765,767 Horizon Service Shares of the California
Tax-Exempt Fund. The aggregate net assets of the Money Market Fund, Money Market
Portfolio and the Prime Fund immediately prior to the reorganization were
$111,303,842, $117,286,909 and $12,085,598,491, respectively, while the
aggregate net assets of the California Tax-Exempt Fund, Eagle Fund and Tax Free
Portfolio immediately prior to the reorganization were $128,448,256, $38,540,835
and $122,760,649, respectively. Immediately following the reorganization, the
net assets of the Prime Fund and the California Tax-Exempt Fund were
$12,314,189,242 and $289,749,740,
40
<PAGE> 33
respectively. As a result of this reorganization, the California Tax-Exempt Fund
began offering two classes of shares -- Pacific Horizon Shares and Horizon
Service Shares.
Also on March 1, 1993, the First Funds of America -- Government Money Fund
(the "Government Money Fund") and the First Cash Funds of America -- Government
Portfolio (the "Government Portfolio") were reorganized with the Government
Fund, a new portfolio of the Fund, in a tax-free reorganization. Additionally,
the First Funds of America -- Treasury Money Fund (the "Treasury Money Fund")
and the First Cash Funds of America -- Treasury Portfolio (the "Treasury
Portfolio") were reorganized with the Treasury Only Fund, a new portfolio of the
Fund, in a tax-free reorganization. Pursuant to the terms of the reorganization,
the Government Money Fund and the Government Portfolio transferred all of their
assets and liabilities to the Government Fund in exchange for Pacific Horizon
Shares and Horizon Service Shares, respectively, of the Government Fund, and the
Treasury Money Fund and the Treasury Portfolio transferred all of their assets
and liabilities to the Treasury Only Fund in exchange for Pacific Horizon Shares
and Horizon Service Shares, respectively, of the Treasury Only Fund with values
equivalent to the net values of the assets and liabilities so transferred.
Pursuant to the terms of these reorganizations, the Government Money Fund's
shareholders received 102,576,278 Pacific Horizon Shares of the Government Fund,
the Government Portfolio's shareholders received 228,679,171 Horizon Service
Shares of the Government Fund, the Treasury Money Fund's shareholders received
35,556,959 Pacific Horizon Shares of the Treasury Only Fund and the Treasury
Portfolio's shareholders received 123,669,191 Horizon Service Shares of the
Treasury Only Fund. The aggregate net assets of the Government Money Fund,
Government Portfolio and the Government Fund immediately before the
reorganization were $102,576,278, $228,679,191 and $0, respectively, while the
aggregate net assets of the Treasury Money Fund, Treasury Portfolio and the
Treasury Only Fund immediately before the reorganization were $35,556,959,
$123,669,191 and $0, respectively. Immediately following the reorganization, the
net assets of the Government Fund and the Treasury Only Fund were $331,255,469
and $159,226,150, respectively.
On July 9, 1993, the Pacific Horizon Tax-Exempt Money Market Fund (the
"Pacific Horizon Tax-Exempt Fund") was reorganized with the Tax-Exempt Fund, in
a tax-free reorganization. Pursuant to the terms of the reorganization, the
Pacific Horizon Tax-Exempt Fund transferred all of its assets and liabilities to
the Tax-Exempt Fund in exchange for Pacific Horizon Shares of the Tax-Exempt
Fund. In connection with the reorganization, the Pacific Horizon Tax-Exempt
Fund's shareholders received 81,863,804 Pacific Horizon Shares of the Tax-Exempt
Fund. The aggregate net assets of the Tax-Exempt Fund and Pacific Horizon
Tax-Exempt Fund immediately before the reorganization were $433,140,827 and
$81,797,662, respectively. Immediately following the reorganization, the net
assets of the Tax-Exempt Fund were $514,938,489. As a result of this
reorganization the Tax-Exempt Fund began issuing three classes of
shares -- Pacific Horizon Shares, Horizon Shares and Horizon Service Shares.
41
<PAGE> 34
The Prime Fund, the Government Fund, the Treasury Fund and the Tax-Exempt
Fund issue three classes of shares (Pacific Horizon Shares, Horizon Shares and
Horizon Service Shares) while the Treasury Only Fund and the California
Tax-Exempt Fund issue two classes of shares (Pacific Horizon Shares and Horizon
Service Shares). Pacific Horizon Shares, Horizon Shares and Horizon Service
Shares are substantially the same except that Pacific Horizon Shares bear the
fees payable under the Fund's Special Management Services Agreement at an annual
rate of 0.32% of the average daily net asset value of the outstanding Pacific
Horizon Shares while Horizon Service Shares bear the fees payable, under the
Shareholder Services Plan, to institutions ("Service Organizations"), that
provide support services to their clients who beneficially own such shares. Such
fees are payable at an annual rate of 0.25% of the average daily net asset value
of the outstanding Horizon Service Shares.
Bank of America National Trust and Savings Association ("Bank of America"),
a subsidiary of BankAmerica Corporation, serves as the Fund's investment
adviser. Concord Holding Corporation ("Concord") serves as the Fund's
administrator and Concord Financial Group, Inc. (the "Distributor"), a
wholly-owned subsidiary of Concord, serves as the distributor of the Fund's
shares.
Prior to April 22, 1992, Security Pacific National Bank ("Security Pacific")
served as the Fund's investment adviser. On that date, Security Pacific's parent
corporation, Security Pacific Corporation, merged with BankAmerica Corporation,
and contemporaneously with that merger Security Pacific merged with Bank of
America. As a result of these mergers, Bank of America began providing such
investment advisory services to the Fund as of April 22, 1992. Bank of America
and Security Pacific provide or provided such investment advisory services to
the Portfolios on substantially identical terms (including the same fees rates)
as described below in Note 3.
On March 29, 1995, a merger agreement was approved by the Shareholders of
Concord whereby Concord became BISYS Investment Services, Inc., a wholly owned
subsidiary of the BISYS Group, Inc. ("BISYS"). BISYS serves as administrator and
distributor to the Fund on substantially identical terms as described below in
Note 3.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
Each Portfolio seeks to maintain a net asset value per share of $1.00,
although there is no assurance that it will be able to do so on a continuous
basis, and has adopted certain investment, portfolio valuation and dividend and
distribution policies designed to enable it to do so.
A)PORTFOLIO VALUATIONS:
Portfolio securities are valued at amortized cost, which approximates market
value. The amortized cost method involves valuing a security at its cost on the
date of purchase and thereafter assuming a constant amortization to maturity of
the difference between the principal amount due at maturity and cost.
42
<PAGE> 35
B)SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis. Realized gains
and losses from securities transactions are recorded on the identified cost
basis. Interest income, including accretion of discount (for the Prime Fund,
Treasury Fund, Government Fund and Treasury Only Fund only) and amortization of
premium, is accrued daily.
C)REPURCHASE AGREEMENTS (PRIME FUND, TREASURY FUND, AND GOVERNMENT FUND):
The Fund's custodian and other banks acting in a subcustodian capacity take
possession of the collateral pledged for investments in repurchase agreements.
The underlying collateral is valued daily on a mark-to-market basis to determine
that the value, including accrued interest, is not less than 102% of the
repurchase price, including accrued interest. In the event of the seller's
default of the obligation to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. Under
certain circumstances, in the event of default or bankruptcy by the other party
to the agreement, realization and/or retention of the collateral may be subject
to legal proceedings.
D)DIVIDENDS TO SHAREHOLDERS:
Dividends are declared daily to shareholders of record at the close of
business on the day of declaration and paid monthly. Distributions of net
realized gains, if any, will be paid at least annually. However, to the extent
that net realized gains of any Portfolio can be offset by capital loss
carryovers from that Portfolio, such gains will not be distributed. Dividends
and distributions are recorded by each Portfolio on the ex-dividend date.
The amounts of dividends from net investment income and of distributions
from net realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
E)FEDERAL INCOME TAXES:
For federal income tax purposes, each Portfolio is treated as a separate
entity for the purpose of determining the Portfolio's qualification as a
regulated investment company under the Internal Revenue Code (the "Code"). It is
the policy of the Fund that each Portfolio comply with the requirements of the
Code applicable to regulated investment companies, including the requirement
that each Portfolio distribute substantially all of its taxable income to
shareholders. Therefore, no federal income tax provision is required. It is the
policy of the Tax-Exempt Fund and the California Tax-Exempt Fund to qualify as
regulated investment companies which can distribute tax-exempt dividends by
complying with the requirements of the Code. At February 28, 1995, the cost of
securities in each Portfolio for federal income tax purposes was substantially
the same as for financial reporting purposes.
43
<PAGE> 36
At February 28, 1995, the following Portfolios had the following capital
loss carryovers:
<TABLE>
<CAPTION>
CAPITAL
LOSS
FUND CARRYOVER EXPIRATION DATE
- -------------------------------------------------- ---------- ----------------
<S> <C> <C>
Prime Fund........................................ $ 22,098 1999
1,171,786 2002
1,570,608 2003
----------
$2,764,492
==========
Treasury Fund..................................... $ 239,007 2002
==========
Government Fund................................... $ 129,811 2002
943,990 2003
----------
$1,073,801
==========
Treasury Only Fund................................ $ 21,276 2002
92,145 2003
----------
$ 113,421
==========
Tax-Exempt Fund................................... $ 35,348 1997
16,664 1998
14,011 2000
71,218 2002
19,132 2003
----------
$ 156,373
==========
California Tax-Exempt Fund........................ $ 5,893 2001
6,223 2002
----------
$ 12,116
==========
</TABLE>
To the extent these capital loss carryovers are used to offset future net
realized gains on securities transactions, the gains so offset will not be
distributed to shareholders, to the extent provided by the regulations under the
Code. Capital losses incurred after October 31, 1994 and within the fiscal year
are deemed to arise on the first business day of the following fiscal year. The
Government Fund, California Tax-Exempt Fund and Tax-Exempt Money Fund incurred
and elected to defer such losses of $2,264, $4,545 and $11,080, respectively.
Additionally, the Treasury Fund and California Tax-Exempt Fund utilized $21,681
and $35,692, respectively, of capital loss carryovers during the year ended
February 28, 1995.
F)OTHER:
The Fund accounts separately for the assets, liabilities and operations of
each Portfolio. Expenses directly attributable to each Portfolio are charged to
that Portfolio, while expenses which are attributable to more than one portfolio
of the Fund are allocated among the respective portfolios. The investment income
and the expenses (other than expenses incurred
44
<PAGE> 37
under the Special Management Services Agreement and Shareholder Services Plan)
of each Portfolio are allocated to the separate classes of shares based upon
their relative net asset value.
NOTE 3 -- AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Portfolios have an Investment Advisory Agreement with Bank of America
and a Basic Administrative Services Agreement with Concord. Bank of America is
entitled to a fee from each Portfolio, which is accrued daily and payable
monthly, at an annual rate of 0.10% of each Portfolio's first $3 billion of net
assets, plus 0.09% of each Portfolio's next $2 billion of net assets, plus 0.08%
of each Portfolio's net assets in excess of $5 billion. Concord is entitled to a
fee from each Portfolio, which is accrued daily and payable monthly, at an
annual rate of 0.10% of each Portfolio's first $7 billion of net assets, plus
0.09% of each Portfolio's next $3 billion of net assets plus 0.08% of each
Portfolio's net assets in excess of $10 billion. For the year ended February 28,
1995, Bank of America and Concord voluntarily waived fees from the Prime Fund,
the Government Fund, the Treasury Only Fund and the Tax-Exempt Fund in the
following amounts:
<TABLE>
<CAPTION>
BANK OF
AMERICA CONCORD
--------- ---------
<S> <C> <C>
Prime Fund....................................................... $ 920,627 $ 949,233
Government Fund.................................................. 313,740 185,733
Treasury Only Fund............................................... 8,313 8,313
Tax-Exempt Fund.................................................. 11,611 11,611
</TABLE>
In addition, for the year ended February 28, 1995, Bank of America agreed to
reimburse other operating expenses of the Government Fund in the amount of
$14,000.
The agreements provide that if, in any fiscal year, the aggregate expenses
of any Portfolio (generally excluding interest, taxes, brokerage commissions and
extraordinary expenses) exceed the most restrictive expense limitation of any
state having jurisdiction over that Portfolio, then Bank of America and Concord
will reimburse the Portfolio for any such excess expenses. As of February 28,
1995, the most restrictive expense limitation is believed to limit expenses to
2.5% of the first $30 million of each Portfolio's average daily net assets, plus
2.0% of the next $70 million of such assets plus 1.5% of such assets in excess
of $100 million. The agreements provide that such reimbursements will be
estimated and paid on a monthly basis. No reimbursement was required for the
year ended February 28, 1995.
The Portfolios have entered into a Special Management Service Agreement
("Services Agreement") pursuant to which they have agreed to pay Bank of America
and Concord a fee for various services relating to the Pacific Horizon Shares.
The special management services fee is accrued daily at an annual rate of 0.32%
of the average daily net asset value of the outstanding Pacific Horizon Shares
of each Portfolio, and is borne solely by the Pacific Horizon Shares. For the
year ended February 28, 1995, the Portfolios were advised that
45
<PAGE> 38
Concord, Bank of America and their affiliates earned the following amounts
pursuant to the Services Agreement:
<TABLE>
<CAPTION>
AFFILIATES OF
BANK OF AFFILIATES BANK OF
FUND AMERICA CONCORD OF CONCORD AMERICA
- ------------------------------------------ ------- ------- ---------- -------------
<S> <C> <C> <C> <C>
Prime Fund................................ $18,906 $65,326 $268,593 $ 3,112,159
Treasury Fund............................. 9,031 28,381 40,665 3,751,925
Government Fund........................... -- 135 -- 774,124
Treasury Only Fund........................ 1,581 1,779 287 187,925
Tax-Exempt Fund........................... 1,062 8,273 -- 125,664
California Tax-Exempt Fund................ 2,892 9,701 21,474 605,436
</TABLE>
The Portfolios have also adopted a Shareholder Services Plan (the "Horizon
Service Plan") pursuant to which Service Organizations agree to provide certain
services to their clients who are the beneficial owners of Horizon Service
Shares in return for payment by the Portfolios of a fee at an annual rate of
0.25% of the average daily net asset value of the Horizon Service Shares
outstanding from time to time. These payments are borne solely by the Horizon
Service Shares. Service Organizations may include the Distributor, Bank of
America and their affiliates. For the year ended February 28, 1995, the
Portfolios were advised that affiliates of Bank of America earned the following
amounts pursuant to the Horizon Service Plan:
<TABLE>
<CAPTION>
FUND
- -------------------------------------------------------------------------
<S> <C>
Prime Fund............................................................... $ 391,875
Treasury Fund............................................................ 224,434
Government Fund.......................................................... 132,934
Treasury Only Fund....................................................... 569,889
Tax-Exempt Fund.......................................................... 28,442
California Tax-Exempt Fund............................................... 251,505
</TABLE>
During the period from May 6, 1994 through July 12, 1994, the advisor
voluntarily contributed capital to the Prime Fund and the Government Fund in the
aggregate amount of approximately $77.4 million and $5.5 million, respectively.
The adviser received no shares of common stock or other consideration in
exchange for these contributions which increased net asset value. For tax
purposes, these capital contributions were applied against the realized losses
for the year ended February 28, 1995. Accordingly, such amounts have been
reclassified from additional paid-in capital against accumulated net realized
losses in the Statement of Assets and Liabilities.
During the year ended February 28, 1995, Bank of America issued a letter of
credit which guaranteed California Tax-Exempt Fund the payment of principal and
interest by an issuer of a security issued by Orange County California that was
held by the California Tax-Exempt Fund. This letter of credit enabled the
security, together with the letter of credit, to be valued
46
<PAGE> 39
at par, which was approximately $675,000 in excess of the security's fair market
value on the date of issuance of the letter of credit. As this letter of credit
was issued by Bank of America, the increase in value is deemed to be a voluntary
contribution of capital. Bank of America received no consideration for the
issuance of this letter of credit.
For the year ended February 28, 1995, the Treasury Fund, Prime Fund,
Government Fund, Treasury Only Fund, Tax-Exempt Fund and California Tax-Exempt
Fund incurred legal charges totaling $23,875, $48,539, $27,770, $20,951, $42,790
and $22,480, respectively, which were earned by a law firm, a partner of which
serves as Secretary to the Fund. Certain officers of the Fund are "affiliated
persons" (as defined in the Act) of Concord.
Concord Financial Services Inc., a wholly owned subsidiary of Concord
Holding Corp., acts as transfer agent for the Horizon class of shares for the
Portfolios. For the year ended February 28, 1995 Concord Financial Services
received $27,063, $19,693, $17,873 and $18,221, respectively, from the Prime
Fund, Treasury Fund, Government Fund and Tax-Exempt Fund.
NOTE 4 -- DIRECTORS' COMPENSATION
For services as a director to all of the Fund's 16 investment portfolios,
last year through October 31, 1994 each director was entitled to receive a
retainer determined at the annual rate of $60,000 and the Chairman of the Board
was entitled to receive an additional annual retainer of $40,000. Effective
November 1, 1994, the annual retainer for the Chairman was increased to $50,000
and all directors (including the Chairman) agreed to waive $10,000 of their
annual retainer. This waiver remained in effect until February 28, 1995. Total
charges for directors' fees incurred for the year ended February 28, 1995 by the
Portfolios were as follows:
<TABLE>
<S> <C>
Prime Fund....................................................... $ 23,318
Treasury Fund.................................................... 22,408
Government Fund.................................................. 23,093
Treasury Only Fund............................................... 22,179
Tax-Exempt Fund.................................................. 21,538
California Tax-Exempt Fund....................................... 23,388
</TABLE>
As of March 1, 1995, each director is entitled to an annual retainer of
$25,000, plus $1,000 for each day the director participates in all or part of a
Board or Committee meeting and the Chairman of each Committee receives a
retainer of $1,000 for services as Chairman of the Committee. In addition, the
Fund's President is entitled to an annual salary of $40,000 for services as
President.
The Board also established a retirement plan (the "Retirement Plan") for
Directors. The Retirement Plan provides that each Director who dies or resigns
after five years of service as a director will be entitled to receive ten annual
payments each equal to the greater of: (i) 50% of the annual Director's retainer
that was payable during the year of that Director's death or resignation, or
(ii) 50% of the annual Director's retainer then in effect for Directors of the
47
<PAGE> 40
Fund during the year of such payment. A Director who dies or resigns after nine
years of service as a director will be entitled to receive ten annual payments
equal to the greater of: (i) 100% of the annual Director's retainer that was
payable during the year of that Director's death or resignation, or (ii) 100% of
the annual Director's retainer then in effect for Directors of the Fund during
the year of such payment. In addition, the amount payable each year to a
Director who dies or resigns shall be increased by $1,000 for each year of
service that the Director served as Chairman of the Board. Each Director may
receive any benefits payable under the Retirement Plan, at his or her election,
either in one lump sum payment or ten annual installments. A Director's years of
service for the purpose of calculating the payments described above shall be
based upon service as a Director or Chairman after February 28, 1994.
NOTE 5 -- CONCENTRATION OF CREDIT RISK
The Prime Fund invests substantially all of its assets in a diversified
portfolio of high quality U.S. dollar-denominated money market instruments as
disclosed in the portfolio of investments by security type. The issuers'
abilities to meet their obligations may be affected by domestic and foreign
economic, regional and political developments.
The Prime Fund had the following concentrations by industry sector at
February 28, 1995 (as a percentage of total investment):
<TABLE>
<S> <C>
Repurchase Agreements.............................................. 33.0%
Banking............................................................ 22.6
Brokerage Services................................................. 16.8
Finance Companies.................................................. 6.8
Automobiles........................................................ 3.8
Conglomerates...................................................... 3.8
Federal Agency Notes............................................... 3.6
Leasing............................................................ 2.0
Publishing......................................................... 1.7
Agriculture........................................................ 1.5
Telecommunications................................................. 1.5
Pharmaceuticals.................................................... 1.1
Photographic Products.............................................. 1.0
Oil and Gas........................................................ 0.8
-----
100.0%
=====
</TABLE>
The Tax-Exempt Fund invests substantially all of its assets in a diversified
portfolio of tax-exempt debt obligations. The California Tax-Exempt Fund invests
substantially all of its assets in a nondiversified portfolio of tax-exempt debt
obligations primarily consisting of issuers in the state of California. The
issuers' abilities to meet their obligations may be affected by economic,
regional or political developments.
48
<PAGE> 41
The Tax-Exempt Fund and the California Tax-Exempt Fund had the following
concentrations by industry sector at February 28, 1995 (as a percentage of total
investments):
<TABLE>
<CAPTION>
CALIFORNIA
TAX-EXEMPT TAX-EXEMPT
FUND FUND
----- -----
<S> <C> <C>
Revenue Anticipation
Notes.................................................... 24.9% 21.1%
General Obligations........................................ 13.7 9.2
Pollution Control.......................................... 11.6 17.4
Education Facilities....................................... 9.7 --
Power Projects............................................. 9.2 7.5
Health and Medical
Facilities............................................... 8.6 5.7
Industrial Developments.................................... 5.7 9.7
Housing Developments....................................... 4.5 6.5
Airport Facilities......................................... 3.3 --
Air Transportation......................................... 2.7 --
Water Projects............................................. 2.5 --
Transit Projects........................................... 1.8 9.1
Hospital Supplies.......................................... 1.2 --
Health Care & Hospital Management.......................... 0.3 --
Tax and Revenue Anticipation Notes......................... 0.3 --
Transportation............................................. -- 8.0
Certificates of Participation.............................. -- 5.8
----- -----
100.0% 100.0%
===== =====
</TABLE>
49
<PAGE> 42
NOTE 6 -- CAPITAL SHARE TRANSACTIONS
At February 28, 1995, there were 200 billion shares of the Fund's $0.001
par value Common Stock authorized, of which 44.4 billion shares were classified
as Class A Common Stock (Treasury Fund -- 15 billion Pacific Horizon Shares,
14.4 billion Horizon Shares and 15 billion Horizon Service Shares), 58 billion
shares were classified as Class B Common Stock (Prime Fund -- 15 billion Pacific
Horizon Shares, 28 billion Horizon Shares and 15 billion Horizon Service
Shares), 37 billion shares were classified as Class L Common Stock (Government
Fund -- 15 billion Pacific Horizon Shares, 7 billion Horizon Shares and 15
billion Horizon Service Shares), 37 billion shares were classified as Class K
Common Stock (Treasury Only Fund -- 15 billion Pacific Horizon Shares, 7 billion
Horizon Shares and 15 billion Horizon Service Shares), 2 billion shares were
classified as Class J Common Stock (California Tax-Exempt Fund -- 1 billion
Pacific Horizon Shares and 1 billion Horizon Service Shares) and 7.5 billion
shares were classified as Class I Common Stock (Tax-Exempt Fund -- 1.5 billion
Pacific Horizon Shares, 3 billion Horizon Shares and 3 billion Horizon Service
Shares).
Transactions in shares of each Portfolio (at $1.00 per share) for the
periods indicated are summarized below:
<TABLE>
<CAPTION>
YEAR ENDED PRIME TREASURY GOVERNMENT
FEBRUARY 28, 1995 FUND FUND FUND
- --------------------------------------------- --------------- -------------- --------------
<S> <C> <C> <C>
PACIFIC HORIZON SHARES:
Shares sold................................. 5,272,091,603 3,121,913,879 2,002,378,412
Shares issued to shareholders in
reinvestment of dividends................. 19,756,810 3,689,780 2,572,553
Shares redeemed............................. (5,379,915,571) (3,570,873,713) (1,804,183,343)
--------------- -------------- --------------
Net (decrease) increase in Pacific Horizon
Shares...................................... (88,067,158) (445,270,054) 200,767,622
--------------- -------------- --------------
HORIZON SHARES
Shares sold................................. 9,961,911,460 3,341,778,010 1,775,658,648
Shares issued to shareholders in
reinvestment of dividends................. 11,806,370 2,245,214 4,881,402
Shares redeemed............................. (13,196,902,924) (3,362,768,467) (1,914,876,241)
--------------- -------------- --------------
Net decrease in Horizon Shares............... (3,223,185,094) (18,745,243) (134,336,191)
--------------- -------------- --------------
HORIZON SERVICE SHARES
Shares sold................................. 7,545,587,777 2,416,217,972 1,894,013,434
Shares issued to shareholders in
reinvestment of dividends................. 12,981,295 3,641,678 2,492,187
Shares redeemed............................. (7,533,904,759) (2,597,621,232) (1,933,589,550)
--------------- -------------- --------------
Net increase (decrease) in Horizon Service
Shares...................................... 24,664,313 (177,761,582) (37,083,929)
--------------- -------------- --------------
Total (decrease) increase in Portfolio
shares...................................... (3,286,587,939) (641,776,879) 29,347,502
================= ================ ================
</TABLE>
50
<PAGE> 43
<TABLE>
<CAPTION>
CALIFORNIA
YEAR ENDED TREASURY ONLY TAX-EXEMPT TAX-EXEMPT
FEBRUARY 28, 1995 FUND FUND FUND
- ----------------------------------------------- -------------- -------------- ------------
<S> <C> <C> <C>
PACIFIC HORIZON SHARES
Shares sold................................... 362,313,215 341,854,376 502,909,799
Shares issued to shareholders in reinvestment
of dividends................................ 1,251,054 374,200 4,297,456
Shares redeemed............................... (345,324,334) (354,420,485) (524,307,461)
-------------- -------------- ------------
Net increase (decrease) in Pacific Horizon
Shares........................................ 18,239,935 (12,191,909) (17,100,206)
-------------- -------------- ------------
HORIZON SHARES
Shares sold................................... -- 2,300,191,836 --
Shares issued to shareholders in reinvestment
of dividends................................ -- 782,137 --
Shares redeemed............................... -- (2,433,802,141) --
-------------- -------------- ------------
Net decrease in Horizon Shares................. -- (132,828,168) --
-------------- -------------- ------------
HORIZON SERVICE SHARES
Shares sold................................... 1,078,190,598 126,594,988 323,331,486
Shares issued to shareholders in reinvestment
of dividends................................ 8,626,220 845,786 2,512,925
Shares redeemed............................... (1,164,016,127) (136,607,781) (361,600,101)
-------------- -------------- ------------
Net decrease in Horizon Service Shares......... (77,199,309) (9,167,007) (35,755,690)
-------------- -------------- ------------
Total decrease in Portfolio shares............. (58,959,374) (154,187,084) (52,855,896)
================ ================ ==============
</TABLE>
51
<PAGE> 44
<TABLE>
<CAPTION>
YEAR ENDED PRIME TREASURY GOVERNMENT
FEBRUARY 28, 1994 FUND FUND FUND
- -------------------------------------------- ---------------- -------------- --------------
<S> <C> <C> <C>
PACIFIC HORIZON SHARES
Shares sold................................ 8,017,483,077 5,331,697,632 820,860,014
Shares issued to shareholders in
reinvestment of dividends and
distributions............................ 11,261,343 1,974,933 1,030,462
Shares issued in connection with
reorganization with First Funds
of America............................... 111,317,819 -- 102,576,278
Shares redeemed............................ (7,913,818,777) (5,501,668,245) (770,032,307)
---------------- -------------- --------------
Net increase (decrease) in Pacific Horizon
Shares..................................... 226,243,462 (167,995,680) 154,434,447
---------------- -------------- --------------
HORIZON SHARES
Shares sold................................ 112,481,847,902 3,284,109,100 3,342,731,411
Shares issued to shareholders in
reinvestment of dividends and
distributions............................ 36,815,808 685,591 6,359,268
Shares redeemed............................ (118,972,967,917) (3,395,487,378) (2,979,221,592)
---------------- -------------- --------------
Net (decrease) increase in Horizon
Shares..................................... (6,454,304,207) (110,692,687) 369,869,087
---------------- -------------- --------------
HORIZON SERVICE SHARES
Shares sold................................ 6,693,781,799 3,487,274,701 2,134,531,616
Shares issued to shareholders in
reinvestment dividends and
distributions............................ 9,728,980 4,516,376 2,734,399
Shares issued in connection with
reorganization with First Cash Funds
of America............................... 117,295,030 -- 228,679,191
Shares redeemed............................ (6,774,092,871) (3,331,342,948) (2,039,746,919)
---------------- -------------- --------------
Net increase in Horizon Service Shares...... 46,712,938 160,448,129 326,198,287
---------------- -------------- --------------
Total (decrease) increase in Portfolio
shares..................................... (6,181,347,807) (118,240,238) 850,501,821
================== ================ ================
</TABLE>
52
<PAGE> 45
<TABLE>
<CAPTION>
TREASURY CALIFORNIA
YEAR ENDED ONLY TAX-EXEMPT TAX-EXEMPT
FEBRUARY 28, 1994 FUND FUND FUND
- ------------------------------------------------ ------------ -------------- ------------
<S> <C> <C> <C>
PACIFIC HORIZON SHARES
Shares sold.................................... 492,252,432 209,089,937 454,189,650
Shares issued to shareholders in reinvestment
of dividends and distributions............... 910,697 143,859 3,026,362
Shares issued in connection with reorganization
with First Funds of America.................. 35,556,959 -- 38,542,853
Shares issued in connection with reorganization
with Pacific Horizon Tax-Exempt Fund......... -- 81,863,804 --
Shares redeemed................................ (456,586,163) (241,442,104) (420,495,461)
------------ -------------- ------------
Net increase in Pacific Horizon Shares.......... 72,133,925 49,655,496 75,263,404
------------ -------------- ------------
HORIZON SHARES
Shares sold.................................... -- 1,924,190,837 --
Shares issued to shareholders in reinvestment
of dividends and distributions............... -- 433,468 --
Shares redeemed................................ -- (1,793,734,224) --
------------ -------------- ------------
Net increase in Horizon Shares.................. -- 130,890,081 --
------------ -------------- ------------
HORIZON SERVICE SHARES
Shares sold.................................... 658,934,591 230,321,086 399,647,954
Shares issued to shareholders in reinvestment
dividends and distributions.................. 3,207,065 596,205 2,299,860
Shares issued in connection with reorganization
with First Cash Funds of America............. 123,669,191 -- 122,765,767
Shares redeemed................................ (514,169,786) (232,277,252) (400,949,268)
------------ -------------- ------------
Net increase (decrease) in Horizon Service
Shares......................................... 271,641,061 (1,359,961) 123,764,313
------------ -------------- ------------
Total increase in Portfolio shares.............. 343,774,986 179,185,616 199,027,717
============== ================ ==============
</TABLE>
53
<PAGE> 46
PACIFIC HORIZON PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights++
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------------------------
FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
28, 28, 28, 29, 28,
1995 1994 1993 1992 1991
-------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
PACIFIC HORIZON SHARES
Net asset value per share, beginning
of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income............... 0.0424 0.0287 0.0340 0.0558 0.0762
Net realized (loss) gain on
securities........................ (0.0227) (0.0016) 0.0000 0.0005 (0.0001)
-------- --------- --------- --------- ---------
Total income from investment
operations.......................... 0.0197 0.0271 0.0340 0.0563 0.0761
Less dividends from net investment
income.............................. (0.0422) (0.0287) (0.0341) (0.0557) (0.0762)
Increase due to voluntary capital
contribution from investment advisor
(Note 3)............................ 0.0233 0.0000 0.0000 0.0000 0.0000
-------- --------- --------- --------- ---------
Net change in net asset value
per share........................... 0.0008 (0.0016) (0.0001) 0.0006 (0.0001)
-------- --------- --------- --------- ---------
Net asset value per share, end
of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return......................... 4.30%** 2.91% 3.45% 5.72% 7.89%
Ratios/Supplemental Data:
Net assets, end of year
(millions)........................ $ 1,129 $ 1,216 $ 992 1,413 $ 1,086
Ratio of expenses to average net
assets............................ 0.51%* 0.52%* 0.55% 0.56% 0.56%
Ratio of net investment income to
average net assets................ 4.19%* 2.86%* 3.42% 5.51% 7.61%
</TABLE>
- ---------------
++ Security Pacific National Bank served as investment advisor through April
21, 1992. Bank of America National Trust and Savings Association served as
investment advisor commencing April 22, 1992.
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the ratio
of net investment income to average net assets by 0.05% for the year ended
February 28, 1995 and 0.01% for the year ended February 28, 1994.
** Total return includes the effect of the voluntary capital contribution from
the investment adviser (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
See Notes to Financial Statements.
54
<PAGE> 47
PACIFIC HORIZON PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights++
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------------------------
FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
28, 28, 28, 29, 28,
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
HORIZON SHARES
Net asset value per share, beginning
of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income............... 0.0461 0.0319 0.0372 0.0590 0.0794
Net realized (loss) gain on
securities........................ (0.0232) (0.0016) 0.0000 0.0005 (0.0001)
--------- --------- --------- --------- ---------
Total income from investment
operations.......................... 0.0229 0.0303 0.0372 0.0595 0.0793
Less dividends from net investment
income.............................. (0.0454) (0.0319) (0.0372) (0.0589) (0.0794)
Increase due to voluntary capital
contribution from investment advisor
(Note 3)............................ 0.0233 0.0000 0.0000 0.0000 0.0000
--------- --------- --------- --------- ---------
Net change in net asset value
per share........................... 0.0008 (0.0016) 0.000 0.0006 (0.0001)
--------- --------- --------- --------- ---------
Net asset value per share, end
of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return......................... 4.63%** 3.24% 3.78% 6.06% 8.23%
Ratios/Supplemental Data:
Net assets, end of year
(millions)........................ $ 622 $ 3,840 $ 10,301 $ 2,855 $ 487
Ratio of expenses to average net
assets............................ 0.16%* 0.20%* 0.23% 0.24% 0.24%
Ratio of net investment income to
average net assets................ 4.11%* 3.19%* 3.59% 5.59% 7.91%
</TABLE>
- ---------------
++ Security Pacific National Bank served as investment advisor through April
21, 1992. Bank of America National Trust and Savings Association served as
investment advisor commencing April 22, 1992.
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the ratio
of net investment income to average net assets by 0.07% for the year ended
February 28, 1995 and 0.01% for the year ended February 28, 1994.
** Total return includes the effect of the voluntary capital contribution from
the investment advisor (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
See Notes to Financial Statements.
55
<PAGE> 48
PACIFIC HORIZON PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights++
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
----------------------------------------------------------------
FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
28, 28, 28, 29, 28,
1995 1994 1993 1992 1991
-------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
HORIZON SERVICE SHARES
Net asset value per share, beginning
of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income............... 0.0431 0.0294 0.0345 0.0565 0.0769
Net realized (loss) gain on
securities........................ (0.0227) (0.0016) 0.0000 0.0005 (0.0001)
-------- --------- --------- --------- ---------
Total income from investment
operations.......................... 0.0204 0.0278 0.0345 0.0570 0.0768
Less dividends from net investment
income.............................. (0.0429) (0.0294) (0.0347) (0.0564) (0.0769)
Increase due to voluntary capital
contribution from investment advisor
(Note 3)............................ 0.0233 0.0000 0.0000 0.0000 0.0000
-------- --------- --------- --------- ---------
Net change in net asset value
per share........................... 0.0008 (0.0016) (0.0002) 0.0006 (0.0001)
-------- --------- --------- --------- ---------
Net asset value per share, end
of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return......................... 4.37%** 2.98% 3.53% 5.79% 7.96%
Ratios/Supplemental Data:
Net assets, end of year
(millions)........................ $ 864 $ 839 $ 793 $ 859 $ 560
Ratio of expenses to average net
assets............................ 0.44%* 0.45%* 0.48% 0.49% 0.49%
Ratio of net investment income to
average net assets................ 4.31%* 2.94%* 3.49% 5.58% 7.64%
</TABLE>
- ---------------
++ Security Pacific National Bank served as investment advisor through April
21, 1992. Bank of America National Trust and Savings Association served as
investment advisor commencing April 22, 1992.
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the ratio
of net investment income to average net assets by 0.04% for the year ended
February 28, 1995 and 0.01% for the year ended February 28, 1994.
** Total return includes the effect of the voluntary capital contribution from
the investment advisor (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
See Notes to Financial Statements.
56
<PAGE> 49
PACIFIC HORIZON TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
-------------------------------------------------------------
FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
28, 28, 28, 29, 28,
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
PACIFIC HORIZON SHARES
Net asset value per share, beginning
of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income............... 0.0405 0.0262 0.0309 0.0512 0.0731
Net realized gain (loss) on
securities........................ 0.0001 (0.0002) 0.0000 0.0002 0.0006
--------- --------- --------- --------- ---------
Total income from investment
operations.......................... 0.0406 0.0260 0.0309 0.0514 0.0737
Less dividends from net investment
income.............................. (0.0405) (0.0262) (0.0311) (0.0513) (0.0733)
--------- --------- --------- --------- ---------
Net change in net asset value
per share........................... 0.0001 (0.0002) (0.0002) 0.0001 0.0004
--------- --------- --------- --------- ---------
Net asset value per share, end of
year................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return......................... 4.13% 2.65% 3.15% 5.25% 7.58%
Ratios/Supplemental Data:
Net assets, end of year
(millions)........................ $ 1,132 $ 1,577 $ 1,746 $ 2,300 $ 1,663
Ratio of expenses to average
net assets........................ 0.55% 0.55% 0.56% 0.56% 0.55%
Ratio of net investment income to
average net assets................ 3.99% 2.62% 3.11% 5.07% 7.29%
</TABLE>
- ---------------
* Security Pacific National Bank served as investment adviser through April 21,
1992. Bank of America National Trust and Savings Association served as
investment adviser commencing April 22, 1992.
See Notes to Financial Statements.
57
<PAGE> 50
PACIFIC HORIZON TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------------------------------------
FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
28, 28, 28, 29, 28,
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
HORIZON SHARES
Net asset value per share, beginning
of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income............... 0.0437 0.0294 0.0341 0.0543 0.0764
Net realized gain (loss) on
securities........................ 0.0001 (0.0002) 0.0002 0.0003 0.0005
--------- --------- --------- --------- ---------
Total income from investment
operations........................ 0.0438 0.0292 0.0343 0.0546 0.0769
Less dividends from net investment
income.............................. (0.0437) (0.0294) (0.0343) (0.0545) (0.0765)
--------- --------- --------- --------- ---------
Net change in net asset value
per share........................... 0.0001 (0.0002) 0.0000 0.0001 0.0004
--------- --------- --------- --------- ---------
Net asset value per share, end of
year................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return......................... 4.46% 2.98% 3.48% 5.59% 7.92%
Ratios/Supplemental Data:
Net assets, end of year
(millions)........................ $ 469 $ 487 $ 598 $ 432 $ 455
Ratio of expenses to average net
assets............................ 0.23% 0.23% 0.24% 0.24% 0.23%
Ratio of net investment income to
average net assets................ 4.36% 2.94% 3.38% 5.44% 7.57%
</TABLE>
- ---------------
* Security Pacific National Bank served as investment adviser through April 21,
1992. Bank of America National Trust and Savings Association served as
investment adviser commencing April 22, 1992.
See Notes to Financial Statements.
58
<PAGE> 51
PACIFIC HORIZON TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
------------------------------------------------------------
FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
28, 28, 28, 29, 28,
1995 1994 1993 1992 1991
--------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
HORIZON SERVICE SHARES
Net asset value per share, beginning
of year.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------
Income from Investment Operations:
Net investment income................ 0.0412 0.0269 0.0316 0.0517 0.0739
Net realized gain (loss) on
securities......................... 0.0001 (0.0002) 0.0002 0.0004 0.0005
--------- --------- --------- --------- --------
Total income from investment
operations........................... 0.0413 0.0267 0.0318 0.0521 0.0744
Less dividends from net investment
income............................... (0.0412) (0.0269) (0.0318) (0.0520) (0.0740)
--------- --------- --------- --------- --------
Net change in net asset value
per share............................ 0.0001 (0.0002) 0.0000 0.0001 0.0004
--------- --------- --------- --------- --------
Net asset value per share, end of
year................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========
Total return.......................... 4.20% 2.72% 3.23% 5.33% 7.65%
Ratios/Supplemental Data:
Net assets, end of year (millions)... $ 364 $ 541 $ 369 $ 381 $ 304
Ratio of expenses to average net
assets............................. 0.48% 0.48% 0.49% 0.49% 0.48%
Ratio of net investment income to
average net assets................. 4.01% 2.69% 3.28% 5.13% 7.31%
</TABLE>
- ---------------
* Security Pacific National Bank served as investment adviser through April 21,
1992. Bank of America National Trust and Savings Association served as
investment adviser commencing April 22, 1992.
See Notes to Financial Statements.
59
<PAGE> 52
PACIF IC HORIZON GOVERNMENT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
------------------------
FEBRUARY FEBRUARY
28, 1995 28, 1994
--------- ---------
<S> <C> <C>
PACIFIC HORIZON SHARES
Net asset value per share, beginning of year.......... $ 1.00 $ 1.00
--------- ---------
Income from Investment Operations:
Net investment income............................... 0.0421 0.0288
Net realized loss on securities..................... (0.0091) (0.0006)
--------- ---------
Total income from investment operations............. 0.0330 0.0282
Less dividends from net investment income............. (0.0420) (0.0288)
Increase due to voluntary capital contribution from
investment adviser (Note 3)......................... 0.0085 0.0000
--------- ---------
Net change in net asset value per share............... (0.0005) (0.0006)
--------- ---------
Net asset value per share, end of year................ $ 1.00 $ 1.00
======== ========
Total return.......................................... 4.28%** 2.92%
Ratios/Supplemental Data:
Net assets, end of year (000)....................... $ 354,828 $ 154,349
Ratio of expenses to average net assets*............ 0.50% 0.60%
Ratio of net investment income to average net
assets*........................................... 4.27% 2.88%
</TABLE>
- ---------------
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the ratio
of net investment income to average net assets by 0.08% and 0.002%,
respectively.
** Total return includes the effect of the voluntary capital contribution from
the investment adviser (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
See Notes to Financial Statements.
60
<PAGE> 53
PACIF IC HORIZON GOVERNMENT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD
YEAR ENDED
ENDED FEBRUARY
FEBRUARY 28,
28, 1995 1994**
--------- --------
<S> <C> <C>
HORIZON SHARES
Net asset value per share, beginning of period......... $ 1.00 $ 1.00
--------- --------
Income from Investment Operations:
Net investment income................................ 0.0454 0.0227
Net realized loss on securities...................... (0.0092) (0.0006)
--------- --------
Total income from investment operations.............. 0.0362 0.0221
Less dividends from net investment income.............. (0.0452) (0.0227)
Increase due to voluntary capital contribution from
investment adviser (Note 3).......................... 0.0085 0.0000
--------- --------
Net change in net asset value per share................ (0.0005) (0.0006)
--------- --------
Net asset value per share, end of period............... $ 1.00 $ 1.00
======== ========
Total return........................................... 4.61%++ 2.29%***
Ratios/Supplemental Data:
Net assets, end of period (000)...................... $ 235,285 $369,664
Ratio of expenses to average net assets*............. 0.17% 0.28%+
Ratio of net investment income to average net
assets*............................................ 4.67% 3.17%+
</TABLE>
- ---------------
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the ratio
of net investment income to average net assets by 0.08% and 0.002%
(annualized), respectively.
*** For the period June 14, 1993 (initial issuance of Horizon Shares) through
February 28, 1994.
+ Annualized.
++ Total return includes the effect of the voluntary capital contribution from
the investment adviser (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
*** Not annualized.
See Notes to Financial Statements.
61
<PAGE> 54
PACIF IC HORIZON GOVERNMENT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
------------------------
FEBRUARY FEBRUARY
28, 1995 28, 1994
--------- ---------
<S> <C> <C>
HORIZON SERVICE SHARES
Net asset value per share, beginning of year.......... $ 1.00 $ 1.00
--------- ---------
Income from Investment Operations:
Net investment income............................... 0.0429 0.0300
Net realized loss on securities..................... (0.0092) (0.0006)
--------- ---------
Total income from investment operations............... 0.0337 0.0294
Less dividends from net investment income............. (0.0427) (0.0300)
Increase due to voluntary capital contribution from
investment adviser (Note 3)......................... 0.0085 0.0000
--------- ---------
Net change in net asset value per share............... (0.0005) (0.0006)
--------- ---------
Net asset value per share, end of year................ $ 1.00 $ 1.00
======== ========
Total return.......................................... 4.35%** 3.04%
Ratios/Supplemental Data:
Net assets, end of year (000)....................... $ 288,809 $ 326,017
Ratio of expenses to average net assets*............ 0.43% 0.53%
Ratio of net investment income to average net
assets*........................................... 4.32% 2.99%
</TABLE>
- ---------------
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the ratio
of net investment income to average net assets by 0.08% and 0.05%,
respectively.
** Total return includes the effect of the voluntary capital contribution from
the investment adviser (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
See Notes to Financial Statements.
62
<PAGE> 55
PACIFIC HORIZON TREASURY ONLY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
------------------------
FEBRUARY FEBRUARY
28, 1995 28, 1994
--------- ---------
<S> <C> <C>
PACIFIC HORIZON SHARES
Net asset value per share, beginning of year.......... $ 1.00 $ 1.00
--------- ---------
Income from Investment Operations:
Net investment income............................... 0.0384 0.0254
Net realized loss on securities..................... (0.0002) (0.0002)
--------- ---------
Total income from investment operations............... 0.0382 0.0252
--------- ---------
Less dividends from net investment income............. (0.0384) (0.0254)
--------- ---------
Net change in net asset value per share............... (0.0002) (0.0002)
--------- ---------
Net asset value per share, end of year................ $ 1.00 $ 1.00
======== ========
Total return.......................................... 3.90% 2.57%
Ratios/Supplemental Data:
Net assets, end of year (000)....................... $ 90,337 $ 72,120
Ratio of expenses to average net assets*............ 0.62% 0.56%
Ratio of net investment income to average net
assets*........................................... 3.90% 2.54%
</TABLE>
- ---------------
* Net of fee waivers which had the effect of reducing the ratio of expenses to
average net assets and increasing the ratio of net investment income to
average net assets by 0.01% and 0.16%, respectively.
See Notes to Financial Statements.
63
<PAGE> 56
PACIFIC HORIZON TREASURY ONLY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
------------------------
FEBRUARY FEBRUARY
28, 1995 28, 1994
--------- ---------
<S> <C> <C>
HORIZON SERVICE SHARES
Net asset value per share, beginning of year.......... $ 1.00 $ 1.00
--------- ---------
Income from Investment Operations:
Net investment income............................... 0.0391 0.0273
Net realized loss on securities..................... (0.0002) (0.0002)
--------- ---------
Total income from investment operations............... 0.0389 0.0271
--------- ---------
Less dividends from net investment income............. (0.0391) (0.0273)
--------- ---------
Net change in net asset value per share............... (0.0002) (0.0002)
--------- ---------
Net asset value per share, end of year................ $ 1.00 $ 1.00
======== ========
Total return.......................................... 3.98% 2.76%
Ratios/Supplemental Data:
Net assets, end of year (000)....................... $ 194,363 $ 271,588
Ratio of expenses to average net assets*............ 0.55% 0.39%
Ratio of net investment income to average net
assets*........................................... 3.86% 2.73%
</TABLE>
- ---------------
* Net of fee waivers which had the effect of reducing the ratio of expenses to
average net assets and increasing the ratio of net investment income to
average net assets by 0.01% and 0.25%, respectively.
See Notes to Financial Statements.
64
<PAGE> 57
HORIZON TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
FEBRUARY FEBRUARY
28, 28,
1995 1994*
--------- ---------
<S> <C> <C>
PACIFIC HORIZON SHARES
Net asset value per share, beginning of period...... $ 1.00 $ 1.00
--------- ---------
Income from Investment Operations:
Net investment income............................. 0.0253 0.0124
Less dividends from net investment income........... (0.0253) (0.0124)
--------- ---------
Net change in net asset value per share............. 0.0000 0.0000
--------- ---------
Net asset value per share, end of period............ $ 1.00 $ 1.00
======== ========
Total return........................................ 2.56% 1.25%***
Ratios/Supplemental Data:
Net assets, end of period (000)................... $ 37,454 $ 49,648
Ratio of expenses to average net assets........... 0.60% 0.60%+**
Ratio of net investment income to average
net assets...................................... 2.47% 1.95%+**
</TABLE>
- ---------------
* For the period July 9, 1993 (initial offering date) through February 28,
1994.
** Net of fee waivers which had the effect of reducing the ratio of expenses to
average net assets and increasing the ratio of net investment income to
average net assets by 0.01% (annualized).
+ Annualized.
*** Not annualized.
See Notes to Financial Statements.
65
<PAGE> 58
HORIZON TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Financial Highlights++
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
-------------------------------------------------------------
FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
28, 28, 28, 29, 28,
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
HORIZON SHARES
Net asset value per share, beginning
of year............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income.............. 0.0285 0.0225 0.0269 0.0410 0.0557
Less dividends from net investment
income............................. (0.0285) (0.0225) (0.0269) (0.0410) (0.0557)
--------- --------- --------- --------- ---------
Net change in net asset value per
share.............................. 0.0000 0.0000 0.0000 0.0000 0.0000
--------- --------- --------- --------- ---------
Net asset value per share, end of
year............................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return........................ 2.89% 2.27% 2.72% 4.18% 5.71%
Ratios/Supplemental Data:
Net assets, end of year (000)...... $ 381,811 $ 514,663 $ 383,848 $ 345,221 $ 428,127
Ratio of expenses to average net
assets........................... 0.28% 0.28%* 0.28% 0.28% 0.27%*
Ratio of net investment income to
average net assets............... 2.81% 2.25%* 2.69% 4.12% 5.54%*
</TABLE>
- ---------------
* Net of fee waivers which had the effect of reducing the ratio of expenses to
average net assets and increasing the ratio of net investment income to
average net assets by 0.01% and 0.02% for the years ended February 28, 1994
and February 28, 1991, respectively.
++ Security Pacific National Bank served as investment advisor through April 21,
1992. Bank of America National Trust and Savings Association served as
investment advisor commencing April 22, 1992.
See Notes to Financial Statements.
66
<PAGE> 59
HORIZON TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Financial Highlights++
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
------------------------------------------------------------
FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
28, 28, 28, 29, 28,
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
HORIZON SERVICE SHARES
Net asset value per share beginning of
year................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................ 0.0260 0.0200 0.0244 0.0385 0.0532
Less dividends from net investment
income............................... (0.0260) (0.0200) (0.0244) (0.0385) (0.0532)
-------- -------- -------- -------- --------
Net change in net asset value per
share................................ 0.0000 0.0000 0.0000 0.0000 0.0000
-------- -------- -------- -------- --------
Net asset value per share, end of
year................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return.......................... 2.63% 2.02% 2.47% 3.92% 5.45%
Ratios/Supplemental Data:
Net assets, end of year (000)........ $ 39,158 $ 48,328 $ 49,695 $ 47,230 $ 53,732
Ratio of expenses to average net
assets............................. 0.53% 0.53%* 0.53% 0.53% 0.52%*
Ratio of net investment income to
average net assets................. 2.57% 2.04%* 2.42% 3.88% 5.29%*
</TABLE>
- ---------------
* Net of fee waivers which had the effect of reducing the ratio of expenses to
average net assets and increasing the ratio of net investment income to
average net assets by 0.04% and 0.02% for the years ended February 28, 1994
and February 28, 1991, respectively.
++ Security Pacific National Bank served as investment adviser through April 21,
1992. Bank of America National Trust and Savings Association served as
investment adviser commencing April 22, 1992.
See Notes to Financial Statements.
67
<PAGE> 60
PACIFIC HORIZON
CALIFORNIA TAX-EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
Financial Highlights++
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
----------------------------------------------------------------
FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
28, 28, 28, 29, 28,
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PACIFIC HORIZON SHARES
Net asset value per share,
beginning of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income............. 0.0249 0.0186 0.0224 0.0364 0.0495
Net realized gain (loss) on
securities...................... (0.0001) 0.0002 (0.0002) 0.0000 (0.0001)
-------- -------- -------- -------- --------
Total income from investment
operations........................ 0.0248 0.0188 0.0222 0.0364 0.0494
Less dividends from net investment
income............................ (0.0249) (0.0186) (0.0224) (0.0364) (0.0495)
-------- -------- -------- -------- --------
Net change in net asset value per
share............................. (0.0001) 0.0002 (0.0002) 0.0000 (0.0001)
-------- -------- -------- -------- --------
Net asset value per share,
end of year....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return....................... 2.52% 1.88% 2.27% 3.70% 5.06%
Ratios/Supplemental Data:
Net assets, end of year (000)..... $186,643 $203,724 $128,448 $107,424 $118,816
Ratio of expenses to average net
assets.......................... 0.62% 0.66%** 0.66%** 0.57%** 0.55%**
Ratio of net investment income to
average net assets.............. 2.48% 1.86%** 2.21%** 3.62%** 4.81%**
</TABLE>
- ---------------
** Net of fee waivers and expense reimbursements by the Adviser and
Administrator which had the effect of reducing the ratio of expenses to
average net assets and increasing the ratio of net investment income to
average net assets by 0.02%, 0.08%, 0.13% and 0.22%, for the years ended
February 28, 1994, February 28, 1993, February 29, 1992 and February 28,
1991, respectively.
++ Security Pacific National Bank served as investment adviser through April
21, 1992. Bank of America National Trust and Savings Association served as
investment adviser commencing April 22, 1992.
See Notes to Financial Statements.
68
<PAGE> 61
PACIF IC HORIZON
CALIFORNIA TAX-EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
---------------------
FEBRUARY FEBRUARY
28, 1995 28, 1994
--------- --------
<S> <C> <C>
HORIZON SERVICE SHARES
Net asset value per share, beginning of year........ $ 1.00 $ 1.00
--------- --------
Income from Investment Operations:
Net investment income............................. 0.0256 0.0198
Net realized loss on securities................... (0.0001) (0.0001)
--------- --------
Total income from investment operations............. 0.0255 0.0197
Less dividends from net investment income........... (0.0256) (0.0198)
--------- --------
Net change in net asset value per share............. (0.0001) (0.0001)
--------- --------
Net asset value per share, end of year.............. $ 1.00 $ 1.00
======== ========
Total return........................................ 2.59% 2.00%
Ratios/Supplemental Data:
Net assets, end of year (000)..................... $ 88,003 $123,746
Ratio of expenses to average net assets........... 0.55% 0.53%*
Ratio of net investment income to average
net assets...................................... 2.50% 1.98%*
</TABLE>
- ---------------
* Net of fee waivers and expense reimbursements by the Adviser and Administrator
which had the effect of reducing the ratio of expenses to average net assets
and increasing the ratio of net investment income to average net assets by
0.07%.
See Notes to Financial Statements.
69
<PAGE> 62
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors
and Shareholders of
Pacific Horizon Funds, Inc.
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Pacific Horizon Prime Fund, Pacific
Horizon Treasury Fund, Pacific Horizon Government Fund, Pacific Horizon Treasury
Only Fund, Horizon Tax-Exempt Money Fund and California Tax-Exempt Money Market
Fund (six of the portfolios constituting the Pacific Horizon Funds, Inc.,
hereafter referred to as the "Funds") at February 28, 1995, the results of each
of their operations for the year then ended, the changes in each of their net
assets and the financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at February 28, 1995 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
April 21, 1995
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX STATUS OF DIVIDENDS (UNAUDITED)
-------------------------------------------------------------
Pacific Horizon Prime Fund, Pacific Horizon Treasury Fund, Pacific Horizon
Treasury Only Fund and Pacific Horizon Government Fund have determined
that all dividends paid during the year ended February 28, 1995 were paid
from net investment income and are subject to Federal income tax. All
dividends paid during the year ended February 28, 1995 by the Tax-Exempt
Fund and the California Tax-Exempt Fund are exempt-interest dividends for
federal income tax purposes.
- --------------------------------------------------------------------------------
70
<PAGE> 1
PACIFIC HORIZON PRIME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
August 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS PRINCIPAL
ASSIGNED BY MATURITY AMOUNT VALUE
DESCRIPTION N.R.S.R.O. RATE DATE (000) (NOTE 2)
- -------------------------------- ------------ ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 102.1%
COMMERCIAL PAPER -- 54.1%
DOMESTIC -- 42.6%
AGRICULTURE -- 1.5%
Cargill, Inc. ................. A1+/P1 5.77% 9/25/95 $ 20,000 $ 19,923,067
Cargill, Inc. ................. A1+/P1 5.51% 12/04/95 25,000 24,640,319
Cargill, Inc. ................. A1+/P1 5.50% 12/05/95 25,000 24,637,153
------------
69,200,539
------------
AUTOMOBILES -- 5.9%
American Honda Finance Corp. .. F1/P1 5.78% 9/22/95 25,000 24,915,708
American Honda Finance Corp. .. F1/P1 5.76% 9/18/95 36,000 35,902,080
American Honda Finance Corp. .. F1/P1 5.75% 10/27/95 24,000 23,785,333
American Honda Finance Corp. .. F1/P1 5.74% 11/28/95 18,000 17,747,440
American Honda Finance Corp. .. F1/P1 5.72% 11/08/95 30,000 29,675,867
Daimler Benz North America,
Inc. ........................ A1+/P1 5.74% 10/13/95 35,000 34,765,617
Daimler Benz North America,
Inc. ........................ A1+/P1 5.57% 3/15/96 25,000 24,241,861
Ford Motor Credit Company...... A1/P1 5.77% 9/08/95 12,000 12,000,000
Ford Motor Credit Company...... A1/P1 5.699% 10/10/95 25,000 25,000,000
Ford Motor Credit Company...... A1/P1 5.62% 11/17/95 50,000 49,398,972
------------
277,432,878
------------
BANKING -- 6.9%
Abbey National North America... A1+/P1 5.70% 9/11/95 20,000 19,968,333
Abbey National North America... A1+/P1 5.68% 11/09/95 50,000 49,455,667
ABN AMRO N.A. ................. A1+/P1 5.65% 12/27/95 25,000 24,540,938
Bankers Trust, New York
Corp. ....................... A1/P1 5.70% 10/20/95 25,000 24,806,042
Deutche Bank Financial,
Inc. ........................ A1+/P1 5.67% 9/25/95 15,000 14,943,300
Generale Bank, Inc. ........... A1/P1 5.63% 3/15/96 50,000 48,467,389
J.P. Morgan & Co. ............. A1+/P1 5.59% 1/22/96 50,000 48,889,764
Kredietbank N.A. Finance
Corp. ....................... A1/P1 5.63% 1/16/96 20,000 19,571,494
Norwest Corp. ................. A1+/P1 5.70% 10/20/95 20,000 19,844,833
Norwest Corp. ................. A1+/P1 5.58% 11/09/95 15,000 14,839,575
Toronoto Dominion Holdings USA,
Inc. ........................ A1+/P1 5.77% 9/29/95 20,000 19,910,244
Westpac Capital Corp. ......... A1/P1 5.62% 2/07/96 25,000 24,379,458
------------
329,617,037
------------
BROKERAGE -- 4.3%
Bear Stearns Co., Inc. ........ A1/P1 5.71% 11/17/95 25,000 24,694,674
C.S. First Boston Corp. ....... A1/P1 5.77% 9/13/95 25,000 24,951,917
C.S. First Boston Corp. ....... A1/P1 5.69% 12/08/95 25,000 24,612,764
Merrill Lynch & Co., Inc. ..... A1+/P1 5.77% 9/15/95 80,000 79,820,488
Merrill Lynch & Co., Inc. ..... A1+/P1 5.74% 10/02/95 50,000 49,752,861
------------
203,832,704
------------
</TABLE>
- ---------------
See Notes to Financial Statements.
6
<PAGE> 2
<TABLE>
<CAPTION>
RATINGS PRINCIPAL
ASSIGNED BY MATURITY AMOUNT VALUE
DESCRIPTION N.R.S.R.O. RATE DATE (000) (NOTE 2)
- -------------------------------- ----------- ---- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
CHEMICALS -- 1.0%
AKZO Nobel, Inc. .............. A1/P1 5.67% 11/10/95 $ 15,000 $ 14,834,625
AKZO Nobel, Inc. .............. A1/P1 5.65% 1/12/96 31,000 30,352,918
------------
45,187,543
------------
CONGLOMERATES -- 3.0%
General Electric Capital
Corp. ....................... A1+/P1 5.88% 9/05/95 20,000 19,986,933
General Electric Capital
Corp. ....................... A1+/P1 5.87% 9/22/95 50,000 49,828,792
General Electric Capital
Corp. ....................... A1+/P1 5.63% 12/27/95 50,000 49,085,125
General Electric Capital
Service Corp. ............... A1+/P1 5.72% 11/14/95 25,000 24,706,056
------------
143,606,906
------------
CONSUMER -- NON-DURABLES -- 1.1%
Colgate Palmolive Co.*++....... A1/P1 5.74% 12/07/95 25,000 24,613,347
Colgate Palmolive Co.*++....... A1/P1 5.68% 11/10/95 30,000 29,668,667
------------
54,282,014
------------
FINANCE COMPANIES -- 8.7%
American Express Credit
Corp. ....................... A1/P1 5.70% 9/08/95 30,000 29,966,750
American Express Credit
Corp. ....................... A1/P1 5.57% 12/15/95 25,000 24,593,854
American Express Credit
Corp. ....................... A1/P1 5.50% 12/08/95 50,000 49,251,389
Asset Securitization
Cooperative Corp.*++......... A1+/P1 5.75% 10/17/95 25,000 24,816,319
Asset Securitization
Cooperative Corp.*++......... A1+/P1 5.75% 10/18/95 20,000 19,849,861
Asset Securitization
Cooperative Corp.*++......... A1+/P1 5.70% 11/27/95 36,500 35,997,212
Associates Corporation of North
America...................... A1+/P1 5.895% 9/01/95 15,000 15,000,000
Bank One Funding Corp.*++...... A1/P1 5.75% 10/02/95 34,819 34,646,598
Bank One Funding Corp.*++...... A1/P1 5.73% 10/20/95 35,000 34,727,029
Bank One Funding Corp.*++...... A1/P1 5.72% 11/21/95 30,000 29,613,900
BHF Finance (DEL).............. A1/P1 5.67% 10/10/95 25,000 24,846,438
Ciesco L.P. ................... A1+/P1 5.70% 9/26/95 16,798 16,731,508
Countrywide Funding Corp....... A1/F1 5.79% 9/06/95 50,000 49,959,792
Household Finance Corp. ....... A1/P1 5.72% 11/22/95 25,000 24,674,278
------------
414,674,928
------------
HOUSEHOLD FURNITURE &
APPLIANCES -- 2.1%
Whirlpool Financial Corp. ..... A1/D1 5.75% 10/17/95 50,000 49,632,639
Whirlpool Financial Corp. ..... A1/D1 5.73% 9/08/95 50,000 49,944,292
------------
99,576,931
------------
INSURANCE -- 2.2%
Transamerica Finance Corp. .... A1/P1 5.70% 12/05/95 30,000 29,548,750
Transamerica Finance Corp. .... A1/P1 5.62% 1/05/96 25,000 24,508,250
Transamerica Finance Corp. .... A1/P1 5.60% 12/21/95 30,000 29,482,000
Transamerica Finance Corp. .... A1/P1 5.50% 12/11/95 19,050 18,756,048
------------
102,295,048
------------
LEASING -- 1.0%
Hertz Corp. ................... A1/P1 5.69% 11/03/95 25,000 24,751,063
Hertz Corp. ................... A1/P1 5.68% 12/15/95 25,000 24,585,833
------------
49,336,896
------------
</TABLE>
- ---------------
See Notes to Financial Statements.
7
<PAGE> 3
<TABLE>
<CAPTION>
RATINGS PRINCIPAL
ASSIGNED BY MATURITY AMOUNT VALUE
DESCRIPTION N.R.S.R.O. RATE DATE (000) (NOTE 2)
- -------------------------------- ----------- ---- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
PHARMACEUTICALS -- 0.4%
Sherwood Medical Company,
Inc. ........................ D1/P1 5.91% 9/05/95 $ 20,000 $ 19,986,867
------------
RELOCATION SERVICES -- 0.5%
PHH Corp. ..................... A1/P1 5.75% 10/11/95 25,000 24,840,278
------------
TELECOMMUNICATIONS -- 2.9%
Alcatel Alsthom, Inc. ......... A1+/P1 5.69% 10/27/95 29,000 28,743,318
Alcatel Alsthom, Inc. ......... A1+/P1 5.62% 3/01/96 22,000 21,374,931
AT&T Corp. .................... A1+/P1 5.63% 12/07/95 50,000 49,241,514
AT&T Corp. .................... A1+/P1 5.50% 12/06/95 25,000 24,633,333
AT&T Corp. .................... A1+/P1 5.50% 12/07/95 15,000 14,777,708
------------
138,770,804
------------
UTILITIES -- 1.1%
National Rural Utilities
Cooperative.................. A1+/P1 5.92% 9/21/95 20,000 19,934,222
Southern California Gas Co. ... A1/P1 5.57% 5/03/96 25,000 24,052,326
Southwestern Bell Capital
Corp. ....................... A1/P1 5.56% 1/18/96 10,000 9,785,322
------------
53,771,870
------------
2,026,413,243
------------
FOREIGN -- 11.5%
AGRICULTURE -- 0.5%
Canadian Wheat Board........... A1+/P1 5.67% 12/04/95 24,000 23,644,680
------------
AUTOMOBILES -- 2.4%
Renault Credit Internationale
S.A. Banque.................. F1/P1 5.75% 3/01/96 16,000 15,534,889
Renault Credit Internationale
S.A. Banque.................. F1/P1 5.72% 10/24/95 24,200 23,996,209
Renault Credit Internationale
S.A. Banque.................. F1/P1 5.68% 10/17/95 50,000 49,637,111
Renault Credit Internationale
S.A. Banque.................. F1/P1 5.62% 11/20/95 25,000 24,687,778
------------
113,855,987
------------
BANKING -- 2.7%
Barclays Bank of Canada........ A1+/P1 5.62% 3/01/96 15,000 14,573,817
Bradford & Bingley Building
Society...................... A1/P1 5.70% 11/06/95 40,000 39,582,000
Bradford & Bingley Building
Society...................... A1/P1 5.67% 11/24/95 50,000 49,338,500
Bradford & Bingley Building
Society...................... A1/P1 5.61% 10/18/95 25,000 24,816,896
------------
128,311,213
------------
CONGLOMERATES -- 3.3%
BTR Dunlop Finance, Inc.*++.... A1+/P1 5.65% 12/15/95 50,000 49,176,042
Hanson Finance (UK) PLC........ A1/P1 5.72% 11/15/95 15,000 14,821,250
Hanson Finance (UK) PLC........ A1/P1 5.72% 11/20/95 25,000 24,682,222
Hanson Finance (UK) PLC........ A1/P1 5.70% 10/19/95 10,000 9,924,000
Hanson Finance (UK) PLC........ A1/P1 5.68% 10/31/95 24,000 23,772,800
Hanson Finance (UK) PLC........ A1/P1 5.64% 10/13/95 21,000 20,861,820
Hanson Finance (UK) PLC........ A1/P1 5.63% 10/13/95 12,000 11,921,180
------------
155,159,314
------------
</TABLE>
- ---------------
See Notes to Financial Statements.
8
<PAGE> 4
<TABLE>
<CAPTION>
RATINGS PRINCIPAL
ASSIGNED BY MATURITY AMOUNT VALUE
DESCRIPTION N.R.S.R.O. RATE DATE (000) (NOTE 2)
- -------------------------------- ----------- ---- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
OIL & GAS -- 0.5%
Repsol International Finance
B.V. ........................ A1+/P1 6.00% 10/02/95 $ 25,000 $ 24,870,833
------------
SOVEREIGN -- 0.5%
Province of Ontario............ A1+/P1 5.73% 11/14/95 25,000 24,705,542
------------
TEXTILES -- 0.9%
Wool International............. A1+/P1 5.65% 2/16/96 25,000 24,340,833
Wool International............. A1+/P1 5.64% 2/21/96 20,000 19,457,934
------------
43,798,767
------------
UTILITIES -- 0.7%
Ontario Hydro.................. A1+/P1 5.90% 9/01/95 31,000 31,000,000
------------
545,346,336
------------
Total Commercial Paper
(amortized cost
$2,571,759,579)................ 2,571,759,579
------------
BANK NOTES -- 11.0%
American Express Centurion Bank
Monthly, Variable Rate
(final maturity date
6/20/96)+.................... A1/P1 5.927% 9/20/95 50,000 50,000,000
Bank One, Milwaukee N.A., Daily
Variable Rate
(final maturity date
1/31/96)+.................... A1+/P1 6.12% 9/01/95 100,000 100,000,000
Bankers Trust New York Corp.
Daily Variable Rate
(final maturity date
12/07/95)+................... A1/P1 6.00% 9/01/95 50,000 50,000,000
Comercia Bank, Detroit MI,
Weekly Variable Rate
(final maturity date
10/27/95)+................... A1/P1 5.61% 9/01/95 100,000 99,986,621
Comercia Bank, Detroit MI,
Weekly Variable Rate
(final maturity date
11/22/95)+................... A1/P1 5.61% 9/01/95 15,000 14,991,514
FCC National Bank, Daily
Variable Rate
(final maturity date
1/12/96)+.................... A1/P1 6.08% 9/01/95 50,000 50,000,000
First Union National Bank of
North Carolina, Daily
Variable Rate (final maturity
date 5/15/96)+............... A1/P1 5.96% 9/01/95 50,000 49,982,304
Huntington National Bank,
Columbus, Daily Variable Rate
(final maturity date
1/12/96)+.................... A1/P1 6.06% 9/01/95 50,000 49,992,591
Huntington National Bank,
Columbus..................... A1/P1 5.80% 11/27/95 30,000 30,010,716
</TABLE>
- ---------------
See Notes to Financial Statements.
9
<PAGE> 5
<TABLE>
<CAPTION>
RATINGS PRINCIPAL
ASSIGNED BY MATURITY AMOUNT VALUE
DESCRIPTION N.R.S.R.O. RATE DATE (000) (NOTE 2)
- -------------------------------- ----------- ------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
BANK NOTES -- (CONTINUED)
Wachovia Bank of North America,
Daily Variable Rate
(final maturity date
5/02/96)+.................... A1+/P1 5.825% 9/05/95 $ 25,000 $ 25,001,483
------------
Total Bank Notes
(amortized cost $519,965,229).. 519,965,229
------------
MASTER NOTES -- 8.4%
Goldman Sachs Group L.P., Daily
Variable Rate
(final maturity date
11/03/95)+ .................. A1+/P1 5.962% 9/01/95 200,000 200,000,000
Morgan Stanley Group, Inc.,
Daily Variable Rate
(final maturity date
4/08/96)+ ................... A1+/P1 5.912% 9/01/95 200,000 200,000,000
------------
Total Master Notes
(amortized cost $400,000,000).. 400,000,000
------------
CORPORATE OBLIGATIONS -- 8.1%
AUTOMOBILES -- 0.0%
Ford Motor Credit Corp. ....... A1/P1 9.40% 10/09/95 1,000 1,003,389
Ford Motor Credit Corp. ....... A1/P1 9.35% 9/05/95 100 100,035
------------
1,103,424
------------
BROKERAGE -- 2.3%
Bear Stearns Co., Inc., Series
B, Monthly Variable Rate
(final maturity date
2/02/96)+.................... A1/P1 5.975% 9/01/95 100,000 100,000,000
Merrill Lynch & Co., Inc.,
Monthly Variable Rate
(final maturity date
9/07/95)+.................... A1+/P1 5.899% 9/07/95 10,000 9,999,993
------------
109,999,993
------------
BUSINESS EQUIPMENT & SERVICES -- 1.2%
IBM Credit Corp.,
Daily Variable Rate
(final maturity date
9/29/95)+.................... A1/P1 5.799% 9/01/95 30,000 29,999,590
------------
IBM Credit Corp.,
Daily Variable Rate
(final maturity date
10/06/95)+................... A1/P1 5.799% 9/01/95 25,000 24,986,350
------------
54,996,750
CONGLOMERATES -- 0.4%
General Electric Capital Corp.,
Daily Variable Rate
(final maturity date
2/16/96)+.................... A1+/P1 6.025% 9/01/95 20,000 19,997,772
------------
</TABLE>
- ---------------
See Notes to Financial Statements.
10
<PAGE> 6
<TABLE>
<CAPTION>
RATINGS PRINCIPAL
ASSIGNED BY MATURITY AMOUNT VALUE
DESCRIPTION N.R.S.R.O. RATE DATE (000) (NOTE 2)
- -------------------------------- ----------- ------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
FINANCE COMPANIES -- 3.0%
Associates Corporation of North
America...................... A1+/P1 8.75% 2/01/96 $ 1,180 $ 1,187,284
Ciesco L.P.,
Monthly Variable Rate (final
maturity date 8/14/96)+ ++... A1+/P1 5.839% 9/14/96 75,000 74,985,738
CIT Group Holdings, Inc. ...... A1+/P1 5.65% 11/15/95 10,000 9,993,030
Household Finance Corp. ....... A1/P1 9.625% 3/11/96 1,250 1,264,922
Household Finance Corp. ....... A1/P1 9.375% 2/15/96 500 504,532
Household Finance Corp. ....... A1/P1 9.00% 9/01/95 6,500 6,500,000
Household Finance Corp.,
Monthly Variable Rate
(final maturity date
8/27/96)+ ++................. A1/P1 5.927% 9/25/95 50,000 50,000,000
Norwest Financial, Inc. ....... A1+/P1 4.625% 9/15/95 100 99,949
------------
144,535,455
------------
OIL AND GAS -- 0.0%
Shell Oil Company.............. A1+/P1 7.70% 2/01/96 300 300,473
------------
RELOCATION SERVICES -- 0.7%
PHH Corp., Monthly Variable
Rate
(final maturity date
9/05/95)+ ++................. A1/P1 5.828% 9/05/95 30,000 29,999,840
------------
TELECOMMUNICATIONS -- 0.4%
AT&T Capital Corp., Daily
Variable Rate
(final maturity date
12/15/95)+ ++................ A1/P1 5.848% 12/15/95 20,000 20,000,000
------------
TRUCKING -- 0.1%
Paccar Financial Corp. ........ A1+/P1 4.18% 9/15/95 5,000 4,996,947
------------
Total Corporate Obligations
(amortized cost $385,930,654).. 385,930,654
------------
CERTIFICATES OF DEPOSIT -- 2.5%
U.S. BRANCHES OF FOREIGN BANKS -- 2.5%
Banque National de Paris, New
York......................... A1/P1 5.75% 12/11/95 25,000 24,991,149
Banque Paribas, New York....... A1/P1 5.76% 10/17/95 20,000 20,000,504
Societe Generale, New York..... A1+/P1 5.90% 9/06/95 20,000 20,000,165
Societe Generale, New York..... A1+/P1 5.89% 9/12/95 15,000 15,000,091
Societe Generale, New York..... A1+/P1 5.88% 3/07/96 40,000 40,018,248
------------
Total Certificates of Deposit
(amortized cost $120,010,157).. 120,010,157
------------
</TABLE>
- ---------------
See Notes to Financial Statements.
11
<PAGE> 7
<TABLE>
<CAPTION>
RATINGS PRINCIPAL
ASSIGNED BY MATURITY AMOUNT VALUE
DESCRIPTION N.R.S.R.O. RATE DATE (000) (NOTE 2)
- -------------------------------- ----------- ----- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
FEDERAL AGENCY NOTES -- 1.1%
Federal Farm Credit Bank,
Quarterly Variable Rate
(final maturity date
5/06/96)+.................... A1+/P1! 5.71% 9/08/95 $ 500 $ 499,241
Federal Home Loan Bank,
Daily Variable Rate
(final maturity date
3/08/96)+.................... A1+/P1! 6.05% 9/01/95 50,000 49,983,029
------------
Total Federal Agency Notes
(amortized cost $50,482,270)... 50,482,270
------------
BANKERS' ACCEPTANCES -- 0.3%
Bank of New York............... A1/P1 5.61%** 10/05/95 5,000 4,973,508
Chemical Bank.................. A1/P1 5.65%** 9/27/95 2,300 2,290,615
Chemical Bank.................. A1/P1 5.59%** 10/30/95 2,120 2,595,544
Chemical Bank.................. A1/P1 5.47%** 12/20/95 2,500 2,458,215
Chemical Bank.................. A1/P1 5.47%** 12/27/95 3,000 2,946,668
------------
Total Bankers' Acceptances
(amortized cost $15,264,550)... 15,264,550
------------
Total Investments in Securities
(amortized cost
$4,063,412,439).............. 4,063,412,439
------------
REPURCHASE AGREEMENTS -- 16.6%
Repurchase agreement with First
Chicago Capital Markets,
Inc., dated 8/31/95, with a
maturity value of
$150,024,583.
(See Footnote A)............. 5.90% 9/01/95 150,000 150,000,000
Repurchase agreement with First
Chicago Capital Markets,
Inc., dated 8/31/95, with a
maturity value of
$38,511,300.
(See Footnote B)............. 5.89% 9/01/95 38,505 38,505,000
Repurchase agreement with Fuji
Securities, dated 8/31/95,
with a maturity value of
$150,025,208.
(See Footnote C)............. 6.05% 9/01/95 150,000 150,000,000
Repurchase agreement with Fuji
Securities, dated 8/31/95,
with a maturity value of
$150,024,479.
(See Footnote D)............. 5.875% 9/01/95 150,000 150,000,000
Repurchase agreement with J.P.
Morgan Securities, Inc.,
dated 8/31/95, with a
maturity value of
$150,024,375.
(See Footnote E)............. 5.85% 9/01/95 150,000 150,000,000
</TABLE>
- ---------------
See Notes to Financial Statements.
12
<PAGE> 8
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION RATE DATE (000) (NOTE 2)
- -------------------------------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
REPURCHASE AGREEMENTS -- (CONTINUED)
Repurchase agreement with
Nomura Securities
International, Inc., dated
8/31/95, with a maturity
value of $150,024,375.
(See Footnote F)............... 5.85% 9/01/95 $ 150,000 $ 150,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(amortized cost
$788,505,000).................... 788,505,000
--------------
TOTAL INVESTMENTS (AMORTIZED
COST $4,851,917,439) -- 102.1%... 4,851,917,439
Liabilities in excess of other
assets -- (2.1%)................. (101,975,470)
--------------
NET ASSETS -- 100%................ $4,749,941,969
==============
</TABLE>
- ---------------
<TABLE>
<S> <C> <C>
N.R.S.R.O. -- Nationally Recognized Statistical Rating Organization. Rating agencies that are
included within the N.R.S.R.O. category are: S&P, Moody's, Fitch Investor Services,
Duff & Phelps and IBCA.
A1 -- Highest rating assigned by S&P and IBCA.
P1 -- Highest rating assigned by Moody's.
F1 -- Highest rating assigned by Fitch Investors.
D1 -- Highest rating assigned by Duff & Phelps.
! Implied short-term rating
* Illiquid security.
+ Variable rate security. Interest rates are stated as of August 31, 1995. Maturity date
reflects the later of the next interest rate change date or the next put date.
++ Private placement security.
** Effective yield.
</TABLE>
(footnotes continue on next page)
- ---------------
See Notes to Financial Statements.
13
<PAGE> 9
(footnotes continued from previous page)
<TABLE>
<S> <C> <C>
Footnote A -- Collateralized by $154,595,000 U.S. Treasury Note, 4.375%, due 8/15/96, with a
value of $153,004,551.
Footnote B -- Collateralized by $39,685,,000 U.S. Treasury Note, 4.375%, due 8/15/96, with a
value of $39,276,727.
Footnote C -- Collateralized by $12,711,000 U.S. Treasury Notes, with various coupon rates and
maturities ranging from 8/31/96 through 5/15/01, $13,102,000 U.S. Treasury Strip
Principal Note, due 8/15/01, $2,814,000 U.S. Treasury Bond, 13.125%, due 5/15/01,
$11,320,000 U.S. Treasury Bill, due 1/04/96, $627,000 Resolution Funding
Corporation Strip Interest Note, due 1/15/04, $36,177,500 Federal National Mortgage
Backed Securities, with various coupon rates and maturities ranging from 10/11/95
through 12/09/03, $67,673,000 Federal Home Loan Mortgage Association Discount
Notes, with various maturities ranging from 10/02/95 through 11/22/95 and
$12,500,000 Federal Farm Credit Discount Note, due 1/09/96; with an aggregate value
of $153,000,402.
Footnote D -- Collateralized by $12,711,000 U.S. Treasury Notes, with various coupon rates and
maturities ranging from 8/31/96 through 5/15/01, $13,102,000 U.S. Treasury Strip
Principal Note, due 8/15/01, $2,814,000 U.S. Treasury Bond, 13.125%, due 5/15/01,
$11,320,000 U.S. Treasury Bill, due 1/04/96, $627,000 Resolution Funding
Corporation Strip Interest Note, due 1/15/04, $36,177,500 Federal National Mortgage
Backed Securities, with various coupon rates and maturities ranging from 10/11/95
through 12/09/03, $67,673,000 Federal Home Loan Mortgage Association Discount
Notes, with various maturities ranging from 10/02/95 through 11/22/95 and
$12,500,000 Federal Farm Credit Discount Note, due 1/09/96; with an aggregate value
of $153,000,402.
Footnote E -- Collateralized by $154,906,747 Government National Mortgage Association Securities,
with various coupon rates and maturities ranging from 1/01/00 through 7/20/25; with
an aggregate value of $153,941,293.
Footnote F -- Collateralized by $12,600,000 Resolution Funding Corporation Strip Interest Note,
due 7/15/05, $24,025,000 Federal National Mortgage Association Medium Term Notes,
with various coupon rates and maturities ranging from 3/15/00 through 5/20/24,
$32,445,000 Federal National Mortgage Debentures, with various coupon rates and
maturities ranging from 11/15/95 through 8/12/19, $67,385,000 Federal Home Loan
Mortgage Debenture Bonds, with various coupon rates and maturities ranging from
2/23/01 through 5/11/05, $20,000,000 Federal Home Loan Mortgage Discount Notes,
with various maturities ranging from 10/03/95 through 11/02/95; with an aggregate
value of $153,028,547.
</TABLE>
See Notes to Financial Statements.
14
<PAGE> 10
PACIFIC HORIZON TREASURY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
August 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION RATE DATE (000) (NOTE 2)
- -------------------------------------------------- ----- --------- --------- --------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 100.2%
U.S. TREASURY OBLIGATIONS -- 32.5%
U.S. TREASURY NOTES -- 27.2%
U.S. Treasury Note............................... 3.875% 10/31/95 $ 60,000 $ 59,817,582
U.S. Treasury Note............................... 5.125% 11/15/95 65,000 64,891,060
U.S. Treasury Note............................... 8.500% 11/15/95 25,000 25,123,180
U.S. Treasury Note............................... 9.250% 1/15/96 278,150 281,704,303
U.S. Treasury Note............................... 4.000% 1/31/96 75,000 74,499,786
U.S. Treasury Note............................... 4.625% 2/15/96 25,000 24,872,054
U.S. Treasury Note............................... 7.875% 2/15/96 95,000 95,880,944
U.S. Treasury Note............................... 8.750% 2/15/96 50,000 50,682,470
--------------
677,471,379
--------------
U.S. TREASURY BILLS -- 5.3%
U.S. Treasury Bill............................... 5.53%* 9/21/95 15,000 14,954,958
U.S. Treasury Bill............................... 5.67%* 10/05/95 50,000 49,739,806
U.S. Treasury Bill............................... 5.97%* 11/02/95 50,000 49,506,583
U.S. Treasury Bill............................... 6.80%* 11/16/95 2,000 1,972,978
U.S. Treasury Bill............................... 5.54%* 12/07/95 15,000 14,783,165
--------------
130,957,490
--------------
Total U.S. Treasury Obligations
(amortized cost $808,428,869).................... 808,428,869
--------------
REPURCHASE AGREEMENTS -- 67.7%
Repurchase agreement with Barclay's De Zoate Wedd
Securities, Inc., dated 8/31/95, with a
maturity value of $110,017,569.
(See Footnote A)............................... 5.75% 9/01/95 110,000 110,000,000
Repurchase agreement with C.S. First Boston
Corp., dated 8/31/95, with a maturity value of
$210,033,833. (See Footnote B)................. 5.80% 9/01/95 210,000 210,000,000
Repurchase agreement with First Chicago Capital
Markets Inc., dated 8/31/95, with a maturity
value of $110,017,906. (See Footnote C)........ 5.86% 9/01/95 110,000 110,000,000
Repurchase agreement with First National Bank of
Chicago, dated 8/31/95, with a maturity value
of $78,173,723. (See Footnote D)............... 5.86% 9/01/95 78,161 78,161,000
Repurchase agreement with Fuji Securities Inc.,
dated 8/31/95, with a maturity value of
$210,034,125. (See Footnote E)................. 5.85% 9/01/95 210,000 210,000,000
Repurchase agreement with Goldman Sachs and Co.,
dated 8/31/95, with a maturity value of
$110,017,569. (See Footnote F)................. 5.75% 9/01/95 110,000 110,000,000
Repurchase agreement with HSBC Securities, Inc.,
dated 8/31/95, with a maturity value of
$210,033,950. (See Footnote G)................. 5.82% 9/01/95 210,000 210,000,000
Repurchase agreement with Merrill Lynch, dated
8/31/95, with a maturity value of $110,017,631.
(See Footnote H)............................... 5.77% 9/01/95 110,000 110,000,000
</TABLE>
- ---------------
See Notes to Financial Statements.
15
<PAGE> 11
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION RATE DATE (000) (NOTE 2)
- -------------------------------------------------- ---- -------- --------- --------
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS -- (CONTINUED)
Repurchase agreement with Morgan Stanley, Inc.,
dated 8/31/95, with a maturity value of
$210,033,833. (See Footnote I)................. 5.80% 9/01/95 $ 210,000 $ 210,000,000
Repurchase agreement with Nomura Securities
International, Inc., dated 8/31/95, with a
maturity value of $110,017,783.
(See Footnote J)............................... 5.82% 9/01/95 110,000 110,000,000
Repurchase agreement with Smith Barney Inc.,
dated 8/31/95, with a maturity value of
$220,035,414. (See Footnote K)................. 5.795% 9/01/95 220,000 220,000,000
--------------
Total Repurchase Agreements
(amortized cost $1,688,161,000).................. 1,688,161,000
--------------
TOTAL INVESTMENTS (AMORTIZED COST
$2,496,589,869) -- 100.2%........................ 2,496,589,869
Other liabilities in excess of assets -- (0.2%)... (4,047,575)
--------------
NET ASSETS -- 100%................................ $2,492,542,294
==============
</TABLE>
- ---------------
* Effective yield.
<TABLE>
<S> <C> <C>
Footnote A -- Collateralized by $92,482,000 U.S. Treasury Strips, with maturities ranging from 2/15/01
through 2/15/23, $66,071,000 U.S. Treasury Notes with various coupon rates and maturities
ranging from 2/28/97 through 7/31/98, and $32,704,000 U.S. Treasury Non-Callable Strips,
with maturities ranging from 11/15/00 through 11/15/22; with an aggregate value of
$112,200,792.
Footnote B -- Collateralized by $208,647,000 U.S. Treasury Bonds, with various coupon rates and
maturities ranging from 8/15/22 through 8/15/25; with an aggregate value of $215,210,927.
Footnote C -- Collateralized by $113,370,000 U.S. Treasury Note, 4.375%, due 8/15/96, with a value of
$112,203,667.
Footnote D -- Collateralized by $3,316,000 U.S. Treasury Bills, with maturities ranging from 9/21/95
through 10/19/95, $4,208,000 U.S. Treasury Bonds, with various coupon rates and maturities
ranging from 5/15/03 through 2/15/19, $61,304,000 U.S. Treasury Notes, with various coupon
rates and maturities ranging from 5/31/96 through 8/15/03, and a $82,530,000 U.S. Treasury
Strip, due 8/15/03; with an aggregate value of $79,728,827.
Footnote E -- Collateralized by $7,450,000 U.S. Treasury Notes, with various coupon rates and maturities
ranging from 10/31/97 through 2/15/98, $208,155,000 U.S. Treasury Bills, with maturities
ranging from 10/19/95 to 12/7/95; with an aggregate value of $214,200,891.
Footnote F -- Collateralized by $176,822,000 U.S. Treasury Strips, with maturities ranging from 11/15/97
through 11/15/11, and $29,450,000 U.S. Treasury Non-Callable Strip, due 11/15/04; with an
aggregate value of $112,200,254.
Footnote G -- Collateralized by $80,030,000 U.S. Treasury Notes, with various coupon rates and maturities
ranging from 7/31/00 to 2/15/03, $154,529,000 U.S. Treasury Strips, with maturities ranging
from 11/15/95 through 5/15/24, and $84,580,000 U.S. Treasury Non-Callable Strips, with
maturities ranging from 11/15/95 through 8/15/23; with an aggregate value of $214,200,252.
Footnote H -- Collateralized by $107,667,000 U.S. Treasury Notes, with various coupon rates and
maturities ranging from 2/28/97 through 5/15/97, with an aggregate value of $112,203,693.
Footnote I -- Collateralized by $220,777,000 U.S. Treasury Strips with maturities ranging from 11/15/95
through 2/15/23, a $93,380,000 U.S. Treasury Note, 6.25%, due 12/31/96, and $70,068,000
U.S. Treasury Non-Callable Strips, with maturities ranging from 5/15/97 through 2/15/23;
with an aggregate value of $214,562,328.
Footnote J -- Collateralized by $111,489,000 U.S. Treasury Notes, with various coupon rates and
maturities ranging from 3/31/97 through 2/15/03; with an aggregate value of $112,200,517.
Footnote K -- Collateralized by $30,547,000 U.S. Treasury Strips, with maturities ranging from 11/15/97
through 11/15/10, $91,598,000 U.S. Treasury Notes, with various coupon rates and maturities
ranging from 9/30/95 through 11/15/97, $75,000,000 U.S. Treasury Bond, 9.00%, due 11/15/10,
and $63,552,000 U.S. Treasury Non-Callable Strip, due 11/15/21; with an aggregate value of
$224,400,260.
</TABLE>
See Notes to Financial Statements.
16
<PAGE> 12
PACIFIC HORIZON GOVERNMENT FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
August 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION RATE DATE (000) (NOTE 2)
- -------------------------------------------------- ------- --------- -------- ------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 103.7%
U.S. GOVERNMENT AGENCY NOTES -- 71.6%
Federal Farm Credit Bank,
Discount Note.................................. 5.81% 2/13/96 $ 25,000 $ 24,361,771
Federal Home Loan Bank,
Daily Variable Rate
(final maturity date 5/24/96)*................. 5.90% 9/01/95 25,000 24,992,999
Federal Home Loan Bank,
Discount Note.................................. 5.82% 2/16/96 8,950 8,716,942
Federal Home Loan Bank,
Discount Note.................................. 5.70% 10/02/95 7,000 6,966,546
Federal Home Loan Bank,
Discount Note.................................. 5.70% 10/03/95 25,000 24,876,667
Federal Home Loan Bank,
Discount Note.................................. 5.78% 11/17/95 15,000 14,819,692
Federal Home Loan Mortgage Corp.,
Discount Note.................................. 5.74% 10/16/95 44,631 44,319,582
Federal Home Loan Mortgage Corp.,
Discount Note.................................. 5.74% 10/31/95 25,000 24,767,500
Federal Home Loan Mortgage Corp.,
Discount Note.................................. 5.81% 2/08/96 15,000 14,629,333
Federal Home Loan Mortgage Corp.,
Discount Note.................................. 5.70% 9/05/95 25,000 24,984,500
Federal Home Loan Mortgage Corp.,
Discount Note.................................. 5.70% 11/06/95 6,775 6,705,071
Federal Home Loan Mortgage Corp.,
Discount Note.................................. 5.70% 11/21/95 25,000 24,689,500
Federal Home Loan Mortgage Corp.,
Discount Note.................................. 5.69% 10/03/95 25,000 24,876,889
Federal Home Loan Mortgage Corp.,
Discount Note.................................. 5.77% 11/27/95 25,000 24,661,062
Federal National Mortgage Association,
Daily Variable Rate
(final maturity date 1/26/96)*................. 5.51% 9/01/95 20,000 19,995,167
Federal National Mortgage Association,
Discount Note.................................. 5.83% 12/11/95 25,000 24,604,417
Federal National Mortgage Association,
Monthly Variable Rate
(final maturity date 10/30/95)*................ 5.725% 9/30/95 20,000 19,998,021
Federal National Mortgage Association,
Weekly Variable Rate
(final maturity date 2/16/96)*................. 5.60% 9/06/95 25,000 25,000,000
Student Loan Marketing Association,
Monthly Variable Rate
(final maturity date 12/01/95)................. 5.705% 9/01/95 40,000 39,986,403
------------
Total U.S. Government Agency Notes
(amortized cost $423,952,062).................... 423,952,062
------------
</TABLE>
- ---------------
See Notes to Financial Statements.
17
<PAGE> 13
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION RATE DATE (000) (NOTE 2)
- -------------------------------------------------- ------- --------- -------- ------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY GUARANTEE NOTES -- 5.8%
Western Financial Savings Bank (LOC -- Federal
Home Loan Bank, San Francisco)................. 5.76% 9/01/95 $ 14,300 $ 14,300,000
Western Financial Savings Bank (LOC -- Federal
Home Loan Bank, San Francisco)................. 5.75% 9/28/95 20,000 19,914,500
------------
Total U.S. Government Agency Guarantee Notes
(amortized cost $34,214,500)..................... 34,214,500
------------
Total Investments in Securities
(amortized cost $458,166,562).................... 458,166,562
------------
REPURCHASE AGREEMENTS -- 26.3%
Repurchase agreement with Dean Witter Reynolds,
Inc., dated 8/31/95, with a maturity value of
$25,004,080. (See Footnote A).................. 5.875% 9/01/95 25,000 25,000,000
Repurchase agreement with First Chicago Capital
Markets, Inc., dated 8/31/95, with a maturity
value of $30,441,980. (See Footnote B)......... 5.89% 9/01/95 30,437 30,437,000
Repurchase agreement with Fuji Securities, Inc.,
dated 8/31/95, with a maturity value of
$25,004,080. (See Footnote C).................. 5.875% 9/01/95 25,000 25,000,000
Repurchase agreement with HSBC Securities, Inc.,
dated 8/31/95, with a maturity value of
$25,004,063. (See Footnote D).................. 5.85% 9/01/95 25,000 25,000,000
Repurchase agreement with JP Morgan Securities,
Inc., dated 8/31/95, with a maturity value of
$25,004,063. (See Footnote E).................. 5.85% 9/01/95 25,000 25,000,000
Repurchase agreement with Prudential Securities,
Inc., dated 8/31/95, with a maturity value of
$25,004,080. (See Footnote F).................. 5.875% 9/01/95 25,000 25,000,000
------------
Total Repurchase Agreements
(amortized cost $155,437,000).................... 155,437,000
------------
TOTAL INVESTMENTS
(AMORTIZED COST $613,603,562) -- 103.7%.......... 613,603,562
Liabilities in excess of other assets -- (3.7%)... (21,904,158)
------------
NET ASSETS -- 100%................................ $591,699,404
============
</TABLE>
- ---------------
LOC -- Letter of credit.
* Variable rate security. Maturity date reflects the later of the next rate
change date or the next put date.
(footnotes on following page)
See Notes to Financial Statements.
18
<PAGE> 14
(footnotes from previous page)
<TABLE>
<S> <C> <C>
Footnote A -- Collateralized by $669,000 U.S. Treasury Notes with various coupon rates and
maturities ranging from 11/15/95 through 6/30/99; $343,000 U.S. Treasury Bonds with
various coupon rates and maturities ranging from 11/15/01 through 5/15/16; $296,000
U.S. Treasury Bill, due 2/22/96; $31,901,833 Federal National Mortgage Backed
Securities with various coupon rates and maturities ranging from 5/01/97 through
6/01/25; $17,898,732 Federal Home Loan Mortgage Corporation Participation
Certificates with various coupon rates and maturities ranging from 10/31/95 through
5/31/24; with an aggregate value of $25,500,704.
Footnote B -- Collateralized by $15,875,000 U.S. Treasury Note, 4.375%, due 8/15/96; $210,000
Federal Home Loan Bank Consolidated Bond, 6.125%, due 8/05/96; $10,150,000 Federal
Home Loan Mortgage Debenture Bonds with various coupon rates and maturities ranging
from 3/01/01 through 12/16/03; $6,581,000 U.S. Treasury Strips with maturities
ranging from 5/15/99 through 2/15/07; $1,609,000 U.S. Treasury Non-Callable Strips
with various coupon rates and maturities ranging 5/15/05 through 5/15/20; with an
aggregate value of $31,048,451.
Footnote C -- Collateralized by $5,073,000 U.S. Treasury Note, 8.875%, due 11/15/98; $3,140,000
Federal Home Loan Mortgage Fixed Rate Note, 7.36%, due 9/29/99; $11,660,000 Federal
Home Loan Mortgage Debenture Bonds with various coupon rates and maturities ranging
from 5/25/05 through 9/13/05; $4,406,000 Federal Home Loan Mortgage Discount Note,
due 9/01/95; with an aggregate value of $25,501,394.
Footnote D -- Collateralized by $30,745,000 Resolution Funding Corp. Strips with maturities
ranging from 4/15/96 through 10/15/98; with an aggregate value of $25,501,135.
Footnote E -- Collateralized by $25,713,165 Government National Mortgage Association Notes with
various coupon rates and maturities ranging from 6/15/10 through 8/20/25; with an
aggregate value of $25,506,639.
Footnote F -- Collateralized by $4,273,000 Tennessee Valley Authority Bonds with various coupon
rates and maturities ranging from 3/04/96 through 7/15/45; $317,000 Resolution
Funding Corp. Non-callable Principal Strips with maturities ranging from 7/15/20
through 1/15/30; $6,907,000 Resolution Funding Corp. Strips with maturities ranging
from 10/15/95 through 4/15/30; $95,000 Resolution Funding Corporate Bonds with
various coupon rates and maturities ranging from 10/15/19 through 1/15/21; $317,000
Financing Corp. Strip Interest Payments with maturities ranging from 8/03/96
through 8/30/17; $20,000 Financing Corp. Bonds with various coupon rates and
maturities ranging from 10/06/17 through 2/08/18; $5,015,000 Federal National
Mortgage Medium Term Notes with various coupon rates and maturities ranging from
9/01/95 through 5/10/21; $8,005,000 Federal National Mortgage Debentures with
various coupon rates and maturities ranging from 11/15/95 through 11/10/20;
$4,781,000 Federal Home Loan Mortgage Debenture Bonds with various coupon rates and
maturities ranging from 2/28/96 through 11/27/07; $335,000 Federal Farm Credit
Systemwide Bond, 6.76%, due 2/28/96; $275,000 Federal Home Loan Mortgage Fixed Rate
Notes with various coupon rates and maturities ranging from 9/15/95 through
2/15/00; with an aggregate value of $25,502,377.
</TABLE>
See Notes to Financial Statements.
19
<PAGE> 15
PACIFIC HORIZON TREASURY ONLY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
August 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION RATE DATE (000) (NOTE 2)
- ------------------------------------------------- ------- --------- -------- ------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 99.3%
U.S. TREASURY OBLIGATIONS -- 99.3%
U.S. TREASURY NOTES -- 57.1%
U.S. Treasury Note.............................. 8.625% 10/15/95 $ 52,000 $ 52,169,656
U.S. Treasury Note.............................. 3.875% 10/31/95 51,360 51,214,963
U.S. Treasury Note.............................. 5.125% 11/15/95 25,665 25,634,073
U.S. Treasury Note.............................. 8.500% 11/15/95 22,380 22,499,889
U.S. Treasury Note.............................. 4.250% 11/30/95 26,820 26,731,499
U.S. Treasury Note.............................. 9.250% 1/15/96 13,430 13,599,017
U.S. Treasury Note.............................. 4.000% 1/31/96 260 258,229
U.S. Treasury Note.............................. 7.875% 2/15/96 1,035 1,044,801
------------
193,152,127
------------
U.S. TREASURY BILLS -- 42.2%
U.S. Treasury Bill.............................. 5.51%* 9/21/95 65,815 65,617,353
U.S. Treasury Bill.............................. 5.66%* 10/05/95 7,509 7,469,959
U.S. Treasury Bill.............................. 5.55%* 10/19/95 49,328 48,971,825
U.S. Treasury Bill.............................. 5.426%* 11/24/95 20,934 20,675,849
------------
142,734,986
------------
TOTAL INVESTMENTS (AMORTIZED COST
$335,887,113) -- 99.3%.......................... 335,887,113
Other assets in excess of liabilities -- 0.7%.... 2,371,808
------------
NET ASSETS -- 100%............................... $338,258,921
==============
</TABLE>
- ---------------
* Effective yield.
See Notes to Financial Statements.
20
<PAGE> 16
(This page intentionally left blank)
<PAGE> 17
PACIFIC HORIZON FUNDS, INC.
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
August 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRIME
FUND
--------------
<S> <C>
ASSETS:
Investments in securities, at value (amortized cost
$4,063,412,439, $808,428,869, $458,166,562 and $335,887,113,
respectively)................................................. $4,063,412,439
Repurchase agreements (amortized cost $788,505,000,
$1,688,161,000, $155,437,000 and $0, respectively)............ 788,505,000
Receivable from advisor......................................... 265,007
Cash............................................................ --
Interest receivable............................................. 9,105,144
Deferred organization costs and prepaid expenses................ 130,577
--------------
Total assets...................................................... 4,861,418,167
--------------
LIABILITIES:
Advisory fees payable........................................... 384,781
Administration fees payable..................................... 416,798
Special management fees payable (Pacific Horizon Shares)........ 467,065
Service Organization fees payable (Horizon Service Shares)...... 300,327
Due to custodian................................................ 2,470
Dividends payable............................................... 17,564,415
Payable for investment securities purchased..................... 91,501,885
Accrued legal fees.............................................. 56,203
Other accrued expenses.......................................... 782,254
--------------
Total liabilities................................................. 111,476,198
--------------
NET ASSETS........................................................ $4,749,941,969
==============
Shares Outstanding ($0.001 par value)
Pacific Horizon Shares.......................................... 1,727,526,761
Horizon Shares.................................................. 1,744,656,091
Horizon Service Shares.......................................... 1,280,734,442
--------------
Total Shares Outstanding 4,752,917,294
==============
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE.... $1.00
====
COMPOSITION OF NET ASSETS:
Shares of common stock, at par.................................. $ 4,752,917
Additional paid-in capital...................................... 4,747,948,369
Accumulated undistributed net investment income................. 1,297,567
Accumulated net realized losses................................. (4,056,884)
--------------
NET ASSETS, AUGUST 31, 1995....................................... $4,749,941,969
==============
</TABLE>
- ---------------
See Notes to Financial Statements.
22
<PAGE> 18
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY
TREASURY GOVERNMENT ONLY
FUND FUND FUND
-------------- ------------ ------------
<S> <C> <C> <C>
$ 808,428,869 $458,166,562 $335,887,113
1,688,161,000 155,437,000 --
123,796 -- --
-- 536 71,789
6,857,429 840,820 3,778,669
171,689 248,861 124,551
-------------- ------------ ------------
2,503,742,783 614,693,779 339,862,122
-------------- ------------ ------------
192,555 53,005 27,447
208,135 53,005 27,447
334,400 82,890 46,510
140,048 58,255 30,008
760 -- --
10,098,918 2,720,162 1,371,448
-- 19,914,500 --
55,890 15,223 17,853
169,783 97,335 82,488
-------------- ------------ ------------
11,200,489 22,994,375 1,603,201
-------------- ------------ ------------
$2,492,542,294 $591,699,404 $338,258,921
============== ============ ============
1,182,787,663 282,788,744 188,594,333
669,693,469 63,801,554 --
640,517,077 245,802,988 149,748,437
-------------- ------------ ------------
2,492,998,209 592,393,286 338,342,770
============== ============ ============
$1.00 $1.00 $1.00
============== ============ ============
$ 2,492,998 $ 592,393 $ 338,343
2,489,529,524 591,800,893 338,004,427
667,877 340,540 --
(148,105) (1,034,422) (83,849)
-------------- ------------ ------------
$2,492,542,294 $591,699,404 $338,258,921
============== ============ ============
</TABLE>
23
<PAGE> 19
PACIFIC HORIZON FUNDS, INC.
- --------------------------------------------------------------------------------
Statement of Operations
For the six months ended August 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY
PRIME TREASURY GOVERNMENT ONLY
FUND FUND FUND FUND
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest......................... $95,586,299 $62,929,744 $23,202,670 $8,818,426
----------- ----------- ----------- ----------
EXPENSES:
Advisory fees.................... 1,565,958 1,053,759 385,005 153,800
Administration fees.............. 1,559,594 1,053,759 385,005 153,800
Special management service fees
(Pacific Horizon Shares)....... 2,176,728 1,909,645 542,295 237,824
Service Organization fees
(Horizon Service Shares)....... 1,327,473 522,213 321,343 198,699
Custodian fees and expenses...... 215,702 202,138 105,246 46,737
Transfer agent fees and
expenses....................... 156,613 47,033 51,020 35,039
Insurance expense................ 61,846 48,729 10,208 6,359
Membership fees.................. 54,435 46,062 24,226 26,416
Directors' fees.................. 49,365 36,846 18,283 9,124
Audit fees....................... 27,661 26,493 13,148 7,996
Legal fees....................... 20,397 23,207 20,090 22,772
Reports to shareholders.......... 12,919 1,658 7,975 6,486
Registration fees................ 12,392 71,135 87,507 7,867
Amortization of organization
costs.......................... -- 2,262 16,334 13,380
Other expenses................... 12,085 4,519 4,260 4,075
----------- ----------- ----------- ----------
7,253,168 5,049,458 1,991,945 930,374
Less: Fee waivers and expense
reimbursements................... -- -- (463,529) --
----------- ----------- ----------- ----------
7,253,168 5,049,458 1,528,416 930,374
----------- ----------- ----------- ----------
Net Investment Income.............. 88,333,131 57,880,286 21,674,254 7,888,052
REALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on
securities transactions........ (1,110,049) 90,617 41,229 31,017
----------- ----------- ----------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS........ $87,223,082 $57,970,903 $21,715,483 $7,919,069
=========== =========== =========== ==========
</TABLE>
- ---------------
See Notes to Financial Statements.
24
<PAGE> 20
(This page intentionally left blank)
<PAGE> 21
PACIFIC HORIZON FUNDS, INC.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRIME FUND
-------------------------------------
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, 1995 FEBRUARY 28,
(UNAUDITED) 1995
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS
Net investment income............................. $ 88,333,131 $ 138,770,401
Net realized gain (loss) on securities
transactions.................................... (1,110,049) (70,528,584)
---------------- ----------------
Net increase in net assets resulting from
operations........................................ 87,223,082 68,241,817
---------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT
INCOME:
Pacific Horizon Shares............................ (37,494,201) (45,136,378)
Horizon Shares.................................... (20,839,531) (56,633,687)
Horizon Service Shares............................ (29,685,776) (36,337,275)
---------------- ----------------
Total dividends to shareholders from net investment
income............................................ (88,019,508) (138,107,340)
---------------- ----------------
PORTFOLIO SHARE TRANSACTIONS:
(AT $1.00 PER SHARE) (NOTE 4)
Net proceeds from shares subscribed............... 12,197,520,811 22,779,590,840
Net asset value of shares issued to shareholders
in reinvestment of dividends.................... 34,500,110 44,544,475
Cost of shares redeemed........................... (10,096,709,924) (26,110,723,254)
---------------- ----------------
Net increase (decrease) in net assets from
Portfolio share transactions...................... 2,135,310,997 (3,286,587,939)
---------------- ----------------
Increase due to capital contribution from
investment advisor (Note 3)....................... -- 77,411,877
---------------- ----------------
TOTAL INCREASE (DECREASE).......................... 2,134,514,571 (3,279,041,585)
NET ASSETS:
Beginning of year................................. 2,615,427,398 5,894,468,983
---------------- ----------------
End of year (including undistributed net
investment income of $1,297,567 and $983,944,
respectively, for the Prime Fund, $667,877 and
$667,877, respectively, for the Treasury Fund
and $340,540 and $148,038, respectively, for the
Government Fund................................. $ 4,749,941,969 $ 2,615,427,398
=============== ===============
</TABLE>
- ---------------
See Notes to Financial Statements.
26
<PAGE> 22
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY FUND GOVERNMENT FUND
--------------------------------------- -------------------------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
AUGUST 31, 1995 YEAR ENDED AUGUST 31, 1995 YEAR ENDED
(UNAUDITED) FEBRUARY 28, 1995 (UNAUDITED) FEBRUARY 28, 1995
--------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
$ 57,880,286 $ 87,571,768 $ 21,674,254 $ 28,514,766
90,617 505,457 41,229 (6,104,207)
--------------- ------------------- ------------------- -------------------
57,970,903 88,077,225 21,715,483 22,410,559
--------------- ------------------- ------------------- -------------------
(32,251,238) (47,797,370) (9,277,319) (10,270,344)
(14,214,391) (23,889,473) (5,094,245) (7,955,039)
(11,414,657) (15,884,925) (7,110,188) (10,141,345)
--------------- ------------------- ------------------- -------------------
(57,880,286) (87,571,768) (21,481,752) (28,366,728)
--------------- ------------------- ------------------- -------------------
5,640,667,830 8,879,909,861 2,818,362,848 5,672,050,494
7,308,280 9,576,672 11,828,907 9,946,142
(5,120,580,283) (9,531,263,412) (3,117,647,792) (5,652,649,134)
--------------- ------------------- ------------------- -------------------
527,395,827 (641,776,879) (287,456,037) 29,347,502
--------------- ------------------- ------------------- -------------------
-- -- -- 5,500,000
--------------- ------------------- ------------------- -------------------
527,486,444 (641,271,422) (287,222,306) 28,891,333
1,965,055,850 2,606,327,272 878,921,710 850,030,377
--------------- ------------------- ------------------- -------------------
$ 2,492,542,294 $ 1,965,055,850 $ 591,699,404 $ 878,921,710
============== =============== ============== ===============
</TABLE>
27
<PAGE> 23
PACIFIC HORIZON FUNDS, INC.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY ONLY FUND
-----------------------------------------
SIX MONTHS
ENDED
AUGUST 31, 1995 YEAR ENDED
(UNAUDITED) FEBRUARY 28, 1995
----------------- -------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS
Net investment income.............................. $ 7,888,052 $ 11,678,458
Net realized gain (loss) on securities
transactions..................................... 31,017 (48,264)
----------------- -------------------
Net increase in net assets resulting from
operations......................................... 7,919,069 11,630,194
----------------- -------------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT
INCOME:
Pacific Horizon Shares............................. (3,779,402) (2,335,606)
Horizon Shares..................................... -- --
Horizon Service Shares............................. (4,108,650) (9,342,852)
----------------- -------------------
Total dividends to shareholders from net investment
income............................................. (7,888,052) (11,678,458)
----------------- -------------------
PORTFOLIO SHARE TRANSACTIONS:
(AT $1.00 PER SHARE) (NOTE 6)
Net proceeds from shares subscribed................ 978,885,250 1,440,503,813
Net asset value of shares issued to shareholders in
reinvestment of dividends........................ 4,600,642 9,877,274
Cost of shares redeemed............................ (929,958,734) (1,509,340,461)
----------------- -------------------
Net increase (decrease) in net assets from Portfolio
share transactions................................. 53,527,158 (58,959,374)
----------------- -------------------
TOTAL INCREASE (DECREASE)........................... 53,558,175 (59,007,638)
NET ASSETS:
Beginning of year.................................. 284,700,746 343,708,384
----------------- -------------------
End of year........................................ $ 338,258,921 $ 284,700,746
============== ===============
</TABLE>
- ---------------
See Notes to Financial Statements.
28
<PAGE> 24
PACIFIC HORIZON FUNDS, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 -- GENERAL
Pacific Horizon Funds, Inc. (the "Fund"), a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended (the "Act"), as
an open-end management investment company. At August 31, 1995, the Fund operated
as a series company comprising sixteen portfolios. The accompanying financial
statements and notes are those of the Pacific Horizon Prime Fund (the "Prime
Fund"), Pacific Horizon Treasury Fund (the "Treasury Fund"), Pacific Horizon
Government Fund (the "Government Fund") and Pacific Horizon Treasury Only Fund
(the "Treasury Only Fund") (collectively, the "Portfolios") only.
The Prime Fund, the Government Fund and the Treasury Fund issue three
classes of shares (Pacific Horizon Shares, Horizon Shares and Horizon Service
Shares) while the Treasury Only Fund issues two classes of shares (Pacific
Horizon Shares and Horizon Service Shares). Pacific Horizon Shares, Horizon
Shares and Horizon Service Shares are substantially the same except that Pacific
Horizon Shares bear the fees payable under the Fund's Special Management
Services Agreement at an annual rate of 0.32% of the average daily net asset
value of the outstanding Pacific Horizon Shares while Horizon Service Shares
bear the fees payable, under the Shareholder Services Plan, to institutions
("Service Organizations"), that provide support services to their clients who
beneficially own such shares. Such fees are payable at an annual rate of 0.25%
of the average daily net asset value of the outstanding Horizon Service Shares.
Bank of America National Trust and Savings Association ("Bank of America"),
a subsidiary of BankAmerica Corporation, serves as the Fund's investment
adviser. Concord Holding Corporation ("Concord") serves as the Fund's
administrator and Concord Financial Group, Inc. (the "Distributor"), a
wholly-owned subsidiary of Concord, serves as the distributor of the Fund's
shares.
On March 29, 1995, a merger agreement was approved by the Shareholders of
Concord whereby Concord became a wholly owned subsidiary of the BISYS Group,
Inc. ("BISYS") and continues to serve as administrator and distributor to the
Fund on substantially identical terms as described below in Note 3.
On August 25, 1995, a special meeting of the shareholders of the 231 Funds
was held to consider the approval of an Agreement and Plan of Reorganization
whereby the two series portfolios were reorganized into corresponding series of
the Pacific Horizon Funds, Inc.
29
<PAGE> 25
Agreement and Plan of Reorganization -- the shareholders of each portfolio
approved an Agreement and Plan of Reorganization with respect to each portfolio
as follows:
<TABLE>
<CAPTION>
BROKER
IN FAVOR OPPOSED ABSTAIN NON-VOTES
----------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Prime Fund....... 815,483,528 1,680,064 14,766,808 0
Treasury Fund.... 103,015,140 0 0 0
</TABLE>
As a result on August 28, 1995, the 231 Prime Fund -- Institutional Shares
(the "231 Prime Institutional Shares") and the 231 Prime Fund -- Service Shares
(the "231 Prime Service Shares") were reorganized with the Prime Fund, in a
tax-free reorganization. In addition, the 231 Treasury Fund -- Institutional
Shares (the "231 Treasury Institutional Shares") and the 231 Treasury
Fund -- Service Shares (the "231 Treasury Service Shares") were reorganized with
the Treasury Fund, in a tax-free reorganization. Pursuant to the terms of the
reorganization, the 231 Prime Institutional Shares and 231 Prime Service Shares
transferred all of their assets and liabilities to the Prime Fund in exchange
for Horizon Shares and Horizon Service Shares, respectively, of the Prime Fund
with a value equivalent to the net value of the assets and liabilities so
transferred and the 231 Treasury Institutional Shares and 231 Treasury Service
Shares transferred all of their assets and liabilities to the Treasury Fund in
exchange for Horizon Shares and Horizon Service Shares, respectively, of the
Treasury Fund with a value equivalent to the net value of the assets and
liabilities so transferred. In connection with the reorganization, the 231 Prime
Fund Institutional Shares shareholders received 971,168,989 Horizon Shares of
the Prime Fund, the 231 Prime Fund Service Shares shareholders received
140,144,817 Service Shares of the Prime Fund, the 231 Treasury Fund
Institutional Shares shareholders received 117,280,359 Horizon Shares of the
Treasury Fund and the 231 Treasury Service Shares shareholders received
138,004,108 Service Shares of the Treasury Fund. The aggregate net assets of the
231 Prime Fund and the Prime Fund immediately prior to the reorganization were
$1,110,157,724 and $3,755,249,822, respectively, while the aggregate net assets
of the 231 Treasury Fund and the Treasury Fund were $255,284,467 and
$2,230,899,555, respectively. Immediately following the reorganization the net
assets of the Prime Fund and the Treasury Fund were $4,846,823,637 and
$2,480,722,991, respectively.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
Each Portfolio seeks to maintain a net asset value per share of $1.00,
although there is no assurance that it will be able to do so on a continuous
basis, and has adopted certain investment, portfolio valuation and dividend and
distribution policies designed to enable it to do so.
A) PORTFOLIO VALUATIONS:
Portfolio securities are valued at amortized cost, which approximates market
value. The amortized cost method involves valuing a security at its cost on the
date of purchase and
30
<PAGE> 26
thereafter assuming a constant amortization to maturity of the difference
between the principal amount due at maturity and cost.
B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis. Realized gains
and losses from securities transactions are recorded on the identified cost
basis. Interest income, including accretion of discount and amortization of
premium, is accrued daily.
C) REPURCHASE AGREEMENTS (PRIME FUND, TREASURY FUND, AND GOVERNMENT FUND):
The Fund's custodian and other banks acting in a subcustodian capacity take
possession of the collateral pledged for investments in repurchase agreements.
The underlying collateral is valued daily on a mark-to-market basis to determine
that the value, including accrued interest, is not less than 102% of the
repurchase price, including accrued interest. In the event of the seller's
default of the obligation to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. Under
certain circumstances, in the event of default or bankruptcy by the other party
to the agreement, realization and/or retention of the collateral may be subject
to legal proceedings.
D) DIVIDENDS TO SHAREHOLDERS:
Dividends are declared daily to shareholders of record at the close of
business on the day of declaration and paid monthly. Distributions of net
realized gains, if any, will be paid at least annually. However, to the extent
that net realized gains of any Portfolio can be offset by capital loss
carryovers from that Portfolio, such gains will not be distributed. Dividends
and distributions are recorded by each Portfolio on the ex-dividend date.
The amounts of dividends from net investment income and of distributions
from net realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
E) FEDERAL INCOME TAXES:
For federal income tax purposes, each Portfolio is treated as a separate
entity for the purpose of determining the Portfolio's qualification as a
regulated investment company under the Internal Revenue Code (the "Code"). It is
the policy of the Fund that each Portfolio comply with the requirements of the
Code applicable to regulated investment companies, including the requirement
that each Portfolio distribute substantially all of its taxable income to
shareholders. Therefore, no federal income tax provision is required. At
February 28, 1995, the cost of securities in each Portfolio for federal income
tax purposes was substantially the same as for financial reporting purposes.
31
<PAGE> 27
At February 28, 1995, the following Portfolios had the following capital
loss carryovers:
<TABLE>
<CAPTION>
CAPITAL
LOSS
FUND CARRYOVER EXPIRATION DATE
- -------------------------------------------------- ---------- ----------------
<S> <C> <C>
Prime Fund........................................ $ 22,098 1999
1,171,786 2002
1,570,608 2003
----------
$2,764,492
==========
Treasury Fund..................................... $ 239,007 2002
==========
Government Fund................................... $ 129,811 2002
943,990 2003
----------
$1,073,801
==========
Treasury Only Fund................................ $ 21,276 2002
92,145 2003
----------
$ 113,421
==========
</TABLE>
To the extent these capital loss carryovers are used to offset future net
realized gains on securities transactions, the gains so offset will not be
distributed to shareholders, to the extent provided by the regulations under the
Code. Capital losses incurred after October 31, 1994 and within the fiscal year
are deemed to arise on the first business day of the following fiscal year. The
Government Fund incurred and elected to defer such losses of $2,264.
F)OTHER:
The Fund accounts separately for the assets, liabilities and operations of
each Portfolio. Expenses directly attributable to each Portfolio are charged to
that Portfolio, while expenses which are attributable to more than one portfolio
of the Fund are allocated among the respective portfolios. The investment income
and the expenses (other than expenses incurred under the Special Management
Services Agreement and Shareholder Services Plan) of each Portfolio are
allocated to the separate classes of shares based upon their relative net asset
value.
NOTE 3 -- AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Portfolios have an Investment Advisory Agreement with Bank of America
and a Basic Administrative Services Agreement with Concord. Bank of America is
entitled to a fee from each Portfolio, which is accrued daily and payable
monthly, at an annual rate of 0.10% of each Portfolio's first $3 billion of net
assets, plus 0.09% of each Portfolio's next $2 billion of net assets, plus 0.08%
of each Portfolio's net assets in excess of $5 billion. Concord is entitled to a
fee from each Portfolio, which is accrued daily and payable monthly, at an
annual rate of 0.10% of each Portfolio's first $7 billion of net assets, plus
0.09% of each Portfolio's next $3 billion of net assets plus 0.08% of each
Portfolio's net assets in excess of $10 billion. For the
32
<PAGE> 28
six months ended August 31, 1995, Bank of America and Concord voluntarily waived
fees from the Government Fund in the amount of $276,490 and $182,261,
respectively.
In addition, for the six months ended August 31, 1995, Bank of America
agreed to reimburse other operating expenses of the Government Fund in the
amount of $4,778.
The agreements provide that if, in any fiscal year, the aggregate expenses
of any Portfolio (generally excluding interest, taxes, brokerage commissions and
extraordinary expenses) exceed the most restrictive expense limitation of any
state having jurisdiction over that Portfolio, then Bank of America and Concord
will reimburse the Portfolio for any such excess expenses. As of August 31,
1995, the most restrictive expense limitation is believed to limit expenses to
2.5% of the first $30 million of each Portfolio's average daily net assets, plus
2.0% of the next $70 million of such assets plus 1.5% of such assets in excess
of $100 million. The agreements provide that such reimbursements will be
estimated and paid on a monthly basis. No reimbursement was required for the six
months ended August 31, 1995.
The Portfolios have entered into a Special Management Service Agreement
("Services Agreement") pursuant to which they have agreed to pay Bank of America
and Concord a fee for various services relating to the Pacific Horizon Shares.
The special management services fee is accrued daily at an annual rate of 0.32%
of the average daily net asset value of the outstanding Pacific Horizon Shares
of each Portfolio, and is borne solely by the Pacific Horizon Shares. For the
six months ended August 31, 1995, the Portfolios were advised that Concord, Bank
of America and their affiliates earned the following amounts pursuant to the
Services Agreement:
<TABLE>
<CAPTION>
AFFILIATES OF
BANK OF AFFILIATES BANK OF
FUND AMERICA CONCORD OF CONCORD AMERICA
- ------------------------------------------ ------- ------- ---------- -------------
<S> <C> <C> <C> <C>
Prime Fund................................ $7,687 $28,228 $182,285 $ 1,958,208
Treasury Fund............................. 2,879 10,798 30,278 1,865,648
Government Fund........................... -- 90 -- 542,291
Treasury Only Fund........................ 1,376 1,483 3,308 231,589
</TABLE>
The Portfolios have also adopted a Shareholder Services Plan (the "Horizon
Service Plan") pursuant to which Service Organizations agree to provide certain
services to their clients who are the beneficial owners of Horizon Service
Shares in return for payment by the Portfolios of a fee at an annual rate of
0.25% of the average daily net asset value of the Horizon Service Shares
outstanding from time to time. These payments are borne solely by the Horizon
Service Shares. Service Organizations may include the Distributor, Bank of
America and their affiliates. For the six months ended August 31, 1995, the
Portfolios were
33
<PAGE> 29
advised that affiliates of Bank of America earned the following amounts pursuant
to the Horizon Service Plan:
<TABLE>
<CAPTION>
FUND
- ------------------------------------------------------------------------
<S> <C>
Prime Fund.............................................................. $1,137,025
Treasury Fund........................................................... 502,886
Government Fund......................................................... 283,079
Treasury Only Fund...................................................... 168,747
</TABLE>
During the period from May 6, 1994 through July 12, 1994, the advisor
voluntarily contributed capital to the Prime Fund and the Government Fund in the
aggregate amount of approximately $77.4 million and $5.5 million, respectively.
The adviser received no shares of common stock or other consideration in
exchange for these contributions which increased net asset value. For tax
purposes, these capital contributions were applied against the realized losses
for the year ended February 28, 1995. Accordingly, such amounts have been
reclassified from additional paid-in capital against accumulated net realized
losses in the Statement of Assets and Liabilities.
For the six months ended August 31, 1995, the Prime Fund, Treasury Fund,
Government Fund and Treasury Only Fund incurred legal charges totaling $20,397,
$25,207, $20,090 and $22,772, respectively, which were earned by a law firm, a
partner of which serves as Secretary to the Fund. Certain officers of the Fund
are "affiliated persons" (as defined in the Act) of Concord.
Concord Financial Services Inc., a wholly owned subsidiary of Concord, acts
as transfer agent for the Horizon class of shares for the Portfolios. For the
six months ended August 31, 1995 Concord Financial Services received $10,018,
$8,342 and $7,718, respectively, from the Prime Fund, Treasury Fund and
Government Fund.
NOTE 4 -- DIRECTORS' COMPENSATION
As of March 1, 1995, each director is entitled to an annual retainer of
$25,000, plus $1,000 for each day the director participates in all or part of a
Board or Committee meeting and the Chairman of each Committee receives a
retainer of $1,000 for services as Chairman of the Committee. In addition, the
Fund's President is entitled to an annual salary of $40,000 for services as
President.
The Board also established a retirement plan (the "Retirement Plan") for
Directors. The Retirement Plan provides that each Director who dies or resigns
after five years of service as a director will be entitled to receive ten annual
payments each equal to the greater of: (i) 50% of the annual Director's retainer
that was payable during the year of that Director's death or resignation, or
(ii) 50% of the annual Director's retainer then in effect for Directors of the
Fund during the year of such payment. A Director who dies or resigns after nine
years of service as a director will be entitled to receive ten annual payments
equal to the greater of:
34
<PAGE> 30
(i) 100% of the annual Director's retainer that was payable during the year of
that Director's death or resignation, or (ii) 100% of the annual Director's
retainer then in effect for Directors of the Fund during the year of such
payment. In addition, the amount payable each year to a Director who dies or
resigns shall be increased by $1,000 for each year of service that the Director
served as Chairman of the Board. Each Director may receive any benefits payable
under the Retirement Plan, at his or her election, either in one lump sum
payment or ten annual installments. A Director's years of service for the
purpose of calculating the payments described above shall be based upon service
as a Director or Chairman after February 28, 1994.
NOTE 5 -- CONCENTRATION OF CREDIT RISK
The Prime Fund invests substantially all of its assets in a diversified
portfolio of high quality U.S. dollar-denominated money market instruments as
disclosed in the portfolio of investments by security type. The issuers'
abilities to meet their obligations may be affected by domestic and foreign
economic, regional and political developments.
35
<PAGE> 31
The Prime Fund had the following concentrations by industry sector at August
31, 1995 (as a percentage of total investment):
<TABLE>
<CAPTION>
<S> <C>
Banking...................................................................... 23.0%
Repurchase Agreements........................................................ 16.3
Brokerage Services........................................................... 14.7
Finance Companies............................................................ 11.5
Automobiles.................................................................. 8.1
Conglomerates................................................................ 6.6
Telecommunications........................................................... 3.3
Insurance.................................................................... 2.1
Household Furniture & Appliances............................................. 2.1
Agriculture.................................................................. 1.9
Utilities.................................................................... 1.7
Relocation Services.......................................................... 1.1
Business Equipment & Services................................................ 1.1
Consumer-Non Durables........................................................ 1.1
Federal Agency Notes......................................................... 1.1
Leasing...................................................................... 1.0
Chemicals.................................................................... 0.9
Textiles..................................................................... 0.9
Sovereign.................................................................... 0.5
Oil and Gas.................................................................. 0.5
Pharmaceuticals.............................................................. 0.4
Trucking..................................................................... 0.1
-----
100.0%
=====
</TABLE>
NOTE 6 -- CAPITAL SHARE TRANSACTIONS
At August 31, 1995, there were 200 billion shares of the Fund's $0.001 par
value Common Stock authorized, of which 44.4 billion shares were classified as
Class A Common Stock (Treasury Fund -- 15 billion Pacific Horizon Shares, 14.4
billion Horizon Shares and 15 billion Horizon Service Shares), 58 billion shares
were classified as Class B Common Stock (Prime Fund -- 15 billion Pacific
Horizon Shares, 28 billion Horizon Shares and 15 billion Horizon Service
Shares), 37 billion shares were classified as Class L Common Stock (Government
Fund -- 15 billion Pacific Horizon Shares, 7 billion Horizon Shares and 15
billion Horizon Service Shares) and 37 billion shares were classified as Class K
Common Stock (Treasury Only Fund -- 15 billion Pacific Horizon Shares, 7 billion
Horizon Shares and 15 billion Horizon Service Shares).
36
<PAGE> 32
Transactions in shares of each Portfolio (at $1.00 per share) for the
periods indicated are summarized below:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
AUGUST 31, 1995 PRIME TREASURY GOVERNMENT
(UNAUDITED) FUND FUND FUND
- --------------------------------------------- --------------- -------------- --------------
<S> <C> <C> <C>
PACIFIC HORIZON SHARES:
Shares sold................................. 2,937,338,015 1,783,305,872 730,553,806
Shares issued to shareholders in
reinvestment of dividends................. 18,384,796 3,304,591 4,367,486
Shares redeemed............................. (2,358,267,402) (1,736,591,768) (807,334,617)
--------------- -------------- --------------
Net increase (decrease) in Pacific Horizon
Shares...................................... 597,455,409 50,018,695 (72,413,325)
--------------- -------------- --------------
HORIZON SHARES:
Shares sold................................. 2,554,005,547 1,845,314,844 568,005,612
Shares issued to shareholders in
reinvestment of dividends................. 4,712,516 1,100,494 3,048,912
Shares issued in connection with
reorganization with 231 Funds............. 971,168,989 117,280,643 --
Shares redeemed............................. (2,408,204,594) (1,762,924,609) (742,785,866)
--------------- -------------- --------------
Net increase (decrease) in Horizon Shares.... 1,121,682,458 200,771,372 (171,731,342)
--------------- -------------- --------------
HORIZON SERVICE SHARES:
Shares sold................................. 5,594,863,443 1,756,762,363 1,519,803,430
Shares issued to shareholders in
reinvestment of dividends................. 11,402,798 2,903,195 4,412,509
Shares issued in connection with
reorganization with 231 Funds............. 140,144,817 138,004,108 --
Shares redeemed............................. (5,330,237,928) (1,621,063,906) (1,567,527,309)
--------------- -------------- --------------
Net increase (decrease) in Horizon Service
Shares...................................... 416,173,130 276,605,760 (43,311,370)
--------------- -------------- --------------
Total increase (decrease) in Portfolio
shares...................................... 2,135,310,997 527,395,827 (287,456,037)
================= ================ ================
</TABLE>
<TABLE>
<CAPTION>
TREASURY ONLY
FUND
--------------
<S> <C> <C> <C>
PACIFIC HORIZON SHARES:
Shares sold.................................. 450,920,059
Shares issued to shareholders in reinvestment
of dividends............................... 1,535,428
Shares redeemed.............................. (354,235,014)
--------------
Net increase in Pacific Horizon Shares........ 98,220,473
--------------
HORIZON SERVICE SHARES:
Shares sold.................................. 527,965,191
Shares issued to shareholders in reinvestment
of dividends............................... 3,065,214
Shares redeemed.............................. (575,723,720)
--------------
Net decrease in Horizon Service Shares........ (44,693,315)
--------------
Total increase in Portfolio shares............ 53,527,158
==================
</TABLE>
37
<PAGE> 33
<TABLE>
<CAPTION>
YEAR ENDED PRIME TREASURY GOVERNMENT
FEBRUARY 28, 1995 FUND FUND FUND
- --------------------------------------------- --------------- -------------- --------------
<S> <C> <C> <C>
PACIFIC HORIZON SHARES:
Shares sold................................. 5,272,091,603 3,121,913,879 2,002,378,412
Shares issued to shareholders in
reinvestment of dividends................. 19,756,810 3,689,780 2,572,553
Shares redeemed............................. (5,379,915,571) (3,570,873,713) (1,804,183,343)
--------------- -------------- --------------
Net (decrease) increase in Pacific Horizon
Shares...................................... (88,067,158) (445,270,054) 200,767,622
--------------- -------------- --------------
HORIZON SHARES:
Shares sold................................. 9,961,911,460 3,341,778,010 1,775,658,648
Shares issued to shareholders in
reinvestment of dividends................. 11,806,370 2,245,214 4,881,402
Shares redeemed............................. (13,196,902,924) (3,362,768,467) (1,914,876,241)
--------------- -------------- --------------
Net decrease in Horizon Shares............... (3,223,185,094) (18,745,243) (134,336,191)
--------------- -------------- --------------
HORIZON SERVICE SHARES:
Shares sold................................. 7,545,587,777 2,416,217,972 1,894,013,434
Shares issued to shareholders in
reinvestment of dividends................. 12,981,295 3,641,678 2,492,187
Shares redeemed............................. (7,533,904,759) (2,597,621,232) (1,933,589,550)
--------------- -------------- --------------
Net increase (decrease) in Horizon Service
Shares...................................... 24,664,313 (177,761,582) (37,083,929)
--------------- -------------- --------------
Total (decrease) increase in Portfolio
shares...................................... (3,286,587,939) (641,776,879) 29,347,502
================= ================ ================
</TABLE>
<TABLE>
<CAPTION>
TREASURY ONLY
FUND
--------------
<S> <C> <C> <C>
PACIFIC HORIZON SHARES:
Shares sold................................... 362,313,215
Shares issued to shareholders in reinvestment
of dividends................................ 1,251,054
Shares redeemed............................... (345,324,334)
--------------
Net increase in Pacific Horizon
Shares........................................ 18,239,935
--------------
HORIZON SERVICE SHARES:
Shares sold................................... 1,078,190,598
Shares issued to shareholders in reinvestment
of dividends................................ 8,626,220
Shares redeemed............................... (1,164,016,127)
--------------
Net decrease in Horizon Service Shares......... (77,199,309)
--------------
Total decrease in Portfolio shares............. (58,959,374)
================
</TABLE>
38
<PAGE> 34
PACIF IC HORIZON PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights++
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED -------------------------------------------------------------------
AUGUST 31, FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
1995 28, 28, 28, 29, 28,
(UNAUDITED) 1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PACIFIC HORIZON SHARES
Net asset value per share, beginning
of period.......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income.............. 0.0279 0.0424 0.0287 0.0340 0.0558 0.0762
Net realized gain (loss) on
securities....................... 0.0002 (0.0227) (0.0016) 0.0000 0.0005 (0.0001)
------ ------- ------- ------- ------- -------
Total income from investment
operations....................... 0.0281 0.0197 0.0271 0.0340 0.0563 0.0761
Less dividends from net investment
income............................. (0.0279) (0.0422) (0.0287) (0.0341) (0.0557) (0.0762)
Increase due to voluntary capital
contribution from investment
advisor (Note 3)................... 0.0000 0.0233 0.0000 0.0000 0.0000 0.0000
------ ------- ------- ------- ------- -------
Net change in net asset value per
share.............................. 0.0002 0.0008 (0.0016) (0.0001) 0.0006 (0.0001)
------ ------- ------- ------- ------- -------
Net asset value per share, end of
period............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ======= ======= ======= ======= =======
Total return........................ 2.82%*** 4.30%+ 2.91% 3.45% 5.72% 7.89%
Ratios/Supplemental Data:
Net assets, end of period
(millions)....................... $ 1,726 $ 1,129 $ 1,216 $ 992 $ 1,413 $ 1,086
Ratio of expenses to average net
assets........................... 0.56%** 0.51%* 0.52%* 0.55% 0.56% 0.56%
Ratio of net investment income to
average net assets............... 5.53%** 4.19%* 2.86%* 3.42% 5.51% 7.61%
</TABLE>
- ---------------
++ Security Pacific National Bank served as investment advisor through April
21, 1992. Bank of America National Trust and Savings Association served as
investment advisor commencing April 22, 1992.
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the
ratio of net investment income to average net assets by 0.06% for the year
ended February 28, 1995 and 0.01% for the year ended February 28, 1994.
+ Total return includes the effect of the voluntary capital contribution from
the investment advisor (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
** Annualized.
*** Not annualized.
See Notes to Financial Statements.
39
<PAGE> 35
PACIF IC HORIZON PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights++
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, -------------------------------------------------------------------------
1995 FEBRUARY 28, FEBRUARY 28, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
(UNAUDITED) 1995 1994 1993 1992 1991
----------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
HORIZON SHARES
Net asset value per share,
beginning of period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ --------- --------- --------- --------- ---------
Income from Investment
Operations:
Net investment income......... 0.0290 0.0461 0.0319 0.0372 0.0590 0.0794
Net realized gain (loss) on
securities.................. 0.0002 (0.0232) (0.0016) 0.0000 0.0005 (0.0001)
------ --------- --------- --------- --------- ---------
Total income from investment
operations.................. 0.0292 0.0229 0.0303 0.0372 0.0595 0.0793
Less dividends from net
investment income............. (0.0290) (0.0454) (0.0319) (0.0372) (0.0589) (0.0794)
Increase due to voluntary
capital contribution from
investment advisor (Note 3)... 0.0000 0.0233 0.0000 0.0000 0.0000 0.0000
------ --------- --------- --------- --------- ---------
Net change in net asset value
per share..................... 0.0002 0.0008 (0.0016) 0.0000 0.0006 (0.0001)
------ --------- --------- --------- --------- ---------
Net asset value per share, end
of period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ========= ========= ========= ========= =========
Total return................... 2.98%*** 4.63%+ 3.24% 3.78% 6.06% 8.23%
Ratios/Supplemental Data:
Net assets, end of period
(millions).................. $ 1,744 $ 622 $ 3,840 $ 10,301 $ 2,855 $ 487
Ratio of expenses to average
net assets.................. 0.24%** 0.16%* 0.20%* 0.23% 0.24% 0.24%
Ratio of net investment income
to average net assets....... 5.89%** 4.09%* 3.19%* 3.59% 5.59% 7.91%
</TABLE>
- ---------------
++ Security Pacific National Bank served as investment advisor through
April 21, 1992. Bank of America National Trust and Savings Association
served as investment advisor commencing April 22, 1992.
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the
ratio of net investment income to average net assets by 0.06%, for the
years ended February 28, 1995 and 0.01% for the year ended February 28,
1994.
+ Total return includes the effect of the voluntary capital contribution from
the investment advisor (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
** Annualized.
*** Not annualized.
See Notes to Financial Statements.
40
<PAGE> 36
PACIF IC HORIZON PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights++
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, -----------------------------------------------------------------------------
1995 FEBRUARY 28, FEBRUARY 28, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
(UNAUDITED) 1995 1994 1993 1992 1991
----------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
HORIZON SERVICE SHARES
Net asset value per share,
beginning of period............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------- ------- ------- ------- -------
Income from Investment
Operations:
Net investment income........... 0.0282 0.0431 0.0294 0.0345 0.0565 0.0769
Net realized gain (loss) on
securities.................... 0.0002 (0.0227) (0.0016) 0.0000 0.0005 (0.0001)
------ ------- ------- ------- ------- -------
Total income from investment
operations.................... 0.0284 0.0204 0.0278 0.0345 0.0570 0.0768
Less dividends from net
investment income............... (0.0282) (0.0429) (0.0294) (0.0347) (0.0564) (0.0769)
Increase due to voluntary capital
contribution from investment
advisor (Note 3)................ 0.0000 0.0233 0.0000 0.0000 0.0000 0.0000
------ ------- ------- ------- ------- -------
Net change in net asset value per
share........................... 0.0002 0.0008 (0.0016) (0.0002) 0.0006 (0.0001)
------ ------- ------- ------- ------- -------
Net asset value per share, end of
period.......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ======= ======= ======= ======= =======
Total return..................... 2.86%*** 4.37%+ 2.98% 3.53% 5.79% 7.96%
Ratios/Supplemental Data:
Net assets, end of period
(millions).................... $ 1,280 $ 864 $ 839 $ 793 $ 859 $ 560
Ratio of expenses to average net
assets........................ 0.49%** 0.44%* 0.45%* 0.48% 0.49% 0.49%
Ratio of net investment income
to average net assets......... 5.61%** 4.31%* 2.94%* 3.49% 5.58% 7.64%
</TABLE>
- ---------------
++ Security Pacific National Bank served as investment advisor through April
21, 1992. Bank of America National Trust and Savings Association served as
investment advisor commencing April 22, 1992.
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the
ratio of net investment income to average net assets by 0.06% for the year
ended February 28, 1995 and 0.01% for the year ended February 28, 1994.
+ Total return includes the effect of the voluntary capital contribution from
the investment adviser (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
** Annualized.
*** Not annualized.
See Notes to Financial Statements.
41
<PAGE> 37
PACIFIC HORIZON TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED
AUGUST -------------------------------------------------------------
31, FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
1995 28, 28, 28, 29, 28,
(UNAUDITED) 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PACIFIC HORIZON SHARES
Net asset value per share, beginning of
period................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................. 0.0273 0.0405 0.0262 0.0309 0.0512 0.0731
Net realized gain (loss) on
securities.......................... 0.0000 0.0001 (0.0002) 0.0000 0.0002 0.0006
-------- -------- -------- -------- -------- --------
Total income from investment
operations......................... 0.0273 0.0406 0.0260 0.0309 0.0514 0.0737
Less dividends from net investment
income................................ (0.0273) (0.0405) (0.0262) (0.0311) (0.0513) (0.0733)
-------- -------- -------- -------- -------- --------
Net change in net asset value
per share............................. 0.0000 0.0001 (0.0002) (0.0002) 0.0001 0.0004
-------- -------- -------- -------- -------- --------
Net asset value per share, end of
period................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total return........................... 2.76%*** 4.13% 2.65% 3.15% 5.25% 7.58%
Ratios/Supplemental Data:
Net assets, end of period
(millions).......................... $ 1,182 $ 1,132 $ 1,577 $ 1,746 $ 2,300 $ 1,663
Ratio of expenses to average
net assets.......................... 0.56%++ 0.55% 0.55% 0.56% 0.56% 0.55%
Ratio of net investment income to
average net assets.................. 4.27%++ 3.99% 2.62% 3.11% 5.07% 7.29%
</TABLE>
- ---------------
* Security Pacific National Bank served as investment adviser through April
21, 1992. Bank of America National Trust and Savings Association served as
investment adviser commencing April 22, 1992.
++ Annualized.
*** Not annualized.
See Notes to Financial Statements.
42
<PAGE> 38
PACIFIC HORIZON TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED
AUGUST -------------------------------------------------------------
31, FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
1995 28, 28, 28, 29, 28,
(UNAUDITED) 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
HORIZON SHARES
Net asset value per share, beginning of
period................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income................. 0.0289 0.0437 0.0294 0.0341 0.0543 0.0764
Net realized gain (loss) on
securities.......................... 0.0000 0.0001 (0.0002) 0.0002 0.0003 0.0005
--------- --------- --------- --------- --------- ---------
Total income from investment
operations......................... 0.0289 0.0438 0.0292 0.0343 0.0546 0.0769
Less dividends from net investment
income................................ (0.0289) (0.0437) (0.0294) (0.0343) (0.0545) (0.0765)
--------- --------- --------- --------- --------- ---------
Net change in net asset value
per share............................. 0.0000 0.0001 (0.0002) 0.0000 0.0001 0.0004
--------- --------- --------- --------- --------- ---------
Net asset value per share, end of
period................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total return........................... 2.92%*** 4.46% 2.98% 3.48% 5.59% 7.92%
Ratios/Supplemental Data:
Net assets, end of period
(millions).......................... $ 670 $ 469 $ 487 $ 598 $ 432 $ 455
Ratio of expenses to average net
assets.............................. 0.24%++ 0.23% 0.23% 0.24% 0.24% 0.23%
Ratio of net investment income to
average net assets.................. 4.75%++ 4.36% 2.94% 3.38% 5.44% 7.57%
</TABLE>
- ---------------
* Security Pacific National Bank served as investment adviser through
April 21, 1992. Bank of America National Trust and Savings Association
served as investment adviser commencing April 22, 1992.
++ Annualized.
*** Not annualized.
See Notes to Financial Statements.
43
<PAGE> 39
PACIFIC HORIZON TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED
AUGUST -------------------------------------------------------------
31, FEBRUARY FEBRUARY FEBRUARY FEBRUARY FEBRUARY
1995 28, 28, 28, 29, 28,
(UNAUDITED) 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
HORIZON SERVICE SHARES
Net asset value per share, beginning
of period........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income............... 0.0276 0.0412 0.0269 0.0316 0.0517 0.0739
Net realized gain (loss) on
securities........................ 0.0000 0.0001 (0.0002) 0.0002 0.0004 0.0005
--------- --------- --------- --------- --------- ---------
Total income from investment
operations....................... 0.0276 0.0413 0.0267 0.0318 0.0521 0.0744
Less dividends from net investment
income.............................. (0.0276) (0.0412) (0.0269) (0.0318) (0.0520) (0.0740)
--------- --------- --------- --------- --------- ---------
Net change in net asset value
per share........................... 0.0000 0.0001 (0.0002) 0.0000 0.0001 0.0004
--------- --------- --------- --------- --------- ---------
Net asset value per share, end of
period.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total return......................... 2.79%*** 4.20% 2.72% 3.23% 5.33% 7.65%
Ratios/Supplemental Data:
Net assets, end of period
(millions)........................ $ 641 $ 364 $ 541 $ 369 $ 381 $ 304
Ratio of expenses to average net
assets............................ 0.49%++ 0.48% 0.48% 0.49% 0.49% 0.48%
Ratio of net investment income to
average net assets................ 4.30%++ 4.01% 2.69% 3.28% 5.13% 7.31%
</TABLE>
- ---------------
* Security Pacific National Bank served as investment adviser through April
21, 1992. Bank of America National Trust and Savings Association served as
investment adviser commencing April 22, 1992.
++ Annualized.
*** Not annualized.
See Notes to Financial Statements.
44
<PAGE> 40
PACIF IC HORIZON GOVERNMENT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, ---------------------------
1995 FEBRUARY 28, FEBRUARY 28,
(UNAUDITED) 1995 1994
----------- ------------ ------------
<S> <C> <C> <C>
PACIFIC HORIZON SHARES
Net asset value per share, beginning of
period................................. $ 1.00 $ 1.00 $ 1.00
----------- ------------ ------------
Income from Investment Operations:
Net investment income.................. 0.0276 0.0421 0.0288
Net realized loss on securities........ (0.0002) (0.0091) (0.0006)
----------- ------------ ------------
Total income from investment
operations........................... 0.0274 0.0330 0.0282
Less dividends from net investment
income................................. (0.0275) (0.0420) (0.0288)
Increase due to voluntary capital
contribution from investment adviser
(Note 3)............................... 0.0000 0.0085 0.0000
----------- ------------ ------------
Net change in net asset value per
share.................................. (0.0001) (0.0005) (0.0006)
----------- ------------ ------------
Net asset value per share, end of
period................................. $ 1.00 $ 1.00 $ 1.00
============ ============ ============
Total return............................. 3.23%*** 4.28%** 2.92%
Ratios/Supplemental Data:
Net assets, end of period (000)........ $ 282,457 $354,828 $154,349
Ratio of expenses to average net
assets*.............................. 0.50%+ 0.50% 0.60%
Ratio of net investment income to
average net assets*.................. 5.47%+ 4.27% 2.88%
</TABLE>
- ---------------
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the
ratio of net investment income to average net assets by 0.12%
(annualized), 0.08% and 0.002%, respectively.
** Total return includes the effect of the voluntary capital contribution from
the investment adviser (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
+ Annualized.
*** Not annualized.
See Notes to Financial Statements.
45
<PAGE> 41
PACIF IC HORIZON GOVERNMENT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
AUGUST 31, YEAR ENDED FEBRUARY
1995 FEBRUARY 28,
(UNAUDITED) 28, 1995 1994**
----------- ---------- --------
<S> <C> <C> <C>
HORIZON SHARES
Net asset value per share, beginning of
period................................. $ 1.00 $ 1.00 $ 1.00
----------- ---------- --------
Income from Investment Operations:
Net investment income.................. 0.0293 0.0454 0.0227
Net realized loss on securities........ (0.0003) (0.0092) (0.0006)
----------- ---------- --------
Total income from investment
operations........................... 0.0290 0.0362 0.0221
Less dividends from net investment
income................................. (0.0291) (0.0452) (0.0227)
Increase due to voluntary capital
contribution from investment adviser
(Note 3)............................... 0.0000 0.0085 0.0000
----------- ---------- --------
Net change in net asset value per
share.................................. (0.0001) (0.0005) (0.0006)
----------- ---------- --------
Net asset value per share, end of
period................................. $ 1.00 $ 1.00 $ 1.00
============ =========== ============
Total return............................. 3.42%*** 4.61%++ 2.29%
Ratios/Supplemental Data:
Net assets, end of period (000)........ $ 63,727 $235,285 $369,664
Ratio of expenses to average net
assets*.............................. 0.15%+ 0.17% 0.28%+
Ratio of net investment income to
average net assets*.................. 5.86%+ 4.67% 3.17%+
</TABLE>
- ---------------
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the
ratio of net investment income to average net assets by 0.14% (annualized),
0.08% and 0.002% (annualized), respectively.
** For the period June 14, 1993 (initial issuance of Horizon Shares) through
February 28, 1994.
+ Annualized.
++ Total return includes the effect of the voluntary capital contribution from
the investment adviser (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
*** Not annualized.
See Notes to Financial Statements.
46
<PAGE> 42
PACIF IC HORIZON GOVERNMENT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, ------------------------
1995 FEBRUARY 28, FEBRUARY
(UNAUDITED) 1995 28, 1994
----------- ------------ --------
<S> <C> <C> <C>
HORIZON SERVICE SHARES
Net asset value per share, beginning of
period................................. $ 1.00 $ 1.00 $ 1.00
----------- ------------ --------
Income from Investment Operations:
Net investment income.................. 0.0279 0.0429 0.0300
Net realized loss on securities........ (0.0002) (0.0092) (0.0006)
----------- ------------ --------
Total income from investment
operations............................. 0.0277 0.0337 0.0294
Less dividends from net investment
income................................. (0.0278) (0.0427) (0.0300)
Increase due to voluntary capital
contribution from investment adviser
(Note 3)............................... 0.0000 0.0085 0.0000
----------- ------------ --------
Net change in net asset value per
share.................................. (0.0001) (0.0005) (0.0006)
----------- ------------ --------
Net asset value per share, end of
period................................. $ 1.00 $ 1.00 $ 1.00
============ ============ ========
Total return............................. 3.27%*** 4.35%** 3.04%
Ratios/Supplemental Data:
Net assets, end of period (000)........ $ 245,515 $288,809 $326,017
Ratio of expenses to average net
assets*.............................. 0.43%+ 0.43% 0.53%
Ratio of net investment income to
average net assets*.................. 5.53%+ 4.32% 2.99%
</TABLE>
- ---------------
* Net of fee waivers and expense reimbursements which had the effect of
reducing the ratio of expenses to average net assets and increasing the
ratio of net investment income to average net assets by 0.11% (annualized),
0.08% and 0.05%, respectively.
** Total return includes the effect of the voluntary capital contribution from
the investment adviser (see Note 3 to Financial Statements). Without this
capital contribution, the total return would have been lower.
+ Annualized.
*** Not annualized.
See Notes to Financial Statements.
47
<PAGE> 43
PACIFIC HORIZON TREASURY ONLY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED ------------------------
AUGUST 31, FEBRUARY
1995 FEBRUARY 28, 28,
(UNAUDITED) 1995 1994
----------- ------------ --------
<S> <C> <C> <C>
PACIFIC HORIZON SHARES
Net asset value per share, beginning of
period................................. $ 1.00 $ 1.00 $ 1.00
----------- ------------ --------
Income from Investment Operations:
Net investment income.................. 0.0257 0.0384 0.0254
Net realized gain (loss) on
securities........................... 0.0001 (0.0002) (0.0002)
----------- ------------ -------
Total income from investment
operations............................. 0.0258 0.0382 0.0252
----------- ------------ ------
Less dividends from net investment
income................................. (0.0257) (0.0384) (0.0254)
----------- ------------ -------
Net change in net asset value per
share.................................. 0.0001 (0.0002) (0.0002)
----------- ------------ -------
Net asset value per share, end of
period................................. $ 1.00 $ 1.00 $ 1.00
============ ============ ============
Total return............................. 2.60%*** 3.90% 2.57%
Ratios/Supplemental Data:
Net assets, end of period (000)........ $ 188,548 $ 90,337 $72,120
Ratio of expenses to average net
assets*.............................. 0.64%** 0.62% 0.56%
Ratio of net investment income to
average net assets*.................. 5.08%** 3.90% 2.54%
</TABLE>
- ---------------
* Net of fee waivers which had the effect of reducing the ratio of expenses to
average net assets and increasing the ratio of net investment income to
average net assets by 0.00%, 0.01% and 0.16%, respectively.
** Annualized.
*** Not annualized.
See Notes to Financial Statements.
48
<PAGE> 44
PACIFIC HORIZON TREASURY ONLY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED ------------------------
AUGUST 31, FEBRUARY
1995 FEBRUARY 28, 28,
(UNAUDITED) 1995 1994
----------- ------------ --------
<S> <C> <C> <C>
HORIZON SERVICE SHARES
Net asset value per share, beginning of
period................................. $ 1.00 $ 1.00 $ 1.00
----------- ------------ --------
Income from Investment Operations:
Net investment income.................. 0.0260 0.0391 0.0273
Net realized gain (loss) on
securities........................... 0.0001 (0.0002) (0.0002)
----------- ------------ --------
Total income from investment
operations............................. 0.0261 0.0389 0.0271
----------- ------------ --------
Less dividends from net investment
income................................. (0.0260) (0.0391) (0.0273)
----------- ------------ --------
Net change in net asset value per
share.................................. 0.0001 (0.0002) (0.0002)
----------- ------------ --------
Net asset value per share, end of
period................................. $ 1.00 $ 1.00 $ 1.00
============ ============ ========
Total return............................. 2.63%*** 3.98% 2.76%
Ratios/Supplemental Data:
Net assets, end of period (000)........ $ 149,711 $194,363 $271,588
Ratio of expenses to average net
assets*.............................. 0.57%** 0.55% 0.39%
Ratio of net investment income to
average net assets*.................. 5.18%** 3.86% 2.73%
</TABLE>
- ---------------
* Net of fee waivers which had the effect of reducing the ratio of expenses to
average net assets and increasing the ratio of net investment income to
average net assets by 0.00%, 0.01% and 0.25%, respectively.
** Annualized.
*** Not annualized.
See Notes to Financial Statements.
49
