STRONG INCOME FUNDS INC, 485BPOS, 1995-12-14

STRONG INCOME FUNDS INC
485BPOS, 1995-12-14

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<PAGE> 1

As filed with the Securities and Exchange Commission on or about
December 14, 1995

Securities Act Registration No. 33-37435
Investment Company Act Registration No. 811-6195

================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington D.C.

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
------
Post-Effective Amendment No. 8 [X]
------

and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]

Amendment No. 9 [X]
-----

(Check appropriate box or boxes)

STRONG INCOME FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)

100 HERITAGE RESERVE
MENOMONEE FALLS, WISCONSIN 53051
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (414) 359-3400

THOMAS P. LEMKE
STRONG CAPITAL MANAGEMENT, INC.
100 HERITAGE RESERVE
MENOMONEE FALLS, WISCONSIN 53051
(Name and Address of Agent for Service)

Copies to
SCOTT A. MOEHRKE
GODFREY & KAHN, S.C.
780 NORTH WATER STREET
MILWAUKEE, WISCONSIN 53202

Registrant has registered an indefinite amount of securities pursuant to
Rule 24f-2 under the Securities Act of 1933; the Registrant's Rule 24f-2 Notice
for the fiscal year ended December 31, 1994 was filed on or about January 27,
1995.

It is proposed that this filing will become effective (check appropriate
box).

[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on December 28, 1995 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

[X] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

================================================================================
<PAGE> 2

STRONG INCOME FUNDS, INC.

CROSS REFERENCE SHEET

FOR STRONG U.S. TREASURY MONEY FUND

(Pursuant to Rule 481 showing the location in the Prospectus and the
Statement of Additional Information of the responses to the Items of Parts A
and B of Form N-1A.)

<TABLE>
<CAPTION>
CAPTION OR SUBHEADING IN PROSPECTUS OR
ITEM NO. ON FORM N-1A STATEMENT OF ADDITIONAL INFORMATION
--------------------- -----------------------------------
<S> <C>

PART A - INFORMATION REQUIRED IN PROSPECTUS

1. Cover Page Cover Page

2. Synopsis Expenses; Highlights

3. Condensed Financial Information Financial Highlights

4. General Description of Registrant Strong Income Funds; Investment Objectives and
Policies; Fundamentals of Fixed Income Investing;
Implementation of Policies and Risks; About the
Funds - Organization

5. Management of the Fund About the Funds - Management; Financial Highlights

5A. Management's Discussion of Fund Performance *

6. Capital Stock and Other Securities About the Funds - Organization, - Distributions and
Taxes; Shareholder Manual - Shareholder Services

7. Purchase of Securities Being Offered Shareholder Manual - How to Buy Shares,
- Determining Your Share Price, - Shareholder
Services

8. Redemption or Repurchase Shareholder Manual - How to Sell Shares,
- Determining Your Share Price, - Shareholder
Services

9. Pending Legal Proceedings Inapplicable

PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL
INFORMATION

10. Cover Page Cover page

11. Table of Contents Table of Contents

12. General Information and History **

13. Investment Objectives and Policies Investment Restrictions; Investment Policies and
Techniques

14. Management of the Fund Directors and Officers of the Funds

15. Control Persons and Principal Holders of Principal Shareholders; Directors and Officers of
Securities the Funds; Investment Advisor and Distributor

</TABLE>
<PAGE> 3

<TABLE>
<CAPTION>
CAPTION OR SUBHEADING IN PROSPECTUS OR
ITEM NO. ON FORM N-1A STATEMENT OF ADDITIONAL INFORMATION
--------------------- -----------------------------------
<S> <C>

16. Investment Advisory and Other Services Investment Advisor and Distributor; About the Funds
- Management (in Prospectus); Custodian; Transfer
Agent and Dividend-Disbursing Agent; Independent
Accountants; Legal Counsel

17. Brokerage Allocation and Other Practices Portfolio Transactions and Brokerage

18. Capital Stock and Other Securities Included in Prospectus under the heading About the
Funds - Organization and in the Statement of
Additional Information under the heading
Shareholder Meetings

19. Purchase, Redemption and Pricing of Securities Included in Prospectus under the headings:
Being Offered Shareholder Manual - How to Buy Shares,
- Determining Your Share Price, - How to Sell
Shares, - Shareholder Services; and in the
Statement of Additional Information under the
headings: Additional Shareholder Information;
Investment Advisor and Distributor; and
Determination of Net Asset Value

20. Tax Status Included in Prospectus under the heading About the
Funds - Distributions and Taxes; and in the
Statement of Additional Information under the
heading Taxes

21. Underwriters Investment Advisor and Distributor

22. Calculation of Performance Data Performance Information

23. Financial Statements Financial Statements
</TABLE>

* Complete answer to Item is contained in Fund's Annual Report.
** Complete answer to Item is contained in Fund's Prospectus.
<PAGE> 4

STRONG INCOME FUNDS, INC.

CROSS REFERENCE SHEET

FOR STRONG HIGH-YIELD BOND FUND

(Pursuant to Rule 481 showing the location in the Prospectus and the
Statement of Additional Information of the responses to the Items of Parts A
and B of Form N-1A.)

<TABLE>
<CAPTION>
CAPTION OR SUBHEADING IN PROSPECTUS OR
ITEM NO. ON FORM N-1A STATEMENT OF ADDITIONAL INFORMATION
--------------------- -----------------------------------
<S> <C>

PART A - INFORMATION REQUIRED IN PROSPECTUS

1. Cover Page Cover Page

2. Synopsis Expenses

3. Condensed Financial Information Inapplicable

5. Management of the Fund About the Funds - Management

5A. Management's Discussion of Fund Performance Inapplicable

6. Capital Stock and Other Securities About the Funds - Organization, - Distributions and
Taxes; Shareholder Manual - Shareholder Services

7. Purchase of Securities Being Offered Shareholder Manual - How to Buy Shares,
- Determining Your Share Price, - Shareholder
Services

8. Redemption or Repurchase Shareholder Manual - How to Sell Shares,
- Determining Your Share Price, - Shareholder
Services

9. Pending Legal Proceedings Inapplicable

PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL
INFORMATION

10. Cover Page Cover page

11. Table of Contents Table of Contents

12. General Information and History *

13. Investment Objectives and Policies Investment Restrictions; Investment Policies and
Techniques

14. Management of the Fund Directors and Officers of the Funds

15. Control Persons and Principal Holders of Principal Shareholders; Directors and Officers of
Securities the Funds; Investment Advisor and Distributor

</TABLE>
<PAGE> 5

<TABLE>
<CAPTION>
CAPTION OR SUBHEADING IN PROSPECTUS OR
ITEM NO. ON FORM N-1A STATEMENT OF ADDITIONAL INFORMATION
--------------------- -----------------------------------
<S> <C>

17. Brokerage Allocation and Other Practices Portfolio Transactions and Brokerage

18. Capital Stock and Other Securities Included in Prospectus under the heading About the
Funds - Organization and in the Statement of
Additional Information under the heading
Shareholder Meetings

20. Tax Status Included in Prospectus under the heading About the
Funds - Distributions and Taxes; and in the
Statement of Additional Information under the
heading Taxes

21. Underwriters Investment Advisor and Distributor

22. Calculation of Performance Data Performance Information

23. Financial Statements Inapplicable
</TABLE>

* Complete answer to Item is contained in Fund's Prospectus.
<PAGE> 6

PART A

PROSPECTUS

STRONG U.S. TREASURY MONEY FUND

STRONG INCOME FUNDS

<TABLE>
<S> <C>
STRONG MONEY MARKET FUND STRONG FUNDS
STRONG SHORT-TERM BOND FUND P.O. Box 2936
STRONG GOVERNMENT SECURITIES FUND Milwaukee, Wisconsin 53201
STRONG CORPORATE BOND FUND Telephone: (414) 359-1400
STRONG HIGH-YIELD BOND FUND Toll-Free: (800) 368-3863
Device for the
Hearing-Impaired:
(800) 999-2780
</TABLE>

The Strong Family of Funds ("Strong Funds") is a family of more than
twenty-five diversified and non-diversified mutual funds. All of the Strong
Funds are no-load funds, meaning that you may purchase, redeem, or exchange
shares without paying a sales charge. Strong Funds include growth funds,
conservative equity funds, income funds, municipal income funds, international
funds, and cash management funds. The five Strong Income Funds are described in
this Prospectus.

This Prospectus contains information you should consider before you invest.
Please read it carefully and keep it for future reference. A Statement of
Additional Information for the Funds, dated December 28, 1995, contains further
information, is incorporated by reference into this Prospectus, and has been
filed with the Securities and Exchange Commission ("SEC"). This Statement, which
may be revised from time to time, is available without charge upon request to
the above-noted address or telephone number.

- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- ----------------------------------------------------------------------------

AN INVESTMENT IN THE STRONG MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. THE STRONG HIGH-YIELD BOND
FUND MAY INVEST UP TO 100% OF ITS NET ASSETS IN LOWER-RATED BONDS, COMMONLY
KNOWN AS "JUNK BONDS."

Dated December 28, 1995

---------------------

PROSPECTUS PAGE I-1
<PAGE> 8

BONDS OF THIS TYPE ARE SUBJECT TO GREATER RISKS WITH REGARD TO PAYMENT OF
INTEREST AND RETURN OF PRINCIPAL, INCLUDING DEFAULT RISKS, THAN ARE HIGHER-RATED
BONDS. INVESTORS SHOULD CAREFULLY CONSIDER THE RISKS ASSOCIATED WITH AN
INVESTMENT IN THE FUND. (SEE THE PROSPECTUS SECTION ENTITLED "FUNDAMENTALS OF
FIXED INCOME INVESTING - CREDIT QUALITY - HIGH-YIELD (HIGH-RISK) SECURITIES.")

STRONG INCOME FUNDS

The Strong Money Market Fund, Inc., Strong Short-Term Bond Fund, Inc., Strong
Government Securities Fund, Inc., and Strong Corporate Bond Fund, Inc. are
separately incorporated, diversified, open-end management investment companies.
The Strong High-Yield Bond Fund is a diversified series of Strong Income Funds,
Inc., which is an open-end management investment company.

STRONG MONEY MARKET FUND (the "Money Market Fund") seeks current income, a
stable share price, and daily liquidity. The Fund invests in corporate, bank,
and government instruments that present minimal credit risk.

STRONG SHORT-TERM BOND FUND (the "Short-Term Bond Fund") seeks total return
by investing for a high level of current income with a low degree of share-price
fluctuation. The Fund invests primarily in short- and intermediate-term,
investment-grade debt obligations, and its average portfolio maturity will
normally be between one and three years.

STRONG GOVERNMENT SECURITIES FUND (the "Government Securities Fund") seeks
total return by investing for a high level of current income with a moderate
degree of share-price fluctuation. The Fund normally invests at least 80% of its
total assets in U.S. government securities.

STRONG CORPORATE BOND FUND (the "Corporate Bond Fund") seeks total return by
investing for a high level of current income with a moderate degree of
share-price fluctuation. The Fund invests primarily in investment-grade
corporate debt obligations.

STRONG HIGH-YIELD BOND FUND (the "High-Yield Fund") seeks total return by
investing for a high level of current income and capital growth. The Fund
invests primarily in medium- and lower-quality corporate debt obligations.

---------------------

PROSPECTUS PAGE I-2
<PAGE> 9

TABLE OF CONTENTS

<TABLE>
<S><C>
EXPENSES..................................... I-4
FINANCIAL HIGHLIGHTS......................... I-6
HIGHLIGHTS................................... I-11
INVESTMENT OBJECTIVES AND POLICIES........... I-12
Comparing the Funds................. I-13
Strong Money Market Fund............ I-13
Strong Short-Term Bond Fund......... I-14
Strong Government Securities Fund... I-15
Strong Corporate Bond Fund.......... I-15
Strong High-Yield Bond Fund......... I-16
FUNDAMENTALS OF FIXED INCOME INVESTING....... I-17
IMPLEMENTATION OF POLICIES AND RISKS......... I-20
ABOUT THE FUNDS.............................. I-28
SHAREHOLDER MANUAL........................... II-1
APPENDIX A................................... A-1
APPENDIX B................................... B-1
</TABLE>

No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and the Statement
of Additional Information, and if given or made, such information or
representations may not be relied upon as having been authorized by the Strong
Income Funds. This Prospectus does not constitute an offer to sell securities in
any state or jurisdiction in which such offering may not lawfully be made.

---------------------

PROSPECTUS PAGE I-3
<PAGE> 10

EXPENSES

The following information is provided in order to help you understand the
various costs and expenses that you, as an investor in the Funds, will bear
directly or indirectly.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<S> <C>
Sales Load Imposed on Purchases............. NONE
Sales Load Imposed on Reinvested
Dividends................................. NONE
Deferred Sales Load......................... NONE
Redemption Fees............................. NONE
Exchange Fees............................... NONE
</TABLE>

There are certain charges associated with retirement accounts and with
certain other special shareholder services offered by the Funds. Additionally,
purchases and redemptions may also be made through broker-dealers or others who
may charge a commission or other transaction fee for their services. (See
"Shareholder Manual - How to Buy Shares" and "- How to Sell Shares.")

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
- ----------------------------------------------------------------------------

<TABLE>
<CAPTION>
Management Other 12b-1 Total Operating
Fund Fees Expenses Fees Expenses
<S> <C> <C> <C> <C>
Money Market .50 % .42 % NONE .92%
Short-Term Bond .625 .285 NONE .91
Government Securities .60 .34 NONE .94
Corporate Bond .625 .505 NONE 1.13
High-Yield .625 .475 NONE 1.10
</TABLE>

- ----------------------------------------------------------------------------

---------------------

PROSPECTUS PAGE I-4
<PAGE> 11

From time to time, the Funds' investment advisor, Strong Capital Management,
Inc. (the "Advisor"), may voluntarily waive its management fee and/or absorb
certain expenses for a Fund. The expenses specified in the table above for the
Short-Term Bond and Corporate Bond Funds are based on actual expenses incurred
during the year ended December 31, 1994. During 1994, the Advisor waived a
portion of its management fee for the Government Securities Fund and waived a
portion of its management fee and absorbed certain expenses for the Money Market
Fund. (See "Financial Highlights.") Therefore, the expenses specified in the
table above for these Funds have been restated for the fiscal year ended
December 31, 1994 to include such management fees and/or expenses. The actual
total operating expenses incurred for the fiscal year ended December 31, 1994
for the Money Market and Government Securities Funds after waivers and
absorptions were 0.64% and 0.88%, respectively. Since the High-Yield Fund is new
and did not begin operations until December 28, 1995, the Other Expenses have
been estimated. For additional information concerning fees and expenses, see
"About the Funds - Management."

EXAMPLE. You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time period:
- ----------------------------------------------------------------------------

<TABLE>
<CAPTION>
Period (in years)
-----------------------------------
Fund 1 3 5 10
<S> <C> <C> <C> <C>
Money Market $ 9 $29 $51 $113
Short-Term Bond 9 29 50 112
Government Securities 10 30 52 115
Corporate Bond 12 36 62 137
High-Yield 11 35 -- --
</TABLE>

- ----------------------------------------------------------------------------

The Example is based on each Fund's "Total Operating Expenses" before any
waivers and absorptions, as described above. PLEASE REMEMBER THAT THE EXAMPLE
SHOULD NOT BE CONSIDERED AS REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND THAT
ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN THOSE SHOWN. The assumption in the
Example of a 5% annual return is required by regulations of the SEC applicable
to all mutual funds. The assumed 5% annual return is not a prediction of, and
does not represent, the projected or actual performance of a Fund's shares.

---------------------

PROSPECTUS PAGE I-5
<PAGE> 12

FINANCIAL HIGHLIGHTS

The following annual Financial Highlights for each of the Funds that has
completed a fiscal year has been audited by Coopers & Lybrand L.L.P.,
independent certified public accountants. Their report for the fiscal year
ended December 31, 1994 is included in the Annual Report of the Income
Funds that is contained in the Funds' Statement of Additional Information.
The Financial Highlights for the Funds for the semi-annual period ended
June 30, 1995 are unaudited. The Financial Highlights for the High-Yield
Fund are not provided because it did not commence operations until December
28, 1995. The Financial Highlights for the Funds should be read in
conjunction with the Financial Statements and related notes included in the
Funds' Annual and Semi-Annual Reports. Additional information about each
Fund's performance is contained in the Funds' Annual and Semi-Annual
Reports, which may be obtained without charge by calling or writing Strong
Funds. The following presents information relating to a share of capital
stock of each of the Funds, outstanding for the entire period.

---------------------

PROSPECTUS PAGE I-6
<PAGE> 13

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
STRONG MONEY MARKET FUND
-------------------------------------------------------------------------------------------------------------------------
1995*** 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985**
---------- ---------- ---------- -------- -------- -------- -------- -------- -------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET
ASSET
VALUE,
BEGINNING
OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
Net
Invest-
ment
Income 0.03 0.04 0.03 0.03 0.06 0.08 0.09 0.07 0.06 0.06 0.02
Dividends
From Net
Invest-
ment
Income (0.03) (0.04) (0.03) (0.03) (0.06) (0.08) (0.09) (0.07) (0.06) (0.06) (0.02)
------ -------- ---------- -------- -------- -------- -------- -------- -------- ------- ------
NET
ASSET
VALUE,
END
OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
====== ======== ========= ======== ======== ======== ======== ======== ======== ======= ======
Total
Return +3.1% +4.0% +2.9% +3.7% +6.1% +8.1% +9.2% +7.5% +6.4% +6.5% +1.5%
Net
Assets,
End of
Period
(In
Thou-
sands) $2,065,059 $540,983 $329,988 $390,003 $533,869 $768,870 $829,332 $464,459 $194,963 $26,363 $ 944
Ratio
of
Expenses
to
Average
Net
Assets 0.0%* 0.6% 0.7% 0.8% 0.7% 0.7% 0.7% 1.1% 0.8% 0.8% 0.4%*
Ratio
of
Expenses
to
Average
Net
Assets
Without
Waivers
and
Absorptions 0.6%* 0.9% 1.0% 1.1% 1.0% 0.9% 1.0% 1.1% 1.1% 1.3% 0.9%*
Ratio
of
Net
Investment
Income
to
Average
Net
Assets 6.3%* 4.0% 2.9% 3.7% 6.0% 7.8% 8.8% 7.4% 6.6% 5.8% 7.8%*
</TABLE>

*Calculated on an annualized basis.
**Inception date is October 22, 1985. Total return is not annualized.

***For the six months ended June 30, 1995 (Unaudited). Total return is not
annualized.

---------------------

PROSPECTUS PAGE I-7
<PAGE> 14

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
STRONG SHORT-TERM BOND FUND
-----------------------------------------------------------------------------------------------------
1995*** 1994 1993 1992 1991 1990 1989 1988 1987**
---------- ---------- ---------- -------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 9.42 $ 10.23 $ 9.99 $ 10.12 $ 9.53 $ 9.86 $ 10.09 $ 10.03 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.34 0.64 0.66 0.76 0.75 0.81 0.99 0.86 0.27
Net Realized and
Unrealized Gains
(Losses)
on Investments 0.29 (0.80) 0.25 (0.11) 0.59 (0.33) (0.18) 0.13 0.04
---------- ---------- ---------- -------- -------- ------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 0.63 (0.16) 0.91 0.65 1.34 0.48 0.81 0.99 0.31
LESS DISTRIBUTIONS
From Net Investment
Income (0.27) (0.65) (0.66) (0.76) (0.75) (0.81) (0.99) (0.86) (0.27)
In Excess of Net
Investment Income (0.07) -- (0.01) -- -- -- -- -- --
From Net Realized Gains -- -- -- (0.02)(1) -- -- (0.05) (0.07) (0.01)
---------- ---------- ---------- -------- -------- ------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.34) (0.65) (0.67) (0.78) (0.75) (0.81) (1.04) (0.93) (0.28)
---------- ---------- ---------- -------- -------- ------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD $ 9.71 $ 9.42 $ 10.23 $ 9.99 $ 10.12 $ 9.53 $ 9.86 $ 10.09 $ 10.03
========= ========= ========= ======== ======== ======= ======== ======== =======
Total Return +6.8% -1.6% +9.3% +6.7% +14.6% +5.3% +8.2% +10.1% +3.2%
Net Assets, End of Period
(In Thousands) $1,053,353 $1,041,081 $1,531,627 $756,867 $164,954 $80,070 $130,001 $102,175 $ 17,128
Ratio of Expenses to
Average Net Assets 1.0%* 0.9% 0.8% 0.6% 1.0% 1.3% 1.1% 1.0% 0.1%*
Ratio of Expenses to
Average Net Assets
Without Waivers and
Absorptions 1.0%* 0.9% 0.9% 0.9% 1.2% 1.3% 1.2% 1.2% 0.8%*
Ratio of Net Investment
Income to Average
Net Assets 7.2%* 6.5% 6.3% 7.3% 7.8% 8.6% 9.7% 8.5% 8.8%*
Portfolio Turnover Rate 239.2% 249.7% 444.9% 353.3% 398.1% 313.8% 177.0% 461.3% 135.5%*
</TABLE>

*Calculated on an annualized basis.

**Inception date is August 31, 1987. Total return is not annualized.

***For the six months ended June 30, 1995 (Unaudited). Total return and
portfolio turnover rate are not annualized.

(1)Ordinary income distribution is for tax purposes.

----------------------

PROSPECTUS PAGE I-8
<PAGE> 15

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
STRONG GOVERNMENT SECURITIES FUND
---------------------------------------------------------------------------------------------------------
1995*** 1994 1993 1992 1991 1990 1989 1988 1987 1986**
-------- -------- -------- -------- -------- -------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 9.63 $ 10.61 $ 10.39 $ 10.77 $ 10.10 $ 10.08 $ 9.98 $ 9.75 $ 10.09 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.33 0.62 0.66 0.80 0.77 0.72 0.78 0.68 0.65 0.13
Net Realized and
Unrealized Gains
(Losses)
on Investments 0.84 (0.98) 0.63 0.11 0.84 0.12 0.17 0.32 (0.34) 0.09
-------- -------- -------- -------- -------- -------- -------- ------- ------- --------
TOTAL FROM INVESTMENT
OPERATIONS 1.17 (0.36) 1.29 0.91 1.61 0.84 0.95 1.00 0.31 0.22
LESS DISTRIBUTIONS
From Net Investment
Income (0.33) (0.62) (0.66) (0.80) (0.77) (0.72) (0.78) (0.68) (0.65) (0.13)
From Net Realized
Gains -- -- (0.32) (0.49) (0.17) (0.10) (0.07) (0.09) -- --
In Excess of Net
Realized Gains -- -- (0.09) -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- ------- ------- --------
TOTAL DISTRIBUTIONS (0.33) (0.62) (1.07) (1.29) (0.94) (0.82) (0.85) (0.77) (0.65) (0.13)
-------- -------- -------- -------- -------- -------- -------- ------- ------- --------
NET ASSET VALUE, END OF
PERIOD $ 10.47 $ 9.63 $ 10.61 $ 10.39 $ 10.77 $ 10.10 $ 10.08 $ 9.98 $ 9.75 $ 10.09
======== ======== ======== ======= ======= ======= ======= ======= ======= =======
Total Return +12.3% -3.4% +12.7% +9.2% +16.7% +8.7% +9.9% +10.5% +3.4% +2.2%
Net Assets, End of
Period (In Thousands) $352,994 $276,832 $221,961 $ 82,169 $ 51,934 $ 41,099 $ 35,119 $25,408 $11,380 $ 880
Ratio of Expenses to
Average Net Assets 0.9%* 0.9% 0.8% 0.7% 0.8% 1.3% 1.3% 0.4% 1.0% 0.6%*
Ratio of Expenses to
Average Net Assets
Without Waivers and
Absorptions 0.9%* 0.9% 1.0% 1.2% 1.4% 1.5% 1.6% 1.6% 1.6% 1.2%*
Ratio of Net Investment
Income to Average Net
Assets 6.5%* 6.2% 6.0% 7.7% 7.5% 7.2% 7.6% 6.9% 6.6% 7.2%*
Portfolio Turnover Rate 306.0% 479.0% 520.9% 628.8% 292.9% 254.2% 421.6% 1,727.8% 715.0% 0.0%*
</TABLE>

* Calculated on an annualized basis.

** Inception date is October 29, 1986. Total return is not annualized.

*** For the six months ended June 30, 1995 (Unaudited). Total return and
portfolio turnover rate are not annualized.

----------------------

PROSPECTUS PAGE I-9
<PAGE> 16

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
STRONG CORPORATE BOND FUND
---------------------------------------------------------------------------------------------------------
1995*** 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985**
-------- -------- -------- -------- ------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE,
BEGINNING
OF PERIOD $ 9.36 $ 10.24 $ 9.40 $ 9.37 $ 8.87 $ 10.57 $ 11.88 $ 11.64 $ 12.65 $ 10.30 $ 10.00
INCOME FROM
INVESTMENT
OPERATIONS
Net
Investment
Income 0.38 0.73 0.70 0.82 0.76 1.06 1.40 1.17 1.23 0.98 0.03
Net
Realized
and
Unrealized
Gains
(Losses)
on
Investments 0.99 (0.87) 0.84 0.03 0.50 (1.70) (1.31) 0.24 (0.67) 2.08 0.27
------ -------- -------- -------- ------- ------- -------- -------- -------- -------- --------
TOTAL FROM
INVESTMENT
OPERATIONS 1.37 (0.14) 1.54 0.85 1.26 (0.64) 0.09 1.41 0.56 3.06 0.30
LESS
DISTRIBUTIONS
From Net
Investment
Income (0.38) (0.73) (0.70) (0.82) (0.76) (1.06) (1.40) (1.17) (1.53) (0.71) --
In Excess
of Net
Investment
Income -- (0.01) -- -- -- -- -- -- -- -- --
From Net
Realized
Gains -- -- -- -- -- -- -- -- (0.04) -- --
------ -------- -------- -------- ------- ------- -------- -------- -------- -------- --------
TOTAL
DISTRIBUTIONS (0.38) (0.74) (0.70) (0.82) (0.76) (1.06) (1.40) (1.17) (1.57) (0.71) --
------ -------- -------- -------- ------- ------- -------- -------- -------- -------- --------
NET ASSET
VALUE, END
OF PERIOD $ 10.35 $ 9.36 $ 10.24 $ 9.40 $ 9.37 $ 8.87 $ 10.57 $ 11.88 $ 11.64 $ 12.65 $ 10.30
======= ======== ======== ======== ======= ======= ======== ======== ======== ======== =======
Total Return +14.9% -1.3% +16.8% +9.4% +14.8% -6.2% +0.4% +12.5% +4.5% +30.0% +3.0%
Net Assets,
End of
Period (In
Thousands) $175,922 $123,305 $123,400 $102,783 $92,364 $92,201 $195,350 $202,623 $137,898 $118,727 $ 2,452
Ratio of
Expenses
to Average
Net Assets 1.1%* 1.1% 1.1% 1.3% 1.5% 1.4% 1.2% 1.2% 1.1% 1.0% 1.1%*
Ratio of Net
Investment
Income
to Average
Net Assets 7.8%* 7.6% 7.0% 8.7% 8.4% 11.2% 12.1% 9.8% 10.6% 11.3% 23.5%*
Portfolio
Turnover
Rate 415.7% 603.0% 665.8% 557.0% 392.4% 293.5% 207.2% 400.2% 245.4% 204.9% 7.3%*
</TABLE>

* Calculated on an annualized basis.
** Inception date is December 12, 1985. Total return is not annualized.

*** For the six months ended June 30, 1995 (Unaudited). Total return and
portfolio turnover rate are not annualized.

----------------------

PROSPECTUS PAGE I-10
<PAGE> 17

HIGHLIGHTS

INVESTMENT OBJECTIVES AND POLICIES

Each Fund has distinct investment objectives and policies. Each Fund seeks to
provide income consistent with its maturity, quality, and other standards as set
forth under "Investment Objectives and Policies."

IMPLEMENTATION OF POLICIES AND RISKS

With the exception of the Money Market Fund, the Funds may engage in
derivative transactions, including options, futures, and options on futures
transactions within specified limits. Each Fund may invest in when-issued
securities, illiquid securities, and repurchase agreements. Each Fund, except
for the Government Securities Fund, may also invest in foreign securities. Each
Fund, except the Money Market Fund, may engage in reverse repurchase agreements
and mortgage dollar roll transactions. The Short-Term Bond and Corporate Bond
Funds may invest a portion of their assets, and the High-Yield Fund may invest
without limitation in junk bonds. These investment practices involve risks that
are different in some respects from those associated with similar funds that do
not use them. (See "Implementation of Policies and Risks" and "Fundamentals of
Fixed Income Investing - Credit Quality.")

MANAGEMENT

The Advisor, Strong Capital Management, Inc., serves as investment advisor to
the Funds. The Advisor provides investment management services for mutual funds
and other investment portfolios representing assets of over $15 billion. (See
"About the Funds - Management.")

PURCHASE AND REDEMPTION OF SHARES

You may purchase or redeem shares of a Fund at net asset value. There are no
redemption or 12b-1 charges. The Money Market Fund seeks to maintain a stable
net asset value of $1.00 per share. The net asset values of the Short-Term Bond,
Government Securities, Corporate Bond, and High-Yield Funds change daily with
the value of each Fund's portfolio. You can locate the net asset value for a
Fund in newspaper listings of mutual fund prices under the "Strong Funds"
heading. (See "Shareholder Manual - How to Buy Shares" and "- How to Sell
Shares.")

----------------------

PROSPECTUS PAGE I-11
<PAGE> 18

SHAREHOLDER SERVICES

Strong shareholder benefits include: telephone purchase, exchange, and
redemption privileges; professional representatives available 24 hours a day;
automatic investment, automatic dividend reinvestment, payroll direct deposit,
automatic exchange and systematic withdrawal plans; free check writing; and a
no-minimum investment program. (See "Shareholder Manual - Shareholder
Services.")

DIVIDENDS AND OTHER DISTRIBUTIONS

The policy of each Fund is to pay dividends from net investment income
monthly and to distribute substantially all net realized capital gains annually.
(See "About the Funds - Distributions and Taxes.")

INVESTMENT OBJECTIVES AND POLICIES

The descriptions that follow are designed to help you choose the Fund that
best fits your investment objective. You may want to pursue more than one
objective by investing in more than one of the Funds or by investing in one of
the other Strong Funds, which are described in separate prospectuses. Each
Income Fund's investment objective is discussed below in connection with the
Fund's investment policies. Because of the risks inherent in all investments,
there can be no assurance that the Funds will meet their objectives.
Each Fund's return and risk potential depends in part on the maturity and
credit-quality characteristics of the underlying investments in its portfolio.
In general, longer-maturity fixed income securities carry higher yields and
greater price volatility than shorter-term fixed income securities. Similarly,
fixed income securities issued by less creditworthy entities tend to carry
higher yields than those with higher credit ratings. (See "Fundamentals of Fixed
Income Investing" for a more detailed discussion of the principles and risks
associated with fixed income securities.)

----------------------

PROSPECTUS PAGE I-12
<PAGE> 19

COMPARING THE FUNDS

The following chart is intended to help distinguish the Funds and help you
determine their suitability for your investments.

<TABLE>
<CAPTION>
AVERAGE CREDIT INCOME DEGREE OF SHARE-
FUND MATURITY QUALITY POTENTIAL PRICE FLUCTUATION
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MONEY 90 days or Two highest Low Stable, but not
MARKET less guaranteed
- ----------------------------------------------------------------------------
SHORT-TERM 1 to 3 years Primarily Moderate Low
BOND investment
grade
- ----------------------------------------------------------------------------
GOVERNMENT Intermediate* Investment Moderate Moderate
SECURITIES grade to high
- ----------------------------------------------------------------------------
CORPORATE Intermediate* Primarily Moderate Moderate
BOND investment to high
grade
- ----------------------------------------------------------------------------
HIGH-YIELD Intermediate* Primarily High Moderate to high
non-investment
grade
- ----------------------------------------------------------------------------
</TABLE>

*Expected range

Each Fund has adopted certain fundamental investment restrictions that are
set forth in the Funds' Statement of Additional Information ("SAI"). Those
restrictions, each Fund's investment objective, and any other investment
policies identified as "fundamental" cannot be changed without shareholder
approval. To further guide investment activities, each Fund has also instituted
a number of non-fundamental operating policies, which are described throughout
this Prospectus and in the SAI. Although operating policies may be changed by a
Fund's Board of Directors without shareholder approval, a Fund will promptly
notify shareholders of any material change in operating policies.
When the Advisor determines market conditions warrant a temporary defensive
position, the Short-Term Bond, Government Securities, Corporate Bond, and
High-Yield Funds may each invest without limitation in cash and short-term fixed
income securities.

STRONG MONEY MARKET FUND

The Money Market Fund seeks current income, a stable share price, and daily
liquidity. The Fund's investments include corporate, bank, and government
instruments that present minimal credit risk.

----------------------

PROSPECTUS PAGE I-13
<PAGE> 20

The Fund is designed for investors who seek money-market yields with no
anticipated fluctuations in principal. Because the Fund seeks to maintain a
constant net asset value of $1.00 per share, capital appreciation is not
expected to play a role in the Fund's returns, and dividend income alone will
provide its entire investment return. All money market instruments can change in
value when interest rates or an issuer's creditworthiness changes dramatically.
Although the Fund's share price has remained constant in the past, THE FUND
CANNOT GUARANTEE THAT IT WILL ALWAYS BE ABLE TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE. An investment in the Fund is neither insured nor
guaranteed by the U.S. government.

The Money Market Fund invests in a combination of bank, corporate, and
government obligations that present minimal credit risks. The Fund restricts its
investments to instruments that meet certain maturity and quality standards
required or permitted by Rule 2a-7 under the Investment Company Act of 1940 (the
"1940 Act") for money market funds. Accordingly, the Fund:

(i) limits its average portfolio maturity to ninety days or less;
(ii) buys only securities with remaining maturities of thirteen months or
less; and
(iii) buys only U.S. dollar-denominated securities that represent minimal
credit risks and are "high quality," as described below.
The Fund invests only in high-quality securities. Accordingly, the Fund will
invest at least 95% of its total assets in "first-tier" securities, generally
defined as those securities that, at the time of acquisition, are rated in the
highest rating category by at least two nationally recognized statistical rating
organizations ("NRSROs") or, if unrated, are determined by the Advisor to be of
comparable quality. The balance of the Fund, up to 5% of its total assets, may
be invested in securities that are considered "second-tier" securities,
generally defined as those securities that, at the time of acquisition, are
rated in the second-highest rating category or are determined by the Advisor to
be of comparable quality. (See "Fundamentals of Fixed Income Investing - Credit
Quality" and the SAI.)

STRONG SHORT-TERM BOND FUND

The Short-Term Bond Fund seeks total return by investing for a high level of
current income with a low degree of share-price fluctuation.
The Fund is designed for investors who are willing to accept some fluctuation
in principal in order to pursue a higher level of income than is generally
available from money market securities. BECAUSE ITS SHARE PRICE WILL VARY, THE
FUND IS NOT AN APPROPRIATE INVESTMENT FOR THOSE WHOSE PRIMARY OBJECTIVE IS
ABSOLUTE PRINCIPAL STABILITY.
The Fund invests primarily in short- and intermediate-term, investment-grade
debt obligations. Under normal market conditions at least 65% of the Fund's
total assets will be invested in debt obligations, such as corporate and

----------------------

PROSPECTUS PAGE I-14
<PAGE> 21

U.S. government debt obligations. The Fund's average portfolio maturity will
be between one and three years under normal market conditions.

Under normal market conditions, at least 75% of the Fund's net assets will be
invested in investment-grade debt obligations, which generally include a range
of obligations from those in the highest rating category to those in the fourth
highest rating category (e.g., BBB or higher by Standard & Poor's Ratings Group
or "S&P"). The Fund may also invest up to 25% of its net assets in
non-investment-grade debt obligations that are rated in the fifth-highest rating
category (e.g., BB by S&P) or unrated securities of comparable quality. (See
"Fundamentals of Fixed Income Investing - Credit Quality.")

STRONG GOVERNMENT SECURITIES FUND

The Government Securities Fund seeks total return by investing for a high
level of current income with a moderate degree of share-price fluctuation.
The Fund is designed for long-term investors who want to pursue higher income
than shorter-term securities generally provide, who are willing to accept the
fluctuation in principal associated with longer-term securities, and who seek
the low credit risk that U.S. government securities generally carry.
Under normal market conditions, at least 80% of the Fund's total assets will
be invested in U.S. government securities. The balance of the Fund's assets may
be invested in other investment-grade debt obligations. While there are no
maturity restrictions on the portfolio, it is anticipated that the Fund's
average portfolio maturity will normally be between 5 and 10 years.
Under federal law, the interest income earned from U.S. Treasury securities
is exempt from state and local taxes. All states allow mutual funds to "pass
through" that exemption to their shareholders, although there are conditions to
this treatment in some states. Because the requirements vary by state, you
should consult the instructions to your state's income tax return or a qualified
tax adviser to determine whether you may be able to exclude the Fund's
distributions from your state and local taxable income. (See "About the Funds -
Distributions and Taxes.")

STRONG CORPORATE BOND FUND

The Corporate Bond Fund seeks total return by investing for a high level of
current income with a moderate degree of share-price fluctuation.
The Fund is designed for long-term investors who want to pursue higher income
than shorter-term securities generally provide and who are willing to accept the
fluctuation in principal associated with longer-term debt obligations. While
there are no maturity restrictions on the portfolio, it is anticipated that the
Fund's average portfolio maturity will normally be between 7 and 12 years.
Under normal market conditions at least 65% of the Fund's total assets will
be invested in the bonds of corporate issuers, which includes any corporate debt
obligation. The Fund may invest up to 35% of its total assets in any other

----------------------

PROSPECTUS PAGE I-15
<PAGE> 22

type of fixed income security, such as U.S. government securities and
mortgage-backed issues. Under normal market conditions, at least 75% of the
Fund's total assets will be invested in investment-grade debt obligations, which
include a range of securities from those in the highest rating category to those
rated medium-quality (e.g., BBB or higher by S&P). The Fund may also invest up
to 25% of its total assets in non-investment-grade debt obligations and other
high-yield (high-risk) securities (e.g., those rated C or better by S&P). (See
"Fundamentals of Fixed Income Investing - Credit Quality.")

STRONG HIGH-YIELD BOND FUND

The High-Yield Bond Fund seeks total return by investing for a high level of
current income and capital growth.
The Fund is designed for investors who want to pursue higher income than
higher-quality debt obligations generally provide and who are willing to accept
the risk of principal fluctuation associated with medium- and lower-quality debt
obligations. While there are no maturity restrictions for the Fund's debt
obligations, it is anticipated that the Fund will maintain an average portfolio
maturity of between 5 and 10 years.

The Fund invests primarily in medium- and lower-quality debt obligations.
Under normal market conditions the Fund invests at least 65% of its total assets
in medium- and lower-quality debt obligations of corporate issuers. Medium-
quality debt obligations are those rated in the fourth highest category (e.g.,
bonds rated BBB by S&P) or obligations determined by the Advisor to be of
comparable quality. Medium-quality debt obligations, although considered
investment-grade, have some speculative characteristics. Lower-quality bonds,
also commonly referred to as "non-investment-grade" bonds or "junk" bonds, are
those rated below the fourth highest category (e.g., bonds rated as low as C by
S&P) or bonds of comparable quality. The Fund also may invest in debt
obligations that are in default, but such obligations are not expected to exceed
10% of the Fund's net assets. The Fund may also invest without limitation in
higher-quality debt obligations. Under normal market conditions, however, the
Fund is unlikely to emphasize higher-quality debt obligations, since generally
they offer lower yields than medium and lower-quality bonds with similar
maturities. (See "Fundamentals of Fixed Income Investing - High Yield (High-
Risk) Securities" for further information on the risks associated with investing
in medium- and lower-quality debt obligations.) The Fund may also invest up to
20% of its net assets in common stocks and securities that are convertible into
common stocks, such as warrants.

----------------------

PROSPECTUS PAGE I-16
<PAGE> 23

FUNDAMENTALS OF
FIXED INCOME INVESTING

The Funds may invest in a wide variety of debt obligations and other
securities. See "Implementation of Policies and Risks - Debt Obligations."
Issuers of debt obligations have a contractual obligation to pay interest at
a specified rate ("coupon rate") on specified dates and to repay principal
("face value" or "par value") on a specified maturity date. Certain debt
obligations (usually intermediate- and long-term obligations) have provisions
that allow the issuer to redeem or "call" the obligation before its maturity.
Issuers are most likely to call such debt obligations during periods of falling
interest rates. As a result, a Fund may be required to invest the unanticipated
proceeds of the called obligations at lower interest rates, which may cause the
Fund's income to decline.
Although the net asset values of the Short-Term Bond, Government Securities,
Corporate Bond, and High-Yield Funds are expected to fluctuate, the Advisor
actively manages each Fund's portfolio and adjusts its average portfolio
maturity according to the Advisor's interest rate outlook while seeking to avoid
or reduce, to the extent possible, any negative changes in net asset value. The
Money Market Fund seeks to maintain a stable net asset value of $1.00 per share.

PRICE VOLATILITY

The market value of debt obligations is affected by changes in prevailing
interest rates. The market value of a debt obligation generally reacts inversely
to interest-rate changes, meaning, when prevailing interest rates decline, an
obligation's price usually rises, and when prevailing interest rates rise, an
obligation's price usually declines. A fund portfolio consisting primarily of
debt obligations will react similarly to changes in interest rates.

MATURITY

In general, the longer the maturity of a debt obligation, the higher its
yield and the greater its sensitivity to changes in interest rates. Conversely,
the shorter the maturity, the lower the yield but the greater the price
stability. Commercial paper is generally considered the shortest form of debt
obligation. Notes, whose original maturities are two years or less, are
considered short-term obligations. The term "bond" generally refers to
securities with maturities longer than two years. Bonds with maturities of three
years or less are considered short-term, bonds with maturities between three and
seven years are considered intermediate-term, and bonds with maturities greater
than seven years are considered long-term.
A Fund's average portfolio maturity represents an average based on the actual
stated maturity dates of the debt securities in the Fund's portfolio,

----------------------

PROSPECTUS PAGE I-17
<PAGE> 24

except that (i) variable-rate securities are deemed to mature at the next
interest-rate adjustment date, (ii) debt securities with put features are deemed
to mature at the next put-exercise date, (iii) the maturity of mortgage-backed
securities is determined on an "expected life" basis, and (iv) securities being
hedged with futures contracts may be deemed to have a longer maturity, in the
case of purchases of futures contracts, and a shorter maturity, in the case of
sales of futures contracts, than they would otherwise be deemed to have. The
Money Market Fund will calculate average portfolio maturity in accordance with
Rule 2a-7 under the 1940 Act.

CREDIT QUALITY

The values of debt obligations may also be affected by changes in the credit
rating or financial condition of their issuers. Generally, the lower the quality
rating of an obligation, the higher the degree of risk as to the payment of
interest and return of principal. To compensate investors for taking on such
increased risk, those issuers deemed to be less creditworthy generally must
offer their investors higher interest rates than do issuers with better credit
ratings.

In conducting its credit research and analysis, the Advisor considers both
qualitative and quantitative factors to evaluate the creditworthiness of
individual issuers. The Advisor also relies, in part, on credit ratings compiled
by a number of NRSROs. "Appendix A - Ratings of Debt Obligations" presents a
summary of the ratings of three well-known such organizations: S&P, Moody's
Investors Service, Inc., and Fitch Investors Service, Inc. Please refer to the
Appendix in the Funds' SAI for a more detailed description of these ratings.

INVESTMENT-GRADE DEBT OBLIGATIONS. Debt obligations rated in the highest-
through the medium-quality categories are commonly referred to as
"investment-grade" debt obligations and include the following:

- - U.S. government securities (See "Implementation of Policies and Risks - Debt
Obligations" below);
- - bonds or bank obligations rated in one of the four highest rating categories
(e.g., BBB or higher by S&P);
- - short-term notes rated in one of the two highest rating categories (e.g., SP-2
or higher by S&P);

- - short-term bank obligations rated in one of the three highest rating
categories (e.g., A-3 or higher by S&P), with respect to obligations maturing
in one year or less;

- - commercial paper rated in one of the three highest rating categories (e.g.,
A-3 or higher by S&P);
- - unrated debt obligations determined by the Advisor to be of comparable
quality; and
- - repurchase agreements involving investment-grade debt obligations.

----------------------

PROSPECTUS PAGE I-18
<PAGE> 25

Investment-grade debt obligations are generally believed to have relatively
low degrees of credit risk. However, medium-quality debt obligations, while
considered investment-grade, may have some speculative characteristics, since
their issuers' capacity for repayment may be more vulnerable to adverse economic
conditions or changing circumstances than that of higher-rated issuers.
All ratings are determined at the time of investment. Any subsequent rating
downgrade of a debt obligation will be monitored by the Advisor to consider what
action, if any, a Fund should take consistent with its investment objective, and
with respect to the Money Market Fund, Rule 2a-7 under the 1940 Act.

HIGH-YIELD (HIGH-RISK) SECURITIES. High-yield (high-risk) securities, also
referred to as "junk bonds," are those securities that are rated lower than
investment-grade and unrated securities of comparable quality. Although these
securities generally offer higher yields than investment-grade securities with
similar maturities, lower-quality securities involve greater risks, including
the possibility of default or bankruptcy. In general, they are regarded to be
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal. Other potential risks associated with investing in high-
yield securities include:

- - substantial market-price volatility resulting from changes in interest rates,
changes in or uncertainty about economic conditions, and changes in the actual
or perceived ability of the issuer to meet its obligations;
- - greater sensitivity of highly leveraged issuers to adverse economic changes
and individual-issuer developments;
- - subordination to the prior claims of other creditors;
- - additional Congressional attempts to restrict the use or limit the tax and
other advantages of these securities; and
- - adverse publicity and changing investor perceptions about these securities.

As with any other asset in a Fund's portfolio, any reduction in the value of
such securities as a result of the factors listed above would be reflected in
the net asset value of the Fund. In addition, a Fund that invests in
lower-quality securities may incur additional expenses to the extent it is
required to seek recovery upon a default in the payment of principal and
interest on its holdings. As a result of the associated risks, successful
investments in high-yield, high-risk securities will be more dependent on the
Advisor's credit analysis than generally would be the case with investments in
investment-grade securities.
It is uncertain how the high-yield market will perform during a prolonged
period of rising interest rates. A prolonged economic downturn or a prolonged
period of rising interest rates could adversely affect the market for these
securities, increase their volatility, and reduce their value and liquidity. In
addition, lower-quality securities tend to be less liquid than higher-quality
debt securities because the market for them is not as broad or active. If market
quotations are not available, these securities will be valued in accordance with
procedures established by a Fund's Board of Directors. Judgment may, therefore,
play a greater role in valuing these securities. The lack of a liquid

----------------------

PROSPECTUS PAGE I-19
<PAGE> 26

secondary market may have an adverse effect on market price and a Fund's ability
to sell particular securities.
See Appendix B for information concerning the credit quality of the Short-
Term Bond and Corporate Bond Funds' investments in 1994.

IMPLEMENTATION OF POLICIES AND RISKS

In addition to the investment policies described above (and subject to
certain restrictions described below), the Funds may invest in some or all of
the following securities and may employ some or all of the following investment
techniques, some of which may present special risks as described below. A more
complete discussion of certain of these securities and investment techniques and
the associated risks is contained in the Funds' SAI.

DEBT OBLIGATIONS

The Short-Term Bond, Government Securities, Corporate Bond, and High-Yield
Funds may invest in any debt obligations. A Fund's authority to invest in
certain types of debt obligations may be restricted or subject to objective
investment criteria. For additional information on these restrictions, see
"Investment Objectives and Policies."

TYPES OF OBLIGATIONS. Debt obligations include (i) corporate debt securities,
including bonds, debentures, and notes; (ii) bank obligations, such as
certificates of deposit, banker's acceptances, and time deposits of domestic and
foreign banks and their subsidiaries and branches, and domestic savings and loan
associations (in amounts in excess of the insurance coverage (currently $100,000
per account) provided by the Federal Deposit Insurance Corporation); (iii)
commercial paper (including variable-amount master demand notes); (iv)
repurchase agreements; (v) loan interests; (vi) foreign debt obligations issued
by foreign issuers traded either in foreign markets or in domestic markets
through depositary receipts; (vii) convertible securities - debt obligations of
corporations convertible into or exchangeable for equity securities or debt
obligations that carry with them the right to acquire equity securities, as
evidenced by warrants attached to such securities, or acquired as part of units
of the securities; (viii) preferred stocks - securities that represent an
ownership interest in a corporation and that give the owner a prior claim over
common stock on the company's earnings or assets; (ix) U.S. government
securities; (x) mortgage-backed securities, collateralized mortgage obligations,
and similar securities; and (xi) municipal obligations.

GOVERNMENT SECURITIES. U.S. government securities are issued or guaranteed by
the U.S. government or its agencies or instrumentalities. Securities issued by
the government include U.S. Treasury obligations, such as Treasury

----------------------

PROSPECTUS PAGE I-20
<PAGE> 27

bills, notes, and bonds. Securities issued or guaranteed by government agencies
or instrumentalities include the following:

- - the Federal Housing Administration, Farmers Home Administration, Export-Import
Bank of the United States, Small Business Administration, and the Government
National Mortgage Association, including GNMA pass-through certificates, whose
securities are supported by the full faith and credit of the United States;
- - the Federal Home Loan Banks, Federal Intermediate Credit Banks, and the
Tennessee Valley Authority, whose securities are supported by the right of the
agency to borrow from the U.S. Treasury;
- - the Federal National Mortgage Association, whose securities are supported by
the discretionary authority of the U.S. government to purchase certain
obligations of the agency or instrumentality; and
- - the Student Loan Marketing Association, the Interamerican Development Bank,
and International Bank for Reconstruction and Development, whose securities
are supported only by the credit of such agencies.

Although the U.S. government provides financial support to such U.S.
government-sponsored agencies or instrumentalities, no assurance can be given
that it will always do so. The U.S. government and its agencies and
instrumentalities do not guarantee the market value of their securities;
consequently, the value of such securities will fluctuate.

MORTGAGE- AND ASSET-BACKED SECURITIES. Mortgage-backed securities represent
direct or indirect participation in, or are secured by and payable from,
mortgage loans secured by real property, and include single- and multi-class
pass-through securities and collateralized mortgage obligations. Such securities
may be issued or guaranteed by U.S. government agencies or instrumentalities or
by private issuers, generally originators in mortgage loans, including savings
associations, mortgage bankers, commercial banks, investment bankers, and
special purpose entities (collectively, "private lenders"). Mortgage-backed
securities issued by private lenders may be supported by pools of mortgage loans
or other mortgage-backed securities that are guaranteed, directly or indirectly,
by the U.S. government or one of its agencies or instrumentalities, or they may
be issued without any governmental guarantee of the underlying mortgage assets
but with some form of non-governmental credit enhancement.
Asset-backed securities have structural characteristics similar to mortgage-
backed securities. However, the underlying assets are not first-lien mortgage
loans or interests therein; rather they include assets such as motor vehicle
installment sales contracts, other installment loan contracts, home equity
loans, leases of various types of property and receivables from credit card or
other revolving credit arrangements. Payments or distributions of principal and
interest on asset-backed securities may be supported by non-governmental

----------------------

PROSPECTUS PAGE I-21
<PAGE> 28

credit enhancements similar to those utilized in connection with mortgage-backed
securities.
The yield characteristics of mortgage- and asset-backed securities differ
from those of traditional debt obligations. Among the principal differences are
that interest and principal payments are made more frequently on mortgage-and
asset-backed securities, usually monthly, and that principal may be prepaid at
any time because the underlying mortgage loans or other assets generally may be
prepaid at any time. As a result, if a Fund purchases these securities at a
premium, a prepayment rate that is faster than expected will reduce yield to
maturity, while a prepayment rate that is slower than expected will have the
opposite effect of increasing the yield to maturity. Conversely, if a Fund
purchases these securities at a discount, a prepayment rate that is faster than
expected will increase yield to maturity, while a prepayment rate that is slower
than expected will reduce yield to maturity. Accelerated prepayments on
securities purchased by a Fund at a premium also impose a risk of loss of
principal because the premium may not have been fully amortized at the time the
principal is prepaid in full. The market for privately issued mortgage- and
asset-backed securities is smaller and less liquid than the market for
government sponsored mortgage-backed securities.
The Funds may invest in stripped mortgage- or asset-backed securities, which
receive differing proportions of the interest and principal payments from the
underlying assets. The market value of such securities generally is more
sensitive to changes in prepayment and interest rates than is the case with
traditional mortgage- and asset-backed securities, and in some cases the market
value may be extremely volatile. With respect to certain stripped securities,
such as interest-only ("IO") and principal-only ("PO") classes, a rate of
prepayment that is faster or slower than anticipated may result in a Fund
failing to recover all or a portion of its investment, even though the
securities are rated investment-grade.

LOAN INTERESTS. The Short-Term Bond, Corporate Bond, and High-Yield Funds may
each invest a portion of their assets in loan interests, which are interests in
amounts owed by a corporate, governmental or other borrower to lenders or
lending syndicates. Loan interests purchased by a Fund may have a maturity of
any number of days or years, and may be secured or unsecured. Loan interests,
which may take the form of participation interests in, assignments of, or
novations of a loan, may be acquired from U.S. and foreign banks, insurance
companies, finance companies or other financial institutions that have made
loans or are members of a lending syndicate or from the holders of loan
interests. Loan interests involve the risk of loss in case of default or
bankruptcy of the borrower and, in the case of participation interests, involve
a risk of insolvency of the agent lending bank or other financial intermediary.
Loan interests are not rated by any NRSROs and are, at present, not readily
marketable and may be subject to contractual restrictions on resale.

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<PAGE> 29

FOREIGN SECURITIES AND CURRENCIES

The Money, Short-Term Bond, Corporate Bond, and High-Yield Funds each may
invest up to 25% of their net assets directly in foreign securities. The
Short-Term Bond, Corporate Bond, and High-Yield Funds may also invest in foreign
securities through depositary receipts without regard to this limitation.
However, the Advisor currently intends to invest not more than 25% of a Fund's
net assets in foreign securities, including both direct investments and
investments made through depositary receipts. Depositary receipts are generally
issued by banks or trust companies and evidence ownership of underlying foreign
securities. In accordance with Rule 2a-7 under the 1940 Act, the Money Market
Fund will limit its investments in foreign securities to those denominated in
U.S. dollars.
Foreign investments involve special risks, including:

- - expropriation, confiscatory taxation, and withholding taxes on dividends and
interest;
- - less extensive regulation of foreign brokers, securities markets, and issuers;
- - less publicly available information and different accounting standards;
- - costs incurred in conversions between currencies, possible delays in
settlement in foreign securities markets, limitations on the use or transfer
of assets (including suspension of the ability to transfer currency from a
given country), and difficulty of enforcing obligations in other countries;
and
- - diplomatic developments and political or social instability.

Foreign economies may differ favorably or unfavorably from the U.S. economy
in various respects, including growth of gross domestic product, rates of
inflation, currency depreciation, capital reinvestment, resource
self-sufficiency, and balance of payments positions. Many foreign securities are
less liquid and their prices more volatile than comparable U.S. securities.
Although the Funds generally invest only in securities that are regularly traded
on recognized exchanges or in over-the-counter markets, from time to time
foreign securities may be difficult to liquidate rapidly without adverse price
effects. Certain costs attributable to foreign investing, such as custody
charges and brokerage costs, are higher than those attributable to domestic
investing.

Because most foreign securities are denominated in non-U.S. currencies, the
investment performance of the Short-Term Bond, Corporate Bond, and High-Yield
Funds could be affected by changes in foreign currency exchange rates to some
extent. The value of a Fund's assets denominated in foreign currencies will
increase or decrease in response to fluctuations in the value of those foreign
currencies relative to the U.S. dollar. Currency exchange rates can be volatile
at times in response to supply and demand in the currency exchange markets,
international balances of payments, governmental intervention, speculation, and
other political and economic conditions.

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PROSPECTUS PAGE I-23
<PAGE> 30

The Short-Term Bond, Corporate Bond, and High-Yield Funds may purchase and
sell foreign currency on a spot basis and may engage in forward currency
contracts, currency options, and futures transactions for hedging or any other
lawful purpose. (See "Derivative Instruments.")

REPURCHASE AGREEMENTS

Each Fund may enter into repurchase agreements with certain banks and
non-bank dealers. In a repurchase agreement, a Fund buys a security at one
price, and at the time of sale, the seller agrees to repurchase the obligation
at a mutually agreed upon time and price (usually within seven days). The
repurchase agreement determines the yield during the purchaser's holding period,
while the seller's obligation to repurchase is secured by the value of the
underlying security. A Fund may enter into repurchase agreements with respect to
any security in which it may invest. The Advisor will monitor, on an ongoing
basis, the value of the underlying securities to ensure that the value always
equals or exceeds the repurchase price plus accrued interest. Repurchase
agreements could involve certain risks in the event of a default or insolvency
of the other party to the agreement, including possible delays or restrictions
upon a Fund's ability to dispose of the underlying securities. Although no
definitive creditworthiness criteria are used, the Advisor reviews the
creditworthiness of the banks and non-bank dealers with which the Funds enter
into repurchase agreements to evaluate those risks. A Fund may, under certain
circumstances, deem repurchase agreements collateralized by U.S. government
securities to be investments in U.S. government securities.

DERIVATIVE INSTRUMENTS

The Short-Term Bond, Government Securities, Corporate Bond, and High-Yield
Funds may use derivative instruments for any lawful purpose consistent with each
Fund's investment objective, including hedging or managing risk but not for
speculation. Derivative instruments are securities or agreements whose value is
derived from the value of some underlying asset, for example, securities,
reference indexes, or commodities. Options, futures, and options on futures
transactions are considered derivative transactions. Derivatives generally have
investment characteristics that are based upon either forward contracts (under
which one party is obligated to buy and the other party is obligated to sell an
underlying asset at a specific price on a specified date) or option contracts
(under which the holder of the option has the right but not the obligation to
buy or sell an underlying asset at a specified price on or before a specified
date). Consequently, the change in value of a forward-based derivative generally
is roughly proportional to the change in value of the underlying asset. In
contrast, the buyer of an option-based derivative generally will benefit from
favorable movements in the price of the underlying asset but is not exposed to
corresponding losses due to adverse movements in the value of the

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PROSPECTUS PAGE I-24
<PAGE> 31

underlying asset. The seller of an option-based derivative generally will
receive fees or premiums but generally is exposed to losses due to changes in
the value of the underlying asset. Derivative transactions may include elements
of leverage and, accordingly, the fluctuation of the value of the derivative
transaction in relation to the underlying asset may be magnified. In addition to
options, futures, and options on futures transactions, derivative transactions
may include short sales against the box, in which a Fund sells a security it
owns for delivery at a future date; swaps, in which the two parties agree to
exchange a series of cash flows in the future, such as interest-rate payments;
interest-rate caps, under which, in return for a premium, one party agrees to
make payments to the other to the extent that interest rates exceed a specified
rate, or "cap"; and interest-rate floors, under which, in return for a premium,
one party agrees to make payments to the other to the extent that interest rates
fall below a specified level, or "floor." Derivative transactions may also
include forward currency contracts and foreign currency exchange-related
securities.
Derivative instruments may be exchange-traded or traded in over-the-counter
transactions between private parties. Over-the-counter transactions are subject
to the credit risk of the counterparty to the instrument and are less liquid
than exchange-traded derivatives since they often can only be closed out with
the other party to the transaction. When required by SEC guidelines, a Fund will
set aside permissible liquid assets or securities positions that substantially
correlate to the market movements of the derivatives transaction in a segregated
account to secure its obligations under derivative transactions. In order to
maintain its required cover for a derivative transaction, a Fund may need to
sell portfolio securities at disadvantageous prices or times since it may not be
possible to liquidate a derivative position.

The successful use of derivative transactions by a Fund is dependent upon the
Advisor's ability to correctly anticipate trends in the underlying asset. To the
extent that a Fund is engaging in derivative transactions other than for hedging
purposes, the Fund's successful use of such transactions is more dependent upon
the Advisor's ability to correctly anticipate such trends, since losses in these
transactions may not be offset by gains in the Fund's portfolio or by lower
purchase prices for assets it intends to acquire. The Advisor's prediction of
trends in underlying assets may prove to be inaccurate, which could result in
substantial losses to a Fund. Hedging transactions are also subject to risks. If
the Advisor incorrectly anticipates trends in the underlying asset, a Fund may
be in a worse position than if no hedging had occurred. In addition, there may
be an imperfect correlation between a Fund's derivative transactions and the
instruments being hedged.

WHEN-ISSUED SECURITIES

Each Fund may invest without limitation in securities purchased on a when-
issued or delayed delivery basis. Although the payment and interest terms of
these securities are established at the time the purchaser enters into the

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PROSPECTUS PAGE I-25
<PAGE> 32

commitment, these securities may be delivered and paid for at a future date,
generally within 45 days. Purchasing when-issued securities allows a Fund to
lock in a fixed price or yield on a security it intends to purchase. However,
when a Fund purchases a when-issued security, it immediately assumes the risk of
ownership, including the risk of price fluctuation.

The greater a Fund's outstanding commitments for these securities, the
greater the exposure to potential fluctuations in the net asset value of a Fund.
Purchasing when-issued securities may involve the additional risk that the yield
available in the market when the delivery occurs may be higher or the market
price lower than that obtained at the time of commitment. Although a Fund may be
able to sell these securities prior to the delivery date, it will purchase
when-issued securities for the purpose of actually acquiring the securities,
unless, after entering into the commitment, a sale appears desirable for
investment reasons. When required by SEC guidelines, a Fund will set aside
permissible liquid assets in a segregated account to secure its outstanding
commitments for when-issued securities.

ILLIQUID SECURITIES

The Short-Term Bond, Government Securities, Corporate Bond, and High-Yield
Funds may each invest up to 15% of their net assets in illiquid securities. The
Money Market Fund may invest up to 10% of its Fund's net assets in illiquid
securities. Illiquid securities are those securities that are not readily
marketable, including restricted securities and repurchase obligations maturing
in more than seven days. Certain restricted securities which may be resold to
institutional investors under Rule 144A under the Securities Act of 1933 and
Section 4(2) commercial paper may be determined to be liquid under guidelines
adopted by each Fund's Board of Directors.

ZERO-COUPON, STEP-COUPON, AND PAY-IN-KIND SECURITIES

The Short-Term Bond, Government Securities, Corporate Bond, and High-Yield
Funds may invest without limitation in zero-coupon, step-coupon, and pay-in-kind
securities. These securities are debt securities that do not make regular cash
interest payments. Zero-coupon and step-coupon securities are sold at a deep
discount to their face value. Pay-in-kind securities pay interest through the
issuance of additional securities. Because such securities do not pay current
cash income, the price of these securities can be volatile when interest rates
fluctuate. While these securities do not pay current cash income, federal income
tax law requires the holders of zero-coupon, step-coupon, and pay-in-kind
securities to include in income each year the portion of the original issue
discount (or deemed discount) and other non-cash income on such securities
accrued during that year. In order to continue to qualify for treatment as a
"regulated investment company" under the Internal Revenue Code and avoid a
certain excise tax, each Fund may be required to distribute a

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PROSPECTUS PAGE I-26
<PAGE> 33

portion of such discount and income and may be required to dispose of other
portfolio securities, which may occur in periods of adverse market prices, in
order to generate cash to meet these distribution requirements.

MORTGAGE DOLLAR ROLLS AND
REVERSE REPURCHASE AGREEMENTS

The Short-Term Bond, Government Securities, Corporate Bond, and High-Yield
Funds may engage in reverse repurchase agreements to facilitate portfolio
liquidity, a practice common in the mutual fund industry, or for arbitrage
transactions discussed below. In a reverse repurchase agreement, the Fund would
sell a security and enter into an agreement to repurchase the security at a
specified future date and price. The Fund generally retains the right to
interest and principal payments on the security. Since the Fund receives cash
upon entering into a reverse repurchase agreement, it may be considered a
borrowing. When required by SEC guidelines, a Fund will set aside permissible
liquid assets in a segregated account to secure its obligation to repurchase the
security.

Each Fund may also enter into mortgage dollar rolls, in which the Fund would
sell mortgage-backed securities for delivery in the current month and
simultaneously contract to purchase substantially similar securities on a
specified future date. While a Fund would forego principal and interest paid on
the mortgage-backed securities during the roll period, the Fund would be
compensated by the difference between the current sale price and the lower price
for the future purchase as well as by any interest earned on the proceeds of the
initial sale. The Fund also could be compensated through the receipt of fee
income equivalent to a lower forward price. When required by SEC guidelines, a
Fund would set aside permissible liquid assets in a segregated account to secure
its obligation for the forward commitment to buy mortgage-backed securities.
Mortgage dollar roll transactions may be considered a borrowing by the Funds.

The mortgage dollar rolls and reverse repurchase agreements entered into by
the Funds may be used as arbitrage transactions in which a Fund will maintain an
offsetting position in investment-grade debt obligations or repurchase
agreements that mature on or before the settlement date of the related mortgage
dollar roll or reverse repurchase agreement. Since a Fund will receive interest
on the securities or repurchase agreements in which it invests the transaction
proceeds, such transactions may involve leverage. However, since such securities
or repurchase agreements will be high quality and will mature on or before the
settlement date of the mortgage dollar roll or reverse repurchase agreement, the
Advisor believes that such arbitrage transactions do not present the risks to
the Funds that are associated with other types of leverage. The Money Market
Fund only engages in transactions permissible under Rule 2a-7.

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PROSPECTUS PAGE I-27
<PAGE> 34

PORTFOLIO TURNOVER

Historical portfolio turnover rates for the Short-Term Bond, Government
Securities, and Corporate Bond Funds are listed under "Financial Highlights."
The annual portfolio turnover rate indicates changes in a Fund's portfolio. It
may also be affected by sales of portfolio securities necessary to meet cash
requirements for redemptions of shares. The turnover rate may vary from year to
year, as well as within a year. High turnover in any year will result in the
payment by a Fund of above-average amounts of transaction costs and could result
in the payment by shareholders of above-average amounts of taxes on realized
investment gains. The annual portfolio turnover rates for the Short-Term Bond,
Government Securities, Corporate Bond, and High-Yield Funds are expected to be
between 200% and 300%. However, each Fund's portfolio turnover rate may exceed
300% when the Advisor believes the anticipated benefits of short-term
investments outweigh any increase in transaction costs or increase in capital
gains. These rates should not be considered as limiting factors.

ABOUT THE FUNDS

MANAGEMENT

The Board of Directors of each Fund is responsible for managing its business
and affairs. Each of the Funds has entered into an investment advisory agreement
(collectively the "Advisory Agreements") with Strong Capital Management, Inc.
(the "Advisor"). Except for the management fee arrangements, the Advisory
Agreements are substantially identical. Under the terms of these agreements, the
Advisor manages each Fund's investments and business affairs subject to the
supervision of each Fund's Board of Directors.

ADVISOR. The Advisor began conducting business in 1974. Since then, its
principal business has been providing continuous investment supervision for
individuals and institutional accounts, such as pension funds and profit-sharing
plans as well as mutual funds, several of which are funding vehicles for
variable insurance products. As of November 30, 1995, the Advisor had over $15
billion under management. The Advisor's principal mailing address is P.O. Box
2936, Milwaukee, Wisconsin 53201. Mr. Richard S. Strong, the Chairman of the
Board of each Fund, is the controlling shareholder of the Advisor.

As compensation for its services, each Fund pays the Advisor a monthly
management fee based on a percentage of each Fund's average daily net asset
value. The annual rates are as follows: Money Market Fund, .50%; Government
Securities Funds, .60%; Short-Term Bond and Corporate Bond Funds, .625%; and
High-Yield Fund, .625%. From time to time, the Advisor may voluntarily waive all
or a portion of its management fee and/or absorb certain Fund

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PROSPECTUS PAGE I-28
<PAGE> 35

expenses without further notification of the commencement or termination of such
waiver or absorption. Any such waiver or absorption will temporarily lower a
Fund's overall expense ratio and increase a Fund's overall return to investors.
Except for expenses assumed by the Advisor or Strong Funds Distributors,
Inc., each Fund is responsible for all its other expenses, including, without
limitation, interest charges, taxes, brokerage commissions, and similar
expenses; expenses of issue, sale, repurchase, or redemption of shares; expenses
of registering or qualifying shares for sale with the states and the SEC;
expenses of printing and distribution of prospectuses to existing shareholders;
charges of custodians (including fees as custodian for keeping books and similar
services for a Fund), transfer agents (including the printing and mailing of
reports and notices to shareholders), registrars, auditing and legal services,
and clerical services related to recordkeeping and shareholder relations;
printing of stock certificates; fees for directors who are not "interested
persons" of the Advisor; expenses of indemnification; extraordinary expenses;
and costs of shareholder and director meetings.

PORTFOLIO MANAGERS. The following individuals serve as portfolio managers for
the five Strong Income Funds.

STRONG MONEY MARKET FUND

JAY N. MUELLER. Mr. Mueller joined the Advisor in September 1991 as a
securities analyst and portfolio manager. For four years prior to that, he was a
securities analyst and portfolio manager with R. Meeder & Associates of Dublin,
Ohio. Mr. Mueller received his bachelor's degree in economics in 1982 from the
University of Chicago. Mr. Mueller is also a Chartered Financial Analyst. He has
managed the Strong Money Market since September 1991. Mr. Mueller also manages
the Strong U.S. Treasury Money Fund, Strong Heritage Money Fund, and Strong
Institutional Money Fund.

STRONG CORPORATE BOND FUND
STRONG HIGH-YIELD BOND FUND

JEFFREY A. KOCH. Mr. Koch joined the Advisor as a portfolio manager and
securities analyst in June 1989. For a brief period prior to that, he was a
market-maker clerk at Fossett Corporation, a clearing firm. Mr. Koch earned his
M.B.A. in Finance at Washington University in St. Louis, Missouri in 1989. His
undergraduate degree, awarded in 1987, is from the University of
Minnesota-Morris. Mr. Koch is also a Chartered Financial Analyst. In 1991, Mr.
Koch joined Bradley C. Tank as co-portfolio manager of the Strong Corporate Bond
Fund. They managed the Corporate Bond Fund together until 1993, when Mr. Koch
assumed sole management responsibility. He has managed the

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PROSPECTUS PAGE I-29
<PAGE> 36

Strong High-Yield Bond Fund since its inception in December 1995. Mr. Koch
also manages the Strong Advantage Fund.

STRONG SHORT-TERM BOND FUND
STRONG GOVERNMENT SECURITIES FUND

BRADLEY C. TANK. Before joining the Advisor in June 1990, Mr. Tank spent
eight years at Salomon Brothers, Inc., where he was a vice president and fixed
income specialist. He has managed the Strong Short-Term Bond and Government
Securities Funds since he joined the Advisor. In 1991, he was joined by
portfolio co-manager Jeffrey A. Koch. As a team they managed the Strong
Short-Term Bond, Government Securities, and Corporate Bond Funds until 1993,
when Mr. Tank assumed sole management responsibility for the Strong Short-Term
Bond and Government Securities Funds. In addition, Mr. Tank leads the Strong
Asset Allocation Fund investment team and chairs the Fixed Income Investment
Committee.

TRANSFER AND DIVIDEND-DISBURSING AGENT

The Advisor, P.O. Box 2936, Milwaukee, Wisconsin 53201, also acts as
dividend-disbursing agent and transfer agent for the Funds. The Advisor is
compensated for its services based on an annual fee per account plus certain
out-of-pocket expenses. The fees received and the services provided as transfer
agent and dividend-disbursing agent are in addition to those received and
provided under the Advisory Agreements between the Advisor and the Funds.

DISTRIBUTOR

Strong Funds Distributors, Inc., P.O. Box 2936, Milwaukee, Wisconsin 53201,
an indirect subsidiary of the Advisor, acts as distributor of the shares of the
Funds.

ORGANIZATION

SHAREHOLDER RIGHTS. Each Fund (except for the High-Yield Fund) is a Wisconsin
corporation that is authorized to issue shares of common stock and series and
classes of series of shares of common stock. The High-Yield Fund is a series of
common stock of Strong Income Funds, Inc., a Wisconsin corporation that is
authorized to issue shares of common stock and series and classes of series of
shares of common stock. Each share of the Funds has one vote, and all shares
participate equally in dividends and other capital gains distributions by the
respective Fund and in the residual assets of the respective Fund in the event
of liquidation. Certificates will be issued for shares held in your

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PROSPECTUS PAGE I-30
<PAGE> 37

account only upon your written request. You will, however, have full
shareholder rights whether or not you request certificates. Generally, the Funds
will not hold an annual meeting of shareholders unless required by the 1940 Act.

SHAREHOLDER PRIVILEGES. The shareholders of each Fund may benefit from the
privileges described in the "Shareholder Manual" (see page II-1). However, each
Fund reserves the right, at any time and without prior notice, to suspend,
limit, modify, or terminate any of these privileges or their use in any manner
by any person or class.

PRINCIPAL SHAREHOLDER. As of November 30, 1995, Charles Schwab & Co., Inc.
("Schwab") owned of record approximately 36% of the Government Securities Fund.
Schwab's record ownership of greater than 25% of the Fund's shares may result in
it being deemed a controlling entity of the Fund.

DISTRIBUTIONS AND TAXES

PAYMENT OF DIVIDENDS AND OTHER DISTRIBUTIONS. You may elect to have all your
dividends and capital gain distributions from a Fund automatically reinvested in
additional shares of that Fund or in shares of another Strong Fund at the net
asset value determined on the payment date. If you request in writing that your
dividends and other distributions be paid in cash, a Fund will credit your bank
account by Electronic Funds Transfer ("EFT") or issue a check to you within five
business days of the payment date. You may change your election at any time by
calling or writing Strong Funds. Strong Funds must receive any such change 7
days (15 days for EFT) prior to a dividend or capital gain distribution payment
date in order for the change to be effective for that payment.

The policy of each Fund is to pay dividends from net investment income
monthly and to distribute substantially all net realized capital gains, and
gains from foreign currency transactions, if any, annually. Each Fund may make
additional distributions if necessary to avoid imposition of a 4% excise tax on
undistributed income and gains. Each Fund declares dividends on each day its net
asset value is calculated, except the Money Market Fund does not declare
dividends on bank holidays. Income earned on weekends, holidays (including bank
holidays for the Money Market Fund), and other days on which net asset value is
not calculated is declared as a dividend on the day on which a Fund's net asset
value was most recently calculated.

TAX STATUS OF DIVIDENDS AND OTHER DISTRIBUTIONS. You will be subject to
federal income tax at ordinary income tax rates on any dividends you receive
that are derived from investment company taxable income (consisting generally of
net investment income, net short-term capital gain, and net gains from certain
foreign currency transactions, if any). Distributions by the Short-Term Bond,
Government Securities, Corporate Bond, and High-Yield Funds of net

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<PAGE> 38

capital gain (the excess of net long-term capital gain over net short-term
capital loss), when designated as such, are taxable to you as long-term capital
gains, regardless of how long you have held your Fund shares.
The Funds' distributions are taxable in the year they are paid, whether they
are taken in cash or reinvested in additional shares, except that certain
distributions declared in the last three months of the year and paid in January
are taxable as if paid on December 31. All state laws provide a pass-through to
mutual fund shareholders of the state and local income tax exemption afforded
owners of direct U.S. government obligations, although there are conditions to
this treatment in some states. You will be notified annually of the percentage
of a Fund's income that is derived from U.S. government securities.
If a Fund's distributions exceed its investment company taxable income and
net capital gain in any year, as a result of currency-related losses or
otherwise, all or a portion of those distributions may be treated as a return of
capital to shareholders for tax purposes.

YEAR-END TAX REPORTING. After the end of each calendar year, you will receive
a statement (Form 1099) of the federal income tax status of all dividends and
other distributions paid (or deemed paid) during the year.

SHARES SOLD OR EXCHANGED. Your redemption of shares of the Short-Term Bond,
Government Securities, Corporate Bond, or High-Yield Funds may result in taxable
gain or loss to you, depending upon whether the redemption proceeds payable to
you are more or less than your adjusted cost basis for the redeemed shares.
Similar tax consequences generally will result from an exchange of shares of a
Fund for shares of another Strong Fund. If you purchase shares of a Fund within
thirty days before or after redeeming shares of the same Fund at a loss, a
portion or all of that loss will not be deductible and will increase the cost
basis of the newly purchased shares. If you redeem shares out of a retirement
account, you will be subject to withholding for federal income tax purposes
unless you transfer the distribution directly to an "eligible retirement plan."
In addition, if you redeem all shares in an account at any time during a month,
dividends credited to the account since the beginning of the month through the
day of redemption will be paid with the redemption proceeds.

BACKUP WITHHOLDING. If you are an individual or certain other noncorporate
shareholder and do not furnish a Fund with a correct taxpayer identification
number, the Fund is required to withhold federal income tax at a rate of 31%
(backup withholding) from all dividends (in the case of the Money Market Fund),
and from all dividends, capital gain distributions, and redemption proceeds (in
the case of all the other Funds), payable to you. Withholding at that rate from
dividends and capital gain distributions payable to you also is required if you
otherwise are subject to backup withholding. To avoid backup withholding, you
must provide a taxpayer identification number and state that

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<PAGE> 39

you are not subject to backup withholding due to the underreporting of your
income. This certification is included as part of your application. Please
complete it when you open your account.

TAX STATUS OF THE FUNDS. Each Fund intends to continue to qualify for
treatment as a regulated investment company under Subchapter M of the Internal
Revenue Code and, if so qualified, will not be liable for federal income tax on
earnings and gains distributed to its shareholders in a timely manner.
This section is not intended to be a full discussion of present or proposed
federal income tax law and its effects on the Funds and investors therein. See
the SAI for a further discussion. There may be other federal, state, or local
tax considerations applicable to a particular investor. You are therefore urged
to consult your own tax adviser.

PERFORMANCE INFORMATION

Each Fund may advertise "yield," "average annual total return," "total
return," and "cumulative total return." The Money Market Fund may also advertise
"effective yield." Each of these figures is based upon historical results and
does not represent the future performance of a Fund.
Yield is an annualized figure, which means that it is assumed that a Fund
generates the same level of net investment income over a one-year period. The
Money Market Fund's yield and effective yield are measures of the net investment
income per share earned by the Fund over a specific seven-day period and are
shown as a percentage of the investment. However, effective yield will be
slightly higher than the yield because effective yield assumes that the net
investment income earned by the Fund will be reinvested. The Short-Term Bond,
Government Securities, Corporate Bond, and High-Yield Funds' yield is a measure
of the net investment income per share earned by a Fund over a specific
one-month period and is shown as a percentage of the net asset value of the
Fund's shares at the end of the period.
Average annual total return and total return figures measure both the net
investment income generated by, and the effect of any realized and unrealized
appreciation or depreciation of, the underlying investments in a Fund assuming
the reinvestment of all dividends and distributions. Total return figures are
not annualized and simply represent the aggregate change of a Fund's investments
over a specified period of time.

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<PAGE> 40

SHAREHOLDER MANUAL

<TABLE>
<S> <C>
HOW TO BUY SHARES...................... II-1
DETERMINING YOUR SHARE PRICE........... II-5
HOW TO SELL SHARES..................... II-6
SHAREHOLDER SERVICES................... II-9
REGULAR INVESTMENT PLANS............... II-11
SPECIAL SITUATIONS..................... II-12
</TABLE>

HOW TO BUY SHARES

All the Strong Funds are 100% no-load, meaning you may purchase, redeem, or
exchange shares directly at net asset value without paying a sales charge.
Because the Short-Term Bond, Government Securities, Corporate Bond, and
High-Yield Funds' net asset values change daily, your purchase price will be the
next net asset value determined after Strong receives and accepts your purchase
order. Your money will begin earning dividends the day after your purchase order
is accepted in proper form.
Whether you are opening a new account or adding to an existing one, Strong
provides you with several methods to buy Fund shares.

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<PAGE> 41

-----------------------------------------------------------------------------

<TABLE>
<CAPTION>
TO OPEN A NEW ACCOUNT
- ------------------------------------------------------------------------------
<S> <C>
MAIL BY CHECK
- Complete and sign the application. Make your check
or money order payable to "Strong Funds."
- Mail to Strong Funds, P.O. Box 2936, Milwaukee,
Wisconsin 53201. If you're using an express
delivery service, send to Strong Funds, 100
Heritage Reserve, Menomonee Falls, Wisconsin 53051.
BY EXCHANGE
- Call 1-800-368-3863 for instructions on
establishing an account with an exchange by mail.
- ------------------------------------------------------------------------------
TELEPHONE BY EXCHANGE
- Call 1-800-368-3863 to establish a new account by
1-800-368-3863 exchanging funds from an existing Strong Funds
24 HOURS A DAY, account.
7 DAYS A WEEK - Sign up for telephone exchange services when you
open your account. To add the telephone exchange
option to your account, call 1-800-368-3863 for a
Telephone Exchange Form.
- Please note that your accounts must be identically
registered and that you must exchange enough into
the new account to meet the minimum initial
investment.
- ------------------------------------------------------------------------------
IN PERSON - Stop by our Investor Center in Menomonee Falls,
Wisconsin.
Call 1-800-368-3863 for hours and directions.
- The Investor Center can only accept checks or money
orders.
- ------------------------------------------------------------------------------
WIRE Call 1-800-368-3863 for instructions on opening an
account by wire.
- ------------------------------------------------------------------------------
AUTOMATICALLY USE STRONG'S "NO-MINIMUM INVESTMENT PROGRAM."
- If you sign up for Strong's Automatic Investment
Plan when you open your account, Strong Funds will
waive the Fund's minimum initial investment (see
chart on page II-4).
- Complete both the Automatic Investment Plan
application at the back of this Prospectus and the
new account application.
- Mail to the address indicated on the application.
- ------------------------------------------------------------------------------
BROKER-DEALER - You may purchase shares in a Fund through a
broker-dealer or other institution that may charge
a transaction fee.
- Strong Funds may only accept requests to purchase
shares into a broker-dealer street name account
from the broker-dealer.
</TABLE>

----------------------

PROSPECTUS PAGE II-2
<PAGE> 42

-----------------------------------------------------------------------------
TO ADD TO AN EXISTING ACCOUNT
- --------------------------------------------------------------------------------
BY CHECK
- - Complete an Additional Investment Form provided at the bottom of your account
statement, or write a note indicating your fund account number and
registration. Make your check or money order payable to "Strong Funds."
- - Mail to Strong Funds, P.O. Box 2936, Milwaukee, Wisconsin 53201. If you're
using an express delivery service, send to Strong Funds, 100 Heritage Reserve,
Menomonee Falls, Wisconsin 53051.
BY EXCHANGE
- - Call 1-800-368-3863 for instructions on exchanging by mail.
- --------------------------------------------------------------------------------

BY EXCHANGE
- - Add to an account by exchanging funds from another Strong Funds account.
- - Sign up for telephone exchange services when you open your account. To add the
telephone exchange option to your account, call 1-800-368-3863 for a Telephone
Exchange Form.
- - Please note that the accounts must be identically registered and that the
minimum exchange is $50 or the balance of your account, whichever is less.
BY TELEPHONE PURCHASE

- - Sign up for telephone purchase when you open your account to make additional
investments from $50 to $25,000 into your Strong Funds account by telephone.
To add this option to your account, call 1-800-368-3863 for a Telephone
Purchase Form.

Or use Strong DirectSM, Strong Funds' automated telephone response system. Call
1-800-368-3863 for details.
- --------------------------------------------------------------------------------

- - Stop by our Investor Center in Menomonee Falls, Wisconsin. Call 1-800-368-3863
for hours and directions.
- - The Investor Center can only accept checks or money orders.
- --------------------------------------------------------------------------------

Call 1-800-368-3863 for instructions on adding to an account by wire.
- --------------------------------------------------------------------------------

USE ONE OF STRONG'S AUTOMATIC INVESTMENT PROGRAMS. Sign up for these services
when you open your account, or call 1-800-368-3863 for instructions on how to
add them to your existing account.

- - AUTOMATIC INVESTMENT PLAN. Make regular, systematic investments (minimum $50)
into your Strong Funds account from your bank checking or NOW account.
Complete the Automatic Investment Plan section on the account application.

- - AUTOMATIC EXCHANGE PLAN. Make regular, systematic exchanges (minimum $50) from
one Strong Funds account to another. Call 1-800-368-3863 for an application.
- - PAYROLL DIRECT DEPOSIT. Have a specified amount (minimum $50) regularly
deducted from your paycheck, social security check, military allotment, or
annuity payment invested directly into your Strong Funds account. Call
1-800-368-3863 for an application.
- - AUTOMATIC DIVIDEND REINVESTMENT. Unless you choose otherwise, all your
dividends and capital gain distributions will be automatically reinvested in
additional Fund shares. Or, you may elect to have your dividends and capital
gain distributions automatically invested in shares of another Strong Fund.
- --------------------------------------------------------------------------------

- - You may purchase additional shares in a Fund through a broker-dealer or other
institution that may charge a transaction fee.
- - Strong Funds may only accept requests to purchase additional shares into a
broker-dealer street name account from the broker-dealer.

----------------------

PROSPECTUS PAGE II-3
<PAGE> 43

WHAT YOU SHOULD KNOW ABOUT BUYING SHARES

- - Please make all checks or money orders payable to "Strong Funds."
- - We cannot accept third-party checks or checks drawn on banks outside the U.S.
- - You will be charged a $20 service fee for each check, wire, or Electronic
Funds Transfer ("EFT") purchase that is returned unpaid, and you will be
responsible for any resulting losses suffered by a Fund.
- - Further documentation may be requested from corporations, executors,
administrators, trustees, guardians, agents, or attorneys-in-fact.
- - A Fund may decline to accept your purchase order upon receipt when, in the
judgment of the Advisor, it would not be in the best interests of the existing
shareholders.
- - The exchange privileges are available in all 50 states because all the Strong
Funds intend to continue to qualify their shares for sale in all 50 states.
- - Minimum Investment Requirements:
----------------------------------------------------------------------------

To open a regular account

Money Market Fund...............................................$1,000

Short-Term Bond, Government Securities,
Corporate Bond, and High-Yield Funds..........................$2,500

To open an IRA or Defined Contribution account......................$1,000

To open an UGMA/UTMA account..........................................$250

To open a 401(k) or 403(b) retirement account...................No Minimum

To add to an existing account..........................................$50

The Funds offer a No-Minimum Investment Program that waives the minimum
initial investment requirements for investors who participate in the Strong
Automatic Investment Plan (described on page II-11). Unless you participate in
the Strong No-Minimum Investment Program, please ensure that your purchases meet
the minimum investment requirements.
Under certain circumstances (for example, if you discontinue a No-Minimum
Investment Program before you reach a Fund's minimum initial investment), each
Fund reserves the right to close your account. Before taking such action, a Fund
will provide you with written notice and at least 60 days in which to reinstate
an investment program or otherwise reach the minimum initial investment
required.

----------------------

PROSPECTUS PAGE II-4
<PAGE> 44

WHAT YOU SHOULD KNOW ABOUT BUYING SHARES
THROUGH A BROKER-DEALER

- - If you purchase shares through a program of services offered or administered
by a broker-dealer, financial institution, or other service provider, you
should read the program's materials, including information relating to fees,
in connection with a Fund's Prospectus. Certain features of a Fund may not be
available or may be modified in connection with the program of services
provided.
- - Certain broker-dealers, financial institutions, or other service providers
that have entered into an agreement with the Distributor may enter purchase
orders on behalf of their customers by phone, with payment to follow within
several days as specified in the agreement. The Funds may effect such purchase
orders at the net asset value next determined after receipt of the telephone
purchase order. It is the responsibility of the broker-dealer, financial
institution, or other service provider to place the order with the Funds on a
timely basis. If payment is not received within the time specified in the
agreement, the broker-dealer, financial institution, or other service provider
could be held liable for any resulting fees or losses.

DETERMINING YOUR SHARE PRICE

Generally, when you make any purchases, sales, or exchanges, the price of
your shares will be the net asset value ("NAV") next determined after Strong
Funds receives your request in proper form. If Strong Funds receives such
request prior to the close of the New York Stock Exchange (the "Exchange") on a
day on which the Exchange is open, your share price will be the NAV determined
that day. The NAV for each Fund is normally determined as of 3:00 p.m. Central
Time ("CT") each day the Exchange is open. The Funds reserve the right to change
the time at which purchases, redemptions, and exchanges are priced if the
Exchange closes at a time other than 3:00 p.m. CT or if an emergency exists.
Each Fund's NAV is calculated by taking the fair value of a Fund's total assets,
subtracting all its liabilities, and dividing by the total number of shares
outstanding. Expenses are accrued and applied daily when determining the NAV.

With respect to the Short-Term Bond, Government Securities, Corporate Bond,
and High-Yield Funds, debt securities are valued by a pricing service that
utilizes electronic data processing techniques to determine values for normal
institutional size trading units of debt securities without regard to the
existence of sale or bid prices when such techniques are believed to more
accurately reflect the fair market value of such securities. Otherwise, sale or
bid prices are used. Any securities or other assets for which market quotations
are not readily available are valued at fair value as determined in good faith
by the Board of Directors. Debt securities having remaining maturities of 60
days or less when purchased are valued by the amortized cost method when the

----------------------

PROSPECTUS PAGE II-5
<PAGE> 45

Board of Directors determines that the fair value of such securities is their
amortized cost.

The securities in the portfolios of the Money Market Fund are valued on an
amortized-cost basis. Under this method of valuation, a security is initially
valued at its acquisition cost, and thereafter, amortization of any discount or
premium is assumed each day, regardless of the impact of fluctuating interest
rates on the market value of the instrument. Under most conditions, management
believes it will be possible to maintain the NAV of the Fund at $1.00 per share.
Calculations are periodically made to compare the value of the Fund's portfolio
valued at amortized cost with market values. If a deviation of 1/2 of 1% or more
were to occur between the net asset value calculated by reference to market
values and the Fund's $1.00 per share NAV, or if there were any other deviation
that the Board of Directors believed would result in a material dilution to
shareholders or purchasers, the Board of Directors would promptly consider what
action, if any, should be initiated.

HOW TO SELL SHARES

You can access the money in your account at any time by selling (redeeming)
some or all of your shares back to the Fund. Once your redemption request is
received in proper form, Strong will normally mail you the proceeds the next
business day and, in any event, no later than seven days thereafter.
To redeem shares, you may use any of the methods described in the following
chart. However, if you are selling shares in a retirement account, please call
1-800-368-3863 for instructions. Please note that there is a $10.00 fee for
closing an IRA or other retirement account or for transferring assets to another
custodian. For your protection, certain requests may require a signature
guarantee.

----------------------

PROSPECTUS PAGE II-6
<PAGE> 46

-----------------------------------------------------------------------------

<TABLE>
TO SELL SHARES
- ------------------------------------------------------------------------------
<S> <C>
MAIL FOR INDIVIDUAL, JOINT TENANT, AND UGMA/UTMA ACCOUNTS
- Write a "letter of instruction" that includes the
following information: your account number, the
dollar amount or number of shares you wish to
redeem, each owner's name, your street address, and
the signature of each owner as it appears on the
account.
- Mail to Strong Funds, P.O. Box 2936, Milwaukee,
Wisconsin 53201. If you're using an express
delivery service, send to 100 Heritage Reserve,
Menomonee Falls, Wisconsin 53051.
FOR TRUST ACCOUNTS
- Same as above. Please ensure that all trustees sign
the letter of instruction.
FOR OTHER REGISTRATIONS
- Call 1-800-368-3863 for instructions.
- ------------------------------------------------------------------------------
TELEPHONE Sign up for telephone redemption services when you
open your account by checking the "Yes" box in the
1-800-368-3863 appropriate section of the account application. To
24 HOURS A DAY, add the telephone redemption option to your account,
7 DAYS A WEEK call 1-800-368-3863 for a Telephone Redemption Form.
Once the telephone redemption option is in place, you
may sell shares ($500 minimum) by phone and arrange
to receive the proceeds in one of three ways:
TO RECEIVE A CHECK BY MAIL
- At no charge, we will mail a check to the address
to which your account is registered.
TO DEPOSIT BY EFT
- At no charge, we will transmit the proceeds by
Electronic Funds Transfer (EFT) to a pre-authorized
bank account. Usually, the funds will arrive at
your bank two banking days after we process your
redemption.
TO DEPOSIT BY WIRE
- For a $10 fee, we will transmit the proceeds by
wire to a pre-authorized bank account. Usually, the
funds will arrive at your bank the next banking day
after we process your redemption.
You may also use Strong Direct(SM), Strong Funds'
automated telephone response system. Call
1-800-368-3863 for details.
- ------------------------------------------------------------------------------
CHECK WRITING Sign up for the free check-writing privilege when you
open your account. To add check writing to an existing
account or to order additional checks, call
1-800-368-3863.
- Please keep in mind that all check redemptions must
be for a minimum of $500 and that you cannot write a
check to close an account.
- ------------------------------------------------------------------------------
AUTOMATICALLY You can set up automatic withdrawals from your
account at regular intervals. To establish the
Systematic Withdrawal Plan, request a form by calling
1-800-368-3863.
- ------------------------------------------------------------------------------
BROKER-DEALER You may also redeem shares through broker-dealers or
others who may charge a commission or other
transaction fee.
</TABLE>

----------------------

PROSPECTUS PAGE II-7
<PAGE> 47

WHAT YOU SHOULD KNOW ABOUT SELLING SHARES

- - If you have recently purchased shares, please be aware that your redemption
request may not be honored until the purchase check has cleared your bank,
which generally occurs within ten calendar days.
- - The right of redemption may be suspended during any period in which (i)
trading on the Exchange is restricted, as determined by the SEC, or the
Exchange is closed for other than weekends and holidays; (ii) the SEC has
permitted such suspension by order; or (iii) an emergency as determined by the
SEC exists, making disposal of portfolio securities or valuation of net assets
of a Fund not reasonably practicable.
- - If you are selling shares you hold in certificate form, you must submit the
certificates with your redemption request. Each registered owner must endorse
the certificates and all signatures must be guaranteed.
- - Further documentation may be requested from corporations, executors,
administrators, trustees, guardians, agents, or attorneys-in-fact.

REDEMPTIONS IN KIND

The Funds have elected to be governed by Rule 18f-1 under the 1940 Act, which
obligates each Fund to redeem shares in cash, with respect to any one
shareholder during any 90-day period, up to the lesser of $250,000 or 1% of the
assets of the Fund. If the Advisor determines that existing conditions make cash
payments undesirable, redemption payments may be made in whole or in part in
securities or other financial assets, valued for this purpose as they are valued
in computing the NAV for the Fund's shares (a "redemption-in-kind").
Shareholders receiving securities or other financial assets in a redemption-in-
kind may realize a gain or loss for tax purposes, and will incur any costs of
sale, as well as the associated inconveniences. If you expect to make a
redemption in excess of the lesser of $250,000 or 1% of the Fund's assets during
any 90-day period and would like to avoid any possibility of being paid with
securities in-kind, you may do so by providing Strong Funds with an
unconditional instruction to redeem at least 15 calendar days prior to the date
on which the redemption transaction is to occur, specifying the dollar amount or
number of shares to be redeemed and the date of the transaction (please call
1-800-368-3863). This will provide the Fund with sufficient time to raise the
cash in an orderly manner to pay the redemption and thereby minimize the effect
of the redemption on the interests of the Fund's remaining shareholders. This
redemption-in-kind policy will also apply to redemption checks, except that a
check in excess of the lesser of $250,000 or 1% of a Fund's assets may not be
honored by the Fund if the Advisor determines that existing conditions make cash
payments undesirable.

WHAT YOU SHOULD KNOW ABOUT TELEPHONE REDEMPTIONS

- - The Funds reserve the right to refuse a telephone redemption if they believe
it advisable to do so.
- - Once you place your telephone redemption request, it cannot be canceled or
modified.

----------------------

PROSPECTUS PAGE II-8
<PAGE> 48

- - Investors will bear the risk of loss from fraudulent or unauthorized
instructions received over the telephone provided that the Fund reasonably
believes that such instructions are genuine. The Funds and their transfer
agent employ reasonable procedures to confirm that instructions communicated
by telephone are genuine. The Funds may incur liability if they do not follow
these procedures.
- - Because of increased telephone volume, you may experience difficulty in
implementing a telephone redemption during periods of dramatic economic or
market changes.

SHAREHOLDER SERVICES

INFORMATION SERVICES

24-HOUR ASSISTANCE. Strong Funds has registered representatives available to
help you 24 hours a day, 7 days a week. Call 1-414-359-1400 or toll-free
1-800-368-3863. You may also write to Strong Funds at the address on the cover
of this Prospectus.

STRONG DIRECTSM AUTOMATED TELEPHONE SYSTEM. Also available 24 hours a day,
the Strong DirectSM automated response system enables you to use a touch-tone
phone to hear fund quotes and returns on any Strong Fund. You may also confirm
account balances, hear records of recent transactions and dividend activity, and
perform purchases, exchanges or redemptions among your existing Strong accounts.
Your account information is protected by a personal code that you establish. For
more information on this service, call 1-800-368-3863.

STATEMENTS AND REPORTS. At a minimum, each Fund will confirm all transactions
for your account on a quarterly basis. We recommend that you file each quarterly
statement - and, especially, each calendar year-end statement - with your other
important financial papers, since you may need to refer to them at a later date
for tax purposes. Should you need additional copies of previous statements, you
may order confirmation statements for the current and preceding year at no
charge. Statements for earlier years are available for $10 each. Call
1-800-368-3863 to order past statements.

Each year, you will also receive a statement confirming the tax status of any
distributions paid to you, as well as a semiannual report and an annual report
containing audited financial statements.

To reduce the volume of mail you receive, only one copy of certain materials,
such as prospectuses and shareholder reports, is mailed to your house hold. Call
1-800-368-3863 if you wish to receive additional copies, free of charge.
More complete information regarding each Fund's investment policies and
services is contained in its SAI, which you may request by calling or writing

----------------------

PROSPECTUS PAGE II-9
<PAGE> 49

Strong Funds at the phone number and address on the cover of this Prospectus.

CHANGING YOUR ACCOUNT INFORMATION. So that you continue receiving your Strong
correspondence, including any dividend checks and statements, please notify us
in writing as soon as possible if your address changes. You may use the
Additional Investment Form at the bottom of your confirmation
statement, or simply write us a letter of instruction that contains the
following information:
1. a written request to change the address,
2. the account number(s) for which the address is to be changed,
3. the new address, and
4. the signatures of all owners of the accounts.
Please send your request to the address on the cover of this Prospectus.

Changes to an account's registration - such as adding or removing a joint
owner, changing an owner's name, or changing the type of your account - must
also be submitted in writing. Please call 1-800-368-3863 for instructions. For
your protection, some requests may require a signature guarantee.

TRANSACTION SERVICES

FREE EXCHANGE PRIVILEGE. You may exchange shares between identically
registered Strong Funds accounts, either in writing or by telephone. By
establishing the telephone exchange services, you authorize the Fund and its
agents to act upon your instruction by telephone to exchange shares from any
account you specify. For tax purposes, an exchange is considered a sale and a
purchase. Please obtain and read the appropriate prospectus before investing in
any of the Strong Funds. Since an excessive number of exchanges may be
detrimental to the Funds, each Fund reserves the right to discontinue the
exchange privilege of any shareholder who makes more than five exchanges in a
year or three exchanges in a calendar quarter.

FREE CHECK-WRITING PRIVILEGES. You may also redeem shares by check in amounts
of $500 or more. There is no charge for check-writing privileges. Redemption by
check cannot be honored if share certificates are outstanding and would need to
be liquidated to honor the check. In addition, a check may not be honored if the
check results in you redeeming more than the lesser of $250,000 or 1% of the
Fund's assets during any 90-day period and the Advisor determines that existing
conditions make cash payments undesirable. Checks are supplied free of charge,
and additional checks will be sent to you upon request. The Funds do not return
the checks you write, although copies are available upon request.

You may place stop-payment requests on checks by calling Strong Funds at
1-800-368-3863. A $10 fee will be charged for each stop-payment request. A stop
payment will remain in effect for two weeks following receipt of oral
instructions (six months following written instructions) by Strong Funds.
If there are insufficient cleared shares in your account to cover the amount
of your redemption by check, the check will be returned, marked "insufficient
funds," and a fee of $10 will be charged to the account.

-----------------------

PROSPECTUS PAGE II-10
<PAGE> 50

REGULAR INVESTMENT PLANS

Strong Funds' Automatic Investment Plan, Payroll Direct Deposit Plan, and
Automatic Exchange Plan, all discussed below, are methods of implementing DOLLAR
COST AVERAGING. Dollar cost averaging is an investment strategy that involves
investing a fixed amount of money at regular time intervals. By always investing
the same set amount, you will be purchasing more shares when the price is low
and fewer shares when the price is high. Ultimately, by using this principle in
conjunction with fluctuations in share price, your average cost per share may be
less than your average transaction price. A program of regular investment cannot
ensure a profit or protect against a loss during declining markets. Since such a
program involves continuous investment regardless of fluctuating share values,
you should consider your ability to continue the program through periods of both
low and high share-price levels.

AUTOMATIC INVESTMENT PLAN. The Automatic Investment Plan allows you to make
regular, systematic investments in a Fund from your bank checking or NOW
account. You may choose to make investments on any day of the month in amounts
of $50 or more. You can set up the Automatic Investment Plan with any financial
institution that is a member of the Automated Clearing House. Because each Fund
has the right to close an investor's account for failure to reach the minimum
initial investment, please consider your ability to continue this Plan until you
reach the minimum initial investment. Such closing may occur in periods of
declining share prices. To establish the Plan, complete the Automatic Investment
Plan section on the account application, or call 1-800-368-3863 for an
application.

PAYROLL DIRECT DEPOSIT PLAN. Once you meet a Fund's minimum initial
investment requirement, you may purchase additional Fund shares through the
Payroll Direct Deposit Plan. Through this Plan, periodic investments (minimum
$50) are made automatically from your payroll check into your existing Fund
account. By enrolling in the Plan, you authorize your employer or its agents to
deposit a specified amount from your payroll check into the Fund's bank account.
In most cases, your Fund account will be credited the day after the amount is
received by the Fund's bank. In order to participate in the Plan, your employer
must have direct deposit capabilities through Automated Clearing House available
to its employees. The Plan may be used for other direct deposits, such as social
security checks, military allotments, and annuity payments.
To establish a Direct Deposit for your account, call 1-800-368-3863 to obtain
an Authorization for Payroll Direct Deposit to a Strong Funds Account form. Once
the Plan is established, you may alter the amount of the deposit, alter the
frequency of the deposit, or terminate your participation in the program by
notifying your employer.

-----------------------

PROSPECTUS PAGE II-11
<PAGE> 51

AUTOMATIC EXCHANGE PLAN. The Automatic Exchange Plan allows you to make
regular, systematic exchanges (minimum $50) from one Strong Funds account into
another Strong Funds account. By setting up the Plan, you authorize the Fund and
its agents to redeem a set dollar amount or number of shares from the first
account and purchase shares of a second Strong Fund. In addition, you authorize
a Fund and its agents to accept telephone instructions to change the dollar
amount and frequency of the exchange. An exchange transaction is a sale and
purchase of shares for federal income tax purposes and may result in a capital
gain or loss. To establish the Plan, request a form by calling 1-800-368-3863.
To participate in the Automatic Exchange Plan, you must have an initial
account balance of $2,500 in the first account and at least the minimum initial
investment in the second account. Exchanges may be made on any day or days of
your choice. If the amount remaining in the first account is less than the
exchange amount you requested, then the remaining amount will be exchanged. At
such time as the first account has a zero balance, your participation in the
Plan will be terminated. You may also terminate the Plan at any time by calling
or writing to the Fund. Once participation in the Plan has been terminated for
any reason, to reinstate the Plan you must do so in writing; simply investing
additional funds will not reinstate the Plan.

SYSTEMATIC WITHDRAWAL PLAN. You can set up automatic withdrawals from your
account at regular intervals. To begin distributions, you must have an initial
balance of $5,000 in your account and withdraw at least $50 per payment. To
establish the Systematic Withdrawal Plan, request a form by calling
1-800-368-3863. Depending upon the size of the account and the withdrawals
requested (and fluctuations in net asset value of the shares redeemed),
redemptions for the purpose of satisfying such withdrawals may reduce or even
exhaust the account. If the amount remaining in the account is not sufficient to
meet a Plan payment, the remaining amount will be redeemed and the Plan will be
terminated.

SPECIAL SITUATIONS

POWER OF ATTORNEY. If you are investing as attorney-in-fact for another
person, please complete the account application in the name of such person and
sign the back of the application in the following form: "[applicant's name] by
[your name], attorney-in-fact." To avoid having to file an affidavit prior to
each transaction, please complete the Power of Attorney form available from
Strong Funds at 1-800-368-3863. However, if you would like to use your own power
of attorney form, please call the same number for instructions.

CORPORATIONS AND TRUSTS. If you are investing for a corporation, please
include with your account application a certified copy of your corporate
resolution indicating which officers are authorized to act on behalf of the
corporation.

-----------------------

PROSPECTUS PAGE II-12
<PAGE> 52

As an alternative, you may complete a Certification of Authorized Individuals
form, which can be obtained from the Funds. Until a valid corporate resolution
or Certification of Authorized Individuals is received by the Fund, services
such as telephone redemption, wire redemption, and check writing will not be
established.

If you are investing as a trustee, please include the date of the trust. All
trustees must sign the application. If they do not, services such as telephone
redemption, wire redemption, and check writing will not be established. All
trustees must sign redemption requests unless proper documentation to the
contrary is provided to the Fund. Failure to provide these documents or
signatures as required when you invest may result in delays in processing
redemption requests.

SIGNATURE GUARANTEES. A signature guarantee is designed to protect you and
the Funds against fraudulent transactions by unauthorized persons. In the
following instances, the Funds will require a signature guarantee for all
authorized owners of an account:

- - when you add the telephone redemption or check-writing options to your
existing account;
- - if you transfer the ownership of your account to another individual or
organization;
- - when you submit a written redemption request for more than $25,000;
- - when you request to redeem or redeposit shares that have been issued in
certificate form;
- - if you open an account and later decide that you want certificates;
- - when you request that redemption proceeds be sent to a different name or
address than is registered on your account;
- - if you add/change your name or add/remove an owner on your account; and
- - if you add/change the beneficiary on your transfer-on-death account.

A signature guarantee may be obtained from any eligible guarantor
institution, as defined by the SEC. These institutions include banks, savings
associations, credit unions, brokerage firms, and others. PLEASE NOTE THAT A
NOTARY PUBLIC STAMP OR SEAL IS NOT ACCEPTABLE.

-----------------------

PROSPECTUS PAGE II-13
<PAGE> 53

APPENDIX A

RATINGS OF DEBT OBLIGATIONS:

<TABLE>
<CAPTION>
Moody's Standard & Fitch
Investors Poor's Ratings Investors
Service, Inc. Group Service, Inc. Definition
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG-TERM Aaa AAA AAA Highest quality
Aa AA AA High quality
A A A Upper medium grade
Baa BBB BBB Medium grade
Ba BB BB Low grade
B B B Speculative
Caa, Ca, C CCC, CC, C CCC, CC, C Submarginal
D D DDD, DD, D Probably in default
- ----------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Moody's S&P Fitch
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM MIG1/VMIG1 Best quality SP-1+ Very strong quality F-1+ Exceptionally strong
quality
---------------------------------------------------------------
MIG2/VMIG2 High quality SP-1 Strong quality F-1 Very strong quality
---------------------------------------------------------------
MIG3/VMIG3 Favorable SP-2 Satisfactory grade F-2 Good credit quality
quality
---------------------------------------------------------------
MIG4/VMIG4 Adequate F-3 Fair credit quality
quality
---------------------------------------------------------------
SG Speculative SP-3 Speculative grade F-S Weak credit quality
grade
- ----------------------------------------------------------------------------
COMMERCIAL P-1 Superior A-1+ Extremely strong F-1+ Exceptionally strong
PAPER quality quality quality
---------------------------------------------------------------
A-1 Strong quality F-1 Very strong quality
---------------------------------------------------------------
P-2 Strong A-2 Satisfactory quality F-2 Good credit quality
quality
---------------------------------------------------------------
P-3 Acceptable A-3 Adequate quality F-3 Fair credit quality
quality
---------------------------------------------------------------
B Speculative quality F-S Weak credit quality
---------------------------------------------------------------
Not Prime C Doubtful quality D Default
- --------------
</TABLE>

----------------------

PROSPECTUS PAGE A-1
<PAGE> 54

APPENDIX B

WEIGHTED AVERAGE RATINGS OF DEBT OBLIGATIONS1

<TABLE>
<CAPTION>
Average Percentage of Assets Held During 19942
- -------------------------------------------------------------------
Short-Term Bond Corporate Bond
--------------------- ---------------------
Equivalent Equivalent
S&P Moody's Rated Unrated3 Rated Unrated3
<S> <C> <C> <C> <C> <C>
AAA Aaa4 34.8% - 12.2% -
AA Aa 5.9 - 5.1 -
A A 11.1 - 4.2 -
BBB Baa 37.8 1.4% 54.4 -
BB Ba 3.0 0.9 17.6 0.4%
B B 0.8 0.2 2.4 1.0
CCC Caa - - - -
CC Ca - - - -
C C - - - -
Totals 93.4% 2.5% 95.9% 1.4%
</TABLE>

<TABLE>
<CAPTION>
Percentage of Assets Held on December 31, 1994
- -------------------------------------------------------------------
Short-Term Bond Corporate Bond
--------------------- ---------------------
Equivalent Equivalent
S&P Moody's Rated Unrated3 Rated Unrated3
<S> <C> <C> <C> <C> <C>
AAA Aaa4 35.1% - 12.1% -
AA Aa 4.1 - 2.4 -
A A 12.5 - 6.1 -
BBB Baa 34.7 3.9% 51.2 -
BB Ba 4.3 0.6 16.3 2.3%
B B - 0.6 4.6 0.8
CCC Caa - - - -
CC Ca - - - -
C C - - - -
Totals 90.7% 5.1% 92.7% 3.1%
</TABLE>

WEIGHTED AVERAGE RATINGS OF CORPORATE COMMERCIAL PAPER1

<TABLE>
<CAPTION>
Average Percentage of Assets Held During 19942
- -------------------------------------------------------
Rated3
- ----------------
S&P Moody's Short-Term Bond Corporate Bond
<S> <C> <C> <C>
A1 P15 1.8% 2.2%
A2 P25 1.3 0.3
A3 P3 - -
Totals 3.2% 2.5%
</TABLE>

<TABLE>
<CAPTION>
Percentage of Assets Held on December 31, 1994
- -------------------------------------------------------
Rated3
- ----------------
S&P Moody's Short-Term Bond Corporate Bond
<S> <C> <C> <C>
A1 P15 0.5% 0.5%
A2 P25 0.1 1.9
A3 P3 - -
Totals 0.6% 2.4%
</TABLE>

(1) A security rated differently by two or more rating services is included in
the category representing the higher of the ratings assigned to the
security.

(2) Based on a weighted average of the securities held at the end of each
month. Investment-grade debt obligations are those rated in one of the
four highest categories by an NRSRO, and investment-grade commercial paper
is commercial paper rated in one of the top three categories by such
organizations. See "Fundamentals of Fixed Income Investing" in this
Prospectus for a discussion of the risks associated with
non-investment-grade debt obligations and Appendix A and the SAI for a
description of credit ratings. The Appendix does not contain information
on the Money Market and Government Securities Funds because these Funds
may not invest in non-investment-grade debt obligations.

(3) This category represents the comparable quality of unrated securities, as
determined by the Advisor.
(4) Includes all U.S. government obligations.
(5) Includes commercial paper rated in an equivalent category by either S&P or
Fitch.

----------------------

PROSPECTUS PAGE B-1
<PAGE> 55

PART B

STATEMENT OF ADDITIONAL INFORMATION

STRONG U.S. TREASURY MONEY FUND

Incorporated by Reference to the Registrant's Post- Effective Amendment No. 6
to the Registration Statement of Form N-1A (File No. 33-73435), which was filed
with the Securities and Exchange Commission on or about April 20, 1995; as
updated by Registrant's 497 Filing dated September 18, 1995 (Edgar Reference
No. 0000950124-95-002968).
<PAGE> 56
STATEMENT OF ADDITIONAL INFORMATION

STRONG MONEY MARKET FUND

STRONG SHORT-TERM BOND FUND
STRONG GOVERNMENT SECURITIES FUND
STRONG CORPORATE BOND FUND
STRONG HIGH-YIELD BOND FUND

P.O. Box 2936
Milwaukee, Wisconsin 53201
Telephone: (414) 359-1400
Toll-Free: (800) 368-3863

This Statement of Additional Information is not a Prospectus and
should be read in conjunction with the Prospectus of Strong Money Market Fund,
Inc. (the "Money Fund"); Strong Short-Term Bond Fund, Inc. (the "Short-Term
Bond Fund"); Strong Government Securities Fund, Inc. (the "Government Fund");
Strong Corporate Bond Fund, Inc. (the "Corporate Bond Fund"); and Strong
High-Yield Bond Fund (the "High-Yield Fund"), which is a series of Strong
Income Funds, Inc. (hereinafter collectively referred to as the "Funds"), dated
December 28, 1995. Requests for copies of the Prospectus should be made by
calling one of the numbers listed above. The financial statements appearing in
the Money, Short-Term Bond, Government, and Corporate Bond Funds' Annual
Report, which accompanies this Statement of Additional Information, are
incorporated herein by reference. The Financial Highlights for the High-Yield
Fund are not provided because it did not commence operations until December 28,
1995.

This Statement of Additional Information is dated December 28, 1995.

<PAGE> 57

STRONG INCOME FUNDS

<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
COMMON INVESTMENT POLICIES AND TECHNIQUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Illiquid Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
When-Issued Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Lending of Portfolio Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Variable- or Floating-Rate Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Mortgage- and Asset-Backed Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
INVESTMENT POLICIES AND TECHNIQUES--MONEY FUND . . . . . . . . . . . . . . . . . . . . . . . . . 9
Rule 2a-7: Maturity, Quality, and Diversification Restrictions . . . . . . . . . . . . . . . . 9
INVESTMENT POLICIES AND TECHNIQUES -
SHORT-TERM BOND, GOVERNMENT, CORPORATE BOND, AND HIGH-YIELD FUNDS . . . . . . . . . . . . . . . . 10
Derivative Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
High-Yield (High-Risk) Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Short Sales Against the Box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Temporary Defensive Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
INVESTMENT POLICIES AND TECHNIQUES -
SHORT-TERM BOND, CORPORATE BOND, AND HIGH-YIELD FUNDS . . . . . . . . . . . . . . . . . . . . . . 19
Depositary Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Loan Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Foreign Investment Companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
DIRECTORS AND OFFICERS OF THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
INVESTMENT ADVISOR AND DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
PORTFOLIO TRANSACTIONS AND BROKERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 30
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ADDITIONAL SHAREHOLDER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
FUND ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SHAREHOLDER MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
PORTFOLIO MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
LEGAL COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1

</TABLE>

No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information and the Prospectus dated December 28, 1995 and, if given or made,
such information or representations may not be relied upon as having been
authorized by the Funds.

This Statement of Additional Information does not constitute an offer to sell
securities.

<PAGE> 58

INVESTMENT RESTRICTIONS

The investment objective of the Money Fund is to seek current
income, a stable share price and daily liquidity. The investment objective
of the Short-Term Bond Fund is to seek total return by investing for a high
level of current income with a low degree of share-price fluctuation. The
investment objective of the Government Fund is to seek total return by
investing for a high level of current income with a moderate degree of
share-price fluctuation. The investment objective of the Corporate Bond Fund
is to seek total return by investing for a high level of current income
with a moderate degree of share-price fluctuation. The investment objective
of the High-Yield Fund is to seek total return by investing for a high level
of current income and capital growth. The Funds' investment objectives and
policies are described in detail in the Prospectus under the caption
"Investment Objectives and Policies." The following are the Funds'
fundamental investment limitations which cannot be changed without shareholder
approval.

Each Fund:

1. May not with respect to 75% of its total assets, purchase the
securities of any issuer (except securities issued or guaranteed by
the U.S. government or its agencies or instrumentalities) if, as a
result, (i) more than 5% of the Fund's total assets would be invested
in the securities of that issuer, or (ii) the Fund would hold more
than 10% of the outstanding voting securities of that issuer.

2. May (i) borrow money from banks and (ii) make other investments
or engage in other transactions permissible under the Investment
Company Act of 1940 (the "1940 Act") which may involve a borrowing,
provided that the combination of (i) and (ii) shall not exceed 33
1/3% of the value of the Fund's total assets (including the amount
borrowed), less the Fund's liabilities (other than borrowings),
except that the Fund may borrow up to an additional 5% of its
total assets (not including the amount borrowed) from a bank for
temporary or emergency purposes (but not for leverage or the purchase
of investments). The Fund may also borrow money from the other
Strong Funds or other persons to the extent permitted by applicable
law.

3. May not issue senior securities, except as permitted under the 1940
Act.

4. May not act as an underwriter of another issuer's securities, except
to the extent that the Fund may be deemed to be an underwriter
within the meaning of the Securities Act of 1933 in connection with
the purchase and sale of portfolio securities.

5. May not purchase or sell physical commodities unless acquired as a
result of ownership of securities or other instruments (but this
shall not prevent the Fund from purchasing or selling options, futures
contracts, or other derivative instruments, or from investing in
securities or other instruments backed by physical commodities).

6. May not make loans if, as a result, more than 33 1/3% of the Fund's
total assets would be lent to other persons, except through (i)
purchases of debt securities or other debt instruments, or (ii)
engaging in repurchase agreements.

7. May not purchase the securities of any issuer if, as a result,
more than 25% of the Fund's total assets would be invested in the
securities of issuers, the principal business activities of which
are in the same industry. With respect to the Money Market Funds
only, this limitation shall not limit the Funds' purchases of
obligations issued by domestic banks.

8. May not purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prohibit the Fund from purchasing or selling securities or other
instruments backed by real estate or of issuers engaged in real
estate activities).

9. May, notwithstanding any other fundamental investment policy or
restriction, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies, and restrictions as the
Fund.

- 3 -
<PAGE> 59

The following are the Funds' non-fundamental operating policies
which may be changed by the Board of Directors of each Fund without
shareholder approval.

Each Fund may not:

1. Sell securities short, unless the Fund owns or has the right to
obtain securities equivalent in kind and amount to the securities
sold short, or unless it covers such short sale as required by the
current rules and positions of the Securities and Exchange Commission
or its staff, and provided that transactions in options, futures
contracts, options on futures contracts, or other derivative
instruments are not deemed to constitute selling securities short.

2. Purchase securities on margin, except that the Fund may obtain
such short-term credits as are necessary for the clearance of
transactions; and provided that margin deposits in connection with
futures contracts, options on futures contracts, or other derivative
instruments shall not constitute purchasing securities on margin.

3. Invest in illiquid securities if, as a result of such investment,
more than 15% (10% with respect to the Money Fund) of its net assets
would be invested in illiquid securities, or such other amounts as may
be permitted under the 1940 Act.

4. Purchase securities of other investment companies except in compliance
with the 1940 Act and applicable state law.

5. Invest all of its assets in the securities of a single open-end
investment management company with substantially the same fundamental
investment objective, restrictions and policies as the Fund.

6. Purchase the securities of any issuer (other than securities issued
or guaranteed by domestic or foreign governments or political
subdivisions thereof) if, as a result, more than 5% of its total
assets would be invested in the securities of issuers that, including
predecessor or unconditional guarantors, have a record of less than
three years of continuous operation. This policy does not apply to
securities of pooled investment vehicles or mortgage or asset-backed
securities.

7. Invest in direct interests in oil, gas, or other mineral exploration
programs or leases; however, the Fund may invest in the securities of
issuers that engage in these activities.

8. Engage in futures or options on futures transactions which are
impermissible pursuant to Rule 4.5 under the Commodity Exchange Act
and, in accordance with Rule 4.5, will use futures or options on
futures transactions solely for bona fide hedging transactions
(within the meaning of the Commodity Exchange Act), provided,
however, that the Fund may, in addition to bona fide hedging
transactions, use futures and options on futures transactions if the
aggregate initial margin and premiums required to establish such
positions, less the amount by which any such options positions are in
the money (within the meaning of the Commodity Exchange Act), do not
exceed 5% of the Fund's net assets.

In addition, (i) the aggregate value of securities underlying call
options on securities written by the Fund or obligations underlying
put options on securities written by the Fund determined as of the
date the options are written will not exceed 50% of the Fund's net
assets; (ii) the aggregate premiums paid on all options purchased
by the Fund and which are being held will not exceed 20% of the
Fund's net assets; (iii) the Fund will not purchase put or call
options, other than hedging positions, if, as a result thereof, more
than 5% of its total assets would be so invested; and (iv) the
aggregate margin deposits required on all futures and options on
futures transactions being held will not exceed 5% of the Fund's total
assets.

9. Pledge, mortgage or hypothecate any assets owned by the Fund except
as may be necessary in connection with permissible borrowings or
investments and then such pledging, mortgaging, or hypothecating may
not exceed 33 1/3% of the Fund's total assets at the time of the
borrowing or investment.

10. Purchase or retain the securities of any issuer if any officer or
director of the Fund or its investment advisor beneficially owns
more than 1/2 of 1% of the securities of such issuer and such
officers and directors together own beneficially more than 5% of
the securities of such issuer.

- 4 -
<PAGE> 60

11. Purchase warrants, valued at the lower of cost or market value, in
excess of 5% of the Fund's net assets. Included in that amount, but
not to exceed 2% of the Fund's net assets, may be warrants that are
not listed on any stock exchange. Warrants acquired by the Fund in
units or attached to securities are not subject to these restrictions.

12. Borrow money except (i) from banks or (ii) through reverse
repurchase agreements or mortgage dollar rolls, and will not
purchase securities when bank borrowings exceed 5% of its total
assets.

13. Make any loans other than loans of portfolio securities, except
through (i) purchases of debt securities or other debt instruments,
or (ii) engaging in repurchase agreements.

Money Fund. In addition to the common non-fundamental restrictions
described above, the Money Fund may not engage in any transaction or
practice which is not permissible under Rule 2a-7 of the 1940 Act,
notwithstanding any other fundamental investment limitation or
non-fundamental operating policy.

Corporate Bond Fund. Under normal market conditions, the Corporate Bond Fund
will invest at least 65% of its total assets in bonds. The Fund may invest
up to 5% of its total assets in warrants. In addition, the Advisor has
adopted an internal policy that the Fund will not invest more than 10% of
its total assets in debt obligations rated lower than BB or its equivalent.
For the purposes of this internal policy, convertible securities will not be
considered debt obligations.

Except for the fundamental investment limitations listed above and
each Fund's investment objective, the other investment policies described in
the Prospectus and this Statement of Additional Information are not
fundamental and may be changed with approval of a Fund's Board of Directors.

COMMON INVESTMENT POLICIES AND TECHNIQUES

The following information supplements the discussion of the Funds'
investment objectives, policies and techniques that are described in detail in
the Prospectus under the captions "Investment Objectives and Policies" and
"Implementation of Policies and Risks." Investment policies and techniques
that are unique to the Short-Term Bond, Government, Corporate Bond, or
High-Yield Funds are discussed below.

ILLIQUID SECURITIES

The Funds may invest in illiquid securities (i.e., securities that are
not readily marketable). However, a Fund will not acquire illiquid securities
if, as a result, they would comprise more than 15%, or with respect to the
Money Fund, 10%, of the value of the Fund's net assets (or such other amounts
as may be permitted under the 1940 Act). The Board of Directors of each Fund,
or its delegate, has the ultimate authority to determine, to the extent
permissible under the federal securities laws, which securities are illiquid
for purposes of this limitation. Certain securities exempt from registration
or issued in transactions exempt from registration under the Securities Act of
1933, as amended (the "Securities Act"), including securities that may be
resold pursuant to Rule 144A under the Securities Act, may be considered
liquid. The Board of Directors of each Fund has delegated to Strong Capital
Management, Inc. (the "Advisor") the day-to-day determination of the liquidity
of a security, although it has retained oversight and ultimate responsibility
for such determinations. Although no definitive liquidity criteria are used,
the Board of Directors has directed the Advisor to look to such factors as (i)
the nature of the market for a security (including the institutional private
resale market), (ii) the terms of certain securities or other instruments
allowing for the disposition to a third party or the issuer thereof (e.g.,
certain repurchase obligations and demand instruments), (iii) the availability
of market quotations (e.g., for securities quoted in PORTAL system), and (iv)
other permissible relevant factors.

Restricted securities may be sold only in privately negotiated
transactions or in a public offering with respect to which a registration
statement is in effect under the Securities Act. Where registration is
required, a Fund may be obligated to pay all or part of the registration
expenses and a considerable period may elapse between the time of the decision
to sell and the time the Fund may be permitted to sell a security under an
effective registration statement. If, during such a period, adverse market
conditions were to develop, a Fund might obtain a less favorable price than
prevailed when it decided to sell. Restricted securities will be priced at
fair value as determined in good faith by the Board of Directors of each Fund.
If through the appreciation of restricted securities or the depreciation of
unrestricted securities, a Fund should be in a position where more than 15%, or
with

- 5 -
<PAGE> 61

respect to the Money Fund, 10%, of the value of its net assets are invested in
illiquid securities, including restricted securities which are not readily
marketable, the Fund will take such steps as is deemed advisable, if any, to
protect liquidity.

A Fund may sell over-the-counter ("OTC") options and, in connection
therewith, segregate assets or cover its obligations with respect to OTC
options written by the Fund. The assets used as cover for OTC options written
by a Fund will be considered illiquid unless the OTC options are sold to
qualified dealers who agree that the Fund may repurchase any OTC option it
writes at a maximum price to be calculated by a formula set forth in the option
agreement. The cover for an OTC option written subject to this procedure would
be considered illiquid only to the extent that the maximum repurchase price
under the formula exceeds the intrinsic value of the option.

Notwithstanding the above, the Advisor intends, as a matter of
internal policy, to limit each Fund's investments in illiquid securities to 10%
of its net assets.

WHEN-ISSUED SECURITIES

The Funds may from time to time purchase securities on a
"when-issued" basis. The price of debt securities purchased on a when-issued
basis, which may be expressed in yield terms, is fixed at the time the
commitment to purchase is made, but delivery and payment for the securities
take place at a later date. Normally, the settlement date occurs within one
month of the purchase. During the period between the purchase and
settlement, no payment is made by the Fund to the issuer and no interest
on debt securities accrues to the Fund. Forward commitments involve a
risk of loss if the value of the security to be purchased declines prior
to the settlement date, which risk is in addition to the risk of decline in
value of the Fund's other assets. While when-issued securities may be sold
prior to the settlement date, the Funds intend to purchase such securities
with the purpose of actually acquiring them unless a sale appears
desirable for investment reasons. At the time a Fund makes the commitment to
purchase a security on a when-issued basis, it will record the transaction and
reflect the value of the security in determining its net asset value. The
Funds do not believe that their respective net asset values or income will be
adversely affected by purchases of securities on a when-issued basis.

The Funds will maintain cash and marketable securities equal in
value to commitments for when-issued securities. Such segregated securities
either will mature or, if necessary, be sold on or before the settlement
date. When the time comes to pay for when-issued securities, the Funds
will meet their respective obligations from then-available cash flow, sale
of the securities held in the separate account, sale of other securities
or, although it would not normally expect to do so, from the sale of the
when-issued securities themselves (which may have a market value greater or
less than the respective Fund's payment obligation).

LENDING OF PORTFOLIO SECURITIES

Each Fund is authorized to lend up to 33 1/3% of the total value of
its portfolio securities to broker-dealers or institutional investors that the
Advisor deems qualified, but only when the borrower maintains with the Fund's
custodian bank collateral either in cash or money market instruments in an
amount at least equal to the market value of the securities loaned, plus
accrued interest and dividends, determined on a daily basis and adjusted
accordingly. However, the Funds do not presently intend to engage in such
lending. In determining whether to lend securities to a particular
broker-dealer or institutional investor, the Advisor will consider, and during
the period of the loan will monitor, all relevant facts and circumstances,
including the creditworthiness of the borrower. The Funds will retain
authority to terminate any loans at any time. The Funds may pay reasonable
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash or money market
instruments held as collateral to the borrower or placing broker. The Funds
will receive reasonable interest on the loan or a flat fee from the borrower
and amounts equivalent to any dividends, interest or other distributions on the
securities loaned. The Funds will retain record ownership of loaned securities
to exercise beneficial rights, such as voting and subscription rights and
rights to dividends, interest or other distributions, when retaining such
rights is considered to be in a Fund's interest.

VARIABLE- OR FLOATING-RATE SECURITIES

The Funds may invest in securities which offer a variable- or
floating-rate of interest. Variable-rate securities provide for automatic
establishment of a new interest rate at fixed intervals (e.g., daily, monthly,
semi-annually, etc.). Floating-rate securities provide for automatic
adjustment of the interest rate whenever some specified interest rate index
changes. The interest rate on

- 6 -
<PAGE> 62

variable- or floating-rate securities is ordinarily determined by reference to
or is a percentage of a bank's prime rate, the 90-day U.S. Treasury bill rate,
the rate of return on commercial paper or bank certificates of deposit, an
index of short-term interest rates, or some other objective measure.

Variable- or floating-rate securities frequently include a demand
feature entitling the holder to sell the securities to the issuer at par. In
many cases, the demand feature can be exercised at any time on 7 days notice;
in other cases, the demand feature is exercisable at any time on 30 days notice
or on similar notice at intervals of not more than one year. Some securities
which do not have variable or floating interest rates may be accompanied by
puts producing similar results and price characteristics. When considering the
maturity of any instrument which may be sold or put to the issuer or a third
party, each Fund may consider that instrument's maturity to be shorter than its
stated maturity. Any such determination by the Money Fund will be made in
accordance with Rule 2a-7.

Variable-rate demand notes include master demand notes which are
obligations that permit a Fund to invest fluctuating amounts, which may change
daily without penalty, pursuant to direct arrangements between a Fund, as
lender, and the borrower. The interest rates on these notes fluctuate from
time to time. The issuer of such obligations normally has a corresponding
right, after a given period, to prepay in its discretion the outstanding
principal amount of the obligations plus accrued interest upon a specified
number of days' notice to the holders of such obligations. The interest rate
on a floating-rate demand obligation is based on a known lending rate, such as
a bank's prime rate, and is adjusted automatically each time such rate is
adjusted. The interest rate on a variable-rate demand obligation is adjusted
automatically at specified intervals. Frequently, such obligations are secured
by letters of credit or other credit support arrangements provided by banks.
Because these obligations are direct lending arrangements between the lender
and borrower, it is not contemplated that such instruments will generally be
traded. There generally is not an established secondary market for these
obligations, although they are redeemable at face value. Accordingly, where
these obligations are not secured by letters of credit or other credit support
arrangements, a Fund's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand. Such obligations frequently
are not rated by credit rating agencies and, if not so rated, the Funds may
invest in them only if the Funds' Advisor determines that at the time of
investment the obligations are of comparable quality to the other obligations
in which the Funds may invest. The Advisor, on behalf of the Funds, will
consider on an ongoing basis the creditworthiness of the issuers of the
floating- and variable-rate demand obligations in the Funds' portfolio.

Each Fund will not invest more than 15%, or with respect to the Money
Fund, 10%, of its net assets in variable- and floating-rate demand obligations
that are not readily marketable (a variable- or floating-rate demand obligation
that may be disposed of on not more than seven days notice will be deemed
readily marketable and will not be subject to this limitation). (See "Illiquid
Securities" and "Investment Restrictions.") In addition, each variable- or
floating-rate obligation must meet the credit quality requirements applicable
to all the Fund's investments at the time of purchase. When determining
whether such an obligation meets a Fund's credit quality requirements, the Fund
may look to the credit quality of the financial guarantor providing a letter of
credit or other credit support arrangement.

In determining a Fund's weighted average portfolio maturity, a Fund
will consider a floating or variable rate security to have a maturity equal to
its stated maturity (or redemption date if it has been called for redemption),
except that it may consider (i) variable rate securities to have a maturity
equal to the period remaining until the next readjustment in the interest rate,
unless subject to a demand feature, (ii) variable rate securities subject to a
demand feature to have a remaining maturity equal to the longer of (a) the next
readjustment in the interest rate or (b) the period remaining until the
principal can be recovered through demand, and (iii) floating rate securities
subject to a demand feature to have a maturity equal to the period remaining
until the principal can be recovered through demand. Variable and floating
rate securities generally are subject to less principal fluctuation than
securities without these attributes since the securities usually trade at par
following the readjustment in the interest rate.

MORTGAGE- AND ASSET-BACKED SECURITIES

Mortgage-backed securities represent direct or indirect participations
in, or are secured by and payable from, mortgage loans secured by real
property, and include single- and multi-class pass-through securities and
collateralized mortgage obligations. Such securities may be issued or
guaranteed by U.S. government agencies or instrumentalities, such as the
Government National Mortgage Association and the Federal National Mortgage
Association, or by private issuers, generally originators and investors in
mortgage loans, including savings associations, mortgage bankers, commercial
banks, investment bankers, and special purpose entities (collectively, "private
lenders"). Mortgage-backed securities issued by private lenders may be
supported by pools of

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<PAGE> 63

mortgage loans or other mortgage-backed securities that are guaranteed,
directly or indirectly, by the U.S. government or one of its agencies or
instrumentalities, or they may be issued without any governmental guarantee of
the underlying mortgage assets but with some form of non-governmental credit
enhancement.

Asset-backed securities have structural characteristics similar to
mortgage-backed securities. However, the underlying assets are not first lien
mortgage loans or interests therein, but include assets such as motor vehicle
installment sales contracts, other installment loan contracts, home equity
loans, leases of various types of property, and receivables from credit card or
other revolving credit arrangements. Payments or distributions of principal
and interest on asset-backed securities may be supported by non-governmental
credit enhancements similar to those utilized in connection with
mortgage-backed securities.

The yield characteristics of mortgage- and asset-backed securities
differ from those of traditional debt securities. Among the principal
differences are that interest and principal payments are made more frequently
on mortgage-and asset-backed securities, usually monthly, and that principal
may be prepaid at any time because the underlying mortgage loans or other
assets generally may be prepaid at any time. As a result, if a Fund purchases
these securities at a premium, a prepayment rate that is faster than expected
will reduce yield to maturity, while a prepayment rate that is slower than
expected will have the opposite effect of increasing the yield to maturity.
Conversely, if a Fund purchases these securities at a discount, a prepayment
rate that is faster than expected will increase yield to maturity, while a
prepayment rate that is slower than expected will reduce yield to maturity.
Amounts available for reinvestment by a Fund are likely to be greater during a
period of declining interest rates and, as a result, are likely to be
reinvested at lower interest rates than during a period of rising interest
rates. Accelerated prepayments on securities purchased by a Fund at a premium
also impose a risk of loss of principal because the premium may not have been
fully amortized at the time the principal is prepaid in full. The market for
privately issued mortgage- and asset-backed securities is smaller and less
liquid than the market for government-sponsored mortgage-backed securities.

The Funds may invest in stripped mortgage- or asset-backed securities,
which receive differing proportions of the interest and principal payments from
the underlying assets. The market value of such securities generally is more
sensitive to changes in prepayment and interest rates than is the case with
traditional mortgage- and asset-backed securities, and in some cases such
market value may be extremely volatile. With respect to certain stripped
securities, such as interest only and principal only classes, a rate of
prepayment that is faster or slower than anticipated may result in a Fund
failing to recover all or a portion of its investment, even though the
securities are rated investment grade.

REPURCHASE AGREEMENTS

The Funds may invest in repurchase agreements. In a repurchase
agreement, a Fund buys a security at one price, and at the time of sale, the
seller agrees to repurchase the obligation at a mutually agreed upon time and
price (usually within seven days). The repurchase agreement, thereby,
determines the yield during the purchaser's holding period, while the seller's
obligation to repurchase is secured by the value of the underlying security.
If the value of such securities is less than the repurchase price, plus any
agreed-upon additional amount, the other party to the agreement will be
required to provide additional collateral so that at all times the collateral
is at least equal to the repurchase price, plus any agreed-upon additional
amount. The Advisor will monitor, on an ongoing basis, the value of the
underlying securities to ensure that the value always equals or exceeds the
repurchase price plus accrued interest. A Fund may, under certain
circumstances, deem repurchase agreements, collateralized by U.S. government
securities to be investments in U.S. government securities.

BORROWING

Each Fund may borrow money from banks, limited by each Fund's
fundamental investment restriction to 33 1/3% of its total assets, and may
engage in mortgage dollar roll transactions and reverse repurchase agreements
which may be considered a form of borrowing. (See "Implementation of Policies
and Risks - Mortgage Dollar Rolls and Reverse Repurchase Agreements" in the
Funds' Prospectus.) In addition, each Fund may borrow up to an additional 5%
of its total assets from banks for temporary or emergency purposes. A Fund will
not purchase securities when bank borrowings exceed 5% of the Fund's total
assets.

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<PAGE> 64

INVESTMENT POLICIES AND TECHNIQUES--MONEY FUND

RULE 2A-7: MATURITY, QUALITY, AND DIVERSIFICATION RESTRICTIONS

The Money Fund is subject to certain maturity restrictions pursuant to
Rule 2a-7 under the 1940 Act for money market funds that use the amortized cost
method of valuation to maintain a stable net asset value of $1.00 per share.
Accordingly, the Money Fund will (i) maintain a dollar weighted average
portfolio maturity of 90 days or less, and (ii) will purchase securities with a
remaining maturity of no more than 13 months (397 calendar days). And, the
Money Fund will buy only U.S. dollar-denominated securities which represent
minimal credit risks and meet certain credit quality and diversification
requirements. For purposes of calculating the maturity of portfolio
instruments, the Money Fund will follow the requirements of Rule 2a-7. Under
Rule 2a-7, the maturity of portfolio instruments is calculated as indicated
below.

Generally, the maturity of a portfolio instrument shall be deemed to
be the period remaining (calculated from the trade date or such other date on
which the Money Fund's interest in the instrument is subject to market action)
until the date noted on the face of the instrument as the date on which the
principal amount must be paid, or in the case of an instrument called for
redemption, the date on which the redemption payment must be made, except that:

(1) An instrument that is issued or guaranteed by the U.S. government
or any agency thereof which has a variable rate of interest readjusted no less
frequently than every 762 days shall be deemed to have a maturity equal to the
period remaining until the next readjustment of the interest rate.

(2) A Variable Rate Instrument, the principal amount of which is
scheduled on the face of the instrument to be paid on 397 calendar days or less
shall be deemed to have a maturity equal to the period remaining until the next
readjustment of the interest rate.

(3) A Variable Rate Instrument that is subject to a Demand Feature
shall be deemed to have a maturity equal to the longer of the period remaining
until the next readjustment of the interest rate or the period remaining until
the principal amount can be recovered through demand.

(4) A Floating Rate Instrument that is subject to a Demand Feature
shall be deemed to have a maturity equal to the period remaining until the
principal amount can be recovered through demand.

(5) A repurchase agreement shall be deemed to have a maturity equal
to the period remaining until the date on which the repurchase of the
underlying securities is scheduled to occur, or, where no date is specified,
but the agreement is subject to a demand, the notice period applicable to a
demand for the repurchase of the securities.

With respect to the Money Fund, it is subject to certain credit
quality restrictions pursuant to Rule 2a-7 under the 1940 Act. The Money Fund
will invest at least 95% of its assets in instruments determined to present
minimal credit risks and, at the time of acquisition, are (i) obligations
issued or guaranteed by the U.S. government, its agencies, or
instrumentalities; (ii) rated by at least two nationally recognized rating
agencies (or by one agency if only one agency has issued a rating) (the
"required rating agencies") in the highest rating category for short-term debt
obligations; (iii) unrated but whose issuer is rated in the highest category by
the required rating agencies with respect to a class of short-term debt
obligations or any security within that class that is comparable in priority
and security with the instrument; or (iv) unrated (other than the type
described in (iii)) but determined by the Board of Directors of the Fund to be
of comparable quality to the foregoing (provided the unrated security has not
received a short-term rating, and with respect to a long-term security with a
remaining maturity within the Fund's maturity restrictions, has not received a
long-term rating from any agency that is other than in its highest rating
category). The foregoing are referred to as "first-tier securities."

The balance of the securities in which the Money Fund may invest are
instruments determined to present minimal credit risks, which do not qualify as
first-tier securities, and, at the time of acquisition, are (i) rated by the
required rating agencies in one of the two highest rating categories for
short-term debt obligations; (ii) unrated but whose issuer is rated in one of
the two highest categories by the required rating agencies with respect to a
class of short-term debt obligations or any security within that class that is
comparable in priority and security with the obligation; or (iii) unrated
(other than described in (ii)) but determined by the Board of Directors of the
Fund to be of comparable quality to the foregoing (provided the unrated
security has not received a short-term

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<PAGE> 65

rating and, with respect to a long-term security with a remaining maturity
within the Fund's maturity restrictions, has not received a long-term rating
from any agency that is other than in one of its highest two rating
categories). The foregoing are referred to as "second-tier securities."

In addition to the foregoing guidelines, the Money Fund is subject to
certain diversification restrictions pursuant to Rule 2a-7 under the 1940 Act,
which include (i) the Fund will not acquire a second-tier security of an issuer
if, after giving effect to the acquisition, the Fund would have invested more
than the greater of 1% of its total assets or one million dollars in
second-tier securities issued by that issuer, or (ii) the Fund will not invest
more than 5% of the Fund's assets in the securities (other than securities
issued by the U.S. government or any agency or instrumentality thereof) issued
by a single issuer, except for certain investments held for not more than 3
business days.

As used herein, all capitalized but undefined terms shall have the
meaning such terms have in Rule 2a-7.

INVESTMENT POLICIES AND TECHNIQUES -
SHORT-TERM BOND, GOVERNMENT, CORPORATE BOND, AND HIGH-YIELD FUNDS

DERIVATIVE INSTRUMENTS

GENERAL DESCRIPTION. As discussed in the Prospectus, the Funds may
use a variety of derivative instruments, including options, futures contracts
(sometimes referred to as "futures") and options on futures contracts for any
lawful purpose consistent with each Fund's investment objective, such as
hedging the Fund's portfolio or risk management, but not for speculation.

The use of these instruments is subject to applicable regulations of
the Securities and Exchange Commission (the "SEC"), the several options and
futures exchanges upon which they may be traded, the Commodity Futures Trading
Commission ("CFTC") and various state regulatory authorities. In addition, the
Funds' ability to use these instruments will be limited by tax considerations.

In addition to the products, strategies and risks described below and
in the Prospectus, the Advisor may discover additional derivative instruments
and other hedging techniques. These new opportunities may become available as
the Advisor develops new techniques or as regulatory authorities broaden the
range of permitted transactions. The Advisor may utilize these opportunities
to the extent that they are consistent with the Funds' investment objectives
and permitted by the Funds' investment limitations and applicable regulatory
authorities.

SPECIAL RISKS OF THESE INSTRUMENTS. The use of derivative instruments
involves special considerations and risks as described below. Risks pertaining
to particular instruments are described in the sections that follow.

(1) Successful use of most of these instruments depends upon the
Advisor's ability to predict movements of the overall securities and currency
markets, which requires different skills than predicting changes in the prices
of individual securities. While the Advisor is experienced in the use of these
instruments, there can be no assurance that any particular strategy adopted
will succeed.

(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of investments
being hedged. For example, if the value of an instrument used in a short hedge
(such as writing a call option, buying a put option, or selling a futures
contract) increased by less than the decline in value of the hedged investment,
the hedge would not be fully successful. Such a lack of correlation might
occur due to factors unrelated to the value of the investments being hedged,
such as speculative or other pressures on the markets in which these
instruments are traded. The effectiveness of hedges using instruments on
indices will depend on the degree of correlation between price movements in the
index and price movements in the investments being hedged.

(3) Hedging strategies, if successful, can reduce the risk of loss by
wholly or partially offsetting the negative effect of unfavorable price
movements in the investments being hedged. However, hedging strategies can
also reduce opportunity for gain by offsetting the positive effect of favorable
price movements in the hedged investments. For example, if a Fund entered into
a

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<PAGE> 66

short hedge because the Advisor projected a decline in the price of a security
in the Fund's portfolio, and the price of that security increased instead, the
gain from that increase might be wholly or partially offset by a decline in the
price of the instrument. Moreover, if the price of the instrument declined by
more than the increase in the price of the security, the Fund could suffer a
loss.

(4) As described below, a Fund might be required to maintain assets
as "cover," maintain segregated accounts, or make margin payments when it takes
positions in these instruments involving obligations to third parties (i.e.,
instruments other than purchased options). If a Fund were unable to close out
its positions in such instruments, it might be required to continue to maintain
such assets or accounts or make such payments until the position expired or
matured. The requirements might impair the Fund's ability to sell a portfolio
security or make an investment at a time when it would otherwise be favorable
to do so, or require that the Fund sell a portfolio security at a
disadvantageous time. A Fund's ability to close out a position in an
instrument prior to expiration or maturity depends on the existence of a liquid
secondary market or, in the absence of such a market, the ability and
willingness of the other party to the transaction ("counter party") to enter
into a transaction closing out the position. Therefore, there is no assurance
that any hedging position can be closed out at a time and price that is
favorable to a Fund.

For a discussion of the federal income tax treatment of the Funds'
derivative instruments, see "Taxes - Derivative Instruments" below.

GENERAL LIMITATIONS ON CERTAIN DERIVATIVE TRANSACTIONS. The
Short-Term Bond, Government, Corporate Bond, and High-Yield Funds have each
filed a notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the CFTC and the National Futures Association,
which regulate trading in the futures markets. Pursuant to Rule 4.5 of the
regulations under the Commodity Exchange Act (the "CEA"), the notice of
eligibility for each Fund includes representations that the Fund will use
futures contracts and related options solely for bona fide hedging purposes
within the meaning of CFTC regulations, provided that a Fund may hold other
positions in futures contracts and related options that do not qualify as a
bona fide hedging position if the aggregate initial margin deposits and
premiums required to establish these positions, less the amount by which any
such options positions are "in the money," do not exceed 5% of the Fund's net
assets. Adoption of these guidelines does not limit the percentage of a Fund's
assets at risk to 5%.

In addition, (i) the aggregate value of securities underlying call
options on securities written by a Fund or obligations underlying put options
on securities written by a Fund determined as of the date the options are
written will not exceed 50% of the Fund's net assets; (ii) the aggregate
premiums paid on all options purchased by a Fund and which are being held will
not exceed 20% of the Fund's net assets; and (iii) a Fund will not purchase put
or call options, other than hedging positions, if, as a result thereof, more
than 5% of its total assets would be so invested; and (iv) the aggregate margin
deposits required on all futures and options on futures transactions being held
will not exceed 5% of a Fund's total assets.

The foregoing limitations are not fundamental policies of the Funds
and may be changed by each Fund's Board of Directors without shareholder
approval as regulatory agencies permit.

Transactions using options (other than purchased options) expose the
Funds to counter-party risk. To the extent required by SEC guidelines, a Fund
will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities, other options, or futures or (2)
cash and liquid high grade debt securities with a value sufficient at all times
to cover its potential obligations to the extent not covered as provided in (1)
above. Each Fund will also set aside cash and/or appropriate liquid assets in
a segregated custodial account if required to do so by the SEC and CFTC
regulations. Assets used as cover or held in a segregated account cannot be
sold while the position in the corresponding option or futures contract is
open, unless they are replaced with similar assets. As a result, the
commitment of a large portion of a Fund's assets to segregated accounts as a
cover could impede portfolio management or a Fund's ability to meet redemption
requests or other current obligations.

In some cases, a Fund may be required to maintain or limit exposure to
a specified percentage of its assets to a particular asset class or foreign
country. In such cases, when a Fund uses a derivative instrument to increase
or decrease exposure to an asset class or foreign country and is required by
applicable SEC guidelines to set aside liquid assets in a segregated account to
secure its obligations under the derivative instruments, the Advisor will
measure compliance with the applicable percentage by reference to the nature of
the economic exposure created through the use of the derivative instrument and
not by reference to the nature of the

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<PAGE> 67

exposure arising from the liquid assets set aside in the segregated account
(unless another interpretation is specified by applicable regulatory
requirements.)

OPTIONS. Each Fund may also purchase or write put and call options on
securities and enter into closing transactions with respect to such options to
terminate an existing position. The purchase of call options serves as a long
hedge, and the purchase of put options serves as a short hedge. Writing put or
call options can enable a Fund to enhance income by reason of the premiums paid
by the purchaser of such options. Writing call options serves as a limited
short hedge because declines in the value of the hedged investment would be
offset to the extent of the premium received for writing the option. However,
if the security appreciates to a price higher than the exercise price of the
call option, it can be expected that the option will be exercised and the Fund
will be obligated to sell the security at less than its market value or will be
obligated to purchase the security at a price greater than that at which the
security must be sold under the option. All or a portion of any assets used as
cover for over-the-counter ("OTC") options written by a Fund would be
considered illiquid to the extent described under " Common Investment Policies
and Techniques--Illiquid Securities." Writing put options serves as a limited
long hedge because increases in the value of the hedged investment would be
offset to the extent of the premium received for writing the option. However,
if the security depreciates to a price lower than the exercise price of the put
option, it can be expected that the put option will be exercised and the Fund
will be obligated to purchase the security at more than its market value.

The value of an option position will reflect, among other things, the
historical price volatility of the underlying investment, the current market
value of the underlying investment, the time remaining until expiration, the
relationship of the exercise price to the market price of the underlying
investment, and general market conditions. Options that expire unexercised
have no value.

A Fund may effectively terminate its right or obligation under an
option by entering into a closing transaction. For example, a Fund may
terminate its obligation under a call or put option that it had written by
purchasing an identical call or put option; this is known as a closing purchase
transaction. Conversely, a Fund may terminate a position in a put or call
option it had purchased by writing an identical put or call option; this is
known as a closing sale transaction. Closing transactions permit the Funds to
realize the profit or limit the loss on an option position prior to its
exercise or expiration.

The Funds may purchase or write both exchange-traded and OTC options.
Exchange-traded options are issued by a clearing organization affiliated with
the exchange on which the option is listed that, in effect, guarantees
completion of every exchange-traded option transaction. OTC options are
contracts between a Fund and the other party to the transaction ("counter
party") (usually a securities dealer or a bank) with no clearing organization
guarantee. Thus, when a Fund purchases or writes an OTC option, it relies on
the counter party to make or take delivery of the underlying investment upon
exercise of the option. Failure by the counter party to do so would result in
the loss of any premium paid by the Fund as well as the loss of any expected
benefit of the transaction.

The Funds' ability to establish and close out positions in
exchange-listed options depends on the existence of a liquid market. The Funds
intend to purchase or write only those exchange-traded options for which there
appears to be a liquid secondary market. However, there can be no assurance
that such a market will exist at any particular time. Closing transactions can
be made for OTC options only by negotiating directly with the counter party, or
by a transaction in the secondary market if any such market exists. Although
the Funds will enter into OTC options only with counter parties that are
expected to be capable of entering into closing transactions with the Funds,
there is no assurance that the Funds will in fact be able to close out an OTC
option at a favorable price prior to expiration. In the event of insolvency of
the counter party, a Fund might be unable to close out an OTC option position
at any time prior to its expiration.

If a Fund were unable to effect a closing transaction for an option it
had purchased, it would have to exercise the option to realize any profit. The
inability to enter into a closing purchase transaction for a covered call
option written by a Fund could cause material losses because the Fund would be
unable to sell the investment used as a cover for the written option until the
option expires or is exercised.

The writing and purchasing of options is a highly specialized activity
that involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions. Imperfect correlation between
the options and securities markets may detract the effectiveness of attempted
hedging.

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<PAGE> 68

SPREAD TRANSACTIONS. Each Fund may purchase from securities dealers
covered spread options. Such covered spread options are not presently
exchange-listed or exchange-traded. The purchase of a spread option gives the
Fund the right to put, or sell, a security that it owns at a fixed dollar
spread or fixed yield spread in relationship to another security that the Fund
does not own, but which is used as a benchmark. The risk to the Fund in
purchasing covered spread options is the cost of the premium paid for the
spread option and any transaction costs. In addition, there is no assurance
that closing transactions will be available. The purchase of spread options
will be used to protect the Fund against adverse changes in prevailing credit
quality spreads, i.e., the yield spread between high quality and lower quality
securities. Such protection is only provided during the life of the spread
option.

FUTURES CONTRACTS. Each Fund may enter into futures contracts,
including interest rate and index futures. Each Fund may also purchase put and
call options, and write covered put and call options, on futures in which it is
allowed to invest. The purchase of futures or call options thereon can serve
as a long hedge, and the sale of futures or the purchase of put options thereon
can serve as a short hedge. Writing covered call options on futures contracts
can serve as a limited short hedge, and writing covered put options on futures
contracts can serve as a limited long hedge, using a strategy similar to that
used for writing covered options in securities. The Funds' hedging may include
purchases of futures as an offset against the effect of expected increases in
securities prices and sales of futures as an offset against the effect of
expected declines in securities prices. The Funds' futures transactions may be
entered into for any lawful purpose consistent with each Fund's investment
objective, such as hedging purposes or risk management, but not for
speculation. The Funds may also write put options on interest rate futures
contracts while at the same time purchasing call options on the same futures
contracts in order to create synthetically a long futures contract position.
Such options would have the same strike prices and expiration dates. The Funds
will engage in this strategy only when the Advisor believes it is more
advantageous to the Funds than is purchasing the futures contract.

To the extent required by regulatory authorities, the Funds only enter
into futures contracts that are traded on national futures exchanges and are
standardized as to maturity date and underlying financial instrument. Futures
exchanges and trading are regulated under the CEA by the CFTC. Although
techniques other than sales and purchases of futures contracts could be used to
reduce a Fund's exposure to interest rate fluctuations, a Fund may be able to
hedge its exposure more effectively and perhaps at a lower cost through using
futures contracts.

An interest rate futures contract provides for the future sale by one
party and purchase by another party of a specified amount of a specific
financial instrument (e.g., debt security) for a specified price at a
designated date, time, and place. An index futures contract is an agreement
pursuant to which the parties agree to take or make delivery of an amount of
cash equal to the difference between the value of the index at the close of the
last trading day of the contract and the price at which the index futures
contract was originally written. Transactions costs are incurred when a
futures contract is bought or sold and margin deposits must be maintained. A
futures contract may be satisfied by delivery or purchase, as the case may be,
of the instrument or by payment of the change in the cash value of the index.
More commonly, futures contracts are closed out prior to delivery by entering
into an offsetting transaction in a matching futures contract. Although the
value of an index might be a function of the value of certain specified
securities, no physical delivery of those securities is made. If the
offsetting purchase price is less than the original sale price, a Fund realizes
a gain; if it is more, a Fund realizes a loss. Conversely, if the offsetting
sale price is more than the original purchase price, a Fund realizes a gain; if
it is less, a Fund realizes a loss. The transaction costs must also be
included in these calculations. There can be no assurance, however, that a
Fund will be able to enter into an offsetting transaction with respect to a
particular futures contract at a particular time. If a Fund is not able to
enter into an offsetting transaction, the Fund will continue to be required to
maintain the margin deposits on the futures contract.

No price is paid by a Fund upon entering into a futures contract.
Instead, at the inception of a futures contract, a Fund is required to deposit
in a segregated account with its custodian, in the name of the futures broker
through whom the transaction was effected, "initial margin" consisting of cash,
U.S. government securities or other liquid, high grade debt securities, in an
amount generally equal to 10% or less of the contract value. High grade
securities include securities rated "A" or better by an NRSRO. Margin must
also be deposited when writing a call or put option on a futures contract, in
accordance with applicable exchange rules. Unlike margin in securities
transactions, initial margin on futures contracts does not represent a
borrowing, but rather is in the nature of a performance bond or good-faith
deposit that is returned to the Fund at the termination of the transaction if
all contractual obligations have been satisfied. Under certain circumstances,
such as periods of high volatility, a Fund may be

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<PAGE> 69

required by an exchange to increase the level of its initial margin payment,
and initial margin requirements might be increased generally in the future by
regulatory action.

Subsequent "variation margin" payments are made to and from the
futures broker daily as the value of the futures position varies, a process
known as "marking to market." Variation margin does not involve borrowing, but
rather represents a daily settlement of a Fund's obligations to or from a
futures broker. When a Fund purchases an option on a future, the premium paid
plus transaction costs is all that is at risk. In contrast, when a Fund
purchases or sells a futures contract or writes a call or put option thereon,
it is subject to daily variation margin calls that could be substantial in the
event of adverse price movements. If a Fund has insufficient cash to meet
daily variation margin requirements, it might need to sell securities at a time
when such sales are disadvantageous. Purchasers and sellers of futures
positions and options on futures can enter into offsetting closing transactions
by selling or purchasing, respectively, an instrument identical to the
instrument held or written. Positions in futures and options on futures may be
closed only on an exchange or board of trade that provides a secondary market.
The Funds intend to enter into futures transactions only on exchanges or boards
of trade where there appears to be a liquid secondary market. However, there
can be no assurance that such a market will exist for a particular contract at
a particular time.

Under certain circumstances, futures exchanges may establish daily
limits on the amount that the price of a future or option on a futures contract
can vary from the previous day's settlement price; once that limit is reached,
no trades may be made that day at a price beyond the limit. Daily price limits
do not limit potential losses because prices could move to the daily limit for
several consecutive days with little or no trading, thereby preventing
liquidation of unfavorable positions.

If a Fund were unable to liquidate a futures or option on a futures
contract position due to the absence of a liquid secondary market or the
imposition of price limits, it could incur substantial losses. The Fund would
continue to be subject to market risk with respect to the position. In
addition, except in the case of purchased options, the Fund would continue to
be required to make daily variation margin payments and might be required to
maintain the position being hedged by the future or option or to maintain cash
or securities in a segregated account.

Certain characteristics of the futures market might increase the risk
that movements in the prices of futures contracts or options on futures
contracts might not correlate perfectly with movements in the prices of the
investments being hedged. For example, all participants in the futures and
options on futures contracts markets are subject to daily variation margin
calls and might be compelled to liquidate futures or options on futures
contracts positions whose prices are moving unfavorably to avoid being subject
to further calls. These liquidations could increase price volatility of the
instruments and distort the normal price relationship between the futures or
options and the investments being hedged. Also, because initial margin deposit
requirements in the futures markets are less onerous than margin requirements
in the securities markets, there might be increased participation by
speculators in the future markets. This participation also might cause
temporary price distortions. In addition, activities of large traders in both
the futures and securities markets involving arbitrage, "program trading" and
other investment strategies might result in temporary price distortions.

FOREIGN CURRENCY-RELATED DERIVATIVE STRATEGIES - SPECIAL
CONSIDERATIONS. The Funds may purchase and sell foreign currency on a spot
basis, and may use currency-related derivatives instruments such as options on
foreign currencies, futures on foreign currencies, options on futures on
foreign currencies and forward currency contracts (i.e., an obligation to
purchase or sell a specific currency at a specified future date, which may be
any fixed number of days from the contract date agreed upon by the parties, at
a price set at the time the contract is entered into). The Funds may use these
instruments for hedging or any other lawful purpose consistent with their
respective investment objectives, including transaction hedging, anticipatory
hedging, cross hedging, proxy hedging, and position hedging. The Funds' use of
currency-related derivative instruments will be directly related to a Fund's
current or anticipated portfolio securities, and the Funds may engage in
transactions in currency-related derivative instruments as a means to protect
against some or all of the effects of adverse changes in foreign currency
exchange rates on their portfolio investments. In general, if the currency in
which a portfolio investment is denominated appreciates against the U.S.
dollar, the dollar value of the security will increase. Conversely, a decline
in the exchange rate of the currency would adversely affect the value of the
portfolio investment expressed in U.S. dollars.

For example, a Fund might use currency-related derivative instruments
to "lock in" a U.S. dollar price for a portfolio investment, thereby enabling
the Fund to protect itself against a possible loss resulting from an adverse
change in the relationship between the U.S. dollar and the subject foreign
currency during the period between the date the security is purchased or sold
and

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<PAGE> 70

the date on which payment is made or received. A Fund also might use
currency-related derivative instruments when the Advisor believes that one
currency may experience a substantial movement against another currency,
including the U.S. dollar, and it may use currency-related derivative
instruments to sell or buy the amount of the former foreign currency,
approximating the value of some or all of the Fund's portfolio securities
denominated in such foreign currency. Alternatively, where appropriate, a Fund
may use currency-related derivative instruments to hedge all or part of its
foreign currency exposure through the use of a basket of currencies or a proxy
currency where such currency or currencies act as an effective proxy for other
currencies. The use of this basket hedging technique may be more efficient and
economical than using separate currency-related derivative instruments for each
currency exposure held by the Fund. Furthermore, currency-related derivative
instruments may be used for short hedges - for example, a Fund may sell a
forward currency contract to lock in the U.S. dollar equivalent of the proceeds
from the anticipated sale of a security denominated in a foreign currency.

In addition, a Fund may use a currency-related derivative instrument
to shift exposure to foreign currency fluctuations from one foreign country to
another foreign country where the Advisor believes that the foreign currency
exposure purchased will appreciate relative to the U.S. dollar and thus better
protect the Fund against the expected decline in the foreign currency exposure
sold. For example, if a Fund owns securities denominated in a foreign currency
and the Advisor believes that currency will decline, it might enter into a
forward contract to sell an appropriate amount of the first foreign currency,
with payment to be made in a second foreign currency that the Advisor believes
would better protect the Fund against the decline in the first security than
would a U.S. dollar exposure. Hedging transactions that use two foreign
currencies are sometimes referred to as "cross hedges." The effective use of
currency-related derivative instruments by a Fund in a cross hedge is dependent
upon a correlation between price movements of the two currency instruments and
the underlying security involved, and the use of two currencies magnifies the
risk that movements in the price of one instrument may not correlate or may
correlate unfavorably with the foreign currency being hedged. Such a lack of
correlation might occur due to factors unrelated to the value of the currency
instruments used or investments being hedged, such as speculative or other
pressures on the markets in which these instruments are traded.

A Fund also might seek to hedge against changes in the value of a
particular currency when no hedging instruments on that currency are available
or such hedging instruments are more expensive than certain other hedging
instruments. In such cases, the Fund may hedge against price movements in that
currency by entering into transactions using currency-related derivative
instruments on another foreign currency or a basket of currencies, the values
of which the Advisor believes will have a high degree of positive correlation
to the value of the currency being hedged. The risk that movements in the
price of the hedging instrument will not correlate perfectly with movements in
the price of the currency being hedged is magnified when this strategy is used.

The use of currency-related derivative instruments by a Fund involves
a number of risks. The value of currency-related derivative instruments
depends on the value of the underlying currency relative to the U.S. dollar.
Because foreign currency transactions occurring in the interbank market might
involve substantially larger amounts than those involved in the use of such
derivative instruments, a Fund could be disadvantaged by having to deal in the
odd lot market (generally consisting of transactions of less than $1 million)
for the underlying foreign currencies at prices that are less favorable than
for round lots (generally consisting of transactions of greater than $1
million).

There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis.
Quotation information generally is representative of very large transactions in
the interbank market and thus might not reflect odd-lot transactions where
rates might be less favorable. The interbank market in foreign currencies is a
global, round-the-clock market. To the extent the U.S. options or futures
markets are closed while the markets for the underlying currencies remain open,
significant price and rate movements might take place in the underlying markets
that cannot be reflected in the markets for the derivative instruments until
they re-open.

Settlement of transactions in currency-related derivative instruments
might be required to take place within the country issuing the underlying
currency. Thus, a Fund might be required to accept or make delivery of the
underlying foreign currency in accordance with any U.S. or foreign regulations
regarding the maintenance of foreign banking arrangements by U.S. residents and
might be required to pay any fees, taxes and charges associated with such
delivery assessed in the issuing country.

When a Fund engages in a transaction in a currency-related derivative
instrument, it relies on the counterparty to make or take delivery of the
underlying currency at the maturity of the contract or otherwise complete the
contract. In other words, the

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<PAGE> 71

Fund will be subject to the risk that a loss may be sustained by the Fund as a
result of the failure of the counterparty to comply with the terms of the
transaction. The counterparty risk for exchange-traded instruments is
generally less than for privately-negotiated or OTC currency instruments, since
generally a clearing agency, which is the issuer or counterparty to each
instrument, provides a guarantee of performance. For privately-negotiated
instruments, there is no similar clearing agency guarantee. In all
transactions, the Fund will bear the risk that the counterparty will default,
and this could result in a loss of the expected benefit of the transaction and
possibly other losses to the Fund. The Funds will enter into transactions in
currency-related derivative instruments only with counterparties that the
Advisor reasonably believes are capable of performing under the contract.

Purchasers and sellers of currency-related derivative instruments may
enter into offsetting closing transactions by selling or purchasing,
respectively, an instrument identical to the instrument purchased or sold.
Secondary markets generally do not exist for forward currency contracts, with
the result that closing transactions generally can be made for forward currency
contracts only by negotiating directly with the counterparty. Thus, there can
be no assurance that a Fund will in fact be able to close out a forward
currency contract (or any other currency-related derivative instrument) at a
time and price favorable to a Fund. In addition, in the event of insolvency of
the counterparty, a Fund might be unable to close out a forward currency
contract at any time prior to maturity. In the case of an exchange-traded
instrument, a Fund will be able to close the position out only on an exchange
which provides a market for the instruments. The ability to establish and
close out positions on an exchange is subject to the maintenance of a liquid
market, and there can be no assurance that a liquid market will exist for any
instrument at any specific time. In the case of a privately-negotiated
instrument, a Fund will be able to realize the value of the instrument only by
entering into a closing transaction with the issuer or finding a third party
buyer for the instrument. While a Fund will enter into privately-negotiated
transactions only with entities who are expected to be capable of entering into
a closing transaction, there can be no assurance that a Fund will in fact be
able to enter into such closing transactions.

The precise matching of currency-related derivative instrument amounts
and the value of the portfolio securities involved generally will not be
possible because the value of such securities, measured in the foreign
currency, will change after the currency-related derivative instrument position
has been established. Thus, a Fund might need to purchase or sell foreign
currencies in the spot (cash) market. The projection of short-term currency
market movements is extremely difficult, and the successful execution of a
short-term hedging strategy is highly uncertain.

Permissible foreign currency options will include options traded
primarily in the OTC market. Although options on foreign currencies are traded
primarily in the OTC market, the Funds will normally purchase or sell OTC
options on foreign currency only when the Advisor reasonably believes a liquid
secondary market will exist for a particular option at any specific time.

There will be a cost to a Fund of engaging in transactions in
currency-related derivative instruments that will vary with factors such as the
contract or currency involved, the length of the contract period and the market
conditions then prevailing. A Fund using these instruments may have to pay a
fee or commission or, in cases where the instruments are entered into on a
principal basis, foreign exchange dealers or other counterparties will realize
a profit based on the difference ("spread") between the prices at which they
are buying and selling various currencies. Thus, for example, a dealer may
offer to sell a foreign currency to a Fund at one rate, while offering a lesser
rate of exchange should the Fund desire to resell that currency to the dealer.

When required by the SEC guidelines, the Funds will set aside
permissible liquid assets in segregated accounts or otherwise cover their
respective potential obligations under currency-related derivatives
instruments. To the extent a Fund's assets are so set aside, they cannot be
sold while the corresponding currency position is open, unless they are
replaced with similar assets. As a result, if a large portion of a Fund's
assets are so set aside, this could impede portfolio management or the Fund's
ability to meet redemption requests or other current obligations.

The Advisor's decision to engage in a transaction in a particular
currency-related derivative instrument will reflect the Advisor's judgment that
the transaction will provide value to the Fund and its shareholders and is
consistent with the Fund's objectives and policies. In making such a judgment,
the Advisor will analyze the benefits and risks of the transaction and weigh
them in the context of the Fund's entire portfolio and objectives. The
effectiveness of any transaction in a currency-related derivative instrument is
dependent on a variety of factors, including the Advisor's skill in analyzing
and predicting currency values and upon a correlation between price movements
of the currency instrument and the underlying security. There might be
imperfect correlation, or even no correlation, between price movements of an
instrument and price movements of investments being hedged. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such

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<PAGE> 72

as speculative or other pressures on the markets in which these instruments are
traded. In addition, a Fund's use of currency-related derivative instruments
is always subject to the risk that the currency in question could be devalued
by the foreign government. In such a case, any long currency positions would
decline in value and could adversely affect any hedging position maintained by
the Fund.

The Funds' dealing in currency-related derivative instruments will
generally be limited to the transactions described above. However, the Funds
reserve the right to use currency-related derivatives instruments for different
purposes and under different circumstances. Of course, the Funds are not
required to use currency-related derivatives instruments and will not do so
unless deemed appropriate by the Advisor. It also should be realized that use
of these instruments does not eliminate, or protect against, price movements in
the Funds' securities that are attributable to other (i.e., non-currency
related) causes. Moreover, while the use of currency-related derivatives
instruments may reduce the risk of loss due to a decline in the value of a
hedged currency, at the same time the use of these instruments tends to limit
any potential gain which may result from an increase in the value of that
currency.

HIGH-YIELD (HIGH-RISK) SECURITIES

IN GENERAL. The Corporate Bond Fund may invest up to 25% of its
assets, and the High-Yield Fund may invest without limitation, in
non-investment grade debt obligations. The Short-Term Bond Fund may invest up
to 25% of its assets only in non-investment grade debt obligations rated in the
fifth highest rating category (e.g., BB by S&P) or comparable unrated
securities. Securities rated BB are considered the least speculative of
non-investment grade obligations. With respect to the Corporate Bond and
High-Yield Funds, non-investment grade debt obligations (hereinafter referred
to as "lower-quality securities") include (i) bonds rated as low as C by
Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Ratings Group
("S&P"), or Fitch Investors Service, Inc. ("Fitch"), or CCC by Duff & Phelps,
Inc. ("D&P"); (ii) commercial paper rated as low as C by S&P, Not Prime by
Moody's or Fitch 4 by Fitch; and (iii) unrated debt securities of comparable
quality. Lower-quality securities, while generally offering higher yields than
investment grade securities with similar maturities, involve greater risks,
including the possibility of default or bankruptcy. They are regarded as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal. The special risk considerations in connection with
investments in these securities are discussed below. Refer to the Appendix of
this Statement of Additional Information for a discussion of securities
ratings.

EFFECT OF INTEREST RATES AND ECONOMIC CHANGES. The lower-quality and
comparable unrated security market is relatively new and its growth has
paralleled a long economic expansion. As a result, it is not clear how this
market may withstand a prolonged recession or economic downturn. Such an
economic downturn could severely disrupt the market for and adversely affect
the value of such securities.

All interest-bearing securities typically experience appreciation when
interest rates decline and depreciation when interest rates rise. The market
values of lower-quality and comparable unrated securities tend to reflect
individual corporate developments to a greater extent than do higher rated
securities, which react primarily to fluctuations in the general level of
interest rates. Lower-quality and comparable unrated securities also tend to be
more sensitive to economic conditions than are higher-rated securities. As a
result, they generally involve more credit risks than securities in the
higher-rated categories. During an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower-quality and comparable
unrated securities may experience financial stress and may not have sufficient
revenues to meet their payment obligations. The issuer's ability to service
its debt obligations may also be adversely affected by specific corporate
developments, the issuer's inability to meet specific projected business
forecasts or the unavailability of additional financing. The risk of loss due
to default by an issuer of these securities is significantly greater than
issuers of higher-rated securities because such securities are generally
unsecured and are often subordinated to other creditors. Further, if the
issuer of a lower-quality or comparable unrated security defaulted, a Fund
might incur additional expenses to seek recovery. Periods of economic
uncertainty and changes would also generally result in increased volatility in
the market prices of these securities and thus in the Fund's net asset value.

As previously stated, the value of a lower-quality or comparable
unrated security will decrease in a rising interest rate market, and
accordingly so will a Fund's net asset value. If a Fund experiences unexpected
net redemptions in such a market, it may be forced to liquidate a portion of
its portfolio securities without regard to their investment merits. Due to the
limited liquidity of lower-quality and comparable unrated securities (discussed
below), a Fund may be forced to liquidate these securities at a

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<PAGE> 73

substantial discount. Any such liquidation would reduce the Fund's asset base
over which expenses could be allocated and could result in a reduced rate of
return for the Fund.

PAYMENT EXPECTATIONS. Lower-quality and comparable unrated securities
typically contain redemption, call or prepayment provisions which permit the
issuer of such securities containing such provisions to, at its discretion,
redeem the securities. During periods of falling interest rates, issuers of
these securities are likely to redeem or prepay the securities and refinance
them with debt securities with a lower interest rate. To the extent an issuer
is able to refinance the securities, or otherwise redeem them, a Fund may have
to replace the securities with a lower yielding security, which would result in
a lower return for the Funds.

CREDIT RATINGS. Credit ratings issued by credit-rating agencies
evaluate the safety of principal and interest payments of rated securities.
They do not, however, evaluate the market value risk of lower-quality and
comparable unrated securities and, therefore, may not fully reflect the true
risks of an investment. In addition, credit rating agencies may or may not
make timely changes in a rating to reflect changes in the economy or in the
condition of the issuer that affect the market value of the security.
Consequently, credit ratings are used only as a preliminary indicator of
investment quality. Investments in lower-quality and comparable unrated
securities will be more dependent on the Advisor's credit analysis than would
be the case with investments in investment-grade debt securities. The Advisor
employs its own credit research and analysis, which includes a study of
existing debt, capital structure, ability to service debt and to pay dividends,
the issuer's sensitivity to economic conditions, its operating history and the
current trend of earnings. The Advisor continually monitors the investments in
each Fund's portfolio and carefully evaluates whether to dispose of or to
retain lower-quality and comparable unrated securities whose credit ratings or
credit quality may have changed.

LIQUIDITY AND VALUATION. A Fund may have difficulty disposing of
certain lower-quality and comparable unrated securities because there may be a
thin trading market for such securities. Because not all dealers maintain
markets in all lower-quality and comparable unrated securities, there is no
established retail secondary market for many of these securities. The Funds
anticipate that such securities could be sold only to a limited number of
dealers or institutional investors. To the extent a secondary trading market
does exist, it is generally not as liquid as the secondary market for
higher-rated securities. The lack of a liquid secondary market may have an
adverse impact on the market price of the security. As a result, a Fund's
asset value and ability to dispose of particular securities, when necessary to
meet the Fund's liquidity needs or in response to a specific economic event,
may be impacted. The lack of a liquid secondary market for certain securities
may also make it more difficult for a Fund to obtain accurate market quotations
for purposes of valuing the Fund's portfolio. Market quotations are generally
available on many lower-quality and comparable unrated issues only from a
limited number of dealers and may not necessarily represent firm bids of such
dealers or prices for actual sales. During periods of thin trading, the spread
between bid and asked prices is likely to increase significantly. In addition,
adverse publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of lower-quality and comparable
unrated securities, especially in a thinly traded market.

RECENT AND PROPOSED LEGISLATION. Recent legislation has been adopted,
and from time to time proposals have been discussed, regarding new legislation
designed to limit the use of certain lower-quality and comparable unrated
securities by certain issuers. An example of legislation is a recent law which
requires federally insured savings and loan associations to divest their
investments in these securities over time. It is not currently possible to
determine the impact of the recent legislation or the proposed legislation on
the lower-quality and comparable unrated securities market. However, it is
anticipated that if additional legislation is enacted or proposed, it could
have a material affect on the value of these securities and the existence of a
secondary trading market for the securities.

SHORT SALES AGAINST THE BOX

The Funds may sell securities short against the box to hedge
unrealized gains on portfolio securities. Selling securities short against the
box involves selling a security that a Fund owns or has the right to acquire,
for delivery at a specified date in the future. If a Fund sells securities
short against the box, it may protect unrealized gains, but will lose the
opportunity to profit on such securities if the price rises. In addition, the
High-Yield Fund may sell securities short that are not against the box up to 5%
of its net assets provided that the Fund covers such short sales as required by
SEC guidelines.

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<PAGE> 74

TEMPORARY DEFENSIVE POSITION

When the Advisor determines that market conditions warrant a temporary
defensive position, the Funds may invest without limitation in cash and
short-term fixed income securities, including U.S. government securities,
commercial paper, banker's acceptances, certificates of deposit, and time
deposits.

WARRANTS

Warrants are securities giving the holder the right, but not the
obligation, to buy the stock of an issuer at a given price (generally higher
than the value of the stock at the time of issuance) during a specified period
or perpetually. Warrants may be acquired separately or in connection with the
acquisition of securities. A Fund will not purchase warrants, valued at the
lower of cost or market value, in excess of 5% of the Fund's net assets.
Included in that amount, but not to exceed 2% of the Fund's net assets, may be
warrants that are not listed on any stock exchange. Warrants acquired by a
Fund in units or attached to securities are not subject to these restrictions.
Warrants do not carry with them the right to dividends or voting rights with
respect to the securities that they entitle their holder to purchase, and they
do not represent any rights in the assets of the issuer. As a result, warrants
may be considered more speculative than certain other types of investments. In
addition, the value of a warrant does not necessarily change with the value of
the underlying securities, and a warrant ceases to have value if it is not
exercised prior to its expiration date.

INVESTMENT POLICIES AND TECHNIQUES -
SHORT-TERM BOND, CORPORATE BOND, AND HIGH-YIELD FUNDS

DEPOSITARY RECEIPTS

As indicated in the Prospectus, the Funds may invest in foreign
securities by purchasing depositary receipts, including American Depositary
Receipts ("ADRs") and European Depositary Receipts ("EDRs") or other securities
convertible into securities or issuers based in foreign countries. These
securities may not necessarily be denominated in the same currency as the
securities into which they may be converted. Generally, ADRs, in registered
form, are denominated in U.S. dollars and are designed for use in the U.S.
securities markets, while EDRs, in bearer form, may be denominated in other
currencies and are designed for use in European securities markets. ADRs are
receipts typically issued by a U.S. bank or trust company evidencing ownership
of the underlying securities. EDRs are European receipts evidencing a similar
arrangements. For purposes of the Funds' investment policies, ADRs and EDRs
are deemed to have the same classification as the underlying securities they
represent. Thus, an ADR or EDR representing ownership of common stock will be
treated as common stock.

ADR facilities may be established as either "unsponsored" or
"sponsored." While ADRs issued under these two types of facilities are in some
respects similar, there are distinctions between them relating to the rights
and obligations of ADR holders and the practices of market participants. A
depositary may establish an unsponsored facility without participation by (or
even necessarily the acquiescence of) the issuer of the deposited securities,
although typically the depositary requests a letter of non-objection from such
issuer prior to the establishment of the facility. Holders of unsponsored ADRs
generally bear all the costs of such facilities. The depositary usually
charges fees upon the deposit and withdrawal of the deposited securities, the
conversion of dividends into U.S. dollars, the disposition of non-cash
distributions, and the performance of other services. The depositary of an
unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited securities
or to pass through voting rights to ADR holders in respect of the deposited
securities. Sponsored ADR facilities are created in generally the same manner
as unsponsored facilities, except that the issuer of the deposited securities
enters into a deposit agreement with the depositary. The deposit agreement
sets out the rights and responsibilities of the issuer, the depositary and the
ADR holders. With sponsored facilities, the issuer of the deposited securities
generally will bear some of the costs relating to the facility (such as
dividend payment fees of the depositary), although ADR holders continue to bear
certain other costs (such as deposit and withdrawal fees). Under the terms of
most sponsored arrangements, depositories agree to distribute notices of
shareholder meetings and voting instructions, and to provide shareholder
communications and other information to the ADR holders at the request of the
issuer of the deposited securities.

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<PAGE> 75

LOAN INTERESTS

Each Fund may acquire a loan interest (a "Loan Interest"). A Loan
Interest is typically originated, negotiated, and structured by a U.S. or
foreign commercial bank, insurance company finance company, or other financial
institution (the "Agent") for a lending syndicate of financial institutions.
The Agent typically administers and enforces the loan on behalf of the other
lenders in the syndicate. In addition, an institution, typically but not
always the Agent (the "Collateral Bank"), holds collateral (if any) on behalf
of the lenders. These Loan Interests may take the form of participation
interests in, assignments of or novations of a loan during its secondary
distribution, or direct interests during a primary distribution. Such Loan
Interests may be acquired from U.S. or foreign banks, insurance companies,
finance companies, or other financial institutions who have made loans or are
members of a lending syndicate or from other holders of Loan Interests. A Fund
may also acquire Loan Interests under which the Fund derives its rights
directly from the borrower. Such Loan Interests are separately enforceable by
a Fund against the borrower and all payments of interest and principal are
typically made directly to a Fund from the borrower. In the event that a Fund
and other lenders become entitled to take possession of shared collateral, it
is anticipated that such collateral would be held in the custody of a
Collateral Bank for their mutual benefit. The Funds may not act as an Agent, a
Collateral Bank, a guarantor or sole negotiator or structurer with respect to a
loan.

The Advisor will analyze and evaluate the financial condition of the
borrower in connection with the acquisition of any Loan Interest. The Advisor
also analyzes and evaluates the financial condition of the Agent and, in the
case of Loan Interests in which the Fund does not have privity with the
borrower, those institutions from or through whom the Fund derives its rights
in a loan (the "Intermediate Participants").

In a typical loan the Agent administers the terms of the loan
agreement. In such cases, the Agent is normally responsible for the collection
of principal and interest payments from the borrower and the apportionment of
these payments to the credit of all institutions which are parties to the loan
agreement. A Fund will generally rely upon the Agent or an Intermediate
Participant to receive and forward to the Fund its portion of the principal and
interest payments on the loan. Furthermore, unless under the terms of a
participation agreement a Fund has direct recourse against the borrower, the
Fund will rely on the Agent and the other members of the lending syndicate to
use appropriate credit remedies against the borrower. The Agent is typically
responsible for monitoring compliance with covenants contained in the loan
agreement based upon reports prepared by the borrower. The seller of the Loan
Interest usually does, but is often not obligated to, notify holders of Loan
Interests of any failures of compliance. The Agent may monitor the value of
the collateral and, if the value of the collateral declines, may accelerate the
loan, may give the borrower an opportunity to provide additional collateral or
may seek other protection for the benefit of the participants in the loan. The
Agent is compensated by the borrower for providing these services under a loan
agreement, and such compensation may include special fees paid upon structuring
and funding the loan and other fees paid on a continuing basis. With respect
to Loan Interests for which the Agent does not perform such administrative and
enforcement functions, a Fund will perform such tasks on its own behalf,
although a Collateral Bank will typically hold any collateral on behalf of the
Fund and the other lenders pursuant to the applicable loan agreement.

A financial institution's appointment as Agent may usually be
terminated in the event that it fails to observe the requisite standard of care
or becomes insolvent, enters Federal Deposit Insurance Corporation ("FDIC")
receivership, or, if not FDIC insured, enters into bankruptcy proceedings. A
successor Agent would generally be appointed to replace the terminated Agent,
and assets held by the Agent under the loan agreement should remain available
to holders of Loan Interests. However, if assets held by the Agent for the
benefit of the Fund were determined to be subject to the claims of the Agent's
general creditors, the Fund might incur certain costs and delays in realizing
payment on a loan interest, or suffer a loss of principal and/or interest. In
situations involving Intermediate Participants similar risks may arise.

Purchasers of Loan Interests depend primarily upon the
creditworthiness of the borrower for payment of principal and interest. If a
Fund does not receive scheduled interest or principal payments on such
indebtedness, the Fund's share price and yield could be adversely affected.
Loans that are fully secured offer a Fund more protections than an unsecured
loan in the event of non-payment of scheduled interest or principal. However,
there is no assurance that the liquidation of collateral from a secured loan
would satisfy the borrower's obligation, or that the collateral can be
liquidated. Indebtedness of borrowers whose creditworthiness is poor involves
substantially greater risks, and may be highly speculative. Borrowers that are
in bankruptcy or restructuring may never pay off their indebtedness, or may pay
only a small fraction of the amount owed. Direct indebtedness of developing
countries will also involve a risk that the governmental entities responsible
for the repayment of the debt may be unable, or unwilling, to pay interest and
repay principal when due.

- 20 -
<PAGE> 76

FOREIGN INVESTMENT COMPANIES

Some of the countries in which the Funds invest may not permit direct
investment by outside investors. Investments in such countries may only be
permitted through foreign government-approved or -authorized investment
vehicles, which may include other investment companies. Investing through such
vehicles may involve frequent or layered fees or expenses and may also be
subject to limitation under the 1940 Act. Under the 1940 Act, a Fund may
invest up to 10% of its assets in shares of investment companies and up to 5%
of its assets in any one investment company as long as the investment does not
represent more than 3% of the voting stock of the acquired investment company.

DIRECTORS AND OFFICERS OF THE FUNDS

Directors and officers of the Funds, together with information as to
their principal business occupations during the last five years, and other
information are shown below. Each director who is deemed an "interested
person," as defined in the 1940 Act, is indicated by an asterisk. Each officer
and director holds the same position with the following registered investment
companies, and any series thereof: Strong Advantage Fund, Inc.; Strong Asia
Pacific Fund, Inc.; Strong Asset Allocation Fund, Inc.; Strong Common Stock
Fund, Inc.; Strong Conservative Equity Funds, Inc.; Strong Discovery Fund,
Inc.; Strong Equity Funds, Inc.; Strong Heritage Reserve Series, Inc.; Strong
High-Yield Municipal Bond Fund, Inc.; Strong Income Funds, Inc.; Strong Insured
Municipal Bond Fund, Inc.; Strong International Bond Fund, Inc.; Strong
International Stock Fund, Inc.; Strong Municipal Bond Fund, Inc.; Strong
Municipal Funds, Inc.; Strong Opportunity Fund, Inc.; Strong Short-Term Global
Bond Fund, Inc.; Strong Short-Term Municipal Bond Fund, Inc.; and Strong Total
Return Fund, Inc. (collectively, the "Strong Funds"); and Strong Institutional
Funds, Inc.; Strong Special Fund II, Inc.; and Strong Variable Insurance Funds,
Inc.

*Richard S. Strong (DOB 5/12/42), Chairman of the Board and Director
of the Funds.

Prior to August 1985, Mr. Strong was Chief Executive Officer of the
Advisor, which he founded in 1974. Since August 1985, Mr. Strong has been a
Security Analyst and Portfolio Manager of the Advisor. In October 1991, Mr.
Strong also became the Chairman of the Advisor. Mr. Strong is a director of
the Advisor. Since October 1993, Mr. Strong has been Chairman and a director
of Strong Holdings, Inc., a Wisconsin corporation and subsidiary of the Advisor
("Holdings"), and the Fund's underwriter, Strong Funds Distributors, Inc., a
Wisconsin corporation and subsidiary of Holdings ("Distributor"). Since
January 1994, Mr. Strong has been Chairman and a director of Heritage Reserve
Development Corporation, a Wisconsin corporation and subsidiary of Holdings;
and since February 1994, Mr. Strong has been a member of the Managing Boards of
Fussville Real Estate Holdings L.L.C., a Wisconsin Limited Liability Company
and subsidiary of the Advisor, and Fussville Development L.L.C. a Wisconsin
Limited Liability Company and subsidiary of the Advisor, and certain of its
subsidiaries. Mr. Strong has served as a director and Chairman of the Board of
the (i) Money Fund since July 1986; (ii) Short-Term Bond Fund since August
1987; (iii) Government Fund since October 1986; (iv) Corporate Bond Fund since
December 1985; and (v) High-Yield Fund since October 1995.

Marvin E. Nevins (DOB 7/9/18), Director of the Funds.

Private Investor. From 1945 to 1980, Mr. Nevins was Chairman of
Wisconsin Centrifugal Inc., a foundry. From July 1983 to December 1986, he was
Chairman of General Casting Corp., Waukesha, Wisconsin, a foundry. Mr. Nevins
is a former Chairman of the Wisconsin Association of Manufacturers & Commerce.
He was also a regent of the Milwaukee School of Engineering and a member of the
Board of Trustees of the Medical College of Wisconsin. Mr. Nevins has served
as a director of the (i) Money Fund since July 1986; (ii) Short-Term Bond Fund
since August 1987; (iii) Government Fund since October 1986; (iv) Corporate
Bond Fund since December 1985; and (v) High-Yield Fund since October 1995.

- 21 -
<PAGE> 77

Willie D. Davis (DOB 7/24/34), Director of the Funds.

Mr. Davis has been director of Alliance Bank since 1980, Sara Lee
Corporation (a food/consumer products company) since 1983, KMart Corporation (a
discount consumer products company) since 1985, YMCA Metropolitan - Los Angeles
since 1985, Dow Chemical Company since 1988, MGM Grand, Inc. (an
entertainment/hotel company) since 1990, WICOR, Inc. (a utility company) since
1990, Johnson Controls, Inc. (an industrial company) since 1992, L.A. Gear (a
footwear/sportswear company) since 1992, and Rally's Hamburger, Inc. since
1994. Mr. Davis has been a trustee of the University of Chicago since 1980,
Marquette University since 1988, and Occidental College since 1990. Since
1977, Mr. Davis has been President and Chief Executive Officer of All Pro
Broadcasting, Inc. Mr. Davis was a director of the Fireman's Fund (an
insurance company) from 1975 until 1990. Mr. Davis has served as a director of
the (i) Money, Short-Term Bond, Government, and Corporate Bond Funds since July
1994; and (ii) High-Yield Fund since October 1995.

*John Dragisic (DOB 11/26/40), President and Director of the Funds.

Mr. Dragisic has been President of the Advisor since October 1995 and
a director of the Advisor, Holdings, and Distributor since July 1994. Mr.
Dragisic previously served as a director of the Money, Short-Term Bond,
Government, and Corporate Bond Funds between 1991 and 1994; and as Vice
Chairman of the Funds from July 1994 until October 1995. Mr. Dragisic was the
President and Chief Executive Officer of Grunau Company, Inc. (a mechanical
contracting and engineering firm), Milwaukee, Wisconsin from 1987 until July
1994. From 1981 to 1987, he was an Executive Vice President with Grunau
Company, Inc. From 1969 until 1973, Mr. Dragisic worked for the InterAmerican
Development Bank. Mr. Dragisic received his Ph.D. in Economics in 1971 from
the University of Wisconsin - Madison and his B.A. degree in Economics in 1962
from Lake Forest College. Mr. Dragisic has served as (i) President of the
Money, Short-Term Bond, Government, and Corporate Bond Funds since November
1995; (ii) director of the Money, Short-Term Bond, Government, and Corporate
Bond Funds since April 1995; (iii) President of the High-Yield Fund since
November 1995; and as (iv) director of the High-Yield Fund since October 1995.

Stanley Kritzik (DOB 1/9/30), Director of the Funds.

Mr. Kritzik has been a Partner of Metropolitan Associates since 1962,
a Director of Aurora Health Care since 1987, and Health Network Ventures, Inc.
since 1992. He has served as a director of the (i) Money, Short-Term Bond,
Government, and Corporate Bond Funds since April 1995; and (ii) High-Yield Fund
since October 1995.

William F. Vogt (DOB 7/19/47), Director of the Funds.

Mr. Vogt has been the President of Vogt Management Consulting, Inc.
since 1990. From 1982 until 1990, he served as Executive Director of
University Physicians of the University of Colorado. Mr. Vogt is the Past
President of the Medical Group Management Association and a Fellow of the
American College of Medical Practice Executives. He has served as a director
of the (i) Money, Short-Term Bond, Government, and Corporate Bond Funds since
April 1995; and (ii) High-Yield Fund since October 1995.

Lawrence A. Totsky (DOB 5/6/59), C.P.A., Vice President of the Funds.

Mr. Totsky has been Senior Vice President of the Advisor since
September 1994. Mr. Totsky served as Vice President of the Advisor from
December 1992 to September 1994. Mr. Totsky acted as the Advisor's Manager of
Shareholder Accounting and Compliance from June 1987 to June 1991 when he was
named Director of Mutual Fund Administration. Mr. Totsky has been a Vice
President of the (i) Money, Short-Term Bond, Government, and Corporate Bond
Funds since May 1993; and (ii) High-Yield Fund since October 1995.

- 22 -
<PAGE> 78

Thomas P. Lemke (DOB 7/30/54), Vice President of the Funds.

Mr. Lemke has been Senior Vice President, Secretary, and General
Counsel of the Advisor since September 1994. For two years prior to joining
the Advisor, Mr. Lemke acted as Resident Counsel for Funds Management at J.P.
Morgan & Co., Inc. From February 1989 until April 1992, Mr. Lemke acted as
Associate General Counsel to Sanford C. Bernstein Co., Inc. For two years
prior to that, Mr. Lemke was Of Counsel at the Washington, D.C. law firm of Tew
Jorden & Schulte, a successor of Finley, Kumble Wagner. From August 1979 until
December 1986, Mr. Lemke worked at the Securities and Exchange Commission, most
notably as the Chief Counsel to the Division of Investment Management (November
1984 - December 1986), and as Special Counsel to the Office of Insurance
Products, Division of Investment Management (April 1982 - October 1984). Mr.
Lemke has been a Vice President of the (i) Money, Short-Term Bond, Government,
and Corporate Bond Funds since October 1994; and (ii) High-Yield Fund since
October 1995.

Ann E. Oglanian (DOB 12/7/61), Secretary of the Funds.

Ms. Oglanian has been an Associate Counsel to the Advisor since
January 1992. Ms. Oglanian acted as Associate Counsel for the Chicago-based
investment management firm, Kemper Financial Services, Inc., from June 1988
until December 1991. Ms. Oglanian has been the Secretary of the (i) Money,
Short-Term Bond, Government, and Corporate Bond Funds since May 1994; and (ii)
High-Yield Fund since October 1995.

Ronald A. Neville (DOB 5/21/47), C.P.A., Treasurer of the Funds.

Mr. Neville has been the Senior Vice President and Chief Financial
Officer of the Advisor since January 1995. For fourteen years prior to that,
Mr. Neville worked at Twentieth Century Companies, Inc., most notably as Senior
Vice President and Chief Financial Officer (1988 until December 1994). Mr.
Neville received his M.B.A. in 1972 from the University of Missouri - Kansas
City and his B.A. degree in Business Administration and Economics in 1969 from
Drury College. Mr. Neville has been the Treasurer of the (i) Money, Short-Term
Bond, Government, and Corporate Bond Funds since April 1995; and (ii)
High-Yield Fund since October 1995.

Except for Messrs. Nevins, Davis, Kritzik and Vogt, the address of all
of the above persons is P.O. Box 2936, Milwaukee, Wisconsin 53201. Mr. Nevins'
address is 6075 Pelican Bay Boulevard, Naples, Florida 33963. Mr. Davis'
address is 161 North La Brea, Inglewood, California 90301, Mr. Kritzik's
address is 1123 North Astor Street, P.O. Box 92547, Milwaukee, Wisconsin
53202-0547. Mr. Vogt's address is 2830 East Third Avenue, Denver, Colorado
80206.

The mutual fund complex that is managed by the Advisor, which is
composed of 26 open-end management investment companies consisting of 37 mutual
funds, of which the Funds are a part, in the aggregate, pays each Director who
is not a director, officer, or employee of the Advisor, or any affiliated
company (a "disinterested director") an annual fee of $50,000, plus $100 per
Board meeting for each mutual fund. In addition, each disinterested director
is reimbursed by the mutual funds for travel and other expenses incurred in
connection with attendance at such meetings. Other officers and directors of
the mutual funds receive no compensation or expense reimbursement from the
mutual funds.

As of November 30, 1995, the officers and directors of the Money,
Short-Term Bond, Government, and Corporate Bond Funds in the aggregate
beneficially owned less than 1% of each Fund's then outstanding shares. As of
December 27, 1995, the officers and directors of the High-Yield Fund
beneficially owned ___ shares of common stock of the Fund, which was 100% of
the Fund's then outstanding shares.

- 23 -
<PAGE> 79

PRINCIPAL SHAREHOLDERS

As of March 31, 1995, the following persons owned of record or are
known by the Funds to own of record or beneficially, more than 5% of the listed
Fund's outstanding shares:

<TABLE>
<CAPTION>
NAME AND ADDRESS FUND/SHARES PERCENT OF CLASS
---------------- ----------- ----------------
<S> <C> <C>
Charles Schwab & Co., Inc. Short-Term Bond/15,209,195 14.08%
101 Montgomery Street Government/11,067,349 35.89
San Francisco, California 94104 Corporate Bond/1,921,679 12.33

</TABLE>

As of December 27, 1995, the Advisor owned both of record and
beneficially, and Mr. Strong, who controls the Advisor, owned beneficially,
_____ shares (100%) of the High-Yield Fund's outstanding shares.

A shareholder owning more than 25% of a Fund's shares may be
considered a "controlling person" of the Fund. Accordingly, its vote could
have a more significant effect on matters presented to shareholders for
approval than the vote of other Fund shareholders.

INVESTMENT ADVISOR AND DISTRIBUTOR

The Advisor to the Funds is Strong Capital Management, Inc. Mr.
Richard S. Strong controls the Advisor. Mr. Strong is the Chairman and a
director of the Advisor, Mr. Dragisic is the President and a director of the
Advisor, Mr. Totsky is a Senior Vice President of the Advisor, Mr. Lemke is a
Senior Vice President, Secretary and General Counsel of the Advisor, Mr.
Neville is a Senior Vice President and Chief Financial Officer of the Advisor,
and Ms. Oglanian is an Associate Counsel of the Advisor. A brief description
of each Fund's investment advisory agreement ("Advisory Agreement") is set
forth in the Prospectus under "About the Funds - Management."

The Advisory Agreements for the Money, Short-Term Bond, Government,
and Corporate Bond Funds, dated May 1, 1995, were last approved by shareholders
at the annual meeting of shareholders held on April 13, 1995. The High-Yield
Fund's Advisory Agreement, dated December 27, 1995, was last approved by the
sole shareholder on December 27, 1995, and will remain in effect as to the Fund
for a period of two years. Each Advisory Agreement is required to be approved
annually by either the Board of Directors of the Fund or by vote of a majority
of the Fund's outstanding voting securities (as defined in the 1940 Act). In
either case, each annual renewal must be approved by the vote of a majority of
the Fund's directors who are not parties to the Advisory Agreement or
interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval. Each Advisory Agreement is terminable,
without penalty, on 60 days' written notice by the Board of Directors of the
Fund, by vote of a majority of the Fund's outstanding voting securities, or by
the Advisor. In addition, an Advisory Agreement will terminate automatically
in the event of its assignment.

Under the terms of each Advisory Agreement, the Advisor manages the
Fund's investments subject to the supervision of the Fund's Board of Directors.
The Advisor is responsible for investment decisions and supplies investment
research and portfolio management. At its expense, the Advisor provides office
space and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. The Advisor places all orders for the
purchase and sale of the Fund's portfolio securities at the Fund's expense.

Except for expenses assumed by the Advisor as set forth above or by
the Distributor as described below with respect to the distribution of a Fund's
shares, a Fund is responsible for all its other expenses, including, without
limitation, interest charges, taxes, brokerage commissions, and similar
expenses; expenses of issue, sale, repurchase, or redemption of shares;
expenses of registering or qualifying shares for sale; expenses for printing
and distribution costs of Prospectuses and quarterly financial statements
mailed to existing shareholders; and charges of custodians, transfer agents
(including the printing and mailing of reports and notices to shareholders),
registrars, auditing and legal services, clerical services related to
recordkeeping and shareholder relations, printing stock certificates; and fees
for directors who are not "interested persons" of the Advisor.

- 24 -
<PAGE> 80

As compensation for its services, each Fund pays to the Advisor
monthly management fees at the following annual rates: (1) Money Fund: .50% of
average daily net assets; (2) Short-Term Bond Fund: .625% of average daily net
assets; (3) Government Fund: .60% of average daily net assets; and (4)
Corporate Bond and High-Yield Funds: .625% of average daily net assets. (See
"Shareholder Manual - Determining Your Share Price" in the Prospectus.) From
time to time, the Advisor may voluntarily waive all or a portion of its
management fee for a Fund.

The following table sets forth certain information concerning
management fees for each Fund that has completed a fiscal year:

<TABLE>
<CAPTION>
Management Fee
Incurred Management Fee Management Fee
by Fund Waiver Paid by Fund
------- ------ ------------
<S> <C> <C> <C>
Money Fund
1992 $2,248,285 $1,388,272 $ 860,013
1993 $1,771,980 $1,118,603 $ 653,377
1994 $2,159,922 $1,108,463 $1,051,459

Short-Term Bond Fund
1992 $3,070,066 $ 730,213 $2,339,853
1993 $6,876,818 $ 659,797 $6,217,021
1994 $8,715,270 $ 0 $8,715,270

Government Fund
1992 $ 389,659 $ 281,732 $ 107,927
1993 $ 922,030 $ 205,059 $ 716,971
1994 $1,537,259 $ 150,180 $1,387,079

Corporate Bond Fund
1992 $ 606,085 $ 0 $ 606,085
1993 $ 724,883 $ 0 $ 724,883
1994 $ 773,759 $ 0 $ 773,759
- ---------------------------------------------------------

</TABLE>
Each Advisory Agreement requires the Advisor to reimburse a Fund in
the event that the expenses and charges payable by the Fund in any fiscal year,
including the management fee but excluding taxes, interest, brokerage
commissions, and similar fees and to the extent permitted extraordinary
expenses, exceed the percentage of the average net asset value of the Fund for
such year. Such excess is determined by valuations made as of the close of
each business day of the year, which is the most restrictive percentage
provided by the laws of the various states in which the Fund's common stock is
qualified for sale; or if the states in which the Fund's common stock is
qualified for sale impose no restrictions, the Advisor shall reimburse the Fund
in the event the expenses and charges payable by the Fund in any fiscal year
(as described above) exceed 2%. The most restrictive percentage limitation
currently applicable to a Fund is 2.5% of its average daily net assets up to
$30,000,000, 2% on the next $70,000,000 of its average daily net assets and
1.5% of its average daily net assets in excess of $100,000,000. Reimbursement
of expenses in excess of the applicable limitation will be made on a monthly
basis and will be paid to the Fund by reduction of the Advisor's fee, subject
to later adjustment, month by month, for the remainder of the Fund's fiscal
year. The Advisor may from time to time voluntarily absorb expenses for a Fund
in addition to the reimbursement of expenses in excess of application
limitations.

On July 12, 1994, the Securities and Exchange Commission (the "SEC")
filed an administrative action (Order) against the Advisor, Mr. Strong, and
another employee of the Advisor in connection with conduct that occurred
between 1987 and early 1990. In re Strong/Corneliuson Capital Management, Inc.,
et al. Admin. Proc. File No. 3-8411. The proceeding was settled by consent
without admitting or denying the allegations in the Order. The Order alleged
that the Advisor and Mr. Strong aided and abetted violations of Section 17(a)
of the 1940 Act by effecting trades between mutual funds, and between mutual
funds and Harbour Investments Ltd. ("Harbour"), without complying with the
exemptive provisions of SEC Rule 17a-7 or otherwise

- 25 -
<PAGE> 81

obtaining an exemption. It further alleged that the Advisor violated, and Mr.
Strong aided and abetted violations of, the disclosure provisions of the 1940
Act and the Investment Advisers Act of 1940 by misrepresenting the Advisor's
policy on personal trading and by failing to disclose trading by Harbour, an
entity in which principals of the Advisor owned between 18 and 25 percent of
the voting stock. As part of the settlement, the respondents agreed to a
censure and a cease and desist order and the Advisor agreed to various
undertakings, including adoption of certain procedures and a limitation for six
months on accepting certain types of new advisory clients.

The staff of the U.S. Department of Labor (the "Staff") has contacted
the Advisor regarding alleged cross-trading of securities between 1987 and
early 1990 involving various customer accounts subject to the Employee
Retirement Security Act of 1974 ("ERISA") and managed by the Advisor. The
Advisor has informed the Staff of the basis for its position that the trades
complied with ERISA and that, in any event, any alleged noncompliance was not
the cause of any losses to the accounts. The Staff has stated that it
disagrees with the Advisor's positions, although to date it has not filed any
action against the Advisor. At this time, the Advisor is negotiating with the
Staff regarding a possible resolution of the matter, but it cannot presently
determine whether the matter will be settled or litigated or, if it is settled
or litigated, how it ultimately will be resolved. However, management
presently believes, based on current knowledge and the Advisor's insurance
coverage, that the ultimate resolution of this matter should not have a
material adverse effect on the Advisor's financial position.

The Advisor has adopted a Code of Ethics (the "Code") which governs
the personal trading activities of all "Access Persons" of the Advisor. Access
Persons include every director and officer of the Advisor and the investment
companies managed by the Advisor, including the Funds, as well as certain
employees of the Advisor who have access to information relating to the
purchase or sale of securities by the Advisor on behalf of accounts managed by
it. The Code is based upon the principal that such Access Persons have a
fiduciary duty to place the interests of the Advisor's clients ahead of their
own.

The Code requires Access Persons (other than Access Persons who are
independent directors of the investment companies managed by the Advisor,
including the Funds) to, among other things, preclear their securities
transactions (with limited exceptions, such as transactions in shares of mutual
funds, direct obligations of the U.S. government and certain options on
broad-based securities market indexes) and to execute such transactions through
the Advisor's trading department. The Code, which applies to all Access Persons
(other than Access Persons who are independent directors of the investment
companies managed by the Advisor, including the Funds), includes a ban on
acquiring any securities in an initial public offering, other than a new
offering of a registered open-end investment company, and a prohibition from
profiting on short-term trading in securities. In addition, no Access Person
may purchase or sell any security which, at the time, is being purchased or
sold, or to the knowledge of the Access Person, is being considered for
purchase or sale, by the Advisor on behalf of any mutual fund or other account
managed by it. Finally, the Code provides for trading "black out" periods
which prohibit trading by Access Persons who are portfolio managers within
seven calendar days of trading in the same securities by any mutual fund or
other account managed by the portfolio manager.

Under a Distribution Agreement dated December 1, 1993 with the Money,
Short-Term Bond, Government, and Corporate Bond Funds, and a Distribution
Agreement dated December 27, 1995 for the High-Yield Fund (the "Distribution
Agreements"), Strong Funds Distributors, Inc. ("Distributor"), a subsidiary of
the Advisor, acts as underwriter of each Fund's shares. The Distribution
Agreements provide that the Distributor will use its best efforts to distribute
the Fund's shares. Since the Funds are "no-load" funds, no sales commissions
are charged on the purchase of Fund shares. Each Distribution Agreement
further provides that the Distributor will bear the additional costs of
printing Prospectuses and shareholder reports which are used for selling
purposes, as well as advertising and any other costs attributable to the
distribution of a Fund's shares. The Distributor is an indirect subsidiary of
the Advisor and controlled by the Advisor and Richard S. Strong. Prior to
December 1, 1993, the Advisor acted as underwriter for the Money, Short-Term
Bond, Government, and Corporate Bond Funds. On December 1, 1993, the
Distributor succeeded to the broker-dealer registration of the Advisor and, in
connection therewith, the Distribution Agreements for the Money, Short-Term
Bond, Government, and Corporate Bond Funds were executed on substantially
identical terms as the former distribution agreements with the Advisor as
distributor. The Distribution Agreements are subject to the same termination
and renewal provisions as are described above with respect to the Advisory
Agreements.

From time to time, the Distributor may hold in-house sales incentive
programs for its associated persons under which these persons may receive
non-cash compensation awards in connection with the sale and distribution of a
Fund's shares. These awards may include items such as, but not limited to,
gifts, merchandise, gift certificates, and payment of travel expenses, meals
and lodging. As required by the National Association of Securities Dealers,
Inc. or NASD's proposed rule amendments in this

- 26 -
<PAGE> 82

area, any in-house sales incentive program will be multi-product oriented,
i.e., any incentive will be based on an associated person's gross production of
all securities within a product type and will not be based on the sales of
shares of any specifically designated mutual fund.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Advisor is responsible for decisions to buy and sell
securities for the Funds and for the placement of the Funds' portfolio
business and the negotiation of the commissions to be paid on such
transactions. It is the policy of the Advisor to seek the best execution at
the best security price available with respect to each transaction, in light
of the overall quality of brokerage and research services provided to the
Advisor or the Funds. In over-the-counter transactions, orders are placed
directly with a principal market maker unless it is believed that a better
price and execution can be obtained using a broker. The best price to the
Funds means the best net price without regard to the mix between purchase or
sale price and commissions, if any. In selecting broker-dealers and in
negotiating commissions, the Advisor considers a variety of factors, including
best price and execution, the full range of brokerage services provided by
the broker, as well as its capital strength and stability, and the quality of
the research and research services provided by the broker. Brokerage will not
be allocated based on the sale of any shares of the Strong Funds.

Section 28(e) of the Securities Exchange Act of 1934 ("Section
28(e)") permits an investment advisor, under certain circumstances, to cause
an account to pay a broker or dealer a commission for effecting a transaction
in excess of the amount of commission another broker or dealer would have
charged for effecting the transaction in recognition of the value of the
brokerage and research services provided by the broker or dealer. Brokerage
and research services include (a) furnishing advice as to the value of
securities, the advisability of investing in, purchasing or selling
securities, and the availability of securities or purchasers or sellers of
securities; (b) furnishing analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy, and
the performance of accounts; and (c) effecting securities transactions and
performing functions incidental thereto (such as clearance, settlement, and
custody).

In carrying out the provisions of the Advisory Agreements, the
Advisor may cause the Funds to pay a broker, which provides brokerage and
research services to the Advisor, a commission for effecting a securities
transaction in excess of the amount another broker would have charged for
effecting the transaction. The Advisor believes it is important to its
investment decision-making process to have access to independent research.
The Advisory Agreements provide that such higher commissions will not be
paid by a Fund unless (a) the Advisor determines in good faith that the
amount is reasonable in relation to the services in terms of the particular
transaction or in terms of the Advisor's overall responsibilities with
respect to the accounts as to which it exercises investment discretion; (b)
such payment is made in compliance with the provisions of Section 28(e),
other applicable state and federal laws, and the Advisory Agreement; and (c) in
the opinion of the Advisor, the total commissions paid by a Fund will be
reasonable in relation to the benefits to the Fund over the long term.
The investment management fees paid by the Funds under the Advisory
Agreements are not reduced as a result of the Advisor's receipt of research
services.

Generally, research services provided by brokers may include
information on the economy, industries, groups of securities, individual
companies, statistical information, accounting and tax law interpretations,
political developments, legal developments affecting portfolio securities,
technical market action, pricing and appraisal services, credit analysis,
risk measurement analysis, performance analysis, and analysis of corporate
responsibility issues. Such research services are received primarily in the
form of written reports, telephone contacts, and personal meetings with
security analysts. In addition, such research services may be provided
in the form of access to various computer-generated data, computer
hardware and software, and meetings arranged with corporate and industry
spokespersons, economists, academicians, and government representatives. In
some cases, research services are generated by third parties but are provided
to the Advisor by or through brokers. Such brokers may pay for all or a portion
of computer hardware and software costs relating to the pricing of securities.

Where the Advisor itself receives both administrative benefits and
research and brokerage services from the services provided by brokers, it
makes a good faith allocation between the administrative benefits and the
research and brokerage services, and will pay for any administrative benefits
with cash. In making good faith allocations of costs between
administrative benefits and research and brokerage services, a conflict of
interest may exist by reason of the Advisor's allocation of the costs of such
benefits and services between those that primarily benefit the Advisor and
those that primarily benefit the Funds and other advisory clients.

- 27 -
<PAGE> 83

From time to time, the Advisor may purchase securities for a Fund in
a fixed price offering. In these situations, the seller may be a member of
the selling group that will, in addition to selling the securities to the
Funds and other advisory clients, provide the Advisor with research. The
National Association of Securities Dealers has adopted rules expressly
permitting these types of arrangements under certain circumstances.
Generally, the seller will provide research "credits" in these situations at a
rate that is higher than that which is available for typical secondary market
transactions. These arrangements may not fall within the safe harbor of Section
28(e).

Each year, the Advisor considers the amount and nature of research and
research services provided by brokers, as well as the extent to which such
services are relied upon, and attempts to allocate a portion of the
brokerage business of the Funds and other advisory clients on the basis of
that consideration. In addition, brokers may suggest a level of business
they would like to receive in order to continue to provide such services.
The actual brokerage business received by a broker may be more or less than
the suggested allocations, depending upon the Advisor's evaluation of all
applicable considerations.

During its last fiscal year, the Advisor had an arrangement with
various brokers whereby, in consideration of the providing of research
services, the Advisor allocated brokerage to those firms, provided that their
brokerage and research services were satisfactory to the Advisor and their
execution capabilities were compatible with the Advisor's policy of seeking
best execution at the best security price available, as discussed above.

The Advisor may direct the purchase of securities on behalf of the
Funds and other advisory clients in secondary market transactions, in public
offerings directly from an underwriter, or in privately negotiated
transactions with an issuer. When the Advisor believes the circumstances so
warrant, securities purchased in public offerings may be resold shortly after
acquisition in the immediate aftermarket for the security in order to take
advantage of price appreciation from the public offering price or for other
reasons. Short-term trading of securities acquired in public offerings, or
otherwise, may result in higher portfolio turnover and associated brokerage
expenses.

The Advisor places portfolio transactions for other advisory accounts,
including other mutual funds managed by the Advisor. Research services
furnished by firms through which the Funds effect their securities transactions
may be used by the Advisor in servicing all of its accounts; not all of such
services may be used by the Advisor in connection with the Funds. In the
opinion of the Advisor, it is not possible to measure separately the benefits
from research services to each of the accounts (including the Funds) managed by
the Advisor. Because the volume and nature of the trading activities of the
accounts are not uniform, the amount of commissions in excess of those charged
by another broker paid by each account for brokerage and research services will
vary. However, in the opinion of the Advisor, such costs to the Funds will not
be disproportionate to the benefits received by the Funds on a continuing
basis.

The Advisor seeks to allocate portfolio transactions equitably
whenever concurrent decisions are made to purchase or sell securities by the
Funds and another advisory account. In some cases, this procedure could have an
adverse effect on the price or the amount of securities available to the Funds.
In making such allocations between a Fund and other advisory accounts, the main
factors considered by the Advisor are the respective investment objectives, the
relative size of portfolio holdings of the same or comparable securities, the
availability of cash for investment, the size of investment commitments
generally held, and the opinions of the persons responsible for recommending
the investment.

Where consistent with a client's investment objectives, investment
restrictions, and risk tolerance, the Advisor may purchase securities sold in
underwritten public offerings for client accounts, commonly referred to as
"deal" securities. The Advisor has adopted deal allocation procedures (the
"procedures"), summarized below, that reflect the Advisor's overriding policy
that deal securities must be allocated among participating client accounts in a
fair and equitable manner and that deal securities may not be allocated in a
manner that unfairly discriminates in favor of certain clients or types of
clients.

The procedures provide that, in determining which client accounts a
portfolio manager team will seek to have purchase deal securities, the team
will consider all relevant factors including, but not limited to, the nature,
size, and expected allocation to the Advisor of deal securities; the size of
the account(s); the accounts' investment objectives and restrictions; the risk
tolerance of the client; the client's tolerance for possibly higher portfolio
turnover; the amount of commissions generated by the account during the past
year; and the number of other deals the client has participated in during the
past year.

- 28 -
<PAGE> 84

Where more than one of the Advisor portfolio manager team seeks to
have client accounts participate in a deal and the amount of deal securities
allocated to the Advisor by the underwriting syndicate is less than the
aggregate amount ordered by the Advisor (a "reduced allocation"), the deal
securities will be allocated among the portfolio manager teams based on all
relevant factors. The primary factor shall be assets under management,
although other factors that may be considered in the allocation decision
include, but are not limited to, the nature, size, and expected Advisor
allocation of the deal; the amount of brokerage commissions or other amounts
generated by the respective participating portfolio manager teams; and which
portfolio manager team is primarily responsible for the Advisor receiving
securities in the deal. Based on the relevant factors, the Advisor has
established general allocation percentages for its portfolio manager teams, and
these percentages are reviewed on a regular basis to determine whether asset
growth or other factors make it appropriate to use different general allocation
percentages for reduced allocations.

When a portfolio manager team receives a reduced allocation of deal
securities, the portfolio manager team will allocate the reduced allocation
among client accounts in accordance with the allocation percentages set forth
in the team's initial allocation instructions for the deal securities, except
where this would result in a de minimis allocation to any client account. On a
regular basis, the Advisor reviews the allocation of deal securities to ensure
that they have been allocated in a fair and equitable manner that does not
unfairly discriminate in favor of certain clients or types of clients.

The Money Fund paid brokerage commissions during 1992, 1993 and 1994
of $0, $0, and $0, respectively. The Short-Term Bond Fund paid brokerage
commissions during 1992, 1993, and 1994 of approximately $203,000, $286,000,
and $66,000, respectively. The Government Fund paid brokerage commissions
during 1992, 1993, and 1994 of approximately $50,000, $63,000, and $8,000,
respectively. The Corporate Bond Fund paid brokerage commissions during 1992,
1993, and 1994 of approximately $113,000, $61,000 and $4,000, respectively.

For the 1993 fiscal period ended December 31, the Short-Term Bond
Fund's portfolio turnover rate was 444.9%. For the 1993 and 1994 fiscal
periods ended December 31, the Government and Corporate Bond Funds' respective
portfolio turnover rates were as follows: (1) Government Fund: 520.9% and
479.0%; and (2) Corporate Bond Fund: 665.8% and 603.0%. The above listed
portfolio turnover rates for the respective Funds were higher than anticipated
primarily because each Fund employed a trading strategy to take advantage of
yield spread opportunities to help enhance the Fund's total return.

As of December 31, 1994, the Money Fund had acquired securities of its
regular brokers or dealers (as defined in Rule 10b-1 under the 1940 Act) or
their parents in the following amounts:

<TABLE>
<CAPTION>
Regular Broker or Dealer or Parent Issuer Value of Securities Owned as of December 31, 1994*
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Goldman Sachs & Co. $10,000,000
Merrill Lynch & Company, Inc. 1,000,000
</TABLE>

*To the nearest thousand.

CUSTODIAN

As custodian of each Fund's assets, Firstar Trust Company, P.O. Box
701, Milwaukee, Wisconsin 53201, has custody of all securities and cash of
the Funds, delivers and receives payment for securities sold, receives
and pays for securities purchased, collects income from investments, and
performs other duties, all as directed by the officers of the Funds. With
respect to the Money Fund only, the custodian has entered into a
sub-custodial arrangement with First National Bank of Chicago ("First
Chicago") pursuant to which First Chicago may retain custody of certain Money
Fund foreign securities. The custodian and, if applicable, the sub-custodian
are in no way responsible for any of the investment policies or decisions of
the Funds.

- 29 -
<PAGE> 85

TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT

The Advisor acts as transfer agent and dividend-disbursing agent for
the Funds. The Advisor is compensated based on an annual fee per open
account of $32.50 for the Money Fund, and $31.50 for the Short-Term
Bond, Government, Corporate Bond, and High-Yield Funds, plus out-of-pocket
expenses, such as postage and printing expenses in connection with
shareholder communications. The Advisor also receives an annual fee per
closed account of $4.20 from each Fund. The fees received and the services
provided as transfer agent and dividend disbursing agent are in addition to
those received and provided by the Advisor under the Advisory Agreement. In
addition, the Advisor provides certain printing and mailing services for the
Funds, such as printing and mailing of shareholder account statements, checks,
and tax forms.

The following table sets forth certain information concerning amounts
paid by each Fund that has completed a fiscal year for transfer agency and
dividend disbursing and printing and mailing services:

<TABLE>
<CAPTION>
Transfer Agency and Dividend Disbursement
Services Charges Incurred
---------------------------------------------------------------------------------
Per Printing and Amounts Net Amount
Account Expense Mailing Waived By Paid By
Fund Charges Reimbursements Services Advisor Fund
---- ------- -------------- -------- ------- ----
<S> <C> <C> <C> <C> <C>
Money Fund
1992 $1,535,244 $700,855 $73,041 $ 0 $ 2,309,140
1993 1,257,905 486,852 50,097 0 1,794,854
1994 1,155,437 438,197 31,377 187 1,460,176
Short-Term Bond Fund
1992 $ 907,739 $289,618 $ 6,071 $ 633,343 $ 570,085
1993 1,818,354 503,093 65,804 0 2,387,251
1994 2,550,992 528,202 58,057 0 3,137,251
Government Fund
1992 $ 184,550 $ 49,701 $ 6,981 $ 0 $ 241,232
1993 334,277 76,557 10,009 0 420,843
1994 525,837 81,183 9,695 0 616,715
Corporate Bond Fund
1992 $ 409,159 $ 85,929 $14,271 $ 0 $ 509,359
1993 374,189 82,743 11,692 0 468,624
1994 389,833 79,434 8,512 0 477,779
- ----------------------------------------------------------------------
</TABLE>

From time to time, the Funds, directly or indirectly through
arrangements with the Advisor, and/or the Advisor may pay amounts to third
parties that provide transfer agent and other administrative services relating
to the Funds to persons who beneficially own interests in the Funds, such as
participants in 401(k) plans. These services may include, among other things,
sub-accounting services, answering inquiries relating to the Funds,
transmitting, on behalf of the Funds, proxy statements, annual reports,
updated Prospectuses, other communications regarding the Funds, and related
services as the Funds or beneficial owners may reasonably request. In such
cases, the Funds will not pay fees at a rate that is greater than the rate the
Funds are currently paying the Advisor for providing these services to Fund
shareholders.

- 30 -
<PAGE> 86

TAXES

GENERAL

As indicated under "About the Funds - Distributions and Taxes" in the
Prospectus, each Fund intends to continue to qualify annually for treatment as
a regulated investment company ("RIC") under the Internal Revenue Code of
1986, as amended (the "Code"). This qualification does not involve government
supervision of the Funds' management practices or policies.

In order to qualify for treatment as a RIC under the Code, each Fund
must distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting generally of net investment
income, net short-term capital gain, and net gains from certain foreign
currency transactions ) ("Distribution Requirement") and must meet several
additional requirements. For each Fund these requirements include the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of securities or foreign
currencies or other income (including gains from options, futures, or forward
currency contracts) derived with respect to its business of investing in
securities or these currencies ("Income Requirement"); (2) the Fund must
derive less than 30% of its gross income each taxable year from the sale
or other disposition of securities, or options or futures (other than those
on foreign currencies), or foreign currencies (or options, futures, or
forward contracts thereon) that are not directly related to the Fund's
principal business of investing in securities (or options and futures with
respect to securities) that were held for less than three months ("30%
Limitation"); (3) at the close of each quarter of a Fund's taxable year, at
least 50% of the value of its total assets must be represented by cash and cash
items, U.S. government securities, securities of other RICs, and other
securities, with these other securities limited, in respect of any one
issuer, to an amount that does not exceed 5% of the value of the Fund's total
assets and that does not represent more than 10% of the issuer's outstanding
voting securities; and (4) at the close of each quarter of the Fund's taxable
year, not more than 25% of the value of its total assets may be invested in
securities (other than U.S. government securities or the securities of other
RICs) of any one issuer. From time to time the Advisor may find it necessary
to make certain types of investments for the purpose of ensuring that the Fund
continues to qualify for treatment as a RIC under the Code.

If Fund shares are sold at a loss after being held for six
months or less, the loss will be treated as long-term, instead of
short-term, capital loss to the extent of any capital gain distributions
received on those shares.

Each Fund will be subject to a nondeductible 4% excise tax ("Excise
Tax") to the extent it fails to distribute by the end of any calendar year
substantially all of its ordinary income for that year and capital gain net
income for the one-year period ending on October 31 of that year, plus certain
other amounts.

FOREIGN TRANSACTIONS

Interest and dividends received by a Fund may be subject to income,
withholding, or other taxes imposed by foreign countries and U.S.
possessions that would reduce the yield on its securities. Tax conventions
between certain countries and the United States may reduce or eliminate
these foreign taxes, however, and many foreign countries do not impose taxes
on capital gains in respect of investments by foreign investors.

Each Fund maintains its accounts and calculates its income in U.S.
dollars. In general, gain or loss (1) from the disposition of foreign
currencies and forward currency contracts, (2) from the disposition of
foreign-currency-denominated debt securities that are attributable to
fluctuations in exchange rates between the date the securities are acquired
and their disposition date, and (3) attributable to fluctuations in exchange
rates between the time a Fund accrues interest or other receivables or
expenses or other liabilities denominated in a foreign currency and the time
the Fund actually collects those receivables or pays those liabilities, will
be treated as ordinary income or loss. A foreign-currency-denominated debt
security acquired by a Fund may bear interest at a high normal rate that takes
into account expected decreases in the value of the principal amount of the
security due to anticipated currency devaluations; in that case, the Fund
would be required to include the interest in income as it accrues but
generally would realize a currency loss with respect to the principal only
when the principal was received (through disposition or upon maturity).

- 31 -
<PAGE> 87

DERIVATIVE INSTRUMENTS

The use of derivatives strategies, such as purchasing and selling
(writing) options and futures and entering into forward currency contracts,
involves complex rules that will determine for income tax purposes the
character and timing of recognition of the gains and losses the Funds realize
in connection therewith. Gains from the disposition of foreign currencies
(except certain gains therefrom that may be executed by future regulations),
and income from transactions in options, futures, and forward currency
contracts derived by a Fund with respect to its business of investing in
securities or foreign currencies, will qualify as permissible income under
the Income Requirement. However, income from the disposition of options and
futures (other than those on foreign currencies) will be subject to the 30%
Limitation if they are held for less than three months. Income from the
disposition of foreign currencies, and options, futures, and forward
contracts on foreign currencies that are not directly related to a Fund's
principal business of investing in securities (or options and futures with
respect to securities) also will be subject to the 30% Limitation if they are
held for less than three months.

If a Fund satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease
in value (whether realized or not) of the offsetting hedging position during
the period of the hedge for purposes of determining whether the Fund satisfies
the 30% Limitation. Thus, only the net gain (if any) from the designated hedge
will be included in gross income for purposes of that limitation. The Funds
intend that, when they engage in hedging strategies, the hedging transactions
will qualify for this treatment, but at the present time it is not clear
whether this treatment will be available for all of the Funds' hedging
transactions. To the extent this treatment is not available or is not elected
by a Fund, it may be forced to defer the closing out of certain options,
futures, or forward currency contracts beyond the time when it otherwise would
be advantageous to do so, in order for the Fund to continue to qualify as a
RIC.

For federal income tax purposes, each Fund is required to recognize as
income for each taxable year its net unrealized gains and losses on options,
futures, or forward currency contracts that are subject to section 1256 of
the Code ("Section 1256 Contracts") and are held by the Fund as of the end of
the year, as well as gains and losses on Section 1256 Contracts actually
realized during the year. Except for Section 1256 Contracts that are part of
a "mixed straddle" and with respect to which a Fund makes a certain election,
any gain or loss recognized with respect to Section 1256 Contracts is
considered to be 60% long-term capital gain or loss and 40% short-term
capital gain or loss, without regard to the holding period of the Section
1256 Contract. Unrealized gains on Section 1256 Contracts that have been held
by a Fund for less than three months as of the end of its taxable year, and
that are recognized for federal income tax purposes as described above, will
not be considered gains on investments held for less than three months for
purposes of the 30% Limitation.

ZERO-COUPON, STEP-COUPON, AND PAY-IN-KIND SECURITIES

Certain Funds may acquire zero-coupon, step-coupon, or other
securities issued with original issue discount. As a holder of those
securities, a Fund must include in its income the original issue discount
that accrues on the securities during the taxable year, even if the Fund
receives no corresponding payment on the securities during the year.
Similarly, a Fund must include in its income securities it receives as
"interest" on pay-in-kind securities. Because a Fund annually must
distribute substantially all of its investment company taxable income,
including any original issue discount and other non-cash income, to satisfy
the Distribution Requirement and avoid imposition of the Excise Tax, it may
be required in a particular year to distribute as a dividend an amount that
is greater than the total amount of cash it actually receives. Those
distributions may be made from the proceeds on sales of portfolio securities,
if necessary. A Fund may realize capital gains or losses from those sales,
which would increase or decrease its investment company taxable income or net
capital gain, or both. In addition, any such gains may be realized on the
disposition of securities held for less than three months. Because of the 30%
Limitation, any such gains would reduce the Fund's ability to sell other
securities, or certain options, or futures, or forward currency contracts,
held for less that three months that it might wish to sell in the ordinary
course of its portfolio management.

The foregoing federal tax discussion as well as the tax
discussion contained within the Prospectus under "About the Funds -
Distributions and Taxes" is intended to provide you with an overview of
the impact of federal income tax provisions on each Fund or its
shareholders. These tax provisions are subject to change by legislative or
administrative action at the federal, state, or local level, and any changes
may be applied retroactively. Any such action that limits or restricts
each Fund's current ability to pass-through earnings without taxation at the
Fund level, or otherwise materially changes a Fund's tax treatment, could
adversely affect the value of a shareholder's investment in a Fund. Because
each Fund's taxes are a complex matter, you should

- 32 -
<PAGE> 88

consult your tax adviser for more detailed information concerning the
taxation of a Fund and the federal, state, and local tax consequences to
shareholders of an investment in a Fund.

DETERMINATION OF NET ASSET VALUE

As set forth in the Prospectus under the caption "Shareholder Manual
- - Determining Your Share Price," the net asset value of each Fund will be
determined as of the close of trading on each day the New York Stock
Exchange (the "NYSE") is open for trading. The New York Stock Exchange is
open for trading Monday through Friday except New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day. Additionally, if any of the aforementioned holidays falls
on a Saturday, the NYSE will not be open for trading on the preceding
Friday, and when any such holiday falls on a Sunday, the NYSE will not be
open for trading on the succeeding Monday, unless unusual business conditions
exist, such as the ending of a monthly or yearly accounting period.

The Money Fund values its securities on the amortized cost basis
and seeks to maintain its net asset value at a constant $1.00 per share. In
the event a difference of 1/2 of 1% or more were to occur between the net
asset value calculated by reference to market values and the Money Fund's
$1.00 per share net asset value, or if there were any other deviation which
the Board of Directors believed would result in a material dilution to
shareholders or purchasers, the Board of Directors would consider taking any
one or more of the following actions or any other action considered
appropriate: selling portfolio securities to shorten average portfolio
maturity or to realize capital gains or losses, reducing or suspending
shareholder income accruals, redeeming shares in kind, or utilizing a value
per unit based upon available indications of market value. Available
indications of market value may include, among other things, quotations or
market value estimates of securities and/or values based on yield data relating
to money market securities that are published by reputable sources.

ADDITIONAL SHAREHOLDER INFORMATION

TELEPHONE EXCHANGE AND REDEMPTION PRIVILEGES AND AUTOMATIC EXCHANGE PLAN

Shares of a Fund and any other funds sponsored by the Advisor may be
exchanged for each other at relative net asset values. Exchanges will be
effected by redemption of shares of the Fund held and purchase of shares of
the fund for which Fund shares are being exchanged (the "New Fund"). For
federal income tax purposes, any such exchange constitutes a sale upon
which a capital gain or loss will be realized, depending upon whether the
value of the shares being exchanged is more or less than the shareholder's
adjusted cost basis. If you are interested in exercising any of these
exchange privileges, you should obtain Prospectuses of other funds sponsored
by the Advisor from the Advisor. Upon a telephone exchange, the transfer
agent establishes a new account in the New Fund with the same registration and
dividend and capital gains options as the redeemed account, unless otherwise
specified, and confirms the purchase to you.

The Funds employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. The Funds may not be liable for losses
due to unauthorized or fraudulent instructions. Such procedures include
but are not limited to requiring a form of personal identification prior
to acting on instructions received by telephone, providing written
confirmations of such transactions to the address of record, and tape
recording telephone instructions.

The Telephone Exchange and Redemption Privileges and Automatic
Exchange Plan are available only in states where shares of the New Fund may
be sold, and may be modified or discontinued at any time. Additional
information regarding the Telephone Exchange and Redemption Privileges and
Automatic Exchange Plan is contained in the Funds' Prospectus.

RETIREMENT PLANS

Individual Retirement Account (IRA): Everyone under age 70 1/2 with earned
income may contribute to a tax-deferred IRA. The Strong Funds offer a prototype
plan for you to establish your own IRA. You are allowed to contribute up to the
lesser of $2,000 or 100% of your earned income each year to your IRA. Under
certain circumstances, your contribution will be deductible.

- 33 -
<PAGE> 89

Direct Rollover IRA: To avoid the mandatory 20% federal withholding tax on
distributions, you must transfer the qualified retirement or Code section
403(b) plan distribution directly into an IRA. This tax cannot be avoided if
you receive a distribution and then roll it over into an IRA. The amount of
your Direct Rollover IRA contribution will not be included in your taxable
income for the year.

Simplified Employee Pension Plan (SEP-IRA): A SEP-IRA allows an employer to
make deductible contributions to separate IRA accounts established for each
eligible employee.

Salary Reduction Simplified Employee Pension Plan (SAR SEP-IRA): A SAR SEP-IRA
is a type of SEP-IRA in which an employer may allow employees to defer part of
their salaries and contribute to an IRA account. These deferrals help lower the
employees' taxable income.

Defined Contribution Plan: A defined contribution plan allows self-employed
individuals, partners, or a corporation to provide retirement benefits for
themselves and their employees. There are three plan types: a profit-sharing
plan, a money purchase pension plan, and a paired plan (a combination of a
profit-sharing plan and a money purchase plan).

401(k) Plan: A 401(k) plan is a type of profit-sharing plan that allows
employees to have part of their salary contributed to a retirement plan which
will earn tax-deferred income. A 401(k) plan is funded by employee
contributions, employer contributions, or a combination of both.

403(b)(7) Plan: A tax-sheltered custodial account designed to qualify under
section 403(b)(7) of the Code is available for use by employees of certain
educational, non-profit, hospital, and charitable organizations.

FUND ORGANIZATION

The Money, Short-Term Bond, Government, and Corporate Bond Funds are
Wisconsin corporations (each a "Corporation") that are authorized to offer
separate series of shares representing interests in separate portfolios of
securities, each with differing investment objectives. The High-Yield Fund is
a series of common stock of Strong Income Funds, Inc., a Wisconsin corporation
(a "Corporation") that is authorized to offer separate series of shares
representing interests in separate portfolios of securities, each with
differing objectives. The shares in any one portfolio may, in turn, be offered
in separate classes, each with differing preferences, limitations or relative
rights. However, the Articles of Incorporation for each of the Corporations
provides that if additional classes of shares are issued by a Corporation, such
new classes of shares may not affect the preferences, limitations or relative
rights of the Corporation's outstanding shares. In addition, the Board of
Directors of each Corporation is authorized to allocate assets, liabilities,
income and expenses to each series and class. Classes within a series may have
different expense arrangements than other classes of the same series and,
accordingly, the net asset value of shares within a series may differ.
Finally, all holders of shares of a Corporation may vote on each matter
presented to shareholders for action except with respect to any matter which
affects only one or more series or class, in which case only the shares of the
affected series or class are entitled to vote. Fractional shares have the same
rights proportionately as do full shares. Shares of the Corporation have no
preemptive, conversion, or subscription rights. If a Corporation issues
additional series, the assets belonging to each series of shares will be held
separately by the custodian, and in effect each series will be a separate fund.

- 34 -
<PAGE> 90

Each Corporation was organized on the following dates and currently
has the following authorized shares of capital stock:

<TABLE>
<CAPTION>
Incorporation Date Series Authorized Par
Corporation Date Created Shares Value($)
----------- ------------- ----------- ---------- --------
<S> <C> <C> <C> <C>
Strong Corporate Bond Fund, Inc. 07/19/85 300,000,000 .001
Strong Government Securities Fund, Inc. 08/08/86 100,000,000 .001
Strong Income Funds, Inc. 02/24/89 10,000,000,000 .00001
- Strong U.S. Treasury Money Fund* 2/24/89 3,000,000,000 .00001
- Strong High-Yield Bond Fund 10/27/95 300,000,000 .00001
Strong Money Market Fund, Inc. 07/19/85 10,000,000,000 .00001
Strong Short-Term Bond Fund, Inc. 03/20/87 1,000,000,000 .001

</TABLE>

* Described in a different prospectus and statement of additional information.

SHAREHOLDER MEETINGS

The Wisconsin Business Corporation Law permits registered investment
companies, such as the Corporations, to operate without an annual meeting of
shareholders under specified circumstances if an annual meeting is not required
by the 1940 Act. Each Corporation has adopted the appropriate provisions in
their Bylaws and may, at their discretion, not hold an annual meeting in any
year in which the election of directors is not required to be acted on by
shareholders under the 1940 Act.

Each Corporation's Bylaws allow for a director to be removed by its
shareholders with or without cause, only at a meeting called for the purpose
of removing the director. Upon the written request of the holders of shares
entitled to not less than ten percent (10%) of all the votes entitled to be
cast at such meeting, the Secretary of the Corporation shall promptly call a
special meeting of shareholders for the purpose of voting upon the question of
removal of any director. The Secretary of the Corporation shall inform such
shareholders of the reasonable estimated costs of preparing and mailing the
notice of the meeting, and upon payment to the Corporation of such costs, the
Corporation shall give not less than ten nor more than sixty days notice of the
special meeting.

PERFORMANCE INFORMATION

As described in the "About the Funds - Performance Information"
section of the Funds' Prospectus, each Fund's historical performance or return
may be shown in the form of "yield." In addition, the Short-Term Bond,
Government, Corporate Bond, and High-Yield Funds' performance may be shown in
the form of "average annual total return," "total return," and "cumulative
total return," and the Money Fund's performance may be shown in the form of
"effective yield." From time to time, the advisor agrees to waive or reduce
its management fee and to absorb certain operating expenses for a Fund.
Without these waivers and absorptions, the performance results for the Funds
noted herein would have been lower. All performance and returns noted herein
are historical and do not represent the future performance of a Fund.

- 35 -
<PAGE> 91

YIELD

The Short-Term Bond, Government, Corporate Bond, and High-Yield Funds'
yield is computed in accordance with a standardized method prescribed by rules
of the SEC. Under that method, the current yield quotation for a Fund is based
on a one month or 30-day period. The yield is computed by dividing the net
investment income per share earned during the 30-day or one month period by the
maximum offering price per share on the last day of the period, according to
the following formula:

6
YIELD = 2[( a-b + 1) - 1]
---
cd

Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the
period.

For the 30-day period ended December 30, 1994, the Short-Term Bond
Fund's yield was 8.25%, the Government Fund's yield was 7.41%, and the
Corporate Bond Fund's yield was 8.85%. In computing yield, the Funds follow
certain standardized accounting practice specified by SEC rules. These
practices are not necessarily consistent with those that the Funds use to
prepare annual and interim financial statements in conformity with generally
accepted accounting principles.

CURRENT YIELD

The Money Fund's current yield quotation is based on a seven-day
period and is computed as follows. The first calculation is net investment
income per share, which is accrued interest on portfolio securities, plus or
minus amortized premium, less accrued expenses. This number is then divided by
the price per share (expected to remain constant at $1.00) at the beginning of
the period ("base period return"). The result is then divided by 7 and
multiplied by 365 and the resulting yield figure is carried to the nearest
one-hundredth of one percent. Realized capital gains or losses and unrealized
appreciation or depreciation of investments are not included in the
calculation. For the seven-day period ended December 30, 1994, the Money Fund's
current yield was 6.11%. During this period, the Advisor waived management fees
of 0.15% for the Money Fund, and absorbed expenses of 0.50% for the Money Fund.
Without these waivers and absorptions, the Money Fund's current yield would
have been 5.30%.

EFFECTIVE YIELD

The Money Fund's effective yield is determined by taking the base
period return (computed as described above) and calculating the effect of
assumed compounding. The formula for the effective yield is: (base period
return + 1)(365/7) - 1. For the seven-day period ended December 30, 1994, the
Money Fund's effective yield was 6.29%. Without the waivers and absorptions
noted above, the Money Fund's effective yield would have been 5.48%.

DISTRIBUTION RATE

The distribution rate is computed, according to a non-standardized
formula, by dividing the total amount of actual distributions per share paid by
a Fund over a twelve month period by the Fund's net asset value on the last day
of the period. The distribution rate differs from a Fund's yield because the
distribution rate includes distributions to shareholders from sources other
than dividends and interest, such as premium income from option writing and
short-term capital gains. Therefore, a Fund's distribution rate may be
substantially different than its yield. Both a Fund's yield and distribution
rate will fluctuate.

- 36 -
<PAGE> 92

AVERAGE ANNUAL TOTAL RETURN

The Short-Term Bond, Government, Corporate Bond, and High-Yield Funds'
average annual total return quotation is computed in accordance with a
standardized method prescribed by rules of the SEC. The average annual total
return for a Fund for a specific period is found by first taking a hypothetical
$10,000 investment ("initial investment") in the Fund's shares on the first day
of the period and computing the "redeemable value" of that investment at the
end of the period. The redeemable value is then divided by the initial
investment, and this quotient is taken to the Nth root (N representing the
number of years in the period) and 1 is subtracted from the result, which is
then expressed as a percentage. The calculation assumes that all income and
capital gains dividends paid by the Fund have been reinvested at net asset
value on the reinvestment dates during the period. Average annual total return
figures for various periods are set forth in the table below.

TOTAL RETURN

Calculation of each Fund's total return is not subject to a
standardized formula. Total return performance for a specific period is
calculated by first taking an investment (assumed below to be $10,000)
("initial investment") in the Fund's shares on the first day of the period and
computing the "ending value" of that investment at the end of the period. The
total return percentage is then determined by subtracting the initial
investment from the ending value and dividing the remainder by the initial
investment and expressing the result as a percentage. The calculation assumes
that all income and capital gains dividends paid by the Fund have been
reinvested at net asset value on the reinvestment dates during the period.
Total return may also be shown as the increased dollar value of the
hypothetical investment over the period. Total return figures for various
periods are set forth in the table below.

CUMULATIVE TOTAL RETURN

Calculation of each Fund's cumulative total return is not subject to a
standardized formula and represents the simple change in value of our
investment over a stated period and may be quoted as a percentage or as a
dollar amount. Total returns and cumulative total returns may be broken down
into their components of income and capital (including capital gains and
changes in share price) in order to illustrate the relationship between these
factors and their contributions to total return.

A Fund's performance figures are based upon historical results and do
not represent future results. Each Fund's shares are sold at net asset value
per share. The Short-Term Bond, Government, Corporate Bond, and High-Yield
Fund's returns and net asset value will fluctuate and shares are redeemable at
the then current net asset value of the Fund, which may be more or less than
original cost. The yield for the Money Fund will fluctuate. While the Money
Fund seeks to maintain a stable net asset value of $1.00, there is no assurance
that the Fund will be able to do so. An investment in the Money Fund is
neither insured nor guaranteed by the U.S. government. Factors affecting a
Fund's performance include general market conditions, operating expenses and
investment management. Any additional fees charged by a dealer or other
financial services firm would reduce the returns described in this section.

The figures below show performance information for various periods
ended December 31, 1994. No adjustment has been made for taxes, if any,
payable on dividends. Securities prices fluctuated during these periods.

SHORT-TERM BOND FUND

<TABLE>
<CAPTION>
Total Average Annual
Return Total Return
------ ------------
Initial
$10,000 Ending Value Percentage Percentage
Investment December 31, 1994 Increase Increase
-----------------------------------------------------
<S> <C> <C> <C> <C>
Life of Fund(1) $10,000 $17,023 70.23% 7.52%
------------------------------------
Five Years 10,000 13,845 38.45 6.72
------------------------------------
One Year 10,000 9,838 -1.62 -1.62
------------------------------------
- -----------------------
</TABLE>

(1) August 31, 1987

- 37 -
<PAGE> 93

GOVERNMENT FUND

Total Average Annual
Return Total Return
------ ------------
Initial
$10,000 Ending Value Percentage Percentage
Investment December 31, 1994 Increase Increase
------------------------------------------------------
<S> <C> <C> <C> <C>
Life of Fund(1) $10,000 $19,364 93.64% 8.42 %
------------------------------------
Five Years 10,000 15,086 50.86 8.57
------------------------------------
One Year 10,000 9,661 -3.39 -3.39
------------------------------------
</TABLE>

- ------------------------
(1) October 29, 1986

CORPORATE BOND FUND

<TABLE>
<CAPTION>
Total Average Annual
Return Total Return
------ ------------
Initial
$10,000 Ending Value Percentage Percentage
Investment December 31, 1994 Increase Increase
-----------------------------------------------------
<S> <C> <C> <C> <C>
Life of Fund(1) $10,000 $21,447 114.47 % 8.79 %
------------------------------------
Five Years 10,000 13,574 35.74 6.30
------------------------------------
One Year 10,000 9,869 -1.31 -1.31
------------------------------------
</TABLE>

- ------------------------
(1) December 12, 1985

The Short-Term Bond, Government, and Corporate Bond Funds' total
return for the three months ending March 31, 1995, were 2.23%, 5.49%, and
6.70%, respectively.

COMPARISONS

(1) U.S. TREASURY BILLS, NOTES, OR BONDS
Investors may want to compare the performance of a Fund to that of
U.S. Treasury bills, notes or bonds, which are issued by the U.S. government.
Treasury obligations are issued in selected denominations. Rates of Treasury
obligations are fixed at the time of issuance and payment of principal and
interest is backed by the full faith and credit of the United States Treasury.
The market value of such instruments will generally fluctuate inversely with
interest rates prior to maturity and will equal par value at maturity.
Generally, the values of obligations with shorter maturities will fluctuate
less than those with longer maturities.

(2) CERTIFICATES OF DEPOSIT
Investors may want to compare a Fund's performance to that of
certificates of deposit offered by banks and other depositary institutions.
Certificates of deposit may offer fixed or variable interest rates and
principal is guaranteed and may be insured. Withdrawal of the deposits prior to
maturity normally will be subject to a penalty. Rates offered by banks and
other depositary institutions are subject to change at any time specified by
the issuing institution.

(3) MONEY MARKET FUNDS
Investors may also want to compare performance of a Fund to that of
money market funds. Money market fund yields will fluctuate and shares are not
insured, but share values usually remain stable.

- 38 -
<PAGE> 94

(4) LIPPER ANALYTICAL SERVICES, INC. ("LIPPER") AND OTHER INDEPENDENT
RANKING ORGANIZATIONS
From time to time, in marketing and other fund literature, a Fund's
performance may be compared to the performance of other mutual funds in general
or to the performance of particular types of mutual funds, with similar
investment goals, as tracked by independent organizations. Among these
organizations, Lipper, a widely used independent research firm which ranks
mutual funds by overall performance, investment objectives, and assets, may be
cited. Lipper performance figures are based on changes in net asset value,
with all income and capital gain dividends reinvested. Such calculations do
not include the effect of any sales charges imposed by other funds. A Fund
will be compared to Lipper's appropriate fund category, that is, by fund
objective and portfolio holdings. A Fund's performance may also be compared to
the average performance of its Lipper category.

(5) MORNINGSTAR, INC.
A Fund's performance may also be compared to the performance of other
mutual funds by Morningstar, Inc. which rates funds on the basis of historical
risk and total return. Morningstar's ratings range from five stars (highest)
to one star (lowest) and represent Morningstar's assessment of the historical
risk level and total return of a fund as a weighted average for 3, 5, and 10
year periods. Ratings are not absolute and do not represent future results.

(6) INDEPENDENT SOURCES
Evaluations of Fund performance made by independent sources may also
be used in advertisements concerning a Fund, including reprints of, or
selections from, editorials or articles about a Fund, especially those with
similar objectives. Sources for Fund performance information and articles
about a Fund may include publications such as Money, Forbes, Kiplinger's, Smart
Money, Morningstar, Inc., Financial World, Business Week, U.S. News and World
Report, The Wall Street Journal, Barron's, and a variety of investment
newsletters.

(7) VARIOUS BANK PRODUCTS
Each Fund's performance also may be compared on a before or after-tax
basis to various bank products, including the average rate of bank and thrift
institution money market deposit accounts, Super N.O.W. accounts and
certificates of deposit of various maturities as reported in the Bank Rate
Monitor, National Index of 100 leading banks, and thrift institutions as
published by the Bank Rate Monitor, Miami Beach, Florida. The rates published
by the Bank Rate Monitor National Index are averages of the personal account
rates offered on the Wednesday prior to the date of publication by 100 large
banks and thrifts in the top ten Consolidated Standard Metropolitan Statistical
Areas. The rates provided for the bank accounts assume no compounding and are
for the lowest minimum deposit required to open an account. Higher rates may
be available for larger deposits.

With respect to money market deposit accounts and Super N.O.W.
accounts, account minimums range upward from $2,000 in each institution and
compounding methods vary. Super N.O.W. accounts generally offer unlimited
check writing while money market deposit accounts generally restrict the number
of checks that may be written. If more than one rate is offered, the lowest
rate is used. Rates are determined by the financial institution and are
subject to change at any time specified by the institution. Generally, the
rates offered for these products take market conditions and competitive product
yields into consideration when set. Bank products represent a taxable
alternative income producing product. Bank and thrift institution deposit
accounts may be insured. Shareholder accounts in the Fund are not insured.
Bank passbook savings accounts compete with money market mutual fund products
with respect to certain liquidity features but may not offer all of the
features available from a money market mutual fund, such as check writing.
Bank passbook savings accounts normally offer a fixed rate of interest while
the yield of the Fund fluctuates. Bank checking accounts normally do not pay
interest but compete with money market mutual fund products with respect to
certain liquidity features (e.g., the ability to write checks against the
account). Bank certificates of deposit may offer fixed or variable rates for a
set term. (Normally, a variety of terms are available.) Withdrawal of these
deposits prior to maturity will normally be subject to a penalty. In contrast,
shares of each Fund are redeemable at the net asset value (normally, $1.00 per
share) next determined after a request is received, without charge.

- 39 -
<PAGE> 95

(8) INDICES
The Funds may compare their performance to a wide variety of indices
including the following:

<TABLE>
<S> <C>
(a) The Consumer Price Index
(b) Merrill Lynch 91 Day Treasury Bill Index
(c) Merrill Lynch Government/Corporate 1-3 Year Index
(d) IBC/Donoghue's General Purpose Money Fund AverageTM
(e) IBC/Donoghue's Taxable Money Fund AverageTM
(f) IBC/Donoghue's Government Money Fund AverageTM
(g) Salomon Brothers 1-Month Treasury Bill Index
(h) Salomon Brothers 3-Month Treasury Bill Index
(i) Salomon Brothers 1-Year Treasury Benchmark-on-the-Run Index
(j) Salomon Brothers 1-3 Year Treasury/Government-Sponsored/Corporate Bond
Index
(k) Salomon Brothers Corporate Bond Index
(l) Salomon Brothers AAA, AA, A, BBB, and BB Corporate Bond Indexes
(m) Salomon Brothers Broad Investment-Grade Bond Index
(n) Salomon Brothers High-Yield BBB Index
(o) Lehman Brothers Aggregate Bond Index
(p) Lehman Brothers 1-3 Year Government/Corporate Bond Index
(q) Lehman Brothers Intermediate Government/Corporate Bond Index
(r) Lehman Brothers Intermediate AAA, AA, and A Corporate Bond Indexes
(s) Lehman Brothers Government/Corporate Bond Index
(t) Lehman Brothers Corporate Baa Index
(u) Lehman Brothers Intermediate Corporate Baa Index
(v) Lehman Brothers High-Yield Index

</TABLE>

There are differences and similarities between the investments which a
Fund may purchase and the investments measured by the indices which are noted
herein. The market prices and yields of taxable and tax-exempt bonds will
fluctuate. There are important differences among the various investments
included in the indices that should be considered in reviewing this
information.

(9) HISTORICAL ASSET CLASS RETURNS
From time to time, marketing materials may portray the historical
returns of various asset classes. Such presentations will typically compare
the average annual rates of return of inflation, U.S. Treasury bills, bonds,
common stocks, and small stocks. There are important differences between each
of these investments that should be considered in viewing any such comparison.
The market value of stocks will fluctuate with market conditions, and
small-stock prices generally will fluctuate more than large-stock prices.
Stocks are generally more volatile than bonds. In return for this volatility,
stocks have generally performed better than bonds or cash over time. Bond
prices generally will fluctuate inversely with interest rates and other market
conditions, and the prices of bonds with longer maturities generally will
fluctuate more than those of shorter-maturity bonds. Interest rates for bonds
may be fixed at the time of issuance, and payment of principal and interest may
be guaranteed by the issuer and, in the case of U.S. Treasury obligations,
backed by the full faith and credit of the U.S. Treasury.

- 40 -
<PAGE> 96

(10) STRONG FAMILY OF FUNDS
The Strong Family of Funds offers a comprehensive range of
conservative to aggressive investment options. All of the members of the Strong
Family and their investment objectives are listed below. The Funds are listed
in ascending order of risk and return, as determined by the Funds' Advisor.

<TABLE>
<CAPTION>
FUND NAME INVESTMENT OBJECTIVE
<S> <C>
Strong U.S. Treasury Money Fund Current income, a stable share price, and daily liquidity.
Strong Money Market Fund Current income, a stable share price, and daily liquidity.
Strong Heritage Money Fund Current income, a stable share price, and daily liquidity.
Strong Municipal Money Market Federally tax-exempt current income, a stable share-price, and daily
Fund liquidity.
Strong Advantage Fund Current income with a very low degree of share-price fluctuation.
Strong Municipal Advantage Fund Federally tax-exempt current income with a very low degree of
share-price fluctuation.

Strong Short-Term Bond Fund Total return by investing for a high level of current income with a low
degree of share-price fluctuation.
Strong Short-Term Municipal Bond Total return by investing for a high level of federally tax-exempt
Fund current income with a low degree of share-price fluctuation.
Strong Short-Term Global Bond Total return by investing for a high level of income with a low degree
Fund of share-price fluctuation.
Strong Government Securities Total return by investing for a high level of current income with a
Fund moderate degree of share-price fluctuation.
Strong Insured Municipal Bond Total return by investing for a high level of federally tax-exempt
Fund current income with a moderate degree of share-price fluctuation.
Strong Municipal Bond Fund Total return by investing for a high level of federally tax-exempt
current income with a moderate degree of share-price fluctuation.

Strong Corporate Bond Fund Total return by investing for a high level of current income with a
moderate degree of share-price fluctuation.
Strong International Bond Fund High total return by investing for both income and capital appreciation.
Strong High-Yield Bond Fund Total return by investing for a high level of current income and capital
growth.
Strong High-Yield Municipal Bond Total return by investing for a high level of federally tax-exempt
Fund current income.
Strong Asset Allocation Fund High total return consistent with reasonable risk over the long term.
Strong Equity Income Fund* Total return by investing for both income and capital growth.
Strong American Utilities Fund Total return by investing for both income and capital growth.

Strong Total Return Fund High total return by investing for capital growth and income.
Strong Growth and Income Fund* High total return by investing for capital growth and income.
Strong Value Fund Capital growth.
Strong Opportunity Fund Capital growth.
Strong Growth Fund Capital growth.
Strong Common Stock Fund* Capital growth.

Strong Small Cap Fund* Capital growth.
Strong Discovery Fund Capital growth.
Strong International Stock Fund Capital growth.
Strong Asia Pacific Fund Capital growth.
</TABLE>

* The Fund is currently closed to new investors.

The Advisor also serves as Advisor or Subadvisor to several management
investment companies, some of which fund variable annuity separate accounts of
certain insurance companies.

- 41 -
<PAGE> 97

Each Fund may from time to time be compared to the other funds in the
Strong Family of Funds based on a risk/reward spectrum. In general, the amount
of risk associated with any investment product is commensurate with that
product's potential level of reward. The Strong Funds risk/reward continuum or
any Fund's position on the continuum may be described or diagrammed in
marketing materials. The Strong Funds risk/reward continuum positions the risk
and reward potential of each Strong Fund relative to the other Strong Funds,
but is not intended to position any Strong Fund relative to other mutual funds
or investment products. Marketing materials may also discuss the relationship
between risk and reward as it relates to an individual investor's portfolio.

Financial goals vary from person to person. You may choose one or
more of the Strong Funds to help you reach your financial goals. To help you
better understand the Strong Income Funds and determine which Fund or
combination of Funds best meets your personal investment objectives, they are
described in the same Prospectus. Though they appear in the same Prospectus,
each of the Income Funds is a separately incorporated investment company.
Because the Funds share a Prospectus, there may be the possibility of cross
liability between the Funds.

(10) TYING TIME FRAMES TO YOUR GOALS

There are many issues to consider as you make your investment
decisions, including analyzing your risk tolerance, investing experience, and
asset allocations. You should start to organize your investments by learning
to link your many financial goals to specific time frames. Then you can begin
to identify the appropriate types of investments to help meet your goals. As a
general rule of thumb, the longer your time horizon, the more price fluctuation
you will be able to tolerate in pursuit of higher returns. For that reason,
many people with longer-term goals select stocks or long-term bonds, and many
people with nearer-term goals match those up with for instance, short-term
bonds. The Advisor developed the following suggested holding periods to help
our investors set realistic expectations for both the risk and reward potential
of our funds. (See table below.) Of course, time is just one element to
consider when making your investment decision.

STRONG FUNDS SUGGESTED MINIMUM HOLDING PERIODS

<TABLE>
<CAPTION>
UNDER 1 YEAR 1 TO 2 YEARS 4 TO 7 YEARS 5 OR MORE YEARS
------------ ------------ ------------ ---------------
<S> <C> <C> <C>
U.S. Treasury Money Fund Advantage Fund Government Securities Total Return Fund
Money Market Fund Municipal Advantage Fund Fund Opportunity Fund
Heritage Money Fund Insured Municipal Bond Growth Fund
Municipal Money Market 2 TO 4 YEARS Fund Common Stock Fund*
Fund ------------ Municipal Bond Fund Discovery Fund
Short-Term Bond Fund Corporate Bond Fund International Stock
Short-Term Municipal Bond International Bond Fund Fund
Fund High-Yield Municipal Bond Asia Pacific Fund
Short-Term Global Bond Fund Value Fund
Fund Asset Allocation Fund Small Cap Fund*
American Utilities Fund Equity Income Fund*
High-Yield Bond Fund Growth and Income
Fund*

</TABLE>

*This fund is currently closed to new investors.

ADDITIONAL FUND INFORMATION

(1) DURATION

Duration is a calculation that measures the price sensitivity of a
Fund to changes in interest rates. Theoretically, if a Fund had a duration of
2.0, a 1% increase in interest rates would cause the prices of the bonds in the
Fund to decrease by approximately 2%. Conversely, a 1% decrease in interest
rates would cause the prices of the bonds in the Fund to increase by
approximately 2%. Depending on the direction of market interest rates, a Fund's
duration may be shorter or longer than its average maturity.

- 42 -
<PAGE> 98

(2) PORTFOLIO CHARACTERISTICS

In order to present a more complete picture of a Fund's portfolio,
marketing materials may include various actual or estimated portfolio
characteristics, including but not limited to median market capitalizations,
earnings per share, alphas, betas, price/earnings ratios, returns on equity,
dividend yields, capitalization ranges, growth rates, price/book ratios, top
holdings, sector breakdowns, asset allocations, quality breakdowns, and
breakdowns by geographic region.

(3) MEASURES OF VOLATILITY AND RELATIVE PERFORMANCE

Occasionally statistics may be used to specify Fund volatility or
risk. The general premise is that greater volatility connotes greater risk
undertaken in achieving performance. Measures of volatility or risk are
generally used to compare the Fund's net asset value or performance relative to
a market index. One measure of volatility is beta. Beta is the volatility of
a fund relative to the total market as represented by the Standard & Poor's 500
Stock Index. A beta of more than 1.00 indicates volatility greater than the
market, and a beta of less than 1.00 indicates volatility less than the market.
Another measure of volatility or risk is standard deviation. Standard deviation
is a statistical tool that measures the degree to which a fund's performance
has varied from its average performance during a particular time period.

Standard deviation is calculated using the following formula:

Standard deviation = the square root of E(xi - xm)2
-----------
n-1
where E = "the sum of",
xi = each individual return during the time period,
xm = the average return over the time period, and
n = the number of individual returns during the time period.

Statistics may also be used to discuss a Fund's relative performance.
One such measure is alpha. Alpha measures the actual return of a fund compared
to the expected return of a fund given its risk (as measured by beta). The
expected return is based on how the market as a whole performed, and how the
particular fund has historically performed against the market. Specifically,
alpha is the actual return less the expected return. The expected return is
computed by multiplying the advance or decline in a market representation by
the fund's beta. A positive alpha quantifies the value that the fund manager
has added, and a negative alpha quantifies the value that the fund manager has
lost.

Other measures of volatility and relative performance may be used as
appropriate. However, all such measures will fluctuate and do not represent
future results.

GENERAL INFORMATION

BUSINESS PHILOSOPHY

The Advisor is an independent, Midwestern-based investment advisor,
owned by professionals active in its management. Recognizing that investors are
the focus of its business, the Advisor strives for excellence both in
investment management and in the service provided to investors. This commitment
affects many aspects of the business, including professional staffing, product
development, investment management, and service delivery. Through its
commitment to excellence, the Advisor intends to benefit investors and to
encourage them to think of Strong Funds as their mutual fund family.

The increasing complexity of the capital markets requires specialized
skills and processes for each asset class and style. Therefore, the Advisor
believes that active management should produce greater returns than a passively
managed index. The Advisor has brought together a group of top-flight
investment professionals with diverse product expertise, and each concentrates
on their investment specialty. The Advisor believes that people are the firm's
most important asset. For this reason, continuity of professionals is critical
to the firm's long-term success.

- 43 -
<PAGE> 99

INVESTMENT ENVIRONMENT

Discussions of economic, social, and political conditions and their
impact on the Funds may be used in advertisements and sales materials. Such
factors that may impact the Funds include, but are not limited to, changes in
interest rates, political developments, the competitive environment, consumer
behavior, industry trends, technological advances, macroeconomic trends, and
the supply and demand of various financial instruments. In addition, marketing
materials may cite the portfolio management's views or interpretations of such
factors.

EIGHT BASIC PRINCIPLES FOR SUCCESSFUL MUTUAL FUND INVESTING

These common sense rules are followed by many successful investors.
They make sense for beginners, too. If you have a question on these principles,
or would like to discuss them with us, please contact us at 1-800-368-3863.

1. Have a plan - even a simple plan can help you take control of your
financial future. Review your plan once a year, or if your circumstances
change.

2. Start investing as soon as possible. Make time a valuable ally. Let it put
the power of compounding to work for you, while helping to reduce your
potential investment risk.

3. Diversify your portfolio. By investing in different asset classes - stocks,
bonds, and cash - you help protect against poor performance in one type of
investment while including investments most likely to help you achieve your
important goals.

4. Invest regularly. Investing is a process, not a one-time event. By
investing regularly over the long term, you reduce the impact of short-term
market gyrations, and you attend to your long-term plan before you're
tempted to spend those assets on short-term needs.

5. Maintain a long-term perspective. For most individuals, the best discipline
is staying invested as market conditions change. Reactive, emotional
investment decisions are all too often a source of regret - and principal
loss.

6. Consider stocks to help achieve major long-term goals. Over time, stocks
have provided the more powerful returns needed to help the value of your
investments stay well ahead of inflation.

7. Keep a comfortable amount of cash in your portfolio. To meet current needs,
including emergencies, use a money market fund or a bank account - not your
long-term investment assets.

8. Know what you're buying. Make sure you understand the potential risks and
rewards associated with each of your investments. Ask questions...request
information...make up your own mind. And choose a fund company that helps
you make informed investment decisions.

STRONG RETIREMENT PLAN SERVICES

Strong Retirement Plan Services offers a full menu of high quality,
affordable retirement plan options, including traditional money purchase
pension and profit sharing plans, 401(k) plans, simplified employee pension
plans, salary reduction plans, Keoghs, and 403(b) plans. Retirement plan
specialists are available to help companies determine which type of retirement
plan may be appropriate for their particular situation.

- 44 -
<PAGE> 100

Markets:

The retirement plan services provided by the Advisor focus on four
distinct markets, based on the belief that a retirement plan should fit the
customer's needs, not the other way around.

1. Small company plans. Small company plans are designed for companies with
1-50 plan participants. The objective is to incorporate the features and
benefits typically reserved for large companies, such as sophisticated
recordkeeping systems, outstanding service, and investment expertise, into
a small company plan without administrative hassles or undue expense.
Small company plan sponsors receive a comprehensive plan administration
manual as well as toll-free telephone support.

2. Large company plans. Large company plans are designed for companies with
between 51 and 1,000 plan participants. Each large company plan is
assigned a team of professionals consisting of an account manager, who is
typically an attorney, CPA, or holds a graduate degree in business, a
conversion specialist (if applicable), an accounting manager, a
legal/technical manager, and an education/communications educator.

3. Women-owned businesses.

4. Non-profit and educational organizations (the 403(b) market).

Turnkey approach:

The retirement plans offered by the Advisor are designed to be streamlined
and simple to administer. To this end, the Advisor has invested heavily in the
equipment, systems, and people necessary to adopt or convert a plan, and to
keep it running smoothly. The Advisor provides all aspects of the plan,
including plan design, administration, recordkeeping, and investment
management. To streamline plan design, the Advisor provides customizable
IRS-approved prototype documents. The Advisor's services also include annual
government reporting and testing as well as daily valuation of each
participant's account. This structure is intended to eliminate the confusion
and complication often associated with dealing with multiple vendors. It is
also designed to save plan sponsors time and expense.

The Advisor strives to provide one-stop retirement savings programs that
combine the advantages of proven investment management, flexible plan design
and a wide range of investment options. The open architecture design of the
plans allow for the use of the family of mutual funds managed by the Advisor as
well as a stable asset value option. Large company plans may supplement these
options with their company stock (if publicly traded) or funds from other
well-known mutual fund families. Education:

Participant education and communication is key to the success of any
retirement program, and therefore is one of the most important services that
the Advisor provides. The Advisor's goal is twofold: to make sure that plan
participants fully understand their options and to educate them about the
lifelong investment process. To this end, the Advisor provides attractive,
readable print materials that are supplemented with audio and video tapes and
retirement education programs.

Service:

The Advisor's goal is to provide a world class level of service. One
aspect of that service is an experienced, knowledgeable team that provides
ongoing support for plan sponsors, both at adoption or conversion and
throughout the life of a plan. The Advisor is committed to delivering accurate
and timely information, evidenced by straightforward, complete, and
understandable reports, participant account statements and plan summaries.

The Advisor has designed both "high-tech" and "high-touch" systems,
providing an automated telephone system as well as personal contact.
Participants can access daily account information, conduct transactions, or
have questions answered in the way that is most comfortable for them.

- 45 -
<PAGE> 101

STRONG FINANCIAL ADVISORS GROUP

The Strong Financial Advisors Group is dedicated to helping financial
advisors better serve their clients. Financial advisors receive regular
updates on the mutual funds managed by the Advisor, access to portfolio
managers through special conference calls, consolidated mailings of duplicate
confirmation statements, access to the Advisor's network of regional
representatives, and other specialized services. For more information on the
Strong Financial Advisors Group, call 1-800-368-1683.

PORTFOLIO MANAGEMENT

Each portfolio manager works with a team of analysts, traders, and
administrative personnel. From time to time, marketing materials may discuss
various members of the team, including their education, investment experience,
and other credentials.

The Advisor believes that actively managing each Fund's portfolio and
adjusting the average portfolio maturity according to the Advisor's interest
rate outlook is the best way to achieve the Fund's objectives. This policy is
based on a fundamental belief that economic and financial conditions create
favorable and unfavorable investment periods (or seasons) and that these
different seasons require different investment approaches. Through its active
management approach, the Advisor seeks to avoid or reduce any negative change
in the Fund's net asset value per share during the periods of falling bond
prices and provide consistently positive annual returns throughout the seasons
of investment.

SHORT-TERM BOND, GOVERNMENT, CORPORATE BOND, AND HIGH YIELD FUNDS

The Advisor's investment philosophy includes the following basic beliefs:

- - Active management pursued by a team with a uniform discipline across the
fixed income spectrum can produce results that are superior to those
produced through passive management.

- - Controlling risk by making only moderate deviations from the defined
benchmark is the cornerstone of successful fixed income investing.

- - Successful fixed income management is best pursued on a top-down basis
utilizing fundamental techniques.

The investment process includes decisions made at four levels that are
consistent with the Advisor's viewpoint of the path of economic activity,
interest rates, and the supply of and demand for credit.

MONEY FUND

The Advisor's investment philosophy includes the following basic beliefs:

- - Successful fixed-income management begins with a top-down, fundamental
analysis of the economy, interest rates, and the supply of and demand for
credit.

- - Value can be added through active management of average maturity, yield
curve positioning, sector emphasis, and issue selection.

The goal is to derive equivalent amounts of excess performance and risk control
over the long run from each of the four levels of decision-making:

1. Duration. Each Fund's portfolio duration is managed within a range
relative to its respective benchmark.

2. Yield Curve. Modest overweights and underweights along the yield curve are
made to benefit from changes in the yield curve's shape.

3. Sector/Quality. Sector weightings are generally maintained between zero and
two times those of the benchmark.

4. Security Selection. Quantitative analysis drives issue selection in the
Treasury and mortgage marketplace. Proactive credit research drives
corporate issue selection.

- 46 -
<PAGE> 102

Risk control is pursued at three levels:

1. Portfolio structure. In structuring the portfolio, the Advisor carefully
considers such factors as position sizes, duration, benchmark
characteristics, and the use of illiquid securities.

2. Credit research. Proactive credit research is used to identify issues which
the Advisor believes will be candidates for credit upgrade. This research
includes visiting company management, establishing appropriate values for
credit ratings, and monitoring yield spread relationships.

3. Portfolio monitoring. Portfolio fundamentals are re-evaluated continuously,
and buy/sell targets are established and generally adhered to.

LEGAL COUNSEL

Godfrey & Kahn, S.C., 780 North Water Street, Milwaukee, Wisconsin
53202, acts as outside legal counsel for the Funds.

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand L.L.P., 411 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202, are the independent accountants for the Funds, providing audit
services and assistance and consultation with respect to the preparation of
filings with the SEC.

FINANCIAL STATEMENTS

The Annual Report for the Money, Short-Term Bond, Government, and
Corporate Bond Funds that is attached hereto contains the following audited
financial information for the Funds:

(a) Schedules of Investments in Securities.
(b) Statements of Operations.
(c) Statements of Assets and Liabilities.
(d) Statements of Changes in Net Assets.
(e) Notes to Financial Statements.
(f) Financial Highlights.
(g) Report of Independent Accountants.

The Semiannual Report for the Money, Short-Term Bond, Government, and
Corporate Bond Funds that is attached hereto contains the following unaudited
financial information for the six months ended June 30, 1995 for the Funds:

In the opinion of management of the Funds, the unaudited financial
statements reflect all adjustments which are necessary to a fair statement of
the results for the six months ended June 30, 1995. All such adjustments are
of a normal recurring nature.

- 47 -
<PAGE> 103

APPENDIX

BOND RATINGS

STANDARD & POOR'S DEBT RATINGS

A Standard & Poor's corporate or municipal debt rating is a current
assessment of the creditworthiness of an obligor with respect to a specific
obligation. This assessment may take into consideration obligors such as
guarantors, insurers, or lessees.

The debt rating is not a recommendation to purchase, sell, or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.

The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable. S&P does not
perform an audit in connection with any rating and may, on occasion, rely on
unaudited financial information. The ratings may be changed, suspended, or
withdrawn as a result of changes in, or unavailability of, such information, or
for other circumstances.

The ratings are based, in varying degrees, on the following
considerations:

1. Likelihood of default -- capacity and willingness of the
obligor as to the timely payment of interest and repayment
of principal in accordance with the terms of the
obligation.

2. Nature of and provisions of the obligation.

3. Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization, or
other arrangement under the laws of bankruptcy and other
laws affecting creditors' rights.

INVESTMENT GRADE
AAA Debt rated 'AAA' has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.

AA Debt rated 'AA' has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues only in small degree.

A Debt rated 'A' has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.

BBB Debt rated 'BBB' is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for debt in this category than in higher rated categories.

SPECULATIVE GRADE
Debt rated 'BB', 'B', 'CCC', 'CC' and 'C' is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. 'BB' indicates the least degree of speculation
and 'C' the highest. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.

BB Debt rated 'BB' has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The 'BB' rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied 'BBB-' rating.

B Debt rated 'B' has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest

A-1
<PAGE> 104

and repay principal. The 'B' rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied 'BB' or 'BB-'
rating.

CCC Debt rated 'CCC' has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal. In
the event of adverse business, financial, or economic conditions, it is not
likely to have the capacity to pay interest and repay principal. The 'CCC'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied 'B' or 'B-' rating.

CC Debt rated 'CC' typically is applied to debt subordinated to
senior debt that is assigned an actual or implied 'CCC' rating.

C Debt rated 'C' typically is applied to debt subordinated to senior
debt which is assigned an actual or implied 'CCC-' debt rating. The 'C' rating
may be used to cover a situation where a bankruptcy petition has been filed,
but debt service payments are continued.

CI The rating 'CI' is reserved for income bonds on which no interest
is being paid.

D Debt rated 'D' is in payment default. The 'D' rating category is
used when interest payments or principal payments are not made on the date due
even if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grade period. The 'D' rating also will
be used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.

MOODY'S LONG-TERM DEBT RATINGS

Aaa - Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged". Interest payments are protected by a large or by
an exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than in Aaa
securities.

A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment some time in the
future.

Baa - Bonds which are rated Baa are considered as medium-grade
obligations (i.e., they are neither highly protected nor poorly secured).
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such Bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.

Ba - Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured. Often the
protection of interest and principal payments may be very moderate, and thereby
not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes Bonds in this class.

B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

Caa - Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with respect to
principal or interest.

A-2
<PAGE> 105

Ca - Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

FITCH INVESTORS SERVICE, INC. BOND RATINGS

Fitch investment grade bond ratings provide a guide to investors in
determining the credit risk associated with a particular security. The ratings
represent Fitch's assessment of the issuer's ability to meet the obligations of
a specific debt issue or class of debt in a timely manner.

The rating takes into consideration special features of the issue,
its relationship to other obligations of the issuer, the current and
prospective financial condition and operating performance of the issuer and any
guarantor, as well as the economic and political environment that might affect
the issuer's future financial strength and credit quality.

Fitch ratings do not reflect any credit enhancement that may be
provided by insurance policies or financial guaranties unless otherwise
indicated.

Bonds that have the same rating are of similar but not necessarily
identical credit quality since the rating categories do not fully reflect small
differences in the degrees of credit risk.

Fitch ratings are not recommendations to buy, sell, or hold any
security. Ratings do not comment on the adequacy of market price, the
suitability of any security for a particular investor, or the tax-exempt nature
or taxability of payments made in respect of any security.

Fitch ratings are based on information obtained from issuers, other
obligors, underwriters, their experts, and other sources Fitch believes to be
reliable. Fitch does not audit or verify the truth or accuracy of such
information. Ratings may be changed, suspended, or withdrawn as a result of
changes in, or the unavailability of, information or for other reasons.

AAA Bonds considered to be investment grade and of the highest
credit quality. The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be
affected by reasonably foreseeable events.

AA Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay
0principal is very strong, although not quite as strong as bonds
rated 'AAA'. Because bonds rated in the 'AAA' and 'AA'
categories are not significantly vulnerable to foreseeable
future developments, short-term debt of the issuers is generally
rated 'F-1+'.

A Bonds considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay
principal is considered to be strong, but may be more vulnerable
to adverse changes in economic conditions and circumstances than
bonds with higher ratings.

BBB Bonds considered to be investment grade and of satisfactory
credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in
economic conditions and circumstances, however, are more likely
to have adverse impact on these bonds, and therefore impair
timely payment. The likelihood that the ratings of these bonds
will fall below investment grade is higher than for bonds with
higher ratings.

Fitch speculative grade bond ratings provide a guide to investors in
determining the credit risk associated with a particular security. The ratings
('BB' to 'C') represent Fitch's assessment of the likelihood of timely payment
of principal and interest in accordance with the terms of obligation for bond
issues not in default. For defaulted bonds, the rating ('DDD' to 'D') is an
assessment of the ultimate recovery value through reorganization or
liquidation.

A-3
<PAGE> 106

Bonds that have the same rating are of similar but not necessarily
identical credit quality since the rating categories cannot fully reflect the
differences in the degrees of credit risk. Moreover, the character of the risk
factor varies from industry to industry and between corporate, health care and
municipal obligations.

BB Bonds are considered speculative. The obligor's ability to pay
interest and repay principal may be affected over time by
adverse economic changes. However, business and financial
alternatives can be identified which could assist the obligor in
satisfying its debt service requirements.

B Bonds are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the
probability of continued timely payment of principal and
interest reflects the obligor's limited margin of safety and the
need for reasonable business and economic activity throughout
the life of the issue.

CCC Bonds have certain identifiable characteristics which, if not
remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.

CC Bonds are minimally protected. Default in payment of interest
and/or principal seems probable over time.

C Bonds are in imminent default in payment of interest or
principal.

DDD, DD
and, D Bonds are in default on interest and/or principal payments.
Such bonds are extremely speculative and should be valued on the
basis of their ultimate recovery value in liquidation or
reorganization of the obligor. 'DDD' represents the highest
potential for recovery of these bonds, and 'D' represents the
lowest potential for recovery.

DUFF & PHELPS, INC. LONG-TERM DEBT RATINGS

These ratings represent a summary opinion of the issuer's long-term
fundamental quality. Rating determination is based on qualitative and
quantitative factors which may vary according to the basic economic and
financial characteristics of each industry and each issuer. Important
considerations are vulnerability to economic cycles as well as risks related to
such factors as competition, government action, regulation, technological
obsolescence, demand shifts, cost structure, and management depth and
expertise. The projected viability of the obligor at the trough of the cycle
is a critical determination.

Each rating also takes into account the legal form of the security,
(e.g., first mortgage bonds, subordinated debt, preferred stock, etc.). The
extent of rating dispersion among the various classes of securities is
determined by several factors including relative weightings of the different
security classes in the capital structure, the overall credit strength of the
issuer, and the nature of covenant protection. Review of indenture
restrictions is important to the analysis of a company's operating and
financial constraints.

The Credit Rating Committee formally reviews all ratings once per
quarter (more frequently, if necessary). Ratings of 'BBB-' and higher fall
within the definition of investment grade securities, as defined by bank and
insurance supervisory authorities.

A-4
<PAGE> 107

<TABLE>
<CAPTION>
RATING SCALE DEFINITION
- -------------------------------------------------------------------------------------------------------------
<S> <C>
AAA Highest credit quality. The risk factors are negligible, being only slightly more
than for risk-free U.S. Treasury debt.
- -------------------------------------------------------------------------------------------------------------
AA+ High credit quality. Protection factors are strong. Risk is modest, but may
AA vary slightly from time to time because of economic conditions.
AA-
- -------------------------------------------------------------------------------------------------------------
A+ Protection factors are average but adequate. However, risk factors are more
A variable and greater in periods of economic stress.
A-
- -------------------------------------------------------------------------------------------------------------
BBB+ Below average protection factors but still considered sufficient for prudent
BBB investment. Considerable variability in risk during economic cycles.
BBB-
- -------------------------------------------------------------------------------------------------------------
BB+ Below investment grade but deemed likely to meet obligations when due.
BB Present or prospective financial protection factors fluctuate according to
BB- industry conditions or company fortunes. Overall quality may move up or
down frequently within this category.
- -------------------------------------------------------------------------------------------------------------
B+ Below investment grade and possessing risk that obligations will not be met
B when due. Financial protection factors will fluctuate widely according to
B- economic cycles, industry conditions and/or company fortunes. Potential
exists for frequent changes in the rating within this category or into a higher
or lower rating grade.
- -------------------------------------------------------------------------------------------------------------
CCC Well below investment grade securities. Considerable uncertainty exists as to
timely payment of principal, interest or preferred dividends.
Protection factors are narrow and risk can be substantial with unfavorable
economic/industry conditions, and/or with unfavorable company developments.
- -------------------------------------------------------------------------------------------------------------
DD Defaulted debt obligations. Issuer failed to meet scheduled principal and/or
interest payments.
DP Preferred stock with dividend arrearages.
- -------------------------------------------------------------------------------------------------------------
</TABLE>

SHORT-TERM RATINGS

STANDARD & POOR'S COMMERCIAL PAPER RATINGS

A Standard & Poor's commercial paper rating is a current assessment
of the likelihood of timely payment of debt considered short-term in the
relevant market.

Ratings graded into several categories, ranging from 'A-1' for the
highest quality obligations to 'D' for the lowest. These categories are as
follows:

A-5
<PAGE> 108

A-1 This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation.

A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated 'A-1'.

A-3 Issues carrying this designation have adequate capacity for
timely payment. They are, however, more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.

B Issues rated 'B' are regarded as having only speculative capacity
for timely payment.

C This rating is assigned to short-term debt obligations with
doubtful capacity for payment.

D Debt rated 'D' is in payment default. The 'D' rating category is
used when interest payments or principal payments are not made on the date due,
even if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period.

STANDARD & POOR'S NOTE RATINGS

A S&P note rating reflects the liquidity factors and market-access
risks unique to notes. Notes maturing in three years or less will likely
receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating.

The following criteria will be used in making the assessment:

Amortization schedule - the larger the final maturity relative
to other maturities, the more likely the issue is to be treated
as a note.

Source of payment - the more the issue depends on the market for
its refinancing, the more likely it is to be considered a note.

The note rating symbols and definitions are as follows:

SP-1 Strong capacity to pay principal and interest. Issues
determined to possess very strong characteristics are given a plus (+)
designation.

SP-2 Satisfactory capacity to pay interest and principal, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

SP-3 Speculative capacity to pay principal and interest.

MOODY'S COMMERCIAL PAPER RATINGS

The term "commercial paper" as used by Moody's means promissory
obligations not having an original maturity in excess of nine months. Moody's
makes no representation as to whether such commercial paper is by any other
definition "commercial paper" or is exempt from registration under the
Securities Act of 1933, as amended.

Moody's commercial paper ratings are opinions of the ability of
issuers to repay punctually promissory obligations not having an original
maturity in excess of nine months. Moody's makes no representation that such
obligations are exempt from registration under the Securities Act of 1933, nor
does it represent that any specific note is a valid obligation of a rated
issuer or

A-6
<PAGE> 109

issued in conformity with any applicable law. Moody's employs the following
three designations, all judged to be investment grade, to indicate the relative
repayment capacity of rated issuers:

Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: (i)
leading market positions in well established industries, (ii) high rates of
return on funds employed, (iii) conservative capitalization structures with
moderate reliance on debt and ample asset protection, (iv) broad margins in
earnings coverage of fixed financial charges and high internal cash generation,
and (v) well established access to a range of financial markets and assured
sources of alternate liquidity.

Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.

Issuers rated PRIME-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.

Issuers rated NOT PRIME do not fall within any of the Prime rating
categories.

Moody's Note Ratings

MIG 1/VMIG 1 This designation denotes best quality. There is
present strong protection by established cash flows, superior liquidity support
or demonstrated broad based access to the market for refinancing.

MIG 2/VMIG 2 This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.

MIG 3/VMIG 3 This designation denotes favorable quality. All
security elements are accounted for but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well established.

MIG 4/VMIG 4 This designation denotes adequate quality. Protection
commonly regarded as required of an investment security is present and although
not distinctly or predominantly speculative, there is specific risk.

SG This designation denotes speculative quality. Debt instruments
in this category lack margins of protection.

FITCH INVESTORS SERVICE, INC. SHORT-TERM RATINGS

Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal and
investment notes.

The short-term rating places greater emphasis than a long-term rating
on the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.

F-1+ (Exceptionally Strong Credit Quality) Issues assigned this
rating are regarded as having the strongest degree of assurance
for timely payment.

F-1 (Very Strong Credit Quality) Issues assigned this rating reflect
an assurance of timely payment only slightly less in degree than
issues rated 'F-1+'.

A-7
<PAGE> 110

F-2 (Good Credit Quality) Issues assigned this rating have a
satisfactory degree of assurance for timely payment but the
margin of safety is not as great as for issues assigned 'F-1+'
and 'F-1' ratings.

F-3 (Fair Credit Quality) Issues assigned this rating have
characteristics suggesting that the degree of assurance for
timely payment is adequate, however, near-term adverse changes
could cause these securities to be rated below investment grade.

F-S (Weak Credit Quality) Issues assigned this rating have
characteristics suggesting a minimal degree of assurance for
timely payment and are vulnerable to near-term adverse changes
in financial and economic conditions.

D (Default) Issues assigned this rating are in actual or imminent
payment default.

LOC The symbol LOC indicates that the rating is based on a letter of
credit issued by a commercial bank.

DUFF & PHELPS, INC. SHORT-TERM DEBT RATINGS

Duff & Phelps' short-term ratings are consistent with the
rating criteria utilized by money market participants. The ratings apply to
all obligations with maturities of under one year, including commercial paper,
the uninsured portion of certificates of deposit, unsecured bank loans, master
notes, bankers acceptances, irrevocable letters of credit, and current
maturities of long-term debt. Asset-backed commercial paper is also rated
according to this scale.

Emphasis is placed on liquidity which as defined as not only
cash from operations, but also access to alternative sources of funds including
trade credit, bank lines, and the capital markets. An important consideration
is the level of an obligor's reliance on short-term funds on an ongoing basis.

Rating Scale: Definition

Duff 1+ Highest certainty of timely payment.
Short-term liquidity, including internal
operating factors and/or access to
alternative sources of funds, is outstanding,
and safety is just below risk-free U.S.
Treasury short-term obligations.

Duff 1 Very high certainty of timely payment.
Liquidity factors are excellent and supported
by good fundamental protection factors. Risk
factors are minor.

Duff 1- High certainty of timely payment. Liquidity
factors are strong and supported by good
fundamental protection factors. Risk factors
are very small.

Good Grade

Duff 2 Good certainty of timely payment. Liquidity
factors and company fundamentals are sound.
Although ongoing funding needs may enlarge
total financing requirements, access to
capital markets is good. Risk factors are
small.

Satisfactory Grade

Duff 3 Satisfactory liquidity and other protection
factors qualify issue as to investment grade.
Risk factors are larger and subject to more
variation. Nevertheless, timely payment is
expected.

A-8
<PAGE> 111

Non-investment Grade

Duff 4 Speculative investment characteristics.
Liquidity is not sufficient to insure against
disruption in debt service. Operating
factors and market access may be subject to a
high degree of variation.

Default

Duff 5 Issuer failed to meet scheduled principal
and/or interest payments.

A-9
<PAGE> 112

STRONG INCOME FUNDS, INC.

PART C
OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

(1) Strong U.S. Treasury Money Fund (all included or
incorporated by reference in Parts A & B).

Schedules of Investments in Securities
Statements of Operations
Statements of Assets and Liabilities
Statements of Changes in Net Assets
Notes to Financial Statements
Financial Highlights
Report of Independent Accountants

(2) Strong High-Yield Bond Fund.

Inapplicable

(b) Exhibits
(1) Amended and Restated Articles of Incorporation
(1.1) Amendment to Articles of Incorporation
(2) Restated Bylaws
(3) Inapplicable
(4) Specimen Stock Certificate
(5) Investment Advisory Agreement
(6) Distribution Agreement
(7) Inapplicable
(8) Custody Agreement
(8.1) Global Custody Agreement (High-Yield Bond)
(9) Shareholder Servicing Agent Agreement
(10) Opinion of Counsel
(11) Consent of Auditor
(12) Inapplicable
(13) Subscription Agreement (High-Yield Bond)
(14.1) Amended Prototype Defined Contribution Retirement Plan
with Standardized Adoption Agreements
(14.2) Amended Individual Retirement Custodial Account
(14.3) Amended Section 403(b)(7) Retirement Plan
(15) Inapplicable
(16) Computation of Performance Figures
(17) Power of Attorney
(18) Letter of Representation
(27) Financial Data Schedule (U.S. Treasury Money)

C-1
<PAGE> 113

Item 25. Persons Controlled by or under Common Control with Registrant

Registrant neither controls any person nor is under common control
with any other person.

Item 26. Number of Holders of Securities

<TABLE>
<CAPTION>
Number of Record Holders
Title of Class as of November 30, 1995
-------------- ---------------------------
<S> <C>
Common Stock, $.00001 par value

Strong High-Yield Bond Fund None
Strong U.S. Treasury Money Fund 2,393
</TABLE>

Item 27. Indemnification

Officers and directors are insured under a joint errors and omissions
insurance policy underwritten by American International Surplus Lines Insurance
Company and First State Insurance Company in the aggregate amount of
$10,000,000, subject to certain deductions. Pursuant to the authority of the
Wisconsin Business Corporation Law, Article VII of Registrant's Bylaws provides
as follows:

ARTICLE VII. INDEMNIFICATION OF OFFICERS AND DIRECTORS

SECTION 7.01. Mandatory Indemnification. The Corporation
shall indemnify, to the full extent permitted by the WBCL, as
in effect from time to time, the persons described in Sections
180.0850 through 180.0859 (or any successor provisions) of the WBCL or
other provisions of the law of the State of Wisconsin relating to
indemnification of directors and officers, as in effect from time to
time. The indemnification afforded such persons by this section shall
not be exclusive of other rights to which they may be entitled as a
matter of law.

SECTION 7.02. Permissive Supplementary Benefits. The
Corporation may, but shall not be required to, supplement the
right of indemnification under Section 7.01 by (a) the purchase of
insurance on behalf of any one or more of such persons, whether or not
the Corporation would be obligated to indemnify such person under
Section 7.01; (b) individual or group indemnification agreements with
any one or more of such persons; and (c) advances for related expenses
of such a person.

SECTION 7.03. Amendment. This Article VII may be amended or
repealed only by a vote of the shareholders and not by a vote
of the Board of Directors.

SECTION 7.04. Investment Company Act. In no event shall the
Corporation indemnify any person hereunder in contravention of
any provision of the Investment Company Act.

Item 28. Business and Other Connections of Investment Advisor

The information contained under "About the Funds - Management" in the
Prospectus and under "Directors and Officers of the Funds" and "Investment
Advisor and Distributor" in the Statement of Additional Information is hereby
incorporated by reference pursuant to Rule 411 under the Securities Act of
1933.

C-2
<PAGE> 114

Item 29. Principal Underwriters

(a) Strong Funds Distributors, Inc., principal underwriter for
Registrant, also serves as principal underwriter for Strong Advantage Fund,
Inc.; Strong Asia Pacific Fund, Inc.; Strong Asset Allocation Fund, Inc.;
Strong Common Stock Fund, Inc.; Strong Conservative Equity Funds, Inc.; Strong
Corporate Bond Fund, Inc.; Strong Discovery Fund, Inc.; Strong Equity Funds,
Inc.; Strong Government Securities Fund, Inc.; Strong Heritage Reserve Series,
Inc.; Strong High-Yield Municipal Bond Fund, Inc.; Strong Institutional Funds,
Inc.; Strong Insured Municipal Bond Fund, Inc.; Strong International Bond Fund,
Inc.; Strong International Stock Fund, Inc.; Strong Money Market Fund, Inc.;
Strong Municipal Bond Fund, Inc.; Strong Municipal Funds, Inc.; Strong
Opportunity Fund, Inc.; Strong Short-Term Bond Fund, Inc.; Strong Short-Term
Global Bond Fund, Inc.; Strong Short-Term Municipal Bond Fund, Inc.; Strong
Special Fund II, Inc.; Strong Total Return Fund, Inc.; and Strong Variable
Insurance Funds, Inc.

(b) The information contained under "About the Funds - Management" in
the Prospectus and under "Directors and Officers of the Funds" and "Investment
Advisor and Distributor" in the Statement of Additional Information is hereby
incorporated by reference pursuant to Rule 411 under the Securities Act of
1933.

Item 30. Location of Accounts and Records

All accounts, books, or other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are in the physical possession of Registrant's Treasurer, Ronald A.
Neville, at Registrant's corporate offices, 100 Heritage Reserve, Menomonee
Falls, Wisconsin 53051.

Item 31. Management Services

All management-related service contracts entered into by Registrant
are discussed in Parts A and B of this Registration Statement.

Item 32. Undertakings

(a) Inapplicable

(b) The Registrant undertakes to file a post-effective amendment,
using financial statements which need not be certified, within four to six
months from the effective date of this Registration Statement with respect to
Strong High-Yield Bond Fund.

(c) The Registrant undertakes to furnish to each person to whom a
prospectus is delivered, upon request and without charge, a copy of Strong U.S.
Treasury Money Fund's latest annual report to shareholders.

C-3
<PAGE> 115

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant hereby certifies that this
Post-Effective Amendment No. 8 meets all the requirements for effectiveness
pursuant to paragraph (b) of Rule 485 under the Securities Act of 1933, as
amended, and that it has duly caused this Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Menomonee Falls, and
State of Wisconsin on the 13th day of December, 1995.

STRONG INCOME FUNDS, INC.
(Registrant)

BY: /s/ John Dragisic
-----------------
John Dragisic, President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 8 to the Registration Statement on Form N-1A has
been signed below by the following persons in the capacities and on the date
indicated.

NAME TITLE DATE
---- ----- ----

President (Principal Executive
/s/ John Dragisic Officer) and a Director December 13, 1995
- -----------------------
John Dragisic

Treasurer (Principal Financial and
/s/ Ronald A. Neville Accounting Officer) December 13, 1995
- -----------------------
Ronald A. Neville

/s/ Richard S. Strong Chairman of the Board and a December 13, 1995
- ----------------------- Director
Richard S. Strong

- ----------------------- Director December 13, 1995
Marvin E. Nevins*

- ----------------------- Director December 13, 1995
Willie D. Davis*

- ----------------------- Director December 13, 1995
William F. Vogt*

- ----------------------- Director December 13, 1995
Stanley Kritzik*

* Thomas P. Lemke signs this document pursuant to powers of attorney
filed with Post-Effective Amendment No. 6 to the Registration
Statement of Registrant filed with the SEC on or about April 20, 1995.

By: /s/ Thomas P. Lemke
-------------------
Thomas P. Lemke

<PAGE> 116

EXHIBIT INDEX

<TABLE>
<CAPTION>
EDGAR
Exhibit No. Exhibit Exhibit No.
----------- ------- -----------
<S> <C> <C>

(1) Amended and Restated Articles of Incorporation EX-99.B1(2)

(1.1) Amendment to Articles of Incorporation EX-99.B1.1

(2) Restated Bylaws EX-99.B2

(3) Inapplicable

(4) Specimen Stock Certificate EX-99.B4

(5) Investment Advisory Agreement EX-99.B5

(6) Distribution Agreement EX-99.B6

(7) Inapplicable

(8) Custody Agreement EX-99.B8

(8.1) Global Custody Agreement (High-Yield Bond) EX-99.B8.1

(9) Shareholder Servicing Agent Agreement EX-99.B9

(10) Opinion of Counsel EX-99.B10

(11) Consent of Auditor EX-99.B11

(12) Inapplicable

(13) Subscription Agreement (High-Yield Bond) EX-99.B13

(14.1) Amended Prototype Defined Contribution Retirement Plan with Standardized EX-99.B14.1
Adoption Agreements

(14.2) Amended Individual Retirement Custodial Account EX-99.B14.2

(14.3) Amended Section 403(b)(7) Retirement Plan EX-99.B14.3

(15) Inapplicable

(16) Computation of Performance Figures EX-99.B16(1)

(17) Power of Attorney(2)

(18) Letter of Representation EX-99.B18

(27) Financial Data Schedule (U.S. Treasury Money) EX-27.1
U.S. Treasury
- ---------------
</TABLE>

(1) Incorporated herein by reference to Post-Effective Amendment No. 5 to
the Registration Statement on Form N-1A of Registrant filed on or about
February 24, 1995.

(2) Incorporated herein by reference to Post-Effective Amendment No. 6 to
the Registration Statement on Form N-1A of Registrant filed on or
about April 20, 1995.

<PAGE> 1
EXHIBIT 99.B1.1

AMENDMENT OF ARTICLES OF INCORPORATION

STRONG U.S. TREASURY MONEY FUND, INC.

The undersigned Secretary of Strong U.S. Treasury Money Fund, Inc. (the
"Corporation"), hereby certifies that in accordance with Section 180.1002 of
the Wisconsin Statutes and Article IV, Paragraph A of the Corporation's
Articles of Incorporation, as heretofore amended, the following Amendment was
duly adopted to create the following additional class (and to redesignate
Three Billion (3,000,000,000) shares of Common Stock as Strong U.S. Treasury
Money Fund) and to change the Corporation's name to Strong Income Funds, Inc,:

1. "Article I is hereby amended by deleting Article I in its
entirety and inserting the following as a new paragraph:

'ARTICLE I

The name of the corporation (hereinafter, the "Corporation") is:

Strong Income Funds, Inc.'"

2. "Paragraph A of Article IV is hereby amended by deleting
Paragraph A thereof and inserting the following as a new paragraph:

'A. The aggregate number of shares which the Corporation shall have
the authority to issue is Ten Billion (10,000,000,000) shares of Common Stock
with a par value of $.00001 per share. Subject to the following paragraph the
authorized shares are classified as follows:

Class Authorized Number of Shares
----- ---------------------------

Strong U.S. Treasury Money Fund 3,000,000,000
Strong High-Yield Bond Fund 300,000,000

The remaining Six Billion, Seven Hundred Million (6,700,000,000) shares of
Common Stock shall remain unclassified until action is taken by the Board of
Directors pursuant to the following paragraph.'"

This Amendment to the Articles of Incorporation of the Corporation was
adopted by the Board of Directors in accordance with Sections 180.1002 and
180.0602(2) of the Wisconsin Statutes without shareholder approval. No shares
of any class created hereby has been issued. The redesignation of Three
Billion (3,000,000,000) authorized shares of Common Stock as "Strong U.S.
Treasury Money Fund," the redesignation of Six Billion, Seven Hundred Million
(6,700,000,000) unissued shares of Common Stock as unclassified and the change
in corporate name contained herein, is expressly permitted by the Corporation's
Articles of Incorporation, as heretofore amended, which was approved by
shareholders of the Corporation on April 13, 1995.
<PAGE> 2
Executed in duplicate this 20th day of October, 1995.

STRONG U.S. TREASURY MONEY FUND, INC.

By: Ann E. Oglanian
----------------------------
Ann E. Oglanian, Secretary

This instrument was drafted by:

Scott A. Moehrke
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202

<PAGE> 1
EXHIBIT 99.B2

BYLAWS

ARTICLE I. OFFICES

SECTION 1.01. Principal and Other Offices. The principal
office of the Corporation shall be located at any place either within or
outside the State of Wisconsin as designated in the Corporation's most current
Annual Report filed with the Wisconsin Secretary of State. The Corporation may
have such other offices, either within or outside the State of Wisconsin, as
the Board of Directors may designate or as the business of the Corporation may
require from time to time.

SECTION 1.02. Registered Office. The registered office of
the Corporation required by the Wisconsin Business Corporation Law (the "WBCL")
to be maintained in the State of Wisconsin may, but need not, be the same as
any of its places of business. The registered office may be changed from time
to time.

SECTION 1.03. Registered Agent. The registered agent of the
Corporation required by the WBCL to maintain a business office in the State of
Wisconsin may, but need not, be an officer or employee of the Corporation as
long as such agent's business office is identical with the registered office.
The registered agent may be changed from time to time.

ARTICLE II. SHAREHOLDERS

SECTION 2.01. Annual Meeting. The annual meeting of the
shareholders, if the annual meeting shall be held, shall be held in April of
each year, or at such other time and date as may be fixed by or under the
authority of the Board of Directors, for the purpose of electing directors and
for the transaction of such other business as may properly come before the
meeting. The Corporation shall not be required to hold an annual meeting in
any year in which none of the following is required to be acted on by
shareholders under the Investment Company Act of 1940, as amended, and the
rules and regulations promulgated thereunder (the "Investment Company Act"):

(i) Election of directors;

(ii) Approval of the Corporation's investment advisory
contract;

(iii) Ratification of the selection of the Corporation's
independent public accountants; or

(iv) Approval of the Corporation's distribution agreement.
<PAGE> 2

SECTION 2.02. Special Meetings. Special meetings of the
shareholders for any purpose or purposes, unless otherwise prescribed by the
WBCL, may be called by the Board of Directors, the Chairman of the Board, Vice
Chairman or President. Notwithstanding any other provision of these By-Laws,
the Corporation shall call a special meeting of shareholders in the event that
the holders of at least 10% of all of the votes entitled to be cast on any
issue proposed to be considered at the proposed special meeting sign, date and
deliver to the Corporation one or more written demands for the meeting
describing one or more purposes for which it is to be held. The Secretary
shall inform such shareholders of the reasonable estimated costs of preparing
and mailing the notice of the meeting, and upon payment to the Corporation of
such costs, the Corporation shall give not less than ten nor more than sixty
days notice of the special meeting.

SECTION 2.03. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of Wisconsin, as the
place of meeting for any annual or special meeting of shareholders. If no
designation is made, the place of meeting shall be the principal office of the
Corporation. Any meeting may be adjourned to reconvene at any place designated
by vote of a majority of the shares represented thereat.

SECTION 2.04. Notice of Meeting. Written notice stating the
date, time and place of any meeting of shareholders and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten days nor more than sixty days before the date of
the meeting (unless a different time is provided by applicable law or
regulation or the Articles of Incorporation), either personally or by mail, by
or at the direction of the Chairman of the Board, Vice Chairman, President or
Secretary, to each shareholder of record entitled to vote at such meeting and
to such other persons as required by the WBCL. If mailed, such notice shall be
deemed to be effective when deposited in the United States mail, addressed to
the shareholder at his or her address as it appears on the stock record books
of the Corporation, with postage thereon prepaid. If an annual or special
meeting of shareholders is adjourned to a different date, time or place, the
Corporation shall not be required to give notice of the new date, time or place
if the new date, time or place is announced at the meeting before adjournment;
provided, however, that if a new record date for an adjourned meeting is or
must be fixed, the Corporation shall give notice of the adjourned meeting to
persons who are shareholders as of the new record date.

SECTION 2.05. Waiver of Notice. A shareholder may waive any
notice required by the WBCL, the Articles of Incorporation or these By-Laws
before or after the date and time stated in the notice. The waiver shall be in
writing and signed by the shareholder entitled to the notice, contain the same
information that would have been required in the notice
<PAGE> 3

under applicable provisions of the WBCL (except that the time and place of
meeting need not be stated) and be delivered to the Corporation for inclusion
in the corporate records. A shareholder's attendance at a meeting, in person
or by proxy, waives objection to all of the following: (a) lack of notice or
defective notice of the meeting, unless the shareholder at the beginning of the
meeting or promptly upon arrival objects to holding the meeting or transacting
business at the meeting; and (b) consideration of a particular matter at the
meeting that is not within the purpose described in the meeting notice, unless
the shareholder objects to considering the matter when it is presented.

SECTION 2.06. Fixing of Record Date. For the purpose of
determining shareholders of any voting group entitled to notice of or to vote
at any meeting of shareholders or any adjournment thereof, or shareholders
entitled to receive payment of any distribution or dividend, or in order to
make a determination of shareholders for any other proper purpose, the Board of
Directors may fix in advance a date as the record date for any such
determination of shareholders. Such record date shall not be more than 70 days
prior to the date on which the particular action, requiring such determination
of shareholders, is to be taken. If no record date is so fixed for the
determination of shareholders entitled to notice of, or to vote at a meeting of
shareholders, or shareholders entitled to receive a share dividend or
distribution, the record date for determination of such shareholders shall be
at the close of business on:

(a) With respect to an annual shareholders meeting or any
special shareholders meeting called by the Board of Directors or any
person specifically authorized by the Board of Directors or these
By-Laws to call a meeting, the day before the first notice is mailed
to shareholders;

(b) With respect to a special shareholders meeting demanded
by the shareholders, the date the first shareholder signs the demand;

(d) With respect to a distribution to shareholders (other
than one involving a repurchase or reacquisition of shares), the date
the Board of Directors authorizes the distribution.

SECTION 2.07. Voting Lists. After fixing a record date for a
meeting, the Corporation shall prepare a list of the name of all its
shareholders who are entitled to notice of a shareholders meeting. The list
shall be arranged by class or series of shares and show the address of and the
number of shares held by each shareholder. The shareholders list must be

3
<PAGE> 4

available for inspection by any shareholder, beginning two business days after
notice of the meeting is given for which the list was prepared and continuing
to the date of the meeting. The list shall be available at the Corporation's
principal office or at a place identified in the meeting notice in the city
where the meeting is to be held. Subject to the provisions of the WBCL, a
shareholder or his or her agent or attorney may, on written demand, inspect and
copy the list during regular business hours and at his expense, during the
period it is available for inspection. The Corporation shall make the
shareholders list available at the meeting, and any shareholder or his or her
agent or attorney may inspect the list at any time during the meeting or any
adjournment thereof. Refusal or failure to prepare or make available the
shareholders list shall not affect the validity of any action taken at such
meeting.

SECTION 2.08. Shareholder Quorum and Voting Requirements.
Shares entitled to vote as a separate voting group may take action on a matter
at a meeting only if a quorum of those shares exists with respect to that
matter. Unless the Articles of Incorporation or the WBCL provide otherwise, a
majority of the votes entitled to be cast on the matter by the voting group
constitutes a quorum of that voting group for action on that matter.

If the Articles of Incorporation or the WBCL provide for
voting by two or more voting groups on a matter, action on that matter is taken
only when voted upon by each of those voting groups counted separately as
provided in the WBCL. Action may be taken by one voting group on a matter even
though no action is taken by another voting group entitled to vote on the
matter. A voting group described in the WBCL constitutes a single voting group
for purpose of voting on the matter on which the shares are entitled to vote,
unless otherwise required under applicable laws and regulations, including the
Investment Company Act.

Once a share is represented for any purpose at a meeting,
other than for the purpose of objecting to holding the meeting or transacting
business at the meeting, it is deemed present for purposes of determining
whether a quorum exists, for the remainder of the meeting and for any
adjournment of that meeting to the extent provided in Section 2.13.

If a quorum exists, action on a matter, other than the
election of directors, by a voting group is approved if the votes cast within
the voting group favoring the action exceed the votes cast opposing the action,
unless the Articles of Incorporation, the By-Laws, the WBCL or other applicable
laws and regulations, including the Investment Company Act, require a greater
number of affirmative votes. With respect to the election of directors, unless
otherwise provided in the Articles of Incorporation, directors are elected by a
plurality of the votes cast by the shares entitled to vote. For purposes of
this Section 2.08, "plurality" means that the individuals with the largest
number of votes are elected as directors up to the maximum number of directors
to be chosen at the election.

4
<PAGE> 5

SECTION 2.09. Proxies. For all meetings of shareholders, a
shareholder may appoint a proxy to vote or otherwise act for the shareholder by
signing an appointment form, either personally or by a duly authorized
attorney-in-fact. Such proxy shall be effective when filed with the Secretary
of the Corporation or other officer or agent authorized to tabulate votes
before or at the time of the meeting. No proxy shall be valid after eleven
months from the date of its execution, unless otherwise provided in the proxy.

SECTION 2.10. Voting of Shares. Unless otherwise provided in
the Articles of Incorporation, each outstanding share, regardless of class, is
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders.

No shares in the Corporation held by another corporation may
be voted if the Corporation owns, directly or indirectly, a sufficient number
of shares entitled to elect a majority of the directors of such other
corporation; provided, however, that the Corporation shall not be limited in
its power to vote any shares, including its own shares, held by it in a
fiduciary capacity.

Redeemable shares are not entitled to vote after written
notice of redemption that complies with the WBCL is mailed to the holders
thereof and a sum sufficient to redeem the shares has been deposited with a
bank, trust company or other financial institution under an irrevocable
obligation to pay the holders the redemption price on surrender of the shares.

SECTION 2.11. Voting Shares Owned by the Corporation. Shares
of the Corporation belonging to it shall not be voted directly or indirectly at
any meeting and shall not be counted in determining the total number of
outstanding shares at any given time, but shares held by the Corporation in a
fiduciary capacity may be voted and shall be counted in determining the total
number of outstanding shares at any given time.

SECTION 2.12. Acceptance of Instruments Showing Shareholder
Action.

(a) If the name signed on a vote, consent, waiver or proxy
appointment corresponds to the name of a shareholder, the Corporation,
if acting in good faith, may accept the vote, consent, waiver or proxy
appointment and give it effect as the act of the shareholder.

(b) If the name signed on a vote, consent, waiver or proxy
appointment does not correspond to the name of a shareholder, the
Corporation, if acting in good faith,

5
<PAGE> 6

may accept the vote, consent, waiver or proxy appointment and give it effect as
the act of the shareholder if any of the following apply:

(1) the shareholder is an entity, within the meaning
of the WBCL, and the name signed purports to be that of an
officer or agent of the entity;

(2) the name signed purports to be that of a
personal representative, administrator, executor, guardian or
conservator representing the shareholder and, if the
Corporation or its agent request, evidence of fiduciary status
acceptable to the Corporation is presented with respect to the
vote, consent, waiver or proxy appointment;

(3) the name signed purports to be that of a
receiver or trustee in bankruptcy of the shareholder and, if
the Corporation or its agent request, evidence of this status
acceptable to the Corporation is presented with respect to the
vote, consent, waiver or proxy appointment;

(4) the name signed purports to be that of a
pledgee, beneficial owner, or attorney-in-fact of the
shareholder and, if the Corporation or its agent request,
evidence acceptable to the Corporation of the signatory's
authority to sign for the shareholder is presented with
respect to the vote, consent, waiver or proxy appointment; or

(5) two or more persons are the shareholders as
cotenants or fiduciaries and the name signed purports to be
the name of at least one of the coowners and the persons
signing appears to be acting on behalf of all coowners.

(c) The Corporation may reject a vote, consent, waiver or
proxy appointment if the Secretary or other officer or agent of the
Corporation who is authorized to tabulate votes, acting in good faith,
has reasonable basis for doubt about the validity of the signature on
it or about the signatory's authority to sign for the shareholder.

SECTION 2.13. Adjournments. An annual or special meeting of
shareholders may be adjourned at any time, including after action on one or
more matters, by a majority of shares represented, even if less than a quorum.
The meeting may be adjourned for any purpose, including, but not limited to,
allowing additional time to solicit votes on one or more matters, to
disseminate additional information to shareholders or to count votes. Upon
being reconvened, the adjourned meeting shall be deemed to be a continuation of
the initial meeting.

6
<PAGE> 7

(a) Quorum. Once a share is represented for any purpose at
the original meeting, other than for the purpose of objecting to
holding the meeting or transacting business at a meeting, it is
considered present for purposes of determining if a quorum exists, for
the remainder of the meeting and for any adjournment of that meeting
unless a new record date is or must be set for that adjourned meeting.

(b) Record Date. When a determination of shareholders
entitled to notice of or to vote at any meeting of shareholders has
been made as provided in Section 2.06, such determination shall be
applied to any adjournment thereof unless the Board of Directors fixes
a new record date, which it shall do if the meeting is adjourned to a
date more than 120 days after the date fixed for the original meeting.

(c) Notice. Unless a new record date for an adjourned
meeting is or must be fixed pursuant to Section 2.13(b), the
Corporation is not required to give notice of the new date, time or
place if the new date, time or place is announced at the meeting
before adjournment.

SECTION 2.14. Waiver of Notice by Shareholders. A
shareholder may waive any notice required by the WBCL, the Articles of
Incorporation or the By-Laws before or after the date and time stated in the
notice. The waiver shall be in writing and signed by the shareholder entitled
to the notice, contain the same information that would have been required in
the notice under any applicable provisions of the WBCL, except that the time
and place of the meeting need not be stated, and be delivered to the
Corporation for inclusion in the Corporation's records. A shareholder's
attendance at a meeting, in person or by proxy, waives objection to (i) lack of
notice or defective notice of the meeting, unless the shareholder at the
beginning of the meeting or promptly upon arrival objects to the holding of the
meeting or transacting business at the meeting, and (ii) consideration of a
particular matter at the meeting that is not within the purpose described in
the meeting notice, unless the shareholder objects to considering the matter
when it is presented.

SECTION 2.15. Conduct of Meeting. The Chairman of the Board,
Vice Chairman, President or any person chosen by the Chairman of the Board,
shall call the meeting of the shareholders to order and shall act as chairman
of the meeting, and the Secretary of the Corporation or any other person
appointed by the chairman of the meeting, shall act as secretary of all
meetings of the shareholders.

SECTION 2.16. Unanimous Consent without Meeting. Any action
required or permitted to be taken at a meeting of shareholders may be taken
without a meeting only by

7
<PAGE> 8

unanimous written consent or consents signed by all of the shareholders of the
Corporation and delivered to the Corporation for inclusion in the Corporation's
records.

ARTICLE III. BOARD OF DIRECTORS

SECTION 3.01. General Powers and Number. All corporate
powers shall be exercised by or under the authority of, and the business and
affairs of the Corporation managed under the direction of, the Board of
Directors. The number of directors of the Corporation shall be six.

SECTION 3.02. Tenure and Qualifications. Each director shall
hold office until the next annual meeting of shareholders and until his or her
successor shall have been elected and, if necessary, qualified, or until there
is a decrease in the number of directors which takes effect after the
expiration of his or her term, or until his or her prior death, resignation or
removal. A director may be removed by the shareholders, with or without cause,
only at a meeting called for the purpose of removing the director, and the
meeting notice shall state that the purpose, or one of the purposes, of the
meeting is removal of the director. A director may resign at any time by
delivering written notice which complies with the WBCL to the Board of
Directors, to the Chairman of the Board or to the Corporation. A director's
resignation is effective when the notice is delivered unless the notice
specifies a later effective date. Directors need not be residents of the State
of Wisconsin or shareholders of the Corporation.

SECTION 3.03. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than this Section 3.03
immediately before or after the annual meeting of shareholders and each
adjourned session thereof. The place of such regular meeting shall be the same
as the place of the meeting of shareholders which precedes or follows it, as
the case may be, or such other suitable place as may be announced at such
meeting of shareholders. The Board of Directors shall provide, by resolution,
the date, time and place, either within or without the State of Wisconsin, for
the holding of additional regular meetings of the Board of Directors without
other notice than such resolution. Regular meetings of the Board of Directors
may also be called by the Chairman of the Board, Vice Chairman, President or
Secretary.

SECTION 3.04. Special Meetings. Special meetings of the
Board of Directors may be called by or at the request of the Chairman of the
Board, Vice Chairman, President, Secretary or any two directors. The Chairman
of the Board, Vice Chairman, President or Secretary may fix any place, either
within or without the State of Wisconsin, as the place for holding any special
meeting of the Board of Directors, and if no other place is fixed the place of
the meeting shall be the principal business office of the Corporation in the
State of Wisconsin.

8
<PAGE> 9

SECTION 3.05. Notice; Waiver. Notice of special meetings
shall be given at least twenty-four hours previously thereto and shall state
the date, time and place of the meeting of the Board of Directors or committee.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the Board of Directors or committee need be specified in the
notice of such meeting. Notice may be communicated in person, by telephone,
telegraph, teletype, facsimile or other form of wire or wireless communication,
or by mail or private carrier. Written notice is effective at the earliest of
the following: (1) when received; (2) when mailed postpaid and correctly
addressed; (3) when given to a telegram carrier; or (4) the date it is
deposited with a private carrier. Oral notice is deemed effective when
communicated. Facsimile or teletype notice is deemed effective when sent.

A director may waive any notice required by the WBCL, the
Articles of Incorporation or the By-Laws before or after the date and time
stated in the notice. The waiver shall be in writing, signed by the director
entitled to the notice and retained by the Corporation. Notwithstanding the
foregoing, a director's attendance at or participation in a meeting waives any
required notice to such director of the meeting unless the director at the
beginning of the meeting or promptly upon such director's arrival objects to
holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.

SECTION 3.06. Quorum. Except as otherwise provided by the
WBCL, the Articles of Incorporation or the By-Laws, a majority of the number of
directors specified in Section 3.01 shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors. A majority
of the directors present (though less than such quorum) may adjourn any meeting
of the Board of Directors or any committee thereof, as the case may be, from
time to time without further notice.

SECTION 3.07. Manner of Acting. The affirmative vote of a
majority of the directors present at a meeting of the Board of Directors at
which a quorum is present shall be the act of the Board of Directors, unless
the WBCL, the Articles of Incorporation, the By-Laws or other applicable law or
regulation, including the Investment Company Act, require the vote of a greater
number of directors.

SECTION 3.08. Conduct of Meetings. The Chairman of the
Board, and in his absence, the Vice Chairman or any director chosen by the
directors present, shall call meetings of the Board of Directors to order and
shall act as chairman of the meeting. The Secretary of the Corporation shall
act as secretary of all meetings of the Board of Directors unless the presiding
officer appoints another person present to act as secretary of the meeting.
Minutes of any

9
<PAGE> 10

regular or special meeting of the Board of Directors shall be prepared and
distributed to each director.

SECTION 3.09. Vacancies. Except as provided below, any
vacancy occurring in the Board of Directors, including a vacancy resulting from
an increase in the number of directors, may be filled, subject to the
requirements of the Investment Company Act, by any of the following: (a) the
shareholders; (b) the Board of Directors; or (c) if the directors remaining in
office constitute fewer than a quorum of the Board of Directors, the directors,
by the affirmative vote of a majority of all directors remaining in office. If
the vacant office was held by a director elected by a voting group of
shareholders, only the holders of shares of that voting group may vote to fill
the vacancy if it is filled by the shareholders, and only the remaining
directors elected by that voting group may vote to fill the vacancy if it is
filled by the directors. A vacancy that will occur at a specific later date,
because of a resignation effective at a later date or otherwise, may be filled
before the vacancy occurs, but the new director may not take office until the
vacancy occurs.

SECTION 3.10. Compensation. No director shall receive any
stated salary or fees from the Corporation for his services as such director if
such director is, otherwise than by reason of being such director, an
interested person (as such term is defined by the Investment Company Act) of
the Corporation or its investment adviser. Except as provided in the preceding
sentence, directors shall be entitled to receive such compensation from the
Corporation for their services as may from time to time be voted by the Board
of Directors.

SECTION 3.11. Presumption of Assent. A director who is
present and is announced as present at a meeting of the Board of Directors,
when corporate action is taken, assents to the action taken unless any of the
following occurs: (a) the director objects at the beginning of the meeting or
promptly upon his or her arrival to holding the meeting or transacting business
at the meeting; (b) the director dissents or abstains from an action taken and
minutes of the meeting are prepared that show the director's dissent or
abstention; (c) the director delivers written notice that complies with the
WBCL of his or her dissent or abstention to the presiding officer of the
meeting before its adjournment or to the Corporation immediately after
adjournment of the meeting; or (d) the director dissents or abstains from an
action taken, minutes of the meeting are prepared that fail to show the
director's dissent or abstention from the action taken and the director
delivers to the Corporation a written notice of that failure that complies with
the WBCL promptly after receiving the minutes. Such right of dissent or
abstention shall not apply to a director who votes in favor of the action
taken.

SECTION 3.12. Telephonic Meetings. Except as herein provided
and notwithstanding any place set forth in the notice of the meeting or these
By-Laws, members of

10
<PAGE> 11

the Board of Directors may participate in regular or special meetings by, or
through the use of, any means of communication by which all participants may
simultaneously hear each other, such as by conference telephone. If a meeting
is conducted by such means, then at the commencement of such meeting the
presiding officer shall inform the participating directors that a meeting is
taking place at which official business may be transacted. Any participant in
a meeting by such means shall be deemed present in person at such meeting.
Notwithstanding the foregoing, no action may be taken at any meeting held by
such means (i) on any particular matter which the presiding officer determines,
in his or her sole discretion, to be inappropriate under the circumstances for
action at a meeting held by such means (such determination shall be made and
announced in advance of such meeting), or (ii) if the action must be approved
in person pursuant to the requirements of the Investment Company Act.

SECTION 3.13. Action Without Meeting. Any action required or
permitted by the WBCL to be taken at a meeting of the Board of Directors may be
taken without a meeting if the action is taken by all members of the Board.
The action shall be evidenced by one or more written consents describing the
action taken, signed by each director and retained by the Corporation. Such
action shall be effective when the last director signs the consent, unless the
consent specifies a different effective date. Notwithstanding this Section
3.13, no action may be taken by the Board of Directors pursuant to a written
consent with respect to which the action must be approved in person pursuant to
the requirements of the Investment Company Act.

ARTICLE IV. OFFICERS

SECTION 4.01. Number. The principal officers of the
Corporation shall be a Chairman of the Board, a Vice Chairman of the Board, a
President, the number of Vice Presidents as authorized from time to time by the
Board of Directors, a Secretary, and a Treasurer, each of whom shall be elected
by the Board of Directors. Such other officers and assistant officers as may
be deemed necessary may be elected or appointed by the Board of Directors. The
Board of Directors may also authorize any duly authorized officer to appoint
one or more officers or assistant officers. Any two or more offices may be
held by the same person.

SECTION 4.02. Election and Term of Office. The officers of
the Corporation to be elected by the Board of Directors shall be elected
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the shareholders, if any, or on or
after the anniversary of the last annual meeting if no annual meeting is held.
If the election of officers shall not be held at such first meeting of the
Board of Directors, such election shall be held as soon thereafter as is
practicable. Each officer shall hold office until his or her successor shall
have been duly elected or until his or her prior death, resignation or removal.

11
<PAGE> 12

SECTION 4.03. Removal. The Board of Directors may remove any
officer and, unless restricted by the Board of Directors or these By-Laws, an
officer may remove any officer or assistant officer appointed by that officer.
An officer may be removed at any time, with or without cause and
notwithstanding the contract rights, if any, of the officer removed. The
appointment of an officer does not of itself create contract rights.

SECTION 4.04. Resignation. An officer may resign at any time
by delivering notice to the Corporation that complies with the WBCL. The
resignation shall be effective when the notice is delivered, unless the notice
specifies a later effective date and the Corporation accepts the later
effective date.

SECTION 4.05. Vacancies. A vacancy in any principal office
because of death, resignation, removal, disqualification or otherwise, shall be
filled by the Board of Directors for the unexpired portion of the term. If a
resignation of an officer is effective at a later date as contemplated by
Section 4.04 hereof, the Board of Directors may fill the pending vacancy before
the effective date if the Board provides that the successor may not take office
until the effective date of the registration.

SECTION 4.06. Chairman of the Board. The Chairman of the
Board shall be the chief executive officer of the Corporation. The Chairman of
the Board shall preside at all meetings of the shareholders and directors,
shall have general and active management of the business of the Corporation,
and shall see that all orders and resolutions of the Board of Directors are
carried into effect.

SECTION 4.07. The Vice Chairman. During the absence or
disability of the Chairman of the Board, the Vice Chairman shall exercise all
the functions of the Chairman of the Board. The Vice Chairman shall perform
all duties incident to the office of the Vice Chairman and such other duties as
shall from time to time be assigned by the Board of Directors, the Chairman of
the Board or as prescribed by these By-Laws.

SECTION 4.08. President. The President shall be the chief
operating officer of the Corporation and, subject to the direction of the Board
of Directors, shall in general supervise and control all of the business and
affairs of the Corporation. The President shall, when present, preside at all
meetings of the shareholders in the absence of the Chairman of the Board and
the Vice Chairman. The President shall have authority, subject to such rules
as may be prescribed by the Board of Directors, to appoint such agents and
employees of the Corporation as he or she shall deem necessary, to prescribe
their powers, duties and compensation, and to delegate authority to them. Such
agents and employees shall hold office at the discretion of the President.

12
<PAGE> 13

The President shall have authority to sign, execute and acknowledge, on behalf
of the Corporation, all deeds, mortgages, bonds, stock certificates, contracts,
leases, reports and all other documents or instruments necessary or proper to
be executed in the course of the Corporation's regular business, or which shall
be authorized by resolution of the Board of Directors; and, except as otherwise
provided by law or the Board of Directors, he or she may authorize any Vice
President or other officer or agent of the Corporation to sign, execute and
acknowledge such documents or instruments in his or her place and stead. In
general he or she shall perform all duties incident to the office of President
and such other duties as may be prescribed by the Board of Directors from time
to time.

SECTION 4.09. The Vice Presidents. In the absence of the
President or in the event of the President's death, inability or refusal to
act, or in the event for any reason it shall be impracticable for the President
to act personally, the Vice President (or in the event there be more than one
Vice President, the Vice Presidents in the order designated by the Board of
Directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Any Vice President may sign, with the Secretary or Assistant
Secretary, certificates for shares of the Corporation; and shall perform such
other duties and have such authority as from time to time may be delegated or
assigned to him or her by the Chairman of the Board, Vice Chairman or President
or by the Board of Directors. The execution of any instrument of the
Corporation by any Vice President shall be conclusive evidence, as to third
parties, of his or her authority to act for the Corporation.

SECTION 4.10. The Secretary. The Secretary shall: (a) keep
minutes of the meetings of the shareholders and of the Board of Directors (and
of committees thereof) in one or more books provided for that purpose
(including records of actions taken by the shareholders or the Board of
Directors (or committees thereof) without a meeting); (b) see that all notices
are duly given in accordance with the provisions of these By-Laws or as
required by the WBCL; (c) be custodian of the corporate records and of the seal
of the Corporation and see that the seal of the Corporation is affixed to all
documents the execution of which on behalf of the Corporation under its seal is
duly authorized; (d) maintain a record of the shareholders of the Corporation,
in a form that permits preparation of a list of the names and addresses of all
shareholders, by class or series of shares and showing the number and class or
series of shares held by each shareholder; (e) sign with the President, a Vice
President, or any other officer authorized by the Board of Directors,
certificates for shares of the Corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f) have general
charge of the stock transfer books of the Corporation; and (g) in general
perform all duties incident to the office of Secretary and have such other
duties and exercise such authority as from time to time may be

13
<PAGE> 14

delegated or assigned by the Chairman of the Board, Vice Chairman, President or
the Board of Directors.

SECTION 4.11. The Treasurer. The Treasurer shall be the
principal financial and accounting officer of the Corporation and shall have
general charge of the finances and books of account of the Corporation. Except
as otherwise provided by the Board of Directors, he or she shall have general
supervision of the funds and property of the Corporation and of the performance
by the Custodian of its duties with respect thereto. The Treasurer shall
render to the Board of Directors, whenever directed by the Board, an account of
the financial condition of the Corporation and of all his or her transactions
as Treasurer. The Treasurer shall perform all acts incidental to the office of
Treasurer, subject to the control of the Board of Directors.

SECTION 4.12. Assistant Secretaries and Assistant Treasurers.
There shall be such number of Assistant Secretaries and Assistant Treasurers as
the Board of Directors may from time to time authorize. The Assistant
Secretaries may sign with the President, a Vice President or any other officer
authorized by the Board of Directors, certificates for shares of the
Corporation the issuance of which shall have been authorized by a resolution of
the Board of Directors. The Assistant Secretaries and Assistant Treasurers, in
general, shall perform such duties and have such authority as shall from time
to time be delegated or assigned to them by the Secretary or the Treasurer,
respectively, or by the Chairman of the Board, Vice Chairman, President or the
Board of Directors.

SECTION 4.13. Other Assistants and Acting Officers. The
Board of Directors shall have the power to appoint, or to authorize any duly
appointed officer of the Corporation to appoint, any person to act as assistant
to any officer, or as agent for the Corporation in his or her stead, or to
perform the duties of such officer whenever for any reason it is impracticable
for such officer to act personally, and such assistant or acting officer or
other agent so appointed by the Board of Directors or an authorized officer
shall have the power to perform all the duties of the office to which he or she
is so appointed to be an assistant, or as to which he or she is so appointed to
act, except as such power may be otherwise defined or restricted by the Board
of Directors or the appointing officer.

SECTION 4.14. Surety Bonds. The Board of Directors may
require any officer or agent of the Corporation to execute a bond (including,
without limitation, any bond required by the Investment Company Act of 1940) to
the Corporation in such sum and with such surety or sureties as the Board of
Directors may determine, conditioned upon the faithful performance of his or
her duties to the Corporation, including responsibility for negligence and for
the accounting of any of the Corporation's property, funds or securities that
may come into his or her hands.

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<PAGE> 15

ARTICLE V. CERTIFICATES FOR SHARES; TRANSFER OF SHARES

SECTION 5.01. Certificates for Shares. Each shareholder
shall be entitled upon request to have a certificate or certificates which
shall represent and certify the number and kind of shares owned by him or her
in the Corporation. Certificates representing shares of the Corporation shall
be in such form, consistent with the WBCL, as shall be determined by the Board
of Directors. Such certificates shall be signed, either manually or in
facsimile, by the President, a Vice President or any other officer authorized
by the Board of Directors and by the Secretary or an Assistant Secretary. All
certificates for shares shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares represented
thereby are issued, with the number of shares and class of shares and series,
if any, and date of issue, shall be entered on the stock transfer books of the
Corporation. All certificates surrendered to the Corporation for transfer
shall be cancelled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
cancelled, except as provided in Section 5.04.

Shares may also be issued without certificates. Within a
reasonable time after issuance or transfer of shares without certificates, the
Corporation shall send the shareholder a written statement of the information
required on share certificates under the WBCL, including the following:

(a) the name of the Corporation;

(b) the name of the person to whom shares were issued;

(d) either (i) a summary of the designations, relative
rights, preferences and limitations, applicable to each class, and the
variations in rights, preferences and limitations determined for each
series and the authority of the Board of Directors to determine
variations for future series, or (ii) a conspicuous statement that the
Corporation will furnish the information specified in clause (i),
above, on request, in writing and without charge.

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<PAGE> 16

SECTION 5.02. Signature by Former Officers. The validity of
a share certificate is not affected if a person who signed the certificate
(either manually or in facsimile) no longer holds office when the certificate
is issued.

SECTION 5.03. Transfer of Shares. Prior to due presentment
of a certificate for shares for redemption or registration of transfer, the
Corporation may treat the registered owner of such shares as the person
exclusively entitled to vote, to receive notifications and otherwise to have
and exercise all the rights and power of an owner. Where a certificate for
shares is presented to the Corporation with a request for redemption or to
register for transfer, the Corporation shall not be liable to the owner or any
other person suffering loss as a result of such registration of transfer or
redemption if (a) there were on or with the certificate the necessary
endorsements, and (b) the Corporation had no duty to inquire into adverse
claims or has discharged any such duty. The Corporation may require reasonable
assurance that such endorsements are genuine and effective and compliance with
such other regulations as may be prescribed by or under the authority of the
Board of Directors. All certificates and uncertificated shares surrendered to
the Corporation for redemption shall be cancelled, returned to the status of
authorized and unissued shares and the transaction recorded in the stock
transfer books. Transfer or redemption of shares of the Corporation shall be
made only on the stock transfer books of the Corporation by the holder of
record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto duly authorized
by power of attorney duly executed and filed with the transfer agent or the
Secretary of the Corporation, and on surrender for cancellation of the
certificate for such shares, if any.

SECTION 5.04. Lost, Destroyed or Stolen Certificates. Where
the owner claims that certificates for shares have been lost, destroyed or
wrongfully taken, a new certificate shall be issued in place thereof if the
owner (a) so requests before the Corporation has notice that such shares have
been acquired by a bona fide purchaser, (b) files with the Corporation a
sufficient indemnity bond if required by the Board of Directors or any
principal officer, and (c) satisfies such other reasonable requirements as may
be prescribed by or under the authority of the Board of Directors.

SECTION 5.05. Stock Regulations. The Board of Directors
shall have the power and authority to make all such further rules and
regulations not inconsistent with law as it may deem expedient concerning the
issue, transfer and registration of shares of the Corporation and to appoint or
designate one or more stock transfer agents and one or more stock registrars.

ARTICLE VI. SEAL

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<PAGE> 17

SECTION 6.01. The seal of the Corporation shall be circular
in form and shall bear, at a minimum, the name of the Corporation, Wisconsin as
its state of incorporation and the words "Corporate Seal."

ARTICLE VII. INDEMNIFICATION OF OFFICERS AND DIRECTORS

SECTION 7.01. Mandatory Indemnification. The Corporation
shall indemnify, to the full extent permitted by the WBCL, as in effect from
time to time, the persons described in Sections 180.0850 through 180.0859 (or
any successor provisions) of the WBCL or other provisions of the law of the
State of Wisconsin relating to indemnification of directors and officers, as in
effect from time to time. The indemnification afforded such persons by this
section shall not be exclusive of other rights to which they may be entitled as
a matter of law.

SECTION 7.02. Permissive Supplementary Benefits. The
Corporation may, but shall not be required to, supplement the right of
indemnification under Section 7.01 by (a) the purchase of insurance on behalf
of any one or more of such persons, whether or not the Corporation would be
obligated to indemnify such person under Section 7.01; (b) individual or group
indemnification agreements with any one or more of such persons; and (c)
advances for related expenses of such a person.

SECTION 7.03. Amendment. This Article VII may be amended or
repealed only by a vote of the shareholders and not by a vote of the Board of
Directors.

SECTION 7.04. Investment Company Act. In no event shall the
Corporation indemnify any person hereunder in contravention of any provision of
the Investment Company Act.

ARTICLE VIII. AMENDMENTS

SECTION 8.01. By Shareholders. These By-Laws may be amended
or repealed and new By-Laws may be adopted by the shareholders at any annual or
special meeting of the shareholders at which a quorum is in attendance.

SECTION 8.02. By Board of Directors. Except as otherwise
provided by the WBCL, the Articles of Incorporation or a particular By-Law
herein, these By-Laws may also be amended or repealed and new By-Laws may be
adopted by the Board of Directors by affirmative vote of a majority of the
number of directors present at any meeting at which a quorum is in

17
<PAGE> 18

attendance; provided, however, that the shareholders in adopting, amending or
repealing a particular By-Law may provide therein that the Board of Directors
may not amend, repeal or readopt that By-Law.

SECTION 8.03. Implied Amendments. Any action taken or
authorized by the shareholders or by the Board of Directors which would be
inconsistent with the By-Laws then in effect but which is taken or authorized
by affirmative vote of not less than the number of shares or the number of
directors required to amend the By-Laws so that the By-Laws would be consistent
with such action shall be given the same effect as though the By-Laws had been
temporarily amended or suspended so far, but only so far, as is necessary to
permit the specific action so taken or authorized.

ARTICLE IX. DEPOSITARIES, CUSTODIANS, ENDORSEMENTS

SECTION 9.01. Depositories. The funds of the Corporation
shall be deposited with such banks or other depositories as the Board of
Directors of the Corporation may from time to time determine in accordance with
the requirements of the Investment Company Act.

SECTION 9.02. Custodians. All securities and other similar
investments of the Corporation shall be deposited in the safekeeping of such
banks or other companies as the Board of Directors may from time to time
determine in accordance with the requirements of the Investment Company Act.
Every arrangement entered into with any bank or other company for the
safekeeping of the securities and other similar investments of the Corporation
shall contain provisions complying with the requirements of the Investment
Company Act.

SECTION 9.03. Checks, Notes, Drafts, etc. Checks, notes,
drafts, acceptances, bills of exchange and other orders or obligations for the
payment of money shall be signed by such officer or officers or such person or
persons as designated from time to time by the Board of Directors.

SECTION 9.04. Endorsements, Assignments and Transfer of
Securities. All endorsements, assignments, stock powers or other instruments
of transfer of securities standing in the name of the Corporation or its
nominee or directions for the transfer of securities belonging to the
Corporation shall be made by such officer or officers or other person or
persons as may be designated from time to time by the Board of Directors.

ARTICLE X. INDEPENDENT PUBLIC ACCOUNTANTS

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<PAGE> 19

SECTION 10.01. Independent Public Accountants. The
Corporation shall employ an independent public accountant or a firm of
independent public accountants as its accountants to examine the accounts of
the Corporation and to sign and certify financial statements filed by the
Corporation.

ARTICLE XI. SALES AND REDEMPTION OF SHARES; DIVIDENDS

SECTION 11.01. Sale of Shares. Shares of Common Stock of the
Corporation shall be sold by it for the net asset value per share of such
Common Stock calculated in accordance with the requirements of the Investment
Company Act, and the Corporation's then current prospectus.

SECTION 11.02. Periodic Investment, Dividend Reinvestment and
Other Plans. The Corporation shall offer such periodic investment, dividend
reinvestment, periodic redemption or other plans as are specified in the
Corporation's then current prospectus, provided such plans are offered in
accordance with the requirements of the Investment Company Act. Any such plans
may be discontinued at any time if determined advisable by or under the
authority of the Board of Directors.

SECTION 11.03. Redemption of Shares. Subject to the
suspension of the right of redemption or postponement of the date of payment or
satisfaction upon redemption in accordance with the Investment Company Act,
each shareholder, upon request and after complying with the redemption
procedures established by or under the supervision of the Board of Directors,
shall be entitled to require the Corporation to redeem out of legally available
funds all or any part of the Common Stock standing in the name of such holder
at the net asset value per share calculated in accordance with the requirements
of the Investment Company Act, and the Corporation's then current prospectus.

SECTION 11.04. Dividends and Other Distributions. The
Corporation shall pay such dividends and make other distributions to
shareholders, at such times and in such amounts as are determined by or under
the authority of the Board of Directors, from time to time and in accordance
with the requirements of the WBCL, the Investment Company Act, and other
applicable laws and regulations.

<PAGE> 1
EXHIBIT 99.B4

SPECIMEN STOCK CERTIFICATE

NUMBER STRONG LOGO SHARES

________ _______

CUSIP ___________

STRONG <<FUND>>, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF WISCONSIN

This Certifies that is the owner of

Shares of the Common Stock, Par Value $._____ per share, of Strong <<Fund>>,
Inc. transferable on the books of the Corporation by the holder hereof
in person or by duly authorized attorney upon surrender of this certificate
properly endorsed.

This certificate is not valid until countersigned by the Transfer
Agent.
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.

Dated:

CORPORATE SEAL

/s/ Ann E. Oglanian /s/ John Dragisic

Secretary Vice Chairman

Countersigned:

Strong Capital Management, Inc.
Transfer Agent

Authorized Signature
<PAGE> 2

The following abbreviations, when used in the inscription on the face of
this certificate shall be construed as though they were written out in full
according to applicable laws or regulations:

UNIF GIFT MIN ACT _____Custodian_______
(Cust) (Minor)
Under Uniform Gift to Minors

Act - _________________________________
State

TEN COM - as tenants in common
TEN ENT - as tenants by the
entireties UNIF TRANS MIN ACT ____Custodian _______
JT TEN - as joint tenants with (Cust) (Minor)
right of survivorship
and not as tenants Under Uniform Transfers to Minors
in common Act - _________________________________
State

Additional abbreviations also may be used though not in the above list.
For Value Received, __________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

________________________________________________________________________________
________________________________________________________________________________
Shares of capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint _____________________________________________
________________________________________________________________________________
Attorney, to transfer the said shares on the books of the within named
Corporation with full power of substitution in the premises.

Date ________________________________ ___________________________________
Signature

___________________________________
Signature

NOTICE: THE SIGNATURE OF THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATEVER.

___________________________________
Signature(s) Guarantee

Strong <<Fund>>, Inc. is authorized to issue common stock for multiple series.
Upon request, a Shareholder will be given a summary of the designations,
relative rights, preferences and limitations determined by the Board of
Directors for each series in writing and without charge. The Board of
Directors is authorized to determine variations for different series.

<PAGE> 1
EXHIBIT 99.B5
INVESTMENT ADVISORY AGREEMENT

THIS AGREEMENT is made and entered into on this ____ day of _________,
____, between STRONG [ ] FUNDS, INC., a Wisconsin corporation
(the "Corporation"), and STRONG CAPITAL MANAGEMENT, INC., a Wisconsin
corporation (the "Adviser");

WITNESSETH

WHEREAS, the Corporation is an open-end management investment company
under the Investment Company Act of 1940 (the "1940 Act");

WHEREAS, the Corporation is authorized to create separate series, each
with its own separate investment portfolio; and

WHEREAS, the Corporation desires to retain the Adviser, which is a
registered investment adviser under the Investment Advisers Act of 1940, to act
as investment adviser for each series of the Corporation listed in Schedule A
attached hereto, and to manage each of their assets;

NOW, THEREFORE, the Corporation and the Adviser do mutually agree and
promise as follows:

1. Employment. The Corporation hereby appoints Adviser as
investment adviser for each series of the Corporation listed on Schedule A
attached hereto (a "Portfolio" or collectively, the "Portfolios"), and Adviser
accepts such appointment. Subject to the supervision of the Board of Directors
of the Corporation and the terms of this Agreement, the Adviser shall act as
investment adviser for and manage the investment and reinvestment of the assets
of any Portfolio. The Adviser is hereby authorized to delegate some or all of
its services subject to necessary approval, which includes without limitation,
the delegation of its investment adviser duties hereunder to a subadvisor
pursuant to a written agreement (a "Subadvisory Agreement") under which the
subadvisor shall furnish the services specified therein to the Adviser. The
Adviser will continue to have responsibility for all investment advisory
services furnished pursuant to a Subadvisory Agreement. The Adviser shall (i)
provide for use by the Corporation, at the Adviser's expense, office space and
all necessary office facilities, equipment and personnel for servicing the
investments of each Portfolio and maintaining the Corporation's organization,
(ii) pay the salaries and fees of all officers and directors of the Corporation
who are "interested persons" of the Adviser as such term is defined under the
1940 Act, and (iii) pay for all clerical services relating to research,
statistical and investment work.

2. Allocation of Portfolio Brokerage. The Adviser is authorized,
subject to the supervision of the Board of Directors of the Corporation, to
place orders for the purchase and sale of securities and to negotiate
commissions to be paid on such transactions. The Adviser may, on behalf of each
Portfolio, pay brokerage commissions to a broker which provides brokerage and
research services to the Adviser in excess of the
<PAGE> 2

amount another broker would have charged for effecting the transaction,
provided (i) the Adviser determines in good faith that the amount is reasonable
in relation to the value of the brokerage and research services provided by the
executing broker in terms of the particular transaction or in terms of the
Adviser's overall responsibilities with respect to a Portfolio and the accounts
as to which the Adviser exercises investment discretion, (ii) such payment is
made in compliance with Section 28(e) of the Securities Exchange Act of 1934
and other applicable state and federal laws, and (iii) in the opinion of the
Adviser, the total commissions paid by a Portfolio will be reasonable in
relation to the benefits to such Portfolio over the long term.

3. Expenses. Each Portfolio will pay all its expenses and the
Portfolio's allocable share of the Corporation's expenses, other than those
expressly stated to be payable by the Adviser hereunder, which expenses payable
by a Portfolio shall include, without limitation, interest charges, taxes,
brokerage commissions and similar expenses, expenses of issue, sale, repurchase
or redemption of shares, expenses of registering or qualifying shares for sale,
expenses of printing and distributing prospectuses to existing shareholders,
charges of custodians (including sums as custodian and for keeping books and
similar services of the Portfolios), transfer agents (including the printing
and mailing of reports and notices to shareholders), registrars, auditing and
legal services, clerical services related to recordkeeping and shareholder
relations, printing of share certificates, fees for directors who are not
"interested persons" of the Adviser, and other expenses not expressly assumed
by the Adviser under Paragraph 1 above. If expenses payable by a Portfolio,
except interest charges, taxes, brokerage commissions and similar fees, and to
the extent permitted, extraordinary expenses, in any given fiscal year exceed
that percentage of the average net asset value of the Portfolio for such year,
as determined by valuations made as of the close of each business day of such
year, which is the most restrictive percentage expense limitation provided by
the laws of the various states in which the Portfolio's shares are qualified
for sale, or if the states in which the shares qualified for sale impose no
restrictions, then 2%, the Adviser shall reimburse the Portfolio for such
excess. Reimbursement of expenses by the Adviser shall be made on a monthly
basis and will be paid to a Portfolio by a reduction in the Adviser's fee,
subject to later adjustment month by month for the remainder of the Portfolio's
fiscal year.

4. Authority of Adviser. The Adviser shall for all purposes
herein be considered an independent contractor and shall not, unless expressly
authorized and empowered by the Corporation or any Portfolio, have authority to
act for or represent the Corporation or any Portfolio in any way, form or
manner. Any authority granted by the Corporation on behalf of itself or any
Portfolio to the Adviser shall be in the form of a resolution or resolutions
adopted by the Board of Directors of the Corporation.

5. Compensation of Adviser. For the services to be furnished
during any month by the Adviser hereunder, each Portfolio listed in Schedule A
shall pay the Adviser, and the Adviser agrees to accept as full compensation
for all services rendered hereunder, an Advisory Fee as soon as practical after
the last day of such month. The Advisory Fee shall be an amount equal to 1/12th
of the annual fee as set forth in Schedule B of the average of the net asset
value of the Portfolio determined as of the close of business on each business
day throughout the month (the "Average Asset Value"). In case of termination of
this Agreement with respect to any Portfolio during any month, the fee for that
month shall be reduced proportionately on the basis of the number of calendar
days during which it is in effect and the fee computed upon the Average Asset
Value of the business days during which it is so in effect.

2
<PAGE> 3

6. Rights and Powers of Adviser. The Adviser's rights and powers
with respect to acting for and on behalf of the Corporation or any Portfolio,
including the rights and powers of the Adviser's officers and directors, shall
be as follows:

(a) Directors, officers, agents and shareholders of the
Corporation are or may at any time or times be interested in the Adviser as
officers, directors, agents, shareholders or otherwise. Correspondingly,
directors, officers, agents and shareholders of the Adviser are or may at any
time or times be interested in the Corporation as directors, officers, agents
and as shareholders or otherwise, but nothing herein shall be deemed to require
the Corporation to take any action contrary to its Articles of Incorporation or
any applicable statute or regulation. The Adviser shall, if it so elects, also
have the right to be a shareholder in any Portfolio.

(b) Except for initial investments in a Portfolio, not in excess
of $100,000 in the aggregate for the Corporation, the Adviser shall not take
any long or short positions in the shares of the Portfolios and that insofar as
it can control the situation it shall prevent any and all of its officers,
directors, agents or shareholders from taking any long or short position in the
shares of the Portfolios. This prohibition shall not in any way be considered
to prevent the Adviser or an officer, director, agent or shareholder of the
Adviser from purchasing and owning shares of any of the Portfolios for
investment purposes. The Adviser shall notify the Corporation of any sales of
shares of any Portfolio made by the Adviser within two months after purchase by
the Adviser of shares of any Portfolio.

(c) The services of the Adviser to each Portfolio and the
Corporation are not to be deemed exclusive and Adviser shall be free to render
similar services to others as long as its services for others does not in any
way hinder, preclude or prevent the Adviser from performing its duties and
obligations under this Agreement. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject to
liability to the Corporation or to any of the Portfolios or to any shareholder
for any act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security.

7. Duration and Termination. The following shall apply with
respect to the duration and termination of this Agreement:

(a) This Agreement shall begin for each Portfolio as of the date
of this Agreement and shall continue in effect for two years. With respect to
each Portfolio added by execution of an Addendum to Schedule A, the term of
this Agreement shall begin on the date of such execution and, unless sooner
terminated as hereinafter provided, this Agreement shall remain in effect to
the date two years after such execution. Thereafter, in each case, this
Agreement shall remain in effect, for successive periods of one year, subject
to the provisions for termination and all of the other terms and conditions
hereof if: (a) such continuation shall be specifically approved at least
annually by either (i) the affirmative vote of a majority of the Board of
Directors of the Corporation, including a majority of the Directors who are not
parties to this Agreement or interested persons of any such party (other than
as Directors of the Corporation), cast in person at a meeting called for that
purpose or (ii) by the affirmative vote of a majority of a Portfolio's
outstanding voting securities; and (b) Adviser shall not have notified a
Portfolio in writing at least sixty (60) days prior to the anniversary date of
this Agreement in any year thereafter that it does not desire such continuation
with respect to that Portfolio. Prior to

3
<PAGE> 4
voting on the renewal of this Agreement, the Board of Directors of the
Corporation may request and evaluate, and the Adviser shall furnish, such
information as may reasonably be necessary to enable the Corporation's Board of
Directors to evaluate the terms of this Agreement.

(b) Notwithstanding whatever may be provided herein to the
contrary, this Agreement may be terminated at any time with respect to any
Portfolio, without payment of any penalty, by affirmative vote of a majority of
the Board of Directors of the Corporation, or by vote of a majority of the
outstanding voting securities of that Portfolio, as defined in Section 2(a)(42)
of the 1940 Act, or by the Adviser, in each case, upon sixty (60) days' written
notice to the other party and shall terminate automatically in the event of its
assignment.

8. Amendment. This Agreement may be amended by mutual consent of
the parties, provided that the terms of each such amendment shall be approved
by the vote of a majority of the Board of Directors of the Corporation,
including a majority of the Directors who are not parties to this Agreement or
interested persons of any such party to this Agreement (other than as Directors
of the Corporation) cast in person at a meeting called for that purpose, and,
where required by Section 15(a)(2) of the 1940 Act, on behalf of a Portfolio by
a majority of the outstanding voting securities (as defined in Section 2(a)(42)
of the 1940 Act) of such Portfolio. If such amendment is proposed in order to
comply with the recommendations or requirements of the Securities and Exchange
Commission or state regulatory bodies or other governmental authority, or to
obtain any advantage under state or federal laws, the Corporation shall notify
the Adviser of the form of amendment which it deems necessary or advisable and
the reasons therefor, and if the Adviser declines to assent to such amendment,
the Corporation may terminate this Agreement forthwith.

9. Notice. Any notice that is required to be given by the parties
to each other under the terms of this Agreement shall be in writing, addressed
and delivered, or mailed postpaid to the other party at the principal place of
business of such party.

10. Assignment. This Agreement shall neither be assignable nor
subject to pledge or hypothecation and in the event of assignment, pledge or
hypothecation shall automatically terminate. For purposes of determining
whether an "assignment" has occurred, the definition of "assignment" in Section
2(a)(4) of the 1940 Act shall control.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed as of the day and year first stated above.

Attest: Strong Capital Management, Inc.

______________________________________ ____________________________________
Thomas P. Lemke, Senior Vice President John Dragisic, Vice Chairman

Attest: Strong [ ] Funds, Inc.

______________________________________ ____________________________________
Ann E. Oglanian, Secretary Lawrence A. Totsky, Vice President

4
<PAGE> 5

SCHEDULE A

The Portfolio(s) of the Corporation currently subject to this Agreement are
as follows:

Date of Addition
Portfolio(s) to this Agreement
------------ -----------------

Strong [ ] Fund -----------------

Attest: Strong Capital Management, Inc.

______________________________________ ___________________________________
Thomas P. Lemke, Senior Vice President John Dragisic, Vice Chairman

Attest: Strong [ ] Funds, Inc.

______________________________________ ___________________________________
Ann E. Oglanian, Secretary Lawrence A. Totsky, Vice President

<PAGE> 6
SCHEDULE B

Compensation pursuant to Paragraph 5 of this Agreement shall be calculated in
accordance with the following schedules:

Portfolio(s) Annual Fee
------------ ----------

Strong [ ] Fund ____%

Attest: Strong Capital Management, Inc.

______________________________________ ___________________________________
Thomas P. Lemke, Senior Vice President John Dragisic, Vice Chairman

Attest: Strong [ ] Funds, Inc.

_____________________________________ ___________________________________
Ann E. Oglanian, Secretary Lawrence A. Totsky, Vice President

<PAGE> 1

EXHIBIT 99.B6

DISTRIBUTION AGREEMENT

THIS AGREEMENT is made and entered into on this ______day of
___________,____, between STRONG [ ] FUNDS, INC., a Wisconsin
corporation (the "Corporation"), and STRONG FUNDS DISTRIBUTORS, INC., a
Wisconsin corporation (the "Distributor"):

WITNESSETH:

WHEREAS, the Corporation is an open-end management investment company
registered under the Investment Company Act of 1940 (the "Investment Company
Act");

WHEREAS, the Corporation is authorized to issue shares of its $.______
par value common stock (the "Shares") in separate series;

WHEREAS, the Distributor is a registered broker-dealer under state and
federal laws and regulations and is a member of the National Association of
Securities Dealers (the "NASD"); and

WHEREAS, the Corporation desires to retain Distributor as the
distributor of the Shares of each series on whose behalf this Agreement has
been executed.

NOW, THEREFORE, the Corporation and Distributor mutually agree and
promise as follows:

1. Appointment of Distributor

The Company hereby appoints the Distributor as its agent for the
distribution of the Shares of each series of the Corporation listed on Schedule
A attached hereto (each series is hereinafter referred to as a "Fund"), as such
Schedule may be amended from time to time, in jurisdictions wherein the Shares
may legally be offered for sale; provided, however, that the Corporation may
(a) issue or sell Shares directly to holders of such Shares upon such terms and
conditions and for such consideration, if any, as it may determine, whether in
connection with the distribution of subscription or purchase rights, the
payment or reinvestment of dividends or distributions, or otherwise; or (b)
issue or sell Shares at net asset value to the shareholders of any other
investment corporation, as defined in the Investment Company Act, for which the
Distributor shall act as exclusive distributor, who wish to exchange all or a
portion of their investment in shares of such other investment company for
Shares of the Corporation.

2. Acceptance; Services of Distributor

The Distributor hereby accepts appointment as agent for the
distribution of the Shares and agrees that it will use its best efforts with
reasonable promptness to sell such part of the authorized Shares remaining
unissued as from time to time shall be effectively registered under the
Securities Act of 1933 (the "Securities Act"), at prices determined as
hereinafter provided and on terms hereinafter set forth, all

<PAGE> 2

subject to applicable federal and state laws and regulations and the Articles
of Incorporation and By-Laws of the Corporation.

3. Manner of Sale; Compliance with Securities Laws and Regulations

a. The Distributor shall sell Shares to or through qualified
dealers or others in such manner, not inconsistent with the provisions hereof
and the Corporation's then effective Registration Statement under the
Securities Act, as the Distributor may determine from time to time, provided
that no dealer or other person shall be appointed or authorized to act as agent
of the Corporation without the prior consent of the Corporation. The
Distributor shall cause subscriptions for Shares to be transmitted in
accordance with any subscription agreement then in force for the purchase of
Shares. Distributor and Corporation shall cooperate in implementing procedures
to ensure that the sales commission, if any, payable on the purchase of Shares
is paid to the Distributor in a timely manner.

b. The Distributor, as agent of and for the account of the
Corporation, may repurchase Shares at such prices and upon such terms and
conditions as shall be specified in the Corporation's current prospectus
relating to each Fund.

c. The Corporation will furnish to the Distributor from time to
time such information with respect to the Corporation, each Fund, and the
Shares as the Distributor may reasonably request for use in connection with the
sale of the Shares. The Distributor agrees that it will not use or distribute
or authorize the use, distribution or dissemination by its dealers or others,
in connection with the sale of such Shares, of any statements, other than those
contained in the Corporation's current prospectus relating to each Fund, except
such supplemental literature or advertising as shall be lawful under federal
and state securities laws and regulations, and that it will furnish the
Corporation with copies of all such material.

d. In selling or reacquiring Shares for the account of the
Corporation, the Distributor will in all respects conform to the requirements
of all state and federal laws and the Rules of Fair Practice of the NASD,
relating to such sale or reacquisition, as the case may be, and will indemnify
and save harmless the Corporation, each Fund, each person who has been, is or
may hereafter be a director or officer of the Corporation or any Fund from any
damage or expense on account of any wrongful act by the Distributor or any
employee, representative or agent of the Distributor. The Distributor will
observe and be bound by all the provisions of the Articles of Incorporation of
the Corporation (and of any fundamental policies adopted by the Corporation
and/or each Fund pursuant to the Investment Company Act, notice of which shall
have been given to the Distributor) which at the time in any way require,
limit, restrict or prohibit or otherwise regulate any action on the part of the
Distributor.

e. The Distributor will require each dealer to conform to the
provisions hereof and the Registration Statement (and related prospectus or
prospectuses) at the time in effect under the Securities Act with respect to
the public offering price of the Shares.

<PAGE> 3

4. Price of Shares

a. Shares offered for sale or sold by the Distributor for the
account of the Corporation shall be so offered or sold at a price per Share
determined in accordance with the then current prospectus relating to the sale
of such Shares except as departure from such prices shall be permitted by the
rules and regulations of the Securities and Exchange Commission (the "SEC").

b. The price the Corporation shall receive for all Shares
purchased from the Corporation shall be the net asset value used in determining
the public offering price applicable to the sale of each Fund's Shares. The
excess, if any, of the sales price over the net asset value of the Shares sold
by the Distributor as agent for the account of the Corporation shall be
retained by the Distributor as a commission for its services hereunder.

5. Registration of Shares and Distributor

a. The Corporation agrees that it will use its best efforts to
keep effectively registered under the Securities Act for sale as herein
contemplated such Shares as the Distributor shall reasonably request and as the
SEC shall permit to be so registered.

b. The Corporation on behalf of each Fund will execute any and all
documents and furnish any and all information which may be reasonably necessary
in connection with the qualification of its Shares for sale (including the
qualification of the Corporation or a Fund as a dealer where necessary or
advisable) in such states as the Distributor may reasonably request (it being
understood that the Corporation shall not be required without its consent to
comply with any requirement which in its opinion is unduly burdensome). The
Distributor, at its own expense, will effect all required qualifications of the
Distributor as a dealer or broker or otherwise under all applicable state or
federal laws in order that the Shares may be sold in as broad a territory as is
reasonably practicable.

c. Notwithstanding any other provision hereof, the Corporation on
behalf of a Fund may terminate, suspend or withdraw the offering of its Shares
whenever, in its sole discretion, the Corporation deems such action to be
desirable.

6. Expenses

The Corporation or respective Fund will pay or cause to be paid the
expenses (including the fees and disbursements of its own counsel) of any
registration of the Shares under the Securities Act, expenses of qualifying or
continuing the qualification of the Shares for sale, and in connection
therewith, of qualifying or continuing the qualification of the Corporation or
respective Fund as a dealer or broker under the laws of such states as may be
designated by the Distributor under the conditions herein specified, and
expenses incident to the issuance of Shares, such as the cost of share
certificates, issue taxes and fees of the transfer agent. The Distributor will
pay all other expenses (other than expenses which one or more dealers may bear
pursuant to any agreement with the Distributor) incident to the sale and
distribution of the Shares issued or sold hereunder, including, without
limiting the generality of the foregoing, all (a) expenses of printing and
distributing or disseminating any other literature, advertising

3
<PAGE> 4

and selling aids in connection with such offering of the Shares for
sale (except that such expenses shall not include expenses incurred by the
Corporation or any Fund in connection with the preparation, printing and
distribution of any report or other communication to holders of Shares in their
capacity as such); and (b) expenses of advertising in connection with such
offering. No transfer taxes, if any, which may be payable in connection with
the issue or delivery of Shares sold as herein contemplated or of the
certificates for such Shares shall be borne by the Corporation or any Fund, and
the Distributor will indemnify and hold harmless the Corporation and each Fund
against liability for all such transfer taxes.

7. Duration and Termination

a. This Agreement shall become effective as of the date hereof
and shall continue in effect until ________, 1996, and from year to year
thereafter, but only so long as such continuance is specifically approved each
year by either (i) the Board of Directors of the Corporation, or (ii) the
affirmative vote of a majority of the relevant Fund's respective outstanding
voting securities. In addition to the foregoing, each renewal of this
Agreement must be approved by the vote of a majority of the Corporation's
directors who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval. Prior to voting on the renewal of this Agreement, the Board of
Directors of the Corporation shall request and evaluate, and the Distributor
shall furnish, such information as may reasonably be necessary to enable the
Corporation's Board of Directors to evaluate the terms of this Agreement.

b. Notwithstanding whatever may be provided herein to the
contrary, this Agreement may be terminated at any time, without payment of any
penalty, by vote of a majority of the Board of Directors of the Corporation, or
by vote of a majority of the outstanding voting securities of the relevant
Fund, or by the Distributor, in each case, on not more than sixty (60) days'
written notice to the other party and shall terminate automatically in the
event of its assignment as set forth in paragraph 9 of this Agreement.

8. Notice

Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as
such other party may from time to time designate for the receipt of such
notice.

9. Assignment

This Agreement shall neither be assignable nor subject to pledge or
hypothecation and in the event of assignment, pledge or hypothecation shall
automatically terminate. For purposes of determining whether an "assignment"
has occurred, the definition of "assignment" in Section 2(a)(4) of the
Investment Company Act shall control.

10. Miscellaneous

<PAGE> 5

a. This Agreement shall be construed in accordance with the laws
of the State of Wisconsin, provided that nothing herein shall be construed in a
manner inconsistent with the Investment Company Act, the Securities Act, the
Securities Exchange Act of 1934 or any rule or order of the SEC under such Acts
or any rule of the NASD.

b. The captions of this Agreement are included for convenience
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect.

c. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed as of the day and year first stated above.

Attest: Strong Funds Distributors, Inc.

__________________________________________ ___________________________________
Thomas M. Zoeller, Treasurer and Secretary Stephen J. Shenkenberg, President

Attest: Strong ________________ Funds, Inc.

__________________________________________ ___________________________________
Ann E. Oglanian, Secretary Lawrence A. Totsky, Vice President

5
<PAGE> 6

SCHEDULE A

The Fund(s) of the Corporation currently subject to this Agreement are as
follows:

Date of Addition
Fund(s) to this Agreement
------- -----------------
Strong [ ] Fund ____________

Attest: Strong Funds Distributors, Inc.

__________________________________________ __________________________________
Thomas M. Zoeller, Treasurer and Secretary Stephen J. Shenkenberg, President

Attest: Strong ______________ Funds, Inc.

__________________________________________ __________________________________
Ann E. Oglanian, Secretary Lawrence A. Totsky, Vice President

<PAGE> 1
EXHIBIT 99.B8

CUSTODIAN AGREEMENT

THIS AGREEMENT is made and entered into on this ___ day of ____, ____,
between STRONG <<FUND>>, INC., a Wisconsin corporation (the "Corporation"), on
behalf of the Funds (as defined below) of the Corporation, and FIRSTAR TRUST
COMPANY, a Wisconsin corporation (the "Custodian").

WITNESSETH:

WHEREAS, the Corporation is registered with the Securities and Exchange
Commission as an open-end management investment company under the Investment
Company Act of 1940 (the "Investment Company Act");

WHEREAS, the Corporation is authorized to create separate series, each
with its own separate investment portfolio, and the beneficial interest in each
such series will be represented by a separate series of shares (each series
indicated on Schedule A is hereinafter individually referred to as a "Fund" and
collectively as the "Funds"); and

WHEREAS, the Corporation desires to retain the Custodian to hold and
administer the securities and cash of each Fund listed in Schedule A hereto,
and any additional Funds the Corporation and the Custodian may agree upon and
include in Schedule A as such Schedule may be amended from time to time,
pursuant to the terms of this Agreement.

NOW, THEREFORE, the Corporation and the Custodian do mutually agree and
promise as follows:

1. Definitions

The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive,
purchase or subscribe for the same, or evidencing or representing any other
rights or interests therein, or in any property or assets.

The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Corporation by any two of
the President, a Vice President, the Secretary and the Treasurer of the
Corporation, or any other persons duly authorized to sign by the Board of
Directors.

The word "Board" shall mean the Board of Directors the Corporation.

2. Names, Titles and Signatures of the Corporation's Officers

An officer of the Corporation will certify to the Custodian the names
and signatures of those persons authorized to sign the officers' certificates
described in Section 1, hereof, and the names of the members of the Board of
Directors, together with any changes which may occur from time to time.
<PAGE> 2

3. Receipt and Disbursement of Money

A. The Custodian shall open and maintain a separate account or
accounts in the name of each Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this Agreement. The Custodian shall
hold in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of a Fund. The Custodian shall make
payments of cash to, or for the account of, a Fund from such cash only:

(a) for the purchase of securities for the portfolio of a
Fund upon the delivery of such securities to the Custodian, registered
in the name of the Fund or of the nominee of the Custodian referred to
in Section 7 or in proper form for transfer;

(b) for the purchase or redemption of shares of common
stock of a Fund upon delivery thereof to Custodian, or upon proper
instructions from the Fund;

(c) for the payment of interest, dividends, taxes,
investment adviser's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing and custodian
services and expenses for printing and postage);

(d) for payments in connection with the conversion,
exchange or surrender of securities owned or subscribed to by a Fund
held by or to be delivered to Custodian; or

(e) for other proper corporate purposes certified by
resolution of the Board of Directors of the Corporation, on behalf of a
Fund.

Before making any such payment, the Custodian shall receive
(and may rely upon) an officers' certificate requesting such payment
and stating that it is for a purpose permitted under the terms of
items (a), (b), (c) or (d) of this Subsection A, and also, in respect
of item (e), upon receipt of an officers' certificate specifying the
amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom such payment is to
be made, provided, however, that an officers' certificate need not
precede the disbursement of cash for the purpose of purchasing a money
market instrument, or any other security with same or next-day
settlement, if the President, a Vice President, the Secretary or the
Treasurer of the Corporation, on behalf of a particular Fund, issues
appropriate oral or facsimile instructions to the Custodian and an
appropriate officers' certificate is received by the Custodian within
two business days thereafter.

Regardless of the foregoing, if the Corporation's investment
advisor (the "Advisor") is a member of the Institutional Delivery
("ID") system and desires to affirm trades on behalf of a Fund with
the Depository Trust Company ("DTC") for those transactions affirmed
through the ID system; or (ii) has established an automated interface
to transmit trade authorization detail to the Custodian, then no
officers' certificate is required; provided that the appropriate
ID/DTC letter agreement or automated trade authorization agreement has
been executed by both the Advisor and the Custodian.

2
<PAGE> 3

B. The Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received by the
Custodian for each Fund's account.

C. The Custodian shall, upon receipt of proper instructions, make
federal funds available to the Funds as of specified times agreed upon from
time to time by the Corporation, on behalf of the Funds, and the Custodian in
the amount of checks received in payment for shares of the Funds which are
deposited into the respective Fund's account.

4. Segregated Accounts

Upon receipt of proper instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of each Fund, into
which account or accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to paragraph 14
hereof, (i) in accordance with the provisions of any agreement among the
Corporation, on behalf of a Fund or Funds, the Custodian and a broker-dealer
registered under the Exchange Act and a member of the National Association of
Securities Dealers, Inc. (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of the
Options Clearing Corporation and of any registered national securities exchange
(or the Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding escrow or
other arrangements in connection with transactions for a Fund, (ii) for the
purpose of segregating cash or securities in connection with options purchased,
sold or written for a Fund or commodity futures contracts or options thereon
purchased or sold for a Fund, (iii) for the purpose of compliance by the
Corporation or a Fund with the procedures required by any release or
interpretations of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment companies, and (iv)
as mutually agreed upon from time to time between the Corporation, on behalf of
a Fund or Funds, and the Custodian.

5. Transfer, Exchange, Redelivery, etc. of Securities

The Custodian shall have sole power to release or deliver any
securities of the Funds held by it pursuant to this Agreement. The Custodian
agrees to transfer, exchange or deliver securities held by it hereunder only:

(a) for sales of such securities for the account of a Fund upon
receipt by Custodian of payment therefore;

(b) when such securities are called, redeemed or retired or
otherwise become payable;

(d) in exchange for, or upon conversion into, other securities
alone or other securities and cash whether pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment, or otherwise;

3
<PAGE> 4

(e) upon conversion of such securities pursuant to their terms
into other securities;

(f) upon exercise of subscription, purchase or other similar
rights represented by such securities;

(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;

(h) for the purpose of redeeming in kind shares of common stock of
a Fund upon delivery thereof to the Custodian; or

(i) for other proper corporate purposes.

As to any deliveries made by the Custodian pursuant to items (a), (b),
(d), (e), (f), and (g), securities or cash receivable in exchange therefore
shall be deliverable to the Custodian.

Before making any such transfer, exchange or delivery, the Custodian
shall receive (and may rely upon) an officers' certificate requesting such
transfer, exchange or delivery, and stating that it is for a purpose permitted
under the terms of items (a), (b), (c), (d), (e), (f), (g) or (h) of this
Section 5 and also, in respect of item (i), upon receipt of an officers'
certificate specifying the securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to whom delivery of
such securities shall be made, provided, however, that an officers' certificate
need not precede any such transfer, exchange or delivery of a money market
instrument, or any other security with same or next-day settlement, if the
President, a Vice President, the Secretary or the Treasurer of the Corporation,
on behalf of a particular Fund, issues appropriate oral or facsimile
instructions to the Custodian and an appropriate officers' certificate is
received by the Custodian within two business days thereafter.

Regardless of the foregoing, if the Advisor is a member of the ID
system and desires to affirm trades on behalf of a Fund with the DTC for those
transactions affirmed through the ID system; or (ii) has established an
automated interface to transmit trade authorization detail to the Custodian,
then no officers' certificate is required; provided that the appropriate ID/DTC
letter agreement or automated trade authorization agreement has been executed
by both the Advisor and the Custodian.

6. Custodian's Acts Without Instructions

Unless and until the Custodian receives an officers' certificate to
the contrary, the Custodian shall: (a) present for payment all coupons and
other income items held by it for the account of each Fund which call for
payment upon presentation, and hold the cash received by it upon such payment
for the account of the respective Fund; (b) collect interest and cash dividends
received, with notice to each Fund, for the account of the respective Fund; (c)
hold for the account of each Fund hereunder all stock dividends, rights and
similar securities issued with respect to any securities held by it hereunder;
and (d) execute, as agent on behalf of each Fund, all necessary ownership
certificates required by the Internal

4
<PAGE> 5

Revenue Code or the Income Tax Regulations of the United States Treasury
Department or under the laws of any state now or hereafter in effect, inserting
the Fund's name on such certificates as the owner of the securities covered
thereby, to the extent it may lawfully do so.

7. Registration of Securities

Except as otherwise directed by an officers' certificate, the
Custodian shall register all securities, except such as are in bearer form, in
the name of a registered nominee of the Custodian as defined in the Internal
Revenue Code and any Regulations of the Treasury Department issued hereunder or
in any provision of any subsequent federal tax law exempting such transaction
from liability for stock transfer taxes, and shall execute and deliver all such
certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state. The Custodian shall use its best
efforts to the end that the specific securities held by it hereunder shall be
at all times identifiable in its records.

The Corporation shall from time to time 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, any
securities which it may hold for the account of the Funds and which may from
time to time be registered in the name of a particular Fund.

8. Voting and Other Action

Neither the Custodian nor any nominee of the Custodian shall vote any
of the securities held hereunder by or for the account of any Fund, except in
accordance with the instructions contained in an officers' certificate. The
Custodian shall deliver, or cause to be executed and delivered, to the
Corporation all notices, proxies and proxy soliciting materials with relation
to such securities, such proxies to be executed by the registered holder of
such securities (if registered otherwise than in the name of a Fund), but
without indicating the manner in which such proxies are to be voted.

9. Transfer Tax and Other Disbursements

The Corporation, on behalf of the Funds, shall pay or reimburse the
Custodian from time to time for any transfer taxes payable upon transfers of
securities made hereunder, and for all other necessary and proper disbursements
and expenses made or incurred by the Custodian in the performance of this
Agreement.

The Custodian shall execute and deliver such certificates in
connection with securities delivered to it or by it under this Agreement as may
be required under the provisions of the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder, or under the laws of
any state, to exempt from taxation any exemptable transfers and/or deliveries
of any such securities.

10. Concerning Custodian

The Custodian shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed upon in
writing between the Corporation, on behalf of

5
<PAGE> 6

the Funds, and the Custodian. Until modified in writing, such compensation
shall be as set forth in Schedule B attached hereto.

The Custodian shall not be liable for any action taken in good faith
upon any certificate herein described or certified copy of any resolution of
the Board, and may rely on the genuineness of any such document which it may in
good faith believe to have been validly executed.

The Corporation, on behalf of the Funds, agrees to indemnify and hold
harmless the Custodian and its nominee from all taxes, charges, expenses,
assessments, claims and liabilities (including counsel fees) incurred or
assessed against it or by its nominee in connection with the performance of
this Agreement, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct. The
Custodian is authorized to charge the applicable account of a Fund for such
items. In the event of any advance of cash by the Custodian which results in
any overdraft of a Fund, which is a money market fund subject to Rule 2a-7
under the Investment Company Act, the Custodian is granted a security interest
in such Fund's assets limited to the extent of the overdraft.

11. Subcustodians

The Custodian is hereby authorized to engage another bank or trust
company as a Subcustodian for all or any part of the Corporation's assets, so
long as any such bank or trust company meets the requirements of the Investment
Company Act, as amended and the rules and regulations thereunder and provided
further that, if the Custodian utilizes the services of a Subcustodian, the
Custodian shall remain fully liable and responsible for any losses caused to
any of the Funds by the Subcustodian as fully as if the Custodian was directly
responsible for any such losses under the terms of the Custodian Agreement.

Notwithstanding anything contained herein, if the Corporation requires
the Custodian to engage specific Subcustodians for the safekeeping and/or
clearing of assets, the Corporation agrees to indemnify and hold harmless the
Custodian from all claims, expenses and liabilities incurred or assessed
against it in connection with the use of such Subcustodian in regard to the
Corporation's assets, except as may arise from its own negligent action,
negligent failure to act or willful misconduct.

12. Reports by Custodian

The Custodian shall furnish the Corporation periodically as agreed upon
with a statement summarizing all transactions and entries for the account of
each Fund. The Custodian shall furnish to the Corporation, at the end of every
month, a list of the securities held by each Fund, showing the aggregate cost
of each issue. The books and records of the Custodian pertaining to its
actions under this Agreement shall be open to inspection and audit at
reasonable times by officers of, and of auditors employed by, the Corporation.

13. Termination or Assignment

This Agreement may be terminated by the Corporation, on behalf of the
Funds, or by the Custodian, on ninety (90) days notice, given in writing and
sent by registered mail to the Custodian at P. O. Box 2054, Milwaukee,
Wisconsin 53201, or to the Corporation at 100 Heritage Reserve, Menomonee Falls,
Wisconsin 53051, as the case may be. Upon any termination of this Agreement,
pending appointment of a successor to the Custodian or a vote of the
shareholders of the Corporation to dissolve or

6
<PAGE> 7

to function without a custodian of its cash, securities and other property,
the Custodian shall not deliver cash, securities or other property of
the Corporation to the Corporation, but may deliver them to a bank or trust
company of its own selection, that meets the requirements of the Investment
Company Act as a Custodian for the Corporation to be held under terms similar
to those of this Agreement, provided, however, that the Custodian shall not be
required to make any such delivery or payment until full payment shall have
been made by the Corporation of all liabilities constituting a charge on or
against the properties then held by the Custodian or on or against the
Custodian, and until full payment shall have been made to the Custodian of all
its fees, compensation, costs and expenses, subject to the provisions of
Section 10 of this Agreement.

This Agreement may not be assigned by the Custodian without the consent
of the Corporation, authorized or approved by a resolution of its Board of
Directors.

14. Deposits of Securities in Securities Depositories

No provision of this Agreement shall be deemed to prevent the use by
the Custodian of a central securities clearing agency or securities depository,
provided, however, that the Custodian and the central securities clearing
agency or securities depository meet all applicable federal and state laws and
regulations, including the requirements of the Investment Company Act, and the
Board of Directors of the Corporation approves by resolution the use of such
central securities clearing agency or securities depository.

15. Records

To the extent that the Custodian in any capacity prepares or maintains
any records required to be maintained and preserved by the Corporation pursuant
to the provisions of the Investment Company Act, the Custodian agrees to make
any such records available to the Corporation upon request and to preserve such
records for the periods prescribed in Rule 31a-2 under the Investment Company
Act.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.

Attest: Firstar Trust Company

____________________________________ ___________________________________
By: By:
Its: Its:

Attest: Strong <<Name>>, Inc.

____________________________________ ___________________________________
By: Ann E. Oglanian By: Lawrence A. Totsky
Its: Secretary Its: Vice President

7
<PAGE> 8

SCHEDULE A

The Fund(s) of the Corporation currently subject to this Agreement are as
follows:

Fund(s) Date of Addition
------- to this Agreement
-----------------
<<SERIES>> <<AGT DATE>>

Attest: Firstar Trust Company

______________________ ______________________________
By: By:
Its: Its:

Attest: Strong <<NAME>>, Inc.

_______________________ ______________________________
By: Ann E. Oglanian By: Lawrence A. Totsky
Its: Secretary Its: Vice President
<PAGE> 9

SCHEDULE B

FIRSTAR TRUST COMPANY
MUTUAL FUND SERVICES

MUTUAL FUND CUSTODIAL AGENT SERVICE
ANNUAL FEE SCHEDULE FOR THE
STRONG MUTUAL FUNDS

EFFECTIVE JULY 1, 1993

Annual fee on the aggregate market value of all Strong Mutual Funds

$0.10 per $1,000 (one basis point) on the first $2 billion

$0.08 per $1,000 (.8 basis point) on the balance

Aggregate fee shall be apportioned among the funds(1) based upon
market value.

Investment transactions; (purchase, sale, exchange, tender,
redemption, maturity, receipt, delivery)

$ 9.00 per Depository Trust Company or Federal Reserve System
trade, automated and non-automated

$25.00 per definitive security (physical)

$ 8.50 per commercial paper trade

$50.00 per Euroclear

$ 6.00 per principal reduction on pass-through certificates

$35.00 per option/futures contract

$ 7.50 per variation margin transaction

$ 7.50 per Fed wire deposit or withdrawal

__________________________________
1 The term "fund" includes each series of a series company.

<PAGE> 1

EXHIBIT 99.B8.1

AGREEMENT BETWEEN

BROWN BROTHERS HARRIMAN & CO.

AND

FIRSTAR TRUST COMPANY

AND

THE STRONG FUNDS
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<S> <C>
1. Employment of Subcustodian 1

2. Powers and Duties of the Subcustodian
with respect to Property of the Funds
held by the Subcustodian 2

2.1 Safekeeping 2
2.2 Manner of Holding Securities 2
2.3 Registration 2
2.4 Purchases 3
2.5 Exchanges 4
2.6 Sales of Securities 5
2.7 Depositary Receipts 6
2.8 Exercise of Rights; Tender Offers 7
2.9 Stock Dividends, Rights, Etc. 7
2.10 Options 7
2.11 Borrowings 8
2.12 Demand Deposit Bank Accounts 9
2.13 Interest Bearing Call or Time Deposits 10
2.14 Futures Contracts 12
2.15 Foreign Exchange Transactions 13
2.16 Stock Loans 14
2.17 Collections 14
2.18 Dividends, Distributions and Redemptions 16
2.19 Proxies, Notices, Etc. 16
2.20 Nondiscretionary Details 17
2.21 Bills 17
2.22 Deposit of Fund Assets in Securities Systems 18
2.23 Other Transfers 20
2.24 Investment Limitations 21
2.25 Subcustodian Advances 21
2.26 Restricted Securities 22
2.27 Proper Instructions 24
2.28 Segregated Account 26
2.29 Opinion of Fund's Independent Certified
Public Accountants 27
2.30 Reports by Independent Certified Public Accountants 27
2.31 Proceeds from Shares Sold 27

3. Powers and Duties of the Subcustodian with
Respect to the Appointment of Secondary Subcustodians 28

4. Assistance by the Subcustodian as to Certain Matters 33

</TABLE>
<PAGE> 3

<TABLE>
<S> <C>
5. Powers and Duties of the Subcustodian with
Respect to its Role as Recordkeeping Agent 34

5.1 Records 34
5.2 Accounts 34
5.3 Access to Records 34

6. Standard of Care and Related Matters 35

6.1 Liability of the Subcustodian with
Respect to Proper Instructions;
Evidence of Authority; Etc. 35
6.2 Liability of the Subcustodian with
Respect to Use of Securities Systems
and Foreign Depositories 36
6.3 Liability of the Subcustodian with
respect to Secondary Subcustodians 37
6.4 Standard of Care; Liability;
Indemnification 38
6.5 Mitigation by Subcustodian 40
6.6 Expenses of the Custodian and the Funds 40
6.7 Liability for Past Records 41
6.8 Reimbursement of Disbursements, Etc. 41
6.9 Notice of Litigation; Right to Prosecute, Etc. 41
6.10 Security for Obligations to Subcustodian 42
6.11 Appointment of Agents 45
6.12 Powers of Attorney 45

7. Compensation of the Subcustodian 46

8. Termination; Successor Custodian/Subcustodian;
Additional Funds 46

9. Amendment; Waiver 48

10. Governing Law 48

11. Notices 48

12. Binding Effect 49

13. Severability 49

14. Counterparts 49

</TABLE>
<PAGE> 4

CUSTODIAN AGREEMENT

AGREEMENT made this 22nd day of December, 1993, between FIRSTAR TRUST
COMPANY (the "Custodian") and each of the Funds listed in Appendix B attached
hereto as said Exhibit may from time to time be revised (collectively, the
"Funds" individually, a "Fund") and Brown Brothers Harriman & Co, (the
"Subcustodian");
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment of Subcustodian: The Custodian and the Funds hereby
employ and appoint the Subcustodian as a subcustodian for the term and subject
to the provisions of this Agreement. The Subcustodian shall not be under any
duty or obligation to require a Fund to deliver to it any securities, funds or
other property owned by the Fund and shall have no responsibility or liability
for or on account of securities, funds or other property not so delivered. Each
Fund will deposit with the Subcustodian copies of its Declaration of Trust or
Certificate of Incorporation and By-Laws (or comparable documents) and all
amendments thereto, and copies of such votes and other proceedings of the
shareholders or Trustees or Directors of the Fund as may be necessary for or
convenient to the Subcustodian in the performance of its duties. The
Subcustodian shall maintain separate accounts and records for each of the Funds.

- 1 -
<PAGE> 5

2. Powers and Duties of the Subcustodian with respect to Property
of the Funds held by the Subcustodian: Except for securities, funds and other
property held by any Secondary Subcustodian appointed pursuant to the
provisions of Section 3 hereof or held by any Foreign Depository (as said term
is defined in Section 3) utilized by a Secondary Subcustodian, the Subcustodian
shall have and perform the following powers and duties with respect to
securities, funds and other property of the Funds:
2.1 Safekeeping - To keep safely the securities, funds and other
property of each Fund that have been delivered to the Subcustodian and, on
behalf of the Custodian and each Fund, from time to time to receive delivery of
securities and other property for safekeeping.
2.2 Manner of Holding Securities - To hold securities of each Fund
(1) by physical possession of the share certificates or other instruments
representing such securities in registered or bearer form, or (2) in book-entry
form by a Securities System (as said term is defined in Section 2.22) or a
Foreign Depository,
2.3 Registration - To hold registered securities of each Fund, with
or without any indication of fiduciary capacity, provided that securities are
held in an account of the Subcustodian containing only property of such Fund or
only property held as fiduciary or custodian for customers; provided that the
records of the Subcustodian shall indicate at all times the Funds or other
customers for which such securities and other

- 2 -
<PAGE> 6

property are held in such account and the respective interests therein.
2.4 Purchases - Upon receipt of proper instructions, as defined in
Section 2.27, insofar as funds are available for the purpose, to pay for and
receive securities purchased for the account of a Fund, payment being made only
upon receipt of the securities (1) by the Subcustodian, or (2) by a clearing
corporation of a national securities exchange of which the Subcustodian is a
member, or (3) by a Securities System or a Foreign Depository. However, (i) in
the case of repurchase agreements entered into by a Fund, the Subcustodian (as
well as an Agent) may release funds to a Securities System, a Foreign
Depository or a Secondary Subcustodian prior to the receipt of advice from the
Securities System, Foreign Depository or Secondary Subcustodian that the
securities underlying such repurchase agreement have been transferred by
book-entry into the Account (as defined in Section 2.22) of the Subcustodian
(or such Agent) maintained with such Securities System or to the Foreign
Depository or Secondary Subcustodian, so long as such payment instructions to
the Securities System, Foreign Depository or Secondary Subcustodian include a
requirement that delivery is only against payment for securities, (ii) in the
case of foreign exchange contracts, options, time deposits, call account
deposits, currency deposits, and other deposits, contracts or options pursuant
to Sections 2.10, 2.72, 2.13, 2.14 and 2.15, the Subcustodian may make payment
therefor without receiving an

- 3 -
<PAGE> 7

instrument evidencing said deposits, contracts or options so long as such
payment instructions detail specific deposits, contracts or options to be
acquired, and (iii) in the case of securities as to which payment for the
securities and receipt of the instrument evidencing the securities ordinarily
take place in different locations or through separate parties, the Subcustodian
may make payment for such securities prior to delivery thereof only if such
payment is in accordance with the terms of the instrument representing the
security or the generally accepted practice of Institutional Clients (as
hereinafter defined) in the country or countries in which the settlement occurs
or the terms of the instrument representing the security, but in all events
subject to the standard of care set forth in Section 6 hereof. "Institutional
Clients" shall mean major commercial banks, corporations, insurance companies,
or substantially similar institutions, which, as a substantial part of their
business operations, purchase or sell securities and make use of custodial
services.
2.5 Exchanges - Upon receipt of proper instructions, to exchange
securities held by it for the account of a Fund for other securities in
connection with any reorganization, recapitalization, split-up of shares,
change of par value, conversion or other event relating to the securities or
the issuer of such securities and to deposit any such securities in accordance
with the terms of any reorganization or protective plan. Without proper
instructions, the Subcustodian may

- 4 -
<PAGE> 8

surrender securities in temporary form for definitive securities, may surrender
securities for transfer into an account as permitted in Section 2.3, and may
surrender securities for a different number of certificates or instruments
representing the same number of shares or same principal amount of
indebtedness, provided the securities to be issued are to be delivered to the
Subcustodian.
2.6 Sales of Securities - Upon receipt of proper instructions, to
make delivery of securities which have been sold for the account of a Fund, but
only against payment therefor (1) in cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, or (2) by credit to the account of
the Subcustodian with a clearing corporation of a national securities exchange
of which the Subcustodian is a member, or (3) by credit to the account of the
Subcustodian or an Agent of the Subcustodian with a Securities System or a
Foreign Depository. Notwithstanding the foregoing: (i) in the case of delivery
of physical certificates or instruments representing securities, the
Subcustodian may make delivery to the broker buying the securities, against
receipt therefor, for examination in accordance with "street delivery" custom,
provided that the payment therefor is to be made to the Subcustodian (which
payment may be made by a broker's check) or that such securities are to be
returned to the Subcustodian, and (ii) in the case of securities referred to in
clause (iii) of Section 2.4, the Subcustodian may make settlement, including
with respect to the

- 5 -
<PAGE> 9

form of payment, in accordance with the terms of the instrument representing
the security or the generally accepted trade practice of Institutional Clients
in the country or countries in which the settlement occurs, but in all events
subject to the standard of care set forth in Section 6 hereof, provided that
the Subcustodian shall have taken all reasonable steps to ensure prompt
collection of the payment for, or return of, such securities by the broker or
its clearing agent and provided further that the Subcustodian shall not be
responsible for the selection of a broker or clearing agent that fails or is
unable to perform.
2.7 Depositary Receipts - Upon receipt of proper instructions, to
instruct a Secondary Subcustodian or an Agent to surrender securities to the
depositary used by an issuer of American Depositary Receipts or International
Depositary Receipts (hereinafter collectively referred to as "ADRs") for such
securities against a written receipt therefor adequately describing such
securities and written evidence satisfactory to the Secondary Subcustodians or
Agent that the depositary has acknowledged receipt of instructions to issue
with respect to such securities ADRs in the name of the Subcustodian, or a
nominee of the Subcustodian, for delivery to the Subcustodian in Boston,
Massachusetts, or at such other place as the Subcustodian may from time to time
designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately

- 6 -
<PAGE> 10

describing the ADRs surrendered and written evidence satisfactory to the
Subcustodian that the issuer of the ADRs has acknowledged receipt of
instructions to cause its depositary to deliver the securities underlying such
ADRs to a Secondary Subcustodian or an Agent.
2.8 Exercise of Rights; Tender Offers - Upon timely receipt of
proper instructions, to promptly deliver to the issuer or trustee thereof, or
to the agent of either, warrants, puts, calls, rights or similar securities for
the purpose of being exercised or sold, provided that the new securities and
cash, if any, acquired by such action are to be delivered to the Subcustodian,
and, upon receipt of proper instructions, to promptly deposit securities upon
invitations for tenders of securities, provided that the consideration is to be
paid or delivered or the tendered securities are to be returned to the
Subcustodian.
2.9 Stock Dividends, Rights, Etc. - To receive and collect all
stock dividends, rights and other items of like nature; and to deal
with the same pursuant to proper instructions relative thereto.
2.10 Options - Upon receipt of proper instructions or upon
receipt of instructions given pursuant to any agreement relating to an option
or as otherwise provided in any such agreement to (i) receive and retain, to
the extent provided to the Subcustodian, confirmations or other documents
evidencing the purchase, sale or writing of an option of any type on or in

- 7 -
<PAGE> 11
respect of a security, securities index or similar form of property by a Fund;
(ii) deposit and maintain in a segregated account, either physically or by
book-entry in a Securities System or Foreign Depository or with a broker,
dealer or other entity, securities, funds or other property in connection with
options transactions entered into by a Fund; (iii) transfer securities, funds
or other property to a Securities System, Foreign Depository, broker, dealer or
other entity, as margin (including variation margin) or other security for a
Fund's obligations in respect of any option; and (iv) pay, release and/or
transfer such securities, funds or other property in accordance with a notice
or other communication evidencing the expiration, termination or exercise of or
default under any such option furnished by The Options Clearing Corporation, by
the securities or options exchange on which such option is traded or by such
broker, dealer or other entity as may be responsible for handling such options
transaction or have authority to give such notice or communication. The
Subcustodian shall not be responsible for the sufficiency of property held in
any segregated account established in compliance with applicable margin
maintenance requirements or the performance of the other terms of any agreement
relating to an option. Notwithstanding the foregoing, options on futures
contracts and options to purchase and sell foreign currencies shall be governed
by Sections 2.14 and 2.15.
2.11 Borrowings - Upon receipt of proper instructions, to

- 8 -
<PAGE> 12

deliver securities of a Fund to lenders or their agents as collateral for
borrowings effected by the Fund, provided that such borrowed money is payable
by the lender to or upon the Subcustodian's order as Subcustodian for the Fund.
2.12 Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of each Fund, subject only to draft or order by the
Custodian or a Fund, and to hold in such account or accounts as a deposit
accepted on the Subcustodian's books cash, including foreign currency, received
for the account of such Fund other than cash held as deposits with Banking
Institutions in accordance with the following paragraph. The responsibilities
of the Subcustodian for cash, including foreign currency, of a Fund accepted on
the Subcustodian's books as a deposit shall be that of a U. S. bank for a
similar deposit.
If and when authorized by proper instructions, the Subcustodian may open
and operate an additional account(s) in such other banks or trust companies as
may be designated by the Custodian or a Fund in such instructions (any such
bank or trust company so designated by the Custodian and a Fund being referred
to hereafter as a "Banking Institution"), and may deposit cash, including
foreign currency, of such Fund in such account or accounts, provided that such
account(s) (hereinafter collectively referred to as "demand deposit bank
accounts") shall be in the name of the Subcustodian or a nominee of the
Subcustodian for the account of such Fund or for the account of the
Subcustodian's customers generally and shall be subject only to the

- 9 -
<PAGE> 13
Subcustodian's draft or order; provided that any such demand deposit bank
account shall contain only property held by the Subcustodian as a fiduciary or
custodian for the Fund and/or other customers and that the records of the
Subcustodian shall indicate at all times such Fund and/or other customers for
which such funds are held in such account and the respective interests therein.
Such demand deposit accounts may be opened with Banking Institutions in the
United States and in other countries and may be denominated in either U. S.
Dollars or other currencies as the Custodian or a Fund may determine. The
records for each such account will be maintained by the Subcustodian but the
deposits in any such account shall not constitute a deposit liability of the
Subcustodian. All such deposits, including with Secondary Subcustodians, shall
be deemed to be portfolio securities of a Fund and accordingly the
responsibility of the Subcustodian therefor shall be the same as and no greater
than the Subcustodian's responsibility in respect of other portfolio securities
of the Fund. The authorization by Custodian or a Fund to appoint a Secondary
Subcustodian as such shall also constitute a proper instruction to open a
demand deposit bank account subject to the provisions of this paragraph with
such Secondary Subcustodian.
2.13 Interest Bearing Call or Time Deposits - To place interest
bearing fixed term and call deposits with such banks and in such amounts as the
Custodian or a Fund may authorize pursuant to proper instructions. Such
deposits may be placed with the

- 10 -
<PAGE> 14
Subcustodian or with Secondary Subcustodians or other Banking Institutions as
the Custodian or a Fund may determine, in the name of the Subcustodian or a
nominee of the Subcustodian for the account of the Fund or the account of the
Subcustodian's customers generally and subject only to the Subcustodian's draft
or order; provided that any such deposit shall be held in an account containing
only property held by the Subcustodian as a fiduciary or custodian for the Fund
and/or other customers and that the records of the Subcustodian shall indicate
at all times such Fund and/or other customers for which such funds are held in
such account and the respective interests therein. Deposits may be denominated
in U. S. Dollars or other currencies and need not be evidenced by the issuance
or delivery of a certificate to the Subcustodian, provided that the
Subcustodian shall include in its records with respect to the assets of a Fund
appropriate notation as to the amount and currency of each such deposit, the
accepting Banking Institution and other appropriate details, and shall retain
such forms of advice or receipt evidencing the deposit, if any, as may be
forwarded to the Subcustodian by the Banking Institution. Funds, other than
those accepted on the Subcustodian's books as a deposit, but including those
placed with Secondary Subcustodians, shall be deemed portfolio securities of a
Fund and the responsibilities of the Subcustodian therefor shall be the same as
those for demand deposit bank accounts placed with other banks, as described in
the second paragraph of Section 2.12 of this Agreement. The responsibility

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<PAGE> 15
of the Subcustodian for funds accepted on the Subcustodian's books as a deposit
shall be that of a U. S. bank for a similar deposit.
2.14 Futures Contracts - Upon receipt of proper instructions or upon
receipt of instructions given pursuant to any agreement relating to a futures
contract or an option thereon or as otherwise provided in any such agreement,
to (i) receive and retain, to the extent provided to the Subcustodian,
confirmations or other documents evidencing the purchase or sale of a futures
contract or an option on a futures contract by a Fund; (ii) deposit and
maintain in a segregated account, either physically or by book-entry in a
Securities System or Foreign Depository, for the benefit of any futures
commission merchant, or pay to such futures commission merchant, securities,
cash or other property designated by the Custodian or a Fund as initial,
maintenance or variation "margin" deposits intended to secure the Fund's
performance of its obligations under any futures contract purchased or sold or
any option on a futures contract written, purchased or sold by the Fund, in
accordance with the provisions of any agreement relating thereto or the rules
of the Commodity Futures Trading Commission and/or any contract market or any
similar organization on which such contract or option is traded; and (iii) pay,
release and/or transfer securities, cash or other property into or out of such
margin accounts only in accordance with any such agreement or rules. The
Subcustodian shall not be responsible for the sufficiency of property held in
any

- 12 -
<PAGE> 16

segregated account established in compliance with applicable margin maintenance
requirements or the performance of the other terms of any agreement relating to
a futures contract or an option thereon.
2.15 Foreign Exchange Transactions - Pursuant to proper instructions,
to settle foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and for the account of a Fund
with such currency brokers or Banking Institutions, including Secondary
Subcustodians, as the Custodian or the Fund may direct pursuant to proper
instructions. The Subcustodian shall be responsible for the transmission of
cash and instructions to and from the currency broker or Banking Institution
with which the contract or option is made, the safekeeping of all certificates
and other documents and agreements evidencing or relating to such foreign
exchange transactions as the Subcustodian may receive and the maintenance of
proper records as set forth in Section 5.1. In connection with such
transactions, the Subcustodian is authorized to make free outgoing payments of
cash in the form of U. S. Dollars or foreign currency without receiving
confirmation of a foreign exchange contract or option or confirmation that the
countervalue currency completing the foreign exchange contract has been
delivered or received or that the option has been delivered or received. Each
Fund accepts full responsibility for its use of third-party foreign exchange
dealers and for execution of said foreign exchange contracts and options and
understands

- 13 -
<PAGE> 17
that the Fund shall be responsible for any and all costs and interest charges
which may be incurred by the Fund or the Subcustodian as a result of the
failure or delay of third parties to deliver foreign exchange.
Alternatively, such transactions may be undertaken by the Subcustodian
as principal, if instructed by a Fund.
Foreign exchange contracts and options, other than those executed with
the Subcustodian as principal, but including those executed with Secondary
Subcustodians, shall be deemed to be portfolio securities of a Fund and the
responsibility of the Subcustodian therefor shall be the same as and no greater
than the Subcustodian's responsibility in respect of other portfolio securities
of the Fund. The responsibility of the Subcustodian with respect to foreign
exchange contracts and options executed with the Subcustodian as principal
shall be that of a U. S. bank with respect to a similar contract or option.
2.16 Stock Loans - Upon receipt of proper instructions, to deliver
securities of a Fund, in connection with loans of securities by the Fund, to
the borrower thereof prior to receipt of the collateral, if any, for such
borrowing, provided that for stock loans secured by cash collateral the
Subcustodian's instructions to any Securities System holding such securities
require that the Securities System may deliver the securities to the borrower
thereof only upon receipt of the collateral for such borrowing.
2.17 Collections - (i) To collect and receive all income,

- 14 -
<PAGE> 18

payments of principal and other payments with respect to the securities held
hereunder, and in connection therewith to deliver the certificates or other
instruments representing the securities to the issuer thereof or its agent when
securities are called, redeemed, retired or otherwise become payable; provided,
that the payment is to be made in such form and manner and at such time, which
may be after delivery by the Subcustodian of the instrument representing the
security, as is in accordance with the terms of the instrument representing the
security, or such proper instructions as the Subcustodian may receive, or
governmental regulations, the rules of Securities Systems, Foreign Depositories
or other U.S. or foreign securities depositories and clearing agencies or, with
respect to securities referred to in clause (iii) of Section 2.4, in accordance
with the terms of the instrument representing the security or the generally
accepted practice of Institutional Clients in the country or countries in which
the settlement occurs, but in all events subject to the standard of care set
forth in Section 6 hereof, provided that the Subcustodian shall have taken all
reasonable steps to ensure prompt collection of the payment for, or return of,
such securities by the broker or its clearing agent and provided further that
the Subcustodian shall not be responsible for the selection of a broker or
clearing agent that fails or is unable to perform; (ii) to execute ownership
and other certificates and affidavits for all federal and state tax purposes in
connection with receipt of income, principal or other payments with respect

- 15 -
<PAGE> 19
to securities of a Fund or in connection with transfer of securities; and (iii)
pursuant to proper instructions to take such other actions with respect to
collection or receipt of funds or transfer of securities which involve an
investment decision.
2.18 Dividends, Distributions and Redemptions - Upon receipt of
proper instructions from the Custodian or a Fund, or upon receipt of
instructions from the Fund's shareholder servicing agent or agent with
comparable duties (the "Shareholder Servicing Agent") (given by such person or
persons and in such manner on behalf of the Shareholder Servicing Agent as the
Custodian or the Fund shall have authorized), the Subcustodian shall release
securities, funds or other property to the Shareholder Servicing Agent or other
wise apply securities, funds or other property, insofar as available, for the
payment of dividends or other distributions to Fund shareholders. Upon receipt
of proper instructions from the Custodian or the Fund, or upon receipt of
instructions from the Shareholder Servicing Agent (given by such person or
persons and in such manner on behalf of the Shareholder Servicing Agent as the
Custodian or the Fund shall have authorized), the Subcustodian shall release
securities, funds or other property, insofar as available, to the Shareholder
Servicing Agent or as such Agent shall otherwise instruct for payment to Fund
shareholders who have delivered to such Agent a request for repurchase or
redemption of their shares of the Fund.
2.19 Proxies, Notices, Etc. - Promptly to deliver or mail

- 16 -
<PAGE> 20

to the Custodian or a Fund all forms of proxies and all notices of meetings and
any other notices or announcements affecting or relating to securities owned by
the Fund that are received by the Subcustodian, and upon receipt of proper
instructions, to promptly execute and deliver or cause its nominee to promptly
execute and deliver such proxies or other authorizations as may be required.
Neither the Subcustodian nor its nominee shall vote upon any of such securities
or execute any proxy to vote thereon or give any consent or take any other
action with respect thereto (except as otherwise herein provided) unless
ordered to do so by proper instructions.
2.20 Nondiscretionary Details - Without the necessity of express
authorization from the Custodian or a Fund, (1) to attend to all
nondiscretionary details in connection with the sale, exchange, substitution,
purchase, transfer or other dealings with securities, funds or other property
of the Fund held by the Subcustodian except as otherwise directed from time to
time by the Custodian or the Directors or Trustees of the Fund, and (2) to
make payments to itself or others for minor expenses of handling securities or
other similar items relating to the Subcustodian's duties under this Agreement,
provided that all such payments shall be accounted for to a Fund.
2.21 Bills - Upon receipt of proper instructions, to pay or cause to
be paid, insofar as funds are available for the purpose, bills, statements and
other obligations of a Fund (including but not limited to interest charges,
taxes, management

- 17 -
<PAGE> 21

fees, compensation to Fund officers and employees, and other operating expenses
of a Fund).
2.22 Deposit of Fund Property in Securities Systems - The
Subcustodian may deposit and/or maintain securities owned by a Fund in (i) The
Depository Trust Company, (ii) the Participants Trust Company, (iii) any
book-entry system as provided in Subpart O of Treasury Circular No. 300, 31 CFR
306, Subpart B of 31 CFR Part 350, or the book-entry regulations of federal
agencies substantially in the form of Subpart O, or (iv) any other domestic
clearing agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934 which acts as a securities
depository and whose use the Custodian or the Fund has previously approved in
writing (each of the foregoing being referred to in this Agreement as a
"Securities System"). Utilization of a Securities System shall be in
accordance with applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and subject to the following
provisions:
1) The Subcustodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Subcustodian (provided
that any such agent shall be qualified to act as a custodian of a Fund pursuant
to the Investment Company Act of 1940 and the rules and regulations
thereunder), in a Securities System provided that such securities are
represented in an account ("Account") of the Subcustodian or such Agent in the
Securities System which shall not include any

- 18 -
<PAGE> 22

assets of the Subcustodian or Agent other than property held as a fiduciary,
custodian, or otherwise for customers;
2) The records of the Subcustodian with respect to securities of a Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Subcustodian shall pay for securities purchased for the account
of a Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the making of an
entry on the records of the Subcustodian to reflect such payment and transfer
for the account of the Fund. The Subcustodian shall transfer securities sold
for the account of a Fund upon (i) receipt of advice from the Securities System
that payment for such securities has been transferred to the Account, and (ii)
the making of an entry on the records of the Subcustodian to reflect such
transfer and payment for the account of the Fund. Copies of all advices from
the Securities System of transfers of securities for the account of a Fund
shall identify the Fund, be maintained for a Fund by the Subcustodian or an
Agent as referred to above, and be provided to the Custodian or the Fund at its
request. The Subcustodian shall furnish the Custodian or a Fund confirmation
of each transfer to or from the account of the Fund in the form of a written
advice or notice and shall furnish to the Custodian or the Fund copies of daily
transaction sheets reflecting each day's transactions in the Securities System
for the account of the Custodian or the Fund on the next business day;

- 19 -
<PAGE> 23

4) The Subcustodian shall provide the Custodian or a Fund with any
report obtained by the Subcustodian or any Agent as referred to above on the
Securities System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the Securities System; and
the Subcustodian and such Agents shall send to the Custodian or the Fund such
reports on their own systems of internal accounting control as the Custodian or
the Fund may reasonably request from time to time; and
5) At the written request of the Custodian or the Fund, the Subcustodian
will terminate the use of any such Securities System on behalf of the Fund as
promptly as practicable.

2.23 Other Transfers - Upon receipt of proper instructions, to deliver
securities, funds and other property of a Fund to a Secondary Subcustodian or
another custodian for the Fund as necessary to effect transactions authorized
by proper instructions and upon receipt of proper instructions, to deliver
securities, funds and other property of a Fund to a Secondary Subcustodian or
another custodian of the Fund; and, upon receipt of proper instructions, to
make such other disposition of securities, funds or other property of a Fund in
a manner other than or for purposes other than as enumerated elsewhere in this
Agreement, provided that the instructions relating to such disposition shall
state the amount of securities to be delivered and the name of the person or
persons to whom delivery is to be made.

- 20 -
<PAGE> 24

2.24 Investment Limitations - In performing its duties generally, and
more particularly in connection with the purchase, sale and exchange of
securities made by or for a Fund, the Subcustodian may assume unless and until
notified in writing to the contrary that proper instructions received by it are
not in conflict with or in any way contrary to any provisions of the Fund's
Declaration of Trust or Certificate of Incorporation or By-Laws (or comparable
documents) or votes or proceedings of the shareholders or Trustees or Directors
of the Fund. The Subcustodian shall in no event be liable to the Custodian or
any Fund and shall be indemnified by the Custodian and the Fund for any
violation which occurs in the course of carrying out instructions given by the
Custodian or the Fund of any investment limitations to which the Fund is
subject or other limitations with respect to the Fund's powers to make
expenditures, encumber securities, borrow or take similar actions affecting the
Fund.
2.25 Subcustodian Advances - In the event that the Subcustodian is
directed by proper instructions to make any payment or transfer of funds on
behalf of a Fund for which there would be, at the close of business on the date
of such payment or transfer, insufficient funds held by the Subcustodian on
behalf of the Fund, the Subcustodian may, in its discretion without further
proper instructions, provide an advance ("Advance") to the Fund in an amount
sufficient to allow the completion of the transaction by reason of which such
payment or transfer of funds is to be made. In addition, in the event the
Subcustodian is

- 21 -
<PAGE> 25

directed by proper instructions to make any payment or transfer of funds on
behalf of a Fund as to which it is subsequently determined that the Fund has
overdrawn its cash account with the Subcustodian as of the close of business on
the date of such payment or transfer, said overdraft shall constitute an
Advance. Any Advance shall be payable by the Fund or the Custodian on demand by
Subcustodian, unless otherwise agreed by the Custodian or the Fund and the
Subcustodian, and shall accrue interest from the date of the Advance to the
date of payment by the Fund or the Custodian at a rate agreed upon in writing
from time to time by the Subcustodian and the Custodian or the Fund. It is
understood that any transaction in respect of which the Subcustodian shall have
made an Advance, including but not limited to a foreign exchange contract or
transaction in respect of which the Subcustodian is not acting as a principal,
is for the account of and at the risk of a Fund, and not, by reason of such
Advance, deemed to be a transaction undertaken by the Subcustodian for its own
account and risk. The Subcustodian and each Fund acknowledge that the purpose
of Advances is to finance temporarily the purchase or sale of securities for
prompt delivery in accordance with the settlement terms of such transactions or
to meet emergency expenses not reasonably foreseeable by the Fund. The
Subcustodian shall promptly notify a Fund of any Advance. Such notification
shall be sent by facsimile transmission or in such other manner as such Fund
and the Subcustodian may agree.
2.26 Restricted Securities - In the case of a "restricted

- 22 -
<PAGE> 26
security", the Custodian or the Fund shall have the responsibility to provide
to or obtain for the Subcustodian, the issuer of the security or other
appropriate third party any necessary documentation, including without
limitation, legal opinions or consents, and to take any necessary actions
required in connection with the registration of restricted securities in the
manner provided in Section 2.3 upon acquisition thereof by the Fund or required
in connection with any sale or other disposition thereof by the Fund. Upon
acquisition and until so registered, the Subcustodian shall use its best
efforts to service such restricted securities (including, without limitation,
the receipt and collection of cash and stock dividends, rights and other items
of like nature); to exercise in a timely manner any right in respect of any
restricted security; and to take any action in a timely manner in respect of
any other type of corporate action relating to a restricted security. The
Subcustodian shall not have responsibility for the inability of a Fund to sell
or otherwise transfer in a timely manner any restricted security in the absence
of any such documentation or action to be provided, obtained or taken by the
Custodian or the Fund or for the Subcustodian's inability to take in a timely
manner any of the actions referred to in the preceeding sentence provided that
such inability of the Custodian or the Fund to sell or otherwise transfer
restricted securities pursuant to this Section 2.26 or the Subcustodian's
inability to take the aforesaid actions is not caused by the negligence,
misfeasance or

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<PAGE> 27

misconduct of the Subcustodian or its nominees. At such time as the
Subcustodian shall receive any restricted security, regardless of when it shall
be registered as aforesaid, the Custodian or the Fund shall also deliver to the
Subcustodian a term sheet summarizing those rights, restrictions or other
matters of which the Subcustodian should have knowledge, such as exercise
periods, expiration dates and payment dates, in order to assist the
Subcustodian in servicing such securities. As used herein, the term
"restricted security" shall mean a security which is subject to restrictions on
transfer, whether by reason of contractual restrictions or federal, state or
foreign securities or similar laws, or a security which has special rights or
contractual features which do not apply to publicly-traded shares of, or
comparable interests representing, such security.
2.27 Proper Instructions - Proper instructions shall mean a tested
telex or a swift message from the Custodian or a Fund or a written request,
direction, instruction or certification signed or initialled on behalf of the
Custodian or the Fund by two or more persons as the Custodian or the Board of
Trustees or Directors of the Fund shall have from time to time authorized,
provided, however, that no such instructions directing the delivery of
securities or the payment of funds to an authorized signatory of the Custodian
or the Fund shall be signed by such person. Those persons authorized to give
proper instructions may be identified by the Custodian or the Fund's Board of
Trustees or

- 24 -
<PAGE> 28
Directors by name, title or position and will include at least one officer
empowered by the Custodian or the Board to name other individuals who are
authorized to give proper instructions on behalf of the Custodian or the Fund.
Telephonic or other oral instructions or instructions given by facsimile
transmission may be given by any one of the above persons and will be
considered proper instructions if the Subcustodian reasonably believes them to
have been given by a person authorized to give such instructions with respect
to the transaction involved. Oral instructions will be confirmed by tested
telex or in writing in the manner set forth above but the lack of such
confirmation shall in no way affect any action taken by the Subcustodian in
reasonable reliance upon such oral instructions. The Custodian and each Fund
authorizes the Subcustodian to tape record any and all telephonic or other oral
instructions given to the Subcustodian by or on behalf of the Custodian or the
Fund (including any of their respective officers, Directors, Trustees,
employees or agents or any investment manager or adviser of the Fund or person
or entity with similar reponsibilities which is authorized to give proper
instructions on behalf of the Custodian or the Fund to the Subcustodian).
Proper instructions may relate to specific transactions or to types or classes
of transactions, and may be in the form of standing instructions.
Proper instructions may include communications effected directly between
electromechanical or electronic devices or systems, in addition to tested
telex, provided that the Custodian

- 25 -
<PAGE> 29

or the Fund and the Subcustodian agree to the use of such device or system.
2.28 Segregated Account - The Subcustodian shall upon receipt of
proper instructions establish and maintain on its books a segregated account or
accounts for and on behalf of each Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities maintained
by the Subcustodian pursuant to Section 2.22 hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Subcustodian and/or Custodian
and a broker-dealer registered under the Securities Exchange Act of 1934 and a
member of the National Association of Securities Dealers, Inc. (or any futures
commission merchant registered under the Commodity Exchange Act) relating to
compliance with the rules of the Options Clearing Corporation and of any
registered national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Fund, (ii) for purposes of segregating cash or securities
in connection with options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the Fund, (iii) for
the purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment

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<PAGE> 30

companies, or (iv) as mutually agreed from time to time between the Custodian
or the Fund and the Subcustodian.
2.29 Opinion of Fund's Independent Certified Public Accountants - The
Subcustodian shall take all reasonable action as a Fund may request to obtain
from year to year favorable opinions from the Fund's independent certified
public accountants with respect to the Subcustodian's activities hereunder in
connection with the preparation of the Fund's Securities and Exchange
Commission registration statement and all amendments thereto and the Fund's
Form N-SAR or other periodic reports to the Securities and Exchange Commission
and with respect to any other requirements of the Securities and Exchange
Commission.
2.30 Reports by Independent Certified Public Accountants - At the
request of a Fund, the Subcustodian shall deliver to the Fund a written report
prepared by the Subcustodian's independent certified public accountants with
respect to the services provided by the Subcustodian under this Agreement,
including, without limitation, the Subcustodian's accounting system, internal
accounting control and procedures for safeguarding cash, securities and other
property, including cash, securities and other property deposited and/or
maintained in a Securities System or with a Secondary Subcustodian. Such
report shall be sufficient scope and in sufficient detail as may reasonably be
required by a Fund and as may reasonably be obtained by the Subcustodian.
2.31 Proceeds from Shares Sold - The Subcustodian shall

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<PAGE> 31

receive funds representing cash payments received for Fund shares issued or
sold from time to time by a Fund, and shall promptly credit such funds to the
account of the applicable Fund. The Subcustodian shall promptly notify such
Fund of the Subcustodian's receipt of cash in payment for shares issued by the
Fund by facsimile transmission or in such other manner as the Fund and
Subcustodian may agree in writing. Upon receipt of proper instructions, the
Subcustodian shall: (a) deliver all federal funds received by the Subcustodian
in payment for Fund shares in payment for such investments and at the time
agreed upon by the Subcustodian and the relevant Fund; and (b) make federal
funds available to such Fund as of specified times agreed upon from time to
time by the Fund and the Subcustodian, in the amount of checks received in
payment for Fund shares that are deposited in the account of the Fund.
3. Powers and Duties of the Subcustodian with Respect to the
Appointment of Secondary Subcustodians: With regard to the selection of a
Secondary Subcustodian or Foreign Depository pursuant to this Section 3, the
Subcustodian may, at any time and from time to time; appoint, subject to
approval of the relevant Fund or Funds: (i) any bank, trust company or other
entity meeting the requirements of an "eligible foreign custodian" under
Section 17(f) of the Investment Company Act of 1940 and the rules and
regulations thereunder or by order of the Securities and Exchange Commission
exempted therefrom, or (ii) any bank as defined in Section 2(a)(5) of the
Investment Company Act of 1940

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<PAGE> 32

meeting the requirements of a custodian under Section 17(f) of the Investment
Company Act of 1940 and the rules and regulations thereunder. The Custodian
and each Fund hereby authorize and instruct the Subcustodian to hold
securities, funds and other property of the Fund which are maintained outside
the United States at subcustodians appointed pursuant to the provisions of this
Section 3 (a "Secondary Subcustodian"). The Custodian and each Fund shall
approve in writing (1) the appointment of each Secondary Subcustodian and the
subcustodian agreement to be entered into between such Secondary Subcustodian
and the Subcustodian, and (2) if the Secondary Subcustodians is organized under
the laws of a country other than the United States, the country or countries in
which the Secondary Subcustodians is authorized to hold securities, funds and
other property of the Fund. The Custodian and each Fund hereby further
authorize and instruct the Subcustodian and any Secondary Subcustodian to
utilize such securities depositories located outside the United States which
are approved in writing by the Custodian and the Fund to hold securities, funds
and other property of the Fund (a "Foreign Depository"). Upon such approval by
the Custodian and the Fund, the Subcustodian is authorized on behalf of the
Custodian and the Fund to notify each Secondary Subcustodian of its appointment
as such.
Those Secondary Subcustodians, and the countries where and the Foreign
Depositories through which they or the Subcustodian may hold securities, funds
and other property of a Fund which the

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<PAGE> 33

Custodian and each Fund has approved to date are set forth on Appendix A
hereto. The Custodian shall monitor the performance and financial condition of
the Subcustodians, Secondary Subcustodians and Foreign Depositories to the
extent practicable and shall promptly report to each Fund any material adverse
facts of which it becomes aware. Upon request of a Fund, the Custodian shall
deliver to the Fund a certificate stating: (i) the identity of each
Subcustodian or Secondary Subcustodian then acting on behalf of the Custodian,
as identified in Appendix A and as such Appendix may be amended from time to
time; (ii) the countries in which and the securities depositories and clearing
agents through which each such Subcustodian or Secondary Subcustodian is then
holding securities, funds and other property of the Fund; and (iii) such other
information as may be requested by the Fund and as the Custodian shall be
reasonably able to obtain to evidence compliance with Rule 17f-5 under the
Investment Company Act of 1940. Upon approval by a Fund in accordance with
this Section 3, Appendix A shall be amended from time to time as Secondary
Subcustodians, and/or countries and/or Foreign Depositories are changed, added
or deleted. The Custodian or the Fund shall be responsible for informing the
Subcustodian sufficiently in advance of a proposed investment which is to be
held in a country not listed on Appendix A, in order that there shall be
sufficient time for the Custodian and the Fund to give the approval required by
the preceding paragraph and for the Subcustodian to put the appropriate
arrangements in

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<PAGE> 34

place with such Secondary Subcustodian, including negotiation of a subcustodian
agreement and submission of such subcustodian agreement to the Custodian and
the Fund for approval.
If a Fund shall have invested in a security to be held in a country
before the foregoing procedures have been completed, such security shall be
held by such agent as the Subcustodian may appoint. In any event, the
Subcustodian shall be liable to the Custodian and the Fund for the actions of
such agent if and only to the extent the Subcustodian shall have recovered from
such agent for any damages caused the Custodian and/or the Fund by such agent.
At the request of the Custodian or a Fund, the Subcustodian agrees to remove
any securities held on behalf of the Fund by such agent, if practical, to an
approved Secondary Subcustodian. Under such circumstances the Subcustodian
will collect income and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Secondary Subcustodian,
either directly or indirectly (including by a Foreign Depository or foreign
clearing agency) or by a Foreign Depository or foreign clearing agency utilized
by the Subcustodian, notwithstanding any provision of this Agreement to the
contrary, payment for securities purchased and delivery of securities sold may
be made prior to receipt of the securities or payment, respectively, and
securities or payment may be received in a form, in accordance with
governmental regulations, rules of Foreign Depositories and foreign clearing
agencies, or generally accepted trade practice in the applicable local market.

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<PAGE> 35

In the event that any Secondary Subcustodian appointed pursuant to the
provisions of this Section 3 fails to perform any of its obligations under the
terms and conditions of the applicable subcustodian agreement, the Subcustodian
shall use its best efforts to cause such Secondary Subcustodian to perform such
obligations. In the event that the Subcustodian is unable to cause such
Secondary Subcustodian to perform fully its obligations thereunder, the
Subcustodian shall forthwith upon the Custodian or a Fund's request terminate
such Secondary Subcustodian as a Secondary Subcustodian for such Fund in
accordance with the termination provisions under the applicable subcustodian
agreement and, if necessary or desirable, appoint another subcustodian in
accordance with the provisions of this Section 3. At the election of the
Custodian or a Fund, it shall have the right to enforce, to the extent
permitted by the subcustodian agreement and applicable law, the Subcustodian's
rights against any such Secondary Subcustodian for loss, damage or expense
caused the Custodian or the Fund by such Secondary Subcustodian. The
Subcustodian agrees to cooperate with the Fund and or the Custodian, as the
case may be, and take all actions reasonably requested by the Fund or the
Custodian, at the Fund's expense, in connection with the enforcement of any
rights of the Subcustodian by the Fund or the Custodian.
The Subcustodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder in respect of a Fund except upon the
prior written approval of the Custodian and the Fund.

- 32 -
<PAGE> 36

The Subcustodian may, at any time in its discretion upon notification to
the Custodian and a Fund, terminate any Secondary Subcustodian of the Fund in
accordance with the termination provisions under the applicable secondary
subcustodian agreement, and at the written request of the Custodian or a Fund,
the Subcustodian will terminate any Secondary Subcustodian in respect of the
Fund in accordance with the termination provisions under the applicable
secondary subcustodian agreement.
If necessary or desirable, the Subcustodian may appoint another
subcustodian in respect of a Fund to replace a Secondary Subcustodian
terminated pursuant to the foregoing provisions of this Section 3, such
appointment to be made upon approval of the successor subcustodian by the
Custodian and the Fund's Board of Directors or Trustees in accordance with the
provisions of this Section 3.
In the event the Subcustodian receives a claim from a Secondary
Subcustodian under the indemnification provisions of any subcustodian agreement
in respect of a Fund, the Subcustodian shall promptly give written notice to
the Custodian and the Fund of such claim. No more than thirty days after
written notice to the Custodian and the Fund of the Subcustodian's intention to
make such payment, the Custodian or the Fund will reimburse the Subcustodian
the amount of such payment except in respect of any negligence or misconduct of
the Subcustodian.
4. Assistance by the Subcustodian as to Certain Matters: The
Subcustodian may assist generally in the preparation of

- 33 -
<PAGE> 37

reports to Fund shareholders and others, audits of accounts, and other
ministerial matters of like nature.
5. Powers and Duties of the Subcustodian with Respect to its Role
as Recordkeeping Agent: The Subcustodian shall have and perform the following
powers and duties with respect to recordkeeping:
5.1 Records - To create, maintain and retain such records relating
to its activities and obligations under this Agreement as are required under
the Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 31a-1 and 31a-2 thereunder) and under
applicable Federal and State tax laws. All such records will be the property
of the relevant Fund and in the event of termination of this Agreement shall be
delivered to the Fund or successor custodian.
5.2 Accounts - To keep books of account and render statements,
including interim monthly and complete quarterly financial statements, or
copies thereof, from time to time as reasonably requested by proper
instructions.
5.3 Access to Records - The books and records maintained by the
Subcustodian pursuant to Sections 5.1 and 5.2 shall at all times during the
Subcustodian's regular business hours be open to inspection and audit by
officers of, attorneys for and auditors employed by the Custodian or a Fund and
by employees and agents of the Securities and Exchange Commission, provided
that all such individuals shall observe all security requirements of the

- 34 -
<PAGE> 38

Subcustodian applicable to its own employees having access to similar records
within the Subcustodian and such regulations as may be reasonably imposed by
the Subcustodian.
6. Standard of Care and Related Matters:
6.1 Liability of the Subcustodian with Respect to Proper
Instructions; Evidence of Authority, Etc. The Subcustodian shall not be liable
for any action taken or omitted in reliance upon proper instructions reasonably
believed by it to be genuine or upon any other written notice, request,
direction, instruction, certificate or other instrument believed by it to be
genuine and signed by the proper party or parties.
The Secretary or Assistant Secretary of the Custodian and of each Fund
shall certify to the Subcustodian the names, signatures and scope of authority
of all persons authorized to give proper instructions or any other such notice,
request, direction, instruction, certificate or instrument on behalf of the
Custodian or the Fund, respectively, the names and signatures of the officers
of the Custodian or the Fund, respectively, the name and address of the
Shareholder Servicing Agent, and any resolutions, votes, instructions or
directions of the Custodian or the Fund's respective Board of Directors or
Trustees or shareholders. Such certificate may be accepted and relied upon by
the Subcustodian as conclusive evidence of the facts set forth therein and may
be considered in full force and effect until receipt of a similar certificate
to the contrary.
So long as and to the extent that it is in the exercise of

- 35 -
<PAGE> 39

reasonable care, the Subcustodian shall not be responsible for the title,
validity or genuineness of any property or evidence of title thereto received
by it or delivered by it pursuant to this Agreement.
The Subcustodian shall be entitled, at the expense of a Fund, to receive
and act upon advice of (i) counsel regularly retained by the Subcustodian in
respect of custodian matters, (ii) counsel for the Custodian or the Fund, or
(iii) such other counsel as the Custodian or the Fund and the Subcustodian may
agree upon, with respect to all matters, and the Subcustodian shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
6.2 Liability of the Subcustodian with Respect to Use of Securities
Systems and Foreign Depositories - With respect to the portfolio securities,
funds and other property of a Fund held by a Securities System or by a Foreign
Depository utilized by the Subcustodian or any Secondary Subcustodian, the
Subcustodian shall be liable to the Custodian or a Fund only for any loss,
damage or expense to the Custodian or the Fund resulting from use of the
Securities System or Foreign Depository if caused by any negligence,
misfeasance or misconduct of the Subcustodian or any of its Agents (as said
term is defined in Section 6.6) or of any of its or its Agents' employees or
from any failure of the Subcustodian or any such Agent to enforce effectively
such rights as it may have against the Securities System or Foreign Depository.
At the election of the Custodian or a Fund, it shall

- 36 -
<PAGE> 40

be entitled to be subrogated to the rights of the Subcustodian with respect to
any claim against the Securities System, Foreign Depository or any other person
which the Subcustodian may have as a consequence of any such loss, damage or
expense to the Custodian or the Fund if and to the extent that the Custodian or
the Fund has not been made whole for any such loss, damage or expense. The
Subcustodian agrees to cooperate with the Fund or the Custodian, as the case
may be, and take all actions reasonably requested by the Fund or the Custodian,
at the Fund's expense, in connection with the enforcement of any rights of the
Subcustodian by the Fund or the Custodian.
6.3 Liability of the Subcustodian with respect to Secondary
Subcustodians - The Subcustodian shall be liable to a Fund for the actions or
omissions of any Secondary Subcustodian to the same extent as if such actions
or omissions were performed by the Subcustodian itself in the country in which
the Secondary Subcustodian is operating under the terms of the secondary
subcustodian agreement; provided, however, that if there has been a final
adjudication of any term or provision thereof or of the governing law of such
agreement by a court of competent jurisdication, then such determination shall
govern the determination of the Subcustodian's liability under this Section
6.3. In the event of any loss, damage or expense suffered or incurred by a
Fund caused by or resulting from the actions or omissions of any Secondary
Subcustodian for which the Subcustodian would be liable pursuant to this
Section 6.3, the

- 37 -
<PAGE> 41

Subcustodian shall promptly reimburse the Fund in the amount of any such loss,
damage or expense.
The Subcustodian shall also be liable to a Fund for the Subcustodian's
own negligence in transmitting any instructions received by it from a Fund and
for the Subcustodian's own negligence in connection with the delivery of any
securities, funds or other property held by it to any Secondary Subcustodian.
6.4 Standard of Care; Liability; Indemnification - The Subcustodian
shall be held to the exercise of reasonable care and diligence in carrying out
the provisions of this Agreement, and shall be liable to the Custodian and the
relevant Fund for all loss, damage and expense suffered or incurred by the
Custodian or the Fund resulting from the failure of the Subcustodian to
exercise such reasonable care and diligence; provided that the Subcustodian
shall not thereby be required to take any action which is in contravention of
any applicable law, rule or regulation or any order or judgment of any court of
competent jurisdiction.
The Custodian and each Fund agree to indemnify and hold harmless the
Subcustodian and its nominees from all claims and liabilities (including
counsel fees) incurred or assessed against it or its nominees in connection
with the performance of this Agreement, except such as may arise from the
Subcustodian or its nominee's breach of the relevant standard of conduct set
forth in this Agreement. Notwithstanding the above, no Fund shall be liable to
indemnify the Subcustodian for any claims and liabilities other than those
arising from services provided to that particular Fund. Without limiting the

- 38 -
<PAGE> 42

foregoing indemnification obligation of the Custodian and each Fund, the
Custodian and each relevant Fund agree to indemnify the Subcustodian and any
nominee in whose name portfolio securities or other property of the Fund is
registered against any liability the Subcustodian or such nominee may incur by
reason of taxes assessed to the Subcustodian or such nominee or other costs,
liability or expense incurred by the Subcustodian or such nominee resulting
directly or indirectly from the fact that portfolio securities or other
property of the Fund is registered in the name of the Subcustodian or such
nominee.
In no event shall the Subcustodian incur liability under this Agreement
if the Subcustodian or any Secondary Subcustodian, Securities System, Foreign
Depository, Banking Institution or any agent or entity utilized by any of them
(each individually, a "Person") is prevented, forbidden or delayed from
performing, or omits to perform, any act or thing which this Ageement provides
shall be performed or omitted to be performed, by reason of (i) any Sovereign
Risk or (ii) any provision of any present or future law or regulation or order
of the United States of America or any state thereof, or of any foreign country
or political subdivision thereof, or of any securities depository or clearing
agency which operates a central system for handling of securities or equivalent
book-entries in a country or which operates a transnational system for the
central handling of securities or equivalent book-entries, or (iii) any
provision of any order or judgment of any court of competent jurisdiction. A
"Sovereign Risk" shall mean nationalization, expropriation, devaluation,
revaluation,

- 39 -
<PAGE> 43

confiscation, seizure, cancellation, destruction or similar action by any
governmental authority, de facto or de jure; or enactment, promulgation,
imposition or enforcement by any such governmental authority of currency
restrictions, exchange controls, taxes, levies or other charges affecting a
Fund's property; or acts of war, terrorism, insurrection or revolution; or any
other act or event beyond the Subcustodian's control.
6.5 Mitigation by Subcustodian - Upon the occurence of any event
that causes or may cause loss, damage or expense to the Custodian or a Fund,
(i) the Subcustodian or a Secondary Subcustodian shall and (ii) the
Subcustodian or a Secondary Subcustodian shall cause any applicable
Subcustodian or Secondary Subcustodian to use all commercially reasonable
efforts and take all reasonable steps under the circumstances to mitigate the
effects of such event and to avoid continuing harm to the Custodian or the
Fund.
6.6 Expenses of the Custodian and the Funds - In addition to the
liability of the Subcustodian or a Secondary Subcustodian under this Section 6,
the Subcustodian or a Secondary Subcustodian shall be liable to the Custodian
or the relevant Fund for all reasonable costs and expenses incurred by the
Custodian or the Fund in connection with any claim by the Custodian or the Fund
against the Subcustodian or a Secondary Subcustodian arising from the
obligations of the Subcustodian or Secondary Subcustodian hereunder including,
without limitation,

- 40 -
<PAGE> 44

all reasonable attorneys' fees and expenses incurred by the Custodian or the
Fund in asserting any such claim, and all expenses incurred by the Fund in
connection with any investigations, lawsuits or proceedings relating to such
claims; provided, that the Custodian or relevant Fund has recovered from the
Subcustodian or a Secondary Subcustodian for such claim.
6.7 Liability for Past Records - The Subcustodian shall have no
liability in respect of any loss, damage or expense suffered by a Fund, insofar
as such loss, damage or expense arises from the performance of the
Subcustodian's duties hereunder by reason of the Subcustodian's reasonable
reliance upon records that were maintained for the Fund by entities other than
the Subcustodian prior to the Subcustodian's employment hereunder.
6.8 Reimbursement of Disbursements, Etc. - The Subcustodian shall be
entitled to receive reimbursement from the Custodian or the relevant Fund on
demand, in the manner provided in Section 7, for its cash disbursements,
expenses and charges (including the fees and expenses of any Secondary
Subcustodian or any Agent) in connection with this Agreement, but excluding
salaries and usual overhead expenses.
6.9 Notice of Litigation; Right to Prosecute, Etc. - Neither the
Custodian nor the Fund shall be liable for indemnification under Section 6 of
this Agreement unless a Person shall have promptly notified the Custodian or
the relevant Fund in writing of the commencement of any litigation or
proceeding

- 41 -
<PAGE> 45

brought against such Person in respect of which indemnity may be sought under
Section 6. With respect to claims in such litigation or proceedings for which
indemnity by the Custodian or a Fund may be sought and subject to applicable
law and the ruling of any court of competent jurisdiction, the Custodian and
the Fund shall be entitled to participate in any such litigation or proceeding
and, after written notice from the Custodian or the Fund to any Person, the
Custodian or the relevant Fund may assume the defense of such litigation or
proceeding with counsel of its choice at its own expense in respect of that
portion of the litigation for which the Custodian or the Fund may be subject to
an indemnification obligation; provided, however, a Person shall be entitled to
participate in (but not control), at its own expense, the defense of any such
litigation or proceeding if the Custodian or the Fund has not acknowledged in
writing its obligation to indemnify the Person with respect to such litigation
or proceeding. If the Custodian or the Fund is not permitted to participate in
or control such litigation or proceeding under applicable law or by a ruling of
a court of competent jurisdiction, such Person shall reasonably prosecute such
litigation or proceeding.
6.10 Security for Obligations to Subcustodian - If the Subcustodian
or any nominee thereof shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of this
Agreement (collectively a "Liability"), except such as may arise from its

- 42 -
<PAGE> 46

or such nominee's breach of the relevant standard of conduct set forth in this
Agreement, or if the Subcustodian shall make any Advance to a Fund, then in
such event property equal in value to not more than 125% of such Advance and
accrued interest on the Advance or the anticipated amount of such Liability,
held at any time for the account of the Fund by the Subcustodian or a Secondary
Subcustodian may be held as security for such Liability or for such Advance and
accrued interest on the Advance. The Subcustodian shall designate the security
or securities constituting security for an Advance or Liability (the
"Designated Securities") by notice in writing to the Fund (which may be sent by
telefax or telex). In the event the value of the Designated Securities shall
decline to less than 110% of the amount of such Advance and accrued interest on
the Advance or the anticipated amount of such Liability, then the Subcustodian
may designate in the same manner an additional security for such obligation but
the aggregate value of the Designated Securities and Additional Securities
shall not be in excess of 125% of the amount of such Advance and the accrued
interest on the Advance or the anticipated amount of such Liability. At the
request of the Fund, the Subcustodian shall agree to substitution of a security
or securities which have a value equal to the value of the Designated or
Additional Securities which the Fund desires be released from their status as
security, and such release from status as security shall be effective upon the
Subcustodian and the Fund agreeing in writing as to the identity of the

- 43 -
<PAGE> 47

substituted security or securities, which shall thereupon become Designated
Securities.
Notwithstanding the above, the Subcustodian shall, at the request of a
Fund, immediately release from their status as security any or all of the
Designated Securities or Additional Securities upon the Subcustodian's receipt
from such Fund cash or cash equivalents in an amount equal to 100% of the value
of the Designated Securities or Additional Securities that the Fund desires to
be released from their status as security pursuant to this Section. The Fund
shall reimburse or indemnify the Subcustodian and shall pay any Advances upon
demand; provided, however, that the Subcustodian first notified the Custodian
or the Fund of such demand for repayment, reimbursement or indemnification.
If, upon notification, the Custodian or the Fund shall fail to pay such Advance
or interest when due or shall fail to reimburse or indemnify the Subcustodian
promptly in respect of a Liability, the Subcustodian shall be entitled to
dispose of the Designated Securities and Additional Securities to the extent
necessary to obtain repayment, reimbursement or indemnification. Interest,
dividends and other distributions paid or received on the Designated Securities
and Additional Securities, other than payments of principal or payments upon
retirement, redemption or repurchase, shall remain the property of the Fund,
and shall not be subject to this Section 6.10. To the extent that the
disposition of a Fund's property, designated as security for such Advance or
Liability, results in an amount

- 44 -
<PAGE> 48

less than necessary to obtain repayment, reimbursement or indemnification, the
Fund shall continue to be liable to the Subcustodian for the difference between
the proceeds of the disposition of the Fund's property, designated as security
for such Advance or Liability, and the amount of the repayment, reimbursement
or indemnification due to the Subcustodian.
6.11 Appointment of Agents - The Subcustodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank or
trust company as its agent (an "Agent") to carry out such of the provisions of
this Agreement as the Subcustodian may from time to time direct, provided,
however, that the appointment of such Agent (other than an Agent appointed
pursuant to the third paragraph of Section 3) shall not relieve the
Subcustodian of any of its responsibilities under this Agreement.
In the event of any loss, damage, or expense suffered or incurred by the
Custodian or a Fund caused by or resulting from the actions or omissions of any
Agent for which the Subcustodian would otherwise be liable, the Subcustodian
shall promptly reimburse the Custodian or the Fund, as the case may be, in the
amount of any such loss, damage or expense.
6.12 Powers of Attorney - Upon request, the Custodian or a Fund shall
deliver to the Subcustodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in connection with
the performance by the Subcustodian or any Secondary Subcustodian of their
respective

- 45 -
<PAGE> 49
obligations under this Agreement or any applicable subcustodian agreement.
7. Compensation of the Subcustodian: The Custodian or such Fund
shall pay the Subcustodian a custody fee based on such fee schedule as may from
time to time be agreed upon in writing by the Subcustodian, the Custodian and
each Fund. Such fee, together with all amounts for which the Subcustodian is
to be reimbursed in accordance with Section 6.4, shall be billed to the
Custodian or the Fund and be paid in cash to the Subcustodian.
8. Termination; Successor Custodian/Subcustodian; Additional Funds:
This Agreement shall continue in full force and effect until terminated as to
one or more of the Funds by the Custodian, the Subcustodian or such Fund or
Funds by an instrument in writing delivered or mailed, postage prepaid, to the
other parties, such termination to take effect not sooner than sixty (60) days
after the date of such delivery or mailing. In the event of termination, the
Subcustodian shall be entitled to receive prior to delivery of the securities,
funds and other property held by it all accrued fees and unreimbursed expenses
the payment of which is contemplated by Sections 6.4 and 7, and all Advances
and Liabilities, upon receipt by the Custodian or the relevant Fund or Funds of
a statement setting forth such fees, expenses, Advances and Liabilities.
In the event of the appointment of a successor custodian, the
Subcustodian shall take all reasonable steps to execute an agreement with the
successor custodian and a Fund or Funds on

- 46 -
<PAGE> 50

substantially the same terms as contained in this Agreement. The Subcustodian
agrees to cooperate with the Custodian, the successor custodian, and such Fund
or Funds in execution of documents and performance of other actions necessary
or desirable in order to substitute the successor custodian for the Custodian.
In the event of the appointment of a successor subcustodian, it is
agreed that the securities, funds and other property owned by a Fund or Funds
as to which this Agreement has been terminated and held by the Subcustodian or
any Secondary Subcustodian shall be delivered to the successor subcustodian,
unless the Subcustodian is otherwise instructed by the Custodian or the Fund or
Funds. The Subcustodian agrees to cooperate with the Custodian, the successor
custodian, and such Fund or Funds in execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
subcustodian for the Subcustodian under this Agreement.
An additional Fund or Funds may become a party to this Agreement after
the date hereof by an instrument in writing to such effect signed by such Fund
or Funds, the Custodian and the Subcustodian. If this Agreement is terminated
as to one or more of the Funds (but less than all of the Funds) of if an
additional Fund or Funds shall become a party to this Agreement, there shall be
delivered to the Subcustodian by the Custodian an amended Appendix B deleting
or adding such Fund or Funds, as the case may be. The termination of this
Agreement as to less than all of the Funds shall not affect the obligations of
the Custodian, the

- 47 -
<PAGE> 51

Subcustodian and the remaining Funds hereunder as set forth in Appendix B, as
revised from time to time.
9. Amendment; Waiver: This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof. No provision of this Agreement may be waived, amended or
terminated except by a statement in writing signed by the party or parties
against which enforcement of the waiver, amendment or termination is sought.
In connection with the operation of this Agreement, the Subcustodian,
the Custodian and one or more of the Funds may agree in writing from time to
time on such provisions interpretative of or in addition to the provisions of
this Agreement as may in their joint opinion be consistent with the general
tenor of this Agreement. No interpretative or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment of this
Agreement.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. Governing Law: This Agreement is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed according
to the laws of said Commonwealth.
11. Notices: Notices and other writings delivered or mailed
postage prepaid to a Fund addressed to the Fund at 100

- 48 -
<PAGE> 52

Heritage Reserve, Menomonee Falls, Wisconsin 53051 Attention: Helge Krist Lee,
or to such other address as the Fund may have designated to the Subcustodian
and the Custodian in writing, or to the Custodian at 615 East Michigan Street,
P. 0. Box 701, Milwaukee, Wisconsin 53201, Attention: J. Redwine, or to such
other address as the Custodian may have designated to the Funds and the
Subcustodian in writing or to the Subcustodian at 40 Water Street, Boston,
Massachusetts 02109, Attention: Manager, Securities Department, or to such
other address as the Subcustodian may have designated to the Custodian and the
Funds in writing, shall be deemed to have been properly delivered or given
hereunder to the respective addressee.
12. Binding Effect: This Agreement shall be binding on and shall
inure to the benefit of the Funds, the Custodian and the Subcustodian and their
respective successors and assigns, provided that no party hereto may assign
this Agreement or any of its rights or obligations hereunder without the prior
written consent of the other parties (except that assignment by a Fund shall
not require the consent of any other Funds).
13. Severability: If any provision of this Agreement shall be held
or made unenforceable by a court decision, statute, rule, regulation or
otherwise, the remaining provisions of this Agreement shall not be affected
thereby.
14. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more

- 49 -
<PAGE> 53

counterparts have been signed and delivered by each of the parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.

FIRSTAR TRUST COMPANY BROWN BROTHERS HARRIMAN & CO.

By _____________________ per pro ______________________
Title ____________________

FUNDS LISTED IN APPENDIX B

By ______________________
Title _____________________

- 50 -
<PAGE> 54

GLOBAL CUSTODY TRI-PARTY AGREEMENT

WITH FIRSTAR TRUST COMPANY

AND THE INDIVIDUAL STRONG FUNDS LISTED IN

APPENDIX B ATTACHED HERETO

DATE ______________________________

SPECIAL TERMS AND CONDITIONS RIDER

1. Multiple Accounts

Pursuant to Sections 1 and 8 of the Agreement, Brown Brothers Harriman & Co.
and Firstar Trust Company have established the Accounts set forth on Appendix B
to be separately accounted for under the terms of this Agreement. Appendix B
shall be updated from time to time by the Custodian to reflect any changes in
the Funds a party to the Agreement.

- 51 -
<PAGE> 55

BROWN BROTHERS HARRIMAN & CO. - GLOBAL CUSTODY NETWORK
THE STRONG FUNDS
APPENDIX A

<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN DEPOSITORY
- ------- ------------ ----------
<S> <C> <C>
KOREA CITIBANK N.A., SEOUL KSD
Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
Citibank, Seoul Agreement Supplement 3/7/94

MALAYSIA HONGKONG BANK MALAYSIA BERHAD MCD
Hongkong & Shanghai Banking Corp. Agt. 4/19/91 Bank Negara Malaysia
Omnibus Supplement 12/29/93
Malaysia Subsidiary Supplement 5/23/94

MEXICO CITIBANK MEXICO, S. A. Indeval
Citibank N.A., New York Agreement 7/16/81 Banco de Mexico
New York Agreement Amendment 8/31/90

MOROCCO BANQUE MAROCAINE DU COMMERCE EXTERIEUR None
BMCE Agreement 7/6/94

NETHERLANDS ABN-AMRO BANK NECIGEF
ABN-AMRO Agreement 12/19/88 De Nederlandsche Bank

NEW ZEALAND NATIONAL AUSTRALIA BANK LTD. Reserve Bank of
National Australia Bank Agreement 5/1/85 New Zealand
Agreement Amendment 2/13/92
Omnibus Amendment 11/22/93
New Zealand Addendum 3/7/89

NORWAY CHRISTIANIA BANK VPS
Christiania Bank Agreement 3/2/89

PAKISTAN STANDARD CHARTERED BANK, KARACHI None
Standard Chartered Bank Agreement 2/18/92

PERU CITIBANK N.A., LIMA CAVAL
Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90

PHILIPPINES CITIBANK N.A., MANILA None
Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90

2/24/95 PAGE 4 OF 6 RefStrong

</TABLE>
<PAGE> 56

BROWN BROTHERS HARRIMAN & CO. - GLOBAL CUSTODY NETWORK
THE STRONG FUNDS
APPENDIX A

<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN DEPOSITORY
- ------- ------------ ----------
<S> <C> <C>
POLAND CITIBANK (POLAND) S.A. CKDPW
Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
Citibank Subsidiary Amendment 8/7/92
Citibank, N.A./Citibank Poland S.A. Agt. 11/6/92

PORTUGAL BANCO ESPIRITO SANTO E COMERCIAL Interbolsa
DE LISBOA, S.A.
BESCL Agreement 4/26/89
Omnibus Amendment 2/23/94

SINGAPORE HONGKONG & SHANGHAI BANKING CORP. CDP
Hongkong & Shanghai Banking Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93

SOUTH AFRICA FIRST NATIONAL BANK OF SOUTHERN AFRICA CD
First National Bank of Southern Africa Agt. 8/7/91
FNBSA Depository Amendment Proposed

SPAIN BANCO SANTANDER SCLV
Banco Santander Agreement 12/14/88 Banco de Espana

SRI LANKA HONGKONG & SHANGHAI BANKING CORP. CDS
Hongkong & Shanghai Banking Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93

SWAZILAND BARCLAYS BANK PLC None
Barclays Bank Agreement 10/5/94

SWEDEN SKANDINAVISKA ENSKILDA BANKEN VPC
Skandinaviska Enskilda Banken Agreement 2/20/89
Omnibus Amendment 12/3/93

SWITZERLAND UNION BANK OF SWITZERLAND SEGA
Union Bank of Switzerland Agreement 12/20/88

TAIWAN STANDARD CHARTERED BANK, TAIPEI TSCD
Standard Chartered Bank Agreement 2/18/92

2/24/95 PAGE 5 OF 6 RefStrong

</TABLE>
<PAGE> 57

STRONG CAPITAL MANAGEMENT, INC.

DOMESTIC MUTUAL FUND

GLOBAL CUSTODY FEE SCHEDULE
July, 1995

Payable quarterly on the value of assets:

Foreign (excluding Euroclear)

.0015 per year on first $50 million
.0012 per year on next $50 million
.0010 per year on all over $100 million

Euroclear

.0012 per year on first $50 million
.0010 per year on next $50 million
.0008 per year on all over $100 million

Minimum: $45,000 (all domestic portfolios combined)

Transaction Charge: $35

Emerging markets will be negotiated at the time of investment

OUT-OF-POCKET EXPENSES

Out-of-pocket expenses including, but not limited to telex, legal,
telephone, postage and direct expenses including but not limited to customized
systems programming, registration and certificate fees would be additional.
Brokerage, stamp duty and Euroclear deposit and withdrawl charges are for the
account of the Fund.

This schedule includes all custody fees and transaction charges of
subcustodians. Emerging markets may require the use of a local administrative
agent. Administrative fees will be for the account of the Fund. Charges
associated with income collection, governmental stamp or other taxes will also
be for the account of the Fund.
<PAGE> 58

STRONG CAPITAL MANAGEMENT, INC.

DOMESTIC MUTUAL FUND

DOMESTIC CUSTODY FEE SCHEDULE
JULY, 1993

Payable quarterly on the value of assets:

Domestic Assets (Based on Entire Relationship)

.0001 per year on first $1 billion
.000075 per year on all over $1 billion

Transaction Charges:
DTC Eligible: $8
Non-DTC Eligible: $10
Domestic Wires: $10
Options and Futures Variation Margin: $10
Mortgage Backed Securities Paydowns: $8
Transaction charges on trades where BBH&Co. acts as broker will be
waived.

Brokerage Credit
Brokerage commissions executed through BBH&Co. will be available to
reduce custody and transaction charges on the basis of the offset formula of
2:1.

OUT-OF-POCKET EXPENSES
Out-of-pocket expenses including, but not limited to, telex, legal,
telephone and postage would be additional.

<PAGE> 1
EXHIBIT 99.B9

SHAREHOLDER SERVICING AGENT AGREEMENT

THIS AGREEMENT is made and entered into on this ___ day of _____, 1995,
between STRONG [ ], INC., a Wisconsin corporation (the
"Corporation"), on behalf of the Funds (as defined below) of the Corporation,
and STRONG CAPITAL MANAGEMENT, INC., a Wisconsin corporation ("Strong").

WITNESSETH

WHEREAS, the Corporation is an open-end management investment company
registered under the Investment Company Act of 1940;

WHEREAS, the Corporation is authorized to create separate series, each
with its own separate investment portfolio, and the beneficial interest in each
such series will be represented by a separate series of shares (each series is
hereinafter individually referred to as a "Fund" and collectively, the
"Funds");

WHEREAS, the Corporation is authorized to issue shares of its $._____
par value common stock (the "Shares") of each Fund; and

WHEREAS, the Corporation desires to retain Strong as the shareholder
servicing agent of the Shares of each Fund on whose behalf this Agreement has
been executed.

NOW, THEREFORE, the Corporation and Strong do mutually agree and
promise as follows:

1. Appointment. The Corporation hereby appoints Strong to act as
shareholder servicing agent of the Shares of each Fund listed on Schedule A
hereto, as such Schedule may be amended from time to time. Strong shall, at
its own expense, render the services and assume the obligations herein set
forth subject to being compensated therefor as herein provided.

2. Authority of Strong. Strong is hereby authorized by the
Corporation to receive all cash which may from time to time be delivered to it
by or for the account of the Funds; to issue confirmations and/or certificates
for Shares of the Funds upon receipt of payment; to redeem or repurchase on
behalf of the Funds Shares upon receipt of certificates properly endorsed or
properly executed written requests as described in the current prospectus of
each Fund and to act as dividend disbursing agent for the Funds.

3. Duties of Strong. Strong hereby agrees to:

A. Process new accounts.
<PAGE> 2

B. Process purchases, both initial and subsequent, of
Fund Shares in accordance with conditions set forth
in the prospectus of each Fund as mutually agreed by
the Corporation and Strong.

C. Transfer Fund Shares to an existing account or to a
new account upon receipt of required documentation
in good order.

D. Redeem uncertificated and/or certificated shares upon
receipt of required documentation in good order.

E. Issue and/or cancel certificates as instructed;
replace lost, stolen or destroyed certificates upon
receipt of satisfactory indemnification or bond.

F. Distribute dividends and/or capital gain
distributions. This includes disbursement as cash or
reinvestment and to change the disbursement option at
the request of shareholders.

G. Process exchanges between Funds (process and direct
purchase/redemption and initiate new account or
process to existing account).

H. Make miscellaneous changes to records.

I. Prepare and mail a confirmation to shareholders as
each transaction is recorded in a shareholder
account. Duplicate confirmations to be available on
request within current year.

J. Handle phone calls and correspondence in reply to
shareholder requests except those items set forth in
Referrals to Corporation, below.

K. Prepare Reports for the Funds:

i. Monthly analysis of transactions and accounts
by types.

ii. Quarterly state sales analysis; sales by
size; analysis of systematic withdrawals,
Keogh, IRA and 403(b)(7) plans; print-out of
shareholder balances.

L. Perform daily control and reconciliation of Fund
Shares with Strong's records and the Corporation's
office records.

M. Prepare address labels or confirmations for four
reports to shareholders per year.

2
<PAGE> 3

N. Mail and tabulate proxies for one Annual Meeting of
Shareholders, including preparation of certified
shareholder list and daily report to Corporation
management, if required.

O. Prepare and mail required Federal income taxation
information to shareholders to whom dividends or
distributions are paid, with a copy for the IRS and a
copy for the Corporation if required.

P. Provide readily obtainable data which may from time
to time be requested for audit purposes.

Q. Replace lost or destroyed checks.

R. Continuously maintain all records for active and
closed accounts.

S. Furnish shareholder data information for a current
calendar year in connection with IRA and Keogh Plans
in a format suitable for mailing to shareholders.

4. Referrals to Corporation. Strong hereby agrees to refer to the
Corporation for reply the following:

A. Requests for investment information, including
performance and outlook.

B. Requests for information about specific plans (i.e.,
IRA, Keogh, Systematic Withdrawal).

C. Requests for information about exchanges between
Funds.

D. Requests for historical Fund prices.

E. Requests for information about the value and timing
of dividend payments.

F. Questions regarding correspondence from the
Corporation and newspaper articles.

G. Any requests for information from non-shareholders.

H. Any other types of shareholder requests as the
Corporation may request from Strong in writing.

5. Compensation to Strong. Strong shall be compensated for its
services hereunder in accordance with the Shareholder Servicing Fee Schedule
(the "Fee Schedule") attached hereto as Schedule B and as such Fee Schedule may
from time to time be amended in writing between the two parties. The
Corporation will reimburse Strong for all out-of-pocket expenses, including,
but not

3
<PAGE> 4

necessarily limited to, postage, confirmation forms, etc. Special projects,
not included in the Fee Schedule and requested by proper instructions from the
Corporation with respect to the relevant Funds, shall be completed by Strong and
invoiced to the Corporation and the relevant Funds as mutually agreed upon.

6. Rights and Powers of Strong. Strong's rights and powers with
respect to acting for and on behalf of the Corporation, including rights and
powers of Strong's officers and directors, shall be as follows:

A. No order, direction, approval, contract or obligation
on behalf of the Corporation with or in any way affecting Strong shall
be deemed binding unless made in writing and signed on behalf of the
Corporation by an officer or officers of the Corporation who have been
duly authorized to so act on behalf of the Corporation by its Board of
Directors.

B. Directors, officers, agents and shareholders of the
Corporation are or may at any time or times be interested in Strong as
officers, directors, agents, shareholders, or otherwise.
Correspondingly, directors, officers, agents and shareholders of
Strong are or may at any time or times be interested in the
Corporation as directors, officers, agents, shareholders or otherwise.
Strong shall, if it so elects, also have the right to be a shareholder
of the Corporation.

C. The services of Strong to the Corporation are not to
be deemed exclusive and Strong shall be free to render similar services
to others as long as its services for others do not in any manner or
way hinder, preclude or prevent Strong from performing its duties and
obligations under this Agreement.

D. The Corporation will indemnify Strong and hold it
harmless from and against all costs, losses, and expenses which may be
incurred by it and all claims or liabilities which may be asserted or
assessed against it as a result of any action taken by it without
negligence and in good faith, and for any act, omission, delay or
refusal made by Strong in connection with this agency in reliance upon
or in accordance with any instruction or advice of any duly authorized
officer of the Corporation.

7. Effective Date. This Agreement shall become effective as of
the date hereof.

8. Termination of Agreement. This Agreement shall continue in
force and effect until terminated or amended to such an extent that a new
Agreement is deemed advisable by either party. Notwithstanding anything herein
to the contrary, this Agreement may be terminated at any time, without payment
of any penalty, by the Corporation or Strong upon ninety (90) days' written
notice to the other party.

9. Amendment. This Agreement may be amended by the mutual
written consent of the parties. If, at any time during the existence of this
Agreement, the Corporation deems it necessary or advisable in the best
interests of Corporation that any amendment of this Agreement be made in
order to

4
<PAGE> 5

comply with the recommendations or requirements of the Securities and Exchange
Commission or state regulatory agencies or other governmental authority, or to
obtain any advantage under state or federal laws, the Corporation shall notify
Strong of the form of amendment which it deems necessary or advisable and the
reasons therefor, and if Strong declines to assent to such amendment, the
Corporation may terminate this Agreement forthwith.

10. Notice. Any notice that is required to be given by the
parties to each other under the terms of this Agreement shall be in writing,
addressed and delivered, or mailed postpaid to the other party at the principal
place of business of such party.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed as of the day and year first stated above.

Attest: Strong Capital Management, Inc.

______________________________________ ___________________________________
Thomas P. Lemke, Senior Vice President John Dragisic, Vice Chairman

Attest: Strong [ ], Inc.

______________________________________ ___________________________________
Ann E. Oglanian, Secretary Lawrence A. Totsky, Vice President

5
<PAGE> 6

SCHEDULE A

The Fund(s) of the Corporation currently subject to this Agreement are as
follows:

Date of Addition
Fund(s) to this Agreement
------- -----------------

Strong [ ] Fund ___________, 1995

Attest: Strong Capital Management, Inc.

______________________________________ ____________________________________
Thomas P. Lemke, Senior Vice President John Dragisic, Vice Chairman

Attest: Strong [ ], Inc.

______________________________________ ____________________________________
Ann E. Oglanian, Secretary Lawrence A. Totsky, Vice President

6
<PAGE> 7

SCHEDULE B

SHAREHOLDER SERVICING FEE SCHEDULE

Until such time that this schedule is replaced or modified, Strong
[ ], Inc. (the "Corporation"), on behalf of each Fund set
forth on Schedule A to this Agreement, agrees to compensate Strong Capital
Management, Inc. ("Strong") for performing as shareholder servicing agent as
specified below per open Fund account, plus out-of-pocket expenses attributable
to the Corporation and the Fund(s).

Annual Rate per
Fund(s) Open Fund Account
------- -----------------

Strong [ ] Fund $_____

- - an equity fund $21.75

- - an income fund $31.50

- - a money market fund $32.50

Out-of-pocket expenses include, but are not limited to, the following:

1. All materials, paper and other costs associated with necessary
and ordinary shareholder correspondence.

2. Postage and printing of confirmations, statements, tax forms
and any other necessary shareholder correspondence. Printing
is to include the cost of printing account statements and
confirmations by third-party vendors as well as the cost of
printing the actual forms.

3. The cost of mailing (sorting, inserting, etc.) by third-party
vendors.

4. All banking charges of Corporation, including deposit slips and
stamps, checks and share drafts, wire fees not paid by
shareholders, and any other deposit account or checking
account fees.

5. The cost of storage media for Corporation records, including
phone recorder tapes, microfilm and microfiche, forms and
paper.

6. Offsite storage costs for older Corporation records.

7. Charges incurred in the delivery of Corporation materials and
mail.

8. Any costs for outside contractors used in providing necessary
and ordinary services to the Corporation, a Fund or
shareholders, not contemplated to be performed by Strong.

7
<PAGE> 8

9. Any costs associated with enhancing, correcting or developing
the record keeping system currently used by the Corporation,
including the development of new statement or tax form
formats.

For purposes of calculating Strong's compensation pursuant to this
Agreement, all subaccounts which hold shares in a Fund through 401(k) plans,
401(k) alliances, and financial institutions, such as insurance companies,
broker/dealers, and investment advisors shall be treated as direct open
accounts of the Fund upon approval of such arrangement by the Corporation's
Board of Directors. Out-of-pocket expenses will be charged to the applicable
Fund, except for those out-of-pocket expenses attributable to the Corporation
in general, which shall be charged pro rata to each Fund.

In addition, a Fund will pay a fee for closed accounts at an annual
rate of $4.20 per account. All fees will be billed to the Corporation monthly
based upon the number of open and closed accounts existing on the last day of
the month plus any out-of-pocket expenses paid by Strong during the month.
These fees are in addition to any fees the Corporation may pay Strong for
providing investment management services or for underwriting the sale of
Corporation shares.

Attest: Strong Capital Management, Inc.

______________________________________ ____________________________________
Thomas P. Lemke, Senior Vice President John Dragisic, Vice Chairman

Attest: Strong [ ],Inc.

______________________________________ ____________________________________
Ann E. Oglanian, Secretary Lawrence A. Totsky, Vice President

<PAGE> 1
EXHIBIT 99.B10

GODFREY & KAHN, S.C.
ATTORNEYS AT LAW
780 North Water Street
Milwaukee, Wisconsin 53202
Phone: (414)273-3500 Fax: (414) 273-5198

December 12, 1995

Strong Income Funds, Inc.
100 Heritage Reserve
Menomonee Falls, Wisconsin 53051

Re: Strong High-Yield Bond Fund

Gentlemen:

We have acted as your counsel in connection with the preparation of a
Registration Statement on Form N-1A (Registration Nos. 33-37435; 811-6195) (the
"Registration Statement") relating to the sale by you of an indefinite number
of shares (the "Shares") of common stock, $.00001 par value of Strong
High-Yield Bond Fund (the "Fund"), a series of Strong Income Funds, Inc. (the
"Company"), in the manner set forth in the Registration Statement (and the
Prospectus of the Fund included therein).

We have examined: (a) the Registration Statement (and the Prospectus
of the Fund included therein), (b) the Company's Articles of Incorporation and
By-Laws, each as amended to date, (c) certain resolutions of the Company's
Board of Directors, and (d) such other proceedings, documents and records as we
have deemed necessary to enable us to render this opinion.

Based upon the foregoing, we are of the opinion that the Shares, when
sold as contemplated in the Registration Statement, will be duly authorized and
validly issued, fully paid and nonassessable except to the extent provided in
Section 180.0622(2)(b) of the Wisconsin Statutes, or any successor provision,
which provides that shareholders of a corporation organized under Chapter 180
of the Wisconsin Statutes may be assessed up to the par value of their shares
to satisfy the obligations of such corporation to its employees for services
rendered, but not exceeding six months service in the case of any individual
employee; certain Wisconsin courts have interpreted "par value" to mean the
full amount paid by the purchaser of shares upon the issuance thereof.

We consent to the use of this opinion as an exhibit to the Registration
Statement. In giving this consent, however, we do not admit that we are
"experts" within the meaning of Section 11 of the Securities Act of 1933, as
amended, or within the category of persons whose consent is required by Section
7 of said Act.

Very truly yours,
/s/ Godfrey & Kahn, S.C.
GODFREY & KAHN, S.C.

<PAGE> 1
EXHIBIT 99.B11

[COOPERS & LYBRAND LETTERHEAD]

CONSENT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of
Strong Income Funds, Inc.

We consent to the incorporation by reference in Post-Effective Amendment No. 8
to the Registration Statement of Strong Income Funds, Inc. on Form N-1A of our
report dated February 1, 1995 on our audit of the financial statements and
financial highlights of Strong U.S. Treasury Money Fund (formerly known as
Strong U.S. Treasury Money Fund, Inc.), a series of Strong Income Funds, Inc.,
which report is included in the Annual Report to Shareholders for the year
ended December 31, 1994, which is also incorporated by reference in the
Registration Statement. We also consent to the reference to our Firm under the
caption "Independent Accountants" in the Statement of Additional Information.

COOPERS & LYBRAND L.L.P.

Milwaukee, Wisconsin
December 7, 1995

<PAGE> 1
EXHIBIT 99.B13

STRONG <<FUND>>, INC. -

STOCK SUBSCRIPTION AGREEMENT

To the Board of Directors of Strong <<FUND>>, Inc.:

The undersigned purchaser (the "Purchaser") hereby subscribes to
__________ shares (the "Shares") of common stock, _______ par value (the
"Common Stock"), of Strong <<FUND>>, Inc. - in consideration for which the
Purchaser agrees to transfer to you upon demand cash in the amount of
___________________________________.

It is understood that a certificate representing the Shares shall be
issued to the undersigned upon request at any time after receipt by you of
payment therefore, and said Shares shall be deemed fully paid and
nonassessable, except to the extent provided in Section 180.0622(2)(b) of the
Wisconsin Statutes, as interpreted by courts of competent jurisdiction, or any
successor provision to said Section 180.0622(2)(b).

The Purchaser agrees that the Shares are being purchased for
investment with no present intention of reselling or redeeming said Shares.

Dated and effective this _____ day of __________________, 199__.

Strong Capital Management, Inc.

By: _________________________
Lawrence A. Totsky
Senior Vice President

ACCEPTANCE

The foregoing subscription is hereby accepted. Dated and effective as
of this _____ day of ________________, 199__.

STRONG <<FUND>>, INC.

By: _________________________
John Dragisic
Vice Chairman

Attest: _____________________
Ann E. Oglanian
Secretary

<PAGE> 1
EXHIBIT 99.B14.1

STRONG FUNDS
PROTOTYPE DEFINED CONTRIBUTION
RETIREMENT PLAN

PROFIT SHARING PLAN AA - PLAN NO. 01-001
PENSION PLAN AA - PLAN NO. 01-002

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I INTRODUCTION................................................................................ 8

ARTICLE II DEFINITIONS................................................................................. 8

ARTICLE III PARTICIPATION
3.1 Participation at Effective Date............................................................ 10
3.2 Participation After Effective Date......................................................... 10
3.3 Reentry.................................................................................... 10
3.4 Participation by an Owner-Employee of More Than One Trade or Business...................... 10

ARTICLE IV CONTRIBUTIONS
4.1 Employer Profit Sharing Contributions...................................................... 11
4.2 Employer Pension Contributions............................................................. 11
4.3 Participant Voluntary Contributions........................................................ 12
4.4 Time for Making Contributions.............................................................. 12
4.5 Leased Employees........................................................................... 12
4.6 Rollovers and Transfers.................................................................... 12

ARTICLE V CASH OR DEFERRED ARRANGEMENT
(CODE SECTION 401(k))
5.1 Cash or Deferred Arrangement (Code Section 401(k))......................................... 12
5.2 Elective Deferrals......................................................................... 12
5.3 Matching Contributions..................................................................... 14
5.4 Qualified Matching Contributions and Qualified Non-Elective Contributions ................. 16
5.5 Special Distribution Rules................................................................. 16
5.6 Definitions................................................................................ 16

ARTICLE VI SECTION 415 LIMITATIONS
6.1 Employers Maintaining Only this Plan....................................................... 18
6.2 Employers Maintaining Other Master or Prototype Defined Contribution Plans................. 18
6.3 Employers Maintaining Other Defined Contribution Plans .................................... 19
6.4 Employers Maintaining Defined Benefit Plans................................................ 19
6.5 Definitions................................................................................ 19

ARTICLE VII PARTICIPANTS' ACCOUNTS
7.1 Separate Accounts.......................................................................... 20
7.2 Vesting.................................................................................... 20
7.3 Computation of Vesting Service............................................................. 20
7.4 Allocation of Forfeitures.................................................................. 21

ARTICLE VIII PAYMENT OF BENEFITS
8.1 Benefits Payable Under the Plan............................................................ 21
8.2 Manner of Distributions.................................................................... 21
8.3 Commencement of Payments................................................................... 23
8.4 Payment of Small Amounts................................................................... 25
8.5 Persons under Legal or Other Disability.................................................... 25
8.6 Withdrawals from Profit Sharing Plan....................................................... 25

ARTICLE IX ESTABLISHMENT OF CUSTODIAL ACCOUNT; INVESTMENTS
9.1 Custodial Account.......................................................................... 26
9.2 Receipt of Contributions................................................................... 26
9.3 Investment of Account Assets............................................................... 26
9.4 Exclusive Benefit.......................................................................... 26
9.5 Expenses................................................................................... 26
9.6 Voting..................................................................................... 26
9.7 Reports of the Custodian and Administrator................................................. 26
9.8 Limitation of Custodian's Duties and Liability............................................. 27

ARTICLE X AMENDMENT AND TERMINATION
10.1 Amendment.................................................................................. 27
10.2 Termination................................................................................ 28

ARTICLE XI FIDUCIARY RESPONSIBILITIES
11.1 Administrator.............................................................................. 28
11.2 Powers of Administrator.................................................................... 28
11.3 Records and Reports........................................................................ 28
11.4 Other Administrative Provisions............................................................ 28
11.5 Claims Procedure........................................................................... 28
11.6 Claims Review Procedure.................................................................... 28

ARTICLE XII AMENDMENT AND CONTINUATION OF ORIGINAL PLAN................................................. 28

ARTICLE XIII TOP-HEAVY PROVISIONS
13.1 Effect of Top-Heavy Status................................................................. 29
13.2 Additional Definitions..................................................................... 29
13.3 Minimum Allocations........................................................................ 30
13.4 Benefit Limit Change....................................................................... 30

ARTICLE XIV MISCELLANEOUS
14.1 Rights of Employees and Participants....................................................... 30
14.2 Merger with Other Plans.................................................................... 30
14.3 Non-Alienation of Benefits................................................................. 31
14.4 Failure to Qualify......................................................................... 31
14.5 Mistake of Fact: Disallowance of Deduction................................................. 31
14.6 Participation under Prototype Plan......................................................... 31
14.7 Gender..................................................................................... 31
14.8 Headings................................................................................... 31
14.9 Governing Law.............................................................................. 31

</TABLE>

7
<PAGE> 2
STRONG FUNDS
PROTOTYPE DEFINED CONTRIBUTION
RETIREMENT PLAN

ARTICLE I
INTRODUCTION
This Plan, which is made available by Strong/Cornelison Capital Management,
Inc. has been adopted by the Employer named in the Adoption Agreement(s) as a
qualified money purchase pension and/or profit sharing plan for its eligible
employees which is intended to qualify under Code Section 401(a). The Employer's
Plan shall consist of the following provisions, together with the Adoption
Agreement(s).

ARTICLE II
Definitions
2.1 ACCOUNT means the account or accounts maintained by the Custodian for a
Participant, as described in Article VII.

2.2 ADMINISTRATOR means the plan administrator and fiduciary of the Plan with
authority and responsibility to control and manage the operation and
administration of the Plan in accordance with its terms and to comply with the
reporting, disclosure and other requirements of ERISA. Unless a different
Administrator is appointed by the Employer, the Administrator shall be the
Employer.

2.3 BENEFICIARY means the person or persons designated by a Participant or
otherwise entitled to receive benefits in the event of the Participant's
death as provided herein. Such designation shall be made in writing and in such
form as may be required by the Administrator, and shall be filed with the
Administrator. Any designation may include contingent or successive
Beneficiaries. Where such designation has been properly made, distribution of
benefits shall be made directly to such Beneficiary or Beneficiaries. The
Beneficiary or Beneficiaries designated by a Participant may be changed or
withdrawn at any time from time to time, by the Participant, but only by filing
with the Administrator a new designation, and revoking all prior designations.
The most recent valid designation on file with the Administrator at the time of
the Participant's death shall be the Beneficiary. Notwithstanding the
foregoing, in the event the Participant is married at the time of his death,
the Beneficiary shall be the Participant's surviving spouse unless such spouse
consented in writing to the designation of an alternative Beneficiary after
notice of the spouse's rights and such consent was witnessed by a Plan
representative appointed by the Administrator or a notary public as provided in
Section 8.2(a) hereof. In the event no valid designation of Beneficiary is on
file with the Administrator at the date of death or no designated Beneficiary
survives him, the Participant's spouse shall be deemed the Beneficiary; in the
further event the Participant is unmarried or his spouse does not survive him,
the Participant's estate shall be deemed to be his Beneficiary.

2.4 BREAK IN SERVICE means a Plan Year in which a Participant fails to complete
at least five hundred one (501) Hours of Service. Breaks in Service and Years of
Service will be measured on the same vesting computation period.

2.5 CODE means the Internal Revenue Code of 1986, as interpreted by applicable
regulations and rulings issued pursuant thereto, all as amended and in effect
from time to time. Reference to a Code Section shall include that Section, and
any comparable section or sections of any future legislation that amends,
supplements or supersedes that Section.

2.6 COMPENSATION means the wages actually paid by the Employer to an Employee
for the taxable year ending with or within the Plan Year as defined in Code
Section 3121(a) for purposes of calculating social security (FICA) taxes
without regard to the dollar limitation of Code Section 312(a)(1), the special
rules in Code Section 3121(v) (applicable to certain elective contributions and
nonqualified deferred compensation), any rules that limit covered employment
based on the type or location of the Employer, and any rules that limit
remuneration included in wages based on familial relationship, or based on the
nature or location of the employment or the services performed (such as the
exceptions to the definition of employment in Code Section 3121 (b)(1) through
(20)), except as limited pursuant to item 5 of the Adoption Agreement. For any
Self-Employed Individual covered under the Plan. Compensation shall mean such
individual's Earned Income.

For Plan Years beginning after December 31, 1988, the maximum amount of
Compensation taken into account under the Plan for a Participant in any Plan
Year shall not exceed two hundred thousand dollars ($200,000) or such greater
amount as permitted by the Secretary of the Treasury, except that the dollar
increase in effect on January 1 of any calendar year is effective for years
beginning in such calendar year and the first adjustment to the $200,000
limitation is effective on January 1, 1990. If the Plan determines Compensation
on a period of time that contains fewer than 12 calendar months, then the
annual compensation limit is an amount equal to the annual compensation limit
for the calendar year in which the compensation period begins multiplied by the
ratio obtained by dividing the number of full months in the period by 12.

For purposes of this limitation, the family aggregation rules of Code Section
414(q)(6) shall apply, except that the term "family" shall include only the
spouse of the Participant and any lineal descendants of the Participant who
have not attained age nineteen (19) before the close of such year. If, as a
result of the application of such rules the adjusted two hundred thousand
dollars ($200,000) limitation is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration level if the Plan
provides for permitted disparity), the limitation shall be prorated among the
affected individuals in proportion to each such individual's Compensation as
determined under this Section prior to the application of this limitation. If
Compensation for any prior Plan Year is taken into account in determining an
Employee's contributions or benefits for the current year, the Compensation for
such prior year is subject to the applicable annual compensation limit in
effect for that prior year. For this purpose, for years beginning before
January 1, 1990, the applicable annual compensation limit is $200,000.

2.7 CUSTODIAL ACCOUNT means the account established by the Custodian, in
accordance with Article IX, in the name of the Employer or for each Participant
as elected in the Adoption Agreement.

2.8 CUSTODIAN means First Wisconsin Trust Company, or any successor thereto.

2.9 DISABILITY means a mental or physical condition of injury or sickness, as
determined by the Administrator based upon the report of a medical examiner
satisfactory to the Employer, which prevents a Participant from carrying out the
duties of his position and which is likely to be permanent. Any such
determination by the Administrator shall be made in a uniform and
nondiscriminatory manner.

2.10 EARNED INCOME means net earnings from self-employment in the trade or
business with respect to which the Plan is established for which the personal
services of the individual are a material income-producing factor. Net earnings
shall be determined without regard to items not included in gross income and
the deductions allocable to such items. Net earnings shall be reduced by
contributions by the Employer to a qualified plan to the extent deductible
under Code Section 404. Net earnings shall be determined with regard to the
deduction allowed to the Employer under Code Section 164(f) for taxable years
beginning after December 31, 1989.

2.11 EFFECTIVE DATE means the date as of which this Plan is initially effective
as indicated in item 3 of the Adoption Agreement.

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<PAGE> 3
2.12 ELECTIVE DEFERRALS means any Employer contributions made to the Plan at
the election of a participating Employee, in lieu of payment of an equal amount
to the participating Employee in cash as Compensation pursuant to Section 5.2
hereof, and shall include contributions made pursuant to a salary reduction
agreement or other deferral method. With respect to any taxable year, a
participating Employee's Elective Deferrals are the sum of all employer
contributions made on behalf of such Employee pursuant to an election to defer
under any qualified CODA as described in Code Section 401(k), any simplified
employee pension cash or deferred arrangement as described in Code Section
402(h)(1)(B), any eligible deferred compensation plan under Code Section 457,
any plan as described under Code Section 501(c)(18), and any employer
contributions made on the behalf of a participating Employee for the purchase
of an annuity contract under Code Section 403(b) pursuant to a salary reduction
agreement.

2.13 EMPLOYEE means an individual employed by the Employer (including any
eligible Self-Employed Individual) or any Related Employer adopting this Plan
except as excluded pursuant to item 4 of the Adoption Agreement. The term
Employee shall also include any individual who is a Leased Employee, unless
excluded pursuant to item 4 of the Adoption Agreement.

2.14 EMPLOYER means any entity adopting the Plan.

2.15 EMPLOYER PENSION CONTRIBUTIONS means the contributions made by the
Employer pursuant to Section 4.2 hereof if elected in item 6 of the Adoption
Agreement (Pension Plan.)

2.16 EMPLOYER PROFIT SHARING CONTRIBUTIONS means the contributions made by the
Employer pursuant to Section 4.1 hereof if elected in item 6 of the Adoption
Agreement (Profit Sharing Plan).

2.17 ERISA means the Employee Retirement Income Security Act of 1974, as
interpreted and applied under regulations and rulings issued pursuant thereto,
all as amended and in effect from time to time.

2.18 HOUR OF SERVICE means:
(a) Each hour for which an Employee is paid, or entitled to payment for the
performance of duties for the Employer. These hours shall be credited to
the Employee for the compensation period in which the duties are
performed; and

(b) Each hour for which an Employee is paid, or entitled to payment, by the
Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No
more than five hundred one (501) Hours of service shall be credited under
this paragraph for any single continuous period (whether or not such
period occurs in a single computation period). Hours of Service under
this paragraph shall be calculated and credited pursuant to Section 2530.
200b-2 of the Department of Labor and Regulations which are incorporated
herein by this reference; and

(c) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer. The same Hours of Service
shall not be credited both under subsection (a) or subsection (b), as
the case may be, and under this subsection (c). These hours shall be
credited to the Employee for the computation period or periods to which
the award or agreement pertains rather than the computation period in
which the award, agreement or payment is made.

(d) Solely for purposes of determining whether a Break in Service, as defined
in Section 2.4, for participation and vesting purposes has occurred in a
computation period, an individual who is absent from work for maternity
or paternity reasons shall receive credit for the Hours of Service which
would otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be determined, eight
(8) hours of service per normal workday of such absence. For purposes of
this paragraph, an absence from work for maternity or paternity reasons
means an absence:
(i) by reason of the pregnancy of the individual;

(ii) by reason of a birth of a child of the individual;

(iii) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual; or

(iv) for purposes of caring for such child for a period beginning
immediately following such birth or placement.

The Hours of Service credited under this Section 2.18 shall be credited
(i) in the computation period in which the absence begins if the crediting
is necessary to prevent a Break in Service in that period, or (ii) in all
other cases the following computation period.

(e) Hours of Service shall be determined on the basis of actual hours for
which an Employee is paid or entitled to payment unless a different
method of determining Hours of Service is selected in item 4(A) of the
Adoption Agreement.

(f) In the event the Employer maintains the plan of a predecessor employer,
service for such predecessor employer shall be treated as service for the
Employer. Hours of Service will be credited for employment with
members of an affiliated service group under Code Section 414(m), a
controlled group of corporations under Code Section 414(b), or a group
of trades or businesses under common control under Code Section 414(c) of
which the Employer is a member and any other entity required to be
aggregated with the Employer pursuant to Code Section 414(o) and the
Regulations thereunder. Hours of Service will also be credited for any
Leased Employee for purposes of this Plan under Code Sections 414(n) or
(o) and the Regulations thereunder, unless excluded under item 4 of the
Adoption Agreement.

2.19 INVESTMENT ADVISOR means Strong/Corneliuson Capital Management, Inc.

2.20 INVESTMENT COMPANY means Strong Investment Fund, Inc., Strong Total Return
Fund, Inc., Strong Income Fund, Inc., Strong Money Market Fund, Inc., and any
other regulated investment company(ies) designated by the Investment Advisor.

2.21 INVESTMENT COMPANY SHARES means the shares of each Investment Company.

2.22 LEASED EMPLOYEE means any individual who is considered a leased employee
within the meaning of Code Sections 414(n) or (o). For purposes of this
Section, a Leased Employee means any person who, pursuant to an agreement
between the Employer and any other person (which may include the Leased
Employee), has performed services for the Employer (or for the Employer and any
Related Employer) in a capacity other than as a common law employee on a
substantially full-time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business
field of the Employer. Notwithstanding the foregoing, no individual shall be
considered to be a Leased Employee if (a) such individual is covered by a money
purchase pension plan providing: (i) a non-integrated employer contribution
rate of at least ten percent (10%) of compensation, as defined in Code Section
415(c)(3), but including amounts contributed pursuant to a salary reduction
agreement which are excludable from the individual's gross income under Code
Sections 125, 402(a)(8), 402(h) or 403(b), (ii) immediate participation, and
(iii) full and immediate vesting and (b) Leased Employees do not constitute
more than twenty percent (20%) of the Employer's nonhighly compensated work
force. Contributions or benefits provided to a Leased Employee by the leasing
organization which are attributable to services performed for the Employer
shall be treated as provided by the Employer.

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<PAGE> 4
2.23 MATCHING CONTRIBUTION means an Employer contribution made to the Plan or
any other defined contribution plan on behalf of a participating Employee on
account of a participating Employee's Elective Deferrals pursuant to Section
5.3 hereof or on account of any employee contributions or elective deferrals
made to any other plan.

2.24 NET PROFITS means the current or accumulated earnings of the Employer
before federal and state taxes and contributions to this or any other
qualified plan.

2.25 NORMAL RETIREMENT AGE means age 65 or such other age as selected in item
11 of the Adoption Agreement (Profit Sharing Plan) and item 9 of the Adoption
Agreement (Pension Plan). If the Employer enforces a mandatory retirement age,
the Normal Retirement Age shall be the lesser of such mandatory retirement age
or the age specified in the Adoption Agreement.

2.26 ORIGINAL PLAN means any defined contribution plan which meets the
requirements of Code Section 401 and referred to in Article XII of the Plan.

2.27 OWNER-EMPLOYEE means an individual who is a sole proprietor, or who is a
partner owning more than ten percent (10%) of either the capital or profits
interest of the partnership.

2.28 PARTICIPANT means each Employee (including any eligible Self-Employed
Individual) who has completed the requirements for eligibility specified in
Section 3.1 hereof. Each such Employee shall become a Participant as of the
earlier of: (i) the first day of the Plan Year or (ii) the first day of the
seventh month of the Plan Year beginning after he completes such requirements.

2.29 PARTICIPANT VOLUNTARY CONTRIBUTIONS means contributions by a Participant
under the Plan pursuant to Section 4.3, if elected in item 9 of the Adoption
Agreement (Profit Sharing Plan) and item 8 of the Adoption Agreement (Pension
Plan).

2.30 PENSION PLAN means the feature of the Plan pursuant to which the Employer
makes Employer Pension Contributions. Such feature applies only to the extent
elected in item 6 of the Adoption Agreement (Pension Plan).

2.31 PLAN means this prototype profit sharing plan and/or money purchase
pension plan, together with the appropriate Adoption Agreement(s), as set forth
herein and as may be amended from time to time. As used herein, the term Plan
shall mean either or both the money purchase pension plan and the
profit-sharing plan depending on whether the Employer has adopted one or both
plans.

2.32 PLAN YEAR means the twelve (12) consecutive month period designated in
item 2 of the Adoption Agreement. The first Plan Year shall commence on the
Effective Date.

2.33 PROFIT SHARING PLAN means the feaures of the Plan pursuant to which all
contributions, other than Employer Pension Contributions, are made to the Plan,
including any contributions pursuant to the cash or deferred arrangement
(Section 401(k)) described in Article V hereof. Such features apply only to
the extent elected in items 6 and/or 8 of the Adoption Agreement (Profit Sharing
Plan).

2.34 RELATED EMPLOYER means an organization which, together with the Employer,
constitutes (i) a controlled group of corporations as defined in Code Section
414(b); (ii) trades or businesses under common control as defined in Code
Section 414(c); (iii) an affiliated service group as defined in Code Section
414(m); or (iv) a group of employers required to be aggregated under Code
Section 414(o).

2.35 SELF-EMPLOYED INDIVIDUAL means an individual who has Earned Income for
the taxable year from the trade or business for which the Plan was established
or who would have had Earned Income but for the fact that the trade or business
had no Net Profits for the taxable year.

2.36 VALUATION DATE means the last day of each Plan Year and such other times
as shall be determined by the Administrator.

2.37 YEAR OF EMPLOYMENT means the twelve (12) consecutive month period,
beginning on the date the Employee first performs an Hour of Service or any
anniversary thereof, in which the Employee completes at least one thousand
(1,000) Hours of Service or such lesser number of Hours of Service as
selected in item 4 of the Adoption Agreement.

2.38 YEAR OF SERVICE means a Plan Year in which the Employee completes at
least one thousand (1,000) Hours of Service or such lesser number of Hours of
Service as selected in item 7 of the Adoption Agreement.

ARTICLE III
PARTICIPATION
3.1 PARTICIPATION AT EFFECTIVE DATE Each Employee shall become a Participant
on the Effective Date, if on the Effective Date such Employee has completed the
number of Years of Employment and has attained age 21 or such lesser age as
elected in item 4 of the Adoption Agreement.

3.2 PARTICIPATION AFTER EFFECTIVE DATE Each Employee who did not become a
Participant as of the Effective Date, including future Employees, shall be
entitled to become a Participant in accordance with Section 2.28 after such
Employee has completed the number of Years of Employment and has attained age
21 or such lesser age as elected in item 4 of the Adoption Agreement.

3.3 REENTRY A former Participant shall become a Participant immediately upon
his return to employment with the Employer or his return to an eligible class
of Employees, whichever is applicable. In the event an Employee who is not a
member of the eligible class of Employees becomes a member of the eligible
class, such Employee will become a Participant in accordance with Section 3.2
above; provided that if the Employee has previously satisfied the eligibility
requirements of Section 3.2, the Employee shall become a Participant
immediately upon becoming a member of the eligible class of Employees.

3.4 PARTICIPATION BY AN OWNER-EMPLOYEE OF MORE THAN ONE TRADE OR BUSINESS
(a) If this Plan provides contributions or benefits for one or more Owner-
Employees who control both the business with respect to which this Plan is
established, and one or more other trades or businesses, this Plan and the
plan established with respect to such other trades or businesses must,
when looked at as a single plan, satisfy Code Sections 401(a) and (d) with
respect to the employees of this and all such other trades or businesses.

(b) If this Plan provides contributions or benefits for one or more Owner-
Employees who control one or more other trades or businesses, the
employees of each such other trade or business must be included in a plan
which satisfies Code Section 401(a) and (d) and which provides
contributions and benefits not less favorable than provided for such
Owner-Employees under this Plan.

(c) If an individual is covered as an Owner-Employee under the plans of two
or more trades or businesses which he does not control, and such
individual controls a trade or business, then the contributions or
benefits of the employees under the plan of the trade or business which he
or she does control must be as favorable as those provided for him or her
under the most favorable plan of the trade or business which he or she
does not control.

(d) For purposes of the preceding subparagraphs, an Owner-Employee, or two or
more Owner-Employees, shall be considered to control a trade or business
if such Owner-Employee, or such two or more Owner-Employees together, own
the entire interest in an unincorporated trade or

10
<PAGE> 5
business, or, in the case of a partnership, own more than fifty percent
(50%) of either the capital interest or the profits interest in such
partnership. For purposes of the preceding sentence, an Owner-Employee, or
two or more Owner-Employees, shall be treated as owning any interest in a
partnership which is owned, directly or indirectly, by a partnership which
such Owner-Employee, or such two or more Owner-Employees, are considered to
control within the meaning of the preceding sentence.

(e) Employees and Owner-Employees of trades or businesses which are under common
control (within the meaning of Code Section 414(c)) and Employees and
Owner-Employees of the members of an affiliated service group (within the
meaning of Code Section 414(m)) or of a group of aggregated employers (under
Code Section 414(o)) will be treated as employed by a single Employer for
purposes of employee benefit requirements of Code Section 414(m)(4).

ARTICLE IV
CONTRIBUTIONS
4.1 EMPLOYER PROFIT SHARING CONTRIBUTIONS

(a) If elected in item 6 of the Adoption Agreement (Profit Sharing Plan), the
Employer shall make an Employer Profit Sharing Contribution for each
Plan Year ending on or after the Effective Date in the amount determined
under such Adoption Agreement.

(b) The total amount of such Employer Profit Sharing Contribution for a Plan
Year shall be allocated to the Account of each eligible Participant as
follows:

(i) Unless otherwise elected in item 6(C) of the Adoption
Agreement, the total amount of such Employer Profit Sharing
Contribution shall be allocated based on the ratio that such eligible
Participant's Compensation and/or Earned Income for the Plan Year bears
to the total Compensation and Earned Income of all eligible Participants
for the Plan Year.

(ii) If the Integration Formula is selected in item 6(C) of the Adoption
Agreement, the total amount of such Employer Profit Sharing
Contribution shall be allocated based on the ratio that such
eligible Participant's Compensation and/or Earned Income for the
Plan Year in excess of the integration level for the Plan Year
bears to the total Compensation and Earned Income for all eligible
Participants in excess of the integration level for the Plan Year;
provided, however, that contributions allocated to a Participant with
respect to Compensation and/or Earned Income in excess of the
integration level shall not represent a greater percentage of such
excess Compensation and/or Earned Income than the lesser
of (A) 200% of the base contribution percentage, or

(B) the base contribution percentage plus the greater of:

(I) 5.7%, or

(II) the rate of tax under Code Section 3111(a) which
is attributable to old-age insurance in effect
at the beginning of the Plan Year.

Any Employer Profit Sharing Contribution remaining after the allocation
in this subsection (ii) shall be allocated in accordance with
subsection (i) above. The "integration level" shall be the taxable
wage base or such lesser level of Compensation and/or Earned
Income selected in item 6(C) of the Adoption Agreement. The "base
contribution percentage" shall mean the percentage of Compensation
and/or Earned Income which is contributed under the Plan with respect to
each Participant's Compensation and/or Earned Income not in excess
of the integration level.

If the integration level exceeds the greater of ten thousand dollars
($10,000) or one-fifth (1/5) of the taxable wage base but is not
more than eighty percent (80%) of the taxable wage base, the
percentage referred to in (I) above shall be reduced to 4.3% and a
proportionate reduction shall be made to the rate described in (II)
above. If the integration level is more than eighty percent (80%) but
less than one hundred percent (100%) of the taxable wage base, the
percentage referred to in (I) above shall be reduced to 5.4% and a
proportionate reduction shall be made to the rate described in (II)
above. The "taxable wage base" shall be the maximum amount of earnings
which may be considered wages for a year under Code Section 3121(a)(I)
in effect as of the beginning of the applicable Plan Year.

Notwithstanding the above, for any Plan Year in which the Plan is
top-heavy (as defined in Section 13.1 hereof) the Employer Profit
Sharing Contribution shall be allocated

(A) first, to each eligible Participant based on the ratio that
such Participant's Compensation and/or Earned Income for the
Plan Year bears to the total Compensation and Earned Income of all
eligible Participants for the Plan Year, but not more than three
percent (3%) of such Participant's Compensation and/or Earned Income.

(B) second, to each eligible Participant based on the ratio that
such Participant's Compensation and/or Earned Income in excess
of the integration level for the Plan Year bears to the total
Compensation and Earned Income of all eligible Participants in
excess of the integration level for the Plan Year, but not
more than three percent (3%) of such Participant's excess
Compensation and/or Earned Income, and

(C) any remaining Employer Profit Sharing Contribution shall be allocated
pursuant to the provisions of this subsection (ii) above.

(c) A Participant will be considered eligible for an allocation of the
Employer Profit Sharing Contribution if the Participant (i) is employed
by the Employer on the last day of the Plan Year or (ii) has completed at
least Five Hundred One (501) Hours of Service during the Plan Year.

(d) If elected in item 6(B) of the Adoption Agreement, Employer Profit
Sharing Contributions for a Plan Year shall not exceed the Net
Profits of the Employer for such Plan Year.

4.2 EMPLOYER PENSION CONTRIBUTIONS
(a) If elected in item 6 of the Adoption Agreement (Pension Plan),
the Employer shall make an Employer Pension Contribution for each
eligible Participant for each Plan Year ending on or after the Effective
Date in an amount determined under such Adoption Agreement.

(b) The total amount of such Employer Pension Contribution for a Plan
Year shall be allocated to the Account of each eligible Participant
as follows:
(i) Unless otherwise elected in item 6(B) of the Adoption Agreement, each
eligible Participant shall be allocated an amount equal to the
percentage of such eligible Participant's Compensation and/or
Earned Income as specified in the Adoption Agreement.

(ii) If the Integration Formula is selected in item 6(B) of the
Adoption Agreement, the total amount of such Employer Pension
Contribution shall be allocated in accordance with the method
described in Section 4.1(b) (ii) above. Notwithstanding the
foregoing, if the Integration Formula is selected under the
Profit Sharing Plan, the Employer Pension Contribution shall
be allocated in accordance with subsection (b)(i) above.

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<PAGE> 6
(c) A Participant will be considered eligible for an Employer
Pension contribution if the Participant (i) is employed by the
Employer on the last day of the Plan Year or (ii) has completed at
least Five Hundred One (501) Hours of Service during the Plan Year.

4.3 PARTICIPANT VOLUNTARY CONTRIBUTIONS
(a) If elected in item 9 of the Adoption Agreement (Profit Sharing
Plan) or item 8 of the Adoption Agreement (Pension Plan), a
Participant may voluntarily contribute to the Plan an amount up to ten
percent (10%) of his aggregate Compensation for all years since
becoming a Participant under this Plan and all other qualified plans of
the Employer. Any Participant Voluntary Contributions shall be limited
in accordance with the provisions of Section 5.3, even if the Employer
does not elect the Cash or Deferred Arrangement (Section 401(k)) under
item 8 of the Adoption Agreement (Profit Sharing Plan). If the Profit
Sharing Plan is elected, all Participant Voluntary Contributions shall
be deemed made to such plan. Participant Voluntary Contributions shall
be limited to Participants who are not highly compensated employees
(within the meaning of Code Section 414(q)) if elected in the Adoption
Agreement.

(b) A Participant shall be entitled to withdraw from his appropriate
Account at any time upon thirty (30) days' notice from the
Administrator to the Custodian (which notice shall specify the amount
of the withdrawal), a sum not in excess of the capital amount
contributed by him as Participant Voluntary Contributions under the
provisions of this Section 4.3, or the value of such Account, whichever
is less, provided that no ordinary income or capital gains attributable
to such contributions shall be subject to withdrawal. Notwithstanding
anything to the contrary herein, (i) all withdrawals are subject to the
provisions of Article VIII, and (ii) no forfeiture shall occur solely
as a result of a Participant's withdrawal of all or any portion of his
Participant Voluntary Contributions.

(c) No deductible voluntary employee contributions may be made for
taxable years beginning after December 31, 1986. Such contributions
made prior to that date will be maintained in a separate
Account which will be nonforfeitable at all times. The Account will
share in the gains or losses in the same manner as described in Section
9.3 of the Plan. Subject to Section 8.2, a Participant may withdraw
any part of the deductible voluntary contribution Account by making a
written application to the Administrator.

4.4 TIME FOR MAKING CONTRIBUTIONS Employer Pension Contributions and Employer
Profit Sharing Contributions must be made no later than the due date, including
extensions thereof, for filing the Employer's Federal income tax return for the
year coincident with or within which the Plan Year ends (or such later time as
authorized by Treasury Regulations). Participant Voluntary Contributions for
any Plan Year shall be made no later than thirty (30) days after the end of
such Plan Year. The Employer may establish a payroll deduction system or
other procedure to assist the making of Participant Voluntary Contributions and
shall transfer such contributions to the Custodian as soon as practicable
after collected.

4.5 LEASED EMPLOYEES Contributions or benefits provided to a Leased Employee
by the leasing organization (within the meaning of Code Section 414(n)) which
are attributable to services performed for the Employer shall be treated as
provided by the Employer for purposes of this Plan.

4.6 ROLLOVERS AND TRANSFERS In the discretion of the Administrator according
to such uniform and nondiscriminatory rules established by the Administrator,
and in accordance with Sections 402 and 408 of the Code, a Particpant may make
a rollover to the Plan or the Plan may accept a direct transfer (including
voluntary after-tax contributions) from another plan qualified under Section
401(a) of the Code or from an individual retirement account. If the Employer
has adopted the Profit Sharing Plan, any rollover or transfer shall be made to
such Plan.

ARTICLE V
CASH OR DEFERRED ARRANGEMENT
(CODE SECTION 401(k))
5.1 CASH OR DEFERRED ARRANGEMENT (CODE SECTION 401(k)) The provisions of this
Article shall be effective as of the first day of the Plan Year in which this
cash or deferred arrangement is elected in item 8 of the Adoption Agreement
(Profit Sharing Plan). Under no circumstances shall the provisions of this
Article apply prior to the time specified in the preceding sentence.

5.2 ELECTIVE DEFERRALS
(a) ELECTION
(i) An Employee who has satisfied the minimum age and
service requirements set forth in item 8(A) of the Adoption
Agreement (Profit Sharing Plan) may elect to have Elective Deferrals
made to the Plan pursuant to a salary reduction agreement to the
extent permitted in item 8(A) of the Adoption Agreement (Profit
Sharing Plan). Such an election shall be effective as of the time
specified in item 8(A) of the Adoption Agreement (Profit Sharing
Plan) and may not be made effective retroactively.

(ii) An eligible Employee may also base Elective Deferrals,
to the extent provided in item 8(A) of the Adoption Agreement
(Profit Sharing Plan), on cash bonuses that, at the Employee's
election, may be contributed to the Plan or received by the
Employee. Such an election shall be effective as of the time
specified in item 8(A) of the Adoption Agreement (Profit Sharing
Plan) and may not be made effective retroactively.

(b) CHANGE IN RATE The rate at which Elective Deferrals are made
shall remain in effect until modified in accordance with item 8(A) of the
Adoption Agreement (Profit Sharing Plan). Notwithstanding the foregoing,
Elective Deferrals may be suspended entirely by an Employee at any time by
written notice to the Administrator. Any such suspension shall be
effective as soon as administratively practicable following the
Administrator's receipt of such notice.

(d) EXCESS ELECTIVE DEFERRALS
(i) No Participating Employee shall be permitted to have
Elective Deferrals made under this Plan or any other qualified
plan maintained by the employer during any taxable year pursuant to
Code Sections 401(k), 408(k) or 403(b) in excess of the dollar
limitation contained in Code Section 402(g) in effect at the
beginning of such taxable year.

(ii) A Participating Employee may assign to the Plan any
Excess Elective Deferrals made during a taxable year of such
Employee by notifying the Administrator on or before the date
specified below of the Excess Elective Deferrals to be assigned to
the Plan. Notwithstanding any other provision of the Plan, Excess
Elective Deferrals, plus any income and minus any loss allocable
thereto, may be distributed no later than April 15 to any
Participating Employee to whose Accounts Excess Elective Deferrals
were assigned for the preceding year and who claims Excess Elective
Deferrals for such taxable year. A Participating Employee's claim
for Excess Elective Deferrals shall be made in writing and shall be
submitted to the Administrator not later than the March 1
immediately preceding the relevant April 15. Such claim shall
specify the amount of the Participating Employee's Excess Elective
Deferrals for the preceding taxable

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year and shall be accompanied by the Participating Employee's written
statement that if such amounts are not distributed, such Excess Elective
Deferrals, when added to amounts deferred under other plans or
arrangements described in Code Sections 401(k), 408(k) or 403(b), exceed
the limit imposed on the Participating Employee by Code Section 402(g)
for the year of the deferral.

(iii) Excess Elective Deferrals shall be adjusted for any income or
loss up to the date of distribution. The income or loss allocable to
Excess Elective Deferrals is the sum of:

(A) income or loss allocable to the participating Employee's Elective
Deferrals Account for the taxable year for which the Excess Elective
Deferrals occurred multiplied by a fraction, the numerator of
which is such Participating Employee's Excess Elective Deferrals for
such taxable year and the denominator of which is such Participating
Employee's Elective Deferrals Account balance as of the end of the
taxable year without regard to any income or loss occurring during
such taxable year; and

(B) income or loss allocable to the Participating Employee's
Elective Deferrals Account for the period between the end of such
taxable year and the date of distribution under (A) above; or, at
the option of the Employer, ten percent (10%) of the amount
determined under (A) above multiplied by the number of whole calendar
months between the end of such taxable year and the date of
distribution, counting the month of distribution if distribution
occurs after the fifteenth (15th) of such month.

The amount of Excess Elective Deferrals that may be distributed with
respect to a Participating Employee shall be reduced by any Excess
Contributions previously distributed or recharacterized with respect to
such Participating Employee for the Plan Year beginning with or within such
taxable year. In no event may the amount distributed exceed the
Participating Employee's total Elective Deferrals for such taxable year.

(e) ACTUAL DEFERRAL PERCENTAGE
(i) The Actual Deferral Percentage for Participating Employees who
are Highly Compensated Employees for each Plan Year and the Actual
Deferral Percentage for Participating Employees who are not Highly
Compensated Employees for the same Plan Year must satisfy one of the
following tests:
(A) The Actual Deferral Percentage for Participating Employees
who are Highly Compensated Employees for the Plan Year shall not
exceed the Actual Deferral Percentage for Participating Employees
who are not Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or

(B) The Actual Deferral Percentage for Participating Employees
who are Highly Compensated Employees for the Plan Year shall not
exceed the Actual Deferral Percentage for Participating Employees
who are not Highly Compensated Employees for the same Plan Year
multiplied by 2.0, provided that the Actual Deferral Percentage for
Participating Employees who are Highly Compensated Employees does
not exceed the Actual Deferral Percentage for Participating
Employees who are not Highly Compensated Employees by more than two
(2) percentage points.

(ii) The Actual Deferral Percentage for any Participating
Employee who is a Highly Compensated Employee for the Plan Year and
who is eligible to have Elective Deferrals (and Qualified
Non-Elective Contributions or Qualified Matching Contributions, or
both) allocated to his Accounts under two or more arrangements
described in Code Section 401(k), that are maintained by the
Employer, shall be determined as if such Elective Deferrals (and, if
applicable, such Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both) were made under a single
arrangement. If a Highly Compensated Employee participates in two
or more cash or deferred arrangements that have different Plan
Years, contributions for such employee shall be aggregated for
purposes of this subsection (e). Contributions which are required
to be aggregated are any contributions made under all cash or
deferred arrangements ending with or within the same calendar year.

(iii) In the event that the Plan satisfies the requirements
of Code Sections 401(k), 401(a)(4) or 410(b) only if aggregated with
one or more other plans, or if one or more other plans satisfy the
requirements of such Code Sections only if aggregated with this Plan,
then this subsection shall be applied by determining the Actual
Deferral Percentage of Participating Employees as if all such plans
were a single plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy Code Section 401(k) only
if they have the same Plan Year.

(iv) For purposes of determining the Actual Deferral Percentage of a
Participating Employee who is a five (5) percent owner or one of the
ten (10) most highly-paid Highly Compensated Employees, the Elective
Deferrals (and Qualified Non-Elective Contributions and Qualified
Matching Contributions, or both) and Compensation of such
Participating Employee shall include the Elective Deferrals (and,
if applicable, Qualified Non-Elective Contributions and Qualified
Matching Contributions, or both) and Compensation for the Plan Year
of Family Members. Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as separate employees in
determining the Actual Deferral Percentage both for Participating
Employees who are not Highly Compensated Employees and for
Participating Employees who are Highly Compensated Employees.

(v) For purposes of determining the Actual Deferral Percentage test,
Elective Deferrals, Qualified Non-Elective Contributions and
Qualified Matching Contributions must be made before the last day of
the twelve-month period immediately following the Plan Year to which
such contributions relate.

(vi) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Deferral Percentage test and
the amount of Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both, used in such test.

(vii) The determination and treatment of the Actual Deferral
Percentage amounts of any Participating Employee shall satisfy such
other requirements as may be prescribed by the Secretary of the
Treasury.

(f) DISTRIBUTION OF EXCESS CONTRIBUTIONS
(i) Notwithstanding any other provision of this Plan,
Excess Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each
Plan Year to Participating Employees to whose Accounts such Excess
Contributions were allocated for the preceding Plan Year. If

13
<PAGE> 8
such excess amounts are distributed more than two and one-half
(2 1/2) months after the last day of the Plan Year in which such
excess amounts arose, a ten percent (10%) excise tax will be
imposed on the Employer with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on the
basis of the respective portions of the Excess Contributions
attributable to each of such Employees. Excess Contributions shall
be allocated to Participating Employees who are subject to the
family member aggregation rules of Code Section 414(q)(6) in the
manner prescribed by the regulations. Excess Contributions
(including any amounts recharacterized) shall be treated as Annual
Additions for purposes of Article VI of the Plan.

(ii) Excess Contributions shall be adjusted for any income or loss up to
the date of distribution. The income or loss allocable to Excess
Contributions is the sum of:
(A) income or loss allocable to the Participating Employee's
Elective Deferrals Account (and, if applicable, the Qualified
Non-Elective Contributions Account or the Qualified Matching
Contributions Account, or both) for the Plan Year for which
the Excess Contributions occurred multiplied by a fraction,
the numerator of which is such Participating Employee's Excess
Contributions for such Plan Year and the denominator of which
is such Participating Employee's Account balance(s)
attributable to Elective Deferrals (and Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both) as
of the end of the Plan Year without regard to any income or
loss occurring during such Plan Year; and

(B) income or loss allocable to the Participant's Elective
Deferrals Account (and, if applicable, the Qualified
Non-Elective Contribution Account or the Qualified Matching
Contribution Account, or both) for the period between the end
of such Plan Year and the date of distribution multiplied by
the fraction determined under (A) above; or, at the option of
the Employer, ten percent (10%) of the amount determined under
(A) above multiplied by the number of whole calendar months
between the end of such Plan Year and the date of
distribution, counting the month of distribution if
distribution occurs after the fifteenth (15th) of such month.

(iii) Excess Contributions shall be distributed from the Participating
Employee's Elective Deferrals Account and Qualified Matching
Contributions Account (if applicable) in proportion to the
Participating Employee's Elective Deferrals and Qualified Matching
Contributions (to the extent used in the Actual Deferral Percentage
test) for the Plan Year. Excess Contributions shall be distributed
from the Participating Employee's Qualified Non-Elective
Contributions Account only to the extent that such Excess
Contributions exceed the balance in the Participating Employee's
Deferrals Account and Matching Contributions Account.

(g) RECHARACTERIZATION
(i) A Participating Employee may treat his Excess Contributions
as an amount distributed to the Participating Employee and
then contributed by the Participating Employee to the Plan.
Recharacterized amounts will remain nonforfeitable and
subject to the same distribution requirements as Elective
Deferrals. Amounts may not be recharacterized by a Highly
Compensated Employee to the extent that such amount in
combination with other Participant Voluntary Contributions
would exceed any stated limit under the Plan on Participant
Voluntary Contributions. Recharacterizing Excess
Contributions shall be limited to Participants who are not
Highly Compensated Employees if elected in the Adoption
Agreement.

(ii) Recharacterization must occur no later than two and one-half
(2 1/2) months after the end of the Plan Year in which such
Excess Contributions arose and is deemed to occur no
earlier than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the
consequences thereof. Recharacterized amounts will be taxable
to the Participating Employee for such Participating
Employee's taxable year in which the Participating Employee
would have received them in cash.

5.3 MATCHING CONTRIBUTIONS
(a) The Employer shall make Employer Matching Contributions to the Plan to the
extent elected in item 8(B) of the Adoption Agreement (Profit Sharing
Plan).

(b) A Participant shall have a vested interest in his Matching Contributions
Account as determined under the vesting schedule elected in item 8(B) of
the Adoption Agreement (Profit Sharing Plan). Forfeitures derived from
Matching Contributions which become available because of the vesting
provisions above, shall be applied to reduce the Employer Matching
Contributions that would otherwise be due for the Plan Year, or
subsequent Plan Years.

(c) ACTUAL CONTRIBUTION PERCENTAGE
(i) The Actual Contribution Percentage for Participating Employees who
are Highly Compensated Employees for each Plan Year and the Actual
Contribution Percentage for Participating Employees who are not
Highly Compensated Employees for the same Plan Year must
satisfy one of the following tests:
(A) The Actual Contribution Percentage for Participating
Employees who are Highly Compensated Employees for the Plan
Year shall not exceed the Actual Contribution Percentage for
Participating Employees who are not Highly Compensated
Employees for the same Plan Year multiplied by 1.25; or

(B) The Actual Contribution Percentage for Participating
Employees who are Highly Compensated Employees for the Plan
Year shall not exceed the Actual Contribution Percentage for
Participating Employees who are not Highly Compensated
Employees for the same Plan Year multiplied by two (2),
provided that the Actual Contribution Percentage for
Participating Employees who are Highly Compensated Employees
does not exceed the Actual Contribution Percentage for
Participating Employees who are not Highly Compensated
Employees by more than two (2) percentage points.

(ii) If one or more Highly Compensated Employees participate in both a
cash or deferred arrangement and a plan subject to the Actual
Contribution Percentage test maintained by the Employer and the sum
of the Actual Deferral Percentage and the Actual Contribution
percentage of those Highly Compensated Employees subject to either
or both tests exceeds the Aggregate Limit, then the Actual
Contribution Percentage of those Highly Compensated Employees who
also participate in a cash or deferred arrangement will be reduced
(beginning with such Highly Compensated Employee whose Actual
Contribution Percentage is the highest) so that the limit is not
exceeded. The amount by which each Highly Compensated

14
<PAGE> 9
Employee's Contribution Percentage Amount is reduced shall be treated
as an Excess Aggregate Contribution. The Actual Deferral Percentage and
the Actual Contribution Percentage of the Highly Compensated Employees
are determined after any corrections required to meet the Actual
Deferral Percentage and the Actual Contribution Percentage tests.
Multiple use does not occur if both the Actual Deferral Percentage and
the Actual Contribution Percentage of the Highly Compensated Employees
does not exceed 1.25 multiplied by the Actual Deferral Percentage and
the Actual Contribution Percentage of the Participating Employees who
are not Highly Compensated Employees.

(iii) For purposes of this subsection, the Contribution Percentage for any
Participating Employee who is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts allocated to his
account under two or more plans described in Code Section 401(a), or
arrangements described in Code Section 401(k) that are maintained by
the Employer, shall be determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that
have different plan years, all cash or deferred arrangements ending with
or within the same calendar year shall be treated as a single
arrangement.

(iv) In the event that this Plan satisfies the requirements of Code Sections
401(m), 401(a)(4) or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
Code Sections only if aggregated with this Plan, then this subsection
shall be applied by determining the Contribution Percentage of employees
as if all such plans were a single plan. For plan years beginning after
December 31, 1989, plans may be aggregated in order to satisfy Code
Section 401(m) only if they have the same plan year.

(v) For purposes of determining the Contribution Percentage of a
Participating Employee who is a five percent owner or one of the ten
(10) most highly-paid Highly Compensated Employees, the Contribution
Percentage Amounts and Compensation of such Participating Employee shall
include the Contribution Percentage Amounts and Compensation for the
Plan Year of Family Members. Family Members, with respect to Highly
Compensated Employees, shall be disregarded as separate employees in
determining the Contribution Percentage both for Participating Employees
who are not Highly Compensated Employees and for Participating
Employees who are Highly Compensated Employees.

(vi) For purposes of determining the Contribution Percentage test, Employee
Contributions are considered to have been made in the Plan Year in which
contributed to the trust. Matching Contributions and Qualified
Non-Elective Contributions shall be considered made for a Plan Year if
made no later than the end of the twelve-month period beginning on the
day after the close of the Plan Year.

(vii) The Employer shall maintain records sufficient to demonstrate
satisfaction of the Actual Contribution Percentage test and the amount
of Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, used in such test.

(viii) The determination and treatment of the Contribution Percentage of any
Participating Employee shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.

(d) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
(i) Notwithstanding any other provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if forfeitable, or if not forfeitable,
distributed no later than the last day of each Plan Year to
Participating Employees to whose Accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. Excess
Aggregate Contributions shall be allocated to Participating
Employees who are subject to the family member aggregation rules of
Code Section 414(q)(6) in the manner prescribed by the regulations.
If such Excess Aggregate Contributions are distributed more than two
and one-half (2 1/2) months after the last day of the Plan Year in
which such excess amounts arose, a ten percent (10%) excise tax will
be imposed on the Employer with respect to those amounts. Excess
Aggregate Contributions shall be treated as Annual Additions for
purposes of Article VI of the Plan.

(ii) Excess Aggregate Contributions shall be adjusted for any income or
loss up to the date of distribution. The income or loss allocable to
Excess Aggregate Contributions is the sum of:

(A) income or loss allocable to the Participating Employee's
Participant Voluntary Contributions Account. Matching
Contributions Account, Qualified Matching Contribution Account
(if any, and if all amounts therein are not used in the Actual
Deferral Percentage test) and, if applicable, Qualified
Non-Elective Contributions Account and Elective Deferrals
Account for the Plan Year for which the Excess Aggregate
Contributions occurred multiplied by a fraction, the numerator
of which is such Participating Employee's Excess Aggregate
Contributions for such Plan Year and the denominator of which is
the Participating Employee's Account balance(s) attributable to
Contribution Percentage Amounts as of the end of the Plan Year
without regard to any income or loss occurring during such Plan
Year: and

(B) income or loss allocable to the Participating Employee's
Participant Voluntary Contribution Account. Matching
Contributions Account, Qualified Matching Contribution Account
(if any, and if all amounts therein are not used in the Actual
Deferral Percentage test) and, if applicable, Qualified
Non-Elective Contributions Account and Elective Deferrals
Account for the period between the end of such Plan Year and
the date of distribution multiplied by the fraction determined
under (A) above: or, at the election of the Employer, ten
percent (10%) of the amount determined under (A) above
multiplied by the number of whole calendar months between the
end of such Plan Year and the date of distribution, counting the
month of distribution if distribution occurs after the fifteenth
(15th) of such month.

(iii) Forfeitures of Excess Aggregate Contributions shall be applied to
reduce Employer contributions for subsequent Plan Years.

(iv) Excess Aggregate Contributions shall be forfeited, if forfeitable,
or distributed on a prorata basis from the Participating Employee's
Participant Voluntary Contributions Account. Matching Contributions
Account and Qualified Matching Contribution Account (and, if
applicable, the Participating Employee's Qualified Non-Elective
Contributions Account or Elective Deferrals Account, or both).

15
<PAGE> 10
5.4 QUALIFIED MATCHING CONTRIBUTIONS AND QUALIFIED NON-ELECTIVE CONTRIBUTIONS
(a) Qualified Matching Contributions. The Employer may elect to make
Qualified Matching Contributions under the Plan in item 8(C) of the
Adoption Agreement. Qualified Matching Contributions may be made in lieu
of distributing Excess Contributions as provided in Section 5.2(f) hereof.
Qualified Matching Contributions may be either (i) additional amounts
contributed to the Plan by the Employer and allocated to the Accounts of
Participating Employees who are not Highly Compensated Employees based on
such Employees' Elective Deferrals or (ii) Matching Contributions
otherwise made to the Plan pursuant to Section 5.3(a) hereof which the
Employer designates as Qualified Matching Contributions. The amount of
Qualified Matching Contributions (if any) shall be determined by the
Employer for each year. All Qualifying Matching Contributions shall be
used to satisfy the Actual Deferral Percentage test pursuant to regulations
under the Code.

(b) The Employer may elect to make Qualified Non-Elective Contributions under
the Plan in item 8(C) of the Adoption Agreement. Qualified Non-Elective
Contributions may be made in lieu of distributing Excess Contributions as
provided in Section 5.2(f) or Excess Aggregate Contributions as provided
in Section 5.3(d) hereof. Qualified Non-Elective Contributions may be
either (i) additional amounts contributed to the Plan by the Employer and
allocated to the Accounts of Participating Employees who are not Highly
Compensated Employees based on such Employees' Compensation or (ii)
Profit Sharing Contributions otherwise made to the Plan pursuant to Section
4.1(a) hereof which the Employer designates as Qualified Non-Elective
Contributions. The amount of Qualified Non-Elective Contributions (if
any) shall be determined by the Employer for each year. All Qualified
Non-Elective Contributions shall be used to satisfy either the Actual
Deferral Percentage test or the Average Contribution Percentage test, or
both, pursuant to regulations under the Code.

(c) Separate accounts for Qualified Non-Elective Contributions and Qualified
Matching Contributions will be maintained for each Participant consistent
with Section 7.1 hereof. Each account will be credited with the
applicable contributions and earnings thereon.

(d) For purposes of the special distribution rules in Section 5.5, Qualified
Matching Contributions and Qualified Non-Elective Contributions shall be
treated as Elective Deferrals.

(e) Qualified Matching Contributions and Qualified Non-Elective Contributions
shall be appropriately designated when contributed.

5.5 SPECIAL DISTRIBUTION RULES Except as provided below, Elective Deferrals,
Qualified Non-Elective Contributions and Qualified Matching Contributions, and
income allocable to each, are not distributable to a Participant or a
Beneficiary, in accordance with such Participant's or Beneficiary's election,
earlier than upon separation from service, death, or disability.

(a) FINANCIAL HARDSHIP
(i) If elected by the Employer in item 8(D) of the Adoption Agreement
(Profit Sharing Plan), a Participant may elect to withdraw all or
any portion of his Elective Deferrals (excluding net earnings
credited thereto after December 31, 1988) on account of financial
hardship. For purposes of this Section 5.5, a financial hardship
shall mean an immediate and heavy financial need of the Participant
which cannot be satisfied from other resources reasonably
available to such Participant. Hardship withdrawals are subject to
the spousal consent requirements of Code Sections 401(a)(11) and
417.

(ii) A withdrawal is made on account of an immediate and heavy financial
need of a Participant only if it is made on account of: (A)
unreimbursed medical expenses described in Code Section 213(d) of
the Participant or the Participant's spouse or dependents (as
defined in Code Section 152); (B) the purchase (excluding mortgage
payments) of a principal residence for the Participant; (C) payment
of tuition for the next term of post-secondary education for the
Participant or the Participant's spouse, children or dependents; or
(D) the need to prevent the Particpant's eviction from, or
foreclosure on the mortgage of, the Particpant's principal
residence or such other events as may be approved by the
Commissioner of Internal Revenue in rulings, notices or other
published documents.

(iii) A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Participant only if: (A)
the Participant has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained
by the Employer; (B) all plans maintained by the Employer provide
that the Participant's Elective Deferrals and any other elective
contributions or employee contributions under this Plan and any
other plan maintained by the Employer (both qualified and
nonqualified) will be automatically suspended for twelve (12)
months after the receipt of the hardship distribution; (C) the
distribution is not in excess of the amount of an immediate and
heavy financial need; and (D) all plans maintained by the Employer
provide that the Participant may not make Elective Deferrals for
the Participant's taxable year immediately following the taxable
year of the hardship distribution in excess of the applicable limit
under Code Section 402(g) for such taxable year less the amount of
such Participant's Elective Deferrals for the taxable year of the
hardship distribution.

(iv) A request for a hardship distribution shall be made in writing and
in such form as may be prescribed by the Administrator. Processing
of applications and distributions of amounts under this Section, on
account of a bona fide financial hardship, shall be made as soon as
administratively feasible.

(b) ELECTIVE DEFERRALS AT AGE 59 1/2 Upon attaining age fifty-nine and
one-half (59 1/2), a Participant may elect to withdraw all or any portion
of his Elective Deferrals Account and/or Employer Matching Contributions
Account, as of the last day of any month, even if he is still employed.

5.6 DEFINITIONS For purposes of this Article, the following words and phrases
shall have the following meanings:
(a) ACTUAL DEFERRAL PERCENTAGE means, for a specified group of Participating
Employees for a Plan Year, the average of the ratios (calculated
separately for each Participating Employee in such group) of (i) the
amount of Employer contributions actually paid over to the trust on behalf
of such Participating Employee for the Plan Year to (ii) the Participating
Employee's Compensation for such Plan Year (whether or not the Employee was
a Participating Employee for the entire Plan Year). Employer
contributions on behalf of any Participating Employee shall include: (i)
any Elective Deferrals made pursuant to the Participating Employee's
deferral election, including Excess Elective Deferrals of Highly
Compensated Employees, but excluding Elective Deferrals that are taken
into account in the Contribution Percentage test (provided the Actual
Deferral Percentage test is satisfied both with and without exclusion of
these Elective Deferrals); and (ii) at the election of the Employer,
Qualified Non-Elective Contributions and Qualified Matching
Contributions. For purposes of computing Actual Deferral Percentages, an
employee who would be a Participating Employee but for

16
<PAGE> 11
the failure to make Elective Deferrals shall be treated as a Participating
Employee on whose behalf no Elective Deferrals are made.

(b) AGGREGATE LIMIT means the sum of (i) one hundred twenty-five percent
(125%) of the greater of the Actual Deferral Percentage of the
Participating Employees who are not Highly Compensated Employees for the
Plan Year or the Actual Contribution Percentage of Participating Employees
who are not Highly Compensated Employees under the Plan subject to Code
Section 401(m) for the Plan Year beginning with or within the Plan Year of
the cash or deferred arrangement and (ii) the lesser of two hundred
percent (200%) or two (2) plus the lesser of such Actual Deferral
Percentage or Actual Contribution Percentage. "Lesser" is substituted for
"greater" in (i) above and "greater" is substituted for "lesser" after
"two plus the" in (ii) above if it would result in a larger Aggregate
Limit.

(c) AVERAGE CONTRIBUTION PERCENTAGE means the average of the Contribution
Percentages of the Employees in a group who are eligible to make
Participant Voluntary Contributions, or Elective Deferrals (if the
Employer takes such contributions into account in the calculation of the
Contribution Percentage), or to receive Matching Contributions (including
forfeitures) or Qualified Matching Contributions.

(d) CONTRIBUTION PERCENTAGE means the ratio (expressed as a percentage) of the
Participating Employee's Contribution Percentage Amounts to the
Participating Employee's Compensation for the Plan Year (whether or not
the Employee was a Participating Employee for the entire Plan Year).

(e) CONTRIBUTION PERCENTAGE AMOUNTS means the sum of the Participant Voluntary
Contributions, Matching Contributions, and Qualified Matching
Contributions (to the extent not taken into account for purposes of the
Actual Deferral Percentage test) made under the Plan on behalf of the
Participating Employee for the Plan Year. Such Contribution Percentage
Amounts shall include forfeitures of Excess Aggregate Contributions or
Matching Contributions allocated to the Participating Employee's Accounts
which shall be taken into account in the year in which such forfeiture
is allocated. The Employer may elect to include Qualified Non-Elective
Contributions in the Contribution Percentage Amounts. The Employer
also may elect to use all or part of the Elective Deferrals for
the Plan Year in the Contribution Percentage Amounts so long as the Actual
Deferral Percentage test is satisfied both including and excluding the
Elective Deferrals that are included in the Contribution Percentage
Amounts.

(f) EXCESS AGGREGATE CONTRIBUTIONS means, with respect to any Plan Year, the
excess of:
(i) the aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually
made on behalf of Highly Compensated Employees for such Plan
Year, over

(ii) the maximum Contribution Percentage Amounts permitted by the Actual
Contribution Percentage test (determined by reducing contributions
made on behalf of Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of such
percentages).

Such determination shall be made after first determining Excess Elective
Deferrals pursuant to Section 5.2(d) hereof and then determining Excess
Contributions pursuant to Section 5.2(f) hereof.

(g) EXCESS CONTRIBUTIONS means, with respect to any Plan Year, the excess of:
(i) the aggregate amount of Employer contributions actually taken into
account in computing the Actual Deferral Percentage of Highly
Compensated Employees for such Plan Year, over

(ii) the maximum amount of such contributions permitted by the Actual
Deferral Percentage test (determined by reducing contributions made
on behalf of Highly Compensated Employees in order of the Actual
Deferral Percentages, beginning with the highest of such
percentages).

(h) EXCESS ELECTIVE DEFERRALS means those Elective Deferrals that are
includible in a Participating Employee's gross income for a taxable year
under Code Section 402(g) because they exceed the limitation specified in
Section 5.2(d)(i) hereof. Excess Elective Deferrals shall be treated as
Annual Additions under the Plan.

(i) FAMILY MEMBER means the spouse, lineal ascendants and descendants of
the employee or former employee and the spouses of such lineal ascendants
and descendants, all within the meaning of Code Section 414(q)(6).

(j) HIGHLY COMPENSATED EMPLOYEE means both highly compensated active employees
and highly compensated former employees.
(i) A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year and
who, during the look-back year; (i) received compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Code Section
415(d)); (ii) received compensation from the Employer in excess of
$50,000 (as adjusted pursuant to Code Section 415(d)) and was a
member of the top-paid group for such year; or (iii) was an officer
of the Employer and received compensaton during such year that is
greater than 50 percent of the dollar limitation in effect under
Code Section 415(b)(1)(A). The term Highly Compensated Employee
also includes: (i) employees who are both described in the
preceding sentence if the term "determination year" is substituted
for the term "look-back year" and the employee is one of the 100
employees who received the most compensation from the Employer
during the determination year; and (ii) employees who are 5 percent
owners at any time during the look-back year or determination year.
If no officer has satisfied the compensation requirement of (iii)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly
Compensated Employee. For this purpose, the determination year
shall be the Plan Year. The look-back year shall be the
twelve-month period immediately preceding the determination year.

(ii) A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior to
the determination year, performs no service for the Employer during
the determination year, and was a highly compensated active
employee for either the separation year or any determination year
ending on or after the employee's fifty-fifth (55th) birthday.

(iii) If an employee is, during a determination year or look-back year, a
Family Member of either a five percent owner who is an active or
former employee or a Highly Compensated Employee who is one of the
ten (10) most highly compensated employees ranked on the basis of
Compensation paid by the Employer during such year, then the Family
Member and the five percent owner or top-ten Highly
Compensated Employee shall be aggregated. In such case, the Family
Member and five percent owner or top-ten Highly Compensated
Employee shall be treated as a single employee receiv-

<PAGE> 12
ing Compensation and Plan contributions or benefits equal to
the sum of such Compensation and contributions or benefits of the
Family Member and five percent owner or top-ten Highly Compensated
Employee.

(iv) The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of employees
in the top-paid group, the top 100 employees, the number of employees
treated as officers and the Compensation that is considered, will be
made in accordance with Code Section 414(q).

(k) PARTICIPATING EMPLOYEE means an Employee who is eligible to make
Elective Deferrals or Participant Voluntary Contributions (if the Employer
takes such contributions into account in the calculation of the
Contribution Percentage), or to receive Matching Contributions (including
forfeitures) or Qualified Matching Contributions. If an Employee
contribution is required as a condition of participation in the Plan, any
Employee who would be a Participant in the Plan if such Employee made such
a contribution shall be treated as a Participating Employee on behalf of
whom no Employee contributions are made.

(l) QUALIFIED MATCHING CONTRIBUTIONS means Matching Contributions which
are one hundred percent (100%) vested and nonforfeitable at all times and
which are distributable only in accordance with the distribution provisions
applicable to Elective Deferrals.

(m) QUALIFIED NON-ELECTIVE CONTRIBUTIONS means contributions (other
than Matching Contributions or Qualified Matching Contributions) made by
the Employer and allocated to Participating Employees' Accounts that the
Participating Employees may not elect to receive in cash until distributed
from the Plan, are one hundred percent (100%) vested and nonforfeitable
when made, and are distributable only in accordance with the distribution
provisions applicable to Elective Deferrals.

ARTICLE VI
SECTION 415 LIMITATIONS

6.1 EMPLOYERS MAINTAINING ONLY THIS PLAN
(a) If the Participant does not participate in, and has never
participated in another qualified plan, a welfare benefit fund (as defined
in Code Section 419(e)) or an individual medical account (as defined in
Code Section 415(1)(2)) maintained by the Employer, the amount of Annual
Additions which may be credited to a Participant's Account, under this Plan
for a Limitation Year shall not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this Plan. If the
Employer's contribution that would otherwise be contributed or allocated to
the Participant's Account would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the Annual Additions for
the Limitation Year will equal the maximum Permissible Amount.

(b) Prior to the determination of the Participant's actual compensation
for a Limitation Year, the Maximum Permissible Amount may be determined on
the basis of the Participant's estimated annual compensation for such
Limitation Year. Such estimated annual compensation shall be determined on
a reasonable basis and shall be uniformly determined for all Participants
similarly situated. Any Employer contributions based on estimated annual
compensation shall be reduced by any Excess Amounts carried over from prior
years.

(c) As soon as it is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation Year
shall be determined on the basis of the Participant's actual Compensation
for such Limitation Year.

(d) If, pursuant to Section 6.1(c) and notwithstanding the provisions
of Section 6.1(a) hereof which require a reduction of contributions so as
not to exceed the limitations of this Article VI, there is an Excess Amount
with respect to a Participant for a Limitation Year, such Excess Amount
shall be disposed of as follows:

(i) Any Participant Voluntary Contributions, to the extent that
the return would reduce the Excess Amount, shall be returned to the
Participant.

(ii) In the event that the Participant is covered by this Plan
at the end of the Limitation Year, remaining Excess Amounts after the
application of clause (i) shall be applied to reduce future Employer
contributions (including any allocation of forfeitures) for such
Participant under this Plan in the next Limitation Year (and each
succeeding year, as necessary).

(iii) In the event that the Participant is not covered by this
Plan at the end of the Limitation Year, remaining Excess Amounts after
the application of clause (i) shall not be distributed to the
Participant, but shall be held unallocated in a suspense account and
shall be applied to reduce future Employer contributions (including
any allocation of forfeitures) for all remaining Participants in the
next Limitation Year (and each succeeding year, as necessary).

(iv) If a suspense account is in existence at any time during
the Limitation Year pursuant to this Section, it will not participate
in the allocation of any investment gains and losses, and all amounts
in the suspense account must be allocated and reallocated to
Participants' Accounts before any Employer or Employee contributions
may be made to the Plan for such Limitation Year. Excess amounts may
not be distributed to Participants or former Participants.

6.2 EMPLOYERS MAINTAINING OTHER MASTER OR PROTOTYPE DEFINED CONTRIBUTION PLANS.
(a) If, in addition to this Plan, the Participant is covered under
another qualified defined contribution plan which qualifies as a Master or
Prototype Plan or a welfare benefit fund (as defined in Code Section
419(e)) or an individual medical account (as defined in Code Section
415(1)(2)) maintained by the Employer during any Limitation Year, the
amount of Annual Additions which may be allocated under this Plan on the
Participant's behalf for such Limitation Year, shall not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to a
Participant's account under such other plans, welfare benefit funds or
individual medical accounts for the same Limitation Year. If the Annual
Additions with respect to the Participant under other defined contribution
plans and welfare benefit funds maintained by the Employer are less than
the Maximum Permissible Amount and the Employer contribution that would
otherwise be contributed or allocated to the Participant's Account under
this Plan would cause the Annual Additions for the Limitation Year to
exceed this limitation, the amount contributed or allocated will be reduced
so that the Annual Additions under all such plans and funds for the
Limitation Year will equal the Maximum Permissible Amount. If the Annual
Additions with respect to the Participant under such other defined
contribution plans and welfare benefit funds in the aggregate are equal to
or greater than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's Account under this Plan for
the Limitation Year.

(b) Prior to the determination of the Participant's actual Compensation
for the Limitation Year, the amounts referred to in subsection (a) above
may be determined on the Participant's estimated annual compensation for
such Limitation Year. Such estimated annual compensation shall be
determined on

18
<PAGE> 13
a reasonable basis and shall be uniformly determined for all
Participants similarly situated. Any Employer contribution based on
estimated annual compensation shall be reduced by any Excess Amounts
carried over from prior years.

(c) As soon as it is administratively feasible after the end of the
Limitation Year, the amounts referred to in subsection (a) above shall be
determined on the basis of the Participant's actual Compensation for such
Limitation Year.

(d) If a Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount for a Limitation Year, such Excess
Amount shall be deemed to consist of the Annual Additions last allocated,
except that Annual Additions attributable to a welfare benefit fund or
individual medical account will be deemed to have been allocated first
regardless of the actual allocation date.

(e) If an Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another plan,
the Excess Amount attributed to this Plan will be the product of:

(i) the total Excess Amount allocated as of such date (including any
amount which would have been allocated but for the limitations of Code
Section 415), times

(ii) the ratio of (A) the amount allocated to the Participant as of
such date under this Plan, divided by (B) the total amount allocated
as of such date under all qualified master or prototype defined
contribution plans (determined without regard to the limitations of
Code Section 415).

(f) Any Excess Amount attributed to this Plan shall be disposed of as
provided in Section 6.1(d).

6.3 EMPLOYERS MAINTAINING OTHER DEFINED CONTRIBUTION PLANS. If the Participant
is covered under another plan which is a qualified defined contribution plan
which is not a Master or Prototype Plan maintained by the Employer, Annual
Additions allocated under this Plan on behalf of any Participant shall be
limited in accordance with the provisions of Section 6.2, as though the other
plan were a Master or Prototype Plan, unless the Employer provides other
limitations in the Adoption Agreement.

6.4 EMPLOYERS MAINTAINING DEFINED BENEFIT PLANS If the Participant is covered
or was covered at any time under a qualified defined benefit plan maintained by
the Employer, the projected annual benefit thereunder and the Annual Additions
credited to any such Participant's Account under this Plan and any other
qualified defined contribution plan in any Limitation Year will be limited so
that the sum of the Defined Contribution Fraction and the Defined Benefit
Fraction with respect to such Participant will not exceed 1.0 in any Limitation
Year. The Annual Additions which may be credited to the Participant's Account
under this Plan for any Limitation Year will be limited in accordance with the
Adoption Agreement.

6.5 DEFINITIONS For purposes of this Article VI, the following terms shall be
defined as follows:

(a) Annual Additions -- The sum of the following amounts allocated to a
Participant's Account for a Limitation Year: (i) all Employer
contributions; (ii) all Participant contributions (other than a qualified
rollover contribution as described in Code Section 402(a)(51); (iii) all
forfeitures; (iv) all amounts allocated, after March 31, 1984, to an
individual medical account (as defined in Code Section 415(1)(2)) which is
part of a defined benefit or annuity plan maintained by the Employer are
treated as Annual Additions to a defined contribution plan; and (v)
amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account of a
"key employee" (as defined in Code Section 419A(d)(3) under a welfare
benefit fund (as defined in Code Section 419(e)) maintained by the
Employer, are treated as Annual Additions to a defined contribution plan.

For the purposes of this Article VI, amounts reapplied under Sections
6.1(d) and 6.2(f) of the Plan to reduce Employer contributions shall also
be included as Annual Additions.

(b) Compensation -- A Participant's wages as defined in Code Section
3121(a), for purposes of calculating social security taxes, but determined
without regard to the wage base limitation in Code Section 3121(a)(1), the
limitations on the exclusions from wages in Code Section 3121(a)(5)(C) and
(D) for elective contributions and payments by reason of salary reduction
agreements, the special rules in Code Section 3121(v), any rules that
limit covered employment based on the type or location of an employee's
employer, and any rules that limit the remuneration included in wages
based on familial relationship or based on the nature or location of the
employment or the services performed (such as the exceptions to the
definition of employment in Code Section 3121(b)(1) through (20)). For any
Self-Employed Individual Compensation means Earned Income.

For Limitation Years beginning after December 31, 1991, for purposes of
applying the limitations of this Article. Compensation for a Limitation
Year is the Compensation actually paid or includible in gross income
during such Limitation Year. Notwithstanding the preceding sentence,
Compensation for a participant in a defined contribution plan who is
permanently and totally disabled (as defined in Code Section 22(e)(3)) is
the Compensation such participant would have received for the Limitation
Year if the participant had been paid at the rate of Compensation paid
immediately before becoming permanently and totally disabled. Such imputed
Compensation for a disabled participant may be taken into account only if
the participant is not a highly compensated employee (as defined in Code
Section 414(q)) and contributions made on behalf of such participant are
nonforfeitable when made.

(c) Defined Benefit Fraction -- A fraction, the numerator of which is
the sum of a Participant's Projected Annual Benefits under all the
qualified defined benefit plans (whether or not terminated) maintained by
the Employer determined at the end of the Limitation Year, and the
denominator of which is the lesser of (i) one hundred and twenty-five
percent (125%) of the dollar limitation for such Limitation Year under
Code Sections 415(b) and (d) (or such higher amount determined by the
Commissioner of Internal Revenue applicable to the calendar year with
which or within which the Limitation Year ends) or (ii) one hundred and
forty percent (140%) of the Participant's average Compensation (or Earned
Income) for the three highest consecutive calendar years of service during
which the Participant was in the Plan including any adjustments under Code
Section 415(b). Notwithstanding the above, if the Participant was a
Participant as of the first limitation year beginning after December 31,
1986 in one or more defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this fraction will
not be less than the product of 1.25 times the sum of the annual benefits
under such plans which the Participant had accrued as of the close of the
last Limitation Year beginning after January 1, 1987, disregarding any
changes in the terms and conditions of the Plan after May 5, 1986. The
preceding sentence applies only if the defined benefit plans individually
and in the aggregate satisfied the requirements of Code Section 415 for
all Limitation Years beginning before January 1, 1987.

(d) Employer -- The Employer that adopts this Plan and in the case of a
group of employers which constitutes (i) a

<PAGE> 14
controlled group of corporations (as defined in Code Section 414(b) as
modified by Code Section 415(h)); (ii) trades or businesses (whether or not
incorporated) which are under common control (as defined in Section 414(c)
as modified by Code Section 415(h)); (iii) an affiliated service group (as
defined in Code Section 414(m)); or (iv) a group of entities required to
be aggregated (pursuant to Code Section 414(o)) all such employers shall
be considered a single employer for purposes of applying the limitations
of this Articles VI.

(e) Excess Amount -- The excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.

(f) Limitation Year -- A calendar year or any other twelve (12)
consecutive month period adopted by the Employer in item 12 of the
Adoption Agreement (Profit Sharing Plan) or item 10 of the Adoption
Agreement (Pension Plan). All qualified plans maintained by the Employer
shall use the same Limitation Year. If the Limitation Year is amended to a
different twelve (12) consecutive month period, the new Limitation Year
shall begin on the date within the Limitation Year in which the amendment
is made.

(g) Master or Prototype Plan -- A plan the form of which is the subject of
a favorable opinion letter from the Internal Revenue Service.

(h) Maximum Permissible Amount -- For a Limitation Year, the Maximum
Permissible Amount with respect to any Participant shall be the lesser of
(i) the Defined Contribution Dollar Limitation or (ii) twenty-five percent
(25%) of the Participant's Compensation for the Limitation Year. The
Compensation limitation described in (ii) shall not apply to any
contribution for medical benefits (within the meaning of Code Sections
401(h) or 419A(f)(2)) which is otherwise treated as an Annual Addition
under Code Sections 415(l)(1) or 419A(d)(2). If a short Limitation Year is
created because of an amendment changing the Limitation Year to a
different twelve (12) consecutive month period, the Maximum Permissible
Amount shall not exceed the defined contribution dollar limitation in Code
Section 415(c)(1)(A) multiplied by a fraction, the numerator of which is
the number of months in the short Limitation Year and the denominator of
which is twelve (12).

(i) Projected Annual Benefit -- A Participant's annual retirement benefit
(adjusted to the actuarial equivalent of a straight life annuity if
expressed in a form other than a straight life or qualified joint and
survivor annuity) under the Plan, assuming that the Participant will
continue employment until the later of current age or Normal Retirement
Age, and that the Participant's Compensation for the Limitation Year and
all other relevant factors used to determine benefits under the Plan will
remain constant for all future Limitation Years.

(j) Defined Contribution Fraction -- A fraction, the numerator of which
is the sum of the Annual Additions credited to the Participant's account
under this and all other qualified defined contribution plans (whether or
not terminated) maintained by the Employer for the current and all prior
Limitation Years (including the Annual Additions attributable to the
Participant's non-deductible employee contributions to all qualified
defined benefit plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years and the Annual
Additions attributable to all welfare benefit funds (as defined in Code
Section 419(e)) and individual medical accounts (as defined in Code
Section 415(l)(2) maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for the current and all
prior Limitation Years of service with the Employer (regardless of whether
a defined contribution plan was maintained by the Employer). The maximum
aggregate amount in any Limitation Year is the lesser of (i) one hundred
and twenty-five percent (125%) of the dollar limitation determined under
Code Sections 415(b) and (d) in effect under Code Section 415(c)(1)(A) or
(ii) thirty-five percent (35%) of the Participant's Compensation for such
Limitation Year.

If the Employee was a participant as of the end of the first day of the
first Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in
existence on May 5, 1986, the numerator of this fraction will be adjusted
if the sum of this fraction and the defined benefit fraction would
otherwise exceed 1.0 under the terms of this Plan. Under the adjustment,
an amount equal to the product of: (i) the excess of the sum of the
fractions over 1.0 times (ii) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction. The adjustment
is calculated using the fractions as they would be computed as of the end
of the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the Code Section 415 limitation applicable to
the first Limitation Year beginning on or after January 1, 1987. The
annual addition for any Limitation Year beginning before January 1, 1987,
shall not be computed to treat all Employee contributions as Annual
Additions.

(k) Defined Contribution Dollar Limitation -- For a Limitation Year,
thirty thousand dollars ($30,000) or, if greater, one-fourth of the
defined benefit dollar limitation set forth in Code Section 415(b)(1) as
in effect for such Limitation Year.

(l) Highest Average Compensation -- The average compensation for the
three consecutive years of Service with the Employer which produces
the highest average.

ARTICLE VII
PARTICIPANTS' ACCOUNTS

7.1 SEPARATE ACCOUNTS Separate Accounts will be maintained for each
Participant for each of the following types of contributions, and the income,
expenses, gains and losses attributable thereto:

(a) Employer Profit Sharing contributions pursuant to Section 4.1 hereof;

(b) Employer Pension Contributions pursuant to Section 4.2 hereof;

(d) Elective Deferrals pursuant to Section 5.2 hereof;

(e) Matching Contributions pursuant to Section 5.3 hereof;

(f) Rollover Contributions pursuant to Section 4.6 hereof.

The Custodian shall establish such other separate Accounts as may be
necessary under the Plan. These Accounts shall be for accounting purposes
only and the Custodian shall not be required to establish separate
Custodial Accounts for these contributions.

7.2 VESTING

(a) A Participant shall at all times have a fully vested and nonforfeitable
interest in all his Accounts except his Employer Profit Sharing
Contributions Account and/or his Employer Pension Contributions Account.

(b) A Participant shall have a vested interest in his Employer Profit
Sharing Contributions Account and/or his Employer Pension Contributions
Account as determined under the vesting schedule elected in item 7 of the
Adoption Agreement.

7.3 COMPUTATION OF VESTING SERVICE All of a Participant's Years of Service
with the Employer shall be counted to determine the

<PAGE> 15
nonforfeitable percentage of his Employer Profit Sharing Contributions Account
and/or his Employer Pension Contributions Account except those Years of Service
excluded under item 7 of the Adoption Agreement. A former Participant who had a
nonforfeitable right to all or a portion of his Account balance derived from
Employer contributions at the time of his termination shall receive credit for
Years of Service prior to his Break in Service upon completing a Year of
Service after his return to the employ of the Employer. A former Participant
who did not have a nonforfeitable right to any portion of his Account balance
derived from Employer contributions at the time of termination from service
will be considered a new employee for vesting purposes, if the number of
consecutive one year Breaks in Service equals or exceeds the greater of (i)
five (5) years or (ii) the aggregate number of Years of Service before such
Breaks in Service. If such a former Participant's Years of Service before
termination from service may not be disregarded pursuant to the preceding
sentence, such former Participant's prior Years of Service shall not be
cancelled hereunder.

7.4 ALLOCATION OF FORFEITURES
(a) As of the end of the Plan Year, forfeitures derived from Employer
Profit Sharing Contributions Accounts which become available for
reallocation during such Plan Year because of the operation of the vesting
provisions of Section 7.2(b), shall be allocated to the Employer Profit
Sharing Contribution Accounts of the Participants who are eligible to
share in an Employer Profit Sharing Contributions for the Plan Year. Such
amounts shall be allocated according to the ratio that each such
Participant's Compensation or Earned Income for the Plan Year bears to the
total Compensation and Earned Income of all such Participants for the Plan
Year. Forfeitures under this subsection (a) will be allocated only for the
benefit of Participants of the Employer adopting this Plan.

(b) Forfeitures derived from Employer Pension Contributions which become
available for reallocation during a Plan Year shall be applied to reduce
the Employer Pension Contributions that would otherwise be due for such
Plan Year under Section 4.2. Forfeitures under this subsection (b) will
only be used to reduce the Employer Pension Contributions of the Employer
adopting this Plan.

(c) If a benefit is forfeited because a Participant or Beneficiary
cannot be found, such benefit will be reinstated if a claim is made by
the Participant or Beneficiary.

(d) No forfeiture will occur solely as a result of a Participant's
withdrawal of any Employee contributions.

ARTICLE VIII
PAYMENT OF BENEFITS
8.1 BENEFITS PAYABLE UNDER THE PLAN

(a) NORMAL RETIREMENT A Participant's interest in all Employer
contributions allocated to his Accounts shall be fully vested and
nonforfeitable on and after his Normal Retirement Age. Such Participant
may retire at any time on or after that date and shall be entitled to
receive, in accordance with the provisions of Sections 8.2 and 8.3 hereof,
the total amount credited to his Accounts. Any Participant who is employed
beyond his Normal Retirement Age shall continue to share in Employer
contributions until his actual retirement.

(b) DEATH BENEFITS Upon the death of a Participant while employed by
the Employer, the total amount credited to such Participant's Accounts
(plus such Participant's share of the Employer contributions for the year
of his death), shall be payable to such Participant's Beneficiary in
accordance with Sections 8.2 and 8.3 hereof. Upon the death of a
Participant following his termination of employment with the Employer, the
vested portion of his Accounts which has not been distributed shall be
payable to such Participant's Beneficiary in accordance with Sections 8.2
and 8.3 hereof.

(c) OTHER TERMINATION OF EMPLOYMENT A Participant who terminates
employment with the Employer on account of Disability shall be entitled to
receive, in accordance with Sections 8.2 and 8.3 hereof, the total amount
credited to his Account. A Participant whose employment with the Employer
is terminated prior to his Normal Retirement Date for any reason other
than death or Disability shall be entitled to receive, in accordance with
the provisions of Sections 8.2 and 8.3 hereof, the portions of his
Accounts that have vested pursuant to Section 7.2 hereof.

(d) FORFEITURES Any amounts in a Participant's Accounts which are not
payable under subsection (c) above when his employment with the Employer
is terminated shall remain in such Accounts and shall continue to share in
profits or losses on investments under Section 9.3 hereof until such
former Participant incurs five (5) consecutive Breaks in Service,
whereupon they shall be forfeited and administered in accordance with
Section 7.4 hereof. In the event a former Participant is reemployed by the
Employer before incurring five (5) consecutive Breaks in Service his
Accounts shall continue to vest in accordance with the vesting schedule
specified in the applicable Adoption Agreement. Notwithstanding the
foregoing, if a terminated Participant receives a distribution on account
of termination of his participation in the Plan of his entire vested
interest in the Pension Plan or the Profit Sharing Plan, such
Participant's nonvested interest in the relevant plan shall be treated as
a forfeiture and administered in accordance with Section 7.4 hereof. If
the Participant elects to have distributed less than the entire vested
portion of his Account balance derived from Employer contributions, the
part of the nonvested portion that will be treated as a forfeiture is the
total nonvested portion multiplied by a fraction, the numerator of which
is the amount of the distribution attributable to Employer contributions
and the denominator of which is the total value of the vested Employer
derived Account balance. For purposes of this Section, if the value of an
employee's vested account balance is zero, the Employee shall be deemed to
have received a distribution of such vested account balance. A
Participant's vested account balance shall not include accumulated
deductible employee contributions within the meaning of Code Section
72(o)(5)(B) for plan years beginning prior to January 1, 1989. If a
Participant receives or is deemed to receive a distribution pursuant to
this subsection (d) and such Participant subsequently resumes employment
covered under the Plan, the forfeited amounts shall be restored from
current forfeitures, or if those are insufficient by a special Employer
contribution, provided that the Participant repays to the Plan the full
amount of the distribution attributable to Employer contributions prior to
the earlier of (i) five (5) years after the Participant is reemployed, or
(ii) the time the Participant incurs five (5) consecutive Breaks in
Service. In the event a former Participant is reemployed after incurring
five (5) consecutive Breaks in Service, separate Accounts will be
maintained for Employer contributions allocated before and after the Break
in Service, and Years of Service earned after his return to employment
shall be disregarded in determining the Participant's vested percentage in
his prebreak Employer contributions.

8.2 MANNER OF DISTRIBUTIONS
(a) DISTRIBUTIONS FROM PENSION PLAN Distributions from the Pension
Plan shall be made as follows:
(i) A Participant's vested interest in the Plan shall be paid by
purchasing an annuity contract from a licensed insurance company,
unless the Participant elects to receive his interest in one of the
alternate forms of benefit described in subsection (c) below. If a
Partici-

21
<PAGE> 16
pant is not married at his annuity starting date, the annuity contract
shall provide a monthly benefit for his life. If a Participant is married
at his annuity starting date, the annuity shall be in the form of a
qualified joint and survivor annuity. A "qualified joint and survivor
annuity" is an immediate annuity for the life of the Participant with a
survivor annuity for the life of the spouse which is equal to fifty
percent (50%) of the amount of the annuity which is payable during the
joint lives of the Participant and the spouse and which is the amount of
benefit which can be purchased with the Participant's vested Account
balance. The Participant may elect to have such annuity distributed upon
attainment of the earliest retirement age under the Plan. Any annuity
contract purchased hereunder and distributed in accordance with this
Section 8.2 shall be nontransferable and shall comply with the terms of
this Plan. For purposes of this Section, the earliest retirement age
shall be the Participant's age on the earliest date on which the
Participant could elect to receive retirement benefits.

(ii) Unless an optional form of benefit is selected in accordance with
subsection (c) below, if a Participant has a spouse and dies prior to his
annuity starting date (the date annuity payments commence), the
Participant's vested Account balance in the Plan shall be applied toward
the purchase of a life only annuity contract from a licensed insurance
company providing a benefit for the life of the surviving spouse. The
surviving spouse may elect to have such annuity distributed within a
reasonable period after the Participant's death.

(iii) For any distribution subject to the annuity requirements in
subsection (i) above, a Participant or Beneficiary may elect in
writing, within the ninety (90) day period ending on the annuity starting
date (the date annuity or any other form of benefit payments commence),
to receive his vested interest in the Plan in one of the alternate forms
of benefit set forth in subsection (c) below in lieu of the form of
benefit otherwise payable hereunder. Any waiver of the joint and survivor
annuity by a married Participant shall not be effective unless: (A) the
Participant's spouse consents in writing to the election; (B) the election
designates a specific Beneficiary, including any class of beneficiaries
or any contingent beneficiaries, which may not be changed without spousal
consent (or the spouse expressly permits designations by the Participant
without any further spousal consent); (C) the spouse's consent
acknowledges the effect of the election; and (D) the spouse's consent is
witnessed by a Plan representative or notary public. Additionally, a
Participant's waiver of the joint and survivor annuity shall not be
effective unless the election designates a form of benefit payment which
may not be changed without spousal consent (or the spouse expressly
permits designations by the Participant without any further spousal
consent). If it is established to the satisfaction of a Plan
representative that there is no spouse or that the spouse cannot be
located, a waiver will be deemed a qualified election. Any consent by a
spouse obtained under this provision (or establishment that the consent
of a spouse may not be obtained) shall be effective only with respect to
such spouse. A consent that permits designations by the Participant
without any requirement of further consent by such spouse must
acknowledge that the spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit where applicable, and that
the spouse voluntarily elects to relinquish either or both of such
rights. A revocation of a prior election may be made by a Participant
without the consent of the spouse at any time before the commencement of
benefits. The number of revocations shall not be limited. No consent
obtained under this provision shall be valid unless the Participant and
the spouse have received notice as provided in subsection (v) below.

(iv) A Participant may elect in writing to waive the surviving spouse
benefit otherwise payable under subsection (ii) above. The benefit may be
waived at any time during the period which begins on the first day of the
Plan Year in which the Participant attains age 35 and ends on the date of
the Participant's death. A Participant and the spouse may waive the
pre-retirement survivor death benefit prior to age 35, provided that such
early waiver becomes invalid in the Plan Year the Participant attains age
35 and a new waiver must be made pursuant to this subsection (iv). If the
Participant separates from service prior to the first day of the Plan
Year in which he attains age 35, the surviving spouse benefit may be
waived, with respect to the Participant's account balance as of the date
of separation, at any time during the period which begins on the date of
such separation and ends on the date of the Participant's death.
Notwithstanding the foregoing, any election by a Participant to waive the
surviving spouse benefit payable under subsection (ii) above shall not be
effective unless: (A) the Participant's spouse consents in writing to the
election; (B) the spouse's consent acknowledges the effect of the
election; and (C) the spouse's consent is witnessed by a Plan
representative or notary public. If it is established to the satisfaction
of a Plan representative that there is no spouse or that the spouse
cannot be located, a waiver will be deemed a qualified election. Any
consent by a spouse obtained under this provision (or establishment that
the consent of a spouse may not be obtained) shall be effective only with
respect to such spouse. A revocation of a prior election may be made by a
Participant without the consent of the spouse at any time before the
commencement of benefits. The number of revocations shall not be limited.
No consent obtained under this provision shall be valid unless the
Participant and the spouse have received notice as provided in subsection
(v) below.

(v) The Administrator shall provide the Participant and the Spouse, as
applicable, with a written explanation of: (A) the terms and conditions
of the annuity described in subsections (i) or (ii), as applicable; (B)
the Participant's or Spouse's, as applicable, right to waive the payment
of benefits in the form of an annuity; (C) the rights of the
Participant's spouse; and (D) the right to make, and the effect of, the
revocation of a previous election to waive the payment of benefits in the
form of an annuity described in subsections (i) or (ii) hereof. In the
case of the annuity described in subsection (i), such explanation shall
be provided no less than thirty (30) days and no more than ninety (90)
days prior to the annuity starting date. In the case of the annuity
described in subsection (ii), such explanation shall be provided within
the applicable period for such Participant. The applicable period for a
Participant is whichever of the following periods ends last: (A) the
period beginning with the first day of the Plan Year in which the
Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age 35; (B) a
reasonable period ending after the individual becomes a Participant; (C)
a reasonable period ending after this Article first applies to the
Participant. Notwithstanding the foregoing, notice must be provided
within a reasonable period ending after separation from service in

22
<PAGE> 17
the case of a Participant who separates from service before attaining
age 35. For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (B) and (C) is
the end of the two-year period beginning one year prior to the date
the applicable event occurs, and ending one year after that date. In
the case of a Participant who separates from service before the Plan
Year in which age 35 is attained, notice shall be provided within the
two-year period beginning one year prior to separation and ending one
year after separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such
Participant shall be redetermined. A written explanation comparable
to the notices described above shall be provided to a Participant who
is waiving the surviving spouse benefit prior to attaining age 35.

(vi) The Administrator shall be responsible for the purchase of any
annuity contracts required to be purchased in accordance with the
terms of this Plan.

(b) DISTRIBUTIONS FROM PROFIT SHARING PLAN Distributions from the Profit
Sharing Plan shall be made in the form elected by the Participant (or
Beneficiary) as described in subsection (c) below. Notwithstanding the
foregoing, if the Profit Sharing Plan is a direct or indirect transferee of
a defined benefit plan, a money purchase pension plan (including a target
benefit plan), or a stock bonus or profit sharing plan or is an amendment
of an original Plan which is (or was) subject to the survivor annuity
requirements of Code Sections 401(a)(11) or 417 then distributions shall be
made in accordance with the provisions of subsection (a) above.

(c) Optional Forms of Distribution. All distributions required under this
subsection shall be determined and made in accordance with the Income Tax
Regulations under Code Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)-2 of such
Regulations.

(i) Amounts payable to a Participant shall be distributed in one of the
following forms as elected by the Participant, with spousal consent,
as applicable:

(A) a lump sum; or

(B) installments over a period certain not to exceed the life
expectancy of the Participant or the joint life expectancy of the
Participant and his Beneficiary.

Such election shall be made in writing and in such form as shall be
acceptable to the Administrator. If the Participant fails to elect any
of the methods of distribution described above within the time
specified for such election, the Administrator shall distribute the
Participant's Account in the form of a single sum cash payment by the
April 1 following the calendar year in which the Participant attains
age seventy and one-half (70 1/2).

(ii) If a Participant's benefit is to be distributed in installment
payments under (B) above, the amount distributed for each calendar
year, beginning with distributions for the first distribution calendar
year, must at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy. The life
expectancy (or joint and last survivor expectancy) is calculated
using the attained age of the Participant (or Beneficiary) as of the
Participant's (or Beneficiary's) birthday in the applicable calendar
year reduced by one for each calendar year which has elasped since
the date life expectancy is being recalculated, the applicable life
expectancy shall be the life expectancy as so recalculated. The
applicable calendar year shall be the first distribution calendar
year, and, if life expectancy is being recalculated, such succeeding
calendar year.

Unless otherwise elected by the Participant (or the Participant's
spouse) by the time distributions are required to begin, life
expectancies shall be recalculated annually. Such election shall be
irrevocable as to the Participant (or spouse) and shall apply to all
subsequent years. The life expectancy of a nonspouse Beneficiary may
not be recalculated. Life expectancy and joint life expectancy are
computed by use of the expected return multiples in Tables V and VI of
Section 1.72-9 of the Income Tax Regulations.

Notwithstanding anything herein to the contrary, for calendar years
beginning before January 1, 1989, if the Participant's spouse is not
the designated Beneficiary, the method of distribution selected
must assure that at least fifty percent (50%) of the present value of
the amount available for distribution is paid within the life
expectancy of the Participant. For calendar years beginning after
December 31, 1988, the amount to be distributed each year shall not
be less than the quotient obtained by dividing the Participant's
benefit by the lesser of (A) the applicable life expectancy or (B) if
the Participant's spouse is not the designated Beneficiary, the
applicable divisor determined from the table set forth in Q&A-4 of
Section 1.401(a)(9)-2 of the Income Tax Regulations. Distributions
after the death of the Participant shall be distributed using the
applicable return multiple specified in Section 1.72-9 of the Income
Tax Regulations as the relevant divisor without regard to Section
1.401(a)(9)-2 of the Income Tax Regulations.

(iii) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the
Participant's required beginning date as described in Section 8.3(c)
hereof. The minimum distribution for other calendar years,
including the minimum distribution for the distribution calendar year
in which such required beginning date occurs, must be made on or
before December 31 of that distribution calendar year.

(e) In any case where the Participant or Beneficiary has determined payment to
be on an installment basis, such Participant or Beneficiary may by written
request directed to the Administrator, at any time following commencement
of such installment payments, accelerate all or any portion of the unpaid
balance.

(f) For purposes of this Section a "spouse" shall include the spouse or
surviving spouse of a Participant, provided that a former spouse shall be
treated as the spouse or surviving spouse and a current spouse will not be
treated as a spouse or surviving spouse to the extent provided under a
qualified domestic relations order as descibed in Code Section 414(p).

(g) The payment of benefits in either a lump sum or in installments under this
Section 8.2 may be made in cash or in Investment Company Shares.

8.3 COMMENCEMENT OF PAYMENTS
(a) Subject to the provisions of this Section 8.3, payment of benefits, under
whichever method is selected, shall be made or commence as soon as
administratively practicable after the Valuation Date immediately following
the Participant's retirement, death or other termination of employment.

(b) If the Participant's vested Account balance in the Pension Plan or the
Profit Sharing Plan exceeds (or at the time of any prior distribution
exceeded) three thousand five hundred dollars ($3,500), no distribution
of that interest shall be made prior to the Participant's Normal Retirement
Age without the written consent of the Participant and, in the case of the
Pension Plan, the Participant's spouse (or where either the Participant or
the spouse has died, the

23
<PAGE> 18
survivor). The consent of the Participant and the Participant's spouse
shall be obtained in writing within the ninety (90) day period ending on
the annuity starting date. The annuity starting date is the first day of
the first period for which an amount is paid as an annuity or any other
form. The Administrator shall notify the Participant and the Participant's
spouse of the right to defer any distribution until the Participant's
Account balance is no longer immediately distributable. Such notification
shall include a general description of the material features, and an
explanation of the relative values of the optional forms of benefit
available under the Plan in a manner that would satisfy the notice
requirements of Code Section 417(a)(3), and shall be provided no less than
thirty (30) days and no more than ninety (90) days prior to the annuity
starting date.

Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a qualified joint and
survivor annuity while the Account balance is immediately distributable.
(Furthermore, if payment in the form of a qualified joint and survivor
annuity is not required with respect to the Participant pursuant to Section
8.2(b) of the Plan, only the Participant need consent to the distribution
of an Account balance that is immediately distributable.) Neither the
consent of the Participant nor the Participant's spouse shall be required
to the extent that a distribution is required to satisfy Code Sections
401(a)(9) or 415. In addition, upon termination of this Plan if the Plan
does not offer an annuity option (purchased from a commercial insurance
company), the Participant's Account balance may, without the Participant's
consent, be distributed to the Participant or transferred to another
defined contribution plan (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7)) within the same controlled group.

An Account balance is immediately distributable if any part of the
Account balance could be distributed to the Participant (or surviving
spouse) before the Participant attains (or would have attained if not
deceased) the later of his Normal Retirement Age or age sixty-two (62).

For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first Plan
Year beginning after December 31, 1988, a Participant's vested Account
balance shall not include amounts attributable to accumulated deductible
employee contributions within the meaning of Code Section 72(o)(5)(B).

(c) Unless the Participant (or the Participant's Beneficiary, if the
Participant is dead) elects to defer commencement under (b) above,
distribution of benefits shall begin no later than the sixtieth (60th) day
after the close of the Plan Year in which occurs the latest of (i) the
Participant's attainment of age 65 (or normal retirement age, if earlier);
(ii) the tenth (10th) anniversary of the year in which the Participant
commenced participation in the Plan; or (iii) the date the Participant
terminates service with the Employer. Notwithstanding the foregoing, the
failure of a Participant and the spouse to consent to a distribution while
a benefit is immediately distributable, within the meaning of Section 8.1
of the Plan, shall be deemed to be an election to defer commencement of
payment of any benefit sufficient to satisfy this Section.

(d) Notwithstanding anything herein to the contrary, payment of
benefits to a Participant shall commence by the Participant's required
beginning date, even if the Participant is still employed. A Participant's
required beginning date is the April 1 of the calendar year following the
calendar year in which the Participant attains age seventy and one-half (70
1/2): provided that the required beginning date of a Participant who
attains age 70 1/2 before January 1, 1988, shall be determined in
accordance with (i) or (ii) below:
(i) The required beginning date of a Participant who is not a
5-percent owner is the first day of April of the calendar year
following the calendar year in which the later of retirement or
attainment of age seventy and one-half (70 1/2) occurs.

(ii) The required beginning date of a Participant who is a
5-percent owner during any year beginning after December 31, 1979, is
the first day of April following the later of the calendar year in
which the Participant attains age seventy and one-half (70 1/2), or
the earlier of the calendar year with or within which ends the Plan
Year in which the Participant becomes a 5-percent owner, or the
calendar year in which the Participant retires.

The required beginning date of a Participant who is not a
5-percent owner who attains age seventy and one-half (70 1/2) during
1988 and who has not retired as of January 1, 1989, is April 1, 1990.

A Participant is treated as a 5-percent owner for purposes of
this subsection (d) if such Participant is a 5-percent owner as
defined in Code Section 416(i) (determined in accordance with Code
Section 416, but without regard to whether the Plan is top-heavy) at
any time during the Plan Year ending with or within the calendar year
in which such owner attains age sixty-six and one-half (66 1/2) or any
subsequent Plan Year. Once distributions have begun to a 5-percent
owner under this subsection (d), they must continue to be distributed,
even if the Participant ceases to be a 5-percent owner in a subsequent
year.

Distributions may be delayed pursuant to an election made prior
to January 1, 1984, under Section 242 of the Tax Equity and Fiscal
Responsibility Act of 1982; provided that the method of distribution
selected must be in accordance with the requirements of Code Section
401(a)(9) as in effect prior to amendment by the Deficit Reduction Act
of 1984. If such an election is revoked, any subsequent distribution
must satisfy the requirements of Code Section 401(a)(9). If a
designation is revoked subsequent to the date distributions are
required to begin, the Plan must distribute by the end of the calendar
year following the calendar year in which the revocation occurs the
total amount not yet distributed which would have been required to have
been distributed to satisfy Code Section 401(a)(9), but for such
Section 242(b)(2) election. For calendar years beginning after
December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Section 1.401(a)(9)-2
of the Income Tax Regulations. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or
addition does not alter the period over which distributions are to be
made under the designation, directly or indirectly (for example, by
altering the relevant measuring life).

(e) (i) If a Participant dies after benefit payments have
begun, the Participant's remaining interest in the Plan shall be
distributed to his designated Beneficiary at least as rapidly as under
the method of distribution being used prior to the Participant's
death.

(ii) If the Participant dies before benefit payments have
commenced, distribution of the Participant's entire interest in the
Plan shall be completed by the December 31 of the calendar year
containing the fifth (5th)

<PAGE> 19
anniversary of the Participant's death, except to the extent that an
election is made to receive distributions in accordance with the
following: (A) if any portion of the Participant's interest is payable
to a designated Beneficiary, distributions may be made over the life or
over a period certain not greater than the life expectancy of the
designated Beneficiary commencing on or before December 31 of the
calendar year immediately following the calendar year in which the
Participant died; (B) if the designated Beneficiary is the Participant's
surviving spouse, the date distributions are required to begin in
accordance with (A) above shall not be earlier than the later of
December 31 of the calendar year immediately following the calendar year
in which the Participant died and December 31 of the calendar year in
which the Participant would have attained age seventy and one-half
(70-1/2).

If the Participant has not made an election pursuant to this subsection
(ii) by the time of his death, the designated Beneficiary must elect the
method of distribution no later than the earlier of December 31 of the
calendar year in which distributions would be required to begin under
this subsection (e) or December 31 of the calendar year which contains
the fifth anniversary of the date of death of the Participant. If the
Participant has no designated Beneficiary, or if the designated
Beneficiary does not elect a method of distribution, distribution of the
Participant's entire interest in the Plan must be completed by December
31 of the calendar year containing the fifth anniversary of the
Participant's death.

For purposes of this subsection (ii), if the surviving spouse dies
after the Participant, but before payments to such spouse begin, the
provisions of this subsection (ii), with the exception of paragraph (B)
above, shall be applied as if the surviving spouse were the Participant.
Any amount paid to a child of the Participant will be treated as if it
had been paid to the surviving spouse if the amount becomes payable to
the surviving spouse when the child reaches the age of majority.

For the purposes of this subsection (e), distribution of a
Participant's interest is considered to begin on the Participant's
required beginning date (or the date distribution is required to begin
to the surviving spouse). If a distribution in the form of an annuity
irrevocably commences to the Participant before the required beginning
date, the date the distribution is considered to begin is the date
distribution actually commences.

(iii) A Participant's interest in the Plan is his Account balance as
of the last valuation date in the calendar year immediately preceding
the distribution calendar year (the valuation calendar year) increased
by the amount of any contributions or forfeitures allocated to the
Account balance as of dates in the valuation calendar year after the
valuation date and decreased by distributions made in the valuation
calendar year after the valuation date. If any portion of the minimum
distribution for the first distribution calendar year is made in the
second distribution calendar year on or before the required beginning
date, the amount of the minimum distribution made in the second
distribution calendar year shall be treated as if it had been made in
the immediately preceding distribution calendar year.

The distribution calendar year is a calendar year for which a minimum
distribution is required. For distributions beginning before the
Participant's death, the first distribution calendar year is the
calendar year immediately preceding the calendar year which contains the
Participant's required beginning date. For distributions beginning after
the Participant's death, the first distribution calendar year is the
calendar year in which distributions are required to begin pursuant to
subsection (ii) above.

For purposes of this subsection (e), the designated Beneficiary is the
individual who is designated as the Beneficiary under the Plan in
accordance with Code Section 401(a)(9) and the proposed regulations
thereunder.

8.4 PAYMENT OF SMALL AMOUNTS Notwithstanding anything herein to the contrary,
if the present value of the Participant's vested interest in the Pension Plan
does not exceed (nor at the time of any prior distribution exceeded) three
thousand five hundred dollars ($3,500) as of the date the Participant's
employment with the Employer terminates, the Administrator shall distribute the
present value of such interest to the Participant in a lump sum as soon as
administratively practicable after the end of the Plan Year in which
termination occurs. Likewise, if the total present value of the Participant's
vested interest in the Profit Sharing Plan and Cash or Deferred Arrangement
does not exceed (nor at any time of any prior distribution exceeded) three
thousand five hundred dollars ($3,500) as of the date the Participant's
employment with the Employer terminates, the Administrator shall distribute the
present value of this interest to the Participant in a lump sum as soon as
administratively practicable after the end of the Plan Year in which
termination occurs. A Participant whose entire vested interest in the Pension
Plan and/or the Profit Sharing Plan has been distributed or who has no vested
interest in the Pension Plan and/or the Profit Sharing Plan shall be deemed
cashed out from the Pension Plan and/or the Profit Sharing Plan, as applicable.

8.5 PERSONS UNDER LEGAL OR OTHER DISABILITY In the event a Participant or
Beneficiary is declared incompetent and a guardian or other person legally
charged with the care of his person or of his property is appointed, any
benefits to which such Participant or Beneficiary is entitled shall be paid to
such guardian or other person legally charged with the care of his person or of
his property.

8.6 WITHDRAWALS FROM PROFIT SHARING PLAN
(a) If elected in item 10 of the Adoption Agreement (Profit Sharing
Plan), a Participant shall be permitted to withdraw the specified
percentage of his vested Employer Profit Sharing Account while he is still
employed after attainment of age fifty-nine and one-half (59-1/2) or
prior to attainment of such age on account of a financial hardship:
provided, that such Participant has been an active Participant in the Plan
for at least five (5) years. A Participant may not make another withdrawal
on account of financial hardship under this Section 8.6 until he has been
an active Participant for at least an additional five (5) years from the
date of his last hardship withdrawal. For purposes of this Section 8.6, a
financial hardship shall mean a financial need or emergency which requires
the distribution of a Participant's Plan account in order to meet such
need or emergency. The determination of the existence of a financial
hardship and the amount required to be distributed to meet the hardship
shall be made by the Administrator in accordance with such uniform and
nondiscriminatory rules as may be established by the Administrator. A
request for a withdrawal shall be made in writing in a form prescribed by
the Administrator and shall be made in accordance with procedures and
limitations established by the Administrator. Notwithstanding the above,
no withdrawal under this Section 8.6 shall be permitted if the Integration
Formula is selected in item 6 of the Adoption Agreement (Profit Sharing
Plan).

(b) If a distribution is made pursuant to this Section 8.6 at a time
when the Participant has a nonforfeitable right to less than one hundred
percent (100%) of his Account balance

<PAGE> 20
derived from Employer contributions and the Participant may increase
the nonforfeitable percentage in the Account:
(i) A separate Account will be established for the
Participant's interest in the Plan as of the time of the distribution;
and

(ii) At any relevant time the Participant's nonforfeitable
portion of the separate Account will be equal to an amount ("X")
determined by the formula:

X = P(AB + (R x D)) - (R x D)

For purposes of applying the formula above: P is the
nonforfeitable percentage at the relevant time, AB is the Account
balance at the relevant time, D is the amount of the distribution, and
R is the ratio of the Account balance at the relevant time to the
Account balance after distribution.

ARTICLE IX
ESTABLISHMENT OF CUSTODIAL ACCOUNT; INVESTMENTS
9.1 CUSTODIAL ACCOUNT
(a) Unless the Employer elects otherwise in the Adoption Agreement, the
Custodian shall open and maintain separate Custodial Accounts for each
individual that the Employer shall from time to time certify to the
Custodian as a Participant in the Plan. Such Custodial Accounts shall
reflect the various Participant Accounts described at Section 7.1 hereof.

(b) If the Employer so elects in the Adoption Agreement the Custodian
shall open and maintain a single Custodial Account in the name of the
Employer. If only a single Custodial Account is established, the Employer
shall be responsible for maintaining the records for the individual
Participant accounts.

(c) In the event that separate balances are not maintained for the
portion of a Participant's Account balance derived from Employer
contributions and Participant Voluntary Contributions, the Account balance
derived from Participant Voluntary Contributions shall be the Participant's
total account balance multiplied by a fraction, the numerator of which is
the total amount of Participant Voluntary Contributions (less any
withdrawals) and the denominator of which is the sum of the numerator and
the total Employer contributions (including Elective Deferrals) made on
behalf of such Participant.

9.2 RECEIPT OF CONTRIBUTIONS The Custodian shall accept such contributions of
money on behalf of Participants as it may receive from time to time from the
Employer. The Custodian may, in its sole discretion, also accept money or
Investment Company Shares held under a preceding plan of the Employer qualified
under Code Section 401(a) or which qualify as rollover contributions or
transfers under Section 4.6 of the Plan. All such contributions shall be
accompanied by written instructions, in a form acceptable to the Custodian,
from the Employer specifying the Participant Accounts to which they are to be
credited.

9.3 INVESTMENT OF ACCOUNT ASSETS
(a) Upon written instructions given by the Employer on a uniform and
nondiscriminatory basis as between Participants, the Custodian shall invest
and reinvest contributions credited to a Participant Account(s) in
Investment Company Shares. All Participant Accounts shall share in the
profits or losses of the investments on a pro rata basis (i.e., in the
ratio that the Participant's Account balance bears to all Account balances,
other than Accounts which are self-directed under subsection (b) below),
subject to adjustment by the Administrator on a fair and equitable basis
for contributions, distributions and/or withdrawals during the year. The
amount of each contribution credited to a Participant Account to be applied
to the purchase of Investment Company Shares shall be invested by the
Custodian at the applicable offering price. These purchases shall be
credited to such Account with notation as to cost. The Custodian shall have
no discretionary investment responsibility and in no event be liable to any
person for following investment instructions given by the Employer or the
Participant in the manner provided herein.

(b) Each Participant, through his separate Participant Account(s),
shall be the beneficial owner of all investments held in such Account(s).
The Employer however shall direct the Custodian (in a nondiscriminatory
manner) regarding the selection of specific Investment Company Shares to be
purchased for the Accounts of the Participants. The Employer may permit (in
a nondiscriminatory manner) the individual Participants to select and direct
the purchase of specific Investment Company Shares for their own
Account(s). In such a situation, the Employer shall transmit all such
directions to the Custodian. Notwithstanding the foregoing, unless
otherwise elected in the Adoption Agreement the individual Participant may
direct the investment of his Account(s) and select the specific Investment
Company Shares for purchase for his individual Account(s) by directly
communicating with the Custodian.

(c) All income, dividends and capital gain distributions received on
the Investment Company Shares held in each Participant Account shall be
reinvested in such shares which shall be credited to such Account. If any
distribution on Investment Company Shares may be received at the election
of the Participant in additional shares or in cash or other property, the
Custodian shall elect to receive it in additional shares. All investments
acquired by the Custodian shall be registered in the name of the Custodian
or its registered nominee.

9.4 EXCLUSIVE BENEFIT The Custodial Account or Accounts established hereby
shall not be used or diverted to purposes other than the exclusive benefit of
Participants or their Beneficiaries.

9.5 EXPENSES All expenses and charges in respect of the Plan and the Custodial
Account, including, without limitation, the Custodian's fees and commissions
and taxes of any kind upon or with respect to the Plan, shall be paid by the
Employer; provided, however, that the Custodian shall be authorized to pay such
charges and expenses from the Plan if the Employer shall fail to make payment
within thirty (30) days after it has been billed therefor by the Custodian or
such charges have otherwise become due.

9.6 VOTING The Custodian shall deliver, or cause to be executed and delivered,
to the Employer all notices, prospectuses, financial statements, proxies
and proxy soliciting materials received by the Custodian relating to investments
held in Participants' Accounts. The Custodian shall vote all proxies only in
accordance with instructions received from the Employer.

9.7 REPORTS OF THE CUSTODIAN AND ADMINISTRATOR
(a) The Custodian shall keep accurate and detailed records of all
receipts, investments, disbursements and other transactions required to be
performed hereunder. Not later than sixty (60) days after the close of each
calendar year (or after the Custodian's resignation or removal), the
Custodian shall file with the Employer a written report reflecting the
receipts, disbursements and other transactions effected by it during such
year (or period ending with such resignation or removal) and the assets of
this Plan at its close. Such report shall be open to inspection by any
Participant for a period of thirty (30) days immediately following the date
on which it is filed with the Employer. Upon the expiration of such thirty
(30) day period, the Custodian shall be forever released and discharged
from all liability and accountability to anyone with respect to its acts,
transactions, duties, obligations or responsibilities as shown in or
reflected by such report, except with respect to any such acts or
transactions as to which the Employer shall have

26
<PAGE> 21
filed written objections with the Custodian within such thirty (30) day
period.

(b) Annual reports provided to the Employer by the Custodian shall be,
in the Custodian's discretion, on a calendar year basis unless otherwise
required by law. The Employer shall compute the valuation of all Plan assets
at least annually at the fair market value as of the last day of each
calendar year.

(c) The Custodian shall keep such records, make such identifications
and file such returns and other information concerning the Plan as may be
required of the Custodian under the Code or forms adopted thereunder.

(d) The Administrator shall be solely responsible for the filing of any
reports or information required under the Code or forms adopted thereunder.

9.8 LIMITATION OF CUSTODIAN'S DUTIES AND LIABILITY
(a) The Custodian's duties are limited to those set forth in this Plan,
and the Custodian shall have no other responsibility in the administration
of the Plan or for compliance by the Employer with any provision thereof.
The Custodian shall not be responsible for the collection of contributions
provided for under the Plan; the purpose or propriety of any distribution;
or any action or nonaction taken by the Employer or pursuant to the
Employer's request. The Custodian shall have no responsibility to determine
if instructions received by it from the Employer, or the Employer's
designated agent, comply with the provisions of the Plan. The Custodian
shall not have any obligation either to give advice to any Participant on
the taxability of any contributions or payments made in connection with the
Plan or to determine the amount of excess contribution and net income
attributable thereto. The Custodian may employ suitable agents and counsel
and pay their reasonable expenses and compensation, and such agents or
counsel may or may not be agent or counsel for the Employer, and may be the
Investment Advisor or an Investment Company.

(b) The Employer shall at all times fully indemnify and hold harmless
the Custodian, its agents, counsel, successors and assigns, from any
liability arising from distributions made or actions taken, and from any
and all other liability whatsoever which may arise in connection with this
Plan, except liability arising from the negligence or willful misconduct of
the Custodian. The Custodian shall be under no duty to take any action
other than as herein specified with respect to this Plan unless the
Employer shall furnish the Custodian with instructions in a form acceptable
to the Custodian; or to defend or engage in any suit with respect to this
Plan unless the Custodian shall have first agreed in writing to do so and
shall have been fully indemnified to the satisfaction of the Custodian. The
Custodian (and its agents) may conclusively rely upon and shall be
protected in acting upon any written order from the Employer or any other
notice, request, consent, certificate or other instrument or paper believed
by it to be genuine and to have been properly executed, and, so long as it
acts in good faith, in taking or omitting to take any other action. No
amendment to the Plan shall place any greater burden on the Custodian
without its written consent. The Custodian shall not be lible for interest
on any cash balances maintained in the Plan.

(c) The Employer shall have the sole authority to enforce the terms of
the Plan on behalf of any and all persons having or claiming any interest
therein by virtue of the Plan.

(d) The Custodian, its agents, counsel, successors and assigns, shall
not be liable to the Employer, or to any Participants or Beneficiary for
any depreciation or loss of assets, or for the failure of this Plan to
produce any or larger net earnings. The Custodian further shall not be
liable for any act or failure to act of itself, its agents, employees, or
attorneys, so long as it exercises good faith, is not guilty of negligence
or willful misconduct, and has selected such agents, employees, and
attorneys with reasonable diligence. The Custodian shall have no
responsibility for the determination or verification of the offering or
redemption prices or net asset values of Investment Company Shares, and
shall be entitled to rely for such prices and net asset values upon
statements issued by or on behalf of the Investment Company issuing the
Investment Company Shares. The Custodian shall have no duty to inquire into
the investment practices of such Investment Company; such Investment
Company shall have the exclusive right to control the investment of its
funds in accordance with its stated policies, and the investments shall not
be restricted to securities of the character now or hereafter authorized
for trustees by law or rules of court. The Custodian shall not be liable or
responsible for any omissions, mistakes, acts or failures to act of such
Investment Company, or its successors, assigns or agents. Notwithstanding
the foregoing, nothing in this Plan shall relieve the Custodian of any
responsibility or liability under ERISA.

ARTICLE X
AMENDMENT AND TERMINATION
10.1 AMENDMENT
(a) The Employer reserves the right at any time and from time to time
to amend or terminate the Plan. No part of the Plan shall by reason of any
amendment or termination be used for or diverted to purposes other than the
exclusive benefit of Participants and their Beneficiaries, and further that
no amendment or termination may retroactively change or deprive any
Participant or Beneficiary of rights already accrued under the Plan except
insofar as such amendment is necessary to preserve the qualification and
tax exemption of the Plan pursuant to Code Section 401. No amendment shall
increase the duties of the Custodian or otherwise adversely affect the
Custodian unless the Custodian expressly agrees thereto. However, if the
Employer amends any provision of this Plan (including a waiver of the
minimum funding requirements under Code Section 412(d) other than by
changing any election made in the Adoption Agreement, adopting an amendment
stated in the Adoption Agreement which allows the Plan to satisfy Code
Section 415, to avoid duplication of minimum benefits under Code Section
416 or to add certain model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause the
Plan to be treated as an individually designed plan, such Employer shall no
longer participate under this prototype plan and the Employer's Plan shall
be deemed to be an individually designed plan. The Employer hereby
irrevocably delegates (retaining, however, the right and power to change
any election made in the Adoption Agreement) to the Investment Advisor the
right and power to amend the Plan at any time, and from time to time, and
the Employer by adopting the Plan shall be deemed to have consented
thereto. The Investment Advisor shall notify the Employer of any amendment
to the Plan. For purposes of any Investment Advisor amendments, the mass
submitter shall be recognized as the agent of the Investment Advisor. If
the Investment Advisor does not adopt the amendments made by the mass
submitter, it will no longer be identical to or a minor modifier of the
mass submitter plan.

(b) No amendment to the Plan shall be effective to the extent that it
has the effect of decreasing a Participant's accrued benefit except to the
extent permitted by Code Sections 412(c)(8) and 411(d)(6). For purposes of
this subsection, a Plan amendment which has the effect of decreasing a
Participant's Account balance or eliminating an optional form of benefit,
with respect to benefits attributable to service before the amendment shall
be treated as reducing an accrued benefit. Furthermore, if the vesting
schedule of a

<PAGE> 22
Plan is amended, in the case of an Employee who is a Participant as of
the later of the date such amendment is adopted or the date it becomes
effective, the nonforfeitable percentage (determined as of such date) of
such Employee's right to his Employer-derived accrued benefit will not be
less than his percentage computed under the Plan without regard to such
amendment.

(c) Notwithstanding subsection (a) above, an Employer may amend the Plan
by adding overriding plan language to the Adoption Agreement where such
language is necessary to satisfy Code Sections 415 or 416 because of the
required aggregation of multiple plans under such Code Sections.

10.2 TERMINATION Upon complete discontinuance of the Employer's Profit Sharing
Contributions (if the Employer has adopted a Profit Sharing Plan by completing
the appropriate Adoption Agreement) or termination or partial termination of
the Plan, each affected Participant's Account shall become nonforfeitable. Upon
termination or partial termination of the Plan, the Employer shall instruct the
Custodian whether currently to distribute to each Participant the entire amount
of the Participant's Account, in such one or more of the methods described in
Article VIII, or whether to continue the Plan and to make distributions
therefrom as if the Plan had continued; provided that, in the event the Plan is
continued, the Plan must continue to satisfy the requirements of Code Section
401(a). The Employer shall in all events exercise such discretion in a
nondiscriminatory manner. The Plan shall continue in effect until the Custodian
shall have completed the distribution of all of the Plan asset and the accounts
of the Custodian have been settled.

ARTICLE XI
FIDUCIARY RESPONSIBILITIES
11.1 ADMINISTRATOR The Administrator shall have the power to allocate
fiduciary responsibilities and to designate other persons to carry out such
fiduciary responsibilities; provided such allocation is in writing and filed
with the Plan records. The Administrator may employ one or more persons to
render advice to the Administrator with regard to its responsibilities under
the Plan, and consult with counsel, who may be counsel to the Employer.

11.2 POWERS OF ADMINISTRATOR The Administrator shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out its
terms. The Administrator shall have discretionary authority to determine
eligibility for benefits and to interpret and construe the terms of the Plan,
and any such determination, interpretation or construction shall be final and
binding on all parties unless arbitrary and capricious. Any such discretionary
authority shall be carried out in a uniform and nondiscriminatory manner.

11.3 RECORDS AND REPORTS The Administrator, or those to whom it has delegated
fiduciary duties, shall keep a record of all proceedings and actions, and shall
maintain all such books of account, records and other data as shall be
necessary for the proper administration of the Plan. The Administrator, or
those to whom it has delegated fiduciary duties, shall have responsibility for
compliance with the provisions of ERISA relating to such office, including
filing with the Secretary of Labor and Internal Revenue Service of all reports
required by the Code and/or ERISA and furnishing Participants and Beneficiaries
with descriptions of the Plan and reports required by ERISA.

11.4 OTHER ADMINISTRATIVE PROVISIONS
(a) No bond or other security shall be required of the Administrator,
and/or any officer or Employee of the Employer to whom fiduciary
responsibilities are allocated, except as may be required by ERISA.

(b) The Administrator or the Employer may shorten, extend or waive the
time (but not beyond sixty days) required by the Plan for filing any
notice or other form with the Administrator or the Employer, or taking any
other action under the Plan, except a response to an appeal under Section
11.6, from a decision of the Administrator.

(c) The Administrator or the Employer may direct that such reasonable
expenses as may be incurred in the administration of the Plan shall be
paid out of the funds of the Plan, unless the Employer shall pay them.

(d) The Administrator, the Custodian, and any other persons performing
fiduciary duties under the Plan shall act with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of like character and with like aims, and no such
person shall be liable, to the maximum extent permitted by ERISA, for any
act of commission or omission in accordance with the foregoing standard.

11.5 CLAIMS PROCEDURE Any claim relating to benefits under the Plan shall be
filed with the Administrator on a form prescribed by the Administrator. If a
claim is denied in whole or in part, the Administrator shall give the claimant
written notice of such denial within ninety (90) days after the filing of such
claim, which notice shall specifically set forth:

(a) The reasons for the denial;

(b) The pertinent Plan provisions on which the denial was based;

(c) Any additional material or information necessary for the claimant to
perfect the claim and an explanation of why such material or information
is needed; and

(d) An explanation of the Plan's procedure for review of the denial of the
claim.

In the event that the claim is not granted and notice of denial of a claim is
not furnished by the ninetieth (90th) day after such claim was filed, the claim
shall be deemed to have been denied on that day for the purpose of permitting
the claimant to request review of the claim.

11.6 CLAIMS REVIEW PROCEDURE
(a) Any person whose claim filed pursuant to Section 11.5 has been denied
in whole or in part by the Administrator may request review of the claim by
the Employer, by filing a written request with the Administrator. The
claimant shall file such request (including a statement of his position)
with the Employer no later than sixty (60) days after the mailing or
delivery of the written notice of denial provided for in Section 11.5 or,
if such notice is not provided, within sixty (60) days after such be
in writing and shall specifically set forth:

(i) The reasons for the decision; and

(ii) The pertinent Plan provisions on which the decision is based.

Any such decision of the Employer shall bind the claimant and the
Employer, and the Administrator shall take appropriate action to carry out
such decision.

(b) Any person whose claim has been denied in whole or in part must
exhaust the administrative review procedures provided in subsection (a)
above prior to initiating any claim for judicial review.

ARTICLE XII
AMENDMENT AND CONTINUATION OF ORIGINAL PLAN
Notwithstanding any of the foregoing provisions of the Plan to the contrary, an
employer that has previously established an Original Plan may, in accordance
with the provisions of the Original Plan, amend and continue the Original Plan
in the form of this Plan and become an Employer hereunder, subject to the
following:

(a) subject to the conditions and limitations of the Plan, each person who is
a Participant under the Original Plan imme-

<PAGE> 23
diately prior to the effective date of the amendment and continuation
thereof in the form of this Plan will continue as a Participant in this
Plan;

(b) no election may be made in the Adoption Agreement if such election
would reduce the benefits of a Participant under the Original Plan to less
than the benefits to which he would have been entitled if he had resigned
from the employ of the Employer on the date of the Amendment and
continuation of the Original Plan in the form of this Plan;

(c) the amounts, if any, of a Participant's or former Participant's
Accounts immediately prior to the effective date of the amendment and
continuation of the Original Plan in the form of this Plan shall be
reduced to cash, deposited with the Custodian and constitute the opening
balances in such Participant's Account under this Plan;

(d) amounts being paid to individuals in accordance with the provisions
of the Original Plan shall continue to be paid under this Plan, but in the
form that they were being paid under the Original Plan;

(e) any Beneficiary designation in effect under the Original Plan
immediately before its amendment and continuation in the form of this Plan
which effectively meets the requirements contained in Section 2.3 hereof
shall be deemed to be a valid Beneficiary designation pursuant to Section
2.3 of this Plan, unless and until the Participant or former Participant
revokes such Beneficiary designation or makes a new Beneficiary
designation under this Plan. If the Beneficiary designation form does not
meet the requirements of Section 2.3 hereunder, the Participant's spouse
shall be deemed to be his Beneficiary. If the Participant is unmarried, or
his spouse does not survive him, his estate shall be deemed his
Beneficiary.

(f) if the Original Plan's vesting schedule (or this Plan's vesting
schedule) or the Plan is amended or changed in any way that directly or
indirectly affects the computation of a Participant's nonforfeitable
interest in his Account derived from Employer contributions, each such
Participant with at least three (3) Years of Service with the Employer may
elect, within a reasonable period after the adoption of the amendment or
change, to have his nonforfeitable percentage computed under the Plan
without regard for the amendment or change. For any Participant who does
not have at least one (1) Hour of Service in any Plan Year beginning after
December 31, 1988, the preceding sentence shall be applied by substituting
"five (5) Years of Service" for "three (3) Years of Service" where such
language appears therein. Any such election must be made during the period
commencing on the date of the amendment or change and ending on the latest
of: (i) sixty (60) days after that date; (ii) sixty (60) days after the
effective date of the amendment or change; or (iii) sixty (60) days after
such Participant is issued written notice of the amendment or change by
the Plan Administrator or Employer.

ARTICLE XIII
TOP-HEAVY PROVISIONS

13.1 EFFECT OF TOP-HEAVY STATUS The Plan shall be a "Top-Heavy Plan" for any
Plan Year commencing after December 31, 1983, if any of the following conditions
exist:

(a) If the Top-Heavy Ratio for this Plan exceeds sixty percent (60%)
and this Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group.

(b) If this Plan is a part of a Required Aggregation Group but not part
of a Permissive Aggregation Group and the Top-Heavy Ratio for the group
of plans exceeds sixty percent (60%).

(c) If this Plan is a part of a Required Aggregation Group and part of
a Permissive Aggregation Group and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds sixty percent (60%).

If the Plan is a Top-Heavy Plan in any Plan Year beginning after December 31,
1983, the provisions of Sections 13.3 through 13.6 shall supersede any
conflicting provisions of the Plan or the Adoption Agreement.

13.2 ADDITIONAL DEFINITIONS Solely for purposes of this Article, the following
terms shall have the meanings set forth below:

(a) Key Employee means any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the Determination
Period was an officer of the Employer if such individual's annual
compensation exceeds 50 percent of the dollar limitation under Code
Section 415(b)(1)(A), an owner (or considered an owner under Code Section
318) of one of the ten largest interests in the Employer if such
individual's compensation exceeds 100 percent (100%) of the dollar
limitation under Code Section 415(c)(1)(A), a five percent (5%) owner of
the Employer, or one percent (1%) owner of the Employer who has an annual
compensation of more than $150,000. Annual compensation means compensation
as defined in Code Section 415(c)(3), of the Code, but including amounts
contributed by the Employer pursuant to a salary reduction agreement which
are excludible from the Employee's gross income under Code Sections 125,
402(a)(8), 402(h) or 403(b). The determination period is the plan year
containing the Determination Date and the four (4) preceding Plan Years.

The determination of who is a Key Employee will be made in accordance with
Code Section 416(i)(1) and the Regulations thereunder.

(b) Determination Date means the last day of the preceding Plan Year.
For the first Plan Year of the Plan Determination Date shall mean the last
day of that year.

(i) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer has not maintained any defined benefit plan which during the
five (5) year period ending on the Determination Date(s) has or has
had accrued benefits, the Top-Heavy Ratio for this plan alone or for
the Required or Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the account balances
of all Key Employees as of the determination date(s) (including any
part of any account balance distributed in the five (5) year period
ending on the Determination Date(s)), and the denominator of which is
the sum of all account balances (including any part of any account
balance distributed in the five (5) year period ending on the
Determination Date(s)), both computed in accordance with Code Section
416 and the Regulations thereunder. Both the numerator and
denominator of the Top-Heavy Ratio are increased to reflect any
contribution not actually made as of the Determination Date, but
which is required to be taken into account on that date under Code
Section 416 and the Regulations thereunder.

(ii) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer maintains or has maintained one or more defined benefit
plans which during the five (5) year period ending on the
Determination Date(s) has or has had any accrued benefits, the
Top-Heavy Ratio for any Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which is the sum of
account balances under the aggregated defined contribution plan or
plans for all Key Employees, determined in accordance with (i) above,
and the present value of accrued benefits under

<PAGE> 24
the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s), and the denominator of
which is the sum of the account balances under the aggregated defined
contribution plan or plans for all participants, determined in
accordance with (i) above, and the present value of accrued benefits
under the defined benefit plan or plans for all participants as of
the Determination Date(s), all determined in accordance with Code
Section 416 and the Regulations thereunder. The accrued benefits
under a defined benefit plan in both the numerator and denominator of
the Top-Heavy Ratio are increased for any distribution of an accrued
benefit made in the five (5) year period ending on the Determination
Date.

(iii) For purposes of (i) and (ii) above the value of account balances and
the present value of accrued Valuation Date that falls within
or ends with the twelve (12) month period ending on the Determination
Date, except as provided in Code Section 416 and the Regulations
thereunder for the first and second plan years of a defined benefit
plan. The account balances and accrued benefits of a participant (A)
who is not a Key Employee but who was a Key Employee in a prior year,
or (B) who has not been credited with at least one (1) hour of
service with any employer maintaining the plan at any time during the
five (5) year period ending on the Determination Date will be
disregarded. The calculation of the Top-Heavy Ratio, and the extent
to which distributions, rollovers, and transfers are taken into
account will be made in accordance with Code Section 416 and the
Regulations thereunder. Deductible employee contributions will not
be taken into account for purposes of computing the Top-Heavy Ratio.
When aggregating plans the value of account balances and accrued
benefits will be calculated with reference to the determination dates
that fall within the same calendar year.

(iv) The accrued benefit of a participant other than a Key Employee shall
be determined under (i) the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans
maintained by the employer, or (ii) if there is no such method, as if
such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Code Section 411(b)(1)(C).

(d) Permissive Aggregation Group means the Required Aggregation Group of plans
plus any other plan or plans of the Employer which, when considered as
a group with the Required Aggregation Group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.

(e) Required Aggregation Group means (i) each qualified plan of the Employer in
which at least one Key Employee participates or participated at any
time during the five (5) year period ending on the Determination Date
(regardless of whether the plan has terminated), and (ii) any other
qualified plan of the Employer which enables a plan described in (i) to
meet the requirements of Code Sections 401(a)(4) or 410.

(f) Valuation Date means (i) in the case of a defined contribution plan, the
Determination Date, and (ii) in the case of a defined benefit plan, the
date as of which funding calculations are generally made within the twelve
(12) month period ending on the Determination Date.

(g) Employer means the employer or employers whose employees are covered by
this Plan and any other employer which must be aggregated with any such
employer under Code Sections 414(b), (c), (m) and (o).

(h) Present Value means the value based on an interest rate of five percent
(5%) and mortality assumptions based on the 1971 GAM Mortality Table or
such other interest rate or mortality assumptions as may be specified in
the Adoption Agreement.

13.3 MINIMUM ALLOCATIONS
(a) For any year in which the Plan is a Top-Heavy Plan, each Participant who is
not a Key Employee and who is not separated from service at the end of
the Plan Year shall receive allocations of Employer contributions and
forfeitures under this Plan at least equal to three percent (3%) of
Compensation (as defined in Section 2.6) for such year or, if less, the
largest percentage of the first two hundred thousand dollars ($200,000) of
compensation allocated on behalf of the Key Employee for the Plan Year
where the Employer has no defined benefit plan which designates this Plan
to satisfy Code Section 401. This minimum allocation shall be determined
without regard for any Social Security contribution and shall be provided
even though under other provisions the Participant would not otherwise be
entitled to receive an allocation or would have received a lesser
allocation because of (i) the Participant's failure to complete One
Thousand (1,000) Hours of Service (or any equivalent provided in the Plan),
or (ii) the Participant's failure to make mandatory Employee contributions
to the Plan, or (iii) Compensation less than a stated amount.

(b) The provision in (a) above shall not apply to any Participant to the extent
the Participant is covered under any other plan or plans of the
employer and the employer has provided in the Adoption Agreement that the
minimum allocation or benefit requirement applicable to top-heavy plans
will be met in the other plan or plans.

(c) The minimum allocation required (to the extent required to be nonforfeitable
under Section 416(b)) may not be forfeited under Code Sections
411(a)(3)(B) or 411(a)(3)(D).

(d) For purposes of subsection (a) above, neither Elective Deferrals nor
Employer Matching Contributions shall be taken into account for the
purposes of satisfying the minimum top-heavy benefits requirement.

13.4 BENEFIT LIMIT CHANGE If the Employer maintains both the Plan and a defined
benefit plan which cover one or more of the same Key Employees and the plans
are Top-Heavy in a Plan Year, then Section 6.5(c) and (j) hereof shall be
amended to substitute "one hundred percent (100%)" for the number "one hundred
and twenty-five percent (125%)" where the latter appears therein.

ARTICLE XIV
MISCELLANEOUS
14.1 RIGHTS OF EMPLOYEES AND PARTICIPANTS No Employee or Participant shall have
any right or claim to any benefit under the Plan except in accordance with the
provisions of the Plan, and then only to the extent that there are funds
available therefor in the hands of the Custodian. The establishment of the Plan
shall not be construed as creating any contract of employment between the
Employer and any Employee or otherwise conferring upon any Employee or other
person any legal right to continuation of employment, nor as limiting or
qualifying the right of the Employer to discharge any Employee without regard
to the effect that such discharge might have upon his rights under the Plan.

14.2 MERGER WITH OTHER PLANS The Plan shall not be merged or consolidated with,
nor transfer its assets or liabilities to, any other plan unless each
Participant, Beneficiary and other person entitled to benefits, would (if the
Plan then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit he
would have been entitled to receive if the Plan had terminated immediately prior
to the merger, consolidation or transfer.

<PAGE> 25
14.3 NON-ALIENATION OF BENEFITS The right to receive a benefit under the Plan
shall not be subject in any manner to anticipation, alienation, or assignment,
nor shall such right be liable for or subject to debts, contracts, liabilities
or torts, either voluntarily or involuntarily. Any attempt by the Participant,
Beneficiary or other person to anticipate, alienate or assign his interest in
or right to a benefit or any claim against him seeking to subject such interest
or right to legal or equitable process shall be null and void for all purposes
hereunder to the extent permitted by ERISA and the Code. Notwithstanding the
foregoing or any other provision of the Plan, the Administrator shall recognize
and give effect to a qualified domestic relations order with respect to child
support, alimony payments or marital property rights if such order is
determined by the Administrator to meet the applicable requirements of Code
Section 414(p). If any such order so directs, distribution of benefits to the
alternate payee may be made at any time, even if the Participant is not then
entitled to a distribution. The Administrator shall establish reasonable
procedures relating to notice to the Participant and determinations respecting
the qualified status of any domestic relations order.

14.4 FAILURE TO QUALIFY Notwithstanding anything in this Plan to the contrary,
all contributions under the Plan made prior to the receipt by the Employer of a
determination by the Internal Revenue Service to the effect that the Plan is
qualified under Code Section 401 shall be made on the express condition that
such a determination will be received, and in the event that the Internal
Revenue Service determines upon initial application for a determination that
the Plan is not so qualified or tax exempt, all contributions made by the
Employer or Participants prior to the date of determination must be returned
within one (1) year from the date of such determination, but only if the
application for qualification is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan is adopted or such
later date as the Secretary of the Treasury may prescribe.

14.5 MISTAKE OF FACT; DISALLOWANCE OF DEDUCTION Notwithstanding anything in
this Plan to the contrary, any contributions made by the Employer which are
conditioned on the deductibility of such amount under Code Section 404, to the
extent of the amount disallowed, or which are made because of a mistake of fact
must be returned to the Employer within one year after such disallowance or
such mistaken contribution.

14.6 PARTICIPATION UNDER PROTOTYPE PLAN If the Plan as adopted by the Employer
either fails to attain or maintain qualification under the Code, such Plan will
no longer participate in this prototype plan and will be considered an
individually designed plan.

14.7 GENDER Where the context admits, words used in the singular include the
plural, words used in the plural include the singular, and the masculine gender
shall include the feminine and neuter genders.

14.8 HEADINGS The headings of Sections are included solely for convenience of
reference, and if there is any conflict between such headings and the text of
the Plan, the text shall control.

14.9 GOVERNING LAW Except to the extent governed by ERISA and any other
applicable federal law, the Plan shall be construed, administered and enforced
according to the laws of the state in which the Employer has its principal
place of business.

31
<PAGE> 26
IRS OPINION LETTER

INTERNAL REVENUE SERVICE Department of the Treasury
Plan Description: Prototype Standardized Washington, D.C. 20224
Profit Sharing Plan
with CODA
FFN: 5025414AL01-001 Person to Contact: Ms. Arrington
Case: 9006833 EIN: 39-1213042 Telephone Number: (202)566-4576
BPD: 01 Plan: 001 Refer Reply to: E:EP:Q:ICU
Letter Serial No: D255803a Date: 11/29/90

Strong/Corneliuson Capital Management, Inc.
100 Heritage Reserve
Menomonee Falls, WI 53051

Dear Applicant:

In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit
of their employees. This opinion relates only to the acceptability of the form
of the plan under the Internal Revenue Code. It is not an opinion of the effect
of other Federal or local statutes.

You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.

Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for officers, owners, or highly compensated
employees than for other employees. Except as stated below, the Key District
Director will not issue a determination letter with regard to this plan.

Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if: (1) if an employer ever maintained another qualified plan for
one or more employees who are covered by this plan, other than a specified
paired plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-6 I.R.B.
14; or (2) after December 31, 1985, the employer maintains a welfare benefit
fund defined in Code section 419(e), which provides postretirement medical
benefits allocated to separate accounts for key employees as defined in Code
section 419A(d)(3). In such situations the employer should request a
determination as to whether the plan, considered with all related qualified
plans and, if appropriate, welfare benefit funds, satisfies the requirements of
Code section 401(a)(16) as to limitations on benefits and contributions in Code
section 415.

If you, the plan sponsor, have any questions concerning the IRS processing of
this case, please call the above telephone number. This number is only for use
of the plan sponsor. Individual participants and/or adopting employer with
questions concerning the plan should contact the plan sponsor. The plan's
adoption agreement must include the sponsor's address and telephone number for
inquiries by adopting employers.

If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.

You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.

Sincerely yours,

/s/ John Swica

Chief, Employee Plans Qualifications Branch

32
<PAGE> 27
IRS OPINION LETTER

INTERNAL REVENUE SERVICE Department of the Treasury
Plan Description: Prototype Standardized Washington, D.C. 20224
Profit Sharing Plan
with CODA
FFN: 5025414AL01-002 Case: 9006834 Person to Contact: Ms. Arrington
EIN: 39-1213042 Telephone Number: (202)566-4576
BPD: 01 Plan: 002 Letter Serial No: D255804a Refer Reply to: E:EP:Q:ICU
Date: 11/29/90
Strong/Corneliuson Capital Management, Inc.
100 Heritage Reserve
Menomonee Falls, WI 53051

Dear Applicant:

Your should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.

Sincerly yours,

/s/ John Swica

Chief, Employee Plans Qualifications Branch

33
<PAGE> 28
IRS OPINION LETTER

INTERNAL REVENUE SERVICE Department of the Treasury
Plan Description: Prototype Money Purchase Washington, D.C. 20224
Pension Plan
FFN: 5025414AL01-003 Case: 9006836 Person to Contact: Ms. Arrington
EIN: 39-1213042 Telephone Number: (202)566-4576
BPD: 01 Plan: 003 Letter Serial No: D255805a Refer Reply to: E:EP:Q:ICU
Date: 11/29/90
Strong/Corneliuson Capital Management, Inc.
100 Heritage Reserve
Menomonee Falls, WI 53051

Dear Applicant:

You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.

Sincerly yours,

/s/ John Swica

Chief, Employee Plans Qualifications Branch

34
<PAGE> 29
IRS OPINION LETTER

INTERNAL REVENUE SERVICE Department of the Treasury
Plan Description: Prototype Standardized Washington, D.C. 20224
Profit Sharing Plan
with CODA
FFN: 5025414AL01-004 Case: 9006838 Person to Contact: Ms. Arrington
EIN: 39-1213042 Telephone Number: (202)566-4576
BPD: 01 Plan: 004 Letter Serial No: D255810a Refer Reply to: E:EP:Q:ICU
Date: 11/29/90
Strong/Corneliuson Capital Management, Inc.
100 Heritage Reserve
Menomonee Falls, WI 53051

Dear Applicant:

You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.

Sincerly yours,

/s/ John Swica

Chief, Employee Plans Qualifications Branch

35
<PAGE> 30

AMENDMENTS TO THE STRONG FUNDS
PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN

The Strong Funds Prototype Defined Contribution Retirement Plan has
been amended, effective as of the dates specified below, as follows:

1. Definition of Compensation. This amendment replaces the definition
of compensation at the first sentence of Section 2.6 of the
Plan, effective from the Plan Year which includes December 31, 1992,
with the following:

"'Compensation' is defined as wages within the meaning of Section
3401(a) of the Code and all other payments of compensation to the
Employee by the Employer (in the course of the Employer's trade or
business) for which the Employer is required to furnish the
Employee a written statement under Sections 6041(d), 6051(a)(3) and
6052 of the Code, determined without regard to any rules under
Section 3401(a) that limit the remuneration included in wages based
on the nature or locations of the employment or the services
performed."

2. Direct Rollover Requirements. This amendment adds the following new
Section 8.7 at the end of Article VIII of the Plan, effective
January 1, 1993:

"Section 8.7 Transfer of Benefits to Eligible Retirement Plan.

(a) This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a
distributee's election under this Article VIII, a distributee
may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.

(b) An eligible rollover distribution is any distribution of all
or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution
does not include (i) any distribution that is one of a series
of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; (ii) any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and (iii) the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized
appreciation with respect to employer securities).

(c) An eligible retirement plan is an individual retirement account
described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.

(d) A distributee includes an employee or former employee. In
addition, the employee's or former employee's surviving
spouse and the employee's or former employee's spouse or
former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the
Code, are distributees with regard to the interest of the
spouse or former spouse.

(e) A direct rollover is a payment by the plan to the eligible
retirement plan specified by the distributee."

<PAGE> 31
NOTICE TO INTERESTED PARTIES
STRONG FUNDS PROTOTYPE DEFINED
CONTRIBUTION RETIREMENT PLAN

1. All employees participating in the Strong Funds Prototype Defined
Contribution Retirement Plan, a prototype plan sponsored by
Strong/Corneliuson Capital Management, Inc.

2. The Internal Revenue Service has previously issued a favorable opinion
letter with respect to the form of the prototype plan.

3. You have the right to submit to the IRS Key District Director, either
individually or jointly with other interested parties, your comments as
to whether this plan meets the qualification requirements of the Internal
Revenue Code. If you would like to comment, please contact the Plan
Administrator for the mailing address of the Key District Director and
other information that you will need to provide to the Key District Director
to identify the Plan.

4. You may instead, individually or jointly with other interested parties,
request the Department of Labor to submit, on your behalf, comments to
the Key District Director regarding qualification of the plan. If the
Department declines to comment on all or some of the matters you raise, you
may, individually or jointly, submit your comments on these matters
directly to the Key District Director.

5. The Department of Labor may not comment on behalf of interested parties
unless requested to do so by the lesser of 10 employees or 10 percent
of the employees who qualify as interested parties. If you request the
Department to comment, your comment must be in writing and must specify the
matters upon which comments are requested, and must also include:

- The name of the Plan, the employer that has adopted the Plan, the
prototype Plan sponsor, the Plan number and the identity of the
Plan Administrator. If you wish to comment, the Plan Administrator can
supply you with this information.

- The number of persons needed for the Department to comment.

6. A request to the Department of Labor to comment should be addressed as
follows: Deputy Assistant Secretary, Pension and Welfare Benefits
Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W.,
Washington, D.C. 20210, Attention: 3001 Comment Request.

7. Comments submitted by you to the Key District Director must be in writing
and received by him within 75 days following the date that your
employer received notice of the Plan amendments from Strong/Corneliuson
Capital Management (the "Notice of Amendment Date"). However, if there are
matters that you request the Department of Labor to comment upon on your
behalf, and the Department declines, you may submit comments on these
matters to the Key District Director to be received by him by the earlier
of (i) the later of the 15th day from the time the Department notifies you
that it will not comment on a particular matter or 75 days following the
Notice of Amendment Date, or (ii) 90 days following the Notice of Amendment
Date. A request to the Department of Labor to comment on your behalf must
be received by it within 15 days following the Notice of Amendment Date if
you wish to preserve your right to comment on a matter upon which the
Department declines to comment, or within 25 days of the Notice of
Amendment Date if you wish to waive that right. Further information
regarding the Notice of Amendment Date may be obtained from the Plan
Administrator.

8. Additional information concerning the Plan and these amendments are
available from the Plan Administrator during normal business hours for
inspection and copying. A nominal charge for copying and/or mailing may be
imposed.
<PAGE> 32
Page 1

[STRONG LOGO]

AMENDMENTS TO THE
STRONG FUNDS PROTOTYPE DEFINED CONTRIBUTION PLAN ("PLAN")

The following amendments have been made to the Plan, effective on the
first day of the first plan year beginning on or after January 1, 1994:

1. Section 2.6 is amended by inserting into the conclusion of the current
provision the following:

In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan
years beginning on or after January 1, 1994, the annual Compensation of
such employee taken into account under the plan shall not exceed the OBRA
'83 annual compensation limit. The OBRA '83 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with section 401(a)(11)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar year applies
to any period, not exceeding 12 months, over which compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '83 annual
compensation limit will be multipled by a fraction, the numerator of which
is the number of months in the determination period, and the denominator
of which is 12.

For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under section 401(a)(11) of the Code shall mean
the OBRA '83 annual compensation limit set forth in this provision.

If Compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current
plan year, the compensation for that prior determination period is
subject to OBRA '83 annual compensation limit in effect for that prior
determination period. For this purpose, for determination periods
beginning before the first day of the first plan year beginning on or
after January 1, 1994, the OBRA '83 annual compensation limit is $150,000.

2. The first paragraph of Section 3.3(b) is amended to read as follows:

(b) If the Participants vested account balance in the Pension Plan or
the Profit Sharing Plan exceeds (or at the time of any prior distribution
exceeded) three thousand five hundred dollars ($3,500), as distribution of
that interest shall be made prior to the time the Participant's account
becomes immediately distributable without the written consent of the
Participant and, in the case of the Pension Plan, the Participant's
spouse (or where either the Participant or the spouse has died, the
survivor). The consent of the Participant and the Participant's spouse
shall be obtained in writing within the ninety (90) day period ending on
the annuity starting date. The annuity starting date is the first day of
the first period for which an amount is paid as an annuity or any other
form. The Administrator shall notify the Participant and the Participant's
spouse of the right to defer any distribution until the Participant's
account balance is no longer immediately distributable. Such notification
shall include a general description of the material features, and an
explanation of the relative volume of the optional forms of benefit
available under the Plan is a manner that would satisfy the notice
requirements of Code Section 417(a)(3), and shall be provided no less than
thirty (30) days and no more than ninety (90) days prior to the annuity
starting date; provided that if a distribution is one to which Section
401(a)(11) and 417 of the Internal Revenue Code do not apply, such
distribution may commence less than 30 days after the notice required under
Section 1.411 (a)-11(c) of the Income Tax Regulations is given, provided
that:

(1) The Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and

(2) the Participant, after receiving the notice, affirmatively
elects a distribution.

<PAGE> 1
EXHIBIT 99.B14.2

---------------
IRA
CUSTODIAL
AGREEMENT
---------------

<PAGE> 2

INDIVIDUAL RETIREMENT ACCOUNT
CUSTODIAL AGREEMENT

The following constitutes an agreement establishing an Individual Retirement
Account (under Section 408(a) of the Internal Revenue Code) between the
Depositor and the Custodian.

ARTICLE I

The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in Section 402(c) (but only after December 31, 1992),
403(a)(4),403(b)(8),408(d)(3), or an employer contribution to a simplified
employee pension plan as described in Section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in Section 402(a)(5),
402(a)(6), 402(a)(7),403(a)(4),403(b)(8), 408(d)(3), or an employer contribution
to a simplified employee pension plan as described in Section 408(k).

ARTICLE II

The Depositor's interest in the balance in the custodial account is
nonforfeitable.

ARTICLE III

1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with
other property except in a common trust fund or common investment fund
(within the meaning of Section 408(a)(5)).

2. No part of the custodial funds may be invested in collectibles (within the
meaning of section 408(m)) except as otherwise permitted by Section 408
(m)(3) which provides an exception for certain gold and silver coins and
coins issued under the laws of any state.

ARTICLE IV

1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Depositor's interest in the custodial account shall be
made in accordance with the following requirements and shall otherwise
comply with Section 408(a)(6) and Proposed Regulations Section 1.408-8,
including the incidental death benefit provisions of Proposed Regulations
Section 1.401(a)(9)-2, the provisions of which are incorporated by
reference.

2. Unless otherwise elected by the time of distributions are required to
begin to the Depositor under Paragraph 3, or to the surviving spouse under
Paragraph 4, other than in the case of a life annuity, life expectancies
shall be recalculated annually.

11
<PAGE> 3

Such election shall be irrevocable as to the Depositor and the surviving
spouse and shall apply to all subsequent years. The life expectancy of a
nonspouse beneficiary may not be recalculated.

3. The Depositor's entire interest in the custodial account must be, or begin
to be, distributed by the Depositor's required beginning date, (April 1
following the calendar year end in which the Depositor reaches age 70
1/2). By that date, the Depositor may elect, in a manner acceptable to the
Custodian, to have the balance in the custodial account distributed in:

(a) A single sum payment.

(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the
Depositor.

(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last
survivor lives of the Depositor and his or her designated
beneficiary.

(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Depositor's life expectancy.

(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor
expectancy of the Depositor and his or her designated beneficiary.

4. If the Depositor dies before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:

(a) If the Depositor dies on or after distribution of his or her interest
has begun, distribution must continue to be made in accordance with
Paragraph 3.

(b) If the Depositor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election of
the beneficiary or beneficiaries, either

(i) Be distributed by the December 31 of the year containing the
fifth anniversary of the Depositor's death, or

(ii) Be distributed in equal or substantially equal payments over
the life or life expectancy of the designated beneficiary or
beneficiaries starting by December 31 of the year following
the year of the Depositor's death. If, however, the
beneficiary is the Depositor's surviving spouse, then this
distribution is not required to begin before December 31 of
the year in which the Depositor would have turned age 70 1/2.

12
<PAGE> 4

(c) Except where distribution in the form of an annuity meeting the
requirements of Section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on
the Depositor's required beginning date, even though payments may
actually have been made before that date.

(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving
spouse, no additional cash contributions or rollover contributions
may be accepted in the account.

5. In the case of a distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual
payment for each year, divide the Depositor's entire interest in the
custodial account as of the close of business on December 31 of the
preceding year by the life expectancy of the Depositor (or the joint life
and last survivor expectancy of the Depositor and the Depositor's
designated beneficiary, or the life expectancy of the designated
beneficiary, whichever applies). In the case of distributions under
Paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and
designated beneficiary as of their birthdays in the year the Depositor
reaches age 70 1/2. In the case of a distribution in accordance with
Paragraph 4(b)(ii), determine life expectancy using the attained age of
the designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence.

6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to
satisfy the minimum distribution requirements described above. This method
permits an individual to satisfy these requirements by taking from one
individual retirement account the amount required to satisfy the
requirement for another.

ARTICLE V

1. The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under Section 408(i) and
Regulations Section 1.408-5 and 1.408-6.

2. The Custodian agrees to submit reports to the Internal Revenue Service and
the Depositor prescribed by the Internal Revenue Service.

ARTICLE VI

Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with Section 408(a) and related
regulations will be invalid.

13
<PAGE> 5

ARTICLE VII

This agreement will be amended from time to time to comply with the provisions
of the Code and related regulations. Other amendments may be made with the
consent of the persons whose signatures appear below.

ARTICLE VIII

1. INVESTMENT OF ACCOUNT ASSETS.
(a) All contributions to the Custodial Account shall be invested in the
shares of any regulated investment company ("Investment Company") for
which Strong/Corneliuson Capital Management, Inc., serves as
investment advisor, or any other regulated investment company
designated by the investment advisor. Shares of stock of an
Investment Company shall be referred to as "Investment Company
Shares."

(b) Each contribution to the Custodial Account shall identify the
Depositor's account number and be accompanied by a signed statement
directing the investment of that contribution. The Custodian may
return to the Depositor, without liability for interest thereon, any
contribution which is not accompanied by adequate account
identification or an appropriate signed statement directing
investment of that contribution.

(c) Contributions shall be invested in whole and fractional Investment
Company Shares at the price and in the manner in which such shares
are offered to the public. All distributions received on Investment
Company Shares held in the Custodial Account shall be reinvested in
like shares. If any distribution of Investment Company Shares may be
received at the election of the Depositor in additional like shares
or in cash or other property, the Custodian shall elect to receive
such distribution in additional like Investment Company Shares.

(d) All Investment Company Shares acquired by the Custodian shall be
registered in the name of the Custodian or its nominee. The Depositor
shall be the beneficial owner of all Investment Company Shares held
in the Custodial Account and the Custodian shall not vote any of such
shares, except upon written direction of the Depositor. The Custodian
agrees to forward to the Depositor each prospectus, report, notice,
proxy and related proxy soliciting materials applicable to Investment
Company Shares held in the Custodial Account received by the
Custodian.

(e) The Depositor may, at any time, by written notice to the Custodian,
redeem any number of shares held in the Custodial Account and
reinvest the proceeds in the shares of any other Investment Company.
Such redemptions and reinvestments shall be done at the price and in
the manner such shares are then being redeemed or offered by the
respective Investment Companies.

14
<PAGE> 6

2. AMENDMENT AND TERMINATION.
(a) The Investment Advisor may amend the Custodial Account (including
retroactive amendments) by delivering to the Depositor written notice
of such amendment setting forth the substance and effective date of
the amendment. The Depositor shall be deemed to have consented to any
such amendment not objected to in writing by the Depositor within
thirty (30) days of receipt of the notice, provided that no amendment
shall cause or permit any part of the assets of the Custodial Account
to be diverted to purposes other than for the exclusive benefit of
the Depositor or his beneficiaries.

(b) The Depositor may terminate the Custodial Account by delivering to
the Custodian a written notice of such termination.

(c) The Custodial Account shall automatically terminate upon distribution
to the Depositor or any beneficiary of the entire balance in the
Custodial Account.

(d) At any time after three years from the effective date of this
Agreement, the Custodian may elect to terminate the Custodial Account
upon thirty (30) days written notice to the Depositor.

3. Taxes and Custodial Fees. Any income taxes or other taxes levied or
assessed upon or in respect of the assets or income of the Custodial
Account or any transfer taxes incurred shall be paid from the Custodial
Account. All administrative expenses incurred by the Custodian in the
performance of its duties, including fees for legal services rendered to
the Custodian, and the Custodian's compensation shall be paid from the
Custodial Account, unless otherwise paid by the Depositor or his or her
beneficiaries.

The Custodian's fees are:

(a) Annual maintenance fee - $10.00 per account
Maximum annual maintenance fee - $30.00

(b) Transfer to successor custodian - $10.00

Extraordinary charges resulting from unusual administrative
responsibilities not contemplated by this schedule will be subject to such
additional charges as will reasonably compensate the Custodian for the
services performed.

A separate annual maintenance fee will be charged for each Investment
Company in which the Custodial Account is invested for that calendar year.

15
<PAGE> 7

If you decide not to prepay the maintenance fee, it will be deducted in
September of each year, and enough Investment Company Shares will be
redeemed to cover the fees. Upon thirty (30) days written notice to the
Depositor, the Custodian may change the fees payable in connection with
the Custodial Account.

4. REPORTS AND NOTICES.
(a) The Custodian shall keep adequate records of transactions it is
required to perform hereunder. After the close of each calendar year,
the Custodian shall provide to the Depositor or the Depositor's legal
representative a written report or reports reflecting the
transactions effected by it during such year and the assets and
liabilities of the Custodial Account at the close of the year.

(b) All communications or notices shall be deemed to be given upon
receipt by the Custodian of Strong Funds, at P. O. Box 2936,
Milwaukee, Wisconsin 53201, or the Depositor at his or her most
recent address shown in the Custodian's records. The Depositor agrees
to advise the Custodian promptly, in writing, of any change of
address.

5. DESIGNATION OF BENEFICIARY. The Depositor may designate a beneficiary or
beneficiaries to receive benefits from the Custodial Account in the event
of the Depositor's death. In the event the Depositor has not designated a
beneficiary, or if all beneficiaries shall predecease the Depositor, the
following persons shall take in the order named:

(a) The spouse of the Depositor; or

(b) The personal representative of the Depositor's estate, if the
Depositor does not have a spouse.

6. MULTIPLE INDIVIDUAL RETIREMENT ACCOUNTS. In the event the Depositor
maintains more than one individual retirement account (as defined in
Section 408(a)) and elects to satisfy his or her minimum distribution
requirements described in Article IV above by making a distribution for
another individual retirement account in accordance with Paragraph 6
thereof, the Depositor shall be deemed to have elected to calculate the
amount of his or her minimum distribution under this Custodial Account in
the same manner as under the individual retirement account from which the
distribution is made.

7. INALIENABILITY OF BENEFITS. The benefits provided under this Custodial
Account shall not be subject to alienation, assignment, garnishment,
attachment, execution, or levy of any kind and any attempt to cause such
benefits to be so subjected shall not be recognized except to the extent
as may be required by law.

16
<PAGE> 8

8. ROLLOVER CONTRIBUTIONS AND TRANSFERS. The Custodian shall have the right
to receive rollover contributions and to receive direct transfers from
other custodians or trustees. All contributions must be made in cash or
check.

9. MINIMUM REQUIRED DISTRIBUTIONS. If a Depositor has attained age 70 1/2 and
has not notified the Custodian in writing as to how to calculate the
minimum required distribution or that a minimum required distribution has
been received from another IRA (reference Article IV, Section 6), a
minimum required distribution will be made in accordance with Article IV,
Section 5.

10. CONFLICT IN PROVISIONS. To the extent that any provisions of this Article
VIII shall conflict with the provisions of Articles IV, V and/or VII, the
provisions of this Article VIII shall govern.

11. APPLICABLE STATE LAW. This Custodial Account shall be construed,
administered, and enforced according to the laws of the State of
Wisconsin.

REV. 4/93

17
<PAGE> 9
(STRONG LOGO)

AMENDMENTS TO IRA CUSTODIAL AGREEMENT

The following amendments have been made in the Strong Funds IRA
Disclosure Statement and Custodial Agreement:

Additional language has been added to section 10 in the Disclosure
Statement entitled "Designation of Beneficiary." The following sentences should
be added after the first sentence:

Any new account opened by exchanging money from an existing IRA
account with a valid beneficiary designation will have the same
beneficiary designation as the original account.

Further, Article VIII, section 1, of the IRA Custodial Agreement has
been amended. Paragraph (d) has changed and a new paragraph (e) has been added.
The previous paragraph (e) is now paragraph (f). As amended, these paragraphs
read as follows:

(d) All Investment Company shares acquired by the Custodian
shall be registered in the name of the Custodian or its
nominee. The Depositor shall be the beneficial owner of all
Investment Company Shares held in the Custodial Account.

(e) The Custodian agrees to forward to the Depositor each
prospectus, report, notice, proxy and related proxy soliciting
materials applicable to Investment Company Shares held in the
Custodial Account received by the Custodian. By establishing
or having established the Custodial Account, the Depositor
affirmatively directs the Custodian to vote any Investment
Company Shares held on the applicable record date that have
not been voted by the Depositor prior to a shareholder meeting
for which prior notice has been given. The Custodian shall
vote with the management of the Investment Company on each
proposal that the Investment Company's Board of Directors has
approved unanimously. If the Investment Company's Board of
Directors has not approved a proposal unanimously, the
Custodian shall vote in proportion to all shares voted by the
Investment Company's shareholders.

(f) [Paragraph previously lettered paragraph (e).] The
Depositor may, at any time, by written notice to the
Custodian, redeem any number of shares held in the Custodial
Account and reinvest the proceeds in the shares of any other
Investment Company. Such redemptions and reinvestments shall
be done at the price and in the manner such shares are then
being redeemed or effected by the respective Investment
Companies.

<PAGE> 1
EXHIBIT 99.B14.3

STRONG FUNDS
- --------------------------------------------------------------------------------
SECTION 403(b)(7)
RETIREMENT PLAN

PLAN DOCUMENT

Employees of certain exempt organizations and schools may have a portion of
their compensation set aside for their retirement years in a mutual fund
custodial account plan. The employee is not taxed on the amount set aside or the
earnings thereon until the accumulated funds are withdrawn, normally at
retirement.

Under the Strong Funds Section 403(b)(7) Retirement Plan, contributions are
held by the authorized custodian (the "Custodian") and are invested in the
shares of one or more of the regulated investment companies in the fund group
managed by Strong/Corneliuson Capital Management, Inc., the Investment Advisor.
The Strong Funds 403(b)(7) Retirement Plan (the "Plan") is designed to allow
eligible employers described in Article I to make employer contributions to the
Plan and to allow eligible employees to elect to have their employer make
contributions to the Plan on their behalf pursuant to a salary reduction
agreement. This Plan is intended to comply with the provisions of the Employee
Retirement Income Security Act of 1974 (the "Act") and the Internal Revenue
Code of 1986, as amended (the "Code").

ARTICLE I
ELIGIBILITY
A. Any person who performs services as an employee for an employer which is
an organization described in Section 501(c)(3) of the Code and is exempt from
tax under Section 501(a) of the Code, or who performs services for an
educational institution (as defined in Section 170(b)(1)(A)(ii) of the Code) or
for an employer which is a State or political subdivision of a State or an
agency or instrumentality of either, and who obtains the consent of such
employer to participate herein, is eligible to adopt this Plan.

B. Any employer which is an organization described in Section 501(c)(3) of the
Code and is exempt from tax under Section 501(a) of the Code, or is an
educational institution (as defined in Section 170(b)(1)(A)(ii) of the Code) or
a State or a political subdivision of a State or an agency or instrumentality
of either (the "Employer") may, but is not required to, adopt this Plan for
some or all of its eligible employees. It is,

1
<PAGE> 2
however, necessary for the Employer if it does not adopt this Plan to
cooperate to the extent of executing the proper documents allowing the employee
to establish a custodial account and to reduce the employee's salary and apply
the amount of the reduction for the employee to this Plan.

C. An eligible individual shall not be entitled to elect to have his
Employer make contributions to the Plan pursuant to a salary reduction
agreement unless the Employer has established a plan or program which allows
all employees of the Employer (except as otherwise permitted by the Code) the
opportunity to have contributions made pursuant to such an agreement. An
Employer may exclude from participation employees who are participants in an
eligible deferred compensation plan under Section 457 of the Code, a qualified
cash or deferred arrangement under Section 401(k) of the Code or another
Section 403(b) annuity contract, and non-resident aliens and certain students.

D. In lieu of or in addition to a salary reduction arrangement, an
Employer may make contributions on behalf of its employees, but an Employer is
not obligated to do so. If an Employer makes contributions (other than
contributions made pursuant to a salary reduction agreement), this Plan as
adopted by such Employer must satisfy the nondiscrimination and minimum
participation requirements as set forth in Section 403(b)(12) of the Code.

E. An eligible individual is not disqualified from participation by
reason of the fact that his Employer provides any other retirement plan for its
employees. However, the contributions under this Plan or any other Section
403(b) plan will be affected by the Employer's contributions to such other
retirement plan.

ARTICLE II
PARTICIPATION
An eligible employee who wishes to establish this Plan (the
"Individual") may do so by completing the Section 403(b)(7) Application,
Beneficiary Designation and Spousal Consent Form, and Salary Reduction
Agreement or Transfer Form (as applicable), obtaining the Employer's signature
and returning all necessary forms to Strong Funds. An eligible Employer may
adopt this Plan by either having the Individual follow the procedure described
in the preceding sentence or by obtaining the Individual's signature on the
Application and following the procedure itself thereafter.

The Application, Beneficiary Designation and Spousal Consent Form, and the
Salary Reduction Agree-

2
<PAGE> 3
ment, if applicable, are incorporated herein by reference as part of the Plan.
The Plan will be effective upon written acceptance by or on behalf of the
Custodian on the Application. If the Employer maintains a written Section
403(b) plan for which this Plan serves as a funding vehicle, the terms and
conditions of such plan shall take precedence over the provisions of this Plan
to the extent such provisions are inconsistent.

ARTICLE III
CONTRIBUTIONS
A. An Employer may contribute cash to the Plan in any taxable year in any
amount which (1) is not an "excess contribution" as defined in Section 4973(c)
of the Code and (2) if such contribution is made pursuant to a Salary Reduction
Agreement between the Employer and the Individual, does not exceed the
limitation on "elective deferrals" contained in Section 402(g) of the Code.
Neither the Investment Advisor nor the Custodian shall be responsible for
determining the amount an Employer may contribute on behalf of the Individual,
nor shall either be responsible to recommend or compel Employer contributions
under the Plan.

If during any taxable year the Employer contributes an amount which is an
"excess contribution", such excess contribution (plus any income attributable
thereto) shall, upon written request, be paid to the Individual by the
Custodian or applied towards a contribution for the next subsequent year. In
the event that an amount contributed during a calendar year exceeds the
limitation on "elective deferrals" contained in Section 402(g) of the Code and
the Individual notifies the Custodian, in writing, of such excess amount no
later than March 1 of the following calendar year, the Custodian will
distribute such excess amount (plus any income attributable thereto) to the
Individual not later than the following April 15. Neither the Investment
Advisor nor the Custodian shall have any responsibility for determining that an
excess contribution or excess elective deferral has been made or for
distributing such excess amount except in accordance with the specific written
instructions of the Individual.

B. In addition, the Individual or the Employer may (1) transfer or cause to be
transferred to the Plan the cash surrender or redemption value of a Section
403(b) annuity or variable annuity or the assets of another Section 403(b)(7)
custodial account for which contributions were previously made on the
Individual's behalf or (2) contribute to the Plan any amount distributed from a
Section 403(b) annuity or custodial account which qualifies as a "rollover
contribution" within the meaning of Section 403(b)(8) of the Code. Neither the
Investment Advisor nor

<PAGE> 4
the Custodian shall be responsible for the tax treatment to the Individual of
any transfer or rollover contribution or for losses resulting from any acts,
omissions or delays of any party transferring or rolling over assets to the
Individual's account.

C. Employer contributions to the Plan (including permissible salary reduction
contributions) are not taxable income in the year contributed. The maximum
amount which may be contributed to the Plan on an Individual's behalf may not
exceed the lesser of:

(1) 25% of compensation (as defined in Section 415(c) of the
Code) or $30,000 whichever is less. For this purpose,
"compensation" generally means amounts included in your taxable
income, but does not include Section 403(b) contributions;
(2) the Individual's "exclusion allowance" under Section
403(b)(2) of the Code, which is calculated as 20% of Includible
Compensation times the number of years of service minus the
aggregate amount previously contributed by the Employer
(including salary reduction contributions), under a Section 403(b)
plan and excluded from the Individual's gross income for prior tax
years. "Includible Compensation" (as defined in Section 403(b)
(3) of the Code) is current taxable compensation from an eligible
employer, but does not include amounts contributed by an eligible
employer to a qualified retirement plan which were not currently
taxed to the employee or Section 403(b) contributions. (A special
minimum exclusion allowance applies to certain church employees
whose adjusted gross income is $17,000 or less under Section
403(b)(2)(D) of the Code.); or
(3) for amounts contributed pursuant to a Salary Reduction Agreement,
$9,500 less any salary reduction contributions made during the
year under a qualified cash or deferred arrangement under
Section 401(k) of the Code, a simplified employee pension under
Section 408(k) of the Code or any other Section 403(b) annuity or
custodial account.

If employed by an educational institution, hospital, home health service
agency, health and welfare service agency or a church or convention or
association of churches, the Individual may elect to be governed by one of
three alternate limitations: (a) in lieu of the limitation described in (1)
above, an amount equal to the lesser of 25% of Includible Compensation plus
$4,000, or $15,000; (b) that the limitation described in (2) above not apply;
or (c) for the year in which the

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<PAGE> 5
Individual's employment terminates, replace
the 25% of compensation (but not the $30,000) limitation described in (1) above
with an amount which is equal to the contributions which could have been made,
but were not, under Code Section 403(b), during a ten-year period ending on the
date of termination. The final "catch-up" contribution in (c) cannot exceed
$30,000 and may only be used once. The alternate limitations available are
mutually exclusive and an election of one of the alternatives is irrevocable.

In addition, any employee of a qualified employer who has completed at least 15
years of service, may increase the amount described in (3) above by the lesser
of:

(a) $3,000:
(b) $15,000, less amounts excluded in prior years under this special
catch up election; or
(c) the excess of $5,000 multiplied by the number of years of
service minus any salary reduction contributions under
a Section 403(b) annuity, a Section 401(k) plan or a simplified
employee pension made by the employer on behalf of the employee for
prior taxable years.

D. The interest of the Individual in the Plan and the assets in his custodial
account shall be nonforfeitable at all times, may not be assigned, and shall
not be subject to alienation, assignment, trustee process, garnishment,
attachment, execution or levy of any kind, except with regard to payment of the
expenses of the Custodian as authorized by the provisions of this Plan.
Notwithstanding the foregoing or any other provision herein to the contrary,
the Custodian may recognize a qualified domestic relations order with respect
to child support, alimony payments or marital property rights if such order
contains sufficient information for the Employer to determine that it meets the
applicable requirements of Section 414(p) of the Code. If any such order so
directs, distribution of benefits to the alternate payee may be made at any
time even if the Individual is not then entitled to a distribution.

ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
All contributions made to the Plan shall be used by the Custodian to purchase
shares of any regulated investment company in the fund group of the Investment
Advisor. Each such regulated investment company will be referred to as an
"Investment Company," and the shares of each Investment Company will be
referred to as "Investment Company Shares". Unless otherwise directed by the
Employer, contributions shall be allocated to a separate custodial account

5
<PAGE> 6
("Custodial Account") established for the Individual. The Individual (or the
Individual's beneficiary) may direct the Custodian to invest his Custodial
Account in the shares of the Investment Companies or other regulated investment
companies as may be made available by the Investment Advisor in the future. The
Individual (or the Individual's beneficiary) may direct the Custodian to
transfer all or any part of his Custodial Account assets from one Investment
Company to another at any time. In directing the Custodian to invest
contributions and/or Custodial Account assets, the Individual (or the
Individual's beneficiary) shall designate a percentage allocation to any or all
of the then available Investment Companies. The minimum allocation per fund is
$50 or 100% of the contribution, whichever is less. Any changes in the
allocation of future contributions will be effective only when the Custodian
receives written authorization from the Individual. In the event no direction
is made, the Custodian will invest all contributions in the Strong Money Market
Fund, until further notice is received. All dividends and capital gains shall
be reinvested in additional Investment Company Shares.

ARTICLE V
DISTRIBUTIONS

A. The Individual, or his beneficiary or estate in the event of his death,
shall be entitled to distribution of the assets in his Custodial Account upon
the occurrence of one of the following events:

(a) The Individual reaches age 59 1/2.
(b) The Individual terminates his employment.
(c) The Individual becomes disabled.
(d) The Individual's death.

Note that distributions prior to age 59 1/2 may be subject to a 10% additional
tax under the Code.

For purposes of the Plan, the Individual shall be considered disabled if he is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or to be of long continued and indefinite duration.

B. In addition, an Individual may request distribution of the assets in his
Custodial Account (to the extent attributable to contributions made pursuant to
a Salary Reduction Agreement, not including any earnings thereon upon incurring
a substantial financial hardship. A substantial financial hardship shall exist
if the Individual incurs immediate and heavy financial need and that need
cannot be met by other resources reasonably available to the Individual.

<PAGE> 7
The Individual shall be eligible to receive a hardship distribution from his
Custodial Account after the Custodian's receipt of written notification from
the Employer indicating: (a) that the Individual has incurred a substantial
financial hardship and (b) the specific amount needed to meet the substantial
financial hardship. The amount distributed from the Custodial Account shall not
exceed the amount specified in the notification. The Employer will be
responsible for determining which of the Individual's assets are eligible for
hardship withdrawal.

For purposes of this Plan, a substantial financial hardship shall mean medical
expenses incurred by the Individual, his spouse or a dependent, purchase
(excluding mortgage payments) of a principal residence for the Individual,
payment of tuition for the next semester or quarter of post-secondary education
for the Individual, his spouse or a dependent, the need to prevent the eviction
of the Individual from his principal residence or foreclosure on the mortgage
of the Individual's principal residence, or such other events as may be
approved by the Commissioner of Internal Revenue in rulings, notices or other
published documents.

In determining whether the need cannot be met by other resources reasonably
available to the Individual, the Employer may rely on the Individual's
certification, executed in a form and manner specified by the Employer, that
the need cannot be relieved:

(a) through reimbursement or compensation by insurance or
otherwise;

(b) by reasonable liquidation of the Individual's assets, to
the extent such liquidation would not itself cause an immediate and
heavy financial need;

(d) by other distributions or nontaxable (at the time of the
loan) loans from plans maintained by the Employer or by any other
employer, or by borrowing from commercial sources on reasonable
commercial terms.

In the event the Individual is unwilling or unable to provide the certification
described above, or in the event the Employer determines that it cannot
reasonably rely on the certification provided by an Individual, then the
requirements of this Paragraph B shall be deemed satisfied only if all of the
following conditions are satisfied:

(a) the distribution is not in excess of the amount of the
immediate and heavy financial need of the Individual:

7
<PAGE> 8
(b) the Individual has obtained all distributions, other than hardship
distributions, and all non-taxable (at the time of the loan) loans from
plans maintained by the Employer;

(c) the Individual's elective deferrals under this Plan and all other
plans maintained by the Employer shall be suspended for at least 12
months after receipt of the hardship distribution; and

(d) under this Plan and all other plans maintained by the Employer, the
Individual may not make elective deferrals for the Individual's taxable
year immediately following the taxable year of the hardship distribution
in excess of the limitation on elective deferrals in effect for such next
taxable year under Section 402(g) of the Code less the amount of such
Individual's elective deferrals for the taxable year of the hardship
distribution.

The Employer shall be responsible for:

(a) determining that a substantial financial hardship exists;

(b) designating the amount necessary to meet such a substantial financial
hardship; and

If the Employer does not process hardship distributions in accordance with the
standards set forth under this Plan and applicable law, the hardship
distribution provisions under this Paragraph B shall be ineffective. Neither
the Custodian nor the Investment Advisor shall be responsible for determining
that a substantial financial hardship exists or the amount necessary to satisfy
such hardship and may rely on any written notification from the Employer
certifying the existence and the amount of a substantial financial hardship.

Any determination under Paragraph B is to be made in accordance with uniform
and nondiscriminatoy standards established by the Employer. The Individual has
the responsibility of providing the Employer with any and all documents,
financial data or other information which the Employer deems necessary in order
to make the determination.

C. The Individual may elect a form of distribution from among the following
alternatives:

(a) a single sum payment in cash;

(b) equal or substantially equal monthly, quarterly, or annual payments
over a period not extending beyond the life expectancy of the
Individual; or

<PAGE> 9
beyond the joint and last survivor life expectancy of the Individual and
his beneficiary.

Such election shall be made in writing in such form as shall be acceptable to
the Custodian. After attaining age 70 1/2, certain restrictions may apply to
the Individual's ability to change the period over which payments are made. In
no event shall the Custodian or the Investment Advisor have any responsibility
for determining, or giving advice with respect to life expectancies or minimum
distribution requirements.

If the Individual fails to elect any of the methods of distribution described
above within the time specified for such election, the Custodian may distribute
the Individual's Custodial Account in the form of a single sum cash payment by
the April 1 following the calendar year in which the Individual attains age
70 1/2. If the Individual elects a mode of distribution under subparagraphs
(b) or (c) of this Paragraph C, except as otherwise required by
Section 403(b)(10) of the Code, the amount of the monthly, quarterly or annual
payments shall be determined by dividing the entire interest of the Individual
in the Custodial Account at the close of the prior year by the number of years
remaining in the period specified by the Individual's election.

D. Unless the Individual (or his spouse) elects not to have his life expectancy
recalculated, the Individual's life expectancy (and the life expectancy of the
Individual's spouse, if applicable) will be recalculated annually using their
attained ages as of their birthdays in the year for which the minimum annual
payment is being determined. The life expectancy of the designated beneficiary
(other than the spouse) will not be recalculated. The minimum annual payment
may be made in a series of installments (e.g., monthly, quarterly, etc.) as
long as the total payments for the year made by the date required are not less
than the minimum amounts required.

E. The Individual must receive distributions from the Plan in accordance with
Regulations prescribed by the Secretary of the Treasury pursuant to Section
403(b)(10) of the Code which are hereby incorporated by reference, or in the
absence of such regulations, in accordance with Section 401(a)(9) of the Code.
In general, these provisions require that certian minimum distributions must
commence not later than April 1, following the calendar year in which the
Individual attains age 70 1/2.

F. If the Individual dies before his entire interest in the Custodial Account
is distributed to him, the remaining undistributed balance of such interest
shall be distributed to the beneficiary or beneficiaries, if

<PAGE> 10
any, designated by the Individual. If no beneficiary designation is made,
distributions shall be made to the Individual's surviving spouse, or the
Individual's estate, in that order.

If the Individual dies after installment payments have commenced, the
beneficiary shall continue to receive distributions in accordance with the
payment method specified by the Individual or may elect, in writing, to receive
a lump sum distribution.

If the Individual dies prior to the commencement of benefits, the beneficiary
may elect, in writing, to receive the distribution in one of the following
forms:

(a) a single sum payment in cash made by December 31 of the
year containing the fifth anniversary of the Individual's death;
or

(b) equal or substantially equal monthly, quarterly, or annual
payments commencing not later than December 31 following the year
of the Individual's death over a period not to exceed the life
expectancy of the beneficiary.

Notwithstanding the foregoing, if the beneficiary is the Individual's spouse,
distributions may be delayed until December 31 of the year in which the
Individual would have attained age 70 1/2. A beneficiary must receive
distributions from the Plan in accordance with the regulations prescribed by
the Secretary of the Treasury pursuant to Section 403(b)(10) of the Code,
including the incidental death benefit requirements, which are hereby
incorporated by reference, or in the absence of such Regulations, in accordance
with Section 401(a)(9) of the Code.

G. The Individual may designate a beneficiary or beneficiaries, and may, in
addition, name a contingent beneficiary. Such designation shall be made in
writing in a form acceptable to the Custodian. The Individual may, at any time,
revoke his or her designation of a beneficiary or change the beneficiary by
filing notice of such revocation or change with the Custodian. Notwithstanding
the foregoing, in the event the Individual is married at the time of his death,
the beneficiary shall be the Individual's surviving spouse unless such spouse
consented in writing to the designation of an alternative beneficiary after
notice of the spouse's rights and such consent was witnessed by a notary public
or representative of the Employer. In the event no valid designation of
beneficiary is on file with the Employer or the Custodian at the date of death
or no designated beneficiary survives him, the Individual's spouse shall be
deemed the beneficiary; in the further event the Individual is unmarried or his
spouse does not survive him, the Individual's estate shall be deemed to be his
beneficiary.

10
<PAGE> 11
ARTICLE VI
ADMINISTRATION
Except as otherwise provided in this Plan, the Custodian shall perform solely
the duties assigned to the Custodian hereunder as agent on behalf of the
Individual and any beneficiary. The Custodian shall not be deemed to be a
fiduciary in carrying out the following duties:

(a) Receiving contributions pursuant to the provisions of this
Plan.
(b) Holding, investing and reinvesting the contributions in Investment
Company Shares.
(c) Registering any property held by the Custodian in its own name, or
in nominee or bearer form that will pass delivery.
(d) Making distributions from the Custodial Account in cash.

The Custodian shall mail to the Individual all proxies, proxy soliciting
materials, and periodic reports or other communications that may come into the
Custodian's possession by reason of its custody of Investment Company Shares.
The Individual shall vote the proxy, notwithstanding the fact that the
Custodian may be the registered owner of the Investment Company Shares, and the
Custodian shall have no further liability or responsibility with respect to the
voting of such shares.

The Custodian shall keep accurate and detailed account of its receipts,
investments and disbursements. As soon as practicable after December 31, each
year, and whenever required by Regulations adopted by the Internal Revenue
Service under the Act or the Code, the Custodian shall file with the Individual
a written report of the Custodian's transactions relating to the Custodial
Account during the period from the last previous accounting, and shall file
such other reports with the Internal Revenue Service as may be required by its
Regulations.

Unless the Individual sends the Custodian written objection to a report within
sixty (60) days after its receipt, the Individual shall be deemed to have
approved such report, and in such case, the Custodian shall be forever released
and discharged with respect to all matters and things included therein. The
Custodian may seek a judicial settlement of its accounts. In any such
proceeding the only necessary party thereto in addition to the Custodian shall
be the Individual.

All written notices or communications to the Individual or the Employer shall
be effective when sent by first class mail to the last known address of the
Individual or the Employer on the Custodian's records.

11
<PAGE> 12
All written notices or communications to the Custodian shall be mailed or
delivered to the Custodian at its designated mailing address, and no such
written notice of communications shall be effective until the Custodian's
actual receipt thereof. The Custodian shall be entitled to rely conclusively
upon, and shall be fully protected in any action taken by it in good faith in
reliance upon the authenticity of signatures contained in all written notices
or other communications which it receives and which appear to have been sent by
the Individual, the Employer, or any other person.

The Custodian shall make payments from the Custodial Account in accordance with
written directions received from the Individual, and it need not make inquiry as
to the rightfulness of such distribution. If the Custodian has reason to
believe that a distribution may be due, it may, but shall not be required to
make the distribution at the request of any beneficiary who appears to be
entitled thereto. The Custodian shall properly withhold from any payment to the
Individual or beneficiary such amounts as may be required to satisfy any income
or other tax withholding requirements.

The Custodian shall use ordinary care and reasonable diligence in the
performance of its duties as Custodian. The Custodian shall have no
responsibilities other than those provided for herein or in the Act or Code and
shall not be liable for a mistake in judgment, for any action taken in good
faith, or for any loss that is not a result of its gross negligence, except as
provided herein, or in the Act or Code, or regulations promulgated thereunder.

The Individual and the Employer agree to indemnify and hold the Custodian
harmless from and against any liability that the Custodian may incur in the
administration of the Custodial Account, unless arising from the Custodian's
own negligence or willful misconduct or from a violation of the provisions of
the Act or Regulations promulgated thereunder.

The Custodian shall be under no duty to question any direction of the
Individual with respect to the investment of contributions, or to make
suggestions to the Individual with respect to the investment, retention or
disposition of any contributions or assets held in the Custodial Account.

The Custodian shall be paid out of the Custodial Account for expenses of
administration, including the fees of counsel employed by the Custodian, taxes,
and its fees for maintaining the Custodial Account which are set forth in the
Application or in accordance with any schedule of fees subsequently adopted by
the Custodian. The Custodian may sell Investment

<PAGE> 13
Company Shares and use the proceeds of sale to pay the foregoing expenses.

The following fees apply to Strong Funds Section 403(b)(7) custodial accounts:

To establish an account $ 8.00
Annual maintenance fee per account $10.00
Nonretirement distribution
to a participant $15.00
Transfer to successor trustee $15.00
Refund of excess contribution $15.00
Periodic retirement distribution $ 2.50
(per distribution)
Systematic Retirement distribution No charge

The Custodian may make changes in the fee schedule at any time.

The Custodian will send account statments periodically, and after all
transactions. Statements will include any information as the law may require,
and in particular the amount of contributions, earnings, distributions, and
total account valuation. The Custodian will also send a statement to the
Internal Revenue Service as required by law.

The Custodian may resign as Custodian of any Individual's Custodial Account
upon sixty (60) days prior notice to the Investment Advisor and thirty (30)
days prior notice to each Individual who will be affected by such resignation.

ARTICLE VII
THE INVESTMENT ADVISOR
The Individual and the Employer delegate to the Investment Advisor the
following powers with respect to the Plan: to remove the Custodian and select a
successor Custodian; and to amend this Plan as provided in Article VIII hereof.

The powers herein delegated to the Investment Advisor shall be exercised by such
officer thereof as the Investment Advisor may designate from time to time, and
shall be exercised only when similarly exercised with respect to all other
Individuals adopting the Plan.

Neither an Investment Company, the Investment Advisor, nor any officer,
director, board, committee, employee or member of any Investment Company or of
the Investment Advisor shall have any responsibility with regard to the
administration of the Plan except as provided in this Article VII of the Plan,
and none of them shall incur any liability of any nature to the Individual or
beneficiary or other person in connection with any act done or omitted to be
done in good faith in the exercise of any power or authority herein delegated to
the Investment Advisor.

<PAGE> 14
The Individual and the Employer agree to indemnify and hold the Investment
Companies and the Investment Advisor harmless from and against any and all
liabilities and expenses, including attorneys' and accountants' fees, incurred
in connection with the exercise of, or omission to exercise, any of the powers
delegated to it under this Article, except such liabilities and expense as may
arise from the Investment Advisor's and/or Investment Company's willful
misconduct.

If the Investment Advisor shall hereafter determine that it is no longer
desirable for it to continue to exercise any of the powers hereby delegated to
it, it may relieve itself of any further responsibilities hereunder by notice
in writing to the Individual at least sixty (60) days prior to the date on
which it proposes to discontinue the exercise of the powers delegated to it.

ARTICLE VIII
AMENDMENT AND TERMINATION

The Individual and the Employer delegate to the Investment Advisor the power to
amend this Plan (including retroactive amendments).

The Individual or the Employer may amend the Application (including retroactive
amendment) by submitting to the Custodian a copy of such amended Application,
and evidence satisfactory to the Custodian that the Plan, as amended by such
amended Application, will continue to qualify under the provisions of Section
403(b)(7) of the Code.

No amendment shall be effective if it would cause or permit: (a) any part of
the Custodial Account to be diverted to any purpose that is not for the
exclusive benefit of the Individual and his beneficiaries; (b) the Individual
to be deprived of any portion of his interest in the Custodial Account; or (c)
the imposition of an additional duty on the Custodian without its consent.

The Employer reserves the right to terminate further contributions to this
Plan. The Individual also reserves the right to terminate his adoption of the
Plan in the event that he shall be unable to secure a favorable ruling from the
Internal Revenue Service with respect to this Plan. In the event of such
termination, the Custodian shall distribute the Custodial Account to the
Individual. The Individual also reserves the right to transfer the assets of
his Custodial Account to such other form of Section 403(b)(7) retirement plan
as he may determine, upon written instructions to the Custodian in such form as
the Custodian may reasonably require.

<PAGE> 15
ARTICLE IX
PROHIBITED TRANSACTIONS

Except as provided in Section 408 of the Act or Section 4975 of the Code, the
Custodian:

A. Shall not cause the Plan to engage in a transaction if it knows or should
know that such transaction constitutes a direct or indirect:

(1) sale or exchange or leasing of any property between the Plan and a
party in interest;

(2) lending of money or other extension of credit between the Plan and
a party in interest;

(3) furnishing of goods, services, or facilities between the Plan and a
party in interest;

(4) transfer to, or use by or for the benefit of, a party in interest,
of any assets of the Plan; or

(5) acquisition, on behalf of the Plan, of any employer security or
employer real property in violation of Section 407(a) of the Act.

B. Shall not permit the Plan to hold any employer security or employer real
property if it knows or should know that holding such security or real property
violates Section 407(a) of the Act.

C. Shall not deal with the assets of the Plan in its own interest or for its
own account.

D. Shall not in any capacity act in any transaction involving the Plan on
behalf of a party (or represent a party) whose interests are adverse to the
interests of the Plan or the interests of its participants or beneficiaries.

E. Shall not receive any consideration for its own account from any party
dealing with the Plan in connection with a transaction involving the assets of
the Plan; provided that nothing in this Article IX shall be construed to
prohibit the payment to the Custodian of any fees otherwise authorized under
the terms of this Plan.

ARTICLE X
CHANGES IN APPLICABLE LAW

The foregoing Plan provisions are intended to comply with applicable Code
requirements as currently in effect. Certain provisions of the Tax Reform Act
of 1986, effective in 1989, affect the operation and administration of the
Plan. The changes impose additional nondiscrimination, distribution and
withdrawal requirements. An individual should consult his attorney or tax
advisor as to the effect these changes have on his Section 403(b)(7)
contributions.

It should be understood that neither the Investment Advisor nor the Custodian
is in a position to render legal or tax advice and that the information
contained

<PAGE> 16
in and the documents furnished with this description merely represent the
Investment Advisor's understanding of the statutes and regulations affecting
the establishment and qualification of a Section 403(b)(7) plan. Accordingly,
an Individual is urged to consult his attorney or tax advisor in connection
with the adoption of the Plan and the submission of a ruling request on his
behalf.

<PAGE> 17

AMENDMENT TO THE STRONG FUNDS
SECTION 403(b)(7) RETIREMENT PLAN

The Strong Funds Section 403(b)(7) Retirement Plan has been amended,
effective January 1, 1993, by adding the following Section H to Article V:

In the case of any distribution that constitutes an "eligible
rollover distribution" as defined in Section 402(f)(2)(A) of the Code,
the individual shall have the option of (i) receiving the distribution
directly, (ii) having the distribution transferred to an individual
retirement account or other eligible 403(b) retirement plan that
accepts such transfers, or (iii) to the extent required under
regulations issued by the Secretary of the Treasury, a combination of
(i) and (ii). The direct transfer option also applies to surviving
spouses who are entitled to receive distribution following the
Individual's death, and to former spouses who are entitled to
distribution of all or a portion of the Individual's account pursuant
to a qualified domestic relations order; in any such case, references
to the Individual in the remainder of this Section H shall be deemed a
reference to the surviving spouse or former spouse, as applicable.

If the Individual timely elects the transfer option and
provides appropriate information regarding the transferee plan or
account, including the name of the transferee plan or account and the
identity of the trustee or custodian, the transfer shall be
accomplished by delivering to the transferee trustee or custodian a
check or wire transfer for the full amount of the distribution.
Alternatively, the Custodian may deliver to the Individual a check, for
the full amount of the distribution, made payable to the trustee or
custodian of the transferee plan or account. The Individual shall then
be responsible for delivering the check to the trustee or custodian of
the transferee plan.

If the Individual elects payments made directly to the
Individual, distribution shall be accomplished by delivering to the
Individual a check, for the amount of the distribution less applicable
withholding, made payable to the Individual.

If the Individual fails to make a timely election, or if the
Individual elects the transfer option but fails to provide appropriate
information to enable the Custodian to implement the transfer, the
Individual's distribution will be paid directly to the Individual less
applicable withholding.

The direct transfer option will not apply in the case of any
"eligible rollover distribution" that has been exempted from the
transfer requirements under rules and regulations issued (whether in
proposed, temporary or final form) by the Secretary of the Treasury. In
addition, the Custodian may promulgate additional rules and
regulations, including rules and regulations governing the time by
which elections must be made, that it determines to be necessary or
desirable to administer the direct transfer provisions of this Plan.

<PAGE> 1
EXHIBIT 99.B18

[GODFREY & KAHN, S.C. LETTERHEAD]

December 12, 1995

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Strong Income Funds, Inc.

Gentlemen:

We represent Strong Income Funds, Inc. (the "Company"), in connection
with its filing of Post-Effective Amendment No. 8 (the "Post-Effective
Amendment") to the Companys Registration Statement (Registration Nos. 33-37435;
811-6195) on Form N-1A under the Securities Act of 1933 (the "Securities Act")
and the Investment Company Act of 1940. The Post-Effective Amendment is being
filed pursuant to Rule 485(b) under the Securities Act.

We have reviewed the Post-Effective Amendment and, in accordance with
Rule 485(b)(4) under the Securities Act, hereby represent that the
Post-Effective Amendment does not contain disclosures which would render it
ineligible to become effective pursuant to Rule 485(b).

Very truly yours,

GODFREY & KAHN, S.C.

/s/ Scott A. Moehrke
Scott A. Moehrke

<ARTICLE> 6
<CIK> 0000869297
<NAME> STRONG U.S. TREASURY MONEY FUND, INC.
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 67,813
<INVESTMENTS-AT-VALUE> 67,813
<RECEIVABLES> 0
<ASSETS-OTHER> 40
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 67,853
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 326
<TOTAL-LIABILITIES> 326
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 67,527
<SHARES-COMMON-STOCK> 67,527
<SHARES-COMMON-PRIOR> 41,851
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 67,527
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,817
<OTHER-INCOME> 0
<EXPENSES-NET> (166)<F3>
<NET-INVESTMENT-INCOME> 2,651
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2,651
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,651)<F3>
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 165,274
<NUMBER-OF-SHARES-REDEEMED> (141,600)<F3>
<SHARES-REINVESTED> 2,002
<NET-CHANGE-IN-ASSETS> 25,676
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (277)<F3>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (530)<F3>
<AVERAGE-NET-ASSETS> 69,068
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> 0.04<F1>
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.04)<F1>
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> 0.2<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Per share amounts not stated in 000's. Debit amounts shown as negative ().
<F2>Stated in percent, including waivers and absorptions. Without waivers and
absorptions, ratio would have been 0.8%.
<F3>All debits except assets shown as negative ().
</FN>

</TABLE>