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EXHIBIT 99.B5(d)
ADVISORY CONTRACT
The California Tax-Free Bond Fund
a portfolio of
OVERLAND EXPRESS FUNDS, INC.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
October 6, 1988
Xxxxx Fargo Bank, N.A.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Company") on behalf of the California Tax-Free Bond Fund (the "Fund") and
Xxxxx Fargo Bank, N.A. (the "Adviser") as follows:
1. The Company is an open-end investment company currently consisting
of four investment portfolios, but which may from time to time consist of a
greater or lesser number of investment portfolios (the "Funds"). The Company
proposes to engage in the business of investing and reinvesting the assets of
the fund in the manner and in accordance with the investment objective and
restrictions specified in the Company's currently effective prospectus and the
currently effective statement of additional information incorporated by
reference therein relating to the Fund and the Company (such prospectus and
such statement of additional information being collectively referred to as the
"Prospectus") included in the Company's Registration Statement, as amended from
time to time (the "Registration Statement"), filed by the Company under the
Investment Company Act of 1940 (the "Act) and the Securities Act of 1933.
Copies of the documents referred to in the preceding sentence have been
furnished to the Adviser. Any amendments to those documents shall be furnished
to the Adviser promptly.
2. The Company is engaging the Adviser to manage the investing and
reinvesting of the assets of the Fund and to provide the advisory services
specified elsewhere in this contract, subject to the overall supervision of the
Board of Directors of the Company. Pursuant to an administrative agreement
between the Company and Xxxxxxxx Inc. (the "Administrator") on behalf of the
Fund, the Company has engaged the Administrator to provide the administrative
services specified therein.
3. (a) The Adviser shall make investments for the account of the Fund
in accordance with the Adviser's best judgment and consistent with the
investment objective and restrictions set forth in the Company's Prospectus,
the Act and the provisions of the Internal Revenue Code relating to regulated
investment companies, subject to policy decisions adopted by the Company's
Board of Directors. The Adviser shall advise the Company's officers and Board
of Directors, at
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such times as the Company's Board of Directors may specify, of investments made
for the Fund and shall, when requested by the Company's officers or Board of
Directors, supply the reasons for making particular investments.
(b) The Advisor shall provide to the Company investment guidance
and policy direction in connection with its daily management of the Fund's
portfolio, including oral and written research, analysis, advice, statistical
and economic data and information and judgments, and shall furnish to the
Company's Board of Directors periodic reports on the investment strategy and
performance of the Fund and such additional reports and information as the
Company's Board of Directors and officers shall reasonably request.
(c) The Adviser shall pay the costs of printing and distributing
all materials relating to the Fund prepared by it, or prepared at its request,
other than such costs relating to proxy statement, prospectuses, shareholder
reports and other materials distributed to existing or prospective shareholders
on behalf of the Fund.
(d) The Adviser shall, at its expense, employ or associate with
itself such persons as the Adviser believes appropriate to assist it in
performing it obligations under this contract.
4. Except as provided in each of the Company's advisory contracts and
administration agreements, the Company shall bear all costs of its operations,
including the compensation of its directors who are not affiliated with the
Adviser, the Administrator or any of their affiliates; advisory and
administration fees; payments of distribution-related expenses pursuant to any
Rule 12b-1 Plan, i.e. a plan of distribution of the Company adopted on behalf
of any of the Funds pursuant to Rule 12b-1 under the Act; governmental fees;
interest charges; taxes; fees and expenses of its independent accountants,
legal counsel, transfer agent and dividend disbursing agent; expenses of
redeeming shares; expenses of preparing and printing stock certificates,
prospectuses (except the expense of printing and mailing prospectuses used for
promotional purposes, unless otherwise payable pursuant to a Rule 12b-1 Plan),
shareholders' reports, notices, proxy statements and reports to regulatory
agencies; travel expenses of directors, officers and employees; office
supplies; insurance premiums and certain expenses relating to insurance
coverage; trade association membership dues; brokerage and other expenses
connected with the execution of portfolio securities transactions; fees and
expenses of any custodian, including those for keeping books and accounts and
calculating the net asset value per share of the Fund; expenses of
shareholders' meetings; expenses relating to the issuance, registration and
qualification of shares of the Fund; pricing services, if any; organizational
expenses; and any extraordinary expenses. Expenses attributable to one or more,
but not all, of the Funds are charged against the assets of the relevant Funds.
General expenses of the Funds are allocated among the Funds in a manner
proportionate to the net assets of each Fund, on a transactional basis or on
such other basis as the Board of Directors deems equitable.
5. The Adviser shall give the Company the benefit of the Adviser's
best judgment and efforts in rendering services under this contract. As an
inducement to the Adviser's undertaking to render these services, the Company
agrees that the Adviser shall not be liable under this contract for any mistake
in judgment or in any other event whatsoever except for lack of good faith,
provided that nothing in this contract shall be deemed to protect or purport to
protect the Adviser against any liability to the Company or its shareholder to
which the Adviser would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of the
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Adviser's duties under this contract or by reason of reckless disregard of its
obligations and duties hereunder.
6. In consideration of the services to be rendered by the Adviser
under this contract, the Company shall pay the Adviser a monthly fee on the
first business day of each month, at the annual rate of 0.50% of the average
daily value (as determined on each day that such value is determined for the
Fund at the time set forth in the Prospectus for determining net asset value
per share) of the Fund's net assets during the preceding month. If the fee
payable to the Adviser pursuant to this paragraph 6 begins to accrue before the
end of any month or if this contract terminates before the end of any month,
the fee for the period from the effective date to the end of that month or from
the beginning of that month to the termination date, respectively, shall be
prorated according to the proportion that the period bears to the full month in
which the effectiveness or termination occurs. For purposes of calculating each
such monthly fee, the value of the Fund's net assets shall be computed in the
manner specified in the Prospectus and the Company's Articles of Incorporation
for the computation of the value of the Fund's net assets in connection with
the determination of the net asset value of Fund shares.
7. If in any fiscal year the total expenses of the Fund incurred by,
or allocated to, the Fund excluding taxes, interest, brokerage commissions and
other portfolio transaction expenses, other expenditures that are capitalized
in accordance with generally accepted accounting principles, extraordinary
expenses and amounts accrued or paid under a Rule 12b-1 Plan of the Fund, but
including the fees provided for in paragraph 6 and those provided for pursuant
to the Fund's Administration Agreement ("includible expenses"), exceed the most
restrictive expense limitation applicable to the Fund imposed by state
securities laws or regulations thereunder, as these limitations may be raised
or lowered from time to time, the Adviser shall waive or reimburse that portion
of the excess derived by multiplying the excess by a fraction, the numerator of
which shall be the percentage at which the excess portion attributable to the
fee payable pursuant to this agreement is calculated under paragraph 6 hereof,
and the denominator of which shall be the sum of such percentage plus the
percentage at which the excess portion attributable to the fee payable pursuant
to the Fund's Administration Agreement is calculated (the "Applicable Ratio"),
but only to the extent of the fee hereunder for the fiscal year. If the fees
payable under this agreement and/or the Fund's Administration Agreement
contributing to such excess portion are calculated at more than one percentage
rate, the Applicable Ratio shall be calculated separately on the basis of, and
applied separately to, the portions of the fees calculated at the different
rates. At the end of each month of the Company's fiscal year, the Company shall
review the includible expenses accrued during that fiscal year to the end of
the period and shall estimate the contemplated includible expenses for the
balance of that fiscal year. If as a result of that review and estimation it
appears likely that the includible expenses will exceed the limitations
referred to in this paragraph 7 for a fiscal year with respect to the Fund, the
monthly fee set forth in paragraph 6 payable to the Adviser for such month
shall be reduced, subject to a later adjustment, by an amount equal to the
Applicable Ratio times the pro rata portion (prorated on the basis of the
remaining months of the fiscal year, including the month just ended) of the
amount by which the includible expenses for the fiscal year are expected to
exceed the limitations provided for in this paragraph 7. For purposes of
computing the excess, if any, over the most restrictive applicable expense
limitation, the value of the Fund's net assets shall be computed in the manner
specified in the last sentence of paragraph 6, and any reimbursements required
to be made by the Adviser shall be made once a year promptly after the end of
the Company's fiscal year.
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8. This contract shall become effective on its execution date and
shall thereafter continue in effect, provided that this contract shall continue
in effect for a period of more than two years from the date hereof only so long
as the continuance is specifically approved at least annually (a) by the vote
of a majority of the Fund's outstanding voting securities (as defined in the
Act) or by the Company's Board of Directors and (b) by the vote, cast in person
at a meeting called for the purpose, of a majority of the Company's directors
who are not parties to this contract or "interested persons" (as defined in the
Act) of any such party. This contract may be terminated at any time by the
Company, without the payment of any penalty, by a vote of a majority of the
Fund's outstanding voting securities (as defined in the Act) or by a vote of a
majority of the Company's entire Board of Directors on 60 days' written notice
to the Adviser or by the Adviser, at any time after the second anniversary of
the effective date of this contract, on 60 days' written notice to the Company.
This contract shall terminate automatically in the event of its assignment (as
defined in the Act).
9. Except to the extent necessary to perform the Adviser's obligations
under this contract, nothing herein shall be deemed to limit or restrict the
right of the Adviser, or any affiliate of the Adviser, or any employee of the
Adviser, to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association.
10. The Adviser and the Company each agree that the words "Overland
Express," which comprise a component of the Company's name is a property right
of the parent of the Adviser. The Company agrees and consents that: (i) it will
use the words "Overland Express" as a component of its corporate name, the name
of any class, or both and for no other purpose; (ii) it will not grant to any
third party the right to use the words "Overland express" for any purpose;
(iii) the Adviser or any corporate affiliate of the Adviser may use or grant to
others the right to use the words "Overland Express," or any combination or
abbreviation thereof, as all or a portion of a corporate or business name or
for any commercial purpose, other than a grant of such right to another
registered investment company not advised by the Adviser or one of its
affiliates; and (iv) in the event that the Adviser or an affiliate thereof is
no longer acting as investment adviser to any class, the Company shall, upon
request by the Adviser, promptly take such action as may be necessary to change
its corporate name to one not containing the words "Overland Express" and
following such change, shall not use the words "Overland Express," or any
combination thereof, as a part of its corporate name or for any other
commercial purpose, and shall use its best efforts to cause its directors,
officers, and shareholders to take any and all actions that the Adviser may
request to effect the foregoing and to reconvey to the Adviser any and all
rights to such words.
11. This contract shall be governed by and construed in accordance with
the laws of the State of California.
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If the foregoing correctly sets forth the agreement between the Company and the
Adviser, please so indicate by signing and returning to the Company the
enclosed copy hereof.
Very truly yours,
OVERLAND EXPRESS FUNDS, INC.,
behalf of the California Tax-Free Bond Fund
By: /s/X. Xxxx Xxxxxx
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Title: President
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ACCEPTED as of the date set forth above:
XXXXX FARGO BANK, N.A.
By: /s/Xxxxx Xxxxxxxx
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Title: Vice President
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By: /s/Xxxxxxx X. Xxxxxxxx
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Title: Executive Vice President
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