<PAGE> 1
As filed with the Securities and Exchange Commission
on November 29, 1995
Registration No. 33-16296; 811-8275
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
[X]
Post-Effective Amendment No. 30
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 32 [X]
(Check appropriate box or boxes)
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OVERLAND EXPRESS FUNDS, INC.
(Exact Name of Registrant as specified in Charter)
111 Center Street
Little Rock, Arkansas 72201
(Address of Principal Executive Offices, including Zip Code)
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Registrant's Telephone Number, including Area Code: (800) 458-6589
Richard H. Blank, Jr.
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
(Name and Address of Agent for Service)
With a copy to:
Robert M. Kurucza, Esq.
Marco E. Adelfio, Esq.
Morrison & Foerster
2000 Pennsylvania Ave., N.W.
Washington, D.C. 20006
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant [ ] on _________ pursuant
to Rule 485(b), or to Rule 485(b), or
[ ] 60 Days after filing pursuant [ ] on _________ pursuant
to Rule 485(a), or to Rule 485(a)
[X] 75 days after filing pursuant [ ] on (date) pursuant
to paragraph (a)(2) paragraph (a)(2) of Rule 485
<PAGE> 2
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has registered an indefinite number of shares of its Common
Stock, $.001 par value, under the Securities Act of 1933, pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Rule 24f-2
Notice for the fiscal year ended December 31, 1994, was filed with the
Securities and Exchange Commission on February 28, 1995.
This Post-Effective Amendment to the Registrant's Registration Statement has
been executed by Master Investment Trust (another registered investment company
with separate series in which certain of the Registrant's series invest
substantially all of their assets) and by such company's trustees and principal
officers.
<PAGE> 3
EXPLANATORY NOTE
This Post-Effective Amendment No. 30 to the Registration Statement
(the "Amendment") of Overland Express Funds, Inc. (the "Company") is being
filed to register a new fund of the Company, the National Tax-Free
Institutional Money Market Fund (the "Fund"). The Fund will invest
substantially all of its assets in the corresponding master portfolio of
Master Investment Trust, a management investment company organized as a
Delaware business trust (SEC File No. 811-6415). This Amendment does not
affect the Registration Statement for the Company's Asset Allocation Fund,
California Tax-Free Bond Fund, California Tax-Free Money Market Fund, Municipal
Income Fund, Money Market Fund, Overland Sweep Fund, U.S. Government Income
Fund, U.S. Treasury Money Market Fund, Short-Term Municipal Income Fund,
Short-Term Government-Corporate Income Fund, Strategic Growth Fund and Variable
Rate Government Fund.
<PAGE> 4
Cross Reference Sheet
NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND
Form N-1A Item Number
<TABLE>
<S> <C>
Part A Prospectus Captions
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1 Cover Page
2 Prospectus Summary; Summary of Expenses
3 Not Applicable
4 How the Fund Works; Management of the Fund and the Master Series;
General Information; Prospectus Appendix -- Additional Investment
Policies
5 Management of the Fund and the Master Series
6 Management of the Fund and the Master Series; Dividends
7 Investing in the Fund; Dividends; Taxes
8 How to Redeem Shares
9 Not Applicable
Part B Statement of Additional Information Captions
- ------ --------------------------------------------
10 Cover Page
11 Table of Contents
12 Introduction
13 Investment Restrictions; Additional Permitted Investment Activities;
Portfolio Transactions; SAI Appendix
14 Management
15 Management
16 Management; Custodian and Transfer and Dividend Disbursing Agent;
Independent Auditors
17 Portfolio Transactions
18 Capital Stock
19 Determination of Net Asset Value
20 Federal Income Taxes
21 Management
22 Calculation of Yield and Total Return
23 Not Applicable
Part C General Information
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24-32 Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of this Document.
</TABLE>
<PAGE> 5
LOGO
Telephone: (800) 552-9612
NATIONAL TAX-FREE INSTITUTIONAL
MONEY MARKET FUND
Stephens Inc. -- Sponsor, Administrator and Distributor
Wells Fargo Bank, N.A. -- Investment Adviser, Transfer and Dividend Disbursing
Agent and Custodian
Overland Express Funds, Inc. (the "Company") is a professionally managed,
open-end, series investment company. This Prospectus describes the NATIONAL
TAX-FREE INSTITUTIONAL MONEY MARKET FUND (the "Fund"). The investment objective
of the Fund is to provide investors with a high level of income exempt from
federal income tax, while preserving capital and liquidity. THE FUND SEEKS TO
ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS ASSETS IN THE TAX-FREE
MONEY MARKET MASTER PORTFOLIO (THE "MASTER PORTFOLIO") OF MASTER INVESTMENT
TRUST (THE "MASTER TRUST"), AN OPEN-END, MANAGEMENT INVESTMENT COMPANY, RATHER
THAN IN A PORTFOLIO OF SECURITIES. THE MASTER PORTFOLIO HAS THE SAME INVESTMENT
OBJECTIVE AS THE FUND. THEREFORE, THE FUND'S INVESTMENT EXPERIENCE CORRESPONDS
DIRECTLY WITH THE MASTER PORTFOLIO'S INVESTMENT EXPERIENCE. SHARES OF THE MASTER
PORTFOLIO MAY BE PURCHASED ONLY BY OTHER INVESTMENT COMPANIES OR SIMILAR
ACCREDITED INVESTORS. The Master Portfolio seeks to achieve its investment
objective by investing in high-quality, U.S. dollar-denominated money market
instruments, primarily municipal obligations, with remaining maturities not
exceeding thirteen months.
This Prospectus sets forth concisely the information about the Fund and the
Master Portfolio that a prospective investor should know before investing in the
Fund. A Statement of Additional Information (the "SAI"), dated February ,
1996, containing additional information about the Fund, has been filed with the
Securities and Exchange Commission (the "SEC") and is incorporated by reference
into this Prospectus. The SAI is available without charge and can be obtained by
writing the Company c/o Overland Express Shareholder Services, P.O. Box 63084,
San Francisco, California 94163 or by calling 1-800-552-9612.
AN INVESTMENT IN THE FUND AND MASTER PORTFOLIO IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND OR
MASTER PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE.
------------------------
INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
AND RETAIN IT FOR FUTURE REFERENCE.
------------------------
FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED, ENDORSED OR
GUARANTEED BY WELLS FARGO BANK, N.A. ("WELLS FARGO BANK") OR ANY OF ITS
AFFILIATES. SUCH SHARES ARE NOT INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY. AN
INVESTMENT IN THE FUND INVOLVES CERTAIN INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THESE AUTHORITIES PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
PROSPECTUS DATED FEBRUARY 16, 1996
<PAGE> 6
As noted below under "How the Fund Works," investors may be able to invest
indirectly in the Master Portfolio through other investment companies or series
of the Company which invest substantially all of their assets in the Master
Portfolio.
WELLS FARGO BANK IS THE INVESTMENT ADVISER TO THE MASTER PORTFOLIO AND
PROVIDES CERTAIN OTHER SERVICES TO THE FUND AND MASTER PORTFOLIO FOR WHICH
IT IS COMPENSATED. STEPHENS INC. ("STEPHENS"), WHICH IS NOT AFFILIATED
WITH WELLS FARGO BANK, IS THE SPONSOR AND ADMINISTRATOR AND SERVES
AS THE DISTRIBUTOR FOR THE COMPANY AND PLACEMENT AGENT FOR THE
MASTER TRUST.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Prospectus Summary........................................................................ ii
Summary of Expenses....................................................................... iv
How the Fund Works........................................................................ 1
Risk Factors............................................................................ 3
Management of the Fund and the Master Portfolio........................................... 4
Investing in the Fund..................................................................... 7
Dividends................................................................................. 10
How to Redeem Shares...................................................................... 10
Additional Shareholder Services........................................................... 13
Taxes..................................................................................... 15
General Information....................................................................... 16
Prospectus Appendix -- Additional Investment Policies..................................... A-1
</TABLE>
i
<PAGE> 7
PROSPECTUS SUMMARY
The following summary provides investors with basic information about the
Fund. For more information, please refer specifically to the identified
Prospectus sections and generally to the Prospectus and SAI.
Q. WHO CAN INVEST IN THE FUND?
A. Shares of the Fund are offered primarily to a select group of investors.
These include:
Foundations, corporations and other business entities and high net-worth
individuals and Trusts that have a business relationship with one of the
Company's Selling Agents that permits investments in Fund shares, and
persons who invest pursuant to an agreement between such an entity and a
Selling Agent (for example, Wells Fargo Bank). See "Investing in the
Fund -- Purchase of Shares."
Q. WHAT IS THE INVESTMENT OBJECTIVE OF THE FUND AND THE MASTER PORTFOLIO?
A. The NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND, a diversified
portfolio of securities, seeks to provide investors with a high level of
income exempt from federal income tax, while preserving capital and
liquidity. The Fund seeks to achieve its investment objective by investing
all of its assets in the Tax-Free Money Market Master Portfolio of the
Master Trust, which has the same investment objective as the Fund. The
Master Portfolio seeks to achieve its investment objective by investing in
high-quality, U.S. dollar-denominated money market instruments, primarily
municipal obligations, with remaining maturities not exceeding 13 months.
See "How the Fund Works -- Investment Objective and Policies" and
"Prospectus Appendix -- Additional Investment Policies."
Q. WHAT ARE SOME OF THE RISKS ASSOCIATED WITH AN INVESTMENT IN THE FUND?
A. Investments in the Fund are not bank deposits or obligations of Wells
Fargo Bank and are not insured by the Federal Deposit Insurance
Corporation ("FDIC"), nor are they insured or guaranteed against loss of
principal. Therefore, investors should be willing to accept some risk with
money invested in the Fund. Although the Fund and the Master Portfolio
seek to maintain a stable net asset value of $1.00 per share, there is no
assurance that they will be able to do so. As with all mutual funds, there
can be no assurance that the Fund will achieve its investment objective.
See "How the Fund Works -- Investment Objective and Policies" and
"Prospectus Appendix -- Additional Investment Policies."
Q. HOW MAY INVESTORS PURCHASE SHARES?
A. Investors may invest by purchasing Fund shares at their net asset value
next calculated on any Business Day (as defined below). There are no sales
loads. Investors may open an account by investing at least $150,000 and
may make additional investments of at least $25,000, although certain
exceptions to these minimums may be available. Shares of the Fund may be
purchased on any Business Day by calling an account representative, wiring
money, mailing a check or electing an automatic investment feature called
the Systematic Purchase Plan. Shares of the Fund may not be suitable
investments for tax-exempt institutions or tax-exempt retirement plans,
since such investors would not generally benefit from the tax-exempt
status of the Fund's dividends. See "Investing in the
ii
<PAGE> 8
Fund." For more details, investors may contact Stephens (the Fund's
sponsor and distributor) or a Selling Agent (such as Wells Fargo Bank).
Q. WHO MANAGES INVESTMENTS?
A. Wells Fargo Bank, as investment adviser of the Master Portfolio, manages
the Master Portfolio's investments. The Company has not retained the
services of a separate investment adviser for the Fund because the Fund
invests all of its assets in the Master Portfolio. Wells Fargo Bank, one
of the largest commercial banks in the United States, was founded in 1852
and is the oldest bank in the western United States. As of October 31,
1995, Wells Fargo Bank provided investment advisory services for
approximately $33.9 billion of assets for individuals, trusts, estates and
institutions. See "Management of the Fund and the Master Portfolio" and
"General Information" in this Prospectus.
Q. WHAT ARE THE FEES FOR INVESTING?
A. Unlike certain other mutual funds that charge sales loads or other
transactions fees, the Fund does not impose shareholder transaction fees
on the purchase, redemption or exchange of its shares or for reinvesting
dividends. For its advisory services to the Master Portfolio, Wells Fargo
Bank is entitled to receive an annual fee at the rate of 0.30% of the
Master Portfolio's average daily net assets. Wells Fargo Bank also
provides transfer and dividend disbursing agency services and custodial
services to the Fund and the Master Portfolio. No additional compensation
is payable to Wells Fargo Bank for providing such services to the Fund or
the Master Portfolio.
For its services as administrator of the Fund and the Master Portfolio,
Stephens is entitled to receive an annual fee at the rate of 0.05% of the
Fund's average daily net assets.
Q. HOW ARE FUND INVESTMENTS VALUED?
A. The price per share or "net asset value" ("NAV") of the Fund depends on
the NAV of the Master Portfolio's shares, which in turn depends on the
total value of the portfolio securities owned by the Master Portfolio
(plus cash and other assets after subtracting all liabilities) and the
number of Master Portfolio shares outstanding. On each Business Day, Wells
Fargo Bank calculates a new NAV for the Fund and the Master Portfolio.
(See "Investing in the Fund -- Share Price")
Although the Fund and Master Portfolio seek to maintain a stable NAV of
$1.00 per share, there can be no assurance that this will be achieved.
Q. DOES THE FUND PAY DIVIDENDS AND DISTRIBUTE CAPITAL GAINS?
A. Dividends from any net investment income are declared daily, paid monthly
and automatically reinvested in additional Fund shares at NAV unless
payment in cash is requested and arrangements with an account
representative or Wells Fargo Bank permit the processing of cash payments.
Each reinvestment increases the total number of shares held in an account.
Any capital gains are distributed at least annually. See "Dividends" and
"Investing in the Fund."
Q. HOW MAY AN INVESTOR REDEEM SHARES?
A. Investors may redeem Fund shares at NAV, without paying any sales charge
or redemption fee, on any Business Day by calling an account
representative, by letter, by an automatic feature called the Systematic
Withdrawal Plan, or by telephone (unless the investor specifically
declines telephone privileges). See "How To Redeem Shares." For more
information, investors should contact an account representative, Stephens
or a Selling Agent (such as Wells Fargo Bank).
iii
<PAGE> 9
SUMMARY OF EXPENSES(1)
ANNUAL FUND OPERATING EXPENSES(2)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<S> <C> <C>
Master Portfolio Management Fee..................................................... 0.30%
Other Expenses:
Administrative Fee................................................................ 0.05%
Miscellaneous Expenses(3)......................................................... 0.05%
----
Total Other Expenses(3)............................................................. 0.10%
====
Total Fund Operating Expenses(3).................................................... 0.40%
</TABLE>
- ---------------
(1) Other mutual funds may invest in the Master Portfolio and such other funds'
expenses and, correspondingly, investment returns may differ from those of
the Fund.
(2) ANNUAL FUND OPERATING EXPENSES summarize expenses charged at the Master
Trust level as well as expenses charged at the Company level. The amounts
shown above under "Master Portfolio Management Fee" and "Administrative Fee"
reflect contract rates. The amounts shown above under "Miscellaneous
Expenses," "Total Other Expenses" and "Total Fund Operating Expenses"
reflect certain anticipated voluntary fee waivers and expense
reimbursements that are in effect for the current fiscal year. Absent
waivers and reimbursements, the amounts shown under "Miscellaneous
Expenses," "Total Other Expenses" and "Total Fund Operating Expenses" would
be 0.30%, 0.35% and 0.65%, respectively. As of the date of this Prospectus,
the Fund had not commenced operations. For a further description of the
Master Portfolio's and Fund's fee structure, see "Management of the Fund
and the Master Portfolio." Wells Fargo Bank and Stephens have each agreed
to waive or reimburse all or a portion of its respective fees if certain
Fund expenses exceed limits set by state securities laws or regulations.
The Fund does not anticipate Fund expenses exceeding state limits. In
addition, Wells Fargo Bank and Stephens may each elect, in its sole
discretion, to waive fees or reimburse all or a portion of their respective
expenses. Any such fee waivers or expense reimbursements would reduce the
Fund's total expenses. There can be no assurance that such waivers or
reimbursements would continue. Investors should see the Prospectus section
captioned "Management of the Fund and the Master Portfolio" for more
complete descriptions of the various costs and expenses they can expect to
incur as investors in the Fund.
(3) After any waivers or reimbursements.
iv
<PAGE> 10
EXAMPLE
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
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<S> <C> <C>
An investor would pay the following expenses on a $1,000 investment in the
Fund, assuming (A) a 5% annual return and (B) redemption at the end of each
time period indicated:...................................................... $4 $13
</TABLE>
The purpose of the foregoing table is to assist an investor in
understanding the various costs and expenses that an investor in the Fund will
bear directly or indirectly. There are no sales loads, redemption fees or
exchange fees charged by the Fund. However, the Company reserves the right to
impose charges for wiring redemption proceeds. The table summarizes expenses for
both the Master Portfolio and the Fund. As noted above, these fees and expense
amounts summarize the fees and expenses of the Fund and the Master Portfolio.
The 5% rate of return reflected in the Example should not be considered an
indication of actual or expected performance of the Fund. In addition, the
Example should not be considered a representation of past or future expenses;
actual expenses may be greater or lesser than those shown.
With regard to the combined fees and expenses of the Fund and the Master
Portfolio, the Company's Board of Directors has considered whether various costs
and benefits of investing all the Fund's assets in the Master Portfolio would be
more or less than if the Fund invested in portfolio securities directly, and
believes that the Fund should achieve economic efficiencies by investing in the
Master Portfolio. Additionally, the Board of Directors has determined that the
aggregate fees assessed by the Fund and the Master Portfolio should be less than
those expenses that the Directors believe would be incurred if the Fund had
invested directly in the securities held by the Master Portfolio. See the
Prospectus section captioned "Management of the Fund and the Master Portfolio"
for more complete descriptions of the various costs and expenses applicable to
investors in the Fund. In addition, if the Fund were to change its investment
strategy and no longer invest in the Master Portfolio, these expenses could
change.
v
<PAGE> 11
HOW THE FUND WORKS
INVESTMENT OBJECTIVE AND POLICIES
The NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND seeks to provide
investors with a high level of income exempt from federal income tax, while
preserving capital and liquidity. The Fund, which is diversified portfolio,
seeks to achieve its investment objective by investing all of its assets in the
Master Portfolio, which has the same investment objective as the Fund. The
Master Portfolio seeks to achieve its investment objective by investing in
high-quality, short-term U.S. dollar-denominated money market instruments,
primarily municipal obligations, with remaining maturities not exceeding
thirteen months.
The Fund may withdraw its investments in the Master Portfolio only if the
Company's Board of Directors determines that such action is in the best
interests of the Fund and its shareholders. Upon such withdrawal, the Board
would consider alternative investments, including investing all of the Fund's
assets in another investment company with the same investment objective as the
Fund or hiring an investment adviser to manage the Fund's assets in accordance
with the investment policies described in this section with respect to the
Master Portfolio. For a description of the management and expenses of the Master
Trust, see the Prospectus section captioned "Management of the Fund and the
Master Portfolio."
Since the investment characteristics of the Fund correspond directly to
those of the Master Portfolio, the following is a discussion of the various
investments of, and techniques employed by, the Master Portfolio.
Wells Fargo Bank, as investment adviser to the Master Portfolio, pursues
the Master Portfolio's investment objective by investing (under normal market
conditions) substantially all of the Master Portfolio's assets in the following
types of municipal obligations that pay interest which is exempt from federal
income tax: bonds, notes and commercial paper issued by or on behalf of states,
territories, and possessions of the United States (including the District of
Columbia) and their political subdivisions, agencies, instrumentalities
(including government-sponsored enterprises) and authorities, the interest on
which, in the opinion of counsel to the issuer or bond counsel, is exempt from
federal income tax. These municipal obligations and the taxable investments
described below may bear interest at rates that are not fixed ("floating- and
variable-rate instruments").
The Master Portfolio may temporarily invest some of its assets in cash
reserves or certain high-quality, taxable money market instruments, or may
engage in certain other investment activities as described in this Prospectus.
The Master Portfolio may elect to invest temporarily up to 20% of its net assets
in certain permitted taxable investments, including cash reserves, U.S.
Government obligations, obligations of domestic banks, commercial paper, taxable
municipal obligations and repurchase agreements. The Master Portfolio may also
invest in U.S. dollar-denominated obligations of foreign banks and foreign
securities. Such temporary investments would most likely be made when there is
an unexpected or abnormal level of investor purchases or redemptions of
interests in the Master Portfolio or because of unusual market conditions. The
income from these temporary investments and investment activities may be subject
to federal income tax. However, as stated above, Wells Fargo Bank seeks to
invest substantially all of the Master Portfolio's assets in securities exempt
from such tax. A more complete description of tax-free municipal obligations,
taxable money market instruments, and other investment activities is contained
in the "Prospectus Appendix -- Additional Investment Policies."
1
<PAGE> 12
As a matter of fundamental policy, at least 80% of the net assets of the
Master Portfolio is invested (under normal market conditions) in municipal
obligations that pay interest which is exempt from federal income tax and is not
subject to the federal alternative minimum tax. However, as a matter of general
operating policy, the Master Portfolio seeks to invest substantially all of its
assets in such municipal obligations. The Master Portfolio's investment adviser
may rely either on the opinion of counsel to the issuer of the municipal
obligations or on Internal Revenue Service ("IRS") rulings regarding the tax
treatment of these obligations. In addition, the Master Portfolio may invest 25%
or more of its assets in municipal obligations that are related in such a way
that an economic, business or political development or change affecting one such
obligation would also affect the other obligations; for example, the Master
Portfolio may own different municipal obligations which pay interest based on
the revenues of similar types of projects.
MASTER/FEEDER STRUCTURE
The Fund is a feeder fund in a master/feeder structure, which means that it
invests all of its assets in the Master Portfolio, which has the same investment
objective as the Fund. The Master Trust is organized as a trust under the laws
of the State of Delaware. See "General Information -- Description of the
Company." In addition to selling its shares to the Fund, the Master Portfolio
may sell its shares to other mutual funds or qualified investors. Such other
mutual funds and other qualified investors may have different expenses and,
accordingly, may experience different investment returns and yields compared
with the Fund. Information regarding additional options, if any, for investing
in shares of the Master Portfolio is available from Stephens and may be obtained
by calling (800) 643-9691.
The Company's Board of Directors believes that if other investors invest
their assets in the Master Portfolio, certain economic efficiencies may be
realized with respect to the Master Portfolio. For example, fixed expenses that
otherwise would have been borne solely by the Fund would be spread across a
potentially larger asset base provided by more than one fund investing in the
Master Portfolio. The Fund and any other entities investing in the Master
Portfolio are each liable for all obligations of the Master Portfolio. The risk
of the Fund incurring financial loss on account of such liability, however, is
limited to circumstances in which both inadequate insurance exists and the
Master Trust itself is unable to meet its obligations. Accordingly, the
Company's Board of Directors believes that neither the Fund nor its shareholders
will be adversely affected by reason of investing the Fund's assets in the
Master Portfolio. However, if a mutual fund or other investor withdraws its
investment from the Master Portfolio, the economic efficiencies (e.g., spreading
fixed expenses across a larger asset base) that the Company's Board believes
should be available through investment in the Master Portfolio may not be fully
achieved. In addition, given the relatively novel nature of the master/feeder
structure, accounting and operational difficulties, although unlikely, could
occur.
The investment objective and other fundamental policies of the Fund or the
Master Portfolio cannot be changed without approval by the holders of a
majority, as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), of the Fund's or Master Portfolio's, as applicable, outstanding
voting securities. Whenever the Fund, as a Master Portfolio interestholder, is
requested to vote on matters pertaining to any fundamental policy of the Master
Portfolio, the Company will hold a meeting of the Fund's shareholders to
consider such matters, and the Fund's votes will be cast in proportion to the
votes received from Fund shareholders. The Fund will vote those Fund shares for
which it receives no voting
2
<PAGE> 13
instructions in the same proportion as the votes received from Fund
shareholders. In addition, certain policies of the Master Portfolio that are
non-fundamental could be changed by vote of a majority of the Master Trust's
Trustees without interestholder vote. If the Master Portfolio's investment
objective or fundamental or non-fundamental policies are changed, the Fund could
subsequently change its objective or policies to correspond to those of the
Master Portfolio, or the Fund could redeem its Master Portfolio interests and
either seek a new investment company with a matching objective in which to
invest or it could retain its own investment adviser to manage the Fund's
portfolio in accordance with its investment objective. In the latter case, the
Fund's inability to find a substitute investment company in which to invest or
equivalent management services could adversely affect shareholders' investments
in the Fund. The Fund will provide shareholders with 30 days' written notice
prior to the implementation of any change in the investment objective of the
Fund or the Master Portfolio, to the extent possible. Additional information
regarding the officers and directors/trustees of the Company and the Master
Trust is located in Fund's SAI under "Management."
RISK FACTORS
Investments in the Fund and Master Portfolio are not bank accounts and are
not insured or guaranteed against loss of principal. Although both the Fund and
the Master Portfolio seek to maintain a stable NAV of $1.00 per share, there is
no assurance that they will be able to do so. As with all mutual funds, there
can be no assurance that the Fund and the Master Portfolio will achieve their
respective investment objectives. See "Prospectus Appendix -- Additional
Investment Policies" for further discussion of investment objectives and risks.
The Master Portfolio and the Fund, under the 1940 Act, must comply with
certain investment criteria designed to provide liquidity, reduce risk and allow
the Fund and the Master Portfolio each to maintain a stable NAV of $1.00 per
share. The dollar-weighted average portfolio maturity of the Master Portfolio or
the Fund must not exceed 90 days. In addition, any security that the Fund or
Master Portfolio purchases must have a remaining maturity of not more than
thirteen months. Any security that the Fund or Master Portfolio purchases must
present minimal credit risks and be of high-quality (i.e., be rated in the top
two rating categories by the required number of nationally recognized
statistical rating organizations ("NRSROs") or, if unrated, determined to be of
comparable quality to such rated securities). These determinations are made by
Wells Fargo Bank, as the Master Portfolio's investment adviser, under guidelines
adopted by the Master Trust's Board of Trustees.
The Fund and the Master Portfolio seek to reduce risk by investing in
securities of various issuers. As such, the Fund and the Master Portfolio are
considered to be diversified for purposes of the 1940 Act. In addition, the Fund
and the Master Portfolio, since their inception, have emphasized safety of
principal and high credit quality. In particular, the internal investment
policies of the Master Portfolio's investment adviser, Wells Fargo Bank, have
always prohibited the purchase of many types of floating-rate instruments,
commonly referred to as "derivatives," that are considered potentially volatile.
The following types of derivative securities ARE NOT permitted investments for
the Master Portfolio or the Fund:
- capped floaters (on which interest is not paid when market rates move
above a certain level);
- leveraged floaters (whose interest-rate reset provisions are based on a
formula that magnifies changes in interest rates);
3
<PAGE> 14
- range floaters (which do not pay any interest if market interest rates
move outside of a specified rate);
- dual index floaters (whose interest-rate reset provisions are tied to
more than one index so that a change in the relationship between these
indices may result in the value of the instrument falling below face
value); and
- inverse floaters (which reset in the opposite direction of their
indices).
Additionally, neither the Master Portfolio nor the Fund may invest in
instruments whose interest-rate reset provisions are tied to an index that
materially lags short-term interest rates, such as Cost of Funds Index ("COFI")
floaters. The Master Portfolio and the Fund may only invest in floating-rate
instruments that bear interest at a rate that resets quarterly or more
frequently, and that resets based on changes in standard money market rate
indices such as U.S. Government Treasury bills, London Interbank Offered Rate
("LIBOR"), the prime rate, published commercial paper rates, federal funds
rates, Public Securities Associates ("PSA") Floaters or JJ Kenney index
floaters.
PERFORMANCE
The performance of the Fund may be advertised in terms of current yield,
effective yield, tax-equivalent yield or effective tax-equivalent yield. These
performance figures are based on historical results and are not intended to
indicate future performance. The investment performance of the Fund corresponds
to the investment experience of the Master Portfolio.
The Fund's yield refers to the income generated by an investment in shares
of the Fund over a seven- or thirty-day period (which period will be specified
in any advertisement) expressed as an annual percentage rate. Effective yields
are calculated similarly but assume that the income earned from the Fund is
reinvested in the Fund. Because of the effects of compounding, effective yields
are slightly higher than yields. The tax-equivalent yield and the effective
tax-equivalent yield of the Fund assume that a stated income tax rate has been
applied to determine the tax-equivalent figures. The application of the stated
income tax rate results in higher effective yield figures. The Fund may also
present nonstandard performance information, such as distribution rate, for
purposes of sales literature.
Additional performance information will be contained in the Company's
annual report which will be available upon request without charge by calling the
Company at (800) 552-9612.
MANAGEMENT OF THE FUND AND THE MASTER PORTFOLIO
MASTER PORTFOLIO INVESTMENT ADVISER
Pursuant to an Investment Advisory Contract, Wells Fargo Bank, a wholly
owned subsidiary of Wells Investment Fargo & Company located at 420 Montgomery
Street, San Francisco, California 94105, is the Master Portfolio's investment
adviser. Wells Fargo Bank, one of the largest banks in the United States, was
founded in 1852 and is the oldest bank in the western United States. As of
October 31, 1995, Wells Fargo Bank provided investment advisory services for
approximately $33.9 billion of assets for individuals, trusts, estates and
institutions. The Investment Advisory Contract provides that Wells Fargo Bank
furnish to the Master Portfolio invest-
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<PAGE> 15
ment guidance and policy direction in connection with the daily portfolio
management of the Master Portfolio, subject to the supervision of the Master
Trust's Board of Trustees and in conformity with Delaware law and the stated
policies of the Master Portfolio. Pursuant to the Investment Advisory Contract,
Wells Fargo Bank furnishes to the Trust's Board of Trustees periodic reports on
the investment strategy and performance of the Master Portfolio. Wells Fargo
Bank also serves as the investment adviser to certain other separately managed
funds of the Company, to the Master Trust and to five other registered,
open-end management investment companies, each of which consists of several
separately managed investment portfolios.
Wells Fargo Bank deals, trades and invests for its own account in the types
of securities in which the Master Portfolio may invest and may have deposit,
loan and commercial banking relationships with the issuers of securities
purchased by the Master Portfolio. Wells Fargo Bank has informed the Master
Trust that in making its investment decisions it does not obtain or use material
inside information in its possession.
Under the terms of the Investment Advisory Contract, the Master Trust has
agreed to pay Wells Fargo Bank a monthly fee at the annual rate of 0.30% of the
Master Portfolio's average daily net assets. From time to time Wells Fargo Bank
may voluntarily waive all or a portion of its advisory fees. There can be no
assurance that such fee waivers would continue. Any fee waivers reduce the
Master Portfolio's and the Fund's expenses and, accordingly, increase amounts
that are available for distribution to shareholders.
Morrison & Foerster, counsel to the Company and the Master Trust and
special counsel to Wells Fargo Bank, has advised the Company, the Master Trust
and Wells Fargo Bank that Wells Fargo Bank may perform the services contemplated
by the Investment Advisory Contract without violation of the Glass-Steagall Act
or other applicable banking laws or regulations. Such counsel has pointed out,
however, that there are no controlling judicial or administrative
interpretations or decisions and that future judicial or administrative
interpretations of, or decisions relating to, present federal or state statutes,
including the Glass-Steagall Act and regulations relating to the permissible
activities of banks and their subsidiaries or affiliates, as well as future
changes in such statutes, regulations and judicial or administrative decisions
or interpretations, could prevent Wells Fargo Bank from continuing to perform,
in whole or in part, such services. If Wells Fargo Bank were prohibited from
performing any such services, it is expected that the Company's Board of
Directors would recommend to the Fund's shareholders that they approve a new
advisory agreement with another entity or entities qualified to perform such
services.
SPONSOR, ADMINISTRATOR AND DISTRIBUTOR
Stephens, located at 111 Center Street, Little Rock, Arkansas 72201, serves
as the Fund's and the Master Portfolio's administrator pursuant to
Administration Agreements. Under the Administration Agreement with respect to
the Fund, Stephens generally supervises all aspects of the operation of the
Fund, other than the provision of investment advice, subject to the overall
authority of the Board of Directors and in accordance with Maryland law. The
administrative services provided to the Fund also include coordination of the
other services provided to the Fund, compilation of information for reports to
the SEC and state securities commissions, preparation of proxy statements and
shareholder reports, and general supervision of data compilation in connection
with preparing periodic reports to the Company's Board of Directors and
Officers. Stephens also furnishes office space and certain facilities to conduct
the Company's business and compensates the Company's Directors, Officers and
employees who are affiliated with Stephens. For
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<PAGE> 16
providing administrative services to the Fund, the Company has agreed to pay
Stephens a monthly fee at the annual rate of 0.05% of the Fund's average daily
net assets.
Stephens also serves as the Master Portfolio's and the Fund's principal
underwriter within the meaning of the 1940 Act and as distributor of the Fund's
shares pursuant to a Distribution Agreement with the Company. Under the
Distribution Agreement, Stephens has agreed to act as agent for the Company for
the sale of Fund shares and may enter into Selling Agreements with selling
agents that wish to make available Fund shares to their respective customers
("Selling Agents"). Wells Fargo Bank presently acts as a Selling Agent, but does
not receive any fee from the Fund for such activities.
Stephens is a full service broker/dealer and investment advisory firm.
Stephens and its predecessor have been providing securities and investment
services for more than 60 years, including discretionary portfolio management
services since 1983. Stephens currently manages investment portfolios for
pension and profit sharing plans, individual investors, foundations, insurance
companies and university endowments.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT
Wells Fargo Bank serves as the Fund's and the Master Portfolio's custodian
and transfer and dividend disbursing agent (the "Transfer Agent") but does not
receive a fee from the Company or the Master Trust for such services. Pursuant
to their separate Custody Agreements with Wells Fargo Bank, the Fund and the
Master Portfolio may each, at times, borrow money from Wells Fargo Bank as
needed to satisfy temporary liquidity needs. Wells Fargo Bank charges interest
on such overdrafts at a rate determined pursuant to the Fund's and/or Master
Portfolio's Custody Agreement. The custodial, transfer and dividend disbursing
agency activities are performed at 525 Market Street, San Francisco, California
94105.
EXPENSES
As noted previously, from time to time, Wells Fargo Bank and Stephens may
waive their respective fees in whole or in part. Any such waivers reduce the
Fund's expenses and, accordingly, have a favorable impact on the Fund's yield.
Except for the expenses borne by Wells Fargo Bank and Stephens, the Fund bears
all costs of its operations, including a pro rate portion of the compensation of
the Company's Directors who are not affiliated with Wells Fargo Bank or Stephens
or any of their affiliates; advisory, administration fees; interest charges;
taxes; fees and expenses of independent auditors, legal counsel, expenses of
redeeming shares, expenses of preparing and printing prospectuses (except the
expense of printing and mailing prospectuses used for promotional purposes),
shareholders' reports, notices, proxy statements and reports to regulatory
agencies; insurance premiums and certain expenses relating to insurance
coverage; trade association membership dues; brokerage and other expenses
connected with the execution of portfolio transactions; expenses of
shareholders' meetings; expenses relating to the issuance, registration and
qualification of Fund shares; pricing services; and any extraordinary expenses.
Expenses attributable to the Fund are charged against the Fund's assets. General
expenses of the Company are allocated among all of the funds of the Company,
including the Fund, in a manner proportionate to the net assets of each fund, on
a transactional basis, or on such other basis as the Company's Board of
Directors deems equitable. The Fund bears a pro rata portion of the Master
Portfolio's Expenses.
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<PAGE> 17
INVESTING IN THE FUND
OPENING AN ACCOUNT
Fund shares may be purchased in one of the several ways described below. An
Account Application, which must be completed and signed to open an account,
accompanies this Prospectus. Additional documentation may be required from
corporations, associations and certain fiduciaries. Investors must not mail
cash. Investors with any questions or requiring extra forms may call (800)
552-9612. The Company or Stephens may make this Prospectus available in an
electronic format. Upon receipt of a request from an investor or the investor's
representative, the Company or Stephens will transmit or cause to be transmitted
promptly, without charge, a paper copy of the electronic prospectus.
After an Account Application has been processed and an account has been
established, subsequent purchases of different funds of the Company under the
same umbrella account do not require the completion of additional Account
Applications. A separate Account Application must be processed for each
different umbrella account number (even if the registration is the same).
Investors should call the number on their confirmation statements to obtain
information about what is required to change registration.
SHARE PRICE
The price of each Fund share is its "net asset value" or NAV, which is
computed by adding the value of the Fund's portfolio investments plus cash and
other assets, deducting liabilities and then dividing the result by the number
of shares outstanding. The Fund's investments in the Master Portfolio are valued
at the NAV of the Master Portfolio's shares. The Master Portfolio calculates the
NAV of its shares on each day and at the same time as the Fund. As noted above,
the Fund seeks to maintain a constant $1.00 NAV share price, although there is
no assurance that it will be able to do so.
The Master Portfolio's portfolio investments are valued on the basis of
amortized cost. This valuation method is based on the receipt of a steady rate
of payment from the date of purchase until maturity rather than actual changes
in market value. The Master Trust's Board of Trustees and the Company's Board of
Directors believe that this valuation method accurately reflects fair value.
PURCHASE OF SHARES
Investors may purchase Fund shares on any day the New York Stock Exchange
("NYSE") is open for trading (a "Business Day"). The NYSE is closed on New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day (each, a "Holiday"). When any Holiday
falls on a Saturday, the NYSE usually is closed the preceding Friday, and when
any Holiday falls on a Sunday, the NYSE is closed the following Monday. Wells
Fargo Bank calculates the NAV each Business Day. All transaction orders are
processed at the NAV next determined after the order is received.
Investors may purchase Fund shares on any Business Day and by any of the
methods described below. After a properly completed Account Application is
received and the investor's wire order or check is received, or an account with
a bank that is designated in the Account Application and that is approved by the
Transfer Agent (an "Approved Account") is debited, the purchase order is
effective, and full and fractional shares are purchased at the next determined
NAV, which is expected to remain a constant $1.00
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<PAGE> 18
per share. All investments in the Fund's shares are subject to a determination
by the Company that the investment instructions are complete. If shares are
purchased by a check that does not clear, the Company reserves the right to
cancel the purchase and hold the investor responsible for any losses or fees
incurred. In addition, the Fund may hold payment on any redemption until
reasonably satisfied that investments made by check have been collected (which
may take up to 15 days). The Company reserves the right to reject any purchase
order or suspend sales at any time. The Fund does not issue share certificates.
The minimum initial investment is $25,000 by the Systematic Purchase Plan
purchase method (described below) and $150,000 by all other methods. All
subsequent investments must be at least $25,000. Investors with questions
regarding purchases of shares, should contact the Company at (800) 572-7797 or
contact a Selling Agent (such as Wells Fargo Bank).
Purchase orders that are received by the Transfer Agent before 9:00 a.m.
(Pacific time) generally are executed on the same day. Orders received by the
Transfer Agent after 9:00 a.m. (Pacific time) are executed on the next Business
Day.
Federal regulations require that an investor provide a social security
number or a certified taxpayer identification number ("TIN") upon opening or
reopening an account. See "Taxes" for further information concerning this
requirement. Failure to furnish a certified TIN to the Trust could subject the
investor to a $50 penalty imposed by the IRS.
Shares of the Fund may not be suitable investments for tax-exempt
institutions or tax-sheltered retirement plans, since such investors would not
benefit from the exempt status of the Fund's dividends. See "Federal Income
Taxes -- Special Tax Considerations" in the SAI.
Investors may buy Fund shares on any Business Day by any of the methods
described below.
INITIAL PURCHASES BY WIRE
The investor should:
1. Telephone toll free (800) 572-7797. Give the name of the Fund, the
name(s) in which the shares are to be registered, address, social security
number or TIN (where applicable) of the person or entity in whose name(s) the
shares are to be registered, dividend payment election, amount to be wired, name
of the wiring bank and name and telephone number of the person to be contacted
in connection with the order. An account number will be assigned. Some banks may
impose wiring fees.
2. Instruct the wiring bank to transmit the specified amount in federal
funds ($150,000 or more) to:
Wells Fargo Bank, N.A.
San Francisco, California
Bank Routing Number: 121000248
Wire Purchase Account Number: 4068-000462
Attention: National Tax-Free Institutional Money Market Fund
Account Name(s): Name(s) in which the account is to be registered
Account Number: (if investing into an existing account)
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<PAGE> 19
3. A completed Account Application should be mailed, or sent by
telefacsimile with the original subsequently mailed, to the following address
immediately after the funds are wired and must be received and accepted by the
Transfer Agent before an account can be opened:
Wells Fargo Bank, N.A.
c/o Overland Express Shareholder Services
P.O. Box 63084
San Francisco, California 94163
Telefacsimile: 1-415-781-4082
4. Share purchases are effected at the NAV next determined after the
Account Application is received and accepted.
INITIAL PURCHASES BY MAIL
The investor should:
1. Complete an Account Application. Indicate the services to be used.
2. Mail the Account Application and a check for $150,000 or more, payable
to "National Tax-Free Institutional Money Market Fund" to the address above.
3. Share purchases are effected at the NAV next determined after the
Account Application is received and accepted.
SYSTEMATIC PURCHASE PLAN
The Company's Systematic Purchase Plan provides investors with a convenient
way to establish and automatically add to a Fund account on a monthly basis. To
participate in the Systematic Purchase Plan, an investor must specify an amount
($25,000 or more) to be withdrawn automatically by the Transfer Agent on a
monthly basis from a designated Approved Bank. Wells Fargo Bank is an Approved
Bank. The Transfer Agent withdraws and uses this amount to purchase Fund shares
on the investor's behalf on or about the fifth Business Day of each month. There
are no separate fees charged to investors by the Fund for participating in the
Systematic Purchase Plan.
An investor may change the investment amount, suspend purchases or
terminate the investor's election at any time by notifying the Transfer Agent at
least five Business Days prior to any scheduled transaction.
ADDITIONAL PURCHASES
Additional purchases of $25,000 or more may be made by instructing the
Fund's Transfer Agent to debit a designated Approved Bank account, by wire by
instructing the wiring bank to transmit the specified amount as directed above
for initial purchases, or by mail with a check payable to "National Tax-Free
Institutional Money Market Fund" to the above address. An investor should write
the Fund account number on the check and include the detachable stub from the
investor's Statement of Account or a letter providing the investor's Fund
account number.
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<PAGE> 20
PURCHASES THROUGH SELLING AGENTS
Purchase orders for Fund shares placed through Selling Agents by 9:00 a.m.
(Pacific time) on any Business Day, including orders for which payment is to be
made from free cash credit balances in securities accounts maintained with a
Selling Agent, generally are executed on the same day an order is placed if
notice is provided to the Transfer Agent by 9:00 a.m. (Pacific time) and federal
funds are received by the Transfer Agent before the close of business.
Purchase orders that are received by a Selling Agent after 9:00 a.m.
(Pacific time) on any Business Day or federal funds that are not received by the
Transfer Agent before the close of business generally are executed on the next
Business Day following the day the order is placed. The Selling Agent is
responsible for the prompt transmission of purchase orders to the Fund.
Financial institutions acting as Selling Agents, or in certain other capacities,
may be required to register as dealers pursuant to applicable state securities
laws, which may differ from federal law and any interpretations expressed
herein.
STATEMENTS AND REPORTS
Investors are sent monthly statements of accounts after every month in
which there has been a transaction that affects such investors' share balances
or Fund account registrations. Statements with tax information are mailed to
investors by January 31 of each year and also are filed with the IRS. At least
twice a year, investors receive the Company's financial statements will be
mailed to investors.
DIVIDENDS
The Fund intends to declare dividends on a daily basis, payable to
shareholders of record as of 9:00 a.m. (Pacific time). If a purchase order is
received before 9:00 a.m. (Pacific time) on any Business Day, the investor
begins earning dividends on that Business day and continues to earn dividends
through the day prior to the date the investor redeems such shares. If the
investor's purchase order is received at or after 9:00 a.m. (Pacific time) on
any Business Day, the investor begins earning dividends on the next Business Day
and continues to earn dividends through the day prior to the date the investor
redeems such shares. Dividends for a Saturday, Sunday or Holiday are credited on
the preceding Business Day. If an investor redeems shares before the dividend
payment date, any dividends credited to the investor are paid on the following
dividend payment date unless the investor has redeemed all of the shares in the
account, in which case the investor receives any accrued dividends together with
any redemption proceeds. The Fund declares and distributes any capital gains at
least annually.
Dividends declared in, and attributable to, a month are paid early in the
following month. Investors have three options for receiving distributions of
dividends and capital gains (if any). They are discussed under "Additional
Shareholder Services -- Dividend and Distribution Options."
HOW TO REDEEM SHARES
Investors may redeem all or a portion of their shares in the Fund on any
Business Day without any charge by the Fund. Shares are redeemed at the next NAV
calculated after the Fund has received a redemption request in proper form.
Redemption proceeds may be more or less than the amount invested and, therefore,
a redemption of shares in the Fund may result in a gain or loss for federal and
state income
10
<PAGE> 21
tax purposes. The Fund ordinarily remits redemption proceeds within seven days
after a redemption order is received in proper form, unless the SEC permits a
longer period under extraordinary circumstances. Such extraordinary
circumstances could include a period during which an emergency exists as a
result of which (a) disposal by the Fund and/or Master Portfolio of securities
owned by them is not reasonably practicable or (b) it is not reasonably
practicable for the Fund and/or Master Portfolio fairly to determine the value
of their net assets, or (c) a period during which the SEC by order permits
deferral of redemptions for the protection of security holders of the Fund
and/or Master Portfolio. In addition, the Fund may hold payment on a redemption
until reasonably satisfied that investments made by check have been collected
(which can take up to 15 days from the purchase date). To ensure acceptance of a
redemption request, investors should follow the procedures described below.
Payment of redemption proceeds may be made in securities, subject to regulation
by some state securities commissions.
Telephone redemption or exchange privileges are made available to
shareholders automatically upon opening an account, unless a shareholder
specifically declines the privileges. These privileges authorize the Transfer
Agent to act on telephone instructions from any person representing himself or
herself to be the investor and reasonably believed by the Transfer Agent to be
genuine. The Company requests the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such procedures, the Company
or the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Company nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be genuine.
Due to the high cost of maintaining Fund accounts with small balances, the
Company reserves the right to redeem accounts that fall below $1,000. Prior to
such a redemption, an investor will be given 30 days' notice to make an
additional investment to raise the account balance to the specified minimum.
Redemption orders that are received by the Transfer Agent before 9:00 a.m.
(Pacific time) on any Business Day generally are executed on that Business Day.
Redemption orders that are received after 9:00 a.m. (Pacific time) on any
Business Day generally are executed on the next Business Day.
REDEMPTIONS BY MAIL
The investor should:
1. Write a letter of instruction. Indicate the dollar amount or number of
Fund shares the investor wants to redeem. Refer to the Fund account number and
provide a social security number or TIN (as applicable).
2. Sign the letter in exactly the same way the account is registered. If
there is more than one owner of the shares, all owners must sign.
3. Signature guarantees are not required for redemption requests unless
redemption proceeds of $5,000 or more are to be paid to someone other than the
investor at the investor's address of record or to the investor's designated
Approved Bank account, or other unusual circumstances exist which cause the
Transfer Agent to determine that a signature guarantee is necessary or prudent
to protect against unauthorized redemption requests. If required, a signature
must be guaranteed by an "eligible guarantor institution," which includes a
commercial bank that is an FDIC member, a trust company, a member firm of a
domestic stock exchange, a savings association, or a credit union that is
authorized by its charter to
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<PAGE> 22
provide a signature guarantee. Signature guarantees by notaries public are not
acceptable. Further documentation may be requested from corporations,
administrators, executors, personal representatives, trustees or custodians.
4. Mail a letter to the Transfer Agent at the mailing address set forth
under "Investing in the Fund -- Initial Purchases By Wire."
Unless other instructions are given in proper form, a check for redemption
proceeds is sent to the investor's address of record.
SYSTEMATIC WITHDRAWAL PLAN
The Company's Systematic Withdrawal Plan provides an investor with a
convenient way to have Fund shares redeemed from an account and the proceeds
distributed to the investor on a monthly basis. An investor may participate in
this plan only if the investor has a Fund account valued at $10,000 or more as
of the date of the election to participate, the investor has an account at an
Approved Bank, the investor's dividends and capital gain distributions are being
reinvested automatically and the investor is not also a participant in the
Systematic Purchase Plan at any time while participating in the Systematic
Withdrawal Plan. The investor specifies an amount ($100 or more) to be
distributed by check to the investor's address of record or deposited in an
Approved Bank account designated in the Account Application. The Transfer Agent
redeems sufficient shares and mails or deposits redemption proceeds as
instructed on or about the fifth Business Day prior to the end of each month.
There are no separate fees charged to investors by the Fund for participating in
the Systematic Withdrawal Plan.
Investors may change the withdrawal amount, suspend withdrawals or
terminate participation in the Systematic Withdrawal Plan at any time by
notifying the Transfer Agent at least ten Business Days prior to any scheduled
transaction. Participation in the Systematic Withdrawal Plan will be terminated
automatically if a Fund account or Approved Bank account is closed.
EXPEDITED REDEMPTIONS BY LETTER AND TELEPHONE
Investors may request an expedited redemption of shares of the Fund by
letter, in which case receipt of redemption proceeds, but not the Fund's receipt
of a redemption request, would be expedited. Telephone redemption or exchange
privileges are made available to investors automatically upon the opening of an
account unless an investor specifically declines such privileges. An investor
also may request an expedited redemption of shares of the Fund by telephone on
any Business Day, in which case both the receipt of redemption proceeds and the
Fund's receipt of the redemption request would be expedited. Investors may
request a redemption by telephone only if the total value of the shares redeemed
is equal to $100 or more.
Investors may request expedited redemption by telephone by calling the
Transfer Agent at (800) 572-7797.
Investors may mail expedited redemption requests to the Transfer Agent at
the mailing address set forth under "Investing in the Fund -- Initial Purchases
by Wire."
Upon request, proceeds of expedited redemptions of $5,000 or more are wired
or credited to an Approved Bank account designated in an Account Application or
wired to the Selling Agent designated in
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<PAGE> 23
an Account Application. The Company reserves the right to impose a charge for
wiring redemption proceeds. When proceeds of an expedited redemption are to be
paid to someone other than the investor, or to an address other than that of
record, or to an account with an Approved Bank or Selling Agent that the
investor has not predesignated in the Account Application, the expedited
redemption request must be made by letter and the signature(s) on the letter
must be guaranteed, regardless of the amount of the redemption. If an expedited
redemption request is received by the Transfer Agent by 9:00 a.m. on a Business
Day, redemption proceeds are transmitted to a designated account with an
Approved Bank or Selling Agent on the same Business Day (assuming the investment
check has cleared as described above), absent extraordinary circumstances. Such
extraordinary circumstances could include those described above as potentially
delaying redemptions, and also could include situations involving an unusually
heavy volume of wire transfer orders on a national or regional basis or
communication or transmittal delays that could cause a brief delay in the wiring
or crediting of funds. A check for proceeds of less than $5,000 may be mailed to
the address of record, or, at the investor's election, credited to an Approved
Bank account designated in the Account Application.
During periods of drastic economic or market activity or changes, investors
may experience problems implementing an expedited redemption by telephone. In
the event an investor is unable to reach the Transfer Agent by telephone, the
investor should consider using overnight mail to implement an expedited
redemption. The Fund reserves the right to modify or terminate the expedited
telephone redemption privileges at any time.
REDEMPTIONS THROUGH SELLING AGENTS
Investors may request a redemption of shares of the Fund through Selling
Agents. Redemption orders transmitted by a Selling Agent to the Transfer Agent
before 9:00 a.m. (Pacific time) on any Business Day generally are executed on
that day. Redemption orders transmitted by a Selling Agent to the Transfer Agent
after 9:00 a.m. (Pacific time) on any Business Day are executed on the next
Business Day. The Selling Agent is responsible for the prompt transmission of
redemption orders to the Fund.
Unless an investor has made other arrangements with the Selling Agent, and
the Transfer Agent has been informed of such arrangements, proceeds of a
redemption order made by the investor through the Selling Agent are credited to
an account with the Approved Bank that is designated in the Account Application.
If no such account is designated, a check for the proceeds is mailed to the
investor's address of record or, if such address is no longer valid, the
proceeds are credited to the investor's account with the Selling Agent. An
investor may request a check from the Selling Agent or may elect to retain the
redemption proceeds in such account. The Selling Agent may charge a service fee.
In addition, the Selling Agent may benefit from the use of redemption proceeds
until the check it issues to the investor has cleared or until such proceeds
have been disbursed or reinvested on the investor's behalf.
ADDITIONAL SHAREHOLDER SERVICES
The Company offers investors a number of optional services. As noted above,
investors can take advantage of the Systematic Purchase Plan, the Systematic
Withdrawal Plan, and Expedited Redemptions by Letter and Telephone. In addition,
the Fund offers three dividend and distribution payment options and an exchange
privilege, which are described below.
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<PAGE> 24
DIVIDEND AND DISTRIBUTION OPTIONS
When an investor fills out an Account Application, the investor can choose
from three dividend and distribution options:
A. The AUTOMATIC REINVESTMENT OPTION provides for the reinvestment of
dividends and capital gain distributions in additional shares of the Fund.
Dividends and distributions declared in a month are reinvested at NAV early
in the following month. Investors are assigned this option automatically if
they make no choice on their Account Applications.
B. The CHECK PAYMENT OPTION allows an investor to receive a check for
a dividend or capital gain distribution, which is mailed either to the
designated address, or a designated Approved Bank, early in the month
following declaration. If the U.S. Postal Service cannot deliver such
checks, or if such checks remain uncashed for six months, distributions are
held in a non-interest bearing omnibus bank account established by the
Fund's dividend disbursing agent on an investor's behalf.
C. The AUTOMATIC CLEARING HOUSE OPTION permits investors to have
dividends and capital gain distributions deposited in an Approved Bank
account designated in the Account Application. In the event the Approved
Bank account is closed, distributions are held in a non-interest bearing
omnibus bank account established by the Fund's dividend disbursing agent on
the investor's behalf.
The Company forwards moneys to the dividend disbursing agent so that it may
issue investors dividend checks under the Check Payment Option. The dividend
disbursing agent may benefit from the temporary use of such moneys until these
checks clear.
EXCHANGE PRIVILEGE
The exchange privilege enables an investor to exchange shares of the Fund
for shares of another fund offered by the Company or shares of certain other
funds offered by other investment companies advised by Wells Fargo Bank, to the
extent such shares are offered for sale in the investor's state of residence.
The exchange privilege may be expanded to permit exchanges between the Fund and
other funds that, in the future, may be advised by Wells Fargo Bank. Investors
will be notified of any such change. Before making an exchange from the Fund to
another fund advised by Wells Fargo Bank, an investor should observe the
following:
- Obtain and carefully read the prospectus of the fund into which the
investor wants to exchange. Prospectuses may be obtained from Stephens.
- Shares will be exchanged at the next determined NAV.
- If the investor exchanges into another fund with a front-end sales
charge, the investor must pay the difference between that fund's sales
charge and any sales charge already paid in connection with the shares
which are being exchanged.
- Each exchange, in effect, represents the redemption of shares of one
fund and the purchase of shares of another, which may produce a gain or
loss for tax purposes. A confirmation of each exchange transaction is
sent to investors.
14
<PAGE> 25
- The dollar amount of shares exchanged must meet the minimum initial
and/or subsequent investment amounts of the other fund.
- The Company reserves the right to limit the number of times shares may
be exchanged between funds, to reject any telephone exchange order, to
charge a nominal exchange fee (although it currently does not do so),
or otherwise to modify or discontinue exchange privileges at any time.
Under SEC rules, subject to limited exceptions, the Company must notify
investors 60 days before it modifies or discontinues the exchange
privilege.
- No fees are currently charged investors directly in connection with
exchanges through the Company although the Company reserves the right,
upon not less than 60 days' written notice, to charge investors a
nominal exchange fee in accordance with rules promulgated by the SEC.
The procedures applicable to Fund share redemptions also apply to Fund
share exchanges. In particular, exchange orders received after 9:00 a.m.
(Pacific time) are processed on the next Business Day for each fund involved in
the exchange. In addition, a signature guarantee may be required if the amount
being exchanged is more than $25,000.
To exchange shares, investors should write the Transfer Agent at the
mailing address under "Investing in the Fund -- Initial Purchases by Wire," or
call the Transfer Agent at the telephone number listed on the transaction
confirmation, or contact a Selling Agent. The procedures applicable to telephone
redemptions, including the discussion regarding the responsibility for the
authenticity of telephone instructions, are also applicable to telephone
exchange requests. See "How to Redeem Shares -- Expedited Redemptions by Letter
and Telephone."
TAXES
The Company intends to qualify the Fund as a regulated investment company
under Subchapter M of the Internal Revenue Code (the "Code"). The Fund will be
treated as a separate entity for tax purposes and thus the provisions of the
Code applicable to regulated investment companies generally will be applied to
the Fund, rather than to the Company as a whole. In addition, net capital gains,
net investment income, and operating expenses will be determined separately for
the Fund.
By complying with the applicable provisions of the Code, the Fund will not
be subject to federal income taxes with respect to net investment income and net
realized capital gains distributed to its shareholders, and the Fund's
shareholders will not be subject to federal income taxes on any dividends of the
Fund attributable to interest from tax-exempt securities. However, dividends
attributable to interest from taxable securities and capital gains (if any) will
be taxable to shareholders. In addition, by complying with the applicable
provisions of the Code, Fund dividends also will be exempt from personal income
tax to the extent such dividends are attributable to instruments that pay
interest which would be exempt from personal income taxes if such instruments
were held directly by an individual. The Fund does not make any representation
regarding the taxation of its corporate shareholders and recommends that such
shareholders consult their tax advisors.
The Fund seeks to comply with the applicable provisions of the Code by
investing all of its assets in the Master Portfolio. The Master Portfolio
intends to qualify for federal tax purposes as a partnership. As such, the Fund
will be deemed to own directly its proportionate share of the Master Trust's
assets. Therefore, any
15
<PAGE> 26
interest, dividends, gains or losses of the Master Portfolio will be deemed to
have been "passed through" to the Fund and other investors in the Master
Portfolio, regardless of whether such interest, dividends or gains have been
distributed by the Master Portfolio or losses have been realized by the Fund or
other investors. Accordingly, if the Master Portfolio were to accrue but not
distribute any interest, dividends or gains, the Fund would be deemed to have
realized and recognized its proportionate share of interest, dividends or gains
without receipt of any corresponding distribution. The Master Portfolio seeks to
minimize recognition by investors of interest, dividends or gains without a
corresponding distribution.
The Fund, or a Shareholder Servicing Agent on its behalf, will inform
investors of the amount and nature of Fund dividends and capital gains.
Investors should retain all statements received to assist in personal
recordkeeping. The Company is required to withhold, subject to certain
exemptions, at a rate of 31% on dividends paid or credited to individual
shareholders of the Fund, if a shareholder has not complied with IRS regulations
or if a correct social security number or TIN (a certified TIN when required),
is not on file with the Company or the Transfer Agent. In connection with this
withholding requirement, investors are asked to certify on their Account
Applications that the social security number or TIN provided is correct and that
such investors are not subject to 31% back-up withholding for previous
underreporting to the IRS.
Foreign shareholders may be subject to different tax treatment, including a
withholding tax. See "Federal Income Taxes -- Foreign Shareholders" in the SAI.
The foregoing discussion regarding dividends, distributions and taxes is
based on tax laws and regulations which were in effect as of the date of this
Prospectus and summarizes only some of the important federal tax considerations
generally affecting the Fund and its shareholders. It is not intended as a
substitute for careful tax planning; investors should consult their tax advisors
with respect to their specific tax situations as well as with respect to state
and local taxes.
Further federal tax considerations are discussed in the SAI for the Fund.
GENERAL INFORMATION
DESCRIPTION OF THE COMPANY
The Fund is a series of the Company. The Company, an open-end management
investment company, was incorporated in Maryland on April 27, 1987. The
authorized capital stock of the Company consists of 20,000,000,000 shares having
a par value of $.001 per share. The Company is currently authorized to offer
fourteen other series of shares: Asset Allocation Fund, California Tax-Free Bond
Fund, California Tax-Free Money Market Fund, Dividend Income Fund, Growth and
Income Fund, Municipal Income Fund, Money Market Fund, Overland Sweep Fund,
Short-Term Government-Corporate Income Fund, Short-Term Municipal Income Fund,
Strategic Growth Fund, Variable Rate Government Fund, U.S. Government Income
Fund and U.S. Treasury Money Market Fund. The Board of Directors may, in the
future, authorize the issuance of shares of capital stock representing
additional series or investment portfolios. All shares of the Company have equal
voting rights and will be voted in the aggregate, and not by series or class,
except where voting by series or class is required by law or where the matter
involved affects only one series or class. The Company may dispense with the
annual meeting of shareholders in any fiscal year in which it is not required to
elect Directors under the 1940 Act; however, shareholders are entitled to call a
meeting of
16
<PAGE> 27
shareholders for purposes of voting on removal of a Director or Directors. A
more detailed statement of the voting rights of shareholders is contained in the
SAI. All shares of the Company, when issued, will be fully paid and
nonassessable. The Company's principal office is located at 111 Center Street,
Little Rock, Arkansas 72201.
The Board of Directors of the Company supervises the Fund's activities and
monitors its contractual arrangements with various service providers. Additional
information about the Directors/Trustees and Officers of the Company and Master
Portfolio is included in the Fund's SAI under "Management." As noted above, the
Fund may withdraw its investment in the Master Portfolio only if the Board of
Directors of the Company determines that it is in the best interests of the Fund
and its shareholders to do so. Upon any such withdrawal, the Board of Directors
of the Company would consider what action might be taken, including the
investment of all the assets of the Fund in another pooled investment entity
having the same investment objective as the Fund or the hiring of an investment
adviser to manage the Fund's assets in accordance with the investment policies
described above with respect to the Master Portfolio. Although the Company is
not required to hold regular annual shareholder meetings, occasional annual or
special meetings may be required for purposes such as electing or removing
Directors, approving advisory contracts and distribution plans, and changing the
Fund's investment objective or fundamental investment policies.
The Master Trust was established on August 15, 1991 as a Delaware business
trust. The Master Trust's Declaration of Trust permits the Board of Trustees to
issue beneficial interests in a Master Portfolio of the Master Trust to
investors based on their proportionate investments in the Master Portfolio. The
Master Trust, on behalf of the Master Portfolio, has retained the services of
Wells Fargo Bank as investment adviser and Stephens as administrator and
placement agent. The Board of Trustees of the Master Trust is responsible for
the general management of the Master Trust and its Master Portfolios and
supervising the actions of Wells Fargo Bank and Stephens in these capacities.
VOTING
All shares of the Company have equal voting rights and will be voted in the
aggregate, unless otherwise required by law (such as when a matter affects only
one fund). Shareholders of the Fund are entitled to one vote for each share
owned and fractional votes for fractional shares owned. A more detailed
description of the voting rights and attributes of the shares is contained above
under "How The Fund Works -- Master/Feeder Structure" and in the "Capital Stock"
section of the SAI.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP serve as independent auditors for the Company. Their
address is Three Embarcadero Center, San Francisco, California 94111.
LEGAL COUNSEL
Morrison & Foerster serves as counsel to the Company. Its address is 2000
Pennsylvania Avenue, N.W., Washington, D.C. 20006.
17
<PAGE> 28
INFORMATION ON THE FUND
The Company will provide annual and semi-annual reports to all
shareholders. The annual reports contain audited financial statements and other
information about the Company's funds, including additional information on
performance. Shareholders may obtain a copy of the Company's most recent report
without charge by phoning (800) 552-9612. Future annual reports will contain
information about the Fund.
18
<PAGE> 29
PROSPECTUS APPENDIX -- ADDITIONAL INVESTMENT POLICIES
The following describes certain instruments in which the Fund and Master
Portfolio of the Master Trust may invest.
Municipal Obligations
Subject to the maturity and other restrictions under Rule 2a-7, the Master
Portfolio may invest in Municipal Obligations. Municipal bonds generally have a
maturity at the time of issuance of up to 40 years. Medium-term municipal notes
are generally issued in anticipation of the receipt of tax funds, of the
proceeds of bond placements, or of other revenues. The ability of an issuer to
make payments on notes is therefore especially dependent on such tax receipts,
proceeds from bond sales or other revenues, as the case may be. Municipal
commercial paper is a debt obligation with a stated maturity of 270 days or less
that is issued to finance seasonal working capital needs or as short-term
financing in anticipation of longer-term debt. From time to time, the Master
Portfolio may invest 25% or more of the current value of its total assets in
certain "private activity bonds," such as pollution control bonds; provided,
however, that such investments will be made only to the extent they are
consistent with the Master Portfolio's fundamental policy of investing, under
normal circumstances, at least 80% of its net assets in municipal obligations
that are exempt from federal income taxes and not subject to the federal
alternative minimum tax.
The Master Portfolio will invest in the following municipal obligations
with remaining maturities not exceeding 13 months:
(i) long-term municipal bonds rated at the date of purchase "Aa" or
better by Moody's or "AA" or better by S&P;
(ii) municipal notes rated at the date of purchase "MIG 1" or "MIG 2"
(or "VMIG 1" or "VMIG 2" in the case of an issue having a variable
rate with a demand feature) by Moody's or "SP-1+", "SP-1" or "SP-2"
by S&P; and
(iii) short-term municipal commercial paper rated at the date of
purchase "P-1" by Moody's or "A-1+", "A-1" or "A-2" by S&P.
Taxable Investments
Pending the investment of proceeds from the sale of interests of the Master
Portfolio or proceeds from sales of portfolio securities or in anticipation of
redemptions or to maintain a "defensive" posture when, in the opinion of Wells
Fargo Bank, as investment adviser, it is advisable to do so because of market
conditions, the Master Portfolio may elect to invest temporarily up to 20% of
the current value of its net assets in cash reserves, including the following
taxable high-quality money market instruments: (i) U.S. Government obligations;
(ii) negotiable certificates of deposit, bankers' acceptances and fixed time
deposits and other obligations of domestic banks (including foreign branches)
that have more than $1 billion in total assets at the time of investment and are
members of the Federal Reserve System or are examined by the Comptroller of the
Currency or whose deposits are insured by the FDIC; (iii) commercial paper rated
at the date of purchase "P-1" by Moody's or "A-1+" or "A-1" by S&P; (iv) certain
repurchase agreements; and (v) high-quality municipal obligations, the income
from which may or may not be exempt from federal income taxes.
A-1
<PAGE> 30
Moreover, the Master Portfolio may invest temporarily more than 20% of its
total assets in such securities and in high-quality, short-term municipal
obligations the interest on which is not exempt from federal income taxes to
maintain a temporary defensive posture or in an effort to improve after-tax
yield to the Master Portfolio's shareholders when, in the opinion of Wells Fargo
Bank, as investment adviser, it is advisable to do so because of unusual market
conditions.
U.S. Government Obligations
The Master Portfolio may invest in various types of U.S. Government
obligations with remaining maturities of up to 13 months. U.S. Government
obligations include securities issued or guaranteed as to principal and interest
by the U.S. Government and supported by the full faith and credit of the U.S.
Treasury. U.S. Treasury obligations differ mainly in the length of their
maturities. Treasury bills, the most frequently issued marketable government
securities, have a maturity of up to one year and are issued on a discount
basis. U.S. Government obligations also include securities issued or guaranteed
by federal agencies or instrumentalities, including government-sponsored
enterprises. Some obligations of such agencies or instrumentalities of the U.S.
Government are supported by the full faith and credit of the United States or
U.S. Treasury guarantees; others, by the right of the issuer or guarantor to
borrow from the U.S. Treasury; still others by the discretionary authority of
the U.S. Government to purchase certain obligations of the agency or
instrumentality; and others, only by the credit of the agency or instrumentality
issuing the obligation. In the case of obligations not backed by the full faith
and credit of the United States, the investor must look principally to the
agency or instrumentality issuing or guaranteeing the obligation for ultimate
repayment, which agency or instrumentality may be privately owned. There can be
no assurance that the U.S. Government would provide financial support to its
agencies or instrumentalities (including government-sponsored enterprises) where
it is not obligated to do so. In addition, U.S. Government obligations are
subject to fluctuations in market value due to fluctuations in market interest
rates. As a general matter, the value of debt instruments, including U.S.
Government obligations, declines when market interest rates increase and rises
when market interest rates decrease. Certain types of U.S. Government
obligations are subject to fluctuations in yield or value due to their structure
or contract terms.
Other Investment Companies
For temporary investments, the Fund and Master Portfolio may invest in
shares of other open-end investment companies that invest exclusively in
high-quality short-term securities subject to the limits set forth under Section
12 of the 1940 Act, provided however, that any such company has a fundamental
policy of investing, under normal market conditions, at least 80% of its net
assets in obligations that are exempt from federal income tax and are not
subject to the federal alternative minimum tax. Such investment companies can be
expected to charge management fees and other operating expenses that would be in
addition to those charged to the Fund or Master Portfolio; however, the Master
Portfolio's investment adviser has undertaken to waive its advisory fees with
respect to that portion of the Master Portfolio's assets so invested, except
when such purchase is part of a plan of merger, consolidation, reorganization or
acquisition. Under Section 12(d)(1), the Fund or Master Portfolio, together with
any company or companies controlled by it, is generally prohibited from owning
more than 3% of the total outstanding voting stock of any such investment
company, nor may the Fund or Master Portfolio, together with any such company or
companies, invest more than 5% of its assets in any one such investment company
or
A-2
<PAGE> 31
invest more than 10% of its assets in securities of all such investment
companies combined. Under Section 12, however, the Fund may invest substantially
all of its assets in the Master Portfolio.
Floating- and Variable-Rate Instruments
Certain of the debt instruments that the Master Portfolio may purchase bear
interest at rates that are not fixed, but vary with, for example, changes in
specified market rates or indices or at specified intervals. These instruments
typically have maturities of more than thirteen months but may carry a demand
feature that would permit the holder to tender them back to the issuer at par
value prior to maturity. The floating-and variable-rate instruments that the
Master Portfolio may purchase include certificates of participation in such
obligations purchased from banks. Wells Fargo Bank, as investment adviser, may
rely upon either the opinion of counsel or IRS rulings regarding the tax-exempt
status of these certificates.
Wells Fargo Bank, as investment adviser to the Master Portfolio, monitors
on an ongoing basis the ability of an issuer of a demand instrument to pay
principal and interest on demand. Events affecting the ability of the issuer of
a demand instrument to make payment when due may occur between the time the
Master Portfolio elects to demand payment and the time payment is due, thereby
affecting the Master Portfolio's ability to obtain payment at par. The
investment adviser, in accordance with the guidelines approved by the Master
Trust's Board of Trustees, determines the liquidity of those instruments that
have a demand feature that is not exercisable within seven days, provided that
an active secondary market exists.
The Master Portfolio may, in accordance with SEC rules, account for these
instruments as maturing at the next interest-rate readjustment date or the date
at which the Master Portfolio may tender the instrument back to the issuer,
whichever is later. The Master Portfolio may invest in floating- and variable-
rate obligations even if they carry stated maturities in excess of 13 months,
upon compliance with certain conditions of SEC rules, in which case such
obligations may be treated in accordance with these conditions as having
maturities not exceeding 13 months.
Repurchase Agreements
The Master Portfolio may enter into repurchase agreements wherein the
seller of a security agrees to repurchase that security from the Master
Portfolio at a mutually agreed-upon time and price. The period of maturity is
usually quite short, often overnight or a few days, although it may extend over
a number of months. The Master Portfolio may enter into repurchase agreements
only with respect to obligations that could otherwise be purchased by the Master
Portfolio. All repurchase agreements will be fully collateralized based on
values that are marked to market daily. While the maturities of the underlying
securities in a repurchase agreement transaction may be greater than thirteen
months, the term of any repurchase agreement on behalf of the Master Portfolio
will always be less than thirteen months. If the seller defaults and the value
of the underlying securities declines, the Master Portfolio may incur a loss. In
addition, if bankruptcy proceedings are commenced with respect to the seller of
the security, the participating Master Portfolio's disposition of the security
may be delayed or limited. The Master Portfolio enters into repurchase
agreements only with registered broker/dealers and commercial banks that meet
guidelines established by the Board of Trustees of the Master Trust and that are
not affiliated with Wells Fargo Bank. The Master Portfolio may enter into pooled
repurchase agreement transactions with other funds advised by Wells Fargo Bank.
A-3
<PAGE> 32
Foreign Obligations
The Master Portfolio may invest up to 25% of its total assets in
high-quality, short-term (thirteen months or less) debt obligations of foreign
branches of U.S. banks or U.S. branches of foreign banks that are denominated in
and pay interest in U.S. dollars. Investments in foreign obligations involve
certain considerations that are not typically associated with investing in
domestic obligations. There may be less publicly available information about a
foreign issuer than about a domestic issuer. Foreign issuers also are not
generally subject to the same uniform accounting, auditing and financial
reporting standards or governmental supervision as domestic issuers. In
addition, with respect to certain foreign countries, interest may be withheld at
the source under foreign income tax laws and there is a possibility of
expropriation or confiscatory taxation, political or social instability or
diplomatic developments that could adversely affect investments in, the
liquidity of, and the ability to enforce contractual obligations with respect
to, securities of issuers located in those countries.
INVESTMENT POLICIES
The Fund's investment objective and its investment policy of investing all
of its assets in the Master Portfolio, as set forth above, are fundamental.
Accordingly, such investment objective and policy may not be changed without
approval by the vote of holders of a majority of the Fund's outstanding voting
securities, as described under "Capital Stock" in the SAI. In addition, any
fundamental investment policy may not be changed without such shareholder
approval. If the Company's Board of Directors determines, however, that the
Fund's investment objective can best be achieved by a substantive change in a
non-fundamental investment policy or strategy, the Company's Board may make such
change without shareholder approval and will disclose any such material changes
in the Fund's then-current prospectus.
The investment objective of the Master Portfolio may not be changed without
approval of the investors in the Master Portfolio. The classification of the
Fund and the Master Portfolio as "diversified" may not be changed, in the case
of the Fund, without the approval of the Fund's shareholders, or, in the case of
the Master Portfolio, without the approval of the Fund and any other investors
in the Master Portfolio.
As matters of fundamental policy the Fund and the Master Portfolio may: (i)
borrow from banks up to 10% of the current value of each of their net assets
only for temporary purposes in order to meet redemptions, and these borrowings
may be secured by the pledge of up to 10% of the current value of their
respective net assets (but investments by the Master Portfolio may not be
purchased while any such outstanding borrowing in excess of 5% of its net assets
exists); (ii) not make loans, except that each of the Fund and the Master
Portfolio may purchase or hold debt instruments, lend its portfolio securities
and enter into repurchase agreement transactions in accordance with its
investment policies; loans for purposes of this restriction will not include the
Fund's purchase of interests in the Master Portfolio; (iii) not purchase the
securities of issuers conducting their principal business activity in the same
industry if, immediately after the purchase and as a result thereof, the value
of the Fund's or Master Portfolio's investments in that industry would be 25% or
more of the current value of the Fund's or Master Portfolio's total assets,
provided that there is no limitation with respect to investments in (a)
municipal securities (for the purposes of this restriction, private activity
bonds and notes shall not be deemed municipal securities if the payments of
principal and interest on such bonds and notes is the ultimate responsibility of
non-governmental entities), (b) U.S. Government obligations, and (c) certain
obligations of domestic banks; and (iv) not purchase securities of any issuer
(except securities issued or guaranteed by the U.S.
A-4
<PAGE> 33
Government, its agencies and instrumentalities, including government-sponsored
enterprises) if, as a result, with respect to 75% of its total assets, more than
5% of the value of the Portfolio's total assets would be invested in the
securities of any one issuer or, with respect to 100% of its total assets the
Portfolio's ownership would be more than 10% of the outstanding voting
securities of such issuer.
As matters of non-fundamental policy the Fund and the Master Portfolio may:
(i) invest up to 10% of the current value of each of their net assets in
securities that are illiquid by virtue of the absence of a readily available
market or the existence of legal or contractual restrictions on resale and fixed
time deposits that are subject to withdrawal penalties and that have maturities
of more than seven days; and (ii) invest up to 10% of the current value of each
of their net assets in repurchase agreements having maturities of more than
seven days, and restricted securities (which include securities that must be
registered under the Securities Act of 1933 before they may be offered to the
public).
A-5
<PAGE> 34
<TABLE>
<S> <C>
NATIONAL TAX-FREE
INSTITUTIONAL MONEY
LOGO MARKET FUND
ACCOUNT APPLICATION
PAGE 1 OF 5
</TABLE>
NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET
FUND
C/O OVERLAND EXPRESS SHAREHOLDER SERVICES,
WELLS FARGO BANK, N.A.
POST OFFICE BOX 63084, SAN FRANCISCO,
CALIFORNIA 94163
FOR PERSONAL SERVICE PLEASE CALL
YOUR INVESTMENT SPECIALIST OR 1-800-572-7797
1. ACCOUNT REGISTRATION / / NEW ACCOUNT / / ADDITIONAL INVESTMENT OR CHANGE
TO ACCOUNT #
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
/ / INDIVIDUAL 1. Individual - -
---------------------------------
USE LINE 1 First Name Initial Last Name Soc. Security
No.
(Only one
Soc. Security
/ / JOINT OWNERS 2. Joint Owner No. is
---------------------------------
USE LINES 1 & 2 First Name Initial Last Name required for
Joint Owners)
Joint Tenancy with right of survivorship is presumed unless Tenancy in Common is
indicated:
/ / Tenants in Common
/ / TRANSFER TO 3. Uniform
-----------------------------------------------------------
MINORS Transfer Custodian's Name (only one) Minor's State
of Residence
USE LINE 3 to Minors - -
---------------------------------
Minor's Soc.
Minor's Name (only one) Security No.
/ / TRUST* 4. Trust Name
-----------------------------------------------------------
USE LINE 4 Trustee(s)
-----------------------------------------------------------
(If you would like Trustee's name included in
registration.)
Trust ID Number ---------------------------------------------
Please attach title page, the page(s) allowing investment in a mutual fund
("powers page") and signature page, and complete Section 6, "Authorization
for Trusts and Organizations."
/ / ORGANIZATION* 5. Organization Name -
USE LINE 5 *Complete "Authorization for Trusts and Tax I.D. No.
Organizations" (Section 6).
</TABLE>
- --------------------------------------------------------------------------------
ADDRESS:
Number and Street Apartment No.
City State Zip Code
Telephone Numbers: (DAY) - - (EVENING) - -
(Area Code) (Area Code)
(CONTINUED)
<PAGE> 35
<TABLE>
<S> <C>
NATIONAL TAX-FREE
INSTITUTIONAL MONEY
LOGO MARKET FUND
ACCOUNT APPLICATION
PAGE 2 OF 5
</TABLE>
2. INVESTMENT INSTRUCTIONS (Minimum initial investment: $150,000.)
- --------------------------------------------------------------------------------
INVESTMENT AMOUNT: $
METHOD OF PAYMENT: / / Debit bank account designated in Section 3.
/ / Check attached (payable to National Tax-Free
Institutional Money Market Fund)
/ / Funds have been wired to my Overland Express
Account #
- --------------------------------------------------------------------------------
SETTLEMENT ARRANGEMENTS: (Check only one if applicable)
/ / Automatic debit/credit of an account with a bank that has been authorized
by the Transfer Agent. (If you check this box, your initial and/or
subsequent purchases and redemptions can be settled through the bank
account you designate in Section 3.) Please attach a voided check or
deposit slip and fill in bank account information in Section 3.
/ / Bank wire instructions. (If you check this box, redemptions can be
settled by wire through the bank account you designate below. Some banks
impose fees for wires; check with your bank to determine policy. The
Company reserves the right to impose a charge for wiring redemption
proceeds.) Please attach a voided check or deposit slip and fill in bank
account information in Section 3.
- --------------------------------------------------------------------------------
3. BANK ACCOUNT INFORMATION
- --------------------------------------------------------------------------------
Bank Name
Address City State Zip
Bank Account Number Bank Routing Number
- --------------------------------------------------------------------------------
4. TELEPHONE INSTRUCTIONS (Do NOT check this box if you wish to authorize
telephone instructions.)
- --------------------------------------------------------------------------------
/ / If this box is checked, you are NOT authorized to honor my telephone
instructions for purchase of additional Fund shares, redemptions of Fund
shares and exchanges of shares between funds. If this box is not checked,
I understand that telephone instructions will be effected by
debiting/crediting the account designated in Section 3 (if approved) and
that if a designated account has not been authorized and approved, a
check or wire transfer will be required for a purchase and a check will
be sent for a redemption.
(CONTINUED)
<PAGE> 36
<TABLE>
<S> <C>
NATIONAL TAX-FREE
INSTITUTIONAL MONEY
LOGO MARKET FUND
ACCOUNT APPLICATION
PAGE 3 OF 5
</TABLE>
5. DISTRIBUTIONS (Do NOT check boxes if you want reinvestment.)
- --------------------------------------------------------------------------------
All dividends and capital gain distributions will be automatically reinvested
in shares of the Fund unless otherwise indicated:
/ / Invest dividends in Account # of Fund
of the Overland Express Family of Funds.
/ / Invest capital gain distributions in Account # of Fund
of the Overland Express Family of Funds.
/ / Pay dividends by Automatic Clearing House ("ACH")* and/or / / pay capital
gain distributions by ACH by crediting amounts to the bank account
designated in Section 3 (a voided check or deposit slip is attached)
/ / Pay dividends by check and/or / / pay capital gains distributions by
check
AND MAIL CHECKS TO:
/ / The registration address set forth in Section 1, / / The bank account
designated in Section 3.
* Please verify that your bank participates in the ACH system.
- --------------------------------------------------------------------------------
(CONTINUED)
<PAGE> 37
<TABLE>
<S> <C>
NATIONAL TAX-FREE
INSTITUTIONAL MONEY
LOGO MARKET FUND
ACCOUNT APPLICATION
PAGE 4 OF 5
</TABLE>
6. AUTHORIZATION FOR TRUSTS AND ORGANIZATIONS (If Applicable.)
- --------------------------------------------------------------------------------
CORPORATIONS, TRUSTS, PARTNERSHIPS OR OTHER ORGANIZATIONS MUST COMPLETE
THIS SECTION.
<TABLE>
<S> <C> <C> <C> <C>
Registered Owner is a: / / Trust / / Corporation, Incorporated Association
/ / Partnership / / Other:
(such as Non-Profit Organization, Religious Organization,
Sole Proprietorship, Investment Club, Non-incorporated
Association, etc.)
</TABLE>
The following named persons are currently officers/trustees/general
partners/other authorized signatories of the Registered Owner; this(these)
Authorized Person(s) is(are) currently authorized under the applicable
governing document to act with full power to sell, assign or transfer
securities of Overland Express Funds, Inc. for the Registered Owner and to
execute and deliver any instrument necessary to effectuate the authority
hereby conferred:
<TABLE>
<S> <C> <C>
Name Title Specimen Signature
---------------------------------- ---------------------------------- ----------------------------------
---------------------------------- ---------------------------------- ----------------------------------
---------------------------------- ---------------------------------- ----------------------------------
</TABLE>
Overland Express Funds, Inc., Stephens Inc. and Wells Fargo Bank, N.A.
may, without inquiry, act upon the instruction of ANY PERSON(S) purporting
to be (an) Authorized Person(s) as named in the Authorization Form last
received by you, and shall not be liable for any claims, expenses
(including legal fees) or losses resulting from acting upon any
instructions reasonably believed to be genuine.
FOR CORPORATIONS AND INCORPORATED ASSOCIATIONS:
I, , Secretary of the
above-named Registered Owner, do hereby certify that at a meeting on
at which a quorum was present throughout, the Board of
Directors of the corporation/the officers of the association duly adopted
a resolution, which is in full force and effect and in accordance with the
Registered Owner's charter and by-laws, which resolution: (1) empowered
the above-named Authorized Person(s) to effect securities transactions for
the Registered Owner on the terms described above; (2) authorized the
Secretary to certify, from time to time, the names and titles of the
officers of the Registered Owner and to notify you when changes in the
office occur; and (3) authorized the Secretary to certify that such a
resolution has been duly adopted and will remain in full force and effect
until you receive a duly executed amendment to the Authorization Form.
Witness my hand on behalf of the corporation/association on this
day of , 19
<TABLE>
<S> <C>
------------------------------------------------
Secretary (Signature Guarantee or
Corporate Seal is Required)
FOR ALL OTHER ORGANIZATIONS: ------------------------------------------------
Certifying Trustee, General Partner, or Other
</TABLE>
(CONTINUED)
<PAGE> 38
<TABLE>
<S> <C>
NATIONAL TAX-FREE
INSTITUTIONAL MONEY
LOGO MARKET FUND
ACCOUNT APPLICATION
PAGE 5 OF 5
</TABLE>
<TABLE>
<S> <C>
---------------------------------------------------------------------------------------------------------------
7. SIGNATURE, TAX INFORMATION & CERTIFICATION
---------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
/ / U.S. CITIZEN OR RESIDENT
I understand that the Federal Government requires Overland Express Funds, Inc. to withhold and pay to
the Internal Revenue Service 31% from all interest, dividends, capital gains distributions and
proceeds from redemptions UNLESS I have provided a certified taxpayer identification (Social Security
or Employer Identification) number and certify in the Withholding Status below that I am NOT subject
to backup withholding. The taxpayer identification number I provided in Section 1 will be the number
under which any taxable earnings will be reported to the IRS.
WITHHOLDING STATUS: Unless I indicate that I am subject to backup withholding by checking the box
below, I certify that 1) I have NOT been notified by the IRS that I am subject to backup withholding
as a result of a failure to report all interest or dividends, OR 2) I have been notified by the IRS
that I am no longer subject to backup withholding: / / I am currently subject to backup withholding.
/ / NON-RESIDENT ALIEN (In order to claim this exemption, ALL owners on the account must be non-resident
aliens and sign below.)
I am not a U.S. citizen or resident (nor is this account held by a foreign corporation, partnership,
estate or trust) and my permanent address is:
Country:
By signing below, I (we) certify, under penalties of perjury, that I (we) have full authority and legal
capacity to purchase shares of the Fund and affirm that I (we) have received a current prospectus and agree
to be bound by its terms and further certify that 1) the correct taxpayer identification number has been
provided in Section 1 of this Application and that the Withholding Status information, above, is correct OR
2) all owners are entitled to claim non-resident alien status. Investors should be aware that the failure to
check the box under "Telephone Instructions" above means that the telephone exchange and redemption
privileges will be provided. A shareholder would bear the risk of loss in the event of the fraudulent use of
the pre-authorized redemption or exchange privileges. Please see "Additional Shareholder
Services -- Exchange Privilege" and "How to Redeem Shares" in the Prospectus for more information on these
privileges.
</TABLE>
<TABLE>
<S> <C>
X SIGNATURE GUARANTEE: NOT REQUIRED WHEN
Individual (or Custodian) date ESTABLISHING NEW ACCOUNTS. Required only if
establishing privileges in Block 2 on an
X existing account. Signature Guarantee may be
Joint Owner (if any) date provided by an "eligible guarantor
institution," which includes a commercial bank,
X trust company, member firm of a domestic stock
Corporate Officer or Trustee date exchange, savings association, or credit union
that is authorized by its charter to provide a
signature guarantee.
Title of Corporate Officer or Trustee
AFFIX SIGNATURE GUARANTEE STAMP
Signature Guaranteed By
---------------------------------------------------------------------------------------------------------------
</TABLE>
DEALER INFORMATION
<TABLE>
<S> <C> <C>
Dealer Name Branch ID #
Representative's Last Name Rep ID # Rep Phone #
X
Authorized signature of Broker/Dealer Title date
</TABLE>
<PAGE> 39
SPONSOR, ADMINISTRATOR AND DISTRIBUTOR
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
INVESTMENT ADVISER, TRANSFER AND
DIVIDEND DISBURSING AGENT AND
CUSTODIAN
Wells Fargo Bank, N.A.
P.O. Box 63084
San Francisco, California 94163
LEGAL COUNSEL
Morrison & Foerster
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Three Embarcadero Center
San Francisco, California 94111
NOT FDIC INSURED
FOR MORE INFORMATION ABOUT THE FUND,
SIMPLY CALL (800) 552-9612,
OR WRITE:
NATIONAL TAX-FREE
INSTITUTIONAL MONEY MARKET FUND
C/O OVERLAND EXPRESS
SHAREHOLDER SERVICES
WELLS FARGO BANK, N.A.
P.O. BOX 63084
SAN FRANCISCO, CALIFORNIA 94163
LOGO
------------------------
PROSPECTUS
------------------------
National
Tax-Free Institutional
Money Market Fund
------------------------
February 16, 1996
------------------------
NOT FDIC INSURED
92P 7/95
<PAGE> 40
OVERLAND EXPRESS FUNDS, INC.
Telephone: 1-800-552-9612
STATEMENT OF ADDITIONAL INFORMATION
Dated February 16, 1996
NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND
_______________________________
Overland Express Funds, Inc. (the "Company") is a professionally
managed, open-end, series investment company. This Statement of Additional
Information ("SAI") contains information about the NATIONAL TAX-FREE
INSTITUTIONAL MONEY MARKET FUND (the "Fund"). The Fund seeks to achieve its
investment objective by investing all of its assets in the Tax-Free Money
Market Master Portfolio (the "Master Portfolio") of Master Investment Trust
(the "Master Trust"). The Master Portfolio has the same investment objective
as the Fund.
The Fund may withdraw its investment in the Master Portfolio at
any time if the Board of Directors of the Company determines that such action
is in the best interests of the Fund and its shareholders. Upon such
withdrawal, the Company's Board of Directors would consider alternative
investments, including investing all of the Fund's assets in another investment
company with the same investment objective as the Fund or hiring an investment
adviser to manage the Fund's assets in accordance with the investment policies
and restrictions described in the Fund's then current Prospectus and SAI.
This SAI is not a prospectus and should be read in conjunction
with the Fund's Prospectus, also dated February 16, 1996. All terms used in
this SAI that are defined in the Fund's Prospectus have the meanings assigned
in such Prospectus. A copy of the Prospectus may be obtained without charge by
writing Stephens Inc., the Company's sponsor, administrator and distributor, at
111 Center Street, Little Rock, Arkansas 72201, or by calling Wells Fargo Bank,
N.A. ("Wells Fargo Bank") at 1-800-222-8222.
- 1 -
<PAGE> 41
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Additional Permitted Investment Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Calculation of Yield and Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Federal Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Custodian and Transfer and Dividend Disbursing Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SAI Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>
- 2 -
<PAGE> 42
INTRODUCTION
The Master Trust is a registered, open-end, management investment
company. The Master Trust is a "series fund," which is a mutual fund divided
into separate portfolios. The Master Trust currently offers four diversified
portfolios: the Cash Investment Trust Master Portfolio, the Short-Term
Municipal Income Master Portfolio (formerly, the 1-3 Year Duration Municipal
Income Master Portfolio), the Short-Term Government-Corporate Income Master
Portfolio (formerly, the 1-3 Year Duration Full Faith and Credit Government
Income Master Portfolio) and the Tax-Free Money Market Master Portfolio. The
Fund invests substantially all of its assets in the Tax-Free Money Market
Master Portfolio, which has the same investment objective as the Fund.
INVESTMENT RESTRICTIONS
The Fund and the Master Portfolio are subject to the following
investment restrictions, all of which are fundamental policies.
The Fund and the Master Portfolio may not:
(1) purchase the securities of issuers conducting their
principal business activity in the same industry if, immediately after the
purchase and as a result thereof, the value of the Fund's or the Master
Portfolio's investments in that industry would be 25% or more of the current
value of the Fund's or the Master Portfolio's total assets, provided that there
is no limitation with respect to investments in (i) municipal securities (for
the purpose of this restriction, private activity bonds and notes shall not be
deemed municipal securities if the payment of principal and interest on such
bonds or notes is the ultimate responsibility of non-governmental entities);
(ii) obligations of the U.S. Government, its agencies or instrumentalities
(including government-sponsored enterprises); and (iii) obligations of domestic
banks (for the purpose of this restriction, domestic bank obligations do not
include obligations of U.S. branches of foreign banks or obligations of foreign
branches of U.S. banks), and further provided that this investment restriction
does not affect the Fund's ability to invest all or a portion of its assets in
the Master Portfolio;
(2) purchase or sell real estate or real estate limited
partnerships (other than municipal obligations or other securities secured by
real estate or interests therein or securities issued by companies that invest
in real estate or interests therein), commodities or commodity contracts
(including futures contracts) except that the Fund and Master Portfolio may
purchase securities of an issuer which invests or deals in commodities and
commodity contracts and except that the Fund and Master Portfolio may enter
into futures and options contracts in accordance with their respective
investment policies;
(3) purchase securities on margin (except for short-term
credits necessary for the clearance of transactions) or make short sales of
securities;
- 3 -
<PAGE> 43
(4) underwrite securities of other issuers, except to the
extent that the purchase of municipal securities or other permitted investments
directly from the issuer thereof or from an underwriter for an issuer and the
later disposition of such securities in accordance with the Fund's or Master
Portfolio's investment program (including the Fund's investments in the Master
Portfolio) may be deemed to be an underwriting;
(5) make investments for the purpose of exercising control or
management, provided that this restriction does not affect the Fund's ability
to invest all or a portion of its assets in the Master Portfolio;
(6) issue senior securities, except that the Fund and the
Master Portfolio may each borrow from banks up to 10% of the current value of
its net assets for temporary purposes only in order to meet redemptions, and
these borrowings may be secured by the pledge of up to 10% of the current value
of its net assets (but investments may not be purchased while any such
outstanding borrowing in excess of 5% of its net assets exists);
(7) write, purchase or sell puts, calls, warrants, options or
any combination thereof, except that the Fund and Master Portfolio may purchase
securities with put rights in order to maintain liquidity;
(8) purchase securities of any issuer (except securities issued
or guaranteed by the U.S. Government, its agencies and instrumentalities,
including government - sponsored enterprises) if, as a result, with respect to
75% of its total assets, more than 5% of the value of the Fund's or Master
Portfolio's total assets would be invested in the securities of any one issuer
or, with respect to 100% of its total assets the Fund's or Master Portfolio's
ownership would be more than 10% of the outstanding voting securities of such
issuer, provided that this restriction does not affect the Fund's ability to
invest all or a portion of its assets in the Master Portfolio; or
(9) make loans, except that the Fund and Master Portfolio may
each purchase or hold debt instruments, lend its portfolio securities or enter
into repurchase agreement transactions in accordance with its investment
policies; loans for purposes of this restriction will not include the Fund's
purchase of interests in the Master Portfolio.
Fundamental investment restriction number (8), above, is less
restrictive than Rule 2a-7 of the 1940 Act. Nonetheless, it is the operating
policy of the Fund and the Master Portfolio to comply with Rule 2a-7's
diversification requirements.
The Fund and the Master Portfolio are subject to the following
non-fundamental policies.
Neither the Fund nor the Master Portfolio may:
(1) purchase or retain securities of any issuer if the Officers
or Directors/Trustees of the Company, the Master Trust or the investment adviser
owning beneficially more than one-half of one
- 4 -
<PAGE> 44
percent (0.5%) of the securities of the issuer together own beneficially more
than 5% of such securities;
(2) purchase interests, leases, or limited partnership
interests in oil, gas or other mineral exploration or development programs;
(3) purchase securities of issuers who, with their
predecessors, have been in existence less than three years, unless the
securities are fully guaranteed or insured by the U.S. Government, a state,
commonwealth, possession, territory, the District of Columbia or by an entity
in existence at least three years, or the securities are backed by the assets
and revenues of any of the foregoing if, by reason thereof, the value of its
aggregate investments in such securities will exceed 5% of its total assets,
provided that this restriction does not affect the Fund's ability to invest all
or a portion of its assets in the Master Portfolio; and
(4) purchase securities of unseasoned issuers, including their
predecessors, which have been in operation for less than three years, and
equity securities of issuers which are not readily marketable if, by reason
thereof, the value of the Fund's or Master Portfolio's aggregate investment in
such classes of securities will exceed 5% of its total assets.
The Fund and the Master Portfolio may each invest in shares of
other open-end, management investment companies, subject to the limitations of
Section 12(d)(1) of the 1940 Act, provided that any such purchases will be
limited to temporary investments in shares of unaffiliated investment
companies. However, the investment adviser will waive its advisory fees for
that portion of the Fund's or the Master Portfolio's assets so invested, except
when such purchase is part of a plan of merger, consolidation, reorganization
or acquisition. In addition, these unaffiliated investment companies must have
a fundamental investment policy of investing at least 80% of their net assets
in obligations that are exempt from federal income taxes and are not subject to
the federal alternative minimum tax. However, the above restrictions do not
affect the Fund's ability to invest all or a portion of its assets in the
Master Portfolio.
In addition, the Fund and the Master Portfolio each reserves the
right to invest up to 10% of the current value of its net assets in fixed time
deposits that are subject to withdrawal penalties and that have maturities of
more than seven days, repurchase agreements maturing in more than seven days,
illiquid securities and restricted securities. However, as long as the Fund's
shares are registered for sale in a state that imposes a lower limit on the
percentage of a fund's assets that may be so invested, the Fund and the Master
Portfolio will comply with such lower limit. The Fund presently is limited to
investing 10% of its net assets in such securities due to limits applicable in
several states.
Furthermore, the Fund and the Master Portfolio may not purchase or
sell real estate limited partnership interests. The Fund and the Master
Portfolio do not currently intend to make loans of their portfolio securities.
- 5 -
<PAGE> 45
ADDITIONAL PERMITTED INVESTMENT ACTIVITIES
Unrated, Downgraded and Below Investment Grade Investments. The
Master Portfolio may purchase instruments that are not rated if, in the opinion
of Wells Fargo Bank, such obligations are of comparable quality to other rated
investments that are permitted to be purchased by the Master Portfolio. The
Master Portfolio may purchase unrated, downgraded or below investment grade
instruments only if they are purchased in accordance with the Master
Portfolio's procedures adopted by the Master Trust's Board of Trustees in
accordance with Rule 2a-7 under the 1940 Act. After purchase by the Master
Portfolio, a security may cease to be rated or its rating may be reduced below
the minimum required for purchase by the Master Portfolio. Neither event
requires a sale of such security by the Master Portfolio. However, in no event
will the value of such securities exceed 5% of the Master Portfolio's net
assets. To the extent the ratings given by Moody's or S&P may change as a
result of changes in such organizations or their rating systems, the Master
Portfolio will attempt to use comparable ratings as standards for investments
in accordance with the investment policies contained in its Part A and in this
SAI. The ratings of Moody's and S&P are more fully described in the SAI
Appendix.
Because the Master Portfolio is not required to sell downgraded
securities, the Master Portfolio could hold up to 5% of its net assets in debt
securities rated below "Baa" by Moody's or below "BBB" by S&P or, if unrated,
low credit quality (below investment grade) securities. The Master Portfolio
may hold such securities even though it is not permitted to purchase such
securities.
Although they may offer higher yields than do higher rated
securities, low rated and unrated low credit quality debt securities generally
involve greater volatility of price and risk of principal and income, including
the possibility of default by, or bankruptcy of, the issuers of the securities.
In addition, the securities markets in which low rated and unrated low credit
quality debt securities are traded are more limited than those in which higher
rated debt securities are traded. The existence of limited markets for
particular securities may diminish the Master Portfolio's ability to sell the
securities at fair value either to meet redemption requests or to respond to
changes in the economy or in the financial markets and could adversely affect
and cause fluctuations in the daily net asset value of the Master Portfolio's
shares.
Adverse publicity and investor perceptions, whether or not based
on fundamental analysis, may decrease the values and liquidity of low rated or
unrated low quality debt securities, especially in a thinly traded market.
Analysis of the creditworthiness of issuers of low rated or unrated low quality
debt securities may be more complex than for issuers of higher rated
securities, and the ability of the Master Portfolio to achieve its investment
objective may, to the extent it holds low rated or unrated low quality debt
securities, be more dependent upon such creditworthiness analysis than would be
the case if the Master Portfolio held exclusively higher rated or higher
quality debt securities.
- 6 -
<PAGE> 46
Low rated or unrated low quality debt securities may be more
susceptible to real or perceived adverse economic and competitive industry
conditions than investment grade securities. The prices of such debt
securities have been found to be less sensitive to interest rate changes than
higher rated or higher quality investments, but more sensitive to adverse
economic downturns or individual corporate developments. A projection of an
economic downturn or of a period of rising interest rates, for example, could
cause a decline in low rated or unrated low quality debt securities prices
because the advent of a recession could dramatically lessen the ability of a
highly leveraged company to make principal and interest payments on its debt
securities. If the issuer of the debt securities defaults, the Master
Portfolio may incur additional expenses to seek recovery.
Letters of Credit. Certain of the debt obligations (including
municipal securities, certificates of participation, commercial paper and other
short-term obligations) which the Master Portfolio may purchase may be backed
by an unconditional and irrevocable letter of credit of a bank, savings and
loan association or insurance company which assumes the obligation for payment
of principal and interest in the event of default by the issuer. Only banks,
savings and loan associations and insurance companies which, in the opinion of
Wells Fargo Bank, are of comparable quality to issuers of other permitted
investments of the Master Portfolio may be used for letter of credit-backed
investments, provided that the Board of Trustees approves or ratifies such
investments.
Loans of Portfolio Securities. The Master Portfolio may lend
securities from its portfolio to brokers, dealers and financial institutions
(but not individuals) if cash, U.S. Government obligations or other
high-quality debt obligations equal to at least 100% of the current market
value of the securities loaned (including accrued interest thereon) plus the
interest payable to the Master Portfolio with respect to the loan is maintained
with the Master Portfolio. In determining whether or not to lend a security to
a particular broker, dealer or financial institution, the Master Portfolio's
investment adviser considers all relevant facts and circumstances, including
the size, creditworthiness and reputation of the broker, dealer, or financial
institution. Any loans of portfolio securities are fully collateralized based
on values that are marked to market daily. The Master Portfolio will not enter
into any portfolio security lending arrangement having a duration longer than
one year. Any securities that the Master Portfolio receives as collateral do
not become part of the Master Portfolio's portfolio at the time of the loan
and, in the event of a default by the borrower, the Master Portfolio will, if
permitted by law, dispose of such collateral except for such part thereof that
is a security in which the Master Portfolio is permitted to invest. During the
time securities are on loan, the borrower will pay the Master Portfolio any
accrued income on those securities, and the Master Portfolio may invest the
cash collateral and earn additional income or receive an agreed-upon fee from a
borrower that has delivered cash-equivalent collateral. The Master Portfolio
will not lend securities having a value that exceeds one-third of the current
value of its total assets. Loans of securities by the Master Portfolio are
subject to termination at the Master Portfolio's or the borrower's option. The
Master Portfolio may pay reasonable administrative and custodial fees in
connection with a securities loan and may pay a negotiated portion of the
interest or fee earned with respect to the collateral to the borrower or the
placing broker. Borrowers and placing brokers are not permitted to be
affiliated, directly or indirectly, with the Master Trust, the Company, the
investment adviser or the distributor.
- 7 -
<PAGE> 47
Foreign Obligations. Investments in foreign obligations involve
certain considerations that are not typically associated with investing in
domestic obligations. There may be less publicly available information about a
foreign issuer than about a domestic issuer. Foreign issuers also are not
generally subject to uniform accounting, auditing and financial reporting
standards or governmental supervision comparable to those applicable to
domestic issuers. In addition, with respect to certain foreign countries,
interest may be withheld at the source under foreign income tax laws, and there
is a possibility of expropriation or confiscatory taxation, political or social
instability or diplomatic developments that could adversely affect investments
in, the liquidity of, and the ability to enforce contractual obligations with
respect to, securities of issuers located in those countries. The Master
Portfolio may not invest 25% or more of its assets in foreign obligations.
Obligations of foreign banks and foreign branches of U.S. banks
involve somewhat different investment risks from those affecting obligations of
U.S. banks, including the possibilities that liquidity could be impaired
because of future political and economic developments, that the obligations may
be less marketable than comparable obligations of U.S. banks, that a foreign
jurisdiction might impose withholding taxes on interest income payable on those
obligations, that foreign deposits may be seized or nationalized, that foreign
governmental restrictions (such as foreign exchange controls) may be adopted
which might adversely affect the payment of principal and interest on those
obligations and that the selection of those obligations may be more difficult
because there may be less publicly available information concerning foreign
banks or the accounting, auditing and financial reporting standards, practices
and requirements applicable to foreign banks may differ from those applicable
to U.S. banks. In that connection, foreign banks are not subject to
examination by any U.S. Government agency or instrumentality.
Municipal Bonds. The Master Portfolio may invest in municipal
bonds. The two principal classifications of municipal bonds are "general
obligation" and "revenue" bonds. Municipal bonds are debt obligations issued
to obtain funds for various public purposes, including the construction of a
wide range of public facilities such as bridges, highways, housing, hospitals,
mass transportation, schools, streets, and water and sewer works. Other
purposes for which municipal bonds may be issued include the refunding of
outstanding obligations and obtaining funds for general operating expenses or
to loan to other public institutions and facilities. Industrial development
bonds are a specific type of revenue bond backed by the credit and security of
a private user. Certain types of industrial development bonds are issued by or
on behalf of public authorities to obtain funds to provide privately-operated
housing facilities, sports facilities, convention or trade show facilities,
airport, mass transit, port or parking facilities, air or water pollution
control facilities and certain local facilities for water supply, gas,
electricity, or sewage or solid waste disposal. The Master Portfolio may not
invest 25% or more of its assets in industrial development bonds. Assessment
bonds, wherein a specially created district or project area levies a tax
(generally on its taxable property) to pay for an improvement or project may be
considered a variant of either category. There are, of course, other
variations in the types of municipal bonds, both within a particular
classification and between classifications, depending on numerous factors.
- 8 -
<PAGE> 48
Municipal Notes. Municipal notes include, but are not limited to,
tax anticipation notes ("TANs"), bond anticipation notes ("BANs"), revenue
anticipation notes ("RANs") and construction loan notes. Notes sold as interim
financing in anticipation of collection of taxes, a bond sale or receipt of
other revenues are usually general obligations of the issuer.
TANs. Uncertainty concerning a municipal issuer's capacity to
raise taxes as a result of such things as a decline in its tax base or a rise
in delinquencies could adversely affect the issuer's ability to meet its
obligations on outstanding TANs. Furthermore, some municipal issuers mix
various tax proceeds into a general fund that is used to meet obligations other
than those of the outstanding TANs. Use of such a general fund to meet various
obligations could affect the likelihood of making payments on TANs.
BANs. The ability of a municipal issuer to meet its obligations
on its BANs is primarily dependent on the issuer's adequate access to the
longer term municipal bond market and the likelihood that the proceeds of such
bond sales will be used to pay the principal of, and interest on, BANs.
RANs. A decline in the receipt of certain revenues, such as
anticipated revenues from another level of government, could adversely affect
an issuer's ability to meet its obligations on outstanding RANs. In addition,
the possibility that the revenues would, when received, be used to meet other
obligations could affect the ability of the issuer to pay the principal of, and
interest on, RANs.
The values of outstanding municipal securities vary as a result of
changing market evaluations of the ability of their issuers to meet the
interest and principal payments (i.e., credit risk). Such values also change
in response to changes in the interest rates payable on new issues of municipal
securities (i.e., market risk). Should such interest rates rise, the values of
outstanding securities, including those held in the Master Portfolio's
portfolio, will decline and (if purchased at par value) sell at a discount. If
interest rates fall, the values of outstanding securities will generally
increase and (if purchased at par value) would sell at a premium. Changes in
the value of municipal securities held in the Master Portfolio's portfolio
arising from these or other factors will cause changes in the net asset value
per share of the Master Portfolio.
MANAGEMENT
Directors and Officers. The principal occupations during the past
five years of the Directors and Executive Officers of the Company are listed
below. The Officers and Directors of the Company serve in the identical
capacity as Officers and Trustees of the Master Trust. The Officers and
Directors of the Company serve in the identical capacity as Officers and
Trustees of the Master Trust. The address of each, unless otherwise indicated,
is 111 Center Street, Little Rock, Arkansas 72201. Directors deemed to be
"interested persons" of the Company for purposes of the 1940 Act are indicated
by an asterisk.
- 9 -
<PAGE> 49
<TABLE>
<CAPTION>
Principal Occupations
Name, Address and Age Position During Past 5 Years
- --------------------- -------- ---------------------
<S> <C> <C>
Jack S. Euphrat, 73 Director Private Investor.
415 Walsh Road
Atherton, CA 94027.
*R. Greg Feltus, 44 Director, Senior Vice President
Chairman and of Stephens; Manager
President of Financial Services
Group; President of
Stephens
Insurance Services
Inc.; Senior Vice
President of Stephens
Sports Management
Inc.; and President of
Investor Brokerage
Insurance Inc.
Thomas S. Goho, 53 Director T.B. Rose Faculty
321 Beechcliff Court Fellow-Business,
Winston-Salem, NC 27104 Wake Forest University
Calloway School, of
Business and
Accountancy: Associate Professor
of Finance of the School of
Business and Accounting at
Wake Forest University since 1983.
*Zoe Ann Hines, 46 Director Senior Vice President
of Stephens and
Director of Brokerage
Accounting; and
Secretary of Stephens
Resource
Management.
*W. Rodney Hughes, 69 Director Private Investor.
31 Dellwood Court
San Rafael, CA 94901
</TABLE>
- 10 -
<PAGE> 50
<TABLE>
<S> <C> <C>
Robert M. Joses, 77 Director Private Investor.
47 Dowitcher Way
San Rafael, CA 94901
*J. Tucker Morse, 51 Director Private, Investor; Real Estate
10 Legrae Street Developer; Chairman
Charleston, SC 29401 of Renaissance
Properties Ltd.;
President of Morse
Investment
Corporation; and Co-
Managing Partner of
Main Street Ventures.
Richard H. Blank, Jr., 39 Chief Associate of
Operating Financial Services
Officer, Group of Stephens;
Secretary and Director of Stephens
Treasurer Sports Management
Inc.; and Director of
Capo Inc.
</TABLE>
COMPENSATION TABLE
For the Fiscal Year Ended December 31, 1994
<TABLE>
<CAPTION>
Total Compensation
Aggregate Compensation from Registrant and
Name and Position from Registrant Fund Complex
---------------------- --------------------
<S> <C> <C>
Jack S. Euphrat $8,500 $34,188
Director
*R. Greg Feltus 0 0
Director
Thomas S. Goho 8,500 34,188
Director
*Zoe Ann Hines 0 0
Director
*W. Rodney Hughes 8,500 32,188
Director
Robert M. Joses 8,500 34,188
Director
</TABLE>
- 11 -
<PAGE> 51
<TABLE>
<S> <C> <C>
*J. Tucker Morse 8,500 32,188
Director
</TABLE>
Directors of the Company are compensated annually by the Company
and by all registrants in the fund complex for their services as indicated in
the Compensation Table above and also are reimbursed for all out-of-pocket
expenses relating to attendance at board meetings. Each of the Directors and
Officers of the Company serves in the identical capacity as Officers and
Directors of Stagecoach Funds, Inc., and Stagecoach Inc., and as Trustees
and/or Officers of Stagecoach Trust, Master Investment Portfolio, Life &
Annuity Trust, Master Investment Trust and Managed Series Investment Trust,
each of which are registered open-end management investment companies and each
of which is considered to be in the same "fund complex," as such term is
defined in Form N-1A under the 1940 Act, as the Company. The Directors are
compensated by other Companies and Trusts within the fund complex for their
services as Directors/Trustees to such Companies and Trusts. Currently the
Directors do not receive any retirement benefits or deferred compensation from
the Company or any other member of the fund complex.
As of the date of this SAI, Directors and Officers of the Company
as a group beneficially owned less than 1% of the outstanding shares of the
Company.
Investment Adviser. The Fund has not engaged an investment
adviser. The Master Portfolio is advised by Wells Fargo Bank pursuant to an
Investment Advisory Contract approved by the Board of Trustees of the Master
Trust. The Investment Advisory Contract for the Master Portfolio provides that
Wells Fargo Bank shall furnish to the Master Portfolio investment guidance and
policy direction in connection with the daily portfolio management of the Master
Portfolio. Pursuant to the Investment Advisory Contract, Wells Fargo Bank also
furnishes to the Master Trust's Board of Trustees periodic reports on the
investment strategy and performance of the Master Portfolio.
Wells Fargo Bank has agreed to provide to the Master Portfolio,
among other things, money market security and fixed-income research, analysis,
and statistical and economic data, and information concerning interest rate and
security market trends, portfolio composition, credit conditions and average
maturities of the Master Portfolio's portfolio.
The Investment Advisory Contract will continue in effect for more
than two years provided the continuance is approved annually (i) by the holders
of a majority of the Master Portfolio's outstanding voting securities or by the
Master Trust's Board of Trustees and (ii) by a majority of the Trustees of the
Master Trust who are not parties to the Investment Advisory Contract or
"interested persons" (as defined in the 1940 Act) of any such party.
The Investment Advisory Contract may be terminated on 60 days' written notice
by either party and will terminate automatically if assigned.
Morrison & Foerster, counsel to the Company and the Master Trust
and special counsel to Wells Fargo Bank, has advised Wells Fargo Bank, the
Master Trust and the Company that Wells Fargo Bank should be able to perform
the services contemplated by the Investment Advisory Contract,
- 12 -
<PAGE> 52
the Selling Agent Agreement, the Agency Agreement, the Custodian Agreement and
the Prospectus, without violation of the Glass-Steagall Act. Such counsel has
pointed out, however, that there are no controlling judicial or administrative
interpretations or decisions and that future judicial or administrative
interpretations of, or decisions relating to, present federal or state statutes
and regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, as well as future changes in federal or state
statutes and regulations and judicial or administrative decisions or
interpretations thereof, could prevent Wells Fargo Bank from continuing to
perform, in whole or in part, such services. If Wells Fargo Bank were
prohibited from performing any of such services, it is expected that new
agreements would be proposed or entered into with another entity or entities
qualified to perform such services.
Administrator and Distributor. The Company has retained Stephens
as administrator and distributor on behalf of the Fund. In addition, the
Master Trust has retained Stephens as administrator on behalf of the Master
Portfolio. Under the respective Administration Agreements between Stephens and
the Company and the Master Trust, Stephens shall provide as administrative
services, among other things: (i) general supervision of the Fund's and the
Master Portfolio's operations, including coordination of the services performed
by the investment adviser (in the case of the Master Portfolio), transfer
agent, custodian, shareholder servicing agent(s), independent auditors and
legal counsel, regulatory compliance, including the compilation of information
for documents such as reports to, and filings with, the SEC and state
securities commissions; and preparation of proxy statements and shareholder
reports for the Fund and the Master Portfolio; and (ii) general supervision
relative to the compilation of data required for the preparation of periodic
reports distributed to the Company's and Master Trust's Officers, Directors and
Trustees. Stephens also furnishes office space and certain facilities
required for conducting the Fund's and the Master Portfolio's business together
with those ordinary clerical and bookkeeping services that are not being
furnished by Wells Fargo Bank. Stephens also pays the compensation of the
Master Trust's and the Company's Directors/Trustees, Officers and employees
who are affiliated with Stephens.
The Investment Advisory Contract and Administration Agreements for
the Master Portfolio or the Fund, respectively, provide that if, in any fiscal
year, the total expenses of the Fund (including expenses relating to the Master
Portfolio) incurred by, or allocated to, the Fund and the Master Portfolio
(excluding taxes, interest, brokerage commissions and other portfolio
transaction expenses, expenditures that are capitalized in accordance with
generally accepted accounting principles, extraordinary expenses, but including
the fees provided for in the Investment Advisory Contract and the
Administration Agreements) exceed the most restrictive expense limitation
applicable to the Fund imposed by the securities laws or regulations of the
states in which the Fund's shares are registered for sale, Wells Fargo Bank and
Stephens shall waive their fees proportionately under the Investment Advisory
Contract and the Administration Agreements, respectively, for the fiscal year
to the extent of the excess or reimburse the excess, but only to the extent of
their respective fees. The Investment Advisory Contract and the Administration
Agreements for the Master Portfolio and the Fund, respectively, further provide
that the Master Portfolio's and the Fund's total expenses shall be reviewed
monthly so that, to the extent the annualized expenses for such month exceed
the most restrictive applicable annual expense limitation, the monthly fees
under the contract and the agreement shall be reduced as
- 13 -
<PAGE> 53
necessary. The most stringent applicable restriction limits these expenses for
any fiscal year to 2.5% of the first $30 million of the Fund's average net
assets, 2% of the next $70 million of average net assets, and 1.5% of the
average net assets in excess of $100 million.
CALCULATION OF YIELD AND TOTAL RETURN
The Fund may advertise certain yield information. Yield for the
Fund is calculated based on the net changes, exclusive of capital changes, over
a seven- or thirty-day period, in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from shareholder
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7 or 365/30, as applicable) with the
resulting yield figure carried to at least the nearest hundredth of one
percent.
Tax-equivalent yield for the Fund is computed by dividing that
portion of the yield of the Fund which is tax-exempt by one, minus a stated
income tax rate and then adding the product to that portion, if any, of the
Fund's yield that is not tax-exempt.
Effective yield and effective tax-equivalent yield for the Fund
are calculated by determining the net change, or tax-equivalent assumed net
change, exclusive of capital changes in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from
shareholder accounts, and dividing the difference by the value of the account
at the beginning of the base period to obtain the base period return, and then
compounding the base period return by adding one, raising the sum to a power
equal to 365 divided by seven or thirty, as applicable, and subtracting one
from the result.
The yield for the Fund fluctuates from time to time, unlike bank
deposits or other investments that pay a fixed yield for a stated period of
time, and does not provide a basis for determining future yields since it is
based on historical data. Yield is a function of portfolio quality,
composition, maturity and market conditions as well as the expenses allocated
to the Fund.
In addition, investors should recognize that changes in the net
asset value of shares of the Fund will affect the Fund's yield for any
specified period, and such changes should be considered together with the
Fund's yield in ascertaining the Fund's total return to shareholders for the
period. Yield information for the Fund may be useful in reviewing the
performance of the Fund and for providing a basis for comparison with
investment alternatives. The Fund's yield, however, may not be comparable to
the yields from investment alternatives because of differences in the foregoing
variables and differences in the methods used to value portfolio securities,
compute expenses and calculate yield.
Performance Comparisons. From time to time and only to the extent
the comparison is appropriate for the Fund, the Company may quote the Fund's
performance or price-earning
- 14 -
<PAGE> 54
ratio in advertising and other types of literature as compared to the
performance of the 91-Day Treasury Bill Average (Federal Reserve), Lipper Money
Market Fund Average, Donoghue Taxable Money Market Fund Average, Salomon
Three-Month Treasury Bill Index, Bank Averages (which are calculated from
figures supplied by the U.S. League of Savings Institutions based on effective
annual rates of interest on both passbook and certificate accounts), Dow Jones
Industrial Average, Lehman Brothers 20+ Treasury Index, Lehman Brother 5-7 Year
Treasury Index, Real Estate Investment Averages (as reported by the National
Association of Real Estate Investment Trusts), Gold Investment Averages
(provided by the World Gold Council), the Consumer Price Index (as published by
the U.S. Bureau of Labor Statistics and which is an established measure of
change over time in the prices of goods and services in major expenditure
groups), average annualized certificate of deposit rates (from the Federal
Reserve G-13 Statistical Releases or the Bank Rate Monitor), the Salomon One
Year Treasury Benchmark Index, other managed or unmanaged indices or
performance data of bonds, municipal securities, stocks or government
securities (including data provided by Ibbotson Associates), or other services,
companies, publications or persons who monitor mutual funds or overall
performance or other criteria. The S&P Index and the Dow Jones Industrial
Average are unmanaged indices of selected common stock prices.
The Fund's performance also may be compared to the performance of
other mutual funds having similar objectives. This comparative performance
could be expressed as a ranking prepared by Lipper Analytical Services, Inc.
(including the Lipper General Bond Fund Average, the Lipper Intermediate
Investment Grade Debt Fund Average, the Lipper Bond Fund Average, the Lipper
Growth Fund Average, the Lipper Flexible Fund Average), Donoghue's Money Fund
Report, including Donoghue's Taxable Money Market Fund Average, Morningstar,
Inc., or other independent services which monitor the performance of mutual
funds. The Fund's performance will be calculated by relating net asset value
per share at the beginning of a stated period to the net asset value of the
investment, assuming reinvestment of all gains distributions and dividends
paid, at the end of the period. Any such comparisons may be useful to
investors who wish to compare the Fund's past performance with that of its
competitors. Of course, past performance cannot be a guarantee of future
results. The Company also may include in advertisements and other types of
literature references to certain marketing approaches of the Distributor and
may also refer to general mutual fund statistics provided by the Investment
Company Institute.
The Company also may use the following information in
advertisements and other types of literature, only to the extent the
information is appropriate for the Fund: (i) the Consumer Price Index may be
used to assess the real rate of return from an investment in the Fund; (ii)
other government statistics, including, but not limited to, The Survey of
Current Business, may be used to illustrate investment attributes of the Fund
or the general economic, business, investment, or financial environment in
which the Fund operates; (iii) the effect of tax-deferred compounding on the
investment returns of the Fund, or on returns in general, may be illustrated by
graphs, charts, etc., where such graphs or charts would compare, at various
points in time, the return from an investment in the Fund (or returns in
general) on a tax-deferred basis (assuming reinvestment of capital gains and
dividends and assuming one or more tax rates) with the return on a taxable
basis; and (iv) the sectors or industries in which the Fund invests may be
compared to relevant indices of stocks or surveys (e.g., S&P Industry Surveys)
to evaluate the
- 15 -
<PAGE> 55
Fund's historical performance or current or potential value with respect to the
particular industry or sector.
The Company also may use, in advertisements and other types of
literature, information and statements: (1) showing that bank savings accounts
offer a guaranteed return of principal and a fixed rate of interest, but no
opportunity for capital growth; and (2) describing Wells Fargo Bank, and its
affiliates and predecessors, as some of the first investment managers to advise
investment accounts using asset allocation and index strategies. The Company
also may include in advertising and other types of literature information and
other data from reports and studies prepared by the Tax Foundation, including
information regarding federal and state tax levels and the related "Tax Freedom
Day." The Company also may disclose in sales literature the assets and
categories of assets under management by the Fund's or Master Portfolio's
investment adviser and its affiliates.
The Company also may discuss in advertisements and other types of
literature that the Fund has been assigned a rating by a nationally recognized
statistical rating organization ("NRSRO"), such as Standard & Poor's
Corporation. Such rating would assess the creditworthiness of the investments
held by the Fund. The assigned rating would not be a recommendation to
purchase, sell or hold the Fund's shares since the rating would not comment on
the market price of the Fund's shares or the suitability of the Fund for a
particular investor. In addition, the assigned rating would be subject to
change, suspension or withdrawal as a result of changes in, or unavailability
of, information relating to the Fund or its investments. The Company may
compare the Fund's performance with other investments which are assigned
ratings by NRSROs. Any such comparisons may be useful to investors who wish to
compare the Fund's past performance with other rated investments.
The Company also may discuss in advertisements and other types of
literature the features, terms and conditions of Wells Fargo Bank accounts
through which investments in the Fund may be made via a "sweep" arrangement,
including, without limitation, through investments in a Managed Sweep Account,
National Tax-Free Money Market Checking Account or National Tax-Free Money
Market Access Account (collectively, the "Sweep Accounts"). Such
advertisements and other literature may include, without limitation,
discussions of such terms and conditions as the minimum deposit required to
open a Sweep Account, a description of the yield earned on shares of the Fund
through a Sweep Account, a description of any monthly or other service charge
on a Sweep Account and any minimum required balance to waive such service
charges, any overdraft protection plan offered in connection with a Sweep
Account, a description of any express transfer or "Systematic Purchase" plan
offered in connection with a Sweep Account, a description of any automated
teller machine ("ATM") or check privileges offered in connection with a Sweep
Account and any other terms, conditions, features or plans offered in
connection with a Sweep Account. Such advertising or other literature may also
include a discussion of the advantages of establishing and maintaining a Sweep
Account, and may include statements from customers as to the reasons why such
customers have established and maintained a Sweep Account.
- 16 -
<PAGE> 56
DETERMINATION OF NET ASSET VALUE
Net asset value per share of the Fund is determined by the
Custodian on each day the Fund is open for trading. The Fund's investments in
the Master Portfolio are valued at the net asset value of the Master
Portfolio's shares.
As indicated in the Fund's Prospectus, the Master Portfolio uses
the amortized cost method to determine the value of its portfolio securities
pursuant to Rule 2a-7 under the 1940 Act. The amortized cost method involves
valuing a security at its cost and amortizing any discount or premium over the
period until maturity, regardless of the impact of fluctuating interest rates
on the market value of the security. While this method provides certainty in
valuation, it may result in periods during which the value, as determined by
amortized cost, is higher or lower than the price that the Master Portfolio
would receive if the security were sold. During these periods the yield to a
shareholder may differ somewhat from that which could be obtained from a
similar fund that uses a method of valuation based upon market prices. Thus,
during periods of declining interest rates, if the use of the amortized cost
method resulted in a lower value of the Master Portfolio's portfolio on a
particular day, a prospective investor in the Master Portfolio would be able to
obtain a somewhat higher yield than would result from investment in a fund
using solely market values, and existing Master Portfolio shareholders would
receive correspondingly less income. The converse would apply during periods
of rising interest rates.
Rule 2a-7 provides that in order to value its portfolio using the
amortized cost method, the Master Portfolio must maintain a dollar-weighted
average portfolio maturity of 90 days or less, purchase securities having
remaining maturities (as defined in Rule 2a-7) of thirteen months or less and
invest only in those high-quality securities that are determined by the Master
Trust's Board of Trustees to present minimal credit risks. The maturity of an
instrument is generally deemed to be the period remaining until the date when
the principal amount thereof is due or the date on which the instrument is to
be redeemed. However, Rule 2a-7 provides that the maturity of an instrument
may be deemed shorter in the case of certain instruments, including certain
variable- and floating-rate instruments subject to demand features. Pursuant
to the Rule, the Master Trust's Board of Trustees is required to establish
procedures designed to stabilize, to the extent reasonably possible, the Master
Portfolio's price per share as computed for the purpose of sales and
redemptions at $1.00. Such procedures include review of the Master Portfolio's
portfolio holdings by the Master Trust's Board of Trustees, at such intervals
as it may deem appropriate, to determine whether or not the Master Portfolio's
net asset value calculated by using available market quotations deviates from
$1.00 per share based on amortized cost. The extent of any deviation will be
examined by said Board of Trustees. If such deviation exceeds 1/2 of 1%, said
Board will promptly consider what action, if any, will be initiated. In the
event the Board determines that a deviation exists that may result in material
dilution or other unfair results to shareholders, the Board will take such
corrective action as it regards as necessary and appropriate, including the
sale of portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity, withholding dividends or
establishing a net asset value per share by using available market quotations.
- 17 -
<PAGE> 57
PORTFOLIO TRANSACTIONS
The Master Trust has no obligation to deal with any dealer or
group of dealers in the execution of transactions in portfolio securities.
Subject to policies established by the Master Trust's Board of Trustees, Wells
Fargo Bank is responsible for the Master Portfolio's portfolio decisions and
the placing of portfolio transactions. In placing orders, it is the policy of
the Master Trust to obtain the best results taking into account the dealer's
general execution and operational facilities, the type of transaction involved
and other factors such as the dealer's risk in positioning the securities
involved. While Wells Fargo Bank generally seeks reasonably competitive
spreads or commissions, the Master Portfolio will not necessarily be paying the
lowest spread or commission available.
Purchase and sale orders of the securities held by the Master
Portfolio may be combined with those of other accounts that Wells Fargo Bank
manages, and for which it has brokerage placement authority, in the interest of
seeking the most favorable overall net results. When Wells Fargo Bank
determines that a particular security should be bought or sold for the Master
Portfolio and other accounts managed by Wells Fargo Bank, Wells Fargo Bank
undertakes to allocate those transactions among the participants equitably.
Purchases and sales of securities usually will be principal
transactions. Portfolio securities normally will be purchased or sold from or
to dealers serving as market makers for the securities at a net price. The
Master Portfolio also purchases portfolio securities in underwritten offerings
and may purchase securities directly from the issuer. Generally, municipal
obligations, taxable money market securities, adjustable rate mortgage
securities and collateralized mortgage obligations are traded on a net basis
and do not involve brokerage commissions. The cost of executing the Master
Portfolio's portfolio securities transactions consists primarily of dealer
spreads and underwriting commissions. Under the 1940 Act, persons affiliated
with the Master Portfolio are prohibited from dealing with the Master Portfolio
as a principal in the purchase and sale of securities unless an exemptive order
allowing such transactions is obtained from the SEC or an exemption is
otherwise available.
The Master Portfolio may purchase municipal obligations from
underwriting syndicates of which Stephens or Wells Fargo Bank is a member under
certain conditions in accordance with the provisions of a rule adopted under
the 1940 Act and in compliance with procedures adopted by the Master Trust's
Board of Trustees.
Wells Fargo Bank, as the Master Portfolio's investment adviser,
may, in circumstances in which two or more dealers are in a position to offer
comparable results for a Master Portfolio portfolio transaction, give
preference to a dealer that has provided statistical or other research services
to Wells Fargo Bank. By allocating transactions in this manner, Wells Fargo
Bank is able to supplement its research and analysis with the views and
information of securities firms. Information so received will be in addition
to, and not in lieu of, the services required to be performed by Wells Fargo
Bank under the Investment Advisory Contracts, and the expenses of Wells Fargo
Bank will not necessarily be reduced as a result of the receipt of this
supplemental
- 18 -
<PAGE> 58
research information. Furthermore, research services furnished by dealers
through which Wells Fargo Bank places securities transactions for the Master
Portfolio may be used by Wells Fargo Bank in servicing its other accounts, and
not all of these services may be used by Wells Fargo Bank in connection with
advising the Master Portfolio.
Portfolio Turnover. Because the Master Portfolio's portfolio
consists of securities with relatively short- term maturities, the Master
Portfolio can expect to experience high portfolio turnover. A high portfolio
turnover rate should not adversely affect the Master Portfolio (or the Fund),
however, because portfolio transactions ordinarily will be made directly with
principals on a net basis and, consequently, the Master Portfolio (and,
accordingly, the Fund), usually will not incur excessive transaction costs.
FEDERAL INCOME TAXES
The Prospectus describes generally the tax treatment of
distributions by the Master Portfolio and the Fund. This section of the SAI
includes additional information concerning federal income taxes.
Qualification as a "regulated investment company" under the Code
requires, among other things, that (a) at least 90% of the Fund's annual gross
income be derived from interest, payments with respect to securities loans,
dividends and gains from the sale or other disposition of securities or options
thereon; (b) the Fund derives less than 30% of its gross income from gains from
the sale or other disposition of securities or options thereon held for less
than three months; and (c) the Fund diversifies its holdings so that, at the
end of each quarter of the taxable year (i) at least 50% of the market value of
the Fund's assets is represented by cash, government securities and other
securities limited in respect of any one issuer to an amount not greater than
5% of the Fund's assets and 10% of the outstanding voting securities of such
issuer and (ii) not more than 25% of the value of its assets is invested in the
securities of any one issuer (other than U.S. Government obligations and the
securities of other regulated investment companies), or of two or more issuers
which the taxpayer controls and which are determined to be engaged in the same
or similar trades or businesses or related trades or businesses. For purposes
of complying with these qualification requirements, the Fund will "look
through" to the Master Portfolio's investments. As a regulated investment
company, the Fund will not be subject to federal income tax on its net
investment income and net capital gains distributed to its shareholders,
provided that it distributes to its stockholders at least 90% of its net
investment income and tax-exempt income earned in each year.
In addition, the Fund intends that at least 50% of the value of
its total assets at the close of each quarter of its taxable year will consist
of obligations the interest on which is exempt from federal income tax, so that
it will qualify under the Code to pay exempt-interest dividends. The exemption
of interest income derived from investments in tax-exempt obligations for
federal income tax purposes may not result in a similar exemption under the
laws of a particular state or local taxing authority.
- 19 -
<PAGE> 59
A 4% nondeductible excise tax will be imposed on the Fund (other
than to the extent of the Fund's tax- exempt income) to the extent it does not
meet certain minimum distribution requirements by the end of each calendar
year. For this purpose, any income or gain retained by the Fund that is
subject to income tax will be considered to have been distributed by year-end.
In addition, dividends and distributions of taxable income declared payable as
of a date in October, November or December of any calendar year are deemed
under the Code to have been received by the shareholders on December 31 of that
calendar year if the dividend is actually paid in the following January. Such
dividends will, accordingly, be subject to income tax for the year in which the
record date falls. The Fund intends to distribute substantially all of its net
investment income and net capital gains and, thus, expects not to be subject to
the excise tax.
Income and dividends received by the Fund from sources within
foreign countries may be subject to withholding and other taxes imposed by such
countries. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes. Because not more than 50% of the value of the
total assets of the Fund is expected to consist of securities of foreign
issuers, the Fund will not be eligible to elect to "pass through" foreign tax
credits to shareholders.
The Master Portfolio will be treated as a non-publicly traded
partnership rather than as a regulated investment company or a corporation
under the Code. As a non-publicly traded partnership under the Code, any
interest, dividends and gains or losses of the Master Portfolio will be deemed
to have been "passed through" to the Fund and any other investors in the Master
Portfolio, regardless of whether or not such interest, dividends or gains have
been distributed by the Master Portfolio or losses have been realized by the
Fund and any other investors. Therefore, to the extent the Master Portfolio
were to accrue but not distribute any interest, dividends, gains or losses, the
Fund would be deemed to have realized and recognized its proportionate share of
interest, dividends, gains or losses without receipt of any corresponding
distribution. However, the Master Portfolio will seek to minimize recognition
by investors of interest, dividends, gains or losses without a corresponding
distribution.
It is expected that the Net Income of the Fund will be a positive
amount at the time of each determination thereof. If, however, the Fund's Net
Income determined at any time is a negative amount (which could occur, for
instance, upon non-payment of interest and/or principal by an issuer of a
security held by the Master Portfolio), the Fund would, pursuant to a decision
of the Board of Directors as provided by SEC rules, first offset the negative
amount with respect to each shareholder account from the dividends declared
during the month with respect to each such account. If and to the extent that
such negative amount exceeds such declared dividends at the end of the month,
the Fund will reduce the number of its outstanding shares by treating each
shareholder as having contributed to the capital of the Fund that number of
full and fractional shares in the account of such shareholder which represents
the shareholder's proportion of the amount of such excess. Each shareholder
will be deemed to have agreed to such contribution in these circumstances by
investing in the Fund.
Although dividends will be declared daily based on each day's
earnings, for federal income tax purposes the Fund's earnings and profits will
be determined at the end of each taxable year and will be allocated pro rata
over the entire year. For federal income tax purposes, only
- 20 -
<PAGE> 60
amounts paid out of earnings and profits will qualify as dividends. Thus, if
during a taxable year the Fund's declared dividends (as declared daily
throughout the year) exceed the Fund's net income (as determined at the end of
the year), only that portion of the year's distributions which equals the
year's earnings and profits will be deemed to have constituted a dividend. If
during the year, the Fund had reduced the number of shares due to such a
shortfall, shareholders who had redeemed shares prior to such reduction could
be deemed to have realized a capital gain to the extent of the reduction, while
shareholders redeeming shares after the reduction could be deemed to have
realized a capital loss to the extent of the reduction. It is expected that
the Fund's net income, on an annual basis, will equal the dividends declared
during the year.
Gains or losses on sales of portfolio securities by the Fund
generally will be long-term capital gains or losses if the securities have been
held by it for more than one year, except in certain cases including where the
Fund acquires a put or writes a call thereon. Other gains or losses on the
sale of securities will be short-term capital gains or losses. In addition,
any loss realized by a shareholder upon the sale or redemption of Fund shares
held less than six months is disallowed to the extent of any exempt-interest
dividends received by the shareholder. Gain recognized on the disposition of a
debt obligation (including, with respect to obligations purchased after April
30, 1993, tax-exempt obligations) purchased by the Fund at a market discount
(generally, at a price less than its principal amount) will be treated as
ordinary income to the extent such discount had not previously been included in
income. As of the printing of this SAI, the maximum individual tax rate
applicable to ordinary income is 39.6% (effective rates may be higher for some
individuals due to phase out of exemptions and elimination of deductions), the
maximum individual rate applicable to net realized capital gains is 28% and the
maximum corporate tax rate applicable to ordinary income and net realized
capital gains is 35%.
However, to eliminate the benefit of lower marginal corporate
income tax rates, corporations which have taxable income in excess of $100,000
for a taxable year will be required to pay an additional amount of income tax
of up to $11,750 and corporations which have taxable income in excess of
$15,000,000 for a taxable year will be required to pay an additional amount of
income tax of up to $100,000.
Any loss realized on a redemption or exchange of shares of the
Fund will be disallowed to the extent shares are reacquired within the 61-day
period beginning 30 days before and ending 30 days after the shares are
disposed of. In addition, if a shareholder exchanges or otherwise disposes of
Fund shares within 90 days of having acquired such shares, and if, as a result
of having acquired those shares, the shareholder subsequently pays a reduced
sales charge for shares of the Fund, or of a different fund, the sales charge
previously incurred acquiring the Fund's shares shall not be taken into account
(to the extent such previous sales charges do not exceed the reduction in sales
charges) for the purpose of determining the amount of gain or loss on the
exchange, but will be treated as having been incurred in the acquisition of
such other shares.
If, in the opinion of the Company, ownership of its shares has or
may become concentrated to an extent that could cause the Company to be deemed
a personal holding
- 21 -
<PAGE> 61
company within the meaning of the Code, the Company may require the redemption
of shares or reject any order for the purchase of shares in an effort to
prevent such concentration.
Foreign Shareholders. Under the Code, distributions of net
investment income by the Fund to a nonresident alien individual, non-resident
alien fiduciary of a trust or estate, foreign corporation, or foreign
partnership (a "foreign shareholder") will be subject to U.S. withholding tax
(at a rate of 30% or a lower treaty rate). Withholding will not apply if a
dividend paid by the Fund to a foreign shareholder is "effectively connected"
with a U.S. trade or business, in which case the reporting and withholding
requirements applicable to U.S. citizens or domestic corporations will apply.
Distributions of net long-term capital gains are not subject to tax withholding
but, in the case of a foreign shareholder who is a nonresident alien
individual, such distributions ordinarily will be subject to U.S. income tax at
a rate of 30% if the individual is physically present in the U.S. for more than
182 days during the taxable year.
Special Tax Considerations -- Federal. The portion of total
dividends paid by the Fund with respect to any taxable year that qualifies for
exclusion from gross income ("exempt-interest dividends") will be the same for
all shareholders receiving dividends during such year. In order for the Fund
to pay exempt-interest dividends during any taxable year, at the close of each
fiscal quarter at least 50% of the aggregate value of the Fund's assets must
consist of tax-exempt securities. In addition, the Fund must distribute 90% of
the aggregate interest excludable from gross income and 90% of the investment
company taxable income earned by it during the taxable year. Not later than 60
days after the close of its taxable year, the Fund will notify its shareholders
of the portion of the dividends paid with respect to such taxable year which
constitutes exempt-interest dividends. The aggregate amount of dividends so
designated cannot exceed the excess of the amount of interest excludable from
gross income under Section 103 of the Code received by the Fund during the
taxable year over any amounts disallowed as deductions under Sections 265 and
171(a)(2) of the Code. In addition, market discount earned on tax-exempt
obligations will not qualify as tax-exempt income.
The Code treats interest on private activity bonds, as defined
therein, as an item of tax preference subject to an alternative minimum tax on
individuals and corporations at the applicable tax rates. It is expected that
exempt-interest dividends derived from MRBs will be subject to the alternative
minimum tax. As of the printing of the SAI, individuals are subject to an AMT
at a maximum rate of 28% and corporations at a rate of 20%. In addition to
tax- exempt interest on private activity bonds, other "tax preference items"
and "adjustments" which must be considered when calculating the AMT are state
and local taxes and the so-called bargain element of incentive stock options
(the difference between the exercise price and the stock's trading price when
the options are exercised). All interest on municipal bonds and other
tax-exempt obligations, including exempt-interest dividends paid by the Fund,
is included in adjusted current earnings in calculating federal alternative
minimum taxable income, and may also affect corporate federal "environmental
tax" liability.
In addition, any loss realized by a shareholder upon the sale or
redemption of shares of the Fund held less than six months is disallowed to the
extent of any exempt-interest dividends received by the shareholder.
- 22 -
<PAGE> 62
Shareholders who may be "substantial users" (or related persons of
substantial users) with respect to municipal securities held by the Fund should
consult their tax advisers to determine whether exempt-interest dividends and
California exempt-interest dividends (as defined below) paid by the Fund with
respect to such obligations retain their federal and California tax exclusions.
In this connection, the rules regarding the possible unavailability of exempt
dividend treatment to substantial users are similar for federal and California
state tax purposes.
Long-term and/or short-term capital gain distributions will not
constitute exempt-interest dividends and will be taxed as capital gains and
ordinary income dividends, respectively. Moreover, interest on indebtedness
incurred by a shareholder to purchase or carry shares of the Fund is not
deductible for personal income tax purposes to the extent the shareholder
receives exempt-interest dividends during his or her taxable year.
Exempt-interest dividends will be tax exempt for purposes of personal income
tax.
Other Matters. Fund shares would not be suitable for tax-exempt
institutions and may not be suitable for retirement plans qualified under
Section 401 of the Code, H.R. 10 plans and IRAs since such plans and accounts
are generally tax-exempt and, therefore, would not benefit from the exempt
status of dividends from the Fund. Such dividends would be ultimately taxable
to the beneficiaries when distributed to them.
CAPITAL STOCK
The Company, an open-end, management investment company, was
incorporated in Maryland on April 27, 1987. The authorized capital stock of
the Company consists of 20,000,000,000 shares having a par value of $.001 per
share. As of the date of this SAI, the Company's Board of Directors has
authorized the issuance of fifteen series of shares, each representing an
interest in one of the funds in the Overland Express Family of Funds -- the
Asset Allocation Fund, the California Tax-Free Bond Fund, the California
Tax-Free Money Market Fund, the Dividend Income Fund, the Growth and Income
Fund, the Money Market Fund, the Municipal Income Fund, the National Tax-Free
Institutional Money Market Fund, the Overland Sweep Fund, the Short-Term
Government-Corporate Income Fund, the Short-Term Municipal Income Fund, the
Strategic Growth Fund, the U.S. Government Income Fund, the U.S. Treasury Money
Market Fund and the Variable Rate Government Fund. The Board of Directors may,
in the future, authorize the issuance of other series of capital stock
representing shares of additional investment portfolios or funds.
All shares of the Fund have equal voting rights and will be voted
in the aggregate, and not by series, except where voting by series is required
by law or where the matter involved only affects one series. For example, a
change in the Fund's fundamental investment policy would be voted upon only by
shareholders of the Fund. Additionally, approval of an Investment Advisory
Contract is a matter to be determined separately by the Fund. As used in the
Fund's Prospectus and in this SAI, the term "majority," when referring to
approvals to be obtained from shareholders
- 23 -
<PAGE> 63
of the Fund, means the vote of the lesser of (i) 67% of the shares of the Fund
represented at a meeting if the holders of more than 50% of the outstanding
shares of the Fund are present in person or by proxy or (ii) more than 50% of
the outstanding shares of the Fund. The term "majority," when referring to the
approvals to be obtained from shareholders of the Company as a whole, means the
vote of the lesser of (i) 67% of the Company's shares represented at a meeting
if the holders of more than 50% of the Company's outstanding shares are present
in person or by proxy or (ii) more than 50% of the Company's outstanding
shares. Shareholders are entitled to one vote for each full share held and
fractional votes for fractional shares held.
The Company may dispense with an annual meeting of shareholders in
any year in which it is not required to elect Directors under the 1940 Act.
However, the Company has undertaken to hold a special meeting of its
shareholders for the purpose of voting on the question of removal of a Director
or Directors if requested in writing by the holders of at least 10% of the
Company's outstanding voting securities, and to assist in communicating with
other shareholders as required by Section 16(c) of the 1940 Act.
Each share of the Fund represents an equal proportional interest
in the Fund with each other share and is entitled to such dividends and
distributions out of the income earned on the assets belonging to the Fund as
are declared in the discretion of the Directors. In the event of the
liquidation or dissolution of the Company, shareholders of the Fund are
entitled to receive the assets attributable to the Fund that are available for
distribution, and a distribution of any general assets not attributable to a
particular investment portfolio that are available for distribution in such
manner and on such basis as the Directors in their sole discretion may
determine.
Shareholders are not entitled to any preemptive rights. All
shares, when issued, will be fully paid and non-assessable by the Company.
The Master Trust, a no-load, diversified, open-end, series
management investment company, was organized as a Delaware business trust
August 15, 1991. In accordance with Delaware law and in connection with the tax
treatment sought by the Master Trust, the Master Trust's Declaration of Trust
provides that its investors would be personally responsible for Master Trust
liabilities and obligations, but only to the extent the Master Trust property
is insufficient to satisfy such liabilities and obligations. The Declaration
of Trust also provides that the Master Trust shall maintain appropriate
insurance (for example, fidelity bonding and errors and omissions insurance)
for the protection of the Master Trust, its investors, Trustees, Officers,
employees and agents covering possible tort and other liabilities, and that
investors will be indemnified to the extent they are held liable for a
disproportionate share of Master Trust obligations. Thus, the risk of an
investor incurring financial loss on account of investor liability is limited
to circumstances in which both inadequate insurance exists and the Master Trust
itself was unable to meet its obligations.
The Declaration of Trust further provides that obligations of the
Master Trust are not binding upon the Trustees individually but only upon the
property of the Master Trust and that the Trustees will not be liable for any
action or failure to act, but nothing in the Declaration of Trust protects a
Trustee against any liability to which the Trustee would otherwise be subject
by reason of willful
- 24 -
<PAGE> 64
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of the Trustee's office.
The interests in the Master Portfolio have substantially identical
voting and other rights as those rights enumerated above for shares of the
Fund. The Master Portfolio also intends to dispense with annual meetings, but
is required by Section 16(c) of the Act to hold a special meeting and assist
investor communications under the circumstances described above with respect to
the Company. Whenever the Fund is requested to vote on a matter with respect
to the Master Portfolio, the Fund will hold a meeting of Fund shareholders and
will cast its votes as instructed by such shareholders.
In a situation where the Fund does not receive instructions from
certain of its shareholders on how to vote the corresponding shares of the
Master Portfolio, the Fund will vote such shares in the same proportion as the
shares for which the Fund does receive voting instructions.
As of November 14, 1995, the shareholders identified below were
known by the Company to own 5% or more of the Fund's outstanding shares in the
following capacity:
<TABLE>
<CAPTION>
Name and Percentage Capacity
Address of Shareholder of Fund Owned
---------------------- ---------- ------
<S> <C> <C>
Stephens Inc. 100% Record
111 Center Street
Little Rock, Arkansas
72201
</TABLE>
OTHER
The Registration Statements of the Company and the Master Trust,
including the Fund's Prospectus, the SAI and the exhibits filed therewith, may
be examined at the office of the SEC in Washington, D.C. Statements contained
in the Prospectus or the SAI as to the contents of any contract or other
document referred to herein or in the Prospectus are not necessarily complete,
and, in each instance, reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statements, each such
statement being qualified in all respects by such reference.
CUSTODIAN AND TRANSFER AND
DIVIDEND DISBURSING AGENT
Wells Fargo Bank has been retained to act as Custodian for both
the Fund and the Master Portfolio. The Custodian, among other things,
maintains separate custody accounts in the names of the Fund and the Master
Portfolio; receives and delivers all assets for the Fund and the
- 25 -
<PAGE> 65
Master Portfolio upon purchase and upon sale or maturity; collects and receives
all income and other payments and distributions on account of the assets of the
Fund and the Master Portfolio and pays all expenses of the Fund and the Master
Portfolio. Wells Fargo Bank is not entitled to receive a fee for its services
as Transfer and Dividend Disbursing Agent and Custodian for the Fund and the
Master Portfolio.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP have been selected as the independent
auditors for the Company and the Master Trust. KPMG Peat Marwick LLP provides
audit services, tax return preparation and assistance and consultation in
connection with review of certain SEC filings. KPMG Peat Marwick LLP's address
is Three Embarcadero Center, San Francisco, California 94111.
FINANCIAL INFORMATION
The audited financial statements and portfolios of investments contained
in the Company's Annual Report are hereby incorporated by reference in this
SAI. The Company's Annual Report and the SAI will be sent free of charge to
any shareholder who requests these documents.
- 26 -
<PAGE> 66
SAI APPENDIX
The following is a description of the ratings given by
Moody's and S&P to corporate and municipal bonds, municipal notes, and
corporate and municipal commercial paper.
Corporate and Municipal Bonds
Moody's: The four highest ratings for corporate and municipal
bonds are "Aaa," "Aa," "A" and "Baa." Bonds rated "Aaa" are judged to be of
the "best quality" and carry the smallest amount of investment risk. Bonds
rated "Aa" are of "high quality by all standards," but margins of protection or
other elements make long-term risks appear somewhat greater than "Aaa" rated
bonds. Bonds rated "A" possess many favorable investment attributes and are
considered to be upper medium grade obligations. Bonds rated "Baa" are
considered to be medium grade obligations; 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 have speculative characteristics as well. Moody's also
applies numerical modifiers in its rating system: 1, 2 and 3 in each rating
category from "Aa" through "Baa" in its rating system. The modifier 1
indicates that the security ranks in the higher end of its category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the
issue ranks in the lower end.
S&P: The four highest ratings for corporate and municipal bonds
are "AAA," "AA," "A" and "BBB." Bonds rated "AAA" have the highest ratings
assigned by S&P and have an extremely strong capacity to pay interest and repay
principal. Bonds rated "AA" have a "very strong capacity to pay interest and
repay principal" and differ "from the highest rated issued only in small
degree." Bonds rated "A" have a "strong capacity" to pay interest and repay
principal, but are "somewhat more susceptible" to adverse effects of changes in
economic conditions or other circumstances than bonds in higher rated
categories. Bonds rated "BBB" are regarded as having an "adequate capacity" to
pay interest and repay principal, but changes in economic conditions or other
circumstances are more likely to lead to a "weakened capacity" to make such
repayments. The ratings from "AA" to "BBB" may be modified by the addition of
a plus or minus sign to show relative standing within the category.
Municipal Notes
Moody's: The highest ratings for state and municipal short-term
obligations are "MIG 1," "MIG 2," and "MIG 3" (or "VMIG 1," "VMIG 2" and "VMIG
3" in the case of an issue having a variable rate demand feature). Notes rated
"MIG 1" or "VMIG 1" are judged to be of the "best quality." Notes rated "MIG
2" or "VMIG 2" are of "high quality," with margins of protections "ample
although not as large as in the preceding group." Notes rated "MIG 3" or "VMIG
3" are of "favorable quality," with all security elements accounted for, but
lacking the strength of the preceding grades.
A-1
<PAGE> 67
S&P: The "SP-1" rating reflects a "very strong or strong capacity
to pay principal and interest." Notes issued with "overwhelming safety
characteristics" will be rated "SP-1+." The "SP-2" rating reflects a
"satisfactory capacity" to pay principal and interest.
Corporate and Municipal Commercial Paper
Moody's: The highest rating for corporate and municipal
commercial paper is "P-1" (Prime-1). Issuers rated "P-1" have a "superior
capacity for repayment of short-term promissory obligations." Issuers rated
"P-2" (Prime- 2) "have a strong capacity for repayment of short-term promissory
obligations," but earnings trends, while sound, will be subject to more
variation.
S&P: The "A-1" rating for corporate and municipal commercial
paper indicates that the "degree of safety regarding timely payment is either
overwhelming or very strong." Commercial paper with "overwhelming safety
characteristics" will be rated "A-1+." Commercial paper with a strong capacity
for timely payments on issues will be rated "A-2."
Corporate Notes
S&P: The two highest ratings for corporate notes are "SP-1" and
"SP-2." The "SP-1" rating reflects a "very strong or strong capacity to pay
principal and interest." Notes issued with "overwhelming safety
characteristics" will be rated "SP-1+." The "SP-2" rating reflects a
"satisfactory capacity" to pay principal and interest.
A-2
<PAGE> 68
OVERLAND EXPRESS FUNDS, INC.
FILE NO. 33-16296; 811-8275
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
Not Applicable
(b) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
1 - Restated Articles of Incorporation, filed herewith.
2 - By-Laws (as amended), incorporated by reference to the
Registration Statement on Form N-1A filed on August 5, 1987.
3 - Not Applicable.
4 - Specimen Stock Certificates, incorporated by reference to
Post-Effective Amendment No. 21 filed on March 3, 1993.
5(a) (i) - Form of Amended Advisory Contract on behalf of the Asset
Allocation Fund, incorporated by reference to Post-Effective
Amendment No. 24 filed on April 29, 1994.
(ii) - Advisory Contract on behalf of the U.S. Government Income
Fund, incorporated by reference to Pre-Effective Amendment
No. 2 filed on April 4, 1988.
(iii) - Advisory Contract on behalf of the California Tax-Free Money
Market Fund, incorporated by reference to Post-Effective
Amendment No. 6 filed on August 2, 1989.
(iv) - Advisory Contract on behalf of the California Tax-Free Bond
Fund, incorporated by reference to Post-Effective Amendment
No. 6 filed on August 2, 1989.
(v) - Advisory Contract on behalf of the Money Market Fund,
incorporated by reference to Post- Effective Amendment No. 6
filed on August 2, 1989.
(vi) - Advisory Contract on behalf of the Variable Rate Government
Fund, incorporated by reference to Post-Effective Amendment
No. 8 filed on August 6, 1990.
(vii) - Advisory Contract on behalf of the Municipal Income Fund,
incorporated by reference to Post-Effective Amendment No.
16 filed on January 17, 1992.
</TABLE>
C-1
<PAGE> 69
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
(viii) - Advisory Contract on behalf of the U.S. Treasury Money
Market Fund, incorporated by reference to Post-Effective
Amendment No. 22 filed on May 28, 1993.
(ix) - Advisory Contract on behalf of the Strategic Growth Fund,
incorporated by reference to Post- Effective Amendment No.
22 filed on May 28, 1993.
(x) - Sub-Advisory Contract with Wells Fargo Nikko Investment
Advisors on behalf of the Asset Allocation Fund, filed
herewith.
5(b) (i) - Administration Agreement on behalf of the Asset Allocation
Fund, incorporated by reference to Pre-Effective Amendment
No. 2 filed on April 4, 1988.
(ii) - Administration Agreement on behalf of the U.S. Government
Income Fund, incorporated by reference to Pre-Effective
Amendment No. 2 filed on April 4, 1988.
(iii) - Administration Agreement on behalf of the California
Tax-Free Money Market Fund (as amended), incorporated by
reference to Pre-Effective Amendment No. 2 filed on April 4,
1988.
(iv) - Administration Agreement on behalf of the California
Tax-Free Bond Fund, incorporated by reference to
Post-Effective Amendment No. 3 filed on October 3, 1988.
(v) - Administration Agreement on behalf of the Money Market Fund,
incorporated by reference to Post-Effective Amendment No. 6
filed on August 2, 1989.
(vi) - Administration Agreement on behalf of the Variable Rate
Government Fund, incorporated by reference to Post-Effective
Amendment No. 8 filed on August 6, 1990.
(vii) - Administration Agreement on behalf of the Municipal Income
Fund, incorporated by reference to Post-Effective Amendment
No. 16 filed on January 17, 1992.
(viii) - Administration Agreement on behalf of the Overland Sweep
Fund, Short-Term Municipal Income Fund (formerly, the 1-3
Year Duration Municipal Income Fund), 1-3 Year Duration
Government Income Fund (liquidated) and Short-Term
Government-Corporate Income Fund (formerly, the 1-3 Year
Duration Full Faith and Credit Government Income Fund),
filed herewith.
(ix) - Administration Agreement on behalf of the U.S. Treasury
Money Market Fund, filed herewith.
(x) - Administration Agreement on behalf of the Strategic Growth
Fund, incorporated by reference to Post-Effective Amendment
No. 22 filed on May 28, 1993.
(xi) - Form of Administration Agreement with Stephens Inc. on
behalf of the National Tax-Free Institutional Money Market
Fund, filed herewith.
</TABLE>
C-2
<PAGE> 70
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
6(a) (i) - Distribution Agreement with Stephens Inc. (as amended),
incorporated by reference to Post-Effective Amendment No.
18 filed on April 30, 1992.
(a) (ii) - Distribution Agreement on behalf of the Overland Sweep Fund,
incorporated by reference to Post-Effective Amendment No. 14
filed on August 20, 1991.
(a) (iii) - Addendum to Form of Distribution Agreement with Stephens
Inc., incorporated by reference to Post-Effective Amendment
No. 24 filed on April 29, 1994.
(a) (iv) - Form of Amended and Restated Distribution Agreement with
Stephens Inc., filed herewith.
(b) - Dealer Contract (as revised), incorporated by reference to
Post-Effective Amendment No. 13 filed on July 16, 1991.
7 - Not Applicable.
8(a) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of
the Asset Allocation Fund, incorporated by reference to the
Registration Statement on Form N-1A filed on August 5, 1987.
(b) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of
the U.S. Government Income Fund, incorporated by reference
to Post-Effective Amendment No. 9 filed on February 7, 1991.
(c) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of
the California Tax-Free Money Market Fund, incorporated by
reference to Post-Effective Amendment No. 9 filed on
February 7, 1991.
(d) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of
the California Tax-Free Bond Fund, incorporated by
reference to Post-Effective Amendment No. 9 filed on
February 7, 1991.
(e) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of
the Money Market Fund, incorporated by reference to
Post-Effective Amendment No. 9 filed on February 7, 1991.
(f) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of
the Variable Rate Government Fund, incorporated by reference
to Post-Effective Amendment No. 9 filed on February 7, 1991.
(g) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of
the Municipal Income Fund, incorporated by reference to
Post-Effective Amendment No. 16 filed on January 17, 1992.
(h) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of
the U.S. Treasury Money Market Fund, incorporated by
reference to Post-Effective Amendment No. 23 filed on March
2, 1994.
(i) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of
the Strategic Growth Fund, incorporated by reference to
Post-Effective Amendment No. 23 filed on March 2, 1994.
</TABLE>
C-3
<PAGE> 71
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
(j) - Custody Agreement on behalf of the Overland Sweep Fund, the
1-3 Year Duration Municipal Income Fund, the 1-3 Year
Duration Government Income Fund and the 1-3 Year Duration
Full Faith and Credit Government Income Fund, filed
herewith.
(k) - Form of Custody Agreement with Wells Fargo Bank, N.A. on
behalf of the National Tax-Free Institutional Money Market
Fund, filed herewith.
9(a) - Agency Agreement between the Overland Sweep Fund, the 1-3
Year Duration Municipal Income Fund, the 1-3 Year Duration
Government Income Fund, the 1-3 Year Duration Full Faith and
Credit Government Income Fund and Wells Fargo Bank, N.A.,
incorporated by reference to Post-Effective Amendment No.
24 filed on April 29, 1994.
(a) (i) - Form of Agency Agreement with Wells Fargo Bank, N.A. on
behalf of the National Tax-Free Institutional Money Market
Fund, filed herewith.
(b) - License Agreement between Wells Fargo Bank, N.A. and Wells
Fargo Investment Advisors (renamed Wells Fargo Nikko
Investment Advisors), previously filed.
(c) (i) - Shareholder Servicing Agreement on behalf of the Overland
Sweep Fund, incorporated by reference to Post-Effective
Amendment No. 22 filed on May 28, 1993.
(c) (ii) - Form of Servicing Agreement on behalf of Class D Shares,
incorporated by reference to Post-Effective Amendment No.
21 filed on March 3, 1993.
(d) (i) - Servicing Plan on behalf of the Class D Shares of the Asset
Allocation Fund, incorporated by reference to Post-Effective
Amendment No. 22 filed on May 28, 1993.
(d) (ii) - Servicing Plan on behalf of the Class D Shares of the U.S.
Government Income Fund, incorporated by reference to
Post-Effective Amendment No. 22 filed on May 28, 1993.
(d) (iii) - Servicing Plan on behalf of the Class D Shares of the
California Tax-Free Bond Fund, incorporated by reference to
Post-Effective Amendment No. 22 filed on May 28, 1993.
(d) (iv) - Servicing Plan on behalf of the Class D Shares of the
Variable Rate Government Fund, incorporated by reference to
Post-Effective Amendment No. 22 filed on May 28, 1993.
(d) (v) - Servicing Plan on behalf of the Class D Shares of the
Municipal Income Fund, incorporated by reference to
Post-Effective Amendment No. 22 filed on May 28, 1993.
(d) (vi) - Servicing Plan on behalf of the Class D Shares of the
Strategic Growth Fund, incorporated by reference to
Post-Effective Amendment No. 22 filed on May 28, 1993.
10(a) - Opinion and Consent of Counsel, filed herewith.
</TABLE>
C-4
<PAGE> 72
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
11(b) - Not Applicable.
12(a) - None.
13 - Investment Letter, incorporated by reference to
Pre-Effective Amendment No. 2 filed on April 4, 1988.
14 - Not Applicable.
15(a) - Amended Distribution Plan on behalf of the Class A Shares of
the Asset Allocation Fund, incorporated by reference to
Post-Effective Amendment No. 22 filed on May 28, 1993.
(b) - Amended Distribution Plan on behalf of the Class A Shares of
the U.S. Government Income Fund, incorporated by reference
to Post-Effective Amendment No. 22 filed on May 28, 1993.
(c) - Distribution Plan on behalf of the California Tax-Free Money
Market Fund, incorporated by reference to Pre-Effective
Amendment No. 2 filed on April 4, 1988.
(d) - Amended Distribution Plan on behalf of the Class A Shares of
the California Tax-Free Bond Fund, incorporated by reference
to Post-Effective Amendment No. 22 filed on May 28, 1993.
(e) - Amended Distribution Plan on behalf of the Class A Shares of
the Money Market Fund, incorporated by reference to
Post-Effective Amendment No. 24 filed on April 29, 1994.
(f) - Amended Distribution Plan on behalf of the Class A Shares of
the Variable Rate Government Fund, incorporated by reference
to Post-Effective Amendment No. 22 filed on May 28, 1993.
(g) - Amended Distribution Plan on behalf of the Class A Shares of
the Municipal Income Fund, incorporated by reference to
Post-Effective Amendment No. 22 filed on May 28, 1993.
(h) - Distribution Plan on behalf of the Overland Sweep Fund,
incorporated by reference to Post- Effective Amendment No.
14 filed on August 20, 1991.
(i) - Amended Distribution Plan on behalf of the Class A Shares of
the U.S. Treasury Money Market Fund, incorporated by
reference to Post-Effective Amendment No. 24 filed on April
29, 1994.
(j) - Amended Distribution Plan on behalf of the Class A Shares of
the Strategic Growth Fund, incorporated by reference to
Post-Effective Amendment No. 22 filed on May 28, 1993.
(k) - Distribution Plan on behalf of the Class D Shares of the
Asset Allocation Fund, incorporated by reference to
Post-Effective Amendment No. 23 filed on March 2, 1994.
</TABLE>
C-5
<PAGE> 73
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
(l) - Distribution Plan on behalf of the Class D Shares of the
California Tax-Free Bond Fund, incorporated by reference to
Post-Effective Amendment No. 23 filed on March 2, 1994.
(m) - Distribution Plan on behalf of the Class D Shares of the
Municipal Income Fund, incorporated by reference to
Post-Effective Amendment No. 23 filed on March 2, 1994.
(n) - Distribution Plan on behalf of the Class D Shares of the
Strategic Growth Fund, incorporated by reference to
Post-Effective Amendment No. 23 filed on March 2, 1994.
(o) - Distribution Plan on behalf of the Class D Shares of the
U.S. Government Income Fund, incorporated by reference to
Post-Effective Amendment No. 23 filed on March 2, 1994.
(p) - Distribution Plan on behalf of the Class D Shares of the
Variable Rate Government Fund, incorporated by reference to
Post-Effective Amendment No. 23 filed on March 2, 1994.
(q) - Distribution Plan on behalf of the Short-Term Municipal
Income Fund (formerly, the 1-3 Year Duration Municipal
Income Fund), incorporated by reference to Post-Effective
Amendment No. 24 filed on April 29, 1994.
(r) - Distribution Plan of the Short-Term Government-Corporate
Income Fund (formerly, the 1-3 Year Duration Full Faith and
Credit Government Income Fund), incorporated by reference to
Post-Effective Amendment No. 24 filed on April 29, 1994.
16(a) - Schedules for Computation of Performance Quotations,
incorporated by reference to Post-Effective Amendment No. 3
filed on October 3, 1988.
(b) - Schedule of Computation of Performance data.
17 - Powers of Attorney, incorporated by reference to
Post-Effective Amendment No. 14 to the Registration
Statement filed on August 20, 1991.
18 - Rule 18f-3 Multi-Class Plan, incorporated by reference to
Post-Effective Amendment No. 28 to the Registration
Statement filed on April 4, 1995.
</TABLE>
Item 25. Persons Controlled by or under Common Control with Registrant.
Stephens Inc. is the beneficial owner of 100% of the outstanding
voting securities of the National Tax-Free Institutional Money Market Fund.
Item 26. Number of Holders of Securities.
As of October 31, 1995, the number of record holders of each class
of securities of the Registrant was as follows:
C-6
<PAGE> 74
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
-------------- ------------------------
<S> <C>
Asset Allocation Fund
Class A 1,041
Class D 389
California Tax-Free Bond Fund
Class A 3,979
Class D 61
California Tax-Free Money Market Fund 154
Money Market Fund
Class A 207
Institutional Class 242
Municipal Income Fund
Class A 1,253
Class D 262
Overland Sweep Fund 3
Short-Term Municipal Income Fund 26
Short-Term Government-Corporate
Income Fund 11
Strategic Growth Fund
Class A 2,613
Class D 883
U.S. Government Income Fund
Class A 595
Class D 62
U.S. Treasury Money Market Fund
Class A 24
Institutional Class 71
Variable Rate Government Fund
Class A 1,496
Class D 87
</TABLE>
C-7
<PAGE> 75
27. Indemnification.
Section 4 of Article VI of the Registrant's Articles of
Incorporation provides:
To the fullest extent permitted by Maryland statutory or decisional
law, as amended or interpreted, no person who is or was a director or
officer of this Corporation shall be personally liable to the Corporation
or its stockholders for money damages. No amendment of the charter of
the Corporation or repeal of any of its provisions shall limit or
eliminate the benefits provided to any person who is or was a director or
officer under this provision with respect to any act or omission which
occurred prior to such amendment or repeal. The rights of
indemnification under this provision shall neither be exclusive of, nor
be deemed in limitation of, any right to which any person may otherwise
be entitled or permitted by contract or otherwise. This Section 4 shall
not protect any person who is or was a director or officer of the
Corporation against any liability to the Corporation or its stockholders
to which he or she 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 or her office.
Item 28. Business and Other Connections of Investment Adviser.
Wells Fargo Bank, N.A. ("Wells Fargo Bank"), a wholly owned
subsidiary of Wells Fargo & Company, serves as investment adviser to all of the
Registrant's investment portfolios, other than the Overland Sweep Fund, the
Short-Term Municipal Income Fund and the Short-Term Government-Corporate Income
Fund which currently do not retain an investment adviser, and to certain other
registered open-end management investment companies. Wells Fargo Bank's
business is that of a national banking association with respect to which it
conducts a variety of commercial banking and trust activities.
To the knowledge of Registrant, none of the directors or executive
officers of Wells Fargo Bank, except those set forth below, is or has been at
any time during the past two fiscal years engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
executive officers also hold various positions with and engage in business for
Wells Fargo & Company. Set forth below are the names and principal businesses
of the directors and executive officers of Wells Fargo Bank who are or during
the past two fiscal years have been engaged in any other business, profession,
vocation or employment of a substantial nature for their own account or in the
capacity of director, officer, employee, partner or trustee. All the directors
of Wells Fargo Bank also serve as directors of Wells Fargo & Company.
C-8
<PAGE> 76
<TABLE>
<CAPTION>
Name and Position Principal Business(es) and Address(es)
at Wells Fargo Bank During at Least the Last Two Fiscal Years
------------------- ------------------------------------------
<S> <C>
H. Jesse Arnelle Senior Partner of Arnelle & Hastie
Director 455 Market Street
San Francisco, CA 94105
Director of FPL Group, Inc.
700 Universe Blvd.
P.O. Box 14000
North Palm Beach, FL 33408
William R. Breuner General Partner in Breuner Associates, Breuner Properties and
Director Breuner-Pavarnick Real Estate Developers. Retired Chairman of
the Board of Directors of John Breuner Co.
2300 Clayton Road, Suite 1570
Concord, CA 94520
Vice Chairman of the California State Railroad
Museum Foundation.
111 I Street
Old Sacramento, CA 95814
William S. Davila President and Director of The Vons Companies, Inc.
Director 618 Michillinda Avenue
Arcadia, CA 91007
Officer of Western Association of Food Chains
825 Colorado Blvd. #203
Los Angeles, CA 90041
Rayburn S. Dezember Director of CalMat Co.
Director 3200 San Fernando Road
Los Angeles, CA 90065
Director of Tejon Ranch Co.
P.O. Box 1000
Lebec, CA 93243
Director of Turner Casting Corp.
P.O. Box 1099
Cudahy, CA 90201
Director of The Bakersfield Californian
P.O. Box 440
1707 I Street
Bakersfield, CA 93302
Director of Kern County Economic Development Corp.
P.O. Box 1229
2700 M Street, Suite 225
Bakersfield, CA 93301
</TABLE>
C-9
<PAGE> 77
<TABLE>
<S> <C>
Chairman of the Board of Trustees of Whittier College
13406 East Philadelphia Avenue
P.O. Box 634
Whittier, CA 90608
Paul Hazen Chairman of the Board of Directors of
Chairman of the Wells Fargo & Company
Board of Directors 420 Montgomery Street
San Francisco, CA 94105
Director of Pacific Telesis Group
130 Kearny Street
San Francisco, CA 94108
Director of Phelps Dodge Corp.
2600 North Central Avenue
Phoenix, AZ 85004
Director of Safeway Inc.
Fourth and Jackson Streets
Oakland, CA 94660
Robert K. Jaedicke Accounting Professor and Dean Emeritus of
Director Graduate School of Business, Stanford University
MBA Admissions Office
Stanford, CA 94305
Director of Homestake Mining Co.
650 California Street
San Francisco, CA 94108
Director of California Water Service Company
1720 North First Street
San Jose, CA 95112
Director of Boise Cascade Corp.
1111 West Jefferson Street
P.O. Box 50
Boise, ID 83728
Director of Enron Corp.
1400 Smith Street
Houston, TX 77002
Director of GenCorp, Inc.
175 Ghent Road
Fairlawn, OH 44333
Paul A. Miller Chairman of Executive Committee and Director of
Director Pacific Enterprises
633 West Fifth Street
Los Angeles, CA 90071
</TABLE>
C-10
<PAGE> 78
<TABLE>
<S> <C>
Trustee of Mutual Life Insurance Company of New York
1740 Broadway
New York, NY 10019
Director of Newhall Management Corporation
23823 Valencia Blvd.
Valencia, CA 91355
Trustee of University of Southern California
University Park TGF 200
665 Exposition Blvd.
Los Angeles, CA 90089
Ellen M. Newman President of Ellen Newman Associates
Director 323 Geary Street, Suite 507
San Francisco, CA 94102
Chair of Board of Trustees of
University of California at San Francisco Foundation
250 Executive Park Blvd., Suite 2000
San Francisco, CA 94143
Director of American Conservatory Theater
30 Grant Avenue
San Francisco, CA 94108
Director of California Chamber of Commerce
1201 K Street, 12th Floor
Sacramento, CA 95814
Philip J. Quigley Chairman, Chief Executive Officer and
Director Director of Pacific Telesis Group
130 Kearney Street, Rm. 3700
San Francisco, CA 94108
Director of Varian Associates
3050 Hansen Way
P.O. Box 10800
Palo Alto, CA 94303
Carl E. Reichardt Chairman and Chief Executive Officer of the
Director Board of Directors of Wells Fargo & Company
420 Montgomery Street
San Francisco, CA 94105
Director of Ford Motor Company
The American Road
Dearborn, MI 48121
Director of Hospital Corporation of America,
HCA-Hospital Corp. of America
One Park Plaza
Nashville, TN 37203
</TABLE>
C-11
<PAGE> 79
<TABLE>
<S> <C>
Director of Pacific Gas and Electric Company
77 Beale Street
San Francisco, CA 94105
Director of Newhall Management Corporation
23823 Valencia Blvd.
Valencia, CA 91355
Donald B. Rice President, Chief Operating Officer and Director of
Director Teledyne, Inc.
2049 Century Park East
Los Angeles, CA 90067
Director of Vulcan Materials Company
One Metroplex Drive
Birmingham, AL 35209
Retired Secretary of the Air Force
Susan G. Swenson President and Chief Executive Officer of Cellular One
Director 651 Gateway Blvd.
San Francisco, CA 94080
Chang-Lin Tien Chancellor of University of California at Berkeley
Director UC at Berkeley
Berkeley, CA 94720
John A. Young President, Director and Chief Executive Officer of
Director Hewlett-Packard Company
3000 Hanover Street
Palo Alto, CA 94304
Director of Chevron Corporation
225 Bush Street
San Francisco, CA 94104
William F. Zuendt Director of 3Com Corp.
President 5400 Bayfront Plaza
P.O. Box 58145
Santa Clara, CA 95052
Director of MasterCard International
888 Seventh Avenue
New York, NY 10106
Trustee of Golden Gate University
536 Mission Street
San Francisco, CA 94163
</TABLE>
C-12
<PAGE> 80
Wells Fargo Nikko Investment Advisors ("WFNIA") serves as the
sub-adviser to the Asset Allocation Fund and as adviser or sub-adviser to
various other open-end management investment companies. For additional
information, see "Advisory, Administration and Distribution Arrangements" in
the Prospectus describing the Asset Allocation Fund and "Management" in the
Statement of Additional Information of such Fund. For information as to the
business, profession, vocation or employment of a substantial nature of each of
the officers and management committees of WFNIA, reference is made to WFNIA's
Form ADV and Schedules A and D filed under the Investment Advisers Act of 1940,
File No. 801-36479, incorporated herein by reference.
Item 29. Principal Underwriters.
(a) Stephens Inc., distributor for the Registrant, does not
presently act as investment adviser for any other registered investment
companies, but does act as principal underwriter for Stagecoach Funds, Inc.,
Stagecoach Inc., and Stagecoach Trust; and is the exclusive placement agent for
Master Investment Trust, Managed Series Investment Trust, Life & Annuity Trust
and Master Investment Portfolio, which are registered open-end management
investment companies, and has acted as principal underwriter for the Liberty
Term Trust, Inc., Nations Government Income Term Trust 2003, Inc., Nations
Government Income Term Trust 2004, Inc. and the Managed Balanced Target
Maturity Fund, Inc., which are closed-end management investment companies, and
Nations Fund Trust, Nations Fund, Inc., Nations Fund Portfolio, Inc. and the
Capitol Mutual Funds, which are open-end management investment companies.
(b) Information with respect to each director and officer of the
principal underwriter is incorporated by reference to Form ADV and Schedules A
and D filed by Stephens Inc. with the Securities and Exchange Commission
pursuant to The Investment Advisers Act of 1940 (file no. 501-15510).
(c) Not applicable.
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder
are maintained at one or more of the following offices: Overland Express
Funds, Inc. maintains those accounts, books and other documents required by
Rule 31a-1(b)(4) and (d), Rule 31a-2(a)(3) and (c) at 111 Center Street, Little
Rock, Arkansas 72201; Wells Fargo Bank maintains all other accounts, books or
other documents required by Rules 31a-1, 31a-2 and 31a-3 at 525 Market Street,
San Francisco, California 94163; and copies of such documents also are
maintained by Overland Express Funds, Inc. Original and/or copies of certain
of the accounts, books or other documents relating to the Asset Allocation Fund
may be retained by WFNIA in its capacity as sub-adviser and by Wells Fargo
Institutional Trust Company, N.A., in its capacity as custodian.
Item 31. Management Services.
C-13
<PAGE> 81
Other than as set forth under the captions "Management of the Fund
and the Master Series" in the Prospectus constituting Part A of this
Registration Statement and "Management" in the Statement of Additional
Information constituting Part B of this Registration Statement, the Registrant
is not a party to any management-related service contract.
Item 32. Undertakings.
(a) Not Applicable.
(b) Not Applicable.
(c) Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant
to the provisions set forth above in response to Item 27, or
otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such
Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
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, the 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.
(d) Registrant undertakes to hold a special meeting of its
shareholders for the purpose of voting on the question of
removal of a director or directors if requested in writing by
the holders of at least 10W of the Company's outstanding
voting securities, and to assist in communicating with other
shareholders as required by Section 16(c) of the Investment
Company Act of 1940.
(e) Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of its most current
annual report to shareholders, upon request and without
charge.
C-14
<PAGE> 82
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 on Form N-1A to be signed on its behalf by the
undersigned, thereto duly authorized in the City of Little Rock, State of
Arkansas on the 28th day of November, 1995.
OVERLAND EXPRESS FUNDS, INC.
By /s/ Richard H. Blank, Jr.
-------------------------
(Richard H. Blank, Jr.)
Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form N-1A has been signed below by the following
persons in the capacities and on the date indicated:
<TABLE>
<CAPTION>
<S> <C>
Signature Title
--------- -----
/s/ R. Greg Feltus Director, Chairman and President
------------------------------------ (Principal Executive Officer)
(R. Greg Feltus)
/s/ Richard H. Blank, Jr. Secretary and Treasurer (Chief
------------------------------------ Operating Officer)
(Richard H. Blank, Jr.)
/s/ Jack S. Euphrat Director
------------------------------------
(Jack S. Euphrat)
/s/ Thomas S. Goho Director
------------------------------------
(Thomas S. Goho)
/s/ Zoe Ann Hines Director
------------------------------------
(Zoe Ann Hines)
/s/ W. Rodney Hughes Director
------------------------------------
(W. Rodney Hughes)
/s/ Robert M. Joses Director
------------------------------------
(Robert M. Joses)
/s/ J. Tucker Morse Director
------------------------------------
(J. Tucker Morse)
*By: /s/ Richard H. Blank, Jr.
-------------------------------------
(Richard H. Blank, Jr.)
As Attorney-in-Fact
</TABLE>
<PAGE> 83
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 the Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereto duly authorized in the City of Little Rock, State of
Arkansas on the 28th day of November, 1995.
MASTER INVESTMENT TRUST
By /s/ Richard H. Blank, Jr.
------------------------------------
(Richard H. Blank, Jr., Secretary)
Signature Title
--------- -----
/s/ R. Greg Feltus Trustee, Chairman and President
------------------------------------ (Principal Executive Officer)
(R. Greg Feltus)
/s/ Richard H. Blank, Jr. Secretary and Treasurer (Chief
------------------------------------ Operating Officer)
(Richard H. Blank, Jr.)
/s/ Jack S. Euphrat Trustee
------------------------------------
(Jack S. Euphrat)
/s/ Thomas S. Goho Trustee
------------------------------------
(Thomas S. Goho)
/s/ Zoe Ann Hines Trustee
------------------------------------
(Zoe Ann Hines)
/s/ W. Rodney Hughes Trustee
------------------------------------
(W. Rodney Hughes)
/s/ Robert M. Joses Trustee
------------------------------------
(Robert M. Joses)
/s/ J. Tucker Morse Trustee
------------------------------------
(J. Tucker Morse)
*By: /s/ Richard H. Blank, Jr.
------------------------------------
(Richard H. Blank, Jr.)
As Attorney-in-Fact
<PAGE> 84
OVERLAND EXPRESS FUNDS, INC.
SEC FILE NOS. 33-16296; 811-8275
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NUMBER DESCRIPTION PAGE NO.
<S> <C> <C>
1 - Restated Articles of Incorporation
99.B5(a)(x) - Sub-Advisory Contract with Wells Fargo Nikko
Investment Advisors on behalf of the Asset
Allocation Fund
99.B5(b)(viii) - Administration Agreement with Stephens Inc. on
behalf of the Overland Sweep Fund, Short-Term
Municipal Income Fund and Short-Term Government-
Corporate Income Fund
99.B5(b)(ix) - Administration Agreement with Stephens Inc. on
behalf of the U.S. Treasury Money Market Fund
99.B5(b)(xi) - Form of Administration Agreement with Stephens
Inc. on behalf of the National Tax-Free Institutional
Money Market Fund
99.B6(a)(iv) - Form of Amended and Restated Distribution
Agreement with Stephens Inc.
99.B8(j) - Custody Agreement with Wells Fargo Bank, N.A. on
behalf of the Overland Sweep Fund, Short-Term
Municipal Income Fund and Short-Term Government-
Corporate Income Fund
99.B8(k) - Form of Custody Agreement with Wells Fargo Bank,
N.A. on behalf of the National Tax-Free
Institutional Money Market Fund
99.B9(a)(i) - Form of Agency Agreement with Wells Fargo Bank,
N.A. on behalf of the National Tax-Free
Institutional Money Market Fund
99.B10 - Opinion and Consent of Counsel
</TABLE>
<PAGE> 1
EX-99.B1
RESTATED ARTICLES OF INCORPORATION
OF
OVERLAND EXPRESS FUNDS, INC.
Dated November 22, 1995
I.
WHEREAS, the Board of Directors of OVERLAND EXPRESS FUNDS, INC.
(the "Corporation") desires to restate the Corporation's Articles of
Incorporation as currently in effect (sometimes referred to herein as the
"Charter"); and
WHEREAS, the provisions set forth in the articles of restatement
are all of the provisions of the Corporation's Charter currently in effect; and
WHEREAS, a majority of the Corporation's entire Board of Directors
approved the restatement of the Charter at a meeting held on October 10, 1995,
and authorized the filing of the restated charter.
NOW THEREFORE, the undersigned hereby certifies that the following
comprises the Corporation's Restated Articles of Incorporation:
ARTICLE I
Incorporator
Leslie Lowenbraun, as incorporator, whose post office address was 125
Road Street, New York, New York 10004, being at least 18 years of age, formed
the Corporation on April 25, 1987 under and by virtue of the general laws of
the State of Maryland, and such Articles of Incorporation were filed with the
Maryland Department of Assessments and Taxation on April 25, 1987.
ARTICLE II
Name
The name of the Corporation is Overland Express Funds, Inc.
<PAGE> 2
ARTICLE III
Corporate Purposes
The purposes for which the Corporation is formed are:
To engage in the business of an investment company and in
connection therewith, to hold, invest, and reinvest its funds,
including holding part or all of its funds in cash, purchasing or
otherwise acquiring, holding, selling, assigning, negotiating,
lending, transferring, exchanging or otherwise disposing of
securities (as defined below); to exercise any and all rights,
powers and privileges of ownership or interest in respect thereof:
and to preserve, protect, improve and enhance the value of the
funds and securities: held by it.
To issue and sell shares of any class of its own capital
stock whether for cash at not less than the par value thereof or
for such other consideration as the Board of Directors may deem
advisable, in the manner and to the extent now or hereafter
permitted by the laws of Maryland; provided, however, the
consideration (or the value thereof as determined by the Board of
Directors) per share to be received by the Corporation upon the
sale of shares of any class (including treasury shares) shall not
be less than the net asset value (determined as provided in Article
V, Section 7 hereof) per share of that class outstanding at the
time (determined by the Board of Directors) as of which the
computation of such net asset value shall be made.
To purchase, acquire, hold, dispose of, resell, transfer,
reissue, retire 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 the laws of
the State of Maryland and by these Articles of Incorporation.
To carry out the foregoing purposes as principal or agent,
alone or with associates and, to the extent now or hereafter
permitted by the laws of the State of Maryland, as a member or
owner or holder of securities of any firm, association,
corporation, trust or syndicate, and in that connection to make or
enter into contracts with persons, firms, associations,
corporations, syndicates, governments or subdivisions thereof, to
do acts and to exercise powers to the same extent that a natural
person could lawfully make, enter into, do or exercise the same.
2
<PAGE> 3
To do any other acts and to exercise any other powers that may be
incidental, relative or conducive to, or necessary, appropriate or desirable
for, the accomplishment, carrying out or attainment of all or any of the
foregoing purposes.
The enumeration of certain powers is not intended to be exclusive of or a
waiver of any of the powers, rights or privileges conferred on corporations by
the laws of the State of Maryland as now or hereinafter in effect, and the
Corporation shall be authorized to exercise and enjoy all powers conferred upon
corporations by the laws of the State of Maryland as in force from time to
time, but the Corporation shall not carry on any business or exercise any
powers in the State of Maryland or any other jurisdiction that under the laws
thereof it could not lawfully carry on or exercise.
The foregoing provisions shall be construed as powers as well as purposes
of the Corporation, and the matters expressed in each provision shall, except
as otherwise expressly provided, not be limited by reference to or inference
from the terms of any other provision but shall be regarded as independent
purposes and powers, and the use of the term "including" in any of the
foregoing provisions shall not be construed to limit the generality of the
words preceding that term.
For purposes of these Articles of Incorporation, the term "securities"
shall be deemed to include, without limitation, stocks, shares, bonds,
debentures, bills, notes, evidences of interest, evidences of indebtedness,
warrants, certificates of deposit, bank time deposits, bankers' acceptances,
repurchase and reverse repurchase agreements, stand- by commitments, and other
securities, irrespective of their form, the name by which they are described or
the character or form of the entities by which they are issued or created.
ARTICLE IV
Principal Office and Resident Agent
The post office address of the principal office of the Corporation in
Maryland is c/o The Corporation Trust Incorporated, 32 South Street, Baltimore,
Maryland 21202. The resident agent of the Corporation is The Corporation Trust
Incorporated, a Maryland corporation, and the post office address of the
resident agent is 32 South Street, Baltimore, Maryland 21202.
ARTICLE V
Capital Stock
Section 1. Authorized Shares. The aggregate number of all classes of
shares of capital stock that the Corporation is authorized to issue is twenty
billion (20,000,000,000) shares of common stock ("Shares") of par value of
$.001 each, having an aggregate par value of $20,000,000. (Such classes
together with any further class or classes of Shares from time to time created
by the Board of Directors being herein referred to individually as a "Class"
and collectively as "Classes").
3
<PAGE> 4
<TABLE>
<CAPTION>
Class Number of Shares
- ----- ----------------
<S> <C>
Asset Allocation Series
Class A 100,000,000
Class D 100,000,000
California Tax-Free Bond Series
Class A 100,000,000
Class D 100,000,000
California Tax-Free Money Market
Series 3,000,000,000
Dividend Income Series
Class A 100,000,000
Class D 100,000,000
Growth and Income Series
Class A 100,000,000
Class D 100,000,000
Lehman Brothers Government/Corporate
Bond Index Series
Class A 100,000,000
Class D 100,000,000
Money Market Series
Class A 1,000,000,000
Institutional Class 1,000,000,000
Morgan Stanley Capital International
Europe, Australia, Far East (EAFE)
Index Series
Class A 100,000,000
Class D 100,000,000
Municipal Income Series
Class A 100,000,000
Class D 100,000,000
National Tax-Free Institutional Money
Market Series 3,000,000,000
Overland Sweep Series 3,000,000,000
</TABLE>
4
<PAGE> 5
<TABLE>
<S> <C>
Russell 2000 Index Series
Class A 100,000,000
Class D 100,000,000
Short-Intermediate U.S. Government
Income Series
Class A 100,000,000
Class D 100,000,000
Short-Term Government-Corporate
Income Series 300,000,000
Short-Term Municipal Income Series 300,000,000
Short-Term U.S. Government
Portfolio Series 500,000,000
Salomon Brothers World Government
Bond Index Series
Class A 100,000,000
Class D 100,000,000
Strategic Growth Series
Class A 100,000,000
Class D 100,000,000
S&P 500 Index Series
Class A 100,000,000
Class D 100,000,000
U.S. Dollar Strategic Opportunities
Series 100,000,000
U.S. Government Income Series
Class A 100,000,000
Class D 100,000,000
U.S. Treasury Money Market Series
Class A 1,000,000,000
Institutional Class 1,000,000,000
Variable Rate Government Series
Class A 500,000,000
Class D 500,000,000
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C>
1-3 Year Duration Government Income
Series 300,000,000
Unclassified 1,900,000,000
--------------
TOTAL 20,000,000,000
</TABLE>
The Board of Directors of the Corporation is authorized, to the extent
permitted by the laws of the State of Maryland, the Investment Company Act of
1940 and any other applicable law, from time to time to classify or to
reclassify, as the case may be, any unissued Shares by setting or changing the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemption of such unissued Shares.
Section 2. Preferences, Conversion and Other Rights of Classes. A
description of the relative preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption of all Classes of Shares is as follows, unless
otherwise set forth in Articles Supplementary filed with the Maryland State
Department of Assessments and Taxation describing any further Class or Classes
from time to time created by the Board of Directors:
(a) Assets Belonging to Class. A11 consideration received by the
Corporation for the issue or sale of Shares of a particular Class,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits and proceeds thereof, including
any proceeds derived from the sale, exchange or - liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong to
that Class for all purposes, subject only to the rights of creditors, and
shall be so recorded upon the books of account of the Corporation. Such
consideration, assets, income, earnings, profits and proceeds, including
any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, together with any General
Items (as hereinafter defined) allocated to that Class as provided in the
following sentence, are herein referred to as "assets belonging to" that
Class. In the event there are any assets, income, earnings, profits or
proceeds thereof, funds or payments that are not readily identifiable as
belonging to any particular Class (collectively "General Items"), the
Board of Directors shall allocate such General Items to and among any one
or more of the Classes created from time to time in such manner and on
such basis as it, in its sole discretion, deems fair and equitable; and
any General Items so allocated to a particular Class shall belong to that
Class. Each such allocation by the Board of Directors shall be
conclusive and binding upon the stockholders of all Classes for all
purposes.
6
<PAGE> 7
(b) Liabilities Belonging to Class. The assets belonging to each
particular Class shall be charged with the liabilities of the Corporation
in respect of that Class and with all expenses, costs, charges and
reserves attributable to that Class, and shall be so recorded upon the
books of account of the Corporation. Such liabilities, expenses, costs,
charges and reserves, together with any General Items (as hereinafter
defined) allocated to that Class as provided in the following sentence,
so charged to that Class are herein referred to as "liabilities belonging
to" that Class. In the event there are any general liabilities,
expenses, costs, charges or reserves of the Corporation that are not
readily identifiable as belonging to any particular Class (collectively
"General Items"), the Board of Directors shall allocate and charge such
General Items to and among any one or more of the Classes created from
time to time in such manner and on such basis as the Board of Directors
in its sole discretion deems fair and equitable: and any General Items so
allocated and charged to a particular Class shall belong to that Class.
Each such allocation by the Board of Directors shall be conclusive and
binding upon the stockholders of all Classes for all purposes.
(c) Dividends. Dividends and distributions on Shares of a
particular Class may he paid to the holders of Shares of that Class at
such times, in such manner and from such of the income and capital gains,
accrued or realized, from the assets belonging to that Class, after
providing for actual and accrued liabilities belonging to that Class, as
the Board of Directors may determine.
(d) Liquidation. In the event of the liquidation or dissolution of
the Corporation (or one or more Classes in the event of a partial
liquidation of the Corporation), the stockholders of each Class that has
been created (or each Class that is being liquidated or dissolved) shall
be entitled to receive, as a Class, when and as declared by the Board of
Directors, the excess of the assets belonging to that Class over the
liabilities belonging to that Class. The assets so distributable to the
stockholders of any particular Class shall be distributed among such
stockholders in proportion to the number of Shares of that Class held by
them and recorded on the books of the Corporation.
(e) Voting. On each matter submitted to vote of the stockholders,
each holder of a Share shall be entitled to one vote for each such Share
standing in his name on the books of the Corporation irrespective of the
Class thereof and all Shares of all Classes shall vote as a single class
("Single Class Voting"); provided, however, that
(i) as to any matter with respect to which a separate vote of
any Class is required by the Investment Company Act of 1940 or
would be required under the Maryland General Corporation Law, such
requirements as to a separate vote by that Class shall apply in
lieu of Single Class Voting as described above;
7
<PAGE> 8
(ii) in the event that the separate vote requirements
referred to in (i) above apply with respect to one or more Classes,
then, subject to (iii) below, the Shares of all other Classes shall
vote as a single class: and
(iii) as to any matter that does not affect the interest of a
particular Class, only the holders of Shares of the one or more
affected Classes shall be entitled to vote.
(f) Equality. All Shares of each particular Class shall represent
an equal proportionate interest in the assets belonging to that Class
(subject to the liabilities belonging to that Class), and each Share of
any particular Class shall be equal to each other Share of that Class,
but the provisions of this sentence shall not restrict any distinctions
permissible pursuant to subsection (c) of this Section 2 of this Article
or otherwise under these Articles of Incorporation that may exist with
respect to stockholder elections to receive dividends or distributions in
cash or Shares of the same Class or that may otherwise exist with respect
to dividends and distributions on Shares of the same Class.
Section 3. Fractional Shares. Any fractional Share of the Corporation
shall carry proportionately all the rights of a whole Share of the same Class,
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.
Section 4. Quorum; Adjournment; Majority Vote. The presence in person
or by proxy of the holders of one-third of the Shares of all Classes issued and
outstanding and entitled to vote thereat shall constitute a quorum for the
transaction of any business at all meetings of the stockholders except as
otherwise provided by law or in these Articles of Incorporation and except that
where the holders of Shares of any Class are entitled to a separate vote as a
Class (a "Separate Class") or where the holders of Shares of two or more (but
not all) Classes are required to vote as a single Class (a "Combined Class"),
the presence in person or by proxy of the holders of one-third of the Shares of
that Separate Class or Combined Class, as the case may be, issued and
outstanding and entitled to vote thereat shall constitute a quorum for such
vote. If, however, a quorum with respect to all Classes, a Separate Class or a
Combined Class, as the case may be, shall not be present or represented at any
meeting of the shareholders, the holders of a majority of the Shares of all
Classes, such Separate Class or such Combined Class, as the case may be,
present in person or by proxy and entitled to vote shall have power to adjourn
the meeting from time to time as to all Classes, such Separate Class or such
Combined Class, as the case may be, without notice other than announcement at
the meeting, until the requisite number of Shares entitled to vote at such
8
<PAGE> 9
meeting shall be present. At such adjourned meeting at which the requisite
number of Shares entitled to vote thereat shall be represented any business may
be transacted which might have been transacted at the meeting as originally
notified. The absence from any meeting of stockholders of the number of Shares
in excess of one-third of the Shares of all Classes or of the affected Class or
Classes, as the case may be, which may be required by the laws of the State of
Maryland, the Investment Company Act of 1940 or any other applicable law, these
Articles of Incorporation, for action upon any given matter shall not prevent
action at such meeting upon any other matter or matters that may properly come
before the meeting, if there shall he present thereat, in person or by proxy,
holders of the number of Shares required for action in respect of such-other
matter or matters. Notwithstanding any provision of laws of the State of
Maryland requiring any action to be taken or authorized by the holders of a
greater proportion than a majority of the Shares of all Classes or of the
Shares of a particular Class or Classes, as the case may be, entitled to vote
thereon, such action shall be valid and effective if taken or authorized by the
affirmative vote of the holders of a majority of the Shares of all Classes or
of such Class or Classes, as the case may be, outstanding and entitled to vote
thereon.
Section 5. No Preemptive Rights. No holder of shares of capital 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 that the
Corporation may issue or sell (whether consisting of shares of capital stock
authorized by these Articles of Incorporation, or shares of capital stock of
the Corporation accrued by it after the issue thereof, or other shares) other
than any right that the Board of Directors of the Corporation, in its
discretion, may determine.
Section 6. Redemptions and Repurchases.
(a) Circumstances Under Which Shares May Re Redeemed or
Repurchased. The Corporation shall under some circumstances redeem, and
may under other circumstances repurchase or redeem, Shares as follows:
(i) Obligation of the Corporation to Redeem Shares. Each
holder of Shares of any Class shall be entitled at his option to
require the Corporation to redeem all or any part of the Shares of
that Class owned by such holder, upon request to the Corporation or
its designated agent, accompanied by surrender of the certificate
or certificates for such Shares, or any such other evidence of
ownership as shall be specified by the Board of Directors, for the
proportionate interest per Share in the assets of the Corporation
belonging to that Class, or the cash equivalent thereof (being the
net asset value per Share of that Class determined as provided in
Section 7 hereof), subject to and in accordance with the provisions
of paragraph (b) of this Section 6. Notwithstanding the foregoing,
the Board of Directors of the Corporation may suspend the right of
the holders of the capital stock of the Corporation to require the
Corporation to redeem such capital stock:
(A) for any period (I) during which the New York Stock
Exchange is closed other than customary week-end and holiday
closings or (II) during which trading on the New York Stock
Exchange is restricted;
(B) for any period during which any emergency, as
defined by rules of the Securities and Exchange Commission or
any successor thereto, exists as a result of which (I)
disposal by the Corporation of securities owned by it is not
reasonably practicable or (II) it is not reasonably
9
<PAGE> 10
practicable for the Corporation fairly to determine the value
of its net assets; or
(C) for such other periods as the Securities and
Exchange Commission or any successor thereto may by order
permit for the protection of security holders of the
Corporation.
(ii) Right of the Corporation to Redeem Shares. In addition
the Board of Directors may, from time to time in its discretion,
authorize the Corporation to require the redemption of all or any
part of the outstanding Shares of any Class, for the proportionate
interest per Share in the assets of the Corporation belonging to
that Class, or the cash equivalent thereof (being the net asset
value per Share of that Class determined as provided in Section 7
hereof), subject to and in accordance with the provisions of
paragraph (b) of this Section 6, upon the sending of written or
telegraphic notice of redemption to each stockholder any of whose
Shares are so redeemed and upon such terms and conditions as the
Board of Directors shall deem advisable.
(iii) Right of the Corporation to Repurchase Shares. In
addition the Board of Directors may, from time to time in its
discretion, authorize the officers of the Corporation to repurchase
Shares of any Class, either directly or through an agent, subject
to and in accordance with the provisions of paragraph (b) of this
Section 6. The price to be paid by the Corporation upon any such
repurchase shall be determined, in the discretion of the Board of
Directors, in accordance with any applicable provision of the laws
of the State of Maryland and the Investment Company Act of 1940 or
any rule or regulation thereunder, including any rule or regulation
made or adopted pursuant to Section 22 of the Investment Company
Act of 1940 by the Securities and Exchange Commission or any
securities association registered under the Securities Exchange Act
of 1934.
(b) Procedure for Redemptions and Repurchases. The following
provisions shall be applicable with respect to redemptions and
repurchases of Shares of any Class pursuant to paragraph (a) of this
Section 6:
(i) The time as of which the net asset value per Share of a
particular Class applicable to any redemption pursuant to
subparagraph (a)(i) or (a)(ii) of this Section 6 shall be computed,
shall be such time as may be determined by or pursuant to the
direction of the Board of Directors (which time may differ from
Class to Class).
10
<PAGE> 11
(ii) Certificates for Shares of any Class to be redeemed or
repurchased shall be surrendered in proper form for transfer, together
with such proof of the authenticates of signatures as may be required by
resolution of the Board of Directors.
(iii) Payment of the redemption or repurchase price by the
Corporation or its designated agent shall be made within seven days after
the time used for determination of redemption or repurchase price, but in
no event prior to delivery to the Corporation or its designated agent of
the certificate or certificates for the Shares of the particular Class so
redeemed or repurchased or such other evidence of ownership as shall be
specified by the Board of Directors. Any payment may be made in whole or
in part in securities or other assets of the Corporation belonging to
that Class if, as the result of the happening of any event at any time
prior to actual payment that makes the liquidation of securities in
orderly fashion impractical or impossible, the Board of Directors shall
determine that payment in cash would be prejudicial to the best interests
of the remaining stockholders of that Class. In making any such payment
in whole or in part in securities or other assets of the Corporation
belonging to that Class, the Corporation shall, as nearly as may be
practicable, deliver securities or other assets of a "gross value"
(determined in the manner provided in Section 7 hereof) representing the
same proportionate interest in the securities and other assets of the
Corporation belonging to that Class as is represented by the Shares of
that Class so to be paid for.
(iv) The right of the holder of Shares of any Class redeemed
or repurchased by the Corporation to receive dividends thereon as provided
in this Article V and all other rights of such holder with respect to
such shares shall forthwith cease and terminate at the time as of which
the redemption or repurchase price of such Shares has been determined
(except the right of such holder to receive (a) the redemption or
repurchase price of such Shares from the Corporation or its designated
agent, in cash and/or in securities or other assets of the Corporation
belonging to that Class, and (b) any dividend or distribution to which
such holder had previously become entitled as the record holder of such
Shares on the record date for such dividend, and, with respect to Shares
otherwise entitled to vote, except the right of such holder to vote at a
meeting of stockholders such Shares owned of record by him on the record
date for such meeting).
11
<PAGE> 12
Section 7. Determination of Net Asset Value.
(a) For purposes of Article III and this Article V, the net asset
value per share of any Class shall be determined pursuant to the
direction of the Board of Directors and in accordance with the provisions
of this Section 7. Such net asset value per Share of a particular Class
on any day shall be computed as follows:
(i) The net asset value per share of that Class shall be the
quotient obtained by dividing the "net value of the assets" of the
Corporation belonging to that Class by the total number of Shares
of that Class at the time deemed to be outstanding (including
Shares sold whether or not paid for and issued and excluding Shares
redeemed or repurchased on the basis of previously determined
values, whether or not paid for, received and held in treasury).
(ii) The "net value of the assets" of the Corporation
belonging to a particular Class shall be the "gross value" of the
assets belonging to that Class after deducting the amount of all
expenses incurred and accrued and unpaid belonging to that Class,
such reserves belonging to that Class as may be set up to cover
taxes and any other liabilities, and such other deductions
belonging to that Class as in the opinion of the officers of the
Corporation are in accordance with accepted accounting practice.
(iii) The "gross value" of the assets belonging to a
particular Class shall be the amount of all cash and receivables
and the market value of all Securities and other assets held by the
Corporation and belonging to that Class at the time as of which the
determination is made. Securities held shall be valued at market
value or, in the absence of readily available market quotations, at
fair value, both as determined pursuant to methods approved by the
Board of Directors and in accordance with applicable statutes and
regulations.
(b) The Board of Directors is empowered, in its absolute
discretion, to establish other methods for determining such net asset
value whenever such other methods are deemed by it to be necessary or
desirable and are consistent' with the provisions of the Investment
Company Act of 1940 and the rules and regulations thereunder.
Section 8. All Shares Subject to Articles of Incorporation. All persons
who shall acquire Shares shall acquire the same subject to the provisions of
these Articles of Incorporation.
12
<PAGE> 13
ARTICLE VI
Directors
Section 1. Board of Directors. The number of Directors of the Corporation
shall initially be eight. The names of the current Directors who shall hold
office until their successors are elected and qualify are:
<TABLE>
<S> <C>
Jack S. Euphrat W. Rodney Hughes
R. Greg Feltus Robert M. Joses
Thomas S. Goho J. Tucker Morse
Zoe Ann Hines
</TABLE>
Section 2. Number of Directors. The number of Directors in office may
be changed from time to time in the manner specified in the By-Laws of the
Corporation, but this number shall never be less than three.
Section 3. Certain Powers of Board of Directors. In addition to its
other powers explicitly or implicitly granted under these Articles of
Incorporation, by law or otherwise, the Board of Directors of the Corporation
(a) is expressly authorized to adopt, alter, or repeal the By-Laws of the
Corporation, (b) may from time to time determine whether, to what extent, at
what times and places, and under what conditions and regulations the accounts
and books of the Corporation, or any of them, shall be open to the inspection
of the stockholders, and no stockholders shall have any right to inspect any
account, book or document of the Corporation except as conferred by statute or
as authorized by the Board of Directors of the Corporation, and (c) is
empowered to authorize, without stockholder approval, the issuance and sale
from time to time of shares of capital stock of the Corporation whether now or
hereafter authorized.
Section 4. Indemnification. To the fullest extent permitted by Maryland
statutory or decisional law, as amended or interpreted, no person who is or was
a director or officer of this Corporation shall be personally liable to the
Corporation or its stockholders for money damages. No amendment of the charter
of the Corporation or repeal of any of its provisions shall limit or eliminate
the benefits provided to any person who is or was a director or officer under
this provision with respect to any act or omission which occurred prior to such
amendment or repeal. The rights of indemnification under this provision shall
neither be exclusive of, nor be deemed in limitation of, any right to which any
person may otherwise be entitled or permitted by contract or otherwise. This
Section 4 shall not protect any person who is or was a director or officer of
the Corporation against any liability to the Corporation or its stockholders to
which he or she 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 or her office.
13
<PAGE> 14
ARTICLE VII
Amendments
The Corporation reserves the right to take any lawful action and to make
any amendment of these Articles of Incorporation, including the right to make
any amendment that changes the terms of any Shares of any Class now or
hereafter authorized by classification, reclassification, or otherwise, and to
make any amendment authorizing any sale, lease, exchange or transfer of the
property and assets of the Corporation or belonging to any Class or Classes as
an entirety, or substantially as an entirety, with or without its good will and
franchise, if a majority of all the Shares of all Classes or of the affected
Class or Classes, as the case may be, at the time issued and outstanding and
entitled to vote, vote in favor of any such action or amendment, or consent
thereto in writing as permitted by the Maryland General Corporation Law, and
reserves the right to make any amendment of these Articles of Incorporation in
any form, manner or substance now or hereafter authorized or permitted by law.
The terms "Articles of Incorporation" and "these Articles of Incorporation" as
used herein and in the By-Laws of the Corporation shall be deemed to mean these
Articles of Incorporation as from time to time amended or restated.
IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its President and witnessed by its
Secretary on the 22 day of November, 1995.
WITNESS: OVERLAND EXPRESS FUNDS, INC.
/s/ RICHARD H. BLANK, JR. By: /s/ R. GREG FELTUS
- -------------------------------- -------------------------
Richard H. Blank, Jr., Secretary R. Greg Feltus, President
THE UNDERSIGNED, President of the Corporation, who executed on
behalf of the Corporation Restated Articles of Incorporation, hereby
acknowledges in the name and on behalf of said Corporation the foregoing
Restated Articles of Incorporation to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth herein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.
/s/ R. GREG FELTUS
------------------------------
R. Greg Feltus, President
14
<PAGE> 1
EXHIBIT 99.B 5(a)(x)
SUB-ADVISORY CONTRACT
Asset Allocation Fund
a portfolio of
OVERLAND EXPRESS FUNDS, INC.
111 Center Street
Little Rock, Arkansas 72201
September 1, 1994
Wells Fargo Nikko Investment Advisors
45 Fremont Street
San Francisco, California 94105
Dear Sirs:
This will confirm the agreement by and among Wells Fargo Bank, N.A.
(the "Adviser"), Overland Express Funds, Inc. (the "Company"), on behalf of the
Asset Allocation Fund (the "Fund"), and Wells Fargo Nikko Investment Advisors
(the "Sub-Adviser") as follows:
1. The Company is a registered open-end management investment
company currently consisting of 16 investment portfolios, but which may from
time to time consist of a greater or lesser number of investment portfolios
(the "Funds"). The Company proposes to engage in the business of investing and
reinvesting the assets of the Fund in the manner and in accordance with the
investment objective and restrictions specified in the Company's currently
effective prospectus and statement of additional information relating to the
Fund and the Company (such prospectus and such statement of additional
information being collectively referred to as the "Prospectus") and included in
the Company's Registration Statement, as amended from time to time (the
"Registration Statement"), filed by the Company under the Investment Company
Act of 1940 (the "Act") and the Securities Act of 1933. Copies of the
documents referred to in the preceding sentence have been furnished to the
Sub-Adviser. Any amendments to those documents shall be furnished to the
Sub-Adviser promptly.
2. The Company has engaged the Adviser to manage the investing
and reinvesting of the assets of the Fund and to provide the advisory services
specified elsewhere in the Amended Advisory Contract between the Company and
the Adviser, dated as of the date hereof, subject to the overall supervision of
the Board of Directors of the Company. Pursuant to an administration agreement
between the Company, on behalf of the Fund, and Stephens Inc. (the
"Administrator"), the Company has engaged the Administrator to provide the
administrative services specified therein.
3. (a) The Adviser hereby employs the Sub-Adviser to perform
for the Fund certain advisory services and the Sub-Adviser hereby accepts such
employment. The Adviser shall retain the authority to establish and modify,
from time to time, the investment strategies and approaches followed by the
Sub-Adviser, subject, in all respects, to the supervision and direction
<PAGE> 2
of the Company's Board of Directors and subject to compliance with the
investment objectives, policies and restrictions set forth in the Prospectus.
(b) Subject to the overall supervision and control of the
Adviser and the Company, the Sub-Adviser shall be responsible for investing and
reinvesting the Fund's assets in a manner consistent with the investment
strategies and approaches referenced in subparagraph (a), above. In this
regard, the Sub-Adviser, in accordance with the investment objectives, policies
and restrictions set forth in the Prospectus, shall be responsible for
implementing and monitoring the performance of the investment model employed
with respect to the Fund and shall furnish to the Adviser periodic reports on
the investment activity and performance of the Fund. The Sub-Adviser shall
also furnish such additional reports and information as the Adviser and the
Company's Board of Directors and officers shall reasonably request.
(c) The Sub-Adviser shall, at its expense, employ or
associate with itself such persons as the Sub- Adviser believes appropriate to
assist it in performing its obligations under this contract.
4. The Adviser shall be responsible for the fees paid to the
Sub-Adviser for its services hereunder. The Sub-Adviser agrees that it shall
have no claim against the Company or the Fund respecting compensation under
this contract. In consideration of the services to be rendered by the
Sub-Adviser under this contract, the Adviser shall pay the Sub-Adviser a fee on
the first business day of each calendar month, at the annual rate of 0.20% of
the average daily value (as determined on each day that such value is
determined for the Fund at the time set forth in the Prospectus for determining
net asset value per share) of the Fund's net assets during the preceding month.
The Sub-Adviser will also receive an annual payment of $60,000. If the fee
payable to the Sub-Adviser pursuant to this Paragraph 4 begins to accrue on a
day after the first day of any month or if this contract terminates before the
end of any month, the fee for the period from the effective date to the end of
the month or from the beginning of that month to the termination date, shall be
prorated according to the proportion that such period bears to the full month
in which the effectiveness or termination occurs. For purposes of calculating
the monthly fee, the value of the Fund's net assets shall be computed in the
manner specified in the Prospectus and the Company's Articles of Incorporation
for the computation of the value of the Fund's net assets in connection with
the determination of the net asset value of Fund shares.
5. The Sub-Adviser shall give the Company the benefit of the
Sub-Adviser's best judgment and efforts in rendering services under this
contract. As consideration and as an inducement to the Sub-Adviser's
undertaking to render these services, the Company and the Adviser agree that
the Sub-Adviser shall not be liable under this contract for any mistake in
judgment or in any other event whatsoever except for lack of good faith,
provided that nothing in this contract shall be deemed to protect or purport to
protect the Sub-Adviser against any liability to the Adviser, the Company or
its shareholders to which the Sub-Adviser would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of the
Sub-Adviser's duties under this contract or by reason of reckless disregard of
its obligations and duties hereunder.
6. This contract shall become effective as of its execution date
and shall thereafter continue in effect, provided that this contract shall
continue in effect for a period of more than two years from the date hereof
only so long as the continuance is specifically approved at least annually (a)
by the vote of a majority of the Fund's outstanding voting securities (as
defined in the Act) or by the Company's Board of Directors and (b) by the vote,
cast in person at a meeting
2
<PAGE> 3
called specifically for the purpose of continuing this Sub-Advisory Agreement,
of a majority of the Company's Directors who are not parties to this contract
or "interested persons" (as defined in the Act) of any such party. This
contract may be terminated, upon 60 days' written notice to the Sub-Advisor, by
the Company, without the payment of any penalty, by a vote of a majority of the
Fund's outstanding voting securities (as defined in the Act) or by a vote of a
majority of the Company's entire Board of Directors. The Sub-Adviser may
terminate this contract after the second anniversary of the effective date of
this contract, on 60 days' written notice to the Company. This contract shall
terminate automatically in the event of its assignment (as defined in the Act).
7. Except to the extent necessary to perform the Sub-Adviser's
obligations under this contract, nothing herein shall be deemed to limit or
restrict the right of the Sub-Adviser, or any affiliate of the Sub-Adviser, or
any employee of the Sub-Adviser, to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, firm, individual or association.
8. The Sub-Adviser and the Company each agree that the phrase
"Overland Express" which comprises a component of the Company's name, is a
property right of the parent of the Adviser. The Company and the Sub-Adviser
agree and consent that the use of such phrase is subject to the provisions set
forth in the Advisory Contract between the Adviser and the Company.
9. This contract shall be governed by and construed in
accordance with the laws of the State of California.
3
<PAGE> 4
If the foregoing correctly sets forth the agreement between the
Company, the Adviser and the Sub-Adviser, please so indicate by signing and
returning to the Company the enclosed copy hereof.
Very truly yours,
WELLS FARGO BANK, N.A.
By: /s/ Elizabeth A. Gottfried
--------------------------
Name: Elizabeth A. Gottfried
------------------------
Title: Vice President
-----------------------
By: /s/ Robert Chlebowski
--------------------------
Name: Robert Chlebowski
------------------------
Title: Senior Vice President
-----------------------
ACCEPTED as of the date
set forth above:
OVERLAND EXPRESS FUNDS, INC.,
on behalf of
the Asset Allocation Fund
By: /s/ Richard H. Blank, Jr.
--------------------------
Name: Richard H. Blank, Jr.
------------------------
Title: Chief Operating Officer
-----------------------
WELLS FARGO NIKKO INVESTMENT ADVISORS
By: /s/ Donald Luskin
--------------------------
Name: Donald Luskin
------------------------
Title: Managing Director
-----------------------
By: /s/ Dave Nadig
-----------------------
Name: Dave Nadig
-----------------------
Title: Managing Director
-----------------------
4
<PAGE> 1
EX-99.B 5(b)(viii)
ADMINISTRATION AGREEMENT
OVERLAND EXPRESS FUNDS, INC.
111 Center Street
Little Rock, Arkansas 72201
May 4, 1994
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Company") on behalf of the Funds listed on the attached Appendix A (each a
"Fund") and Stephens Inc. (the "Administrator") as follows:
1. The Company is a registered open-end, management investment
company currently consisting of thirteen investment portfolios, but which may
from time to time consist of a greater or lesser number of investment
portfolios (the "Funds"). The Company proposes to engage in the business of
investing and reinvesting the assets of the Fund in the manner and in
accordance with the investment objective and restrictions specified in the
Company's currently effective prospectus and statement of additional
information incorporated by reference therein relating to the Fund and the
Company (such prospectus and such statement of additional information being
collectively referred to as the "Prospectus") included in the Company's
Registration Statement, as amended from time to time (the "Registration
Statement"), filed by the Company under the Investment Company Act of 1940 (the
"Act") and the Securities Act of 1933. Copies of the documents referred to in
the preceding sentence have been furnished to the Administrator. Any
amendments to those documents shall be furnished to the Administrator promptly.
2. The Company is engaging the Administrator to provide the
administrative services specified elsewhere in this agreement, subject to the
overall supervision of the Board of Directors of the Company. The Company's
Board of Directors has directed that the Funds achieve their investment
objective by investing the Funds' assets in a corresponding portfolio of the
Master Investment Trust ("Trust"), another registered investment company, which
is advised by Wells Fargo Bank, N.A. (the "Adviser"), until such time as the
Board decides to invest the Funds' assets in another registered investment
company or enters into an advisory contract to directly manage the Funds'
assets.
1
<PAGE> 2
3. The Administrator shall, at its expense, provide the
following administrative services in connection with the operations of the
Company and the Funds: (a) furnishing office space and certain facilities
required for conducting the business of the Funds; (b) general supervision of
the operation of the Funds, including coordination of the services performed by
the Company's investment adviser (if any), transfer agent, shareholder
servicing agents, custodian, independent accountants and legal counsel;
regulatory compliance, including the compilation of information for documents
such as reports to, and filings with, the Securities and Exchange Commission
and state securities commissions; and preparation of proxy statements and
shareholder reports for the Company; (c) the compensation of the Company's
directors, officers and employees who are affiliated with the Administrator;
(d) general supervision relating to the compilation of data required for the
preparation of periodic reports on the performance of its obligations under
this agreement and statements of the Funds that are distributed to the
Company's officers and Board of Directors and the preparation of such
additional reports and information as the Company's Board of Directors or
officers shall reasonably request; and (e) all other administrative services
reasonably necessary for the operation of the Funds, other than those services
that are to be provided by the Company's shareholder servicing agents and
transfer and dividend disbursing agent.
4. Except as provided in each of the Company's advisory
contracts and administration agreements, the Company shall bear all costs of
its operations, including the compensation of its directors who are not
affiliated with any investment adviser of the Company's Funds, the
Administrator or any of their affiliates; any advisory, shareholder servicing
and administration fees; payments for distribution-related expenses pursuant to
any Rule 12b-1 Plan, i.e., a plan of distribution of the Company adopted on
behalf of any of the Funds pursuant to Rule 12b-1 under the Act; governmental
fees; interest charges; taxes; fees and expenses of its independent
accountants, legal counsel, transfer agent and dividend disbursing agent;
expenses of redeeming shares; expenses of preparing and printing any stock
certificates, prospectuses (except the expense of printing and mailing
prospectuses used for promotional purposes, unless otherwise payable pursuant
to a Rule 12b-1 Plan), shareholders' reports, notices, proxy statements and
reports to regulatory agencies; travel expenses of directors, officers and
employees; office supplies; insurance premiums and certain expenses relating to
insurance coverage; trade association membership dues; any brokerage and other
expenses connected with the execution of portfolio securities transactions;
fees and expenses of any custodian, including those for keeping books and
accounts and calculating the net asset value per share of the Funds; expenses
of shareholders' meetings; expenses relating to the issuance, registration and
qualification of shares of the Funds; pricing services, if any; organizational
expenses; and any extraordinary expenses. Expenses attributable to one or
more, but not all, of the Funds are charged against the assets of the relevant
Funds. General expenses of the Funds are allocated among the Funds in a manner
proportionate to the net assets of each Fund, on a transactional basis or on
such other basis as the Board of Directors deems equitable.
5. The Administrator shall give the Company the benefit of the
Administrator's best judgment and efforts in rendering services under this
agreement. As an inducement to the Administrator's undertaking to render these
services, the Company agrees that the Administrator shall not be liable under
this agreement for any mistake in judgment or in any other event
2
<PAGE> 3
whatsoever except for lack of good faith, provided that nothing in this
agreement shall be deemed to protect or purport to protect the Administrator
against any liability to the Company or its shareholders to which the
Administrator would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of the Administrator's duties
under this agreement or by reason of reckless disregard of its obligations and
duties hereunder.
6. In consideration of the services to be rendered by the
Administrator under this agreement, the Company shall pay the Administrator a
monthly fee on the first business day of each month, at the annual rates shown
on Exhibit A of the average daily value (as determined on each business day at
the time set forth in the Prospectus for determining net asset value per share)
of the Funds' net assets during the preceding month. If the fee payable to the
Administrator pursuant to this paragraph 6 begins to accrue before the end of
any month or if this agreement terminates before the end of any month, the fee
for the period from the effective date to the end of that month or from the
beginning of that month to the termination date, respectively, shall be
prorated according to the proportion that the period bears to the full month in
which the effectiveness or termination occurs. For purposes of calculating
each such monthly fee, the value of a Fund's net assets shall be computed in
the manner specified in its Prospectus and the Company's Articles of
Incorporation for the computation of the value of the Fund's net assets in
connection with the determination of the net asset value of Fund shares.
7. If in any fiscal year the total expenses of a Fund incurred
by, or allocated to, the Fund, excluding taxes, interest, brokerage commissions
and other portfolio transaction expenses, other expenditures that are
capitalized in accordance with generally accepted accounting principles,
extraordinary expenses and amounts accrued or paid under a Rule 12b-1 Plan of
the Fund, but including the fees provided for in paragraph 6 and those provided
for pursuant to any investment advisory agreement of the Fund ("includable
expenses"), exceed the most restrictive expense limitation applicable to the
Fund imposed by state securities laws or regulations thereunder, as these
limitations may be raised or lowered from time to time, the Administrator shall
waive or reimburse that portion of the excess derived by multiplying the excess
by a fraction, the numerator of which shall be the percentage at which the
excess portion attributable to the fee payable pursuant to this agreement is
calculated under paragraph 6 hereof, and the denominator of which shall be the
sum of such percentage plus the percentage at which the excess portion
attributable to any fee payable pursuant to an investment advisory agreement of
the Fund and/or the Trust, to the extent the Fund has invested its assets in
the Trust, is calculated (the "Applicable Ratio"), but only to the extent of
the fee hereunder for the fiscal year. If the fees payable under this
agreement and/or any Fund or Trust investment advisory agreement contributing
to such excess portion are calculated at more than one percentage rate, the
Applicable Ratio shall be calculated separately on the basis of, and applied
separately to, the portions of the fees calculated at the different rates. At
the end of each month of the Company's fiscal year, the Company shall review
the includable expenses accrued during that fiscal year to the end of that
period and shall estimate the includable expenses for the balance of that
fiscal year. If as a result of that review and estimation it appears likely
that the includable expenses will exceed the limitations referred to in this
paragraph 7 for a fiscal year with respect to the Fund, the monthly fee set
forth in paragraph 6 payable to the Administrator for such month shall be
reduced, subject to a later adjustment, by an amount equal to the Applicable
Ratio times the pro rata portion (prorated on
3
<PAGE> 4
the basis of the remaining months of the fiscal year, including the month just
ended) of the amount by which the includable expenses for the fiscal year are
expected to exceed the limitations provided for in this paragraph 7. For
purposes of computing the excess, if any, over the most restrictive applicable
expense limitation, the value of the Fund's net assets shall be computed in the
manner specified in the last sentence of paragraph 6, and any reimbursements
required to be made by the Administrator shall be made once a year promptly
after the end of the Company's fiscal year.
8. This agreement shall become effective on its execution date
and shall thereafter continue in effect for a period of no less than two years.
Thereafter, this agreement may be terminated at any time, without the payment
of any penalty, by a vote of a majority of the Fund's outstanding voting
securities (as defined in the Act) and by a vote of a majority of the Company's
entire Board of Directors on 60 days' written notice to the Administrator or by
the Administrator on 60 days' written notice to the Company.
9. Except to the extent necessary to perform the Administrator's
obligations under this agreement, nothing herein shall be deemed to limit or
restrict the right of the Administrator, or any affiliate of the Administrator,
or any employee of the Administrator to engage in any other business or to
devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, firm, individual or association.
10. This agreement shall be governed by and construed in
accordance with the laws of the State of Arkansas.
4
<PAGE> 5
If the foregoing correctly sets forth the agreement between the
Company and the Administrator, please so indicate by signing and returning to
the Company the enclosed copy hereof.
Very truly yours,
OVERLAND EXPRESS FUNDS, INC.,
By: /s/ Richard H. Blank, Jr.
-------------------------
Name: Richard H. Blank, Jr.
Title: Chief Operating Officer,
Secretary and Treasurer
ACCEPTED as of the date
set forth above:
STEPHENS INC.
By: /s/ Richard H. Blank, Jr.
-------------------------
Title: Vice President
----------------------
5
<PAGE> 6
APPENDIX A
<TABLE>
<CAPTION>
Annual Fee (as a
% of average daily
List of Funds net assets)
------------- --------------------
<S> <C>
Overland Sweep Fund 0.025%
Short-Term Municipal Income Fund 0.15% up to $200
(formerly the 1-3 Year Duration Municipal million in assets;
Income Fund) 0.10% in excess of
$200 million in assets
1-3 Year Duration Government Income Fund (liquidated) 0.15% up to $200
million in assets;
0.10% in excess of
$200 million in assets
Short-Term Government-Corporate Income Fund (formerly, the 0.15% up to $200
1-3 Year Duration Full Faith and Credit Government Income million in assets;
Fund) 0.10% in excess of
$200 million in assets
</TABLE>
6
<PAGE> 1
EX-99.B 5(b)(ix)
ADMINISTRATION AGREEMENT
U.S. TREASURY MONEY MARKET FUND
a portfolio of
OVERLAND EXPRESS FUNDS, INC.
111 Center Street
Little Rock, Arkansas 72201
May 1, 1992
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Company") on behalf of the U.S. Treasury Money Market Fund (the "Fund") and
Stephens Inc. (the "Administrator") as follows:
1. The Company is a registered open-end management investment
company currently consisting of eleven investment portfolios, but which may
from time to time consist of a greater or lesser number of investment
portfolios (the "Funds"). The Company proposes to engage in the business of
investing and reinvesting the assets of the Fund in the manner and in
accordance with the investment objective and restrictions specified in the
Company's currently effective prospectus and currently effective statement of
additional information incorporated by reference therein relating to the Fund
and the Company (such prospectus and such statement of additional information
being collectively referred to as the "Prospectus") included in the Company's
Registration Statement, as amended from time to time (the "Registration
Statement"), filed by the Company under the Investment Company Act of 1940 (the
"Act") and the Securities Act of 1933. Copies of the documents referred to in
the preceding sentence have been furnished to the Administrator. Any
amendments to those documents shall be furnished to the Administrator promptly.
2. The Company is engaging the Administrator to provide the
administrative services specified elsewhere in this agreement, subject to the
overall supervision of the Board of Directors of the Company. Pursuant to an
advisory contract between the Company and Wells Fargo Bank, N.A. (the
"Adviser") on behalf of the Fund, the Company has engaged the Adviser to manage
the investing and reinvesting of the assets of the Fund and to provide advisory
services.
<PAGE> 2
3. The Administrator shall, at its expense, provide the
following administrative services in connection with the operations of the
Company and the Fund: (a) furnishing office space and certain facilities
required for conducting the business of the Fund; (b) general supervision of
the operation of the Fund, including coordination of the services performed by
the Company's investment adviser, transfer agent, custodians, independent
accountants and legal counsel; regulatory compliance, including the compilation
of information for documents such as reports to, and filings with, the
Securities and Exchange Commission and state securities commissions; and
preparation of proxy statements and shareholder reports for the Company; (c)
the compensation of the Company's directors, officers and employees who are
affiliated with the Administrator; (d) general supervision relating to the
compilation of data required for the preparation of periodic reports on the
performance of its obligations under this agreement and statements of the Fund
that are distributed to the Company's officers and Board of Directors and the
preparation of such additional reports and information as the Company's Board
of Directors or officers shall reasonably request; and (e) all other
administrative services reasonably necessary for the operation of the Fund,
other than those services that are to be provided by the Adviser pursuant to
the Advisory Contracts and by the Company's transfer and dividend disbursing
agent.
4. Except as provided in each of the Company's advisory
contracts and administration agreements, the Company shall bear all costs of
its operations, including the compensation of its directors who are not
affiliated with the Adviser, the Administrator or any of their affiliates;
advisory and administration fees; payments distribution- related expenses
pursuant to any Rule 12b-1 Plan, i.e. a plan of distribution of the Company
adopted on behalf of any of the Funds pursuant to Rule 12b-1 under the Act;
governmental fees; interest charges; taxes; fees and expenses of its
independent accountants, legal counsel, transfer agent and dividend disbursing
agent; expenses of redeeming shares; expenses of preparing and printing stock
certificates, prospectuses (except the expense of printing and mailing
prospectuses used for promotional purposes, unless otherwise payable pursuant
to a Rule 12b-1 Plan), shareholders' reports, notices, proxy statements and
reports to regulatory agencies; travel expenses of directors, officers and
employees; office supplies; insurance premiums and certain expenses relating to
insurance coverage; trade association membership dues; brokerage and other
expenses connected with the execution of portfolio securities transactions;
fees and expenses of any custodian, including those for keeping books and
accounts and calculating the net asset value per share of the Fund; expenses of
shareholders' meetings; expenses relating to the issuance, registration and
qualification of shares of the Fund; pricing services, if any; organizational
expenses; and any extraordinary expenses. Expenses attributable to one or
more, but not all, of the Funds are charged against the assets of the relevant
Funds. General expenses of the Funds are allocated among the Funds in a manner
proportionate to the net assets of each Fund, on a transactional basis or on
such other basis as the Board of Directors deems equitable.
5. The Administrator shall give the Company the benefit of the
Administrator's best judgment and efforts in rendering services under this
agreement. As an inducement to the Administrator's undertaking to render these
services, the Company agrees that the Administrator shall not be liable under
this agreement for any mistake in judgment or in any other event whatsoever
except for lack of good faith, provided that nothing in this agreement shall be
deemed to protect or purport to protect the Administrator against any liability
to the Company or its
2
<PAGE> 3
shareholders to which the Administrator would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of the
Administrator's duties under this agreement or by reason of reckless disregard
of its obligations and duties hereunder.
6. In consideration of the services to be rendered by the
Administrator under this agreement, the Company shall pay the Administrator a
monthly fee on the first business day of each month, at the annual rate of
0.10% of the average daily value (as determined on each business day at the
time set forth in the Prospectus for determining net asset value per share) of
the Fund's net assets during the preceding month. If the fee payable to the
Administrator pursuant to this paragraph 6 begins to accrue before the end of
any month or if this agreement terminates before the end of any month, the fee
for the period from the effective date to the end of that month or from the
beginning of that month to the termination date, respectively, shall be
prorated according to the proportion that the period bears to the full month in
which the effectiveness or termination occurs. For purposes of calculating
each such monthly fee, the value of the Fund's net assets shall be computed in
the manner specified in the Prospectus and the Company's Articles of
Incorporation for the computation of the value of the Fund's net assets in
connection with the determination of the net asset value of Fund shares. For
purposes of this agreement, a "business day" is any day the New York Stock
Exchange is open for trading.
7. If in any fiscal year the total expenses of the Fund incurred
by, or allocated to, the Fund excluding taxes, interest, brokerage commissions
and other portfolio transaction expenses, other expenditures that are
capitalized in accordance with generally accepted accounting principles,
extraordinary expenses and amounts accrued or paid under a Rule 12b-1 Plan of
the Fund, but including the fees provided for in paragraph 6 and those provided
for pursuant to the Fund's Advisory Agreement ("includible expenses"), exceed
the most restrictive expense limitation applicable to the Fund imposed by state
securities laws or regulations thereunder, as these limitations may be raised
or lowered from time to time, the Administrator shall waive or reimburse that
portion of the excess derived by multiplying the excess by a fraction, the
numerator of which shall be the percentage at which the excess portion
attributable to the fee payable pursuant to this agreement is calculated under
paragraph 6 hereof, and the denominator of which shall be the sum of such
percentage plus the percentage at which the excess portion attributable to the
fee payable pursuant to the Fund's Advisory Agreement is calculated (the
"Applicable Ratio"), but only to the extent of the fee hereunder for the fiscal
year. If the fees payable under this agreement and/or the Fund's Advisory
Agreement contributing to such excess portion are calculated at more than one
percentage rate, the Applicable Ratio shall be calculated separately on the
basis of, and applied separately to, the portions of the fees calculated at the
different rates. At the end of each month of the Company's fiscal year, the
Company shall review the includible expenses accrued during that fiscal year to
the end of that period and shall estimate the includible expenses for the
balance of that fiscal year. If as a result of that review and estimation it
appears likely that the includible expenses will exceed the limitations
referred to in this paragraph 7 for a fiscal year with respect to the Fund, the
monthly fee set forth in paragraph 6 payable to the Administrator for such
month shall be reduced, subject to a later adjustment, by an amount equal to
the Applicable Ratio times the pro rata portion (prorated on the basis of the
remaining months of the fiscal year, including the month just ended) of the
amount by which the includible expenses for the fiscal year are expected to
exceed the limitations provided for in this paragraph 7. For purposes of
computing the excess,
3
<PAGE> 4
if any, over the most restrictive applicable expense limitation, the value of
the Fund's net assets shall be computed in the manner specified in the last
sentence of paragraph 6, and any reimbursements required to be made by the
Administrator shall be made once a year promptly after the end of the Company's
fiscal year.
8. This agreement shall become effective on its execution date
and shall thereafter continue in effect for a period of no less than three
years. Thereafter, this agreement may be terminated at any time, without the
payment of any penalty, by a vote of a majority of the Fund's outstanding
voting securities (as defined in the Act) and by a vote of a majority of the
Company's entire Board of Directors on 60 days' written notice to the
Administrator or by the Administrator on 60 days' written notice to the
Company.
9. Except to the extent necessary to perform the Administrator's
obligations under this agreement, nothing herein shall be deemed to limit or
restrict the right of the Administrator, or any affiliate of the Administrator,
or any employee of the Administrator to engage in any other business or to
devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, firm, individual or association.
10. This agreement shall be governed by and construed in
accordance with the laws of the State of Arkansas.
4
<PAGE> 5
If the foregoing correctly sets forth the agreement between the
Company and the Administrator, please so indicate by signing and returning to
the Company the enclosed copy hereof.
Very truly yours,
OVERLAND EXPRESS FUNDS, INC.,
on behalf of the U.S. Treasury Money Market Fund
By: /s/ Richard H. Blank, Jr.
-------------------------
Richard H. Blank, Jr.
Chief Operating Officer,
Treasurer and Secretary
ACCEPTED as of the date
set forth above:
STEPHENS INC.
By: /s/ R. Greg Feltus
------------------
R. Greg Feltus
Senior Vice President
5
<PAGE> 1
EX-99.B 5(b)(xi)
FORM OF
ADMINISTRATION AGREEMENT
OVERLAND EXPRESS FUNDS, INC.
111 CENTER STREET
LITTLE ROCK, ARKANSAS 72201
December __, 1995
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Dear Sirs:
This will confirm the agreement between the undersigned (the "Company")
on behalf of the National Tax-Free Institutional Money Market Fund (the "Fund")
and Stephens Inc. (the "Administrator") as follows:
1. The Company is a registered open-end, management investment company
currently consisting of fifteen investment portfolios, but which may from time
to time consist of a greater or lesser number of investment portfolios (the
"Funds"). The Company proposes to engage in the business of investing and
reinvesting the assets of the Fund in the manner and in accordance with the
investment objective and restrictions specified in the Company's Registration
Statement, as amended from time to time (the "Registration Statement"), filed
by the Company under the Investment Company Act of 1940 (the "Act") and the
Securities Act of 1933. Copies of the have been furnished to the
Administrator. Any amendments to the Registration Statement shall be furnished
to the Administrator promptly.
2. The Company is engaging the Administrator to provide the
administrative services specified elsewhere in this agreement, subject to the
overall supervision of the Board of Directors of the Company. The Company's
Board of Directors has directed that the Fund achieve its investment objective
by investing the Fund's assets in a corresponding portfolio of Master
Investment Trust (the "Trust"), another registered investment company, which is
advised by Wells Fargo Bank, N.A. (the "Adviser"), until such time as the Board
decides to invest the Funds' assets in another registered investment company or
enters into an advisory contract to directly manage the Fund's assets.
3. The Administrator shall, at its expense, provide the following
administrative services in connection with the operations of the Company and
the Fund; (a) furnishing office space and certain facilities required for
conducting the business of the Fund; (b) general supervision of the operation
of the Fund, including coordination of the services performed by the Trust's or
Company's investment adviser (if any), transfer agent, shareholder servicing
agents, custodian, independent accountants and legal counsel; regulatory
compliance, including the compilation of information for documents such as
reports to, and filings with, the Securities and Exchange Commission and state
securities
<PAGE> 2
commission; and preparation of proxy statements and shareholder reports for the
Company; (c) the compensation of the Company's directors, officers and
employees who are affiliated with the Administrator; (d) general supervision
relating to the compilation of data required for the preparation of periodic
reports on the performance of its obligations under this agreement and
statements of the Fund that are distributed to the Company's Board of Directors
or officers shall reasonably request; and (e) all other administrative services
reasonably necessary for the operation of the Fund, other than those services
that are to be provided by the Company's shareholder servicing agents and
transfer and dividend disbursing agent.
4. Except as provided in each of the Company's advisory contracts and
administration agreements, the Company shall bear all costs of its operations,
including any Fund's pro rata share of the cost of operations of a Master
Series in which it invests; the compensation of its directors who are not
affiliated with any investment adviser of the Company's Funds, the
Administrator or any of their affiliates; any advisory, shareholder servicing
and administration fees; payments for distribution-related expenses pursuant to
any Rule 12b-1 Plan, i.e., a plan of distribution of the Company adopted on
behalf of any of the Funds pursuant to Rule 12b-1 under the Act; governmental
fees; interest charges; taxes; fees and expenses of its independent
accountants, legal counsel, transfer agent and dividend disbursing agent;
expenses of redeeming shares; expenses of preparing and printing any stock
certificates, prospectuses (except the expense of printing and mailing
prospectuses use for promotional purposes, unless otherwise payable pursuant to
a Rule 12b-1 Plan), shareholders' reports, notices, proxy statements and
reports to regulatory agencies; travel expenses of directors, officers and
employees; office supplies; insurance premiums and certain expenses relating to
insurance coverage; trade association membership dues; any brokerage and other
expenses connected with the execution of portfolio securities transactions;
fees and expenses of any custodian, including those for keeping books and
accounts and calculating the net asset value per share of the Funds; expenses
of shareholders' meetings; expenses relating to the issuance, registration and
qualification of shares of the Funds; pricing services, if any; organizational
expenses; and any extraordinary expenses. Expenses attributable to one or
more, but not all, of the Funds are charged against the assets of the relevant
Funds. General expenses of the Company are allocated among the Funds in a
manner proportionate to the net assets of each Fund, on a transactional basis
or on such other basis as the Board of Directors deems equitable.
5. The Administrator shall give the Company the benefit of the
Administrator's best judgment and efforts in rendering services under this
agreement. As an inducement to the Administrator's undertaking to render these
services, the Company agrees that the Administrator shall not be liable under
this agreement for any mistake in judgment or in any other event whatsoever
except for lack of good faith, provided that nothing in this agreement shall be
deemed to protect or purport to protect the Administrator against any liability
to the Company or its shareholders to which the Administrator would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of the Administrator's duties under this agreement or by reason
of reckless disregard of its obligations and duties hereunder.
6. In consideration of the service to be rendered by the Administrator
under this agreement, the Company shall pay the Administrator a monthly fee on
the first business day of each month, at the annual rate of 0.05% of the
average daily value (as determined on each business day at the time set forth
in the Registration Statement for determining net asset value per share) of the
Fund's net assets during the preceding month. If the fee payable to the
Administrator pursuant to this paragraph 6 begins to accrue after the beginning
of any month or if this agreement terminates before the end of any month, the
2
<PAGE> 3
fee for the period from the effective date to the end of that month or from the
beginning of that month to the termination date, respectively, shall be
prorated according to the proportion that the period bears to the full month in
which the effectiveness or termination occurs. For purposes of calculating
each such monthly fee, the value of a Fund's net assets shall be computed in
the manner specified in its Registration Statement and the Company's Articles
of Incorporation for the computation of the value of the Fund's net assets in
connection with the determination of the net asset value of Fund shares.
7. If in any fiscal year the total expenses of a Fund incurred by, or
allocated to, the Fund, excluding taxes, interest, brokerage commissions and
other portfolio transaction expenses, other expenditures that are capitalized
in accordance with generally accepted accounting principles, extraordinary
expenses and amounts accrued or paid under a Rule 12b-1 Plan of the Fund, but
including the fees provided for in paragraph 6 and those provide for pursuant
to any investment advisory agreement of the Fund or Trust ("includable
expenses"), exceed the most restrictive expense limitation applicable to the
Fund imposed by state securities laws or regulations thereunder, as these
limitations may be raised or lowered from time to time, the Administrator shall
waive or reimburse that portion of the excess derived by multiplying the excess
by a fraction, the numerator of which shall be the percentage at which the
excess portion attributable to the fee payable pursuant to this agreement is
calculated under paragraph 6 hereof, and the denominator of which shall be the
sum of such percentage plus the percentage at which the excess portion
attributable to any fee payable pursuant to an investment advisory agreement of
the Fund and/or the trust, to the extent the Fund has invested its assets in
the Trust, is calculated (the "Applicable Ratio"), but only to the extent of
the fee hereunder for the fiscal year. If the fees payable under this
agreement and/or any Fund or Trust investment advisory agreement contributing
to such excess portion are calculated at more than one percentage rate, the
Applicable Ratio shall be calculated separately on the basis of, and applied
separately on the basis of, and applied separately to, the portions of the fees
calculated at the different rates. At the end of each month of the Company's
fiscal year, the Company shall review the includable expenses accrued during
that fiscal year to the end of that period and shall estimate the includable
expenses for the balance of that fiscal year. If as a result of that review
and estimation it appears likely that the includable expenses will exceed the
limitations referred to in this paragraph 7 for a fiscal year with respect to
the Fund, the monthly fee set forth in paragraph 6 payable to the Administrator
for such month shall be reduced, subject to a later adjustment, but an amount
equal to the Applicable Ratio times the pro rata portion (prorated on the basis
of the remaining months of the fiscal year, including the month just ended) of
the amount by which the includable expenses for the fiscal year are expected to
exceed the limitations provided for in this paragraph 7. For purposes of
computing the excess, if any, over the most restrictive applicable expense
limitation, the value of the Fund's net assets shall be computed in the manner
specified in the last sentence of paragraph 6, and any reimbursements required
to be made by the Administrator shall be made once a year promptly after the
end of the Company's fiscal year.
8. This agreement shall become effective on its execution date and
shall thereafter continue in effect for a period of no less than two years.
Thereafter, this agreement may be terminated at any time, without the payment
of any penalty, by a vote of a majority of the Fund's outstanding voting
securities (as defined in the Act) and by a vote of a majority of the Company's
entire Board of Directors on 60 days' written notice to the Administrator or by
the Administrator on 60 days' written notice to the Company.
9. Except to the extent necessary to perform the Administrator's
obligations under this agreement, nothing herein shall be deemed to limit or
restrict the right of the Administrator, or any affiliate of the Administrator,
or any employee of the Administrator
3
<PAGE> 4
to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association.
10. This agreement shall be governed by and construed in accordance
with the laws of the State of Arkansas.
If the foregoing correctly sets forth the agreement between the Company
and the Administrator, please so indicate by signing and returning to the
Company the enclosed copy hereof.
Very truly yours,
OVERLAND EXPRESS FUNDS, INC.,
By:
-----------------------------
Name: Richard H. Blank, Jr.
Title: Chief Operating Officer,
Secretary and Treasurer
ACCEPTED as of the date
set forth above:
STEPHENS INC.
By:
-----------------------------
Title:
-------------------------
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EX-99.B 6(a)(iv)
FORM OF
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
OVERLAND EXPRESS FUNDS, INC.
111 Center Street
Little Rock, Arkansas 72201
December__,1995
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Company"), on behalf of each of its portfolios now or hereafter in effect
(each, a "Fund"), and you ("Distributor") as follows:
1. As the Company's agent, Distributor shall be the exclusive
distributor for the unsold portion of shares of each Fund that are registered
under the Securities Act of 1933 (the "1933 Act").
2. The Company shall sell through Distributor, as the Company's
agent, and deliver, upon the terms set forth herein, Fund shares that
Distributor orders from the Company and for which Distributor has received and
confirmed unconditional purchase orders. All orders from Distributor shall be
subject to acceptance and confirmation by the Company. The Company shall have
the right, at its election, to deliver either shares issued upon original issue
or treasury shares.
3. As the Company's agent, Distributor may sell and distribute
Fund shares in such manner not inconsistent with the provisions hereof as
Distributor may determine from time to time. In that connection Distributor
shall comply with all laws, rules and regulations applicable to it, 'including,
without limiting the generality of the foregoing, all applicable rules or
regulations under the Investment Company Act of 1940 (the "1940 Act") and of
any securities association registered under the Securities Exchange Act of 1934
(the "1934 Act").
4. The Company reserves the right to sell Fund shares to
purchasers to the extent that it or the transfer agent for Fund shares receives
purchase applications therefor. Distributor's right to accept purchase orders
for Fund shares or to make sales thereof shall not apply to Fund shares that
may be offered by the Company to shareholders for the reinvestment of cash
distributed to
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shareholders by the Company or Fund shares that may otherwise be offered by the
Company to shareholders, unless Distributor is otherwise notified by the
Company.
5. All shares offered for sale and sold by Distributor shall be
offered for sale and sold by Distributor to or through securities dealers or
banks and other depository institutions having agreements with Distributor
("Selling Agents") upon the terms and conditions set forth in paragraph 7(b)
hereof or to investors at the price per share (the "offering price", which is
the net asset value per share plus the applicable sales charge, if any)
specified and determined as provided in the Prospectus for each Fund
(individually, the "Prospectus" and collectively, the "Prospectuses") included
in the Company's Registration Statement, as amended from time to time, under
the 1933 Act and the 1940 Act (the "Registration Statement"), relating to the
offering of its shares for sale. If the offering price is not an exact
multiple of one cent, it shall be adjusted to the nearest full cent. The
Company shall determine and furnish promptly to Distributor a statement of the
offering price at least once on each day on which the Registration Statement
states the Company is required to determine the Company's net asset value for
the purpose of pricing purchase orders. Each offering price shall become
effective at the time and shall remain in effect during the period specified
in the statement. Each such statement shall show the basis of its computation.
For purposes of establishing the offering price, the Company shall consider a
purchase order to have been presented to the Company at the time it was
originally entered by Distributor for transmission to it, provided the original
purchase order and Distributor's fulfilling order to the Company are
appropriately time stamped or evidenced to show the time of original entry and
that Distributor's fulfilling order to the Company is received by the Company
within a time deemed by it to be reasonable after the purchase order was
originally entered. Purchases of shares shall be made for full and fractional
shares, carried to the third decimal place.
6. If certificates for shares are requested by a purchaser, they
shall be delivered by the Company, through its transfer agent, as promptly as
practicable. Ownership of Fund shares sold hereunder shall be registered in
such names and denominations as are specified in writing to the Company or to
its agent designated for the purpose.
7. (a) Distributor shall from time to time employ or associate
with it such persons as it believes necessary to assist it in carrying out its
obligations under this agreement. The compensation of such persons shall be
paid by Distributor.
(b) Distributor shall have the right to enter into selling
agreements with Selling Agents of its choice for the sale or marketing of Fund
shares at the offering price and upon the terms and conditions set forth in the
Registration Statement. The initial form of selling agreement is attached
hereto as an Exhibit. Distributor may amend those agreements, or modify the
form of agreement, only upon approval of the Company.
(c) Distributor shall pay all expenses incurred in
connection with its qualification as a dealer or broker under federal or state
laws.
(d) Distributor shall pay all expenses incurred in
connection with: (i) printing and distributing such number of copies of the
Prospectuses as Distributor deems necessary for use in connection with offering
Fund shares to prospective investors, (ii) preparing, printing and distributing
any other literature and advertising deemed appropriate by Distributor for use
in connection with offering Fund shares for sale and (iii) all other expenses
incurred in connection with the sale of Fund shares as contemplated by this
agreement, except as otherwise specifically provided in this agreement. In
addition, it is understood and agreed that, so long as a plan of distribution
of a Fund adopted pursuant to Rule 12b-1 of the 1940 Act (a "Plan") continues
in effect, any expenses incurred by Distributor hereunder in connection with
such Fund may be paid from amounts received by it from such Fund under the
Plan. So long as a Plan continues in effect, Distributor shall be entitled to
receive reimbursement from the Company under the Plan for actual
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expenses incurred in connection with the Fund to the extent such expenses are
reimbursable under the Plan. The Treasurer of the Company shall provide to the
Board of Directors of the Company and the Board of Directors shall review, at
least quarterly, a written report of the amounts so expended and the purposes
for which such expenditures were made.
(e) The Company shall pay all expenses incurred in
connection with (i) the preparation, printing and distribution to stockholders
of the Prospectuses and reports and other communications to Fund shareholders;
(ii) registrations of Fund shares under the 1933 Act and the Fund under the 1940
Act; (iii) amendments to the Registration Statement; (iv) qualification of Fund
shares for sale in jurisdictions designated by Distributor; (v) qualification
of the Company as a dealer or broker under the laws of jurisdictions designed by
Distributor, (vi) qualification of the Company as a foreign corporation
authorized to do business in any jurisdiction if Distributor determines that
such qualification is necessary or desirable for the purpose of facilitating
sales of Fund shares; (vii) maintaining facilities for the issue and transfer
of Fund shares; (viii) supplying information, prices and other data to be
furnished by the Company under this agreement and (ix) original issue taxes or
transfer taxes applicable to the sale or delivery of Fund shares or
certificates therefor.
(f) The Company shall execute all documents and furnish any
information which may be reasonably necessary in connection with the
qualification of Fund shares of the Company for sale in a jurisdiction
designated by Distributor.
(g) The Company shall pay to the Distributor the amount
that is payable pursuant to, and in accordance with, the Distribution Plan
applicable to a Fund or class of shares of a Fund, or the maximum amount
payable under applicable laws, regulations and rules, Whichever is less. The
actual amount payable with respect to such Fund in any month is to be
determined by mutual agreement.
8. The Company shall furnish to Distributor from time to time, for
use in connection with the sale of Fund shares, such written information with
respect to the Company as Distributor may reasonably request. In each case such
written information shall be signed by an authorized officer of the Company.
The Company represents and warrants that such information, when signed by one
of its officers, shall be true and correct. The Company shall also furnish to
Distributor copies of its reports to its stockholders and such additional
information regarding the Company's financial condition as Distributor may
reasonably request from time to time.
9. The Registration Statement and the Prospectuses have been or
will be, as the case may be, carefully prepared in conformity with the 1933 Act,
the 1940 Act and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "SEC"). The Company represents and
warrants to Distributor that the Registration Statement and the Prospectus for
each Fund contain or will contain all statements required to be stated therein
in accordance with the 1933 Act, the 1940 Act and the Rules and Regulations,
that all statements of fact contained or to be contained therein are or will be
true and correct at the time indicated or the effective date, as the case may
be, and that neither the Registration Statement nor the Prospectuses, when such
Registration Statement or Prospectuses shall become effective under the 1933
Act or be authorized for use, shall include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of Fund
shares. The Company shall from time to time file such amendment or amendments
to the Registration Statement and the Prospectuses as, in the light of future
developments, shall, in the opinion of the Company's counsel, be necessary in
order to have the Registration Statement and the Prospectus for each Fund at
all times contain all material facts required to be stated therein or necessary
to make the statements therein not misleading to a purchaser of Fund shares. If
the Company shall not file such amendment or amendments within 15 days after
receipt by the Company of a written request from Distributor to do so,
Distributor
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may, at its option, terminate this agreement immediately. The Company shall not
file any amendment to the Registration Statement or a Prospectus without giving
Distributor reasonable notice thereof in advance, provided that nothing in this
agreement shall in any way limit the Company's right to file at any time such
amendments to the Registration Statement or a Prospectus as the Company may
deem advisable. The Company represents and warrants to Distributor that any
amendment to the Registration Statement or a Prospectus filed hereafter by the
Company will, when it becomes effective under the 1933 Act, contain all
statements required to be stated therein in accordance with the 1933 Act, the
1940 Act and the Rules and Regulations, that all statements of fact contained
therein will, when the same shall become effective, be true and correct, and
that no such amendment, when it becomes effective, will include an untrue
statement of a material fact or will omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading to
a purchaser of Fund shares.
10. Subject to the provisions of paragraph 7, the Company shall
prepare and furnish to Distributor from time to time such number of copies of
the most recent form of the Prospectus for each Fund filed with the SEC as
Distributor may reasonably request. The Company authorizes Distributor and
Selling Agents to use each Prospectus, in the form furnished to Distributor
from time to time, in connection with the sale of Fund shares. The Company
shall indemnify, defend and hold harmless Distributor, its officers and
partners and any person who controls Distributor within the meaning of the 1933
Act, 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
Distributor, its officers or partners or any such controlling person, may incur
under the 1933 Act, the 1940 Act, the common law or otherwise, arising out of
or based upon any alleged untrue statement of a material fact contained in the
Registration Statement or any Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading.
Notwithstanding the foregoing, this indemnity agreement, to the extent that it
might require indemnity of any person who is an officer or partner of
Distributor and who is also a director of the Company, shall not inure to the
benefit of such officer or partner unless a court of competent jurisdiction
shall determine, or it shall have been determined by controlling precedent,
that such result would not be against public policy as expressed in the 1933
Act or the 1940 Act, and in no event shall anything contained herein be so
construed as to protect Distributor against any liability to the Company or its
stockholders to which Distributor would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this agreement. This indemnity agreement is expressly conditioned upon
the Company's being notified of any action brought against Distributor, its
officers or partners or any such controlling person, which notification shall
be given by letter or by telegram addressed to the Company at its principal
office Little Rock, Arkansas, and sent to the Company by the person against
whom such action is brought within 10 days after the summons or other first
legal process shall have been served. The failure to notify the Company of any
such action shall not relieve the Company from any liability which it may have
to the person against whom such action is brought by reason of any such alleged
untrue statement or omission otherwise than on account of the indemnity
agreement contained in this paragraph. The Company shall be entitled to assume
the defense of any suit brought to enforce any such claim, demand or liability,
but, in such case, the defense shall be conducted by counsel chosen by the
Company and approved by Distributor. If the Company elects to assume the
defense of any such suit and retain counsel approved by Distributor, 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 the Company does not
elect to assume the defense of any such suit, or in case Distributor does not
approve of counsel chosen by the Company, the Company will reimburse
Distributor its officers and partners or the controlling person or persons
named as defendant or defendants in such suit, for the fees and expenses of any
counsel retained by Distributor or them. In addition, Distributor shall have
the right to employ one separate counsel to represent it, its officers and
partners and any such
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controlling person who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by Distributor against the Company
hereunder if in the reasonable judgment of Distributor it is advisable because
of actual or potential differing interests between Distributor, its officers
and partners or such controlling person and the Company in the conduct of the
defense of such action, for Distributor, its officers and partners or such
controlling person to be represented by separate counsel, in which event the
fees and expenses of such separate counsel shall be borne by the Company. This
indemnity agreement and the Company's representations and warranties in this
agreement shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of Distributor, its officers and partners or
any such controlling person and shall survive the delivery of any shares as
provided in this agreement. This indemnity agreement shall inure exclusively to
the benefit of Distributor and its successors, Distributor's officers and
partners and their respective estates and any such controlling persons and
their successors and estates. The Company shall promptly notify Distributor of
the commencement of any litigation or proceedings against it in connection with
the issue and sale of any Fund shares.
11. Distributor agrees to indemnify, defend and hold harmless the
Company, its officers and directors and any person who controls the Company
within the meaning of the 1933 Act, 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 the Company, its officers or directors or any such
controlling person, may incur under the 1933 Act, the 1940 Act, the common law
or otherwise, but only to the extent that such liability or expense incurred by
the Company, its officers or directors or such controlling person resulting
from such claims or demands shall arise out of or be based upon (a) any alleged
untrue statement of a material fact contained in information furnished in
writing by Distributor to the Company specifically for use in the Registration
Statement or each Prospectus or shall arise out of or be based upon any alleged
omission to state a material fact in connection with such information required
to be stated in the Registration Statement or the Prospectuses or necessary to
make such information not misleading and (b) any alleged act or omission on
Distributor's part as the Company's agent that has not been expressly
authorized by the Company in writing. This indemnity agreement is expressly
conditioned upon Distributor's being notified of any action brought against the
Company, its officers and directors or any such controlling person, which
notification shall be given by letter or telegram, addressed to Distributor at
its principal office in Little Rock, Arkansas, and sent to Distributor by the
person against whom such action is brought, within 10 days after the summons or
other first legal process shall have been served. The failure to notify
Distributor of any such action shall not relieve Distributor from any liability
which it may have to the Company, its officers or directors or such controlling
person by reason of any such alleged misstatement or omission on Distributor's
part otherwise than on account of the indemnity agreement contained in this
paragraph. Distributor shall have a right to control the defense of such action
with counsel of its own choosing and approved by the Company if such action is
based solely upon such alleged misstatement or omission on Distributor's part,
and in any other event the Company, its officers and directors or such
controlling person shall each have the right to participate in the defense or
preparation of the defense of any such action at their own expense.
12. No Fund shares shall be sold through Distributor or by the
Company under this agreement and no orders for the purchase of Fund shares
shall be confirmed or accepted by the Company if and so long as the
effectiveness of the Registration Statement shall be suspended under any of the
provisions of the 1933 Act. Nothing contained in this paragraph 12 shall in any
way restrict, limit or have any application to or bearing upon the Company's
obligation to redeem Fund shares from any shareholder in accordance with the
provisions of its Articles of Incorporation. The Company will use its best
efforts at all times to have Fund shares effectively registered under the 1933
Act.
13. The Company agrees to advise Distributor immediately:
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(a) of any request by the SEC for amendments to the
Registration Statement or a Prospectus or for additional information;
(b) in the event of the issuance by the SEC of any stop
order suspending the effectiveness of the registration Statement or a
Prospectus under the 1933 Act or the initiation of any proceedings for that
purpose;
(c) of the happening of any material event that makes
untrue any statement made in the Registration Statement or a Prospectus or that
requires the making of a change in either thereof in order to make the
statements therein not misleading; and
(d) of any action of the SEC with respect to any
amendments to the Registration Statement or a Prospectus that may from time to
time be filed with the SEC under the 1933 Act or the 1940 Act.
14. Insofar as they concern the Company, the Company shall comply
with all applicable laws, rules and regulations, including, without limiting
the generality of the foregoing, all rules or regulations made or adopted
pursuant to the 1933 Act, the 1940 Act or by any securities association
registered under the 1934 Act.
15. Distributor may, if it desires and at its own cost and
expense, appoint or employ agents to assist it in carrying out its obligations
under this agreement, but no such appointment or employment shall relieve
Distributor of any of its responsibilities or obligations to the Company under
this agreement.
16. Subject to the provisions Of Paragraph 9, this agreement shall
continue in effect until such time as there shall remain no unsold balance of
Fund shares registered under the 1933 Act, provided that this agreement shall
continue in effect for a period of more than one year from the date hereof only
so long as such continuance is specifically approved at least annually in
accordance with the 1940 Act and the rules thereunder. This agreement shall
terminate automatically in the event of its assignment (as defined in the 1940
Act). This agreement may, in any event, be terminated at any time, without the
payment of any penalty, by the Company upon 60 days' written notice to
Distributor or by Distributor at any time after the second anniversary of the
effective date of this agreement on 60 days' written notice to the Company.
17. This agreement shall be governed by and construed in accordance
with the laws of the State of Arkansas.
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If the foregoing correctly sets forth the agreement between the
Company and Distributor, please so indicate by signing and returning to the
Company the enclosed copy hereof.
Very truly yours,
OVERLAND EXPRESS FUNDS, INC.
By:
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Name:
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Title:
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ACCEPTED as of the date
set forth above:
STEPHENS INC.
By:
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Name:
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Title:
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EX-99.B 8(j)
CUSTODY AGREEMENT
OVERLAND EXPRESS FUNDS, INC.
111 CENTER STREET
LITTLE ROCK, AR 72201
This Agreement is made as of the 4th day of May, 1994 (the
"Agreement"), by and between OVERLAND EXPRESS FUNDS, INC. (the "Company"), on
behalf of the Funds listed on the attached Appendix A (each a "Fund" and
collectively, the "Funds), and WELLS FARGO BANK, N.A. (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 meaning:
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 Company, duly authorized by the Board of Directors
("Directors") to give Oral Instructions and Written Instructions on behalf of a
Fund and listed in the Certificate attached hereto as Appendices B-1 through
B-4 or such other Certificate as may be received from time to time by the
Custodian.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its
successor(s) and its nominee(s).
3. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Custodian, which is actually received by the Custodian and signed on behalf
of a Fund by any two Officers.
4. "Clearing Member" shall mean a registered broker-dealer which
is 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.
5. "Depository" shall mean The Depository Trust Company ("DTC"),
Participants Trust Company ("PTC"), and any other clearing agency registered
with the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934, its successor(s) and its nominee(s), provided the
Custodian has received a certified copy of a
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resolution of the Directors specifically approving deposits in DTC, PTC or such
other clearing agency. The term "Depository" shall further mean and include
any person authorized to act as a depository pursuant to Section 17, Rule 17f-4
or Rule 17f-5 thereunder, under the Investment Company Act of 1940, its
successor(s) and its nominee(s), specifically identified in a certified copy of
a resolution of the Directors specifically approving deposits therein by the
Custodian.
6. "Margin Account" shall mean a segregated account in the name
of a broker, dealer, or Clearing Member, or in the name of the Company or a
Fund for the benefit of a broker, dealer, or Clearing Member, or otherwise, in
accordance with an agreement between the Company on behalf of a Fund, the
Custodian and a broker, dealer, or Clearing Member (a "Margin Account
Agreement"), separate and distinct from the custody account, in which certain
Securities and/or moneys 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 deposited in, or withdrawn from, a Margin Account upon the
Custodian's effecting an appropriate entry on its books and records.
7. "Money Market Securities" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to principal and interest
by the government of the United States or agencies or instrumentalities
thereof, 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 date as such purchase or sale.
8. "Officers" shall be deemed to include the President, and Vice
President, the Secretary, the Treasurer, the Controller, any Assistant
Secretary, any Assistant Treasurer or any other person or persons duly
authorized by the Directors of the Company to execute any Certificate,
instruction, notice or other instrument on behalf of a Fund and listed in the
Certificates attached hereto as Appendices C-1 through C-4 or such other
Certificates as may be received by the Custodian from time to time.
9. "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.
10. "Reverse Repurchase Agreement" shall mean an agreement
pursuant to which a Fund sells Securities and agrees to repurchase such
Securities at a described or specified date and price.
11. "Security" or "Securities" shall be deemed to include,
without limitation, Money Market Securities, Reverse Repurchase Agreements,
common stock and other instruments or rights having characteristics similar to
common stocks, preferred stocks, debt obligations issued by state or municipal
governments and by public authorities (including, without limitation, general
obligations bonds), bonds, debentures, notes, mortgages or other obligations,
and any certificates, receipts, warrants or other instruments representing
rights to receive, purchase, sell or subscribe
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for the same, or evidencing or representing any other rights or interest
therein, or any property or assets.
12. "Segregated Security Account" shall mean an account
maintained 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 a Fund 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.
13. "Shares" shall mean the shares of common stock of a Fund,
each of which, in the case of a Fund having Series, is allocated to a
particular Series.
14. "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 authenticity of
the sender of such communication.
ARTICLE II
APPOINTMENT OF A CUSTODIAN
1. The Company, on behalf of each Fund, hereby constitutes and
appoints the Custodian as custodian of all the Securities and moneys at any
time owned by a Fund during the term of this Agreement.
2. The Custodian hereby accepts appointment as such custodian
and agrees to perform all the duties thereof as set forth in this Agreement.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in Article V, each Fund will
deliver or cause to be delivered to the Custodian all Securities and all moneys
owned by it, including cash received for the issuance of its Shares, at any
time during the term of this Agreement. The Custodian will not be responsible
for such Securities and such moneys until actually received by it. The
Custodian will be entitled to reverse any credits made on a 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 Directors
of the Company authorizing and instructing the Custodian on a continuous and
ongoing basis to deposit in the Book-Entry System all Securities eligible for
deposit therein 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. Prior to a
deposit of Securities of a Fund in the Depository, the Fund shall deliver to
the
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Custodian a certified resolution of the Directors 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 eligible for deposit therein and to utilize the
Depository 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. Securities and moneys of a Fund 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.
2. The Custodian shall credit to a separate account in the name
of each Fund all moneys received by it for the account of the Fund, and shall
disburse the same only:
(a) In payment for Securities purchased, as provided in
Article IV hereof;
(b) In payment of dividends or distributions, as provided in
Article VIII hereof;
(c) In payment of original issue or other taxes, as provided
in Article IX hereof;
(d) In payment for Shares redeemed by it, as provided in
Article IX hereof;
(e) Pursuant to Certificates setting forth the name and
addresses of the person to whom the payment is to be made, and the purpose for
which payment is to be made; or
(f) In payment of the fees and in reimbursement of the
expenses and liabilities of the Custodian, as provided in Article XII hereof.
3. Promptly after the close of business on each day, the
Custodian shall furnish each Fund with confirmations and a summary of all
transfers to or from the account of the Fund during said day. Where Securities
are transferred to the account of the Fund, the Custodian shall also by
book-entry or otherwise identify as belonging to the Fund 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. The Custodian shall provide to each
Fund, at least monthly, a detailed statement of the Securities and moneys held
for the Fund under this Agreement.
4. Except as otherwise provided in Article V, all Securities
held for a Fund 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 for the Fund 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(s) or their
nominee(s). The Company 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
for the account of a Fund
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and which may from time to time be registered in the name of each Fund. The
Custodian shall hold all such Securities which are not held in the Book-Entry
System or in the Depository in a separate account in the name of the Fund
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
the Securities therein deposited, shall, with respect to all Securities held
for a Fund in accordance with this Agreement:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount payable upon
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 D annexed hereto, which may be
amended at any time by the Custodian upon five business days' prior
notifications to the Company;
(c) Present for payment and collect the amount payable upon
all Securities which mature;
(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
Fund all rights and similar securities issued with respect to any Securities
held by the Custodian 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 a Fund as owner of any Securities may be
exercised;
(b) Deliver any Securities held for a Fund 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 held for a 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
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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;
(d) Make such transfer or exchanges of the assets of a Fund
and take such other steps as shall be stated in said order 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.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
1. Promptly after each purchase or sale (as applicable) of
Securities by a Fund, other than a purchase or sale of any Reverse Repurchase
Agreement, the Fund shall deliver to the Custodian (i) with respect to each
purchase or sale of Securities which are not Money Market Securities, a
Certificate; and (ii) with respect to each purchase or sale of Money Market
Securities, a Certificate, Oral Instructions or Written Instructions,
specifying with respect to each such purchase or sale: (a) the name of the
issuer and the title of the Securities; (b) the number of shares or the
principal amount purchased or sold and accrued interest, if any; (c) the date
of purchase or sale and settlement date; (d) the purchase or sale price per
unit; (e) the total amount payable upon such purchase or sale; (f) the name of
the person from whom or the broker through whom the purchase or sale was made,
and the name of the clearing broker, if any; (g) in the case of a purchase, the
name of the broker to which payment is to be made; and (h) in the case of a
sale, the name of the broker to whom the Securities are to be delivered. In
the case of a purchase, the Custodian shall, upon receipt of Securities
purchased by or for a Fund, pay out of the moneys held for the account of the
Fund 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. In the case of a sale, the Custodian shall deliver the
Securities upon receipt of the total amount payable to a 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. Subject to the
foregoing, the Custodian 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.
ARTICLE V
SHORT SALES
1. Promptly after any short sale, a Fund shall deliver to the
Custodian a Certificate specifying: (a) the name of the issuer and the title
of the Security; (b) the number of shares or principal amount sold, and accrued
interest or dividends, if any; (c) the dates of the sale and settlement; (d)
the sale price per unit; (e) the total amount credited to the Fund upon such
sale, if
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<PAGE> 7
any (f) 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; (g) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in a Segregated
Security Account; and (h) the name of the broker through which such short sale
was made. The Custodian 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
Segregated Security Account specified in the Certificate.
2. In connection with the closing-out of any short sale, a Fund
shall promptly deliver to the Custodian a Certificate specifying with respect
to each such closing-out: (a) the name of the issuer and the title of the
Security; (b) 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; (c) the dates of the closing-out and settlement; (d)
the purchase price per unit; (e) the net total amount payable to the Fund upon
such closing-out; (f) the net total amount payable to the broker upon such
closing-out; (g) the amount of cash and the amount and kind of Securities, if
any, to be withdrawn, from the Margin Account; (h) the amount of cash and/or
the amount and kind of Securities, if any, to be withdrawn from the Segregated
Security Account; and (i) the name of the broker through which the Fund is
effecting such closing-out. The Custodian shall, upon receipt of the net total
amount payable to a 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 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 Segregated Security Account, as the
same are specified in the Certificate.
ARTICLE VI
REVERSE REPURCHASE AGREEMENTS
1. Promptly after a Fund enters into 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 total amount payable
to the Fund in connection with such Reverse Repurchase Agreement; (b) the
broker or dealer through or with which the Reverse Repurchase Agreement is
entered; (c) the amount and kind of Securities to be delivered by the Fund to
such broker or dealer; (d) the date of such Reverse Repurchase Agreement; and
(e) the amount of cash and/or the amount and kind of Securities, if any, to be
deposited in a Segregated Security Account 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 Segregated Security Account, specified in such Certificate, Oral
Instructions or Written Instructions.
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<PAGE> 8
2. Upon the termination of a Reverse Repurchase Agreement
described in paragraph 1 of this Article VI, a 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; (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
in connection with such termination; (d) the date of termination; (e) the name
of the broker or dealer with or through which 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 Segregated Security Account. 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
Segregated Security Account, specified in such Certificate, Oral Instructions
or Written Instructions.
ARTICLE VII
MARGIN ACCOUNTS, SEGREGATED SECURITY
ACCOUNTS AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits
to, or withdrawals from, a Segregated Security Account as specified in a
Certificate received by the Custodian. Such Certificate shall specify the
amount of cash and/or the amount and kind of Securities to be deposited in, or
withdrawn from, the Segregated Security Account. In the event that a Fund
fails to specify in a Certificate 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 Segregated 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 or Clearing Member in whose name, or for whose
benefit, the account was established as specified in the Margin Account
Agreement.
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.
5. On each business day, the Custodian shall furnish each 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 or dealer specified
in the name of a Margin Account a copy of the statement furnished the Fund with
respect to such Margin Account.
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6. Promptly after the close of business on each business day in
which cash and/or Securities are maintained in a Collateral Account, the
Custodian shall furnish each 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.
ARTICLE VIII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. Each Fund shall furnish the Custodian with a copy of the
resolution of the Directors, certified by the Secretary or any Assistant
Secretary, either (i) setting forth 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 to the shareholders of record as of that date and the total amount
payable to the Dividend Agent of the Fund on the payment date, or (ii)
authorizing the declaration of dividends and distributions on a daily basis or
some other periodic 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 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, the Custodian shall pay out
the moneys held for the account of each Fund the total amount payable to the
Dividend Agent of the Fund.
ARTICLE IX
SALE AND REDEMPTION OF SHARES
1. Whenever a Fund shall sell any of its Shares, it shall
deliver to the Custodian a Certificate duly specifying the number of Shares
sold, trade date, price and the amount of money to be received by the Custodian
for the sale of such Shares.
2. Upon receipt of such money from the Transfer Agent or a
Co-Transfer Agent, the Custodian shall credit such money to the account of the
Fund.
3. Upon issuance of any of a Fund's Shares in accordance with
the foregoing provisions of this Article IX, the Custodian 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.
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<PAGE> 10
4. Except as provided hereinafter, whenever a Fund shall redeem
any of its Shares, it shall furnish the Custodian with a Certificate specifying
the number of Shares redeemed and the amount to be paid for the Shares
redeemed.
5. Upon receipt from the Transfer Agent or co-transfer agent of
an advice setting forth the number of Shares received by the Transfer Agent or
co-transfer agent for redemption, and that such Shares are valid and in good
form for redemption, the Custodian shall make payment to the Transfer Agent or
co-transfer agent, as the case may be, out of the moneys held for the account
of a Fund of the total amount specified in the Certificate issued pursuant to
paragraph 4 of this Article IX.
6. Notwithstanding the above provisions regarding the
redemption of any of a Fund's Shares, whenever its 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 money held in the account of the Fund for such
purposes.
ARTICLE X
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion advance funds
on behalf of a Fund which results in an overdraft because the moneys held by
the Custodian for the account of the Fund shall be insufficient to pay the
total amount payable upon a purchase of Securities as set forth in a
Certificate or Oral Instructions issued pursuant to Article IV, or which
results in an overdraft for some other reason, or if the Fund is, for any other
reason, indebted to the Custodian (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 a loan made by the
Custodian to the Fund 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 the Custodian's prime commercial lending rate
in effect from time to time, such rate to be adjusted on the effective date of
any change in such prime commercial 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 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. In
addition, the Company on behalf of each Fund hereby agrees that the Custodian
shall have a continuing lien and security interest in and to any property at
any time held by it for the benefit of a Fund or in which the Fund may have an
interest which is then in the Custodian's possession or control or in
possession or control of any third party acting in the Custodian's behalf.
Each 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 the Fund's credit on the Custodian's
books.
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2. Each 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 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 name of
the bank; (b) 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; (c) the time and date, if known, on which the
loan is to be entered into; (d) the date on which the loan becomes due and
payable; (e) the total amount payable to the Fund on the borrowing date; (f)
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 of any particular Securities; and (g) 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 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 amounts payable as
set forth in the Certificate. The Custodian 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 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 a Fund fails to specify
in a Certificate 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 XI
LOAN OF PORTFOLIO SECURITIES OF A FUND
1. If a Fund is permitted by the terms of the Company's Articles
of Incorporation and as disclosed in the Fund's most recent and currently
effective prospectus to lend its portfolio securities, within twenty-four (24)
hours after each loan of portfolio Securities the Fund shall deliver or cause
to be delivered to the Custodian 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 Custodian against the
loan of the Securities, including the amount of cash collateral and the
premium, if any, separately identified; and (e) 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
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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 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
a 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 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 Custodian
(including the cash collateral for such Securities minus any offsetting credits
as described in said Certificate); and (e) 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 XII
THE CUSTODIAN
1. Except as hereinafter provided, neither the Custodian nor its
nominee shall be liable for any loss or damage, including attorney's 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
Company or of its own counsel, at the expense of the Fund, 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 a Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received thereof;
(b) The legality of the issue or sale of any of a Fund's
Shares, or the sufficiency of the amount to be received therefor;
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(c) The legality of the redemption of any of a Fund's Shares,
or the propriety of the amount to be paid therefor;
(d) The legality of the declaration or payment of any dividend
by a Fund;
(e) The legality of any borrowing by a Fund using Securities as
collateral;
(f) The legality of any loan of portfolio Securities pursuant
to Article XI of this Agreement, 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 institutions or held by it at any time as a result of such
loan of portfolio Securities of a 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 a 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 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 Custodian 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, Segregated Security Account or
Collateral Account in connection with transactions by a Fund. In addition, the
Custodian shall be under no duty or obligation to see that any broker, dealer,
or Clearing Member makes payment to a Fund of any variation margin payment or
similar payment which the Fund may be entitled to receive from such broker,
dealer, or Clearing Member, to see that any payment received by the Custodian
from any broker, dealer, 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 however that the Custodian, upon the Fund's written
request, shall as Custodian, demand from any broker, dealer, or Clearing Member
identified by the Fund the payment of any variation margin payment or similar
payment that the Fund asserts it is entitled to receive pursuant to the terms
of a Margin Account Agreement or otherwise from such broker, dealer, or
Clearing Member.
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 a 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, exchanges,
offers, tenders, interest rate changes or similar matters relating to
Securities held in the Depository unless the Custodian shall have actually
received timely notice from the Depository. In no event shall the Custodian
have any
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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 a 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 a 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 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.
7. The Custodian may appoint one or more banking institutions as
Depository or Depositories or as sub-custodian(s), including, but not limited
to, banking institutions located in foreign countries, of Securities and moneys
at any time owned by a Fund, upon terms and conditions approved in a
Certificate, which shall, if requested by the Custodian, be accompanied by an
approving resolution of the Board of Directors adopted in accordance with Rule
17f-5 under the Investment Company Act of 1940, as amended.
8. The Custodian 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 a Fund are such as properly may be held by the Fund under the
provisions of the Company's Articles of Incorporation.
9. The Custodian shall be entitled to receive and each Fund
agrees to pay to the Custodian all out-of-pocket expenses and fees as set
forth in Appendix D attached hereto. The Custodian may charge such fees and
any expenses incurred by the Custodian in the performance of its duties against
any money held by it for the account of the Fund. The Custodian shall also be
entitled to charge against any money held by it for the account of a Fund the
amount of any loss, damage, liability or expense, including attorney's fees,
for which it shall be entitled to reimbursement under the provisions of this
Agreement. The expenses which the Custodian may charge against the account of
a Fund include, but are not limited to, the expenses of a sub-custodian 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
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Certificate. The Custodian shall be entitled to rely upon any Oral
Instructions and any Written Instructions actually received by the Custodian
pursuant to Article IV or VII hereof. Each 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 by the Custodian, whether by hand delivery, telex or
otherwise, by the close of business of the same day that such Oral Instructions
or Written Instructions are given to the Custodian. Each 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 hereby authorized by the
Fund. Each Fund agrees that the Custodian shall incur no liability to the Fund
in acting upon Oral 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, or Clearing Member.
12. The books and records pertaining to each 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, rules
and regulations. Each Fund, or the Fund's authorized representative(s), shall
have access to such books and records during the Custodian's normal business
hours. Upon the reasonable request of a Fund, copies of any such books and
records shall be provided by the Custodian to the Fund or the Fund's authorized
representative(s) at the Fund's expense.
13. The Custodian shall provide the Company with any report
obtained by the Custodian on the system of internal accounting control of the
Book-Entry System or the Depository and with such reports on its own systems of
internal accounting control as the Company may reasonably request from time to
time.
14. Each 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 IX as part of any check redemption privilege program
of a Fund, except for any such liability, claim, loss and demand arising out of
the Custodian's own negligence or willful misconduct.
15. 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.
15
<PAGE> 16
16. The Custodian shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set
forth in this Agreement or Appendix E attached hereto, and no covenant or
obligation shall be implied in this Agreement against the Custodian.
ARTICLE XIII
TERMINATION
1. This Agreement shall continue until May 4, 1996, and
thereafter shall continue automatically for successive annual periods ending on
the last day of May of each year, provided such continuance is specifically
approved at least annually by (i) the Company's Directors or (ii) with respect
to a Fund, by vote of a majority (as defined in the Investment Company Act of
1940) of the Fund's outstanding voting securities, provided that in either
event its continuance also is approved by a majority of the Company's Directors
who are not "interested persons" (as defined in said Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. This Agreement is terminable with respect to a Fund without
penalty, on sixty (60) days' notice, by the Company's Directors or by vote of
holders of a majority of the Fund's Shares or, upon not less than ninety (90)
days' notice, by the Custodian. In the event such notice is given by a Fund,
it shall be accompanied by a copy of a resolution of the Directors of the
Company on behalf 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 is given by the Custodian, the Fund shall, on or before
the termination date, deliver to the Custodian a copy of a resolution of its
Directors, certified by the Secretary or any Assistant Secretary, designating a
successor custodian or custodians. In the absence of such designation by a
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 a Fund and held by it as
Custodian, after deducting all fees, expenses, and other amounts for the
payment of reimbursement of which shall then be entitled.
2. If a successor custodian is not designated by the Company on
behalf of a 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, in any Depository or by a Clearing Member which cannot be
delivered to the Fund, to hold such Securities hereunder in accordance with
this Agreement.
16
<PAGE> 17
ARTICLE XIV
MISCELLANEOUS
1. Annexed hereto as Appendices B-1 through B-4 are Certificates
signed by two Officers, setting forth the names and the signatures of the
present Authorized Persons. The Company agrees to furnish to the Custodian a
new Certificate(s) 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(s) 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(s).
2. Annexed hereto as Appendices C-1 through C-4 are Certificates
signed by two of the present Officers of the Company, setting forth the names
and the signatures of the present Officers of the Company The Company agrees
to furnish to the Custodian a new Certificate(s) in similar form in the event
any such present Officer ceases to be an Officer of the Company, or in the
event that other or additional Officers are elected or appointed. Until such
new Certificate(s) shall be received, the Custodian shall be fully be protected
in acting under the provisions of this Agreement upon the signatures of the
Officers as set forth in the last delivered Certificate(s).
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian, shall be deemed
sufficiently given if addressed to the Custodian and mailed or delivered to it
at its offices at 420 Montgomery Street, San Francisco, California, 94104, 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 by or on behalf of a Fund, shall be
deemed sufficiently given if addressed to the Company on behalf of the Fund and
mailed or delivered to it at its office at 111 Center Street, Little Rock,
Arkansas, 72201, or at such other place as the Company 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 to this Agreement and
approved by a resolution of the Directors of the Company.
6. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successor(s) and assign(s); provided,
however, that this Agreement shall not be assignable by the Company without the
written consent of the Custodian, or by the Custodian without the written
consent of the Company, authorized or approved by a resolution of its
Directors.
7. This Agreement shall be construed in accordance with the laws
of the State of California.
17
<PAGE> 18
8. This Agreement may be executed in any number of counterparts,
each which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
9. This Agreement has been executed on behalf of the Company by
the undersigned officer of the Company in his or her capacity as an officer of
the Company. The obligations of this agreement shall only be binding upon the
assets and property of the relevant Fund, as provided for in the Company's
Articles of Incorporation, and shall not be binding upon any director, officer
or shareholder of the Company or Fund individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective Officers, thereunto duly authorized, as of
the day and year first above written.
OVERLAND EXPRESS FUNDS, INC. WELLS FARGO BANK, N.A.
By: /s/ Richard H. Blank, Jr. By: /s/ Henry J. Cavigli
-------------------------- ------------------------
Name: Richard H. Blank, Jr. Name: Henry J. Cavigli
------------------------ ----------------------
Title: Chief Operating Officer Title: Vice President
----------------------- ---------------------
By: /s/ Vito P. Limitone
------------------------
Name: Vito P. Limitone
----------------------
Title: Senior Vice President
---------------------
18
<PAGE> 19
APPENDIX A
1-3 YEAR DURATION MUNICIPAL INCOME FUND
1-3 YEAR DURATION GOVERNMENT INCOME FUND
1-3 YEAR DURATION FULL FAITH AND
CREDIT GOVERNMENT INCOME FUND
OVERLAND SWEEP FUND
A-1
<PAGE> 20
APPENDIX B-1
AUTHORIZED PERSONS
Pursuant to Article I, Para. 1, and Article XIV, Para.
1, of the Custody Agreement, the following persons have been authorized persons
term "Officers" by the Board of Directors to give Oral Instructions and Written
Instructions on behalf of the 1-3 Year Duration Municipal Income Fund.
<TABLE>
<S> <C>
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
</TABLE>
B-1
<PAGE> 21
APPENDIX B-2
AUTHORIZED PERSONS
Pursuant to Article I, Para. 1, and Article XIV, Para.
1, of the Custody Agreement, the following persons have been authorized persons
term "Officers" by the Board of Directors to give Oral Instructions and Written
Instructions on behalf of the 1-3 Year Duration Government Income Fund.
<TABLE>
<S> <C>
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
</TABLE>
B-2
<PAGE> 22
APPENDIX B-3
AUTHORIZED PERSONS
Pursuant to Article I, Para. 1, and Article XIV, Para.
1, of the Custody Agreement, the following persons have been authorized persons
term "Officers" by the Board of Directors to give Oral Instructions and Written
Instructions on behalf of the 1-3 Year Duration Full Faith and Credit
Government Income Fund.
<TABLE>
<S> <C>
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
</TABLE>
B-3
<PAGE> 23
APPENDIX B-4
AUTHORIZED PERSONS
Pursuant to Article I, Para. 1, and Article XIV, Para.
1, of the Custody Agreement, the following persons have been authorized persons
term "Officers" by the Board of Directors to give Oral Instructions and Written
Instructions on behalf of the Overland Sweep Fund.
<TABLE>
<S> <C>
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
</TABLE>
B-4
<PAGE> 24
APPENDIX C-1
OFFICERS
Pursuant to Article I, Para. 8, and Article XIV, Para.
2, of the Custody Agreement, the term "Officers" does not include any persons
other than the President, Vice President, Secretary, Treasurer, Controller,
Assistant Secretary and Assistant Treasurer; and the following persons are
Officers of the 1-3 Year Duration Municipal Income Fund and authorized by its
Board of Directors to execute any Certificate, instruction, notice or other
instrument on behalf of the Fund.
<TABLE>
<S> <C>
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
</TABLE>
C-1
<PAGE> 25
APPENDIX C-2
OFFICERS
Pursuant to Article I, Para. 8, and Article XIV, Para.
2, of the Custody Agreement, the term "Officers" does not include any persons
other than the President, Vice President, Secretary, Treasurer, Controller,
Assistant Secretary and Assistant Treasurer; and the following persons are
Officers of the 1-3 Year Duration Government Income Fund ("Fund") authorized by
the Fund's Board of Directors to execute any Certificate, instruction, notice
or other instrument on behalf of the Fund.
<TABLE>
<S> <C>
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
</TABLE>
C-2
<PAGE> 26
APPENDIX C-3
OFFICERS
Pursuant to Article I, Para. 8, and Article XIV, Para.
2, of the Custody Agreement, the term "Officers" does not include any persons
other than the President, Vice President, Secretary, Treasurer, Controller,
Assistant Secretary and Assistant Treasurer; and the following persons are
Officers of the 1-3 Year Duration Full Faith and Credit Government Income Fund
("Fund") authorized by the Fund's Board of Directors to execute any
Certificate, instruction, notice or other instrument on behalf of the Fund.
<TABLE>
<S> <C>
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
</TABLE>
C-3
<PAGE> 27
APPENDIX C-4
OFFICERS
Pursuant to Article I, Para. 8, and Article XIV, Para.
2, of the Custody Agreement, the term "Officers" does not include any persons
other than the President, Vice President, Secretary, Treasurer, Controller,
Assistant Secretary and Assistant Treasurer; and the following persons are
Officers of the Overland Sweep Fund ("Fund") authorized by the Fund's Board of
Directors to execute any Certificate, instruction, notice or other instrument
on behalf of the Fund.
<TABLE>
<S> <C>
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
</TABLE>
C-4
<PAGE> 28
APPENDIX D
CUSTODY FEES
Net Asset Charge 0.0167% (1.67 bps) annually
Transaction Charges:
Depository Eligible $10.00 ea.
Physical Delivery $20.00 ea.
Principal & Interest Paydown $10.00 ea.
Sweeps $-0-
PORTFOLIO ACCOUNTING
Monthly Base Fee $2,000.00
Net Asset Charge
First $50,000,000 Net Assets 0.070% (7 bps) annually
Next $50,000,000 Net Assets 0.045% (4.5 bps) annually
Net Assets Over $100,000,000 0.020% (2.0 bps) annually
D-1
<PAGE> 29
APPENDIX E
FUND AND PORTFOLIO ACCOUNTING SERVICES:
SCHEDULE OF SERVICES (FOR EACH FUND)
A. Maintain Fund general ledger and journal.
B. Prepare and record disbursements for direct Fund expenses.
C. Prepare daily money transfers.
D. Reconcile all Fund bank and custodian accounts.
E. Assist Fund independent auditors as appropriate.
F. Prepare daily projection of available cash balances.
G. Record trading activity for purposes of determining net asset values and
daily dividend.
H. Prepare daily portfolio evaluation report to value portfolio securities
and determine daily accrued income.
I. Determine the daily net asset value per share.
J. Determine the daily dividend per share.
K. Prepare monthly, quarterly, semi-annual and annual financial statements.
L. Provide financial information for reports to the Securities and Exchange
Commission in compliance with the provisions of the Investment Company
Act of 1940 and the Securities Act of 1933, the Internal Revenue Service
and any other regulatory or governmental agencies as required.
M. Provide financial, yield, net asset value, etc., information to National
Association of Securities Dealers, Inc., and other survey and statistical
agencies as instructed from time to time by a Fund.
E-1
<PAGE> 1
EX-99.B 8(k)
FORM OF
CUSTODY AGREEMENT
OVERLAND EXPRESS FUNDS, INC.
111 CENTER STREET
LITTLE ROCK, ARKANSAS 72201
This Agreement is made as of the __ day of December 1995 (the
"Agreement"), by and between OVERLAND EXPRESS FUNDS, INC. (the "Company"), on
behalf of the National Tax-Free Institutional Money Market Fund (the "Fund"),
and WELLS FARGO BANK, N.A. (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
Company 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 meaning:
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 Company, duly authorized by the Board of Directors
("Directors") to give Oral Instructions and Written Instructions on behalf of
the Fund and listed in the Certificate attached hereto as Appendix A or such
other Certificate as may be received from time to time by the Custodian.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its
successor(s) and its nominee(s).
3. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this 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 of the Company.
4. "Clearing Member" shall mean a registered broker-dealer that
is 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.
5. "Depository" shall mean The Depository Trust Company ("DTC"),
Participants Trust Company ("PTC"), and any other clearing agency registered
with the Securities and
<PAGE> 2
Exchange Commission under Section 17A of the Securities Exchange Act of 1934,
its successor(s) and its nominee(s), provided the Custodian has received a
certified copy of a resolution of the Board of Directors specifically approving
deposits in DTC, PTC or such other clearing agency. The term "Depository"
shall further mean and include any person authorized to act as a depository
pursuant to Section 17, Rule 17f-4 or Rule 17f-5 thereunder, under the
Investment Company Act of 1940, its successor(s) and its nominee(s),
specifically identified in a certified copy of a resolution of the Board of
Directors specifically approving deposits therein by the Custodian.
6. "Margin Account" shall mean a segregated account in the name
of a broker, dealer, or Clearing Member, or in the name of the Company or the
Fund for the benefit of a broker, dealer, or Clearing Member, or otherwise, in
accordance with an agreement between the Company on behalf of the Fund, the
Custodian and a broker, dealer, or Clearing Member (a "Margin Account
Agreement"), separate and distinct from the custody account, in which certain
Securities and/or moneys 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 deposited in, or withdrawn from, a Margin Account upon the
Custodian's effecting an appropriate entry on its books and records.
7. "Money Market Securities" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to principal and interest
by the government of the United States or agencies or instrumentalities
thereof, 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 date as such purchase or sale.
8. "Officers" shall be deemed to include the President, Vice
President, the Secretary, the Treasurer, the Controller, any Assistant
Secretary, any Assistant Treasurer or any other person or persons duly
authorized by the Directors of the Company to execute any Certificate,
instruction, notice or other instrument on behalf of the Fund and listed in the
Certificate attached hereto as Appendix B or such other Certificate as may be
received by the Custodian from time to time.
9. "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.
10. "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.
11. "Security" or "Securities" shall be deemed to include,
without limitation, Money Market Securities, Reverse Repurchase Agreements,
common stock and other instruments or rights having characteristics similar to
common stocks, preferred stocks, debt obligations issued
-2-
<PAGE> 3
by state or municipal governments and by public authorities (including, without
limitation, general obligations 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.
12. "Segregated Security Account" shall mean an account
maintained 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 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.
13. "Shares" shall mean the shares of common stock of the Fund,
each of which, in the case of the Fund having Series, is allocated to a
particular Series.
14. "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 authenticity of
the sender of such communication.
ARTICLE II
APPOINTMENT OF A CUSTODIAN
1. The Company on behalf of the Fund hereby constitutes and
appoints the Custodian as custodian of all the Securities and moneys at any
time owned by the Fund during the term of this Agreement.
2. The Custodian hereby accepts appointment as such custodian and
agrees to perform all the duties thereof as set forth in this Agreement.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in Article V, the Fund will
deliver or cause to be delivered to the Custodian all Securities and all moneys
owned by it, including cash received for the issuance of its Shares, at any
time during the term of this Agreement. The Custodian will not be responsible
for such Securities and such moneys until actually received by it. 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 Directors of the Company authorizing and instructing the Custodian on a
continuous and ongoing basis to deposit in the Book-Entry System all Securities
eligible for deposit therein and to utilize the Book-Entry System to the
extent possible in connection with its
-3-
<PAGE> 4
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 of the Fund in the Depository, the Fund shall deliver to the
Custodian a certified resolution of the Directors of the Company 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 eligible for deposit
therein and to utilize the Depository 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. Securities and moneys of the
Fund 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.
2. The Custodian shall credit to a separate account in the name
of the Fund all moneys received by it for the account of the Fund, and shall
disburse the same only:
(a) In payment for Securities purchased, as provided in Article
IV hereof;
(b) In payment of dividends or distributions, as provided in
Article VIII hereof;
(c) In payment of original issue or other taxes, as provided in
Article IX hereof;
(d) In payment for Shares redeemed by it, as provided in Article
IX hereof;
(e) Pursuant to Certificate(s) setting forth the name(s) and
address(es) of the person(s) to whom payment is to be made, and the purpose for
which payment is to be made; or
(f) In payment of the fees and in reimbursement of the expenses
and liabilities of the Custodian, as provided in Article XII hereof.
3. Promptly after the close of business on each day, the
Custodian shall furnish the Fund with confirmations and a summary of all
transfers to or from the account of the Fund during said day. Where Securities
are transferred to the account of the Fund, the Custodian shall also by
book-entry or otherwise identify as belonging to the Fund 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. The Custodian shall furnish the Fund
at least monthly with a detailed statement of the Securities and moneys held
for the Fund under this Agreement.
4. Except as otherwise provided in Article V, all Securities held
for the Fund 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 for the Fund 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
-4-
<PAGE> 5
System or the Depository or their successor(s) or their nominee(s). The
Company 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 for the account of the Fund
and which may from time to time be registered in the name of the Fund. The
Custodian shall hold all such Securities which are not held in the Book-Entry
System or in the Depository in a separate account in the name of the Fund
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
the Securities therein deposited, shall, with respect to all Securities held
for the Fund in accordance with this Agreement:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount payable upon 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 time by the Custodian upon five business days' prior notification to the
Fund;
(c) Present for payment and collect the amount payable upon all
Securities which mature;
(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 the
Fund all rights and similar securities issued with respect to any Securities
held by the Custodian 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 may be exercised;
(b) Deliver any Securities held for the Fund 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;
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<PAGE> 6
(c) Deliver any Securities held for 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;
(d) Make such transfer or exchanges of the assets of the Fund and
take such other steps as shall be stated in said order 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.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
1. Promptly after each purchase or sale (as applicable) of
Securities by the Fund, other than a purchase or sale of any Reverse Repurchase
Agreement, the Fund shall deliver to the Custodian (i) with respect to each
purchase or sale of Securities which are not Money Market Securities, a
Certificate; and (ii) with respect to each purchase or sale of Money Market
Securities, a Certificate, Oral Instructions or Written Instructions,
specifying with respect to each such purchase or sale: (a) the name of the
issuer and the title of the Securities; (b) the number of shares or the
principal amount purchased or sold and accrued interest, if any; (c) the date
of purchase or sale and settlement date; (d) the purchase or sale price per
unit; (e) the total amount payable upon such purchase or sale; (f) the name of
the person from whom or the broker through whom the purchase or sale was made,
and the name of the clearing broker, if any; (g) in the case of a purchase, the
name of the broker to which payment is to be made; and (h) in the case of a
sale, the name of the broker to whom the Securities are to be delivered. In
the case of a purchase, the Custodian shall, upon receipt of Securities
purchased by or for the Fund, pay out of the moneys held for the account of the
Fund 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. In the case of a sale, the Custodian 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. Subject to the
foregoing, the Custodian 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.
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<PAGE> 7
ARTICLE V
SHORT SALES
1. Promptly after any short sale, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the name of the issuer and the title
of the Security; (b) the number of shares or principal amount sold, and accrued
interest or dividends, if any; (c) the dates of the sale and settlement; (d)
the sale price per unit; (e) the total amount credited to the Fund upon such
sale, if any (f) 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; (g) the amount of cash
and/or the amount and kind of Securities, if any, to be deposited in a
Segregated Security Account; and (h) the name of the broker through which such
short sale was made. The Custodian 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 Segregated 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 name of the issuer and the title of the
Security; (b) 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; (c) the dates of the closing-out and settlement; (d)
the purchase price per unit; (e) the net total amount payable to the Fund upon
such closing-out; (f) the net total amount payable to the broker upon such
closing-out; (g) the amount of cash and the amount and kind of Securities, if
any, to be withdrawn, from the Margin Account; (h) the amount of cash and/or
the amount and kind of Securities, if any, to be withdrawn from the Segregated
Security Account; and (i) the name of the broker through which 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 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 Segregated Security Account, as the
same are specified in the Certificate.
ARTICLE VI
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters into 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 total amount payable
to the Fund in connection with such Reverse Repurchase Agreement; (b) the
broker or dealer through or with which the Reverse Repurchase Agreement is
entered; (c) the amount and kind of Securities to be delivered by the Fund to
such broker or dealer; (d) the date of such Reverse Repurchase Agreement; and
(e) the amount of cash and/or the amount and kind of Securities, if
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<PAGE> 8
any, to be deposited in a Segregated Security Account 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 Segregated Security Account, specified in such
Certificate, Oral Instructions or Written Instructions.
2. Upon the termination of a Reverse Repurchase Agreement
described in paragraph 1 of this Article VI, 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; (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
in connection with such termination; (d) the date of termination; (e) the name
of the broker or dealer with or through which 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 Segregated Security Account. 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
Segregated Security Account, specified in such Certificate, Oral Instructions
or Written Instructions.
ARTICLE VII
MARGIN ACCOUNTS, SEGREGATED SECURITY
ACCOUNTS AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits to,
or withdrawals from, a Segregated Security Account as specified in a
Certificate received by the Custodian. Such Certificate shall specify the
amount of cash and/or the amount and kind of Securities to be deposited in, or
withdrawn from, the Segregated Security Account. In the event that the Fund
fails to specify in a Certificate 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 Segregated 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 or Clearing Member in whose name, or for whose
benefit, the account was established as specified in the Margin Account
Agreement.
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.
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<PAGE> 9
5. On each business day, the Custodian shall furnish the Fund
with a statement with respect to the Fund's 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 or dealer 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, the
Custodian shall furnish the Fund with a statement with respect to the Fund's
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 the
Custodian with a Certificate or Written Instructions specifying the then market
value of the Securities described in such statement.
ARTICLE VIII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish the Custodian with a copy of the
resolution of the Directors, certified by the Secretary or any Assistant
Secretary, either (i) setting forth 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 to the shareholders of record as of that date and the total amount
payable to the Dividend Agent of the Fund on the payment date, or (ii)
authorizing the declaration of dividends and distributions on a daily basis or
some other periodic 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 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, the Custodian shall pay out
the moneys held for the account of the Fund the total amount payable to the
Dividend Agent of the Fund.
ARTICLE IX
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any of its Shares, it shall
deliver to the Custodian a Certificate duly specifying the number of Shares
sold, trade date, price and the amount of money to be received by the Custodian
for the sale of such Shares.
2. Upon receipt of such money from the Transfer Agent or a
co-transfer agent, the Custodian shall credit such money to the account of the
Fund.
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<PAGE> 10
3. Upon issuance of any of the Fund's Shares in accordance with
the foregoing provisions of this Article IX, the Custodian 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 shall redeem
any of its Shares, it shall furnish the Custodian with a Certificate specifying
the number of Shares redeemed and the amount to be paid for the Shares
redeemed.
5. Upon receipt from the Transfer Agent or co-transfer agent of
an advice setting forth the number of Shares received by the Transfer Agent or
co-transfer agent for redemption, and that such Shares are valid and in good
form for redemption, the Custodian shall make payment to the Transfer Agent or
co-transfer agent, as the case may be, out of the moneys held for the account
of the Fund of the total amount specified in the Certificate issued pursuant to
paragraph 4 of this Article IX.
6. Notwithstanding the above provisions regarding the redemption
of any of the Fund's Shares, whenever its 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 money held in the account of the Fund for such
purposes.
ARTICLE X
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion advance funds
on behalf of the Fund which results in an overdraft because the moneys held by
the Custodian for the account of the Fund shall be insufficient to pay the
total amount payable upon a purchase of Securities as set forth in a
Certificate or Oral Instructions issued pursuant to Article IV, or which
results in an overdraft for some other reason, or if the Fund is, for any other
reason, indebted to the Custodian (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 a loan made by the
Custodian to the Fund 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 the Custodian's prime commercial lending rate
in effect from time to time, such rate to be adjusted on the effective date of
any change in such prime commercial 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 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. In
addition, the Company on behalf of the Fund hereby agrees that the Custodian
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<PAGE> 11
shall have a continuing lien and security interest in and to any property at
any time held by it for the benefit of the Fund or in which the Fund may have
an interest which is then in the Custodian's possession or control or in
possession or control of any third party acting on the Custodian's behalf. The
Company 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 the Fund's 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 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 name of
the bank; (b) 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; (c) the time and date, if known, on which the
loan is to be entered into; (d) the date on which the loan becomes due and
payable; (e) the total amount payable to the Fund on the borrowing date; (f)
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 of any particular Securities; and (g) 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 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 amounts payable as
set forth in the Certificate. The Custodian 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 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 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 XI
LOANS OF PORTFOLIO SECURITIES OF THE FUND
1. If the Fund is permitted by the terms of the Company's
Articles of Incorporation and as disclosed in the Fund's most recent and
currently effective prospectus to lend its portfolio Securities, within
twenty-four (24) hours after each loan of portfolio Securities the Fund shall
deliver or cause to be delivered to the Custodian 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
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<PAGE> 12
principal amount loaned; (c) the date of loan and delivery; (d) 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 (e) 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 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, it 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 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 Custodian
(including the cash collateral for such Securities minus any offsetting credits
as described in said Certificate); and (e) 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 XII
THE CUSTODIAN
1. Except as hereinafter provided, neither the Custodian nor its
nominee shall be liable for any loss or damage, including attorney's 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
or of its own counsel, at the expense of the Fund, 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:
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<PAGE> 13
(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 thereof;
(b) The legality of the issue or sale of any of the Fund's
Shares, or the sufficiency of the amount to be received therefor;
(c) The legality of the redemption of any of the Fund's 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;
(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 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 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 Custodian 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, Segregated 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, 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, or Clearing Member, to see that any payment received by the
Custodian from any broker, dealer, 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, however, that the Custodian, upon
the Fund's written request, shall as Custodian, demand from any broker, dealer,
or Clearing Member identified by the Fund the payment of any variation margin
payment or similar payment that the Fund asserts it is entitled to receive
pursuant to the terms of a Margin Account Agreement or otherwise from such
broker, dealer, or Clearing Member.
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
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<PAGE> 14
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, exchanges,
offers, tenders, interest rate changes or similar matters relating to
Securities held in the Depository unless the Custodian shall have actually
received timely notice from the 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 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.
7. The Custodian may appoint one or more banking institutions as
Depository or Depositories or as sub-custodian(s), including, but not limited
to, banking institutions located in foreign countries, of Securities and moneys
at any time owned by the Fund, upon terms and conditions approved in a
Certificate, which shall, if requested by the Custodian, be accompanied by an
approving resolution of the Company's Board of Directors adopted in accordance
with Rule 17f-5 under the Investment Company Act of 1940, as amended.
8. The Custodian 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 are such as properly may be held by the Fund under the
provisions of its Articles of Incorporation.
9. The Custodian shall not be entitled to compensation for
providing custody services to the Fund so long as the Custodian receives fees
for providing advisory services to the Fund. If it no longer receives
compensation for providing such services, the Custodian shall be entitled to
such reasonable fees as it may from time to time negotiate with the Fund.
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<PAGE> 15
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 pursuant to Article IV or VII hereof. 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 by the Custodian,
whether by hand delivery, telex 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 hereby authorized by the Fund. The Fund agrees that the Custodian
shall incur no liability to the Fund in acting upon Oral 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, or Clearing Member.
12. 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, rules and
regulations. The Fund, or the Fund's authorized representative(s), 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(s) at the Fund's expense.
13. The Custodian shall provide the Company with any report
obtained by the Custodian on the system of internal accounting control of the
Book-Entry System or the Depository and with such reports on its own systems of
internal accounting control as the Company may reasonably request from time to
time.
14. 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 IX 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.
15. 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
-15-
<PAGE> 16
be made and received by the Custodian in accordance with the customs prevailing
from time to time among brokers or dealers in such Securities.
16. The Custodian shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set
forth in this Agreement or Appendix D attached hereto, and no covenant or
obligation shall be implied in this Agreement against the Custodian.
ARTICLE XIII
TERMINATION
1. This Agreement shall continue until December __, 1996, and
thereafter shall continue automatically for successive annual periods ending on
the last day of December of each year, provided such continuance is specifically
approved at least annually by (i) the Company's Directors or (ii) vote of a
majority (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting securities, provided that in either event its continuance
also is approved by a majority of the Company's Directors who are not
"interested persons" (as defined in said Act) of any party to this Agreement,
by vote cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable without penalty, on sixty (60) days'
notice, by the Company's Directors or, by vote of holders of a majority of the
Fund's Shares or, upon not less than ninety (90) days' notice, by the
Custodian. In the event such notice is given by the Fund, it shall be
accompanied by a copy of a resolution of the Directors of the Company on behalf
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 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 Directors, 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 of
reimbursement of which shall then be entitled.
2. If a successor custodian is not designated by the Company on
behalf of 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, in any Depository or by a Clearing Member which cannot be
delivered to the Fund, to hold such Securities hereunder in accordance with
this Agreement.
-16-
<PAGE> 17
ARTICLE XIV
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by an
Officer of the Company under its seal, setting forth the names and the
signatures of the present Authorized Persons. The Company 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 Company under its seal, setting forth the names and
the signatures of the present Officers of the Company. The Fund agrees to
furnish to the Custodian a new Certificate in similar form in the event any
such present Officer ceases to be an Officer of the Company, 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 be 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 deemed
sufficiently given if addressed to the Custodian and mailed or delivered to it
at its offices at 420 Montgomery Street, San Francisco, California, 94105, 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 by or on behalf of the Fund, shall be
deemed sufficiently given if addressed to the Fund and mailed or delivered to
it at its office at 111 Center Street, Little Rock, Arkansas, 72201, 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 to this Agreement and
approved by a resolution of the Directors of the Company.
6. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successor(s) and assign(s); provided,
however, that this Agreement shall not be assignable by the Company without the
written consent of the Custodian, or by the Custodian without the written
consent of the Company, authorized or approved by a resolution of its
Directors.
7. This Agreement shall be construed in accordance with the laws
of the State of California.
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<PAGE> 18
8. This Agreement may be executed in any number of counterparts,
each which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
-18-
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective Officers, thereunto duly authorized, as of
the day and year first above written.
<TABLE>
<S> <C>
OVERLAND EXPRESS FUNDS, INC. WELLS FARGO BANK, N.A.
By: By:
------------------------ ------------------------------
Name: Name:
---------------------- ----------------------------
Title: Title:
-------------------- ---------------------------
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
</TABLE>
<PAGE> 20
APPENDIX A
AUTHORIZED PERSONS
Pursuant to Article I, Par. 1, and Article XIV, Para. 1, of
the Custody Agreement, the following persons have been authorized by the Board
of Directors to give Oral Instructions and Written Instructions on behalf of
the Fund.
<TABLE>
<S> <C>
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
By:
--------------------------
Name:
------------------------
Title:
</TABLE> -----------------------
A
<PAGE> 21
APPENDIX B
OFFICERS
Pursuant to Article I, Para. 8, and Article XIV, Para. 2,
of the Custody Agreement, the term "Officers" does not include any persons
other than the President, Vice President, Secretary, Treasurer, Controller,
Assistant Secretary and Assistant Treasurer; and the following persons are
Officers of the Company authorized by the Board of Directors to execute any
Certificate, instruction, notice or other instrument on behalf of the Fund.
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
Signature:
----------------------------
Name:
---------------------------------
By: By:
------------------------ -------------------------
Name: Name:
---------------------- -----------------------
Title: Title:
--------------------- ----------------------
B
<PAGE> 22
APPENDIX C
DESIGNATED PUBLICATIONS LIST FOR CALLED INSTRUMENTS
The following publications are designated publications for the
purposes of Article III, Para. 5(b):
A. The Bond Buyer
B. The Depository Trust Company Notices
C. Financial Daily Card Services
D. The New York Times
E. Standard & Poor's Called Bond Record
F. The Wall Street Journal
C
<PAGE> 23
APPENDIX D
COMPANY AND FUND ACCOUNTING SERVICES:
SCHEDULE OF SERVICES
A. Maintain Fund general ledger and journal.
B. Prepare and record disbursements for direct Fund expenses.
C. Prepare daily money transfers.
D. Reconcile all Fund bank and custodian accounts.
E. Assist Fund independent auditors as appropriate.
F. Prepare daily projection of available cash balances.
G. Record trading activity for purposes of determining net asset values and
daily dividend.
H. Prepare daily portfolio evaluation report to value portfolio Securities
and determine daily accrued income.
I. Determine the daily net asset value per share.
J. Determine the daily dividend per share.
K. Prepare monthly, quarterly, semi-annual and annual financial statements.
L. Provide financial information for reports to the Securities and Exchange
Commission in compliance with the provisions of the Investment Company
Act of 1940 and the Securities Act of 1933, the Internal Revenue Service
and any other regulatory or governmental agencies as required.
M. Provide financial, yield, net asset value, etc., information to National
Association of Securities Dealers, Inc., and other survey and statistical
agencies as instructed from time to time by the Fund.
D
<PAGE> 1
EX-99.B 9(a)(i)
FORM OF
AGENCY AGREEMENT
This agreement is made and entered into as of this ___ day of
December, 1995 (the "Agreement"), by and between OVERLAND EXPRESS FUNDS, INC.,
a registered management investment company incorporated under the laws of the
State of Maryland (the "Company"), and Wells Fargo Bank, N.A., a national
banking association ("Agent"), for transfer agency and dividend disbursing
services as follows:
I. SERVICES.
A. Appointment of Agent. The Company hereby appoints Agent
as its transfer and dividend disbursing agent for National Tax-Free
Institutional Money Market Fund (the "Fund") and Agent accepts such
appointment.
B. Description of Services. Agent agrees to provide each
Fund with the facilities and services described and set forth on Schedule A
attached hereto and incorporated herein by reference.
The fund invests all of its assets in the Tax-Free Money Market
Master Series (the "Master Series") of Master Investment Trust. Agent serves
as the investment adviser to the Master Series. Agent will not be entitled to
receive a fee for providing transfer and dividend disbursing services to the
Fund so long as Agent is entitled to receive advisory fees from the Master
Series.
II. EXPENSES. The Company, on behalf of the Fund, shall promptly
reimburse Agent for all reasonable out-of- pocket expenses incurred by Agent in
connection with the performance of services under this Agreement, including,
without limitation, the following:
A. Postage, including first class mail insurance in
connection with mailing share certificates, express delivery, etc.;
B. Envelopes, check forms, continuous forms, forms for
reports and statements, stationery and other similar supplies;
C. Fees and costs of outside legal counsel employed by Agent;
D. Banking services, fees, and costs for wire transfers,
deposit accounts, etc.;
E. Expenses of fidelity and liability insurance and bonding;
F. Fees and costs relating to the use, licensing, development
or implementation of data processing software used by or for the Company;
<PAGE> 2
G. Data transmission expenses;
H. Costs and microfilm/microfiche; and
I. Costs for telephone lines and equipment.
III. TERM. This Agreement shall become effective as of the date first
above written and shall continue until terminated pursuant to its provisions.
IV. INSURANCE. Agent agrees to procure and maintain such fidelity
bond coverage as may be required by the Investment Company Act of 1940 (the
"1940 Act"), in the amounts and with such deductibles as are required by or
permitted under the 1940 Act, as it may be amended from time to time.
V. REGISTRATION AND COMPLIANCE.
A. Agent represents that it is registered as a transfer agent
with the Securities and Exchange Commission ("SEC") pursuant to Section 17A of
the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations promulgated thereunder, and Agent agrees to maintain said
registration current and comply with all of the requirements of the Exchange
Act, rules and regulations during the term of this Agreement.
B. The Company represents that it is a management investment
company registered with the SEC in accordance with the 1940 Act and the rules
and regulations promulgated thereunder. The Company is authorized to offer and
sell Fund shares pursuant to the 1940 Act, the Securities Act of 1933, as
amended ("1933 Act"), and the rules and regulations promulgated thereunder.
The Company agrees promptly to advise Agent of any change in or limitation upon
its authority to carry on business as an investment company pursuant to the
1940 Act, the Exchange Act and the 1933 Act and the statutes, rules and
regulations of each and every jurisdiction to which it is subject.
VI. DOCUMENTATION. The Company and Agent shall each supply to the
other upon request such documentation as is required by them to carry out their
respective obligations under this Agreement including, but not limited to,
declaration of trust, bylaws, codes of ethics, registration statements,
permits, financial reports, third party audits, certificates of authority,
computer tapes and related items.
VII. PROPRIETARY INFORMATION. It is agreed that all records and
documents, excepting computer data processing programs and any related
documentation used or prepared by, or on behalf of Agent for the performance of
its services hereunder, are the property of the Company and shall be open to
audit or inspection by the Company or its agents during the normal business
hours of Agent, shall be maintained in a manner designed to preserve the
confidentiality thereof and to comply with applicable federal and state laws
and regulations, and shall, in whole or any specified part, be surrendered to
the Company or its duly authorized agents upon receipt by Agent of reasonable
notice of and request therefor.
2
<PAGE> 3
VIII. INDEMNITY. The Company, on behalf of the Fund, shall indemnify
and hold Agent harmless against any losses, claims, damages, liabilities or
expenses (including reasonable attorney's fees and expenses) resulting from any
claim, demand, action or suit brought by any person other than the Company
(including a shareholder naming the Company or the Fund as a party) and not
resulting from Agent's bad faith, willful misfeasance, reckless disregard of
its obligations and duties, gross negligence or breach of this Agreement, and
arising out of, or in connection with:
A. Agent's performance hereunder;
B. Any error or omission in any record (including but not
limited to magnetic tapes, computer printouts, hard copies and microfilm or
microfiche copies) delivered, or caused to be delivered, by the Company to
Agent in connection with this Agreement;
C. Bad faith, willful misfeasance, reckless disregard of its
obligations and duties or negligence of the Company or Agent's acting upon any
instructions reasonably believed by it to have been properly executed or
communicated by any person duly authorized by the Company;
D. Agent's acting in reliance upon advice given by counsel
for Agent or upon advice reasonably believed by it to have been given by
counsel for the Company; or
E. Agent's acting in reliance upon any instrument reasonably
believed by it to have been genuine and signed, countersigned or executed by
the proper person(s) in accordance with the currently effective certificate(s)
of authority delivered to Agent by the Company.
In the event that Agent requests the Company to indemnify
or hold it harmless hereunder, agent shall use its best efforts to inform the
Company of the relevant facts concerning the matter in question. Agent shall
use reasonable care to identify and promptly notify the Company concerning any
matter which presents, or appears likely to present, a claim for
indemnification against the Company or the Fund.
The Company shall have the election of defending Agent
against any claim which may be the subject of indemnification hereunder. In the
event the Company so elects, it will so notify Agent and thereupon the Company
shall take over defense of the claim, and (if so requested by the Company)
Agent shall incur no further legal limit or other expenses related thereto for
which it would be entitled to indemnify hereunder; provided, however, that
nothing herein contained shall prevent Agent from retaining, at its own
expense, counsel to defend any claim. Except with the Company's prior consent,
Agent shall in no event confess any claim or make any compromise in any matter
in which the Company will be asked to indemnify or hold harmless hereunder.
3
<PAGE> 4
IX. LIABILITY
A. Damages. Agent shall not be liable to the Company, or any
third party, for punitive, exemplary, indirect, special or consequential
damages (even if Agent has been advised of the possibility of such damages)
arising from its obligations and the services provided under this Agreement,
including but not limited to loss of profits, loss of use of the shareholder
accounting system, cost of capital and expenses of substitute facilities,
programs or services.
B. Force Majeure. Anything in this Agreement to the contrary
notwithstanding, Agent shall not be liable for delays or errors occurring by
reason of circumstances beyond its control, including but not limited to acts
or civil or military authority, national emergencies, work stoppage, fire,
flood, catastrophe, earthquake, acts of God, insurrection, war, riot, data
processing and communications downtime (where such downtime occurs for reasons
other than Agent's gross negligence or willful misconduct) or interruption of
power supply.
X. AMENDMENT. This Agreement and the Schedule attached hereto and
made a part hereof may be amended at any time, with or without shareholder
approval (except as otherwise required by law), in writing signed by each of
the parties hereto. Any change in the Company's registration statements or
other documents of compliance or in the forms relating to any plan, program or
service offered by its current prospectuses which would require a change in
Agent's obligations hereunder shall be subject to Agent's approval, which
approval shall not be unreasonably withheld.
XI. TERMINATION. This Agreement may be terminated by either party
without cause upon one hundred twenty (120) days prior written notice to the
other, and at any time for cause in the event that such cause remains
unremedied for more than thirty (30) days after receipt by the other party of
written specification of such cause.
In the event the Company designates a successor to any of Agent's
obligations hereunder, Agent shall, at the expense and pursuant to the
direction of the Company, transfer promptly to such successor all relevant
books, records and other data of the Company in the possession or under the
control of Agent.
XII. SEVERABILITY. If any clause or provision of this Agreement is
determined to be illegal, invalid or unenforceable under present or future laws
effective during the term hereof, then such clause or provision shall be
considered severed herefrom and the remainder of this Agreement shall continue
in full force and effect.
XIII. APPLICABLE LAW. This Agreement shall be subject to and construed
in accordance with the laws of the State of California.
XIV. ENTIRE AGREEMENT. Except as otherwise provided herein, this
Agreement constitutes the entire and complete agreement of the parties hereto
relating to the subject matter hereof and supersedes and merges all prior
contracts and discussions between the parties.
4
<PAGE> 5
XV. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the
same Agreement and each of which shall be deemed an original.
XVI. MISCELLANEOUS. This Agreement has been executed on behalf of the
Company by the undersigned officer of the Company in his capacity as an officer
of the Company. The obligations of this Agreement shall only be binding upon
the assets and property of the Fund, as provided for in the Company's Articles
of Incorporation, and shall not be binding on any director, officer or
shareholder of the Company or the Fund individually.
<TABLE>
<S> <C>
OVERLAND EXPRESS FUNDS, INC. WELLS FARGO BANK, N.A.
By: By:
---------------------- ----------------------
Name: Name:
-------------------- --------------------
Title: Title:
------------------- -------------------
By:
----------------------
Name:
--------------------
Title:
</TABLE> -------------------
5
<PAGE> 6
SCHEDULE A
SCHEDULE OF SERVICES
1. Share Transfer and Dividend Disbursing Services
A. Maintaining shareholder accounts, including processing new
accounts.
B. Posting address changes and other file maintenance for
shareholder accounts.
C. Posting all transactions to the shareholder file, including:
- Direct purchase
- Wire order purchases
- Direct redemptions
- Telephone redemption
- Wire order redemption
- Direct exchanges
- Dividend payments
- Dividend reinvestments
- Telephone Exchanges
- Transfers
D. Insuring accuracy and deduction of fees.
E. Preparing daily reconciliations of shareholder processing to
money movement instructions.
F. Issuing all checks and stopping and replacing checks.
G. Performing certain of the Trust's other mailings, including:
- Dividend and capital gain distributions
- K-1/year-end shareholder reporting
- Furnish certified list of shareholders (hard copy of
microfilm)
H. Maintaining and retrieving all required past history for
shareholders and provide research capabilities as follows:
- Daily monitoring of all processing activity to verify
back-up documentation
- Providing exception reports
- Microfilming
- Storing, retrieving and archiving records in accordance
with Rules 31a-1, 31a-2, and 31a-3 under the 1940 Act.
I. Reporting and remitting as necessary for state escheat
requirements.
6
<PAGE> 1
EX-99.B 10
[MORRISON & FOERSTER LETTERHEAD]
November 29, 1995
(202) 887-1500
Overland Express Funds, Inc.
111 Center Street
Little Rock, Arkansas 72201
Re: Shares of Common Stock of Overland Express Funds, Inc.
Ladies/Gentlemen:
We refer to Post-Effective Amendment No. 30 and Amendment No. 32 to
the Registration Statement on Form N-1A (SEC File Nos. 33-16296 and 811-8275)
(the "Registration Statement") of Overland Express Funds, Inc. (the "Company")
relating to the registration of an indefinite number of shares of common stock
of the Company (collectively, the "Shares").
We have been requested by the Company to furnish this opinion as
Exhibit 10 to the Registration Statement.
We have examined such records, documents, instruments, certificates
of public officials and of the Company, made such inquires of the Company, and
examined such questions of law as we have deemed necessary for the purpose of
rendering the opinion set forth herein. We have assumed the genuineness of all
signatures and the authenticity of all items submitted to us as originals and
the conformity with originals of all items submitted to us as copies.
Based upon and subject to the foregoing, we are of the opinion that:
The issuance and sale of the Shares by the Company have been duly and
validly authorized by all appropriate action, and upon delivery thereof and
payment therefor in accordance with the Registration Statement, the Shares will
be validly issued, fully paid and nonassessable by the Company.
We consent to the inclusion of this opinion as an exhibit to the
Registration Statement.
In addition, we hereby consent to the use of our name and to the
reference to our firm under the caption "Legal Counsel" in the Prospectus and
the description of advice rendered by our firm under the heading "Management of
the Fund and the Master Portfolio" in the Prospectus and "Management" in the
Statement of Additional Information, both of which are included as part of the
Registration Statement.
Very truly yours,
/s/ Morrison & Foerster
MORRISON & FOERSTER
