AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 1999 REGISTRATION NO. 333-74295; 811-09253 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM N-14 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/ PRE-EFFECTIVE AMENDMENT NO. / / POST-EFFECTIVE AMENDMENT NO. / / AND REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/ AMENDMENT NO. / / ------------------------ WELLS FARGO FUNDS TRUST (Exact Name of Registrant as specified in Charter) 111 CENTER STREET LITTLE ROCK, ARKANSAS 72201 (Address of Principal Executive Offices, including Zip Code) ------------------------ REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (800) 643-9691 RICHARD H. BLANK, JR. C/O STEPHENS INC. 111 CENTER STREET LITTLE ROCK, ARKANSAS 72201 (Name and Address of Agent for Service) ------------------------ WITH A COPY TO: ROBERT M. KURUCZA, ESQ. MARCO E. ADELFIO, ESQ. MORRISON & FOERSTER LLP 2000 PENNSYLVANIA AVE., N.W. WASHINGTON, D.C. 20006 AND KATHLEEN K. CLARKE, ESQ. SEWARD & KISSEL LLP 1200 G STREET, NW WASHINGTON, DC 20005 APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT. The Registrant has registered an indefinite number of securities under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940; accordingly, no fee is payable herewith. It is proposed that this filing will become effective on May 25, 1999 pursuant to Rule 488 under the Securities Act of 1933. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- IMPORTANT NOTICE: PLEASE COMPLETE THE ENCLOSED PROXY BALLOT AND RETURN IT AS SOON AS POSSIBLE. FOR YOUR CONVENIENCE, YOU MAY VOTE BY CALLING D.F. KING & CO., INC. TOLL-FREE AT 1-800-326-3066 FROM 6:00 A.M. TO 7:00 P.M. PACIFIC TIME. YOU MAY ALSO VOTE BY FAXING YOUR PROXY BALLOT TO D.F. KING & CO., INC. AT 1-212-269-2796 OR BY INTERNET WWW.PROXYVOTE.COM A CONFIRMATION OF YOUR TELEPHONE OR TELEFACSIMILE VOTE WILL BE MAILED TO YOU. STAGECOACH FUNDS 111 CENTER STREET LITTLE ROCK, AR 72201 NORWEST ADVANTAGE FUNDS TWO PORTLAND SQUARE PORTLAND, ME 04101 May [ ], 1999 Dear Valued Shareholder: We are seeking your approval of a proposed reorganization of your Stagecoach or Norwest Advantage Fund into a corresponding Fund of Wells Fargo Trust. The proposed reorganization is part of a plan arising from the merger of Wells Fargo & Company and Norwest Corporation, which are the parent companies of the advisors to the Stagecoach and Norwest Advantage Funds. By consolidating the Funds, we expect to reduce management and administrative inefficiencies. We also expect to achieve increased investment leverage and market presence for the consolidated Funds, which we believe will be advantageous for Fund shareholders. WELLS FARGO BANK HAS AGREED TO PAY ALL EXPENSES OF THE REORGANIZATION SO THAT SHAREHOLDERS WILL NOT BEAR THESE COSTS. THE BOARDS OF DIRECTORS AND TRUSTEES OF THE STAGECOACH AND NORWEST ADVANTAGE FUNDS HAVE UNANIMOUSLY APPROVED THE REORGANIZATION AND BELIEVE THAT IT IS IN THE BEST INTERESTS OF SHAREHOLDERS. THEY RECOMMEND THAT YOU APPROVE THE REORGANIZATION BY VOTING YOUR PROXY. Under the reorganization, each of the Stagecoach Funds and the Norwest Advantage Funds will transfer all of its assets and liabilities to a Wells Fargo Trust Fund. We will refer to these fund groups as the SC Funds, the NAF Funds, and the WF Funds and all of them together as the Funds. The following table lists the SC Funds, the NAF Funds, and the corresponding WF Funds that are part of the proposed reorganization. In some cases, only SC Funds or NAF Funds are part of the reorganization. In other cases, both SC Funds and NAF Funds are reorganizing into the same WF Fund. 1 - ------------------------------------------------------------------------------------------- will reorganize into SC FUND NAF FUND WF FUND - ------------------------------------------------------------------------------------------- Asset Allocation Fund -- Asset Allocation Fund Balanced Fund Growth Fund ValuGrowth-SM- Stock Fund Growth Fund Diversified Equity Income Income Equity Fund Income Equity Fund Fund Small Cap Fund Small Company Stock Fund Small Cap Fund Strategic Growth Fund Income Fund Total Return Bond Fund -- Performa Strategic Value Bond Income Fund Fund U.S. Government Income Fund Intermediate Government Intermediate Government U.S. Government Allocation Income Fund Income Fund Fund Short-Intermediate U.S. Limited Term Government Limited Term Government Government Income Fund Income Fund Income Fund National Tax-Free Fund Tax-Free Income Fund National Tax-Free Fund Prime Money Market Fund Cash Investment Money Market (Administrative, Service and Cash Investment Fund Fund Institutional Classes) Prime Money Market Fund Ready Cash Investment Fund (Class A) (Investor and Exchange Money Market Fund Money Market Fund Classes) National Tax-Free Money Municipal Money Market Fund National Tax-Free Money Market Fund (Class A) (Investor Class) Market Fund (Class A) National Tax-Free National Tax-Free Money Municipal Money Market Fund Institutional Money Market Market Fund (Institutional (Institutional Class) Fund (Service and Class) Institutional Classes) Treasury Plus Money Market Treasury Plus Fund Treasury Plus Institutional Fund (Administrative, Service (Institutional Class) Money Market Fund (Service and Institutional Classes) and Institutional Classes) Government Money Market Fund U.S. Government Fund Government Money Market Fund WHAT ARE THE BENEFITS OF THE PROPOSED REORGANIZATION? - The combined Funds, along with the other SC and NAF Funds that will be part of the WF funds family, will provide investors with a wider array of investments options and therefore more choices of available funds. - The reorganization will be tax-free for all Funds, except for certain money market funds, and shareholders of these funds are not expected to experience any tax consequences. 2 - The asset size of the combining Funds will increase substantially; thus we expect the reorganization will result in greater investment leverage and market presence. - The reorganization will result in operating efficiencies for the Funds. - The combining Funds will have compatible objectives and investment strategies. - Wells Fargo will pay all of the costs of the reorganization. You do not need to make any changes to your investments now. We are confident you will be pleased with the choices in the new fund family. Please read the enclosed proxy materials and consider the information provided. We encourage you to complete and mail your proxy card promptly. No postage is necessary if you mail it in the United States. You also may send your proxy to us by fax at 1-212-269-2796, or vote by internet (http://www.proxyvote.com) or telephone 1-800-326-3066. Very truly yours, [NAME] [TITLE] 3 STAGECOACH FUNDS 111 CENTER STREET LITTLE ROCK, AR 72201 NORWEST ADVANTAGE FUNDS TWO PORTLAND SQUARE PORTLAND, ME 04101 NOTICE OF SPECIAL MEETING OF SHAREHOLDERS SCHEDULED FOR AUGUST 5, 1999 To the Shareholders of the SC Funds and the NAF Funds: A special meeting of shareholders will be held on Thursday, August 5, 1999, at a.m. at the principal office of , to consider the following: 1. A proposal to approve Agreements and Plans of Reorganization for the SF Funds and the NAF Funds. Under these Agreements, the SC Funds and the NAF Funds will transfer all of their assets to the corresponding WF Funds in exchange for shares of the WF Funds. These WF Fund shares would be distributed proportionately to the shareholders of the SC Funds and NAF Funds. The WF Funds also would assume the liabilities of the corresponding SC Funds and NAF Funds. 2. Any other business that properly comes before the meeting. Shareholders of record as of the close of business on May 6, 1999 are entitled to vote at the meeting and any related follow-up meetings. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY CARD (VOTING INSTRUCTION CARD). By Order of the Board of Trustees ------------------------------------------- June , 1999 YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWNED ON THE RECORD DATE. 4 COMBINED PROXY STATEMENT/PROSPECTUS June , 1999 STAGECOACH FUNDS NORWEST ADVANTAGE FUNDS 111 CENTER STREET 2 PORTLAND SQUARE LITTLE ROCK, AR 72211 PORTLAND, ME 04101 - -------------------------------------------------------------------------------- WHAT IS THIS DOCUMENT AND WHY DID WE SEND IT TO YOU? On March 25, 1999, the SC Funds' and NAF Funds' Boards of Directors and Trustees approved the reorganization of the Funds into new WF Funds. The reorganization is part of a plan to consolidate the Wells Fargo Bank fund family with the Norwest Advantage fund family, following last November's merger of their investment advisor's parent companies--Wells Fargo & Company and Norwest Corporation. This proxy statement and prospectus contains the information shareholders should know before voting on the proposed reorganization of the following SC Funds and NAF Funds into the corresponding WF Fund: - ------------------------------------------------------------------------------------------- will reorganize into SC FUND NAF FUND WF FUND - ------------------------------------------------------------------------------------------- Asset Allocation Fund Balanced Fund -- Asset Allocation Fund Growth Fund ValuGrowth-SM- Stock Fund Growth Fund Diversified Equity Income Fund Income Equity Fund Income Equity Fund Small Cap Fund Strategic Growth Fund Small Company Stock Fund Small Cap Fund Income Fund Total Return Bond Fund -- Performa Strategic Value Income Fund Bond Fund U.S. Government Income Fund U.S. Government Intermediate Government Intermediate Government Allocation Fund Income Fund Income Fund Short-Intermediate U.S. Limited Term Government Limited Term Government Government Income Fund Income Fund Income Fund National Tax-Free Fund Tax-Free Income Fund National Tax-Free Fund Prime Money Market Fund (Administrative, Service and Cash Investment Fund Cash Investment Institutional Classes) Money Market Fund Prime Money Market Fund Ready Cash Investment Fund (Class A) (Investor and Exchange Money Market Fund Money Market Fund Classes) National Tax-Free Money Market Fund Municipal Money Market Fund National Tax-Free Money (Class A) (Investor Class) Market Fund (Class A) National Tax-Free National Tax-Free Institutional Money Market Fund Municipal Money Market Fund Money Market Fund (Institutional Class) (Institutional Class) (Service and Institutional Classes) Treasury Plus Money Market Treasury Plus Institutional Fund (Administrative, Service Treasury Plus Fund Money Market Fund and (Institutional Class) (Service and Institutional Institutional Classes) Classes) Government Government Money Market Fund U.S. Government Fund Money Market Fund 5 HOW WILL THE REORGANIZATION WORK? The reorganization will involve three steps: - the transfer of the assets and liabilities of the SC Funds and the NAF Funds to the corresponding WF Fund in exchange for shares of the WF Fund of equivalent value to the net assets transferred; - the pro rata distribution of the WF Fund's shares to the shareholders of record of the SC Fund or NAF Fund as of the effective date of the reorganization in full redemption of those shareholders' shares in the SC Fund or NAF Fund; and - the immediate liquidation and termination of the SC Fund or NAF Fund. As a result of the reorganization, shareholders of the SC Funds or NAF Funds will instead hold shares of the corresponding WF Fund having the same total value as the shares of the SC Fund or NAF Fund that they held immediately before the reorganization. If a majority of the shares of one of the SC Funds or NAF Funds do not approve the reorganization, that Fund will not participate in the reorganization and the SC Fund or NAF Fund will not be terminated. In such a case, the SC or NAF Fund will continue its operations and its Directors or Trustees will consider what further action is necessary. IS ADDITIONAL INFORMATION ABOUT THE FUNDS AVAILABLE? Yes, additional information about the Funds is available in the: - Prospectuses for the SC Funds, NAF Funds and WF Funds; - Management's Discussion of Fund Performance, which is included in the SC Funds' and NAF Funds' Annual Reports to shareholders; and - Statements of Additional Information, or SAIs, for the Funds. All of this information is in documents filed with the Securities and Exchange Commission. The prospectuses and Management's Discussion of Fund Performance are legally deemed to be part of this proxy statement/prospectus. The SAI to this proxy statement/prospectus also is legally deemed to be part of this document. The WF Funds' Prospectuses accompany this statement. The SF Funds' and NAF Funds' Prospectuses and annual reports to shareholders, which contain audited financial statements for the most current fiscal year have been previously mailed to shareholders. Copies of all this information, including the SAIs, are available upon request without charge by writing to or calling: Wells Fargo Funds P.O. Box 7066 San Francisco, CA 94120-7066 1-800-552-9612 OTHER IMPORTANT THINGS TO NOTE: - An investment in the WF Funds is not a deposit in Wells Fargo Bank or any other bank and is not insured or guaranteed by the FDIC or any other government agency. - You may lose money by investing in the Funds. - The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense. 6 TABLE OF CONTENTS PAGE ---- Proposal: Approval of Reorganization of SC Funds and NAF Funds............ 8 Summary................................................................... 9 Comparison of Current Fees.............................................. 9 Comparison of Investment Objectives and Strategies...................... 9 Common Risk Considerations.............................................. 23 Comparison of Shareholder Services and Procedures....................... 23 Federal Income Tax Consequences......................................... 23 Comparison of Investment Advisors and Investment Advisory Fees.......... 24 Comparison of Business Structures....................................... 24 Information About the Proposed Transaction................................ 25 Exhibit A: Fee Tables..................................................... A-1 Exhibit B: Agreements and Plans of Reorganization........................ B-1 Exhibit C: Comparison of Investment Objectives and Strategies............ C-1 Exhibit D: Comparison of Shareholder Services and Procedures.............. D-1 Exhibit E: Comparison of Investment Advisors and Investment Advisory Fees.................................................................... E-1 Exhibit F: Comparison of Other Service Providers......................... F-1 Exhibit G: Comparison of Business Structures.............................. G-1 7 PROPOSAL: APPROVAL OF REORGANIZATION OF SC FUNDS AND NAF FUNDS On March 25, 1999, the Board of Directors of the SC Funds and the Board of Trustees of the NAF Funds unanimously voted to approve the reorganization, subject to approval by the Funds' shareholders. Under the reorganization, the SC Funds and the NAF Funds will transfer their assets to the corresponding WF Funds and the WF Funds will assume the liabilities of the SC Funds and NAF Funds. Each WF Fund is modeled on an existing SC Fund or NAF Fund, as identified in the summary section of this proxy statement/prospectus. Following the transfer of assets, shares of each WF Fund will be distributed to shareholders of each corresponding SC Fund or NAF Fund. You will receive shares of a comparable class of the WF Fund. As a result of the reorganization, you will receive WF Fund shares equal to the value of your share of the net assets of each SC Fund or NAF Fund in which you were invested. The reorganization is expected to be a tax-free reorganization or, for certain money market funds, is not expected to result in any tax consequences to shareholders. If approved by shareholders, the reorganization is expected to occur in September, 1999. The Directors and Trustees have concluded that participation in the proposed reorganization is in the best interests of the SC Funds and NAF Funds and their shareholders. The Directors and Trustees also concluded that the proposed reorganization would not dilute shareholders' economic interests. In reaching this conclusion, the Directors and Trustees considered, among other things: 1. The expanded range of investment options available to investors in the WF Funds, including the combined SC and WF Funds. The WF Funds family will offer 61 funds. 2. The similarities of the investment objectives and strategies of the WF Funds with those of the SC Funds and NAF Funds. 3. The tax-free nature of the reorganization for all Funds, except for certain money market funds and the expected lack of tax consequences for shareholders of these funds. 4. The investment and market leverage that the WF Funds are expected to achieve as part of the reorganization. 5. The improved operating efficiencies of the combined Funds. 6. The potential for improved performance of the WF Funds as compared to the SC Funds and NAF Funds, based on a larger asset base and the selection of successful portfolio managers with better track records for the WF Funds. 7. The expense ratios of the SC Funds and NAF Funds as compared to the corresponding WF Funds. 8. The expenses of the reorganization, all of which will be borne by Wells Fargo. For a more complete discussion of the factors considered by the Boards in approving the reorganization, see pages 23-25. 8 SUMMARY The following summary highlights significant differences between the SC Fund and NAF Fund that you own today and the corresponding WF Fund that you will own after the reorganization. This summary is not complete and does not contain all of the information that you should consider before voting on the reorganization of the Funds. For more complete information, please read this entire document and the enclosed Fund prospectuses. COMPARISON OF CURRENT FEES After the reorganization, most of the SC Funds and NAF Funds, with the largest proportion of assets and shareholders, are projected to have the same or lower operating expense ratios. These projections take into account potential savings in fixed and variable expenses resulting from combining the operations of the Funds and renegotiated contract terms with vendors. Some of the SC Funds and NAF Funds, primarily their retail classes, which affect fewer shareholders and less assets, are projected to have higher operating expense ratios before waivers and reimbursements. These higher expense ratios are due primarily to new or increased shareholder servicing fees that are intended to improve the scope or quality of services provided to WF Fund shareholders. Wells Fargo, as investment advisor to the WF Funds, has agreed to a fee waiver or expense reimbursement for a period of at least one year so that expenses remain at or close to the current expense ratios. The SC Asset Allocation and NAF Income Equity Funds are projected to have higher expense ratios due to a reevaluation of the services provided to shareholders in these Funds, which were not reflected in their fees. Because the fees of these funds are expected to change more significantly than other of the combining funds, Wells Fargo has agreed to a fee waiver or expense reimbursement for a period of at least two years for the WF Fund successors to these Funds. See Exhibit A--Comparative Fee Table for more information about expenses, both before and after waivers and reimbursements and Exhibit E--Comparison of Investment Advisors and Investment Advisory Fees for information concerning current and post-reorganization investment advisory fees. COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES The following is a comparison of the investment objectives and strategies of each SC Fund and NAF Fund and the corresponding WF Fund. A more detailed comparison of the Funds' investment objectives and strategies can be found in Exhibit C. You can find complete information on a Fund in its prospectus and SAI. Each SC Fund and NAF Fund and its corresponding WF Fund pursue similar investment objectives and hold substantially similar securities. As a result, the proposed reorganization of the SC Funds and NAF Funds will not cause significant portfolio turnover or transaction expenses due to the WF Funds' disposal of securities that are incompatible with their objectives. As noted below, one of the reorganizing funds is the model for the surviving WF Fund. 9 EQUITY FUNDS WF ASSET ALLOCATION FUND Comparison of: SC ASSET ALLOCATION FUND WHICH WILL REORGANIZE INTO AND WF ASSET ALLOCATION FUND SC BALANCED FUND - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC ASSET ALLOCATION Seeks long-term total return, The Fund is the model for and its FUND consistent with reasonable risk. investment strategies are substantially the same as the WF Asset Allocation Fund described below. SC BALANCED FUND Seeks current income and long-term The Fund pursues a balanced and total return, consistent with diversified investment approach by reasonable risk, through a investing generally between 30% to balanced investment approach. 70% of its assets in common stocks and the remainder in debt securities. WF ASSET ALLOCATION Seeks long-term total return, The Fund allocates and reallocates FUND consistent with reasonable risk. assets among common stocks, U.S. Treasury bonds and money market instruments. The Fund invests in asset classes that the Advisor believes are under-valued in order to achieve better long-term, risk-adjusted returns. 10 WF GROWTH FUND Comparison of: SC GROWTH FUND WHICH WILL REORGANIZE INTO AND WF GROWTH FUND NAF VALUGROWTH-SM- STOCK FUND - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC GROWTH FUND Seeks long-term capital The Fund is the model for and its appreciation and current income. investment strategies are substantially the same as the WF Growth Fund described below. NAF VALUGROWTH-SM- Seeks long-term capital The Fund invests primarily in STOCK FUND appreciation. medium- and large-capitalization companies that appear to have above-average growth characteristics and appear to be undervalued. The Fund considers the quality of a company's management, the existence of a leading or dominant position in a major product line or market, the soundness of the company's financial position, and the maintenance of a relatively high rate of return on invested capital and shareholder's equity. WF GROWTH FUND Seeks long-term capital The Fund invests in equity appreciation. securities of domestic and foreign companies whose market capitalization falls within the range of the Russell 1000 Index, which is considered a mid- to large-capitalization index. The Fund buys stocks of companies that have a strong earnings growth trend and above-average prospects for future growth, or that the Advisor believes are undervalued. 11 WF INCOME EQUITY FUND Comparison of: SC DIVERSIFIED INCOME WHICH WILL REORGANIZE INTO EQUITY FUND WF INCOME EQUITY FUND AND NAF INCOME EQUITY FUND - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC DIVERSIFIED Seeks current income and a growing The Fund actively manages a EQUITY INCOME FUND stream of income over time, diversified portfolio of income- consistent with the preservation producing equity securities. In of capital. selecting stocks, the Fund emphasizes dividend histories and trends. The Fund also looks for equity securities that it believes are selling for less than their intrinsic or true value and that generally exhibit the following characteristics: above average financial strength, a strong position in their industry, a history of profit growth, and relatively high dividends. NAF INCOME EQUITY Seeks long-term capital The Fund is the model for and its FUND appreciation and above-average investment strategies are dividend income. substantially similar to the WF Income Equity Fund described below. WF INCOME EQUITY Seeks long-term capital The Fund invests in the common FUND appreciation and above-average stocks of large, high quality dividend income. domestic companies with above-average return potential and above-average dividend income. The Fund considers "large" companies to be those whose market capitalization is greater than the median of the companies in the Russell 1000 Index, which is considered a mid- to large- capitalization index. 12 WF SMALL CAP FUND Comparison of: SC SMALL CAP FUND WHICH WILL REORGANIZE INTO AND WF SMALL CAP FUND SC STRATEGIC GROWTH FUND AND NAF SMALL COMPANY STOCK FUND - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC SMALL CAP FUND Seeks above-average, long-term The Fund is the model for and its capital appreciation. investment strategies are substantially the same as the WF Small Cap Fund described below. SC STRATEGIC GROWTH Seeks above-average, long-term The Fund's investment strategies FUND capital appreciation. are similar to the WF Small Cap Fund described below. The Fund invests the majority of its holdings in established growth companies, turnaround or acquisition candidates, or attractive larger capitalization companies. NAF SMALL COMPANY Seeks long-term capital The Fund invests primarily in the STOCK FUND appreciation. common stock of small- and medium- sized domestic companies that have market capitalizations well below that of the average company in the S&P 500 Index. The Fund invests in companies that may be in a relatively early stage of development or may produce goods and services that have favorable prospects for growth due to increasing demand or developing markets. WF SMALL CAP FUND Seeks long-term capital The Fund invests in equity appreciation. securities of domestic and foreign companies whose market capitalization falls within the range of the Russell 2000 Index, which is considered a small capitalization index. The Fund buys stocks that the Advisor believes have above-average prospects for capital growth, or that may be involved in new or innovative products, services and processes. 13 WF INCOME FUNDS Comparison of: NAF INCOME FUND WHICH WILL REORGANIZE INTO AND WF INCOME FUND NAF TOTAL RETURN BOND FUND AND NAF PERFORMA STRATEGIC VALUE BOND FUND - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- NAF INCOME FUND Seeks to provide total return The Fund is the model for and its consistent with current income. primary investment strategies are substantially the same as the WF Income Fund described below. NAF TOTAL RETURN Seeks to provide total return. The Fund's primary investment BOND FUND strategies are similar to the WF Income Fund described below. In addition, the Fund seeks strategic diversification. The Fund generally invests 65% of its total assets in fixed-income securities rated within the 3 highest rating categories or, if unrated, of comparable quality. NAF PERFORMA Seeks to provide total return by The Fund's primary investment STRATEGIC VALUE investing primarily in income strategies are substantially the BOND FUND producing securities. same as the NAF Total Return Bond Fund described above and similar to the WF Income Fund described below. WF INCOME FUND Seeks current income and total The Fund invests in corporate, return. mortgage-backed, asset-backed, and U.S. Government debt securities primarily of investment-grade quality or better. The Fund maintains the average dollar-weighted maturity of the portfolio between 3 and 15 years, and applies fundamental economic, credit and market analysis to increase portfolio performance. 14 WF INTERMEDIATE GOVERNMENT INCOME FUND Comparison of: SC U.S. GOVERNMENT INCOME WHICH WILL REORGANIZE INTO FUND WF INTERMEDIATE AND GOVERNMENT INCOME FUND SC U.S. GOVERNMENT ALLOCATION FUND AND NAF INTERMEDIATE GOVERNMENT INCOME FUND - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC U.S. GOVERNMENT Seeks a long-term total rate of The Fund actively manages a INCOME FUND return through preserving capital diversified portfolio of U.S. and earning high interest income Government mortgage-backed by investing principally in a securities, U.S. Treasury portfolio of U.S. Government securities and repurchase mortgage pass-through securities agreements. Under normal market consisting primarily of securities conditions, the Fund invests at issued by GNMA, FNMA and FHLMC. least 65% of its total assets in mortgage-backed securities. SC U.S. GOVERNMENT Seeks over the long-term a high The Fund allocates and reallocates ALLOCATION FUND level of total return, including assets among long-term U.S. net realized an unrealized capital Treasury bonds, intermediate-term gains and net investment income, U.S. Treasury notes, and consistent with reasonable risk. short-term money market instruments. NAF INTERMEDIATE Seeks to provide current income, The Fund is the model for and its GOVERNMENT INCOME consistent with safety of investment strategies are FUND principal. substantially the same as the WF Intermediate Government Income Fund described below. WF INTERMEDIATE Seeks current income, consistent The Fund invests in GOVERNMENT INCOME with safety of principal. investment-grade, FUND intermediate-term (3-10 years) U.S. Government securities, and also in certain debt securities that are not U.S. Government securities. The Fund invests up to 50% of its assets in mortgage-backed securities, and up to 25% of its assets in other asset-backed securities. 15 WF LIMITED TERM GOVERNMENT INCOME FUND Comparison of: SC SHORT-TERM INTERMEDIATE WHICH WILL REORGANIZE INTO U.S. GOVERNMENT INCOME WF LIMITED TERM FUND GOVERNMENT INCOME FUND AND U.S. GOVERNMENT INCOME FUND AND NAF LIMITED TERM GOVERNMENT INCOME FUND - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC SHORT- Seeks current income while The Fund is the model for and its INTERMEDIATE preserving capital by investing investment strategies are U.S. GOVERNMENT primarily in a portfolio substantially the same as the WF INCOME FUND consisting of short to Limited Term Government Income intermediate-term securities Fund described below. issued or guaranteed by the U.S. Government, its agencies and instrumentalities. NAF LIMITED TERM Seeks to provide investors with The Fund invests primarily in GOVERNMENT INCOME current income while preserving fixed and variable rate U.S. FUND capital. Government securities. The Fund normally invests at least 65% of its total assets in U.S. Government securities and may invest up to 35% of its total asset in other fixed-income securities. WF LIMITED TERM Seeks current income and safety of The Fund invests in GOVERNMENT INCOME capital. investment-grade, short-term (1-5 FUND years) U.S. Government securities. WF TAX-FREE INCOME FUND Comparison of: SC NATIONAL TAX-FREE FUND WHICH WILL REORGANIZE INTO AND WF NATIONAL INCOME FUND NAF TAX-FREE INCOME FUND - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC NATIONAL TAX-FREE Seeks current income exempt from The Fund's investment strategies FUND the federal income tax. are similar to the WF Tax-Free Income Fund described below. NAF TAX-FREE INCOME Seeks to provide investors with The Fund is the model for and its FUND current income exempt from federal investment strategies are income tax. substantially the same as the WF Tax-Free Income Fund described below. WF NATIONAL INCOME Seeks current income exempt from The Fund invests in FUND the federal income tax. investment-grade municipal securities with average maturities of 10-20 years and with interest that is exempt from federal income taxes, including the alternative minimum tax or AMT. 16 MONEY MARKET FUNDS All of the Funds are "money market funds" that seek to maintain a stable net asset value of $1.00 per share. Each Fund pursues its strategy by maintaining a portfolio of high-quality money market investments. WF CASH INVESTMENT MONEY MARKET FUND Comparison of: SC PRIME MONEY MARKET WHICH WILL REORGANIZE INTO FUND (ADMINISTRATIVE, WF CASH INVESTMENT MONEY SERVICE AND INSTITUTIONAL MARKET FUND CLASSES) AND NAF CASH INVESTMENT FUND - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC PRIME MONEY Seeks to maximize current income The Fund's investment strategies MARKET FUND to the extent consistent with the are similar to the WF Cash (ADMINISTRATIVE, preservation of capital and Investment Money Market Fund SERVICE AND maintenance of liquidity. described below. INSTITUTIONAL CLASSES) NAF CASH INVESTMENT Seeks to provide high current The Fund is the model for and its FUND income, preservation of capital investment strategies are and liquidity. substantially the same as the WF Cash Investment Money Market Fund described below. WF CASH INVESTMENT Seeks high current income, The Fund invests in obligations of MONEY MARKET FUND preservation of capital and financial institutions. The Fund liquidity. limits its investments to institutions that at the time of investment have total assets in excess of $1 billion, or the equivalent in other currencies. 17 WF PRIME INVESTMENT MONEY MARKET FUND Comparison of: SC MONEY MARKET FUND WHICH WILL REORGANIZE INTO AND WF MONEY MARKET SC PRIME MONEY MARKET FUND FUND (CLASS A) AND NAF READY CASH INVESTMENT FUND - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC MONEY MARKET FUND Seeks to provide investors with a The Fund is the model for and its AND SC PRIME MONEY high level of current income, investment strategies are MARKET FUND (CLASS while preserving capital and substantially the same as the WF A) liquidity. Money Market Fund described below. NAF READY CASH Seeks to provide high current The Fund's investment strategies INVESTMENT FUND income, to extent consistent with are similar to the WF Investment the preservation of capital and Money Market Fund described below. the maintenance of liquidity. The Fund may invest more than 25% of its total assets in obligations of financial institutions, but limits its investments to institutions that have total assets in excess of $1 billion. WF MONEY MARKET FUND Seeks high current income, while The Fund invests in high-quality, preserving capital and liquidity. short-term money market instruments. 18 WF NATIONAL TAX FREE MONEY MARKET FUND Comparison of: SC NATIONAL TAX-FREE WHICH WILL REORGANIZE INTO MONEY MARKET FUND WF NATIONAL TAX-FREE (CLASS A) MONEY MARKET FUND AND (CLASS A) NAF MUNICIPAL MONEY MARKET FUND (CLASS A) - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC NATIONAL TAX-FREE Seeks a high level of income The Fund's investment strategies MONEY MARKET FUND exempt from federal income taxes, are similar to the WF National (CLASS A) while preserving capital and Tax-Free Money Market Fund liquidity. described below. NAF MUNICIPAL MONEY Seeks to provide high current The Fund is the model for and its MARKET FUND (CLASS income exempt from federal income investment strategies are A) taxes, while preserving capital substantially the same as the WF and liquidity. National Tax-Free Money Market Fund described below. WF NATIONAL TAX-FREE Seeks high current income exempt The Fund invests 100% of its MONEY MARKET FUND from federal income taxes, while assets in short-term municipal (CLASS A) preserving capital and liquidity. instruments, including leases. These investments may have fixed, variable, or floating rates of interest and may be zero coupon securities. 19 WF NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND Comparison of: SC NATIONAL TAX-FREE WHICH WILL REORGANIZE INTO MONEY MARKET FUND WF NATIONAL TAX-FREE (INSTITUTIONAL CLASS) INSTITUTIONAL MONEY AND MARKET FUND NAF MUNICIPALMONEY (INSTITUTIONAL AND MARKET FUND SERVICE CLASSES) (SERVICE CLASS) - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC NATIONAL TAX-FREE Seeks a high level of income The Fund's investment strategies MONEY MARKET FUND exempt from federal income taxes, are similar to the WF National (INSTITUTIONAL while preserving capital and Tax-Free Institutional Money CLASS) liquidity. Market Fund described below. NAF MUNICIPAL MONEY Seeks to provide high current The Fund is the model for and its MARKET FUND income exempt from federal income investment strategies are (SERVICE CLASS) taxes, while preserving capital substantially the same as the WF and liquidity. National Tax- Free Institutional Money Market Fund described below. WF NATIONAL TAX-FREE Seeks high current income exempt The Fund invests 100% of its INSTITUTIONAL from federal income taxes, while assets in short-term municipal MONEY MARKET FUND preserving capital and liquidity. instruments, including leases. (INSTITUTIONAL AND These investments may have fixed, SERVICE CLASSES) variable, or floating rates of interest and may be zero coupon securities. 20 WF TREASURY PLUS INSTITUTIONAL MONEY MARKET FUND Comparison of: SC TREASURY PLUS MONEY WHICH WILL REORGANIZE INTO MARKET FUND WF TREASURY PLUS (ADMINISTRATIVE, SERVICE INSTITUTIONAL MONEY AND INSTITUTIONAL MARKET FUND (SERVICE CLASSES) AND INSTITUTIONAL AND CLASSES) NAF TREASURY PLUS FUND (SERVICE CLASS) - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC TREASURY PLUS Seeks current income and stability The Fund is the model for and its MONEY MARKET FUND of principal. investment strategies are (ADMINISTRATIVE, substantially the same as the WF SERVICE AND Treasury Plus Institutional Money INSTITUTIONAL Market Fund described below. CLASSES) NAF TREASURY PLUS Seeks to provide investors with The Fund's investment strategies FUND (SERVICE current income and stability of are similar to the WF Treasury CLASS) principal. Plus Institutional Money Market Fund described below. WF TREASURY PLUS Seeks current income and stability The Fund actively manages a INSTITUTIONAL of principal. portfolio composed of obligations MONEY MARKET FUND issued or guaranteed by the U.S. (SERVICE AND Treasury. The Fund also invests in INSTITUTIONAL notes, repurchase agreements and CLASSES) other instruments collateralized or secured by Treasury obligations. 21 SC GOVERNMENT MONEY MARKET FUND Comparison of: SC GOVERNMENT MONEY WHICH WILL REORGANIZE INTO MARKET FUND WF GOVERNMENT MONEY AND MARKET FUND NAF U.S. GOVERNMENT FUND - ------------------------------------------------------------------------------------------- FUND OBJECTIVE PRINCIPAL STRATEGY - -------------------------------------------------------------------------------------------- SC GOVERNMENT MONEY Seeks a high level of current The Fund investment strategies are MARKET FUND income as is consistent with similar to the WF Government Money preservation of capital and Market Fund described below. liquidity. NAF U.S. GOVERNMENT Seeks to provide high current The Fund is the model for and its FUND income, while preserving capital investment strategies are and liquidity. substantially the same as the WF Government Money Market Fund described below. WF GOVERNMENT MONEY Seeks high current income, while The Fund invests in high-quality, MARKET FUND preserving capital and liquidity. short-term U.S. Government obligations and in repurchase agreements collateralized by these obligations. 22 COMMON RISK CONSIDERATIONS This section will help you understand the main risks of investing in the WF Funds. Because of the similarities in investment objectives and strategies, the SC Funds, the NAF Funds and the WF Funds are subject to substantially similar investment risks. The following discussion describes the principal risks that may affect the Funds' portfolios as a whole. You will find additional descriptions of specific risks for a particular Fund in the Funds' Prospectuses. EQUITY SECURITIES. All of the Funds that invest in equity securities are subject to equity market risk. This is the risk that stock prices will fluctuate and can decline and reduce the value of a Fund's portfolio. Certain types of stock and certain individual stocks selected for a Fund's portfolio may underperform or decline in value more than the overall market. Currently, the equity markets, as measured by the S&P 500 Index and other commonly used indexes, are trading at or close to record levels. There can be no guarantee that these levels will continue. The Funds that invest in smaller companies, in foreign companies (including investments made through ADR's and similar instruments), and in emerging markets are subject to additional risks, including less liquidity and greater price volatility. A Fund's investments in foreign companies and emerging markets are also subject to special risks associated with international investing, including currency, political, regulatory and diplomatic risks. DEBT SECURITIES. All of the Funds that invest in debt securities, such as notes and bonds are subject to credit risk and interest rate risk. Credit risk is the possibility that an issuer of an instrument will be unable to make interest payments or repay principal. Changes in the financial strength of an issuer or changes in the credit rating of a security may affect its value. Interest rate risk is the risk that interest rates may increase, which will reduce the resale value of securities in a Fund's investments, including U.S. Government obligations. Debt securities with longer maturities are generally more sensitive to interest rate changes than those with shorter maturities. Changes in market interest rates do not affect the rate payable on debt securities held in a Fund, unless the securities have adjustable or variable rate features, which can reduce interest rate risk. Changes in market interest rates may also extend or shorten the duration of certain types of instruments, such as asset-backed securities, and affect their value and the return on your investment. YEAR 2000 RISK. The Funds' principal service providers have advised the Funds that they are working on the necessary changes to their computer systems to avoid any system failure based on an inability to distinguish the year 2000 from the year 1900 and that they expect their systems to be adapted in time. There can, of course, be no assurance of success. In addition, the Year 2000 problem may adversely affect the issuers of securities in which the Funds invest, which, in turn, may adversely affect the Funds' NAV. COMPARISON OF SHAREHOLDER SERVICES AND PROCEDURES The WF Funds have substantially similar or improved shareholder services and procedures compared to the SC Funds and the NAF Funds. For additional information on shareholder services and policies, see Exhibit D. As a result of the reorganization, all classes of shares of the SC Funds and NAF Funds will convert into similar classes of shares of the WF Funds. FEDERAL INCOME TAX CONSEQUENCES The completion of this reorganization is subject to the condition that the SC Funds and the NAF Funds receive an opinion from KPMG LLP to the effect that the reorganization, except for certain of the money market funds, will not result in the recognition of gain or loss for federal income tax purposes by the Funds under Sections 361 and 1032 of the Internal Revenue Code of 1986, or by the SC Funds' or NAF Funds' shareholders under Section 354 of the Code. For certain money market funds, the reorganization will not be a tax-free transaction, but it is not expected to result in tax consequences to the shareholders of these funds. 23 COMPARISON OF INVESTMENT ADVISORS AND INVESTMENT ADVISORY FEES Wells Fargo Bank, a wholly-owned subsidiary of Wells Fargo & Company, serves as investment advisor for each of the SC Funds and WF Funds. Norwest Investment Management, Inc., a wholly-owned subsidiary of Wells Fargo & Company, serves as investment advisor for the NAF Funds. Several of the Funds utilize the services of different sub-advisors. For more information on the advisors, sub-advisors, and advisory fees for the SC Funds, NAF Funds and WF Funds, see Exhibit E. COMPARISON OF OTHER SERVICE PROVIDERS For a comparison of the service providers for the SC Funds, NAF Funds and WF Funds, see Exhibit F. COMPARISON OF BUSINESS STRUCTURES The SC Funds are series of Stagecoach Funds, Inc., which is organized as a Maryland corporation. The NAF Funds are series of the Norwest Trust, which is organized as a Delaware business trust. The WF Funds are series of Wells Fargo Funds Trust, which is organized as a Delaware business trust. The responsibilities, powers and fiduciary duties of the Directors of the SC Funds and the Trustees of NAF and WF Funds are substantially similar. WF Funds shareholders will have more limited voting rights than the shareholders of the SC Funds or NAF Funds. WF shareholders will not be able to vote to remove Trustees from the Board of Trustees. For more information on the comparison of business structures of the Funds, see Exhibit G. CAMPARISON OF POLICIES After the reorganization, the WF Funds will have fewer "fundamental" policies, which can only be changed by a shareholder vote, that restrict the Funds' ability to respond to new developments and changing trends in the marketplace. Also, the WF Funds' investment objectives are not fundamental, which means they can be changed by the Board of Trustees without a shareholder vote. 24 INFORMATION ABOUT THE PROPOSED TRANSACTION INTRODUCTION This proxy statement/prospectus is provided to you to solicit your vote for use at a Meeting to approve the reorganization of the SC Funds and NAF Funds into the WF Funds. The Meeting will be held at Stephens, Inc., 111 Center Street, Little Rock, Arkansas 72201 on August 5, 1999. This proxy statement/ prospectus and the enclosed proxy card are being mailed to shareholders of the SC Funds and NAF Funds on or about June 1, 1999. Any shareholder may revoke a proxy once the proxy is given. A shareholder desiring to revoke a proxy must either submit to the appropriate SC Fund or NAF Fund a later dated proxy, deliver to the appropriate SC Fund or NAF Fund a written notice of revocation, or otherwise give written notice of revocation in person at the Meeting. All properly executed proxies received in time for the Meeting will be voted as specified in the proxy, or, if no specification is made, FOR the proposal. Only shareholders of record on May 6, 1999 will be entitled to notice of and vote at the Meeting. Each share as of the close of business on May 6, 1999 is entitled to one vote. For the SF Funds, approval of the reorganization plan requires the affirmative vote of an absolute majority (more than 50%) of the outstanding shares (a) of each of SF Funds and (b) all of the SF Funds. For the NAF Funds, approval of the reorganization plan requires the lesser of (a) 67% or more of the voting shares present at the Meeting, if the holders of more than 50% of the outstanding voting shares of the Funds are present or represented by proxy; or (b) more than 50% of the outstanding voting shares of the Funds. The election inspectors will count your vote at the Meeting if cast by proxy or in person. The election inspectors will count: - votes cast "for" approval of a proposal to determine whether sufficient affirmative votes have been cast; and - abstentions and broker non-votes of shares to determine whether a quorum is present at the meeting, but will not count abstentions or broker non-votes to determine whether the proposal has been approved. Broker non-votes are shares held in street name for which the broker indicates that instructions have not been received from the beneficial owners or other persons entitled to vote and for which the broker lacks discretionary voting authority. The SC Fund Directors and NAF Fund Trustees know of no matters other than the proposal discussed in this proxy statement/prospectus that will be brought before the Meeting. If, however, any other matters properly come before the Meeting, it is the Directors' and Trustees' intention that proxies will be voted on such matters based on the judgment of the persons named in the enclosed form or proxy. In addition to the solicitation of proxies by mail or expedited delivery service, the Board of Directors of SC Funds and the Trustees of the NAF Funds and employees and agents of D.F. King & Company may solicit proxies in person or by telephone. Wells Fargo Bank will reimburse upon request persons holding shares as nominees for their reasonable expenses in sending soliciting material to their principals. The SC Funds and NAF Funds have engaged the proxy solicitation firm of D.F. King & Company which, for its solicitation services, will receive a fee from Wells Fargo Bank estimated at $20,000, and reimbursement of out of pocket expenses estimated at $155,000. 25 TERMS OF THE PROPOSED TRANSACTION At the effective time of the reorganization, the WF Funds will acquire all of the assets and liabilities of the corresponding SC Funds and NAF Funds shown in the table below in exchange for shares of the WF Funds. - ------------------------------------------------------------------------------------------- WILL REORGANIZE INTO SC FUND NAF FUND WF FUND Asset Allocation Fund Balanced Fund -- Asset Allocation Fund Growth Fund ValuGrowth-SM- Stock Fund Growth Fund Diversified Equity Income Fund Income Equity Fund Income Equity Fund Small Cap Fund Strategic Growth Fund Small Company Stock Fund Small Cap Fund Income Fund Total Return Bond Fund -- Performa Strategic Value Bond Income Fund Fund U.S. Government Income Fund U.S. Government Allocation Intermediate Government Intermediate Government Fund Income Fund Income Fund Short-Intermediate U.S. Limited Term Government Limited Term Government Government Income Fund Income Fund Income Fund National Tax-Free Fund Tax-Free Income Fund National Tax-Free Fund Prime Money Market Fund (Administrative, Service and Cash Investment Fund Cash Investment Money Market Institutional Classes) Fund Prime Money Market Fund Ready Cash Investment Fund (Class A) (Investor and Exchange Money Market Fund Money Market Fund Classes) National Tax-Free Money National Tax-Free Money Market Fund Municipal Money Market Fund Market Fund (Class A) (Investor Class) (Class A) National Tax-Free National Tax-Free Money Institutional Money Market Market Fund Municipal Money Market Fund Fund (Institutional Class) (Institutional Class) (Service and Institutional Classes) Treasury Plus Money Market Treasury Plus Institutional Fund Treasury Plus Fund Money Market Fund (Administrative, Service and (Institutional Class) (Service and Institutional Institutional Classes) Classes) Government Money Market Fund U.S. Government Fund Government Money Market Fund 26 The SC Funds have an agreement with the WF Funds specifying the terms and conditions of the reorganization. The NAF Funds have a substantially similar agreement with the WF Funds. In this discussion, we will refer to these agreements as the reorganizations plans. Under the reorganization plans, the WF Funds will assume all the assets and liabilities of the corresponding SC Funds and NAF Funds. Each WF Fund will issue the number of full and fractional shares determined by dividing the net value of all the assets of each respective SC Fund and NAF Fund by the net asset value of one share of the respective WF Fund. In addition, certain funds in which the NAF Funds invest will under a "core/gateway" arrangement will reorganize under a separate reorganization plan. The reorganization plans provide the times for and methods of determining the net value of the SC Funds' and NAF Funds' assets and the net asset value of a share of the WF Funds. The SC Funds and NAF Funds will distribute the WF Fund shares to their shareholders in liquidation of the SC Funds and NAF Funds. Specifically, shareholders of record of each SC Fund and NAF Fund will be credited with shares of the WF Fund corresponding to the SC Fund and NAF Fund shares that the shareholders hold of record at the effective time of the reorganization. The SC Funds and the NAF Funds will redeem and cancel their outstanding shares, will wind up the affairs, and terminate the Funds as soon as is reasonably possible after the reorganization. If a majority of the shares of a SC Fund or a NAF Fund do not approve the reorganization, that SC Fund or NAF Fund will not be terminated. In such a case, the SC or NAF will continue its operations and its Directors or Trustees will consider what futher action is appropriate. Completion of the reorganization is subject to certain conditions set forth in the reorganization plans. The parties may terminate the reorganization plans for any Fund or Funds by mutual consent and either party has the right to terminate the reorganization plans under certain circumstances. Among other circumstances, either party may at any time terminate the reorganization plan unilaterally upon a determination by the party's Board that proceeding with the reorganization plan is not in the best interest of its shareholders. Copies of the reorganization plans are included as Exhibit B. REASONS BOARDS RECOMMEND REORGANIZATION At a meeting on March 25, 1999, the Directors of SC Funds and the Trustees of the NAF Funds unanimously approved the reorganization plans and determined that the reorganization of the SC Funds and the NAF Funds into the WF Funds would be in the best interests of each Fund. At a meeting on March 26, 1999, the Trustees of the WF Funds unanimously approved the reorganization plans. The Directors and Trustees further determined that the interests of existing shareholders of each Fund would not be diluted upon the reorganization. The Directors and Trustees recommend approval of the reorganization for the following reasons: - ENHANCED RANGE OF INVESTMENT OPTIONS Investors in the WF Funds will enjoy a wide array of investment options and strategies. The WF Funds will consist of 61 operating funds, including 18 different equity funds, each with a distinct style or strategy. Previously, the SC Funds had 39 funds, of which 7 were equity funds, and the NAF Funds had 41 funds, of which 15 were equity funds. In addition, the WF Funds will offer 11 balanced funds, 9 income funds, 9 tax-free income funds, and 14 money market funds. This expanded range of investment options will permit WF Fund investors to better diversify their investments and to participate in investment styles currently prevalent in the market. Shareholders are free, with a few exceptions, to make exchanges between funds. Thus, if the reorganization is approved, you will have increased access to investment options and greater flexibility to change investments. - TAX-FREE CONVERSION OF SC FUND AND NAF FUND SHARES 27 If you were to redeem your investment in the SC Funds or NAF Funds to invest in the corresponding WF Funds, you would recognize gain or loss for federal income tax purposes upon the redemption of the shares. By contrast, the proposed reorganization of the Funds will enable you, in effect, to exchange your investment for an investment in the WF Funds without recognition of gain or loss for Federal income tax purposes. Although certain of the money market fund reorganizations do not technically qualify as tax-free transactions, they are not expected to result in any tax consequences to shareholders. After the reorganization, as a shareholder of an open-end fund, you will continue to have the right to redeem any or all of your shares at NAV at any time (except for any applicable CDSC). At that time, you would recognize a taxable gain or loss. - INVESTMENT LEVERAGE AND MARKET PRESENCE The reorganization is expected to result in greater investment leverage and market presence for the WF Funds. If the reorganization is approved, the WF Funds including the combining Funds, would have approximately $51.5 billion in assets under management. Because of this increased asset base, the WF Funds will have greater viability on a combined basis. Fund investment opportunities increase as assets increase. In addition, fund portfolio managers may be able to take advantage of broader investment opportunities and lower trading costs. - IMPROVED ADMINISTRATIVE EFFICIENCIES The SC Funds and NAF Funds are combining their administrative functions. As a result, the WF Funds will be able to operate more efficiently by, among other things, having a combined Board of Trustees, administering a streamlined fund structure, reducing regulatory compliance burdens, enhancing brand identity, and furnishing one group of simplified prospectuses and marketing materials. - BETTER PORTFOLIO MANAGEMENT AND MORE FLEXIBLE INVESTMENT POLICIES Each WF Fund will be modeled on one of the SC Funds or NAF Funds based on the selection of successful portfolio managers with better track records for the WF Funds. In addition, the WF Funds will have more flexible investment policies, which will allow the Funds to better respond to new developments and trends in the marketplace. - EXPENSES OF THE REORGANIZATION Well Fargo has agreed to pay all of the expenses of the reorganization so that shareholders of the Funds will not bear these costs. PERFORMANCE The following table shows the performance of the SC Funds and NAF Funds. The Funds that are the model for the corresponding WF Fund are italicized. For more information regarding the total returns of each of the Funds, see the "Financial Highlights" in the SC Funds' and NAF Funds' Prospectuses. Of course, past performance does not predict future results. TOTAL RETURNS AS OF NOVEMBER 30, 1998 10 YEAR OR STAGECOACH FUNDS AND NORWEST FUNDS INTO 1 YEAR 5 YEAR INCEPTION - --------------------------------------------------------------------------------- --------- --------- ------------- SC Growth Class A (8/90) 15.28% 17.00% 15.72%* NAF ValuGrowth Stock Class A 2.59% 13.23% 13.83% SC Growth Class B (8/90) 14.99% 17.36% 15.75%* NAF ValuGrowth Stock Class B 4.74% 13.57% 13.62% SC Growth Institutional Class (8/90) 21.71% 18.28% 16.47%* NAF ValuGrowth Stock Institutional Class 8.62% 14.55% 14.46% 28 10 YEAR OR STAGECOACH FUNDS AND NORWEST FUNDS INTO 1 YEAR 5 YEAR INCEPTION - --------------------------------------------------------------------------------- --------- --------- ------------- SC Diversified Equity Income Class A (11/92) 0.65% 13.78% 13.74%* NAF Income Equity Stock Class A (3/89) 10.00% 19.37% 16.3%* SC Diversified Equity Income Class B (11/92) 0.37% 14.10% 14.08%* NAF Income Equity Class B (3/89) 12.50% 19.73% 16.12%* NAF Income Equity Class C (3/89) 15.42% 19.82% 16.11%* NAF Income Equity Institutional Class (3/89) 16.38% 20.73% 16.98%* SC Strategic Growth Class A (1/93) (16.31)% 9.66% 13.25%* SC Small Cap Class A (11/94) (21.22)% N/A 17.55%* NAF Small Company Stock Class A (12/93) (25.80)% N/A 4.94%* SC Strategic Growth Class B (1/93) (16.60)% 9.79% 13.18%* SC Small Cap Class B (11/94) (21.61)% N/A 18.06%* NAF Small Company Stock Class B (12/93) (23.96)% N/A 5.02%* SC Small Cap Class C (11/94) (18.36)% N/A 18.33%* SC Strategic Growth Class C (1/93) (13.17)% 10.05% 13.26%* SC Small Cap Institutional Class (11/94) (16.39)% N/A 20.12%* NAF Small Company Stock Institutional Class (12/93) (21.43)% N/A 6.08%* NAF Total Return Bond Class A (12/93) 3.74% N/A 5.47%* NAF Income Class A 5.52% 5.13% 7.97% NAF Total Return Bond Class B (12/93) 5.25% N/A 5.60%* NAF Income Class B 7.10% 5.20% 7.58% NAF Strategic Value Bond Institutional Class (10/97) 9.15% N/A 9.55%* NAF Total Return Bond Institutional Class (12/93) 8.17% N/A 6.40%* NAF Income Institutional Class 9.92% 5.99% 8.46% SC U.S. Government Income Class A 3.17% 4.74% 8.16% SC U.S. Government Allocation Class A 1.37% 3.65% 7.60% NAF Intermediate Government Income Class A 5.70% 4.72% 7.06% SC U.S. Government Income Class B 2.11% 4.65% 7.96% SC U.S. Government Allocation Class B 0.39% 3.82% 7.50% NAF Intermediate Government Income Class B 7.28% 4.79% 6.71% SC U.S. Government Income Class C 6.20% 4.96% 7.97% SC U.S. Government Income Institutional Class 8.01% 5.72% 8.66% NAF Intermediate Government Income Institutional Class 10.10% 5.58% 7.51% SC Short-Intermediate U.S. Government Income Class A (10/93) 4.88% 5.27% 5.21%* SC Short-Intermediate U.S. Government Income Class B (10/93) 2.50% 4.94% 5.03%* SC Short-Intermediate U.S. Government Income Institutional Class (10/93) 8.30% 5.94% 5.88%* NAF Limited Term Government Institutional Class (10/97) 8.23% N/A 8.01%* SC National Tax-Free Class A (1/93) 2.49% 4.77% 5.20%* NAF Tax-Free Income Class A (8/89) 4.17% 6.05% 6.65%* SC National Tax-Free Class B (1/93) 1.50% 4.30% 4.83%* 29 10 YEAR OR STAGECOACH FUNDS AND NORWEST FUNDS INTO 1 YEAR 5 YEAR INCEPTION - --------------------------------------------------------------------------------- --------- --------- ------------- NAF Tax-Free Income Class B (8/89) 5.70% 6.10% 6.34%* SC National Tax-Free Class C (1/93) 5.48% 4.63% 4.96%* SC National Tax-Free Institutional Class (1/93) 7.41% 5.75% 6.04%* NAF Tax-Free Income Institutional Class (8/89) 8.40% 6.91% 7.11%* SC Prime Money Market Institutional Class 5.53% 5.15% 5.56% SC Prime Money Market Administrative Class 5.14% 5.01% 5.49% SC Prime Money Market Service Class 5.32% 5.04% 5.51% NAF Cash Investment Service Class 5.35% 5.06% 5.60% SC Prime Money Market Class A 5.08% 4.87% 5.32% SC Money Market Class A (7/92) 5.00% 4.73% 4.30%* NAF Ready Cash Investment Class A 5.00% 4.71% 5.26% SC Money Market Class S (7/92) 4.30% 3.96% 3.55% NAF Ready Cash Investment Class B SC National Tax-Free Money Market Class A (4/96) 2.75% N/A 2.87%* NAF Municipal Money Market Class A 3.04% 3.05% 3.55% SC National Tax-Free Money Market Institutional Class (4/96) 3.15% N/A 3.02%* NAF Municipal Money Market Service Class (7/93) 3.25% 3.25% 3.19%* SC Treasury Plus Money Market Administrative Class 4.92% 4.85% 5.29% SC Treasury Plus Money Market Service Class 5.10% 4.88% 5.30% NAF Treasury Plus Service Class (6/98) N/A N/A 1.15%* SC Treasury Plus Money Market Institutional Class 5.30% 4.99% 5.36% SC Government Money Market Class A 4.89% 4.65% 5.19% NAF U.S. Government Class A 5.12% 4.88% 5.37% * This performance % is from inception date which can be seen next to the fund name, this fund is not old enough to have a 10 year history. FEDERAL INCOME TAX CONSEQUENCES AND FEDERAL TAX OPINIONS CORPORATE REORGANIZATIONS As a condition of the Reorganization for all but five SC Funds or NAF Funds, the SC Funds and the NAF Funds will each have received an opinion from KPMG LLP in a form reasonably satisfactory to SC Funds and NAF Funds to the effect that, for Federal income tax purposes: (i) the transfer of substantially all the assets and liabilities of each such SC Fund or NAF Fund to its corresponding WF Fund in exchange solely for shares of the WF Fund and the assumption by the WF Fund of all the liabilities of the transferor Fund and the distribution of these WF Fund shares to shareholders of the SC Fund or NAF Fund, under the reorganization plans, will constitute a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and each of the Funds will be a party to the reorganization within the meaning of Section 368 of the Code; 30 (ii) in accordance with Section 361 of the Code, no gain or loss shall be recognized by either of the SC Funds or NAF Funds, upon the transfer of substantially all of their assets to the corresponding WF Fund in exchange for shares of WF Fund and the assumption by WF Fund of the liabilities of such SC Fund or NAF Fund; (iii) pursuant to Section 354 of the Code, no gain or loss will be recognized by the shareholders of any SC Fund or NAF Fund upon the exchange of their shares for shares of the corresponding WF Fund (but shareholders of any SC Fund or NAF Fund, that are subject to taxation will recognize income upon the receipt of any net investment income or net capital gains of the Funds that are distributed by the Funds prior to the reorganization); (iv) in accordance with Section 358 of the Code, the basis of the WF Fund shares received by a shareholder of SC Funds or NAF Funds, will be the same as the basis of the shareholders SC or NAF Fund shares exchanged therefor; (v) in accordance with Section 1032 of the Code, no gain or loss will be recognized by any WF Fund upon the receipt of the assets of the corresponding SC Fund or NAF Fund, in exchange for WF shares and the assumption by the WF Fund of the liabilities of the corresponding SC Fund or NAF Fund; (vi) in accordance with Section 362 of the Code, the basis in the hands of the WF Fund of the assets of the corresponding SC Fund or NAF Fund, will be the same as the basis of the assets in the hands of the corresponding SC Fund or NAF Fund, as the case may be, immediately prior to the transfer; (vii) in accordance with Section 1223(1) of the Code, an SC Fund or NAF Fund shareholder's holding period for the shareholder's WF Fund shares will be determined by including the period for which the shareholder held the SC Fund or NAF Fund shares, provided that the shareholder held the shares as capital assets; (viii) in accordance with Section 1223(2) of the Code, the holding periods of the SC Fund or NAF Fund assets in the hands of the corresponding WF Fund will include the periods during which the assets were held by the corresponding SC or NAF Fund; (ix) each WF Fund will succeed to and take into account the earnings and profits, or deficit in earnings and profits, of the corresponding SC or NAF Fund, immediately prior to the reorganization pursuant to Section 381 of the Code; (x) each WF Fund will succeed to and take into account any Section 855(a) dividend of the corresponding SC Fund or NAF Fund, for the Fund's last taxable year immediately prior to the reorganization; and (xi) In accordance with Section 381 of the Code, the WF Funds will succeed to the capital loss carryovers, if any, if the corresponding SC Fund or NAF Fund, but the use of such carryovers by the WF Funds may be subject to limitations under in Sections 381, 382, 383 and 384 of the Code and applicable regulations under those sections. PARTNERSHIP REORGANIZATIONS The NAF Income Equity Fund, NAF Small Company Stock Fund, NAF Total Return Bond Fund, NAF Performa Strategic Value Bond Fund, NAF Cash Investment Fund and NAF Ready Cash Investment Fund are "gateway" funds in a "core/gateway" arrangement. In this arrangement, a "gateway" fund invests all of its assets in a "core" portfolio that has substantially identical investment objectives and substantially similar strategies as the gateway fund. The "core" portfolios' form of organization is a partnership. After the reorganization, the NAF Funds will transfer their interests to the new WF "core" portfolio. As a condition to the reorganization of the partnerships, the existing core portfolios, or NAF Portfolios, and the 31 new WF core portfolios, or WF Portfolios, each will have received an opinion from KPMG LLP to the effect that, for Federal income tax purposes: (i) neither the NAF Portfolio nor the WF Portfolio will recognize gain or loss as a result of the transfer to the WF Portfolio by the NAF Portfolio of all of its assets in exchange for interests of the WF Portfolio and the assumption of the liabilities of the NAF Portfolio by the WF Portfolio under Section 721(a) of the Code; (ii) in accordance with Section 731(b) of the Code, the NAF Portfolio will recognize no gain or loss as a result of the distribution of the interests in the WF Portfolio to its interest holders in liquidation of their interests in the NAF Portfolio; (iii) in accordance with Sections 731(a)(1) and 731(c)(3)(A)(iii) of the Code, the interest holders of the NAF Portfolio will recognize no gain or loss on the distribution to them by the NAF Portfolio of interests of the WF Portfolio in exchange for their NAF Portfolio interests; (iv) in accordance with Section 732(b) of the Code, the basis of the interests of the WF Portfolio received by each interestholder of the NAF Portfolio will be the same as the basis of the interest holder's NAF Portfolio interests immediately prior to the Reorganization; (v) in accordance with Section 723 of the Code, the basis of the assets received by the WF Portfolio will be the same as the basis of such assets in the hands of the NAF Portfolio immediately prior to the reorganization; (vi) in accordance with Section 1223(i) of the Code, an interest holder's holding period for the interests of the WF Portfolio will include the interestholders' holding period for the NAF Portfolio, as determined under Section 1223 of the Code; (vii) in accordance with Section 1223(2) of the Code, the holding period of the WF Portfolio with respect to the assets acquired from the NAF Portfolio will include the period for which such assets were held by the NAF Portfolio; and (viii) with the exception of the WF Income Portfolios, the WF Portfolio will be treated as a continuation of the NAF Portfolios for federal income tax purposes and, accordingly, the reorganization will not cause a termination of the NAF Portfolio under Section 708 of the Code and the taxable year of the NAF Portfolio will not close under Section 706(c) of the Code with respect to interest holders of the NAF Portfolio that receive interests in the WF Portfolio. CERTAIN MONEY MARKET FUND REORGANIZATIONS As discussed above, the reorganization is expected to be a tax-free "reorganization" within the meaning of Section 386(a) of the Code for most of the SC or NAF Funds. For certain money market funds, the reorganization will not be a tax-free reorganization because substantially all of these Funds' assets will be transferred into more than one new fund rather than into a single fund as required under Section 368(a) of the Code. These funds are the SC Prime Money Market Fund, SC National Tax-Free Money Market Fund, the SC Treasury Plus Money Market Fund, the NAF Ready Cash Investment Fund, and the NAF Municipal Money Market Fund. Even though the reorganization will not qualify as a tax-free reorganization, it is not expected to result in the recognition of taxable gain or loss to the Funds' shareholders. This is because both the SC and NAF Funds, and the WF Funds will, value their shares at amortized cost and strive to maintain a constant NAV of $1.00 per share. Based on this valuation method, and, except in unusually circumstances, the Funds should not recognize any taxable gains or losses with respect to the transfer of their assets to the WF Money Market Funds. 32 SURVIVING FUNDS The table below indicates the SC Funds and NAF Funds that are expected to be the accounting survivors after the reorganization. The WF Fund is "modeled on" the accounting survivor, which will be managed in same the same way as the accounting survivor. The WF Fund will assume the performance record of the accounting survivor. - ------------------------------------------------------------------------------------------- WELLS FARGO FUNDS TRUST ACCOUNTING SURVIVOR EQUITY AND ALLOCATION FUNDS Asset Allocation Fund Stagecoach Asset Allocation Fund Growth Fund Stagecoach Growth Fund Income Equity Fund Norwest Advantage Income Equity Fund Small Cap Fund Stagecoach Small Cap Fund INCOME FUNDS Income Fund Norwest Advantage Income Fund Norwest Advantage Intermediate Government Intermediate Government Income Fund Income Fund Stagecoach Short-Intermediate U.S. Government Limited Term Government Income Fund Income Fund National Tax-Free Fund Norwest Advantage Tax-Free Income Fund MONEY MARKET FUNDS Cash Investment Money Market Fund Norwest Advantage Cash Investment Fund Money Market Fund Stagecoach Money Market Fund National Tax-Free Money Market Fund Norwest Advantage Municipal Money Market Fund (Class A) (Investor Class) National Tax-Free Institutional Money Market Fund Norwest Advantage Municipal Money Market Fund (Service and Institutional Classes) (Institutional Class) Stagecoach Treasury Plus Money Market Fund Treasury Plus Institutional Money Market Fund (Administrative, Service and Institutional (Service and Institutional Classes) Classes) Government Money Market Fund Norwest Advantage U.S. Government Fund 33 EXISTING AND PRO FORMA CAPITALIZATION The following tables set forth (i) the capitalization of the SC Funds and NAF Funds and (ii) the pro forma capitalization of the WF Funds as adjusted giving effect to the proposed acquisition of assets at net asset value: PRO FORMA CAPITALIZATION TABLE AS OF NOVEMBER 30, 1998 NET ASSET SHARES VALUE PER STAGECOACH FUNDS AND NORWEST FUNDS INTO WELLS FARGO FUNDS TOTAL NET ASSETS OUTSTANDING SHARE - ------------------------------------------------------------------ ---------------- ---------------- ----------- SC Balanced Class A............................................. $ 31,940,605 2,472,091 $ 12.92 SC Asset Allocation Class A..................................... $ 1,338,618,802 49,596,349 26.99 PRO FORMA WF GROWTH CLASS A....................................... $ 1,370,559,407 50,779,729 26.99 SC Balanced Class B............................................. $ 36,850,151 2,680,806 $ 12.88 SC Asset Allocation Class B..................................... $ 361,569,723 22,096,613 $ 16.36 PRO FORMA WF GROWTH CLASS B....................................... $ 398,419,874 24,348,886 $ 16.36 SC Asset Allocation Class C..................................... $ 5,747,537 350,374 $ 16.40 PRO FORMA WF GROWTH CLASS C....................................... $ 5,747,537 350,374 $ 16.40 SC Balanced Institutional Class................................. $ 11,039,591 945,983 $ 11.67 PRO FORMA WF GROWTH INSTITUTIONAL CLASS........................... $ 11,039,591 945,983 $ 11.67 SC Growth Class A............................................... $ 342,105,239 14,452,942 $ 23.67 NAF ValuGrowth Stock Class A.................................... $ 21,495,822 843,935 $ 25.47 PRO FORMA GROWTH CLASS A.......................................... $ 363,601,061 15,361,055 $ 23.67 SC Growth Class B............................................... $ 16,393,183 590,536 $ 27.76 NAF ValuGrowth Stock Class B.................................... $ 8,557,355 344,994 $ 24.80 PRO FORMA GROWTH CLASS B.......................................... $ 24,950,538 898,744 $ 27.76 SC Growth Institutional Class................................... $ 55,611,939 3,314,817 $ 16.78 NAF ValuGrowth Stock Institutional Class........................ $ 428,868,412 16,859,467 $ 25.44 PRO FORMA GROWTH INSTITUTIONAL CLASS.............................. $ 484,480,351 28,875,296 $ 16.78 SC Diversified Equity Income Class A............................ $ 174,044,375 9,949,056 $ 17.49 NAF Income Equity Stock Class A................................. $ 86,900,348 2,086,097 $ 41.66 PRO FORMA INCOME EQUITY CLASS A................................... $ 260,944,723 6,262,981 $ 41.66 SC Diversified Equity Income Class B............................ $ 64,022,885 3,910,859 $ 16.37 NAF Income Equity Stock Class B................................. $ 82,770,746 1,990,547 $ 41.58 PRO FORMA INCOME EQUITY CLASS B................................... $ 146,793,631 3,530,248 $ 41.58 NAF Income Equity Stock Class C................................. $ 12,002 281 $ 42.58 PRO FORMA INCOME EQUITY CLASS C................................... $ 12,002 281 $ 42.58 NAF Income Equity Stock Institutional Class..................... $ 1,335,857,367 32,071,380 $ 41.65 PRO FORMA INCOME EQUITY INSTITUTIONAL CLASS....................... $ 1,335,857,367 32,071,380 $ 41.65 SC Strategic Growth Class A..................................... $ 101,046,521 5,570,047 $ 18.14 SC Small Cap Class A............................................ $ 11,611,814 604,591 $ 19.21 NAF Small Company Stock Class A................................. $ 5,360,629 578,171 $ 9.27 PRO FORMA SMALL CAP CLASS A....................................... $ 118,018,964 6,160,119 $ 19.21 SC Strategic Growth Class B..................................... $ 22,324,071 1,015,803 $ 21.98 SC Small Cap Class B............................................ $ 14,181,288 748,881 $ 18.94 34 NET ASSET SHARES VALUE PER STAGECOACH FUNDS AND NORWEST FUNDS INTO WELLS FARGO FUNDS TOTAL NET ASSETS OUTSTANDING SHARE - ------------------------------------------------------------------ ---------------- ---------------- ----------- NAF Small Company Stock Class B................................. $ 4,164,305 468,049 $ 8.90 PRO FORMA SMALL CAP CLASS B....................................... $ 40,669,664 2,147,740 $ 18.94 SC Small Cap Class C............................................ $ 1,485,692 78,483 $ 18.93 SC Strategic Growth Class C..................................... $ 18,197,088 828,774 $ 21.96 PRO FORMA SMALL CAP CLASS C....................................... $ 19,682,780 1,039,759 $ 18.93 SC Small Cap Institutional Class................................ $ 68,905,109 3,552,679 $ 19.40 NAF Small Company Stock Institutional Class..................... $ 58,803,411 6,379,424 $ 9.22 PRO FORMA SMALL CAP INSTITUTIONAL CLASS*.......................... $ 70,960,286 6,585,331 $ 19.40 NAF Total Return Bond Class A................................... $ 1,551,695 158,911 $ 9.76 NAF Income Class A.............................................. $ 10,298,744 1,027,900 $ 10.02 PRO FORMA INCOME CLASS A.......................................... $ 11,850,439 1,341,599 $ 10.02 NAF Total Return Bond Class B................................... $ 3,320,169 339,417 $ 9.78 NAF Income Class B.............................................. $ 6,588,372 658,616 $ 10.00 PRO FORMA INCOME CLASS B.......................................... $ 9,908,541 1,329,983 $ 10.00 NAF Strategic Value Bond Institutional Class.................... $ 9,489,560 910,170 $ 10.43 NAF Total Return Bond Institutional Class....................... $ 103,376,097 10,572,792 $ 9.78 NAF Income Institutional Class.................................. $ 341,686,848 34,133,994 $ 10.01 PRO FORMA INCOME INSTITUTIONAL CLASS.............................. $ 454,552,505 45,412,214 $ 10.01 SC U.S. Government Income Class A............................... $ 180,384,470 16,309,961 $ 11.06 SC U.S. Government Allocation Class A........................... $ 76,624,390 5,091,974 $ 15.05 NAF Intermediate Government Income Class A...................... $ 17,064,962 1,475,293 $ 11.57 PRO FORMA INTERMEDIATE GOVERNMENT INCOME CLASS A.................. $ 274,073,822 23,688,543 $ 11.57 SC U.S. Government Income Class B............................... $ 35,583,777 3,269,106 $ 10.88 SC U.S. Government Allocation Class B........................... $ 18,163,469 1,658,454 $ 10.95 NAF Intermediate Government Income Class B...................... $ 9,011,499 779,618 $ 11.56 PRO FORMA INTERMEDIATE GOVERNMENT INCOME CLASS B.................. $ 62,758,745 5,429,008 $ 11.56 SC U.S. Government Income Class C............................... $ 3,881,752 356,415 $ 10.89 PRO FORMA INTERMEDIATE GOVERNMENT INCOME CLASS C.................. $ 3,881,752 356,415 $ 10.89 SC U.S. Government Income Institutional Class................... $ 8,124,588 508,678 $ 15.97 NAF Intermediate Government Income Institutional Class.......... $ 425,336,172 26,756,976 $ 11.57 PRO FORMA INTERMEDIATE GOVERNMENT INCOME INSTITUTIONAL CLASS...... $ 433,460,760 27,459,185 $ 11.57 SC Short-Intermediate U.S. Government Income Class A............ $ 36,355,977 3,581,329 $ 10.15 PRO FORMA LIMITED TERM GOVERNMENT INCOME CLASS A.................. $ 36,355,977 3,581,329 $ 10.15 SC Short-Intermediate U.S. Government Income Class B............ $ 9,047,836 891,366 $ 10.15 PRO FORMA LIMITED TERM GOVERNMENT INCOME CLASS B.................. $ 9,047,836 891,366 $ 10.15 SC Short-Intermediate U.S. Government Income Institutional Class......................................................... $ 84,039,378 8,438,670 $ 9.96 NAF Limited Term Government Institutional Class................. $ 75,500,542 7,512,259 $ 10.05 35 NET ASSET SHARES VALUE PER STAGECOACH FUNDS AND NORWEST FUNDS INTO WELLS FARGO FUNDS TOTAL NET ASSETS OUTSTANDING SHARE - ------------------------------------------------------------------ ---------------- ---------------- ----------- PRO FORMA LIMITED TERM GOVERNMENT INCOME INSTITUTIONAL CLASS...... $ 159,539,920 16,019,724 $ 9.96 SC National Tax-Free Class A.................................... $ 39,010,459 2,422,097 $ 16.11 NAF Tax-Free Income Class A..................................... $ 48,876,250 4,565,280 $ 10.71 PRO FORMA TAX-FREE INCOME CLASS A................................. $ 87,886,709 8,207,698 $ 10.71 SC National Tax-Free Class B.................................... $ 2,528,660 238,030 $ 10.62 NAF Tax-Free Income Class B..................................... $ 13,048,093 1,218,513 $ 10.71 PRO FORMA TAX-FREE INCOME CLASS B................................. $ 15,576,753 1,454,614 $ 10.71 SC National Tax-Free Class C.................................... $ 6,918,913 651,051 $ 10.63 PRO FORMA TAX-FREE INCOME CLASS C................................. $ 6,918,913 651,051 $ 10.63 SC National Tax-Free Institutional Class........................ $ 8,843,373 549,244 $ 16.10 NAF Tax-Free Income Institutional Class......................... $ 306,870,365 28,646,014 $ 10.71 PRO FORMA TAX-FREE INCOME INSTITUTIONAL CLASS..................... $ 315,713,738 29,471,721 $ 10.71 SC Prime Money Market Institutional Class....................... $ 1,169,269,538 1,169,346,181 $ 1.00 PRO FORMA CASH INVESTMNET MONEY MARKET INSTITUTIONAL CLASS........ $ 1,169,269,538 $ 1,169,346,181 $ 1.00 SC Prime Money Market Administrative Class...................... $ 562,513,434 562,456,538 $ 1.00 SC Prime Money Market Service Class............................. $ 934,746,492 934,864,723 $ 1.00 NAF Cash Investment Service Class............................... $ 6,111,766,258 6,113,539,471 $ 1.00 PRO FORMA CASH INVESTMNET MONEY MARKET SERVICE CLASS.............. $ 7,609,026,184 7,610,860,732 $ 1.00 SC Prime Money Market Class A................................... $ 572,780,966 572,886,864 $ 1.00 SC Money Market Class A......................................... $ 8,040,849,890 8,040,454,142 $ 1.00 NAF Ready Cash Investment Class A............................... $ 842,877,199 842,897,224 $ 1.00 PRO FORMA PRIME INVESTMENT MONEY MARKET CLASS A................... $ 9,456,508,055 9,456,238,230 $ 1.00 SC Money Market Class S......................................... $ 1,141,720,375 1,141,670,830 $ 1.00 NAF Ready Cash Investment Class B............................... $ 1,030,590 1,030,598 $ 1.00 PRO FORMA PRIME INVESTMENT MONEY MARKET CLASS B................... $ 1,142,750,965 1,142,701,428 $ 1.00 SC National Tax-Free Money Market Class A....................... $ 59,274,251 59,278,088 $ 1.00 NAF Municipal Money Market Class A.............................. $ 42,538,407 42,546,122 $ 1.00 PRO FORMA NATIONAL TAX-FREE MONEY MARKET CLASS A.................. $ 101,812,658 101,824,210 $ 1.00 SC National Tax-Free Money Market Institutional Class........... $ 32,162,738 32,169,381 $ 1.00 PRO FORMA NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET INSTITUTIONAL CLASS.............................................. $ 32,162,738 32,169,381 $ 1.00 NAF Municipal Money Market Service Class........................ $ 1,282,332,471 1,282,327,994 $ 1.00 PRO FORMA NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET SERVICE CLASS............................................................ $ 1,282,332,471 1,282,327,994 $ 1.00 SC Treasury Plus Money Market Administrative Class.............. $ 110,453,559 110,438,900 $ 1.00 SC Treasury Plus Money Market Service Class..................... $ 482,860,779 482,877,097 $ 1.00 NorwestAdvantage Treasury Plus Service Class.................... $ 33,399,103 33,398,649 $ 1.00 PRO FORMA TREASURY PLUS INSTITUTIONAL MONEY MARKET SERVICE CLASS............................................................ $ 626,713,441 626,714,646 $ 1.00 SC Treasury Plus Money Market Institutional Class............... $ 513,211,631 513,347,732 $ 1.00 36 NET ASSET SHARES VALUE PER STAGECOACH FUNDS AND NORWEST FUNDS INTO WELLS FARGO FUNDS TOTAL NET ASSETS OUTSTANDING SHARE - ------------------------------------------------------------------ ---------------- ---------------- ----------- PRO FORMA TREASURY PLUS INSTITUTIONAL MONEY MARKET INSTITUTIONAL CLASS............................................................ $ 513,211,631 513,347,732 $ 1.00 SC Government Money Market Class A.............................. $ 69,845,657 69,846,691 $ 1.00 NAF U.S. Government Class A..................................... $ 2,622,824,455 2,622,920,232 $ 1.00 PRO FORMA GOVERNMENT MONEY MARKET CLASS A......................... $ 2,692,670,112 2,692,766,923 $ 1.00 - ------------------------ * Approximately 82% of the Stagecoach Small Cap Fund's Institutional shares will be converted into a collective fund prior to the merger. For purposes of the pro forma financial statements approximately 82% of the assets of the Stagecoach Small Cap Fund's Institutional Class have been removed. FEES AND EXPENSES OF THE REORGANIZATION Wells Fargo will pay all fees and expenses, including accounting, legal and printing expenses, portfolio transfer taxes (if any) or other similar expenses incurred in connection with the completion of the reorganization. 37 OUTSTANDING SHARES As of the Record Date, the SC Funds and NAF Funds had the following number of shares outstanding: - ---------------------------------------------------------------------------------------------------------------- SC FUNDS NUMBER OF SHARES OUTSTANDING NAF FUNDS SC Asset Allocation Fund SC Balanced Fund SC Growth Fund NAF ValuGrowth-SM- Stock Fund SC Diversified Equity Income Fund NAF Income Equity Income Fund SC Small Cap Fund NAF Small Company Stock Fund SC Strategic Growth Fund NAF Income Fund NAF Total Return Bond Fund NAF Performa Strategic Value Bond Fund SC U.S. Government Income Fund NAF Intermediate Government Income Fund SC U.S. Government Allocation Fund SC Short-Intermediate U.S. Government NAF Limited Term Government Income Fund Income Fund SC National Tax-Free Fund NAF Tax-Free Income Fund SC Prime Money Market Fund NAF Cash Investment Fund (Administrative, Service and Institutional Classes) SC Prime Money Market Fund (Class A) NAF Ready Cash Investment Fund (Investor and Exchange Classes) SC Money Market Fund SC National Tax-Free Money Market Fund NAF Municipal Money Market Fund (Class A) (Investor Class) SC National Tax-Free Money Market Fund NAF Municipal Money Market Fund (Institutional Class) (Institutional Class) SC Treasury Plus Money Market Fund NAF Treasury Plus Fund (Administrative, Service and (Institutional Class) Institutional Classes) SC Government Money Market Fund NAF U.S. Government Fund INTEREST OF CERTAIN PERSONS IN THE TRANSACTION To the knowledge of the SC Funds and NAF Funds, the following persons owned of record or beneficially, 5% or more of the outstanding shares of each SC Fund and/or NAF Fund: [Table to be Inserted] To the knowledge of the SC Funds and NAF Funds, the following persons owned of record or beneficially, 25% percent or more of the outstanding shares of each SC Fund and/or NAF Fund: [Table to be Inserted] 38 In addition, as of [ ], 1999, Wells Fargo and Norwest Bank controlled or held with power to vote more than 25% of the outstanding shares of each of the SC Funds and NAF Funds, respectively, in a trust or other fiduciary or representative capacity. As a result, the Banks may be deemed to control each of the Funds and may be able to greatly affect (if not determine) the outcome of the shareholder vote on the reorganization. To avoid any possible conflict between the Banks' duties to their customers and to the Funds, the Bank has arranged for a paid fiduciary to vote the shares of the Banks for the reorganization. 39 EXHIBIT A--FEE TABLES These tables describe the fees and expenses that you may pay if you buy and hold shares of a Fund. STAGECOACH ASSET STAGECOACH WF ASSET ALLOCATION BALANCED ALLOCATION ----------- ----------- ----------- Class A Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........................................... 5.75% 5.75% 5.75% Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)........................................ None None None Annual Fund Operating Expenses: Management fee.................................................................... 0.36% 0.60% 0.80% Distribution (Rule 12b-1 fee)..................................................... 0.05% 0.10% 0.00% Other expenses.................................................................... 0.58% 0.70% 0.40% Total Annual Fund Operating Expenses(Gross)....................................... 0.99% 1.40% 1.20% Waiver............................................................................ 0.00% 0.12% 0.21% Net Annual Fund Operating Expenses................................................ 0.99% 1.28% 0.99% Class B Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........................................... None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)........................................ 5.00% 5.00% 5.00% Annual Fund Operating Expenses: Management fee.................................................................... 0.36% 0.60% 0.80% Distribution (Rule 12b-1 fee)..................................................... 0.70% 0.75% 0.75% Other expenses.................................................................... 0.58% 0.94% 0.40% Total Annual Fund Operating Expenses(Gross)....................................... 1.64% 2.29% 1.95% Waiver............................................................................ 0.00% 0.36% 0.21% Net Annual Fund Operating Expenses................................................ 1.64% 1.93% 1.74% Class C Shareholder Transaction Expenses:................................................. Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........................................... None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)........................................ 1.00% 1.00% Annual Fund Operating Expenses: Management fee.................................................................... 0.36% 0.80% Distribution (Rule 12b-1 fee)..................................................... 0.75% 0.75% Other expenses.................................................................... 0.53% 0.40% A-1 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH ASSET STAGECOACH WF ASSET ALLOCATION BALANCED ALLOCATION ----------- ----------- ----------- Total Annual Fund Operating Expenses(Gross)....................................... 1.64% 1.95% Waiver............................................................................ 0.00% 0.21% Net Annual Fund Operating Expenses................................................ 1.64% 1.74% Class I Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........................................... None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)........................................ None None Annual Fund Operating Expenses: Management fee.................................................................... 0.60% 0.80% Distribution (Rule 12b-1 fee)..................................................... 0.00% 0.00% Other expenses.................................................................... 0.61% 0.30% Total Annual Fund Operating Expenses(Gross)....................................... 1.21% 1.10% Waiver............................................................................ 0.03% 0.10% Net Annual Fund Operating Expenses................................................ 1.18% 1.00% A-2 EXHIBIT A--FEE TABLES (CONTINUED) Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. STAGECOACH ASSET STAGECOACH WF ASSET ALLOCATION BALANCED ALLOCATION ----------- ----------- ----------- Class A One Year.......................................................................... $ 546 $ 649 $ 670 Three Year........................................................................ $ 751 $ 910 $ 872 Five Year......................................................................... $ 972 $ 1,190 $ 1,091 Ten Year.......................................................................... $ 1,608 $ 1,989 $ 1,718 Class B One Year.......................................................................... $ 667 $ 696 $ 677 Three Year........................................................................ $ 817 $ 906 $ 848 Five Year......................................................................... $ 1,092 $ 1,242 $ 1,144 Ten Year.......................................................................... $ 1,605 $ 1,922 $ 1,756 Class C One Year.......................................................................... $ 267 $ 277 Three Year........................................................................ $ 517 $ 548 Five Year......................................................................... $ 892 $ 944 Ten Year.......................................................................... $ 1,944 $ 2,052 Class I One Year.......................................................................... $ 120 $ 102 Three Year........................................................................ $ 375 $ 318 Five Year......................................................................... $ 649 $ 552 Ten Year.......................................................................... $ 1,432 $ 1,225 A-3 EXHIBIT A--FEE TABLES (CONTINUED) NORWEST STAGECOACH ADVANTAGE WF GROWTH GROWTH FUND VALUGROWTH FUND ----------- ----------- ----------- Class A Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price).......................................... 5.75% 5.75% 5.75% Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)....................................... None None None Management fee................................................................... 0.50% 0.78% 0.75% Distribution (Rule 12b-1 fee).................................................... 0.05% 0.00% 0.00% Other expenses................................................................... 0.58% 0.47% 0.57% Total Annual Fund Operating Expenses(Gross)...................................... 1.13% 1.25% 1.32% Waiver........................................................................... 0.01% 0.25% 0.20% Net Annual Fund Operating Expenses............................................... 1.12% 1.00% 1.12% Class B Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price).......................................... None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)....................................... 5.00% 5.00% 5.00% Annual Fund Operating Expenses: Management fee................................................................... 0.50% 0.78% 0.75% Distribution (Rule 12b-1 fee).................................................... 0.70% 1.00% 0.75% Other expenses................................................................... 0.60% 0.53% 0.57% Total Annual Fund Operating Expenses(Gross)...................................... 1.80% 2.31% 2.07% Waiver........................................................................... 0.01% 0.56% 0.20% Net Annual Fund Operating Expenses............................................... 1.79% 1.75% 1.87% Class I Shareholder Transaction Expenses:................................................ Maximum Sales Charge (Load) on Purchases (as a percentage of offering price).......................................... None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)....................................... None None None Annual Fund Operating Expenses: Management fee................................................................... 0.50% 0.78% 0.75% Distribution (Rule 12b-1 fee).................................................... 0.00% 0.00% 0.00% Other expenses................................................................... 0.52% 0.42% 0.32% Total Annual Fund Operating Expenses(Gross)...................................... 1.02% 1.20% 1.07% Waiver........................................................................... 0.00% 0.20% 0.07% Net Annual Fund Operating Expenses............................................... 1.02% 1.00% 1.00% A-4 EXHIBIT A--FEE TABLES (CONTINUED) Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. NORWEST STAGECOACH ADVANTAGE WF GROWTH GROWTH FUND VALUGROWTH FUND ----------- ----------- ----------- Class A One Year......................................................................... $ 633 $ 646 $ 683 Three Year....................................................................... $ 862 $ 851 $ 911 Five Year........................................................................ $ 1,110 $ 1,072 $ 1,156 Ten Year......................................................................... $ 1,817 $ 1,707 $ 1,860 Class B One Year......................................................................... $ 682 $ 578 $ 690 Three Year....................................................................... $ 863 $ 851 $ 888 Five Year........................................................................ $ 1,170 $ 1,149 $ 1,211 Ten Year......................................................................... $ 1,760 $ 1,767 $ 1,898 Class I One Year......................................................................... $ 104 $ 102 $ 102 Three Year....................................................................... $ 325 $ 318 $ 318 Five Year........................................................................ $ 563 $ 552 $ 552 Ten Year......................................................................... $ 1,248 $ 1,225 $ 1,225 A-5 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH NORWEST DIVERSIFIED ADVANTAGE WF INCOME EQUITY INCOME EQUITY EQUITY ----------- ------------- ----------- Class A Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........................................ 5.75% 5.75% 5.75% Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption).................................. None None None Annual Fund Operating Expenses: Management fee................................................................. 0.50% 0.50% 0.75% Distribution (Rule 12b-1 fee).................................................. 0.05% 0.00% 0.00% Other expenses Fund/Portfolio.................................................. 0.65% 0.39/0.07% 0.55% Total Annual Fund Operating Expenses(Gross).................................... 1.20% 0.96% 1.30% Waiver......................................................................... 0.00% 0.11% 0.20% Net Annual Fund Operating Expenses............................................. 1.20% 0.85% 1.10% Class B Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........................................ None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption).................................. 5.00% 5.00% 5.00% Annual Fund Operating Expenses: Management fee................................................................. 0.50% 0.50% 0.75% Distribution (Rule 12b-1 fee).................................................. 0.70% 1% 0.75% Other expenses................................................................. 0.68% 0.39/0.07% 0.55% Total Annual Fund Operating Expenses(Gross).................................... 1.88% 1.96% 2.05% Waiver......................................................................... 0.00% 0.36% 0.20% Net Annual Fund Operating Expenses............................................. 1.88% 1.60% 1.85% Class C Shareholder Transaction Expenses:.............................................. Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........................... None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption).................................. 1.00% 1.00% Annual Fund Operating Expenses: Management fee................................................................. 0.52% 0.75% Distribution (Rule 12b-1 fee).................................................. 0.75% 0.75% Other expenses................................................................. 0.39/0.07% 0.55% Total Annual Fund Operating Expenses(Gross).................................... 1.71% 2.05% Waiver......................................................................... 0.11% 0.20% Net Annual Fund Operating Expenses............................................. 1.60% 1.85% A-6 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH NORWEST DIVERSIFIED ADVANTAGE WF INCOME EQUITY INCOME EQUITY EQUITY ----------- ------------- ----------- Class I Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........................................ None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption).................................. None None Annual Fund Operating Expenses: Management fee................................................................. 0.50% 0.75% Distribution (Rule 12b-1 fee).................................................. 0.00% 0.00% Other expenses................................................................. 0.34/0.07% 0.30% Total Annual Fund Operating Expenses(Gross).................................... 0.91% 1.05% Waiver......................................................................... 0.06% 0.2% Net Annual Fund Operating Expenses............................................. 0.85% 0.85% A-7 EXHIBIT A--FEE TABLES (CONTINUED) Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. STAGECOACH NORWEST DIVERSIFIED ADVANTAGE WF INCOME EQUITY INCOME EQUITY EQUITY ----------- ------------- ----------- Class A One Year....................................................................... $ 641 $ 632 $ 681 Three Year..................................................................... $ 886 $ 806 $ 905 Five Year...................................................................... $ 1,150 $ 995 $ 1,146 Ten Year....................................................................... $ 1,903 $ 1,541 $ 1,838 Class B One Year....................................................................... $ 691 $ 663 $ 688 Three Year..................................................................... $ 891 $ 805 $ 882 Five Year...................................................................... $ 1,216 $ 1,071 $ 1,201 Ten Year....................................................................... $ 1,853 $ 1,601 $ 1,876 Class C One Year....................................................................... $ 263 $ 288 Three Year..................................................................... $ 505 $ 582 Five Year...................................................................... $ 871 $ 1,001 Ten Year....................................................................... $ 1,900 $ 2,169 Class I One Year....................................................................... $ 87 $ 87 Three Year..................................................................... $ 271 $ 271 Five Year...................................................................... $ 471 $ 471 Ten Year....................................................................... $ 1,049 $ 1,049 A-8 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH STAGECOACH NORWEST ADVANTAGE WF STRATEGIC SMALL SMALL COMPANY SMALL GROWTH CAP STOCK CAP ----------- ----------- ----------------- ----------- Class A Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)......................... 5.75% 5.75% 5.75% 5.75% Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................................................. None None None None Annual Fund Operating Expenses: Management fee.................................................. 0.50% 0.60% 0.90% 0.90% Distribution (Rule 12b-1 fee)................................... 0.10% 0.10% 0.00% 0.00% Other expenses.................................................. 0.69% 0.87% 0.47/0.11% 0.78% Total Annual Fund Operating Expenses(Gross)..................... 1.29% 1.57% 1.48% 1.68% Waiver.......................................................... 0.00% 0.21% 0.23% 0.39% Net Annual Fund Operating Expenses.............................. 1.29% 1.36% 1.20% 1.29% Class B Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)......................... None None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................................................. 5.00% 5.00% 5.00% 5.00% Annual Fund Operating Expenses: Management fee.................................................. 0.50% 0.60% 0.90% 0.90% Distribution (Rule 12b-1 fee)................................... 0.75% 0.75% 1.00% 0.75% Other expenses.................................................. 0.76% 0.86% 0.52/0.11% 0.78% Total Annual Fund Operating Expenses(Gross)..................... 2.01% 2.21% 2.53% 2.43% Waiver.......................................................... 0.00% 0.10% 0.58% 0.39% Net Annual Fund Operating Expenses.............................. 2.01% 2.11% 1.95% 2.04% Class C Shareholder Transaction Expenses:............................... Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)......................... None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................................................. 1.00% 1.00% 1.00% Annual Fund Operating Expenses: Management fee.................................................. 0.50% 0.60% 0.90% Distribution (Rule 12b-1 fee)................................... 0.75% 0.75% 0.75% Other expenses.................................................. 0.76% 1.31% 0.78% Total Annual Fund Operating Expenses(Gross)..................... 2.01% 2.66% 2.43% Waiver.......................................................... 0.00% 0.55% 0.39% Net Annual Fund Operating Expenses.............................. 2.01% 2.11% 2.04% A-9 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH STAGECOACH NORWEST ADVANTAGE WF STRATEGIC SMALL SMALL COMPANY SMALL GROWTH CAP STOCK CAP ----------- ----------- ----------------- ----------- Class I Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)......................... None None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................................................. None None None None Annual Fund Operating Expenses: Management fee.................................................. 0.60% 0.90% 0.90% Distribution (Rule 12b-1 fee)................................... 0.00% 0.00% 0.00% Other expenses.................................................. 0.66% 0.36/0.11% 0.63% Total Annual Fund Operating Expenses(Gross)..................... 1.26% 1.37% 1.53% Waiver.......................................................... 0.50% 0.17% 0.33% Net Annual Fund Operating Expenses.............................. 0.76% 1.20% 1.20% Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. STAGECOACH STAGECOACH NORWEST ADVANTAGE WF STRATEGIC SMALL SMALL COMPANY SMALL GROWTH CAP STOCK CAP ----------- ----------- ----------------- ----------- Class A One Year........................................................ $ 649 $ 656 $ 666 $ 699 Three Year...................................................... $ 913 $ 933 $ 910 $ 960 Five Year....................................................... $ 1,195 $ 1,231 $ 1,173 $ 1,242 Ten Year........................................................ $ 2,000 $ 2,074 $ 1,925 $ 2,042 Class B One Year........................................................ $ 704 $ 714 $ 598 $ 707 Three Year...................................................... $ 930 $ 961 $ 912 $ 940 Five Year....................................................... $ 1,283 $ 1,334 $ 1,252 $ 1,298 Ten Year........................................................ $ 1,973 $ 2,064 $ 1,984 $ 2,080 Class C One Year........................................................ $ 304 $ 314 $ 307 Three Year...................................................... $ 630 $ 661 $ 640 Five Year....................................................... $ 1,083 $ 1,134 $ 1,098 Ten Year........................................................ $ 2,338 $ 2,441 $ 2,369 Class I One Year........................................................ $ 78 $ 122 $ 122 Three Year...................................................... $ 243 $ 381 $ 381 Five Year....................................................... $ 422 $ 660 $ 660 Ten Year........................................................ $ 942 $ 1,455 $ 1,455 A-10 EXHIBIT A--FEE TABLES (CONTINUED) NORWEST ADVANTAGE NORWEST ADVANTAGE NORWEST ADVANTAGE PERFORMA STRATEGIC WF INCOME INCOME FUND TOTAL RETURN BOND VALUE FUND FUND ------------------- ----------------- ------------------- ------------- Class A Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)......... 4.50% 4.50% 4.50% Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................. None None None Annual Fund Operating Expenses: Management fee.................................. 0.50% 0.50% 0.50% Distribution (Rule 12b-1 fee)................... 0.00% 0.00% 0.00% Other expenses.................................. 0.64% 0.71/0.10% 0.52% Total Annual Fund Operating Expenses(Gross)..... 1.14% 1.31% 1.02% Waiver.......................................... 0.39% 0.56% 0.02% Net Annual Fund Operating Expenses.............. 0.75% 0.75% 1.00% Class B Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)......... None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................. 5.00% 5.00% 5.00% Annual Fund Operating Expenses: Management fee.................................. 0.50% 0.50% 0.50% Distribution (Rule 12b-1 fee)................... 1.00% 1.00% 0.75% Other expenses Fund/Port........................ 0.65% 0.75/0.11% 0.52% Total Annual Fund Operating Expenses(Gross)..... 2.15% 2.36% 1.77% Waiver.......................................... 0.65% 0.86% 0.02% Net Annual Fund Operating Expenses.............. 1.50% 1.50% 1.75% A-11 EXHIBIT A--FEE TABLES (CONTINUED) NORWEST ADVANTAGE NORWEST ADVANTAGE NORWEST ADVANTAGE PERFORMA STRATEGIC WF INCOME INCOME FUND TOTAL RETURN BOND VALUE FUND FUND ------------------- ----------------- ------------------- ------------- Class I Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)......... None None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................. None None None None Annual Fund Operating Expenses: Management fee.................................. 0.60% 0.50% 0.50% 0.50% Distribution (Rule 12b-1 fee)................... 0.00% 0.00% 0.00% 0.00% Other expenses.................................. 0.32% 0.38/0.10% 1.49% 0.27% Total Annual Fund Operating Expenses(Gross)..... 0.92% 0.98% 1.99% 0.77% Waiver.......................................... 0.17% 0.23% 1.14% 0.02% Net Annual Fund Operating Expenses.............. 0.75% 0.75% 0.85% 0.75% Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. NORWEST ADVANTAGE PERFORMA INCOME (CORP A) NORWEST ADVANTAGE STRATEGIC WF INCOME FUND TOTAL RETURN BOND VALUE FUND FUND ----------------- ----------------- ----------- ------------- Class A One Year.............................................. $ 474 $ 474 $ 547 Three Year............................................ $ 630 $ 630 $ 754 Five Year............................................. $ 800 $ 800 $ 978 Ten Year.............................................. $ 1,293 $ 1,293 $ 1,620 Class B One Year.............................................. $ 453 $ 453 $ 678 Three Year............................................ $ 674 $ 674 $ 851 Five Year............................................. $ 818 $ 818 $ 1,149 Ten Year.............................................. $ 1,489 $ 1,489 $ 1,767 Class I One Year.............................................. $ 77 $ 77 $ 87 $ 77 Three Year............................................ $ 240 $ 240 $ 271 $ 240 Five Year............................................. $ 417 $ 417 $ 471 $ 417 Ten Year.............................................. $ 930 $ 930 $ 1,049 $ 930 A-12 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH STAGECOACH NORWEST ADVANTAGE WF U.S. GOVERNMENT U.S. GOVERNMENT INTERMEDIATE INTERMEDIATE ALLOCATION INCOME GOVERNMENT INCOME GOVERNMENT INCOME --------------- --------------- ----------------- ------------------ Class A Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)...... 5.75% 5.75% 5.75% 5.75% Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)....... None None None None Annual Fund Operating Expenses: Management fee............................... 0.50% 0.50% 0.33% 0.50% Distribution (Rule 12b-1 fee)................ 0.05% 0.05% 0.00% 0.00% Other expenses............................... 0.71% 0.70% 0.48% 0.60% Total Annual Fund Operating Expenses(Gross)............................. 1.26% 1.25% 0.81% 1.10% Waiver....................................... 0.07% 0.00% 0.13% 0.14% Net Annual Fund Operating Expenses........... 1.19% 0.96% 0.68% 0.96% Class B Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)...... None None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)....... 5.00% 5.00% 5.00% 5.00% Annual Fund Operating Expenses: Management fee............................... 0.50% 0.50% 0.33% 0.50% Distribution (Rule 12b-1 fee)................ 0.70% 0.70% 1.00% 0.75% Other expenses............................... 0.88% 0.70% 0.53% 0.60% Total Annual Fund Operating Expenses(Gross)............................. 2.08% 1.90% 1.86% 1.85% Waiver....................................... 0.24% 0.24% 0.43% 0.14% Net Annual Fund Operating Expenses........... 1.84% 1.66% 1.43% 1.71% Class C Shareholder Transaction Expenses:............ Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)...... None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)....... 1.00% 1.00% 1.00% Annual Fund Operating Expenses: A-13 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH STAGECOACH NORWEST ADVANTAGE WF U.S. GOVERNMENT U.S. GOVERNMENT INTERMEDIATE INTERMEDIATE ALLOCATION INCOME GOVERNMENT INCOME GOVERNMENT INCOME --------------- --------------- ----------------- ------------------ Management fee............................... 0.50% 0.50% Distribution (Rule 12b-1 fee)................ 0.75% 0.75% Other expenses............................... 1.21% 0.60% Total Annual Fund Operating Expenses(Gross)............................. 2.46% 1.85% Waiver....................................... 0.80% 0.14% Net Annual Fund Operating Expenses........... 1.66% 1.71% Class I Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)...... None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)....... None None None Annual Fund Operating Expenses: Management fee............................... 0.50% 0.33% 0.50% Distribution (Rule 12b-1 fee)................ 0.00% 0.00% 0.00% Other expenses............................... 0.68% 0.39% 0.35% Total Annual Fund Operating Expenses (Gross)..................................... 1.18% 0.72% 0.85% Waiver....................................... 0.27% 0.04% 0.17% Net Annual Fund Operating Expenses........... 0.91% 0.68% 0.68% A-14 EXHIBIT A--FEE TABLES (CONTINUED) Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. STAGECOACH STAGECOACH NORWEST ADVANTAGE WF U.S. GOVERNMENT U.S. GOVERNMENT INTERMEDIATE INTERMEDIATE ALLOCATION INCOME GOVERNMENT INCOME GOVERNMENT INCOME ----------------- ----------------- ------------------- ------------------- Class A One Year.................................... $ 566 $ 544 $ 467 $ 544 Three Year.................................. $ 811 $ 742 $ 609 $ 742 Five Year................................... $ 1,075 $ 957 $ 764 $ 957 Ten Year.................................... $ 1,828 $ 1,575 $ 932 $ 1,190 Class B One Year.................................... $ 687 $ 669 $ 446 $ 674 Three Year.................................. $ 879 $ 823 $ 652 $ 839 Five Year................................... $ 1,195 $ 1,102 $ 782 $ 1,128 Ten Year.................................... $ 1,825 $ 1,601 $ 1,410 $ 1,723 Class C One Year.................................... $ 269 $ 274 Three Year.................................. $ 523 $ 539 Five Year................................... $ 902 $ 928 Ten Year.................................... $ 1,965 $ 2,019 Class I One Year.................................... $ 93 $ 69 $ 69 Three Year.................................. $ 290 $ 218 $ 218 Five Year................................... $ 504 $ 379 $ 379 Ten Year.................................... $ 1,120 $ 847 $ 847 A-15 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH NORWEST ADVANTAGE WF SHORT-INTERMEDIATE LIMITED TERM LIMITED TERM U.S. GOVERNMENT INCOME GOVERNMENT INCOME GOVERNMENT INCOME ----------------------- ------------------- ------------------- Class A Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)............... 4.50% 4.50% Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................................ None None Annual Fund Operating Expenses: Management fee........................................ 0.50% 0.50% Distribution (Rule 12b-1 fee)......................... 0.05% 0.00% Other expenses........................................ 0.69% 0.59% Total Annual Fund Operating Expenses(Gross)........... 1.24% 1.09% Waiver................................................ 0.28% 0.13% Net Annual Fund Operating Expenses.................... 0.96% 0.96% Class B Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)............... None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................................ 5.00% 5.00% Annual Fund Operating Expenses: Management fee........................................ 0.50% 0.50% Distribution (Rule 12b-1 fee)......................... 0.75% 0.75% Other expenses........................................ 0.72% 0.59% Total Annual Fund Operating Expenses(Gross)........... 1.97% 1.84% Waiver................................................ 0.31% 0.13% Net Annual Fund Operating Expenses.................... 1.66% 1.71% Class I Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)............... None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................................ None None None A-16 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH NORWEST ADVANTAGE WF SHORT-INTERMEDIATE LIMITED TERM LIMITED TERM U.S. GOVERNMENT INCOME GOVERNMENT INCOME GOVERNMENT INCOME ----------------------- ------------------- ------------------- Annual Fund Operating Expenses: Management fee........................................ 0.50% 0.33% 0.50% Distribution (Rule 12b-1 fee)......................... 0.00% 0.00% 0.00% Other expenses........................................ 0.58% 0.56% 0.34% Total Annual Fund Operating Expenses(Gross)........... 1.08% 0.89% 0.84% Waiver................................................ 0.17% 0.21% 0.16% Net Annual Fund Operating Expenses.................... 0.91% 0.68% 0.68% Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. STAGECOACH NORWEST ADVANTAGE WF SHORT-INTERMEDIATE LIMITED TERM LIMITED TERM U.S. GOVERNMENT INCOME GOVERNMENT INCOME GOVERNMENT INCOME ----------------------- ------------------- ------------------- Class A One Year.............................................. $ 395 $ 544 Three Year............................................ $ 597 $ 742 Five Year............................................. $ 815 $ 957 Ten Year.............................................. $ 1,443 $ 1,575 Class B One Year.............................................. $ 669 $ 674 Three Year............................................ $ 823 $ 839 Five Year............................................. $ 1,102 $ 1,128 Ten Year.............................................. $ 1,601 $ 1,723 Class I One Year.............................................. $ 93 $ 69 $ 69 Three Year............................................ $ 290 $ 218 $ 218 Five Year............................................. $ 504 $ 379 $ 379 Ten Year.............................................. $ 1,120 $ 847 $ 847 A-17 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH WF NATIONAL NORWEST ADVANTAGE NATIONAL TAX-FREE BOND TAX-FREE INCOME TAX-FREE ------------- ------------------- ----------- Class A Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)................................. 4.50% 4.50% 4.50% Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption).................. None None None Annual Fund Operating Expenses: Management fee.......................................................... 0.50% 0.50% 0.40% Distribution (Rule 12b-1 fee)........................................... 0.05% 0.00% 0.00% Other expenses.......................................................... 0.82% 0.49% 0.55% Total Annual Fund Operating Expenses(Gross)............................. 1.37% 0.99% 0.95% Waiver.................................................................. 0.56% 0.39% 0.15% Net Annual Fund Operating Exepnses...................................... 0.81% 0.60% 0.80% Class B Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)................................. None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption).................. 5.00% 5.00% 5.00% Annual Fund Operating Expenses: Management fee.......................................................... 0.50% 0.50% 0.40% Distribution (Rule 12b-1 fee)........................................... 0.75% 1.00% 0.75% Other expenses.......................................................... 1.46% 0.55% 0.55% Total Annual Fund Operating Expenses(Gross)............................. 2.71% 2.05% 1.70% Waiver.................................................................. 1.30% 0.70% 0.15% Net Annual Fund Operating Expenses...................................... 1.41% 1.35% 1.55% Class C Shareholder Transaction Expenses:....................................... Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)................................. None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption).................. 1.00% 1.00% Annual Fund Operating Expenses: Class C Management fee.......................................................... 0.50% 0.40% Distribution (Rule 12b-1 fee)........................................... 0.75% 0.75% Other expenses.......................................................... 0.85% 0.55% A-18 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH WF NATIONAL NORWEST ADVANTAGE NATIONAL TAX-FREE BOND TAX-FREE INCOME TAX-FREE ------------- ------------------- ----------- Total Annual Fund Operating Expenses(Gross)............................. 2.10% 1.70% Waiver.................................................................. 0.69% 0.15% Net Annual Fund Operating Expenses...................................... 1.41% 1.55% Class I Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)................................. None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption).................. None None None Annual Fund Operating Expenses: Management fee.......................................................... 0.50% 0.50% 0.40% Distribution (Rule 12b-1 fee)........................................... 0.00% 0.00% 0.00% Other expenses.......................................................... 0.85% 0.42% 0.30% Total Annual Fund Operating Expenses(Gross)............................. 1.35% 0.92% 0.70% Waiver.................................................................. 0.59% 0.32% 0.10% Net Annual Fund Operating Expenses...................................... 0.76% 0.60% 0.60% A-19 EXHIBIT A--FEE TABLES (CONTINUED) Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. STAGECOACH WF NATIONAL NORWEST ADVANTAGE NATIONAL TAX-FREE BOND TAX-FREE INCOME TAX-FREE ------------- ----------------- ----------- Class A One Year.................................................................. $ 529 $ 459 $ 528 Three Year................................................................ $ 697 $ 584 $ 694 Five Year................................................................. $ 879 $ 721 $ 874 Ten Year.................................................................. $ 1,407 $ 1,120 $ 1,395 Class B One Year.................................................................. $ 644 $ 437 $ 658 Three Year................................................................ $ 746 $ 628 $ 790 Five Year................................................................. $ 971 $ 739 $ 1,045 Ten Year.................................................................. $ 1,372 $ 1,319 $ 1,545 Class C One Year.................................................................. $ 244 $ 258 Three Year................................................................ $ 446 $ 490 Five Year................................................................. $ 771 $ 845 Ten Year.................................................................. $ 1,691 $ 1,845 Class I One Year.................................................................. $ 78 $ 61 $ 61 Three Year................................................................ $ 243 $ 192 $ 192 Five Year................................................................. $ 422 $ 335 $ 335 Ten Year.................................................................. $ 942 $ 750 $ 750 A-20 EXHIBIT A--FEE TABLES (CONTINUED) NORWEST STAGECOACH STAGECOACH ADVANTAGE MONEY MARKET PRIME READY CASH WF MONEY FUND MONEY MARKET INVESTMENT MARKET FUND --------------- --------------- ----------- ------------- Class A Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)....................... 5.75% 5.75% 5.75% 5.75% Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)............................................... None None None None Annual Fund Operating Expenses: Management fee................................................ 0.40% 0.25% 0.33% 0.40% Distribution (Rule 12b-1 fee)................................. 0.05% 0.05% 0.00% 0.00% Other expenses................................................ 0.48% 0.53% 0.49% 0.53% Total Annual Fund Operating Expenses(Gross)................... 0.93% 0.83% 0.82% 0.93% Waiver........................................................ 0.18% 0.08% 0.00% 0.17% Net Annual Fund Operating Expenses............................ 0.75% 0.75% 0.82% 0.76% Class B Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)....................... None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)............................................... 5.00% 5.00% 5.00% Annual Fund Operating Expenses: Management fee................................................ 0.40% 0.33% 0.40% Distribution (Rule 12b-1 fee)................................. 0.75% 1.00% 0.75% Other expenses................................................ 0.47% 4.07% 0.53% Total Annual Fund Operating Expenses(Gross)................... 0.62% 5.40% 1.68% Waiver........................................................ 0.20% 3.83% 0.17% Net Annual Fund Operating Expenses............................ 1.42% 1.57% 1.51% A-21 EXHIBIT A--FEE TABLES (CONTINUED) Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. NORWEST STAGECOACH STAGECOACH ADVANTAGE MONEY MARKET PRIME READY CASH WF MONEY FUND MONEY MARKET INVESTMENT MARKET FUND --------------- --------------- ----------- ------------- Class A One Year...................................................... $ 77 $ 77 $ 84 $ 78 Three Year.................................................... $ 240 $ 240 $ 262 $ 243 Five Year..................................................... $ 417 $ 417 $ 455 $ 422 Ten Year...................................................... $ 930 $ 930 $ 1,014 $ 942 Class B One Year...................................................... $ 145 $ 159 $ 154 Three Year.................................................... $ 449 $ 493 $ 477 Five Year..................................................... $ 776 $ 850 $ 824 Ten Year...................................................... $ 1,702 $ 1,856 $ 1,802 STAGECOACH STAGECOACH PRIME MONEY PRIME MONEY NORWEST CASH WF CASH INVESTMENT MARKET (SERV) MARKET (ADMIN) INVESTMENT FUND MONEY MARKET FUND ------------- --------------- ----------------- ------------------- Class Service/Admin Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........... None None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................... None None None None Annual Fund Operating Expenses: Management fee.................................... 0.25% 0.25% 0.23% 0.10% Distribution (Rule 12b-1 fee)..................... 0.00% 0.00% 0.00% 0.00% Other expenses.................................... 0.40% 0.35% 0.33% 0.45% Total Annual Fund Operating Expenses(Gross)....... 0.65% 0.60% 0.56% 0.55% Waiver............................................ 0.20% 0.15% 0.08% 0.07% Net Annual Fund Operating Expenses................ 0.45% 0.45% 0.48% 0.48% A-22 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH STAGECOACH PRIME MONEY PRIME MONEY NORWEST CASH WF CASH INVESTMENT MARKET (SERV) MARKET (ADMIN) INVESTMENT FUND MONEY MARKET FUND ------------- --------------- ----------------- ------------------- Class I Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........... None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)................... None None Annual Fund Operating Expenses: Management fee.................................... 0.25% 0.10% Distribution (Rule 12b-1 fee)..................... 0.00% 0.00% Other expenses.................................... 0.16% 0.20% Total Annual Fund Operating Expenses(Gross)....... 0.41% 0.30% Waiver............................................ 0.16% 0.05% Net Annual Fund Operating Expenses................ 0.25% 0.25% Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. STAGECOACH STAGECOACH PRIME PRIME MONEY MONEY MARKET NORWEST CASH WF CASH INVESTMENT MARKET (SERV) (ADMIN) INVESTMENT FUND MONEY MARKET FUND --------------- ----------------- ----------------- --------------------- Service/Admin One Year.......................................... $ 46 $ 46 $ 49 $ 49 Three Year........................................ $ 144 $ 144 $ 154 $ 154 Five Year......................................... $ 252 $ 252 $ 269 $ 269 Ten Year.......................................... $ 567 $ 567 $ 604 $ 604 Class I One Year.......................................... $ 26 $ 26 Three Year........................................ $ 80 $ 80 Five Year......................................... $ 141 $ 141 Ten Year.......................................... $ 318 $ 318 A-23 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH NORWEST MUNI WF NATIONAL TAX-FREE MONEY MARKET NATIONAL TAX-FREE MONEY MARKET FUND MONEY MARKET ----------------- ------------- ----------------- Class A Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)............................. None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption).............. None None None Annual Fund Operating Expenses: Management fee...................................................... 0.30% 0.34% 0.25% Distribution (Rule 12b-1 fee)....................................... 0.05% 0.00% 0.00% Other expenses...................................................... 0.78% 0.49% 0.79% Total Annual Fund Operating Expenses(Gross)......................... 1.13% 0.83% 1.04% Waiver.............................................................. 0.43% 0.18% 0.34% Net Annual Fund Operating Expenses.................................. 0.70% 0.65% 0.70% Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. STAGECOACH NATIONAL NORWEST MUNI WF TAX-FREE MONEY MONEY MARKET NATIONAL TAX-FREE MARKET FUND MONEY MARKET ------------------- --------------- ------------------- Class A One Year............................................................ $ 72 $ 66 $ 72 Three Year.......................................................... $ 224 $ 208 $ 224 Five Year........................................................... $ 390 $ 362 $ 390 Ten Year............................................................ $ 871 $ 810 $ 871 A-24 EXHIBIT A--FEE TABLES (CONTINUED) WF STAGECOACH NORWEST NATIONAL TAX-FREE NATIONAL TAX-FREE MUNI MONEY INSTITUTIONAL MONEY MARKET MARKET FUND MONEY MARKET ----------------- ------------- ----------------- Class Service Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)............................. None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption).............. None None Annual Fund Operating Expenses: Management fee...................................................... 0.34% 0.10% Distribution (Rule 12b-1 fee)....................................... 0.00% 0.00% Other expenses...................................................... 0.25% 0.51% Total Annual Fund Operating Expenses(Gross)......................... 0.59% 0.61% Waiver.............................................................. 0.14% 0.16% Net Annual Fund Operating Expenses.................................. 0.45% 0.45% Class I Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)............................. None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption).............. None None Annual Fund Operating Expenses: Management fee...................................................... 0.30% 0.10% Distribution (Rule 12b-1 fee)....................................... 0.00% 0.00% Other expenses...................................................... 0.23% 0.26% Total Annual Fund Operating Expenses(Gross)......................... 0.53% 0.36% Waiver.............................................................. 0.23% 0.06% Net Annual Fund Operating Expenses.................................. 0.30% 0.3% A-25 EXHIBIT A--FEE TABLES (CONTINUED) WF STAGECOACH NORWEST NATIONAL TAX-FREE NATIONAL TAX-FREE MUNI MONEY INSTITUTIONAL MONEY MARKET MARKET FUND MONEY MARKET ----------------- ------------- ----------------- Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. WF STAGECOACH NORWEST NATIONAL TAX-FREE NATIONAL TAX-FREE MUNI MONEY INSTITUTIONAL MONEY MARKET MARKET FUND MONEY MARKET ----------------- ------------- ----------------- Class Service One Year............................................................ $ 46 $ 46 Three Year.......................................................... $ 144 $ 144 Five Year........................................................... $ 252 $ 252 Ten Year............................................................ $ 567 $ 567 Class I One Year............................................................ $ 31 $ 31 Three Year.......................................................... $ 97 $ 97 Five Year........................................................... $ 169 $ 169 Ten Year............................................................ $ 381 $ 381 A-26 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH STAGECOACH NORWEST WF TREASURY TREASURY PLUS ADVANTAGE TREASURY PLUS PLUS (SERV) (ADMIN) TREASURY PLUS INST MONEY MARKET ----------- ------------- ------------- ------------------- Class Service Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)................... None None None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)........................................... None None None None Annual Fund Operating Expenses: Management fee............................................ 0.25% 0.25% 0.20% 0.10% Distribution (Rule 12b-1 fee)............................. 0.00% 0.00% 0.00% Other expenses............................................ 0.40% 0.35% 0.40% 0.47% Total Annual Fund Operating Expenses(Gross)............... 0.65% 0.60% 0.60% 0.57% Waiver.................................................... 0.20% 0.15% 0.10% 0.11% Net Annual Fund Operating Expenses........................ 0.45% 0.45% 0.50% 0.46% Class I Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)................... None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)........................................... None None Annual Fund Operating Expenses: Management fee............................................ 0.25% 0.10% Distribution (Rule 12b-1 fee)............................. 0.00% Other expenses............................................ 0.15% 0.22% Total Annual Fund Operating Expenses(Gross)............... 0.40% 0.32% Waiver.................................................... 0.15% 0.07% Net Annual Fund Operating Expenses........................ 0.25% 0.25% A-27 EXHIBIT A--FEE TABLES (CONTINUED) Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. STAGECOACH STAGECOACH NORWEST WF TREASURY PLUS TREASURY PLUS ADVANTAGE TREASURY PLUS (SERV) (ADMIN) TREASURY PLUS INST MONEY MARKET ------------- --------------- --------------- --------------------- Service/Admin One Year.................................................. $ 46 $ 46 $ 51 $ 47 Three Year................................................ $ 144 $ 144 $ 160 $ 148 Five Year................................................. $ 252 $ 252 $ 280 $ 258 Ten Year.................................................. $ 567 $ 567 $ 628 $ 579 Class I One Year.................................................. $ 26 $ 26 Three Year................................................ $ 80 $ 80 Five Year................................................. $ 141 $ 141 Ten Year.................................................. $ 318 $ 318 A-28 EXHIBIT A--FEE TABLES (CONTINUED) STAGECOACH NORWEST ADVANTAGE WF U.S. GOVERNMENT US GOVERNMENT GOVERNMENT MONEY MARKET MONEY MARKET MONEY MARKET ----------------- ------------------- --------------- Class A Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........................... None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)... None None Annual Fund Operating Expenses: Management fee.................................................... 0.25% 0.35% Distribution (Rule 12b-1 fee)..................................... 0.05% 0.00% Other expenses.................................................... 0.70% 0.45% Total Annual Fund Operating Expenses(Gross)....................... 1.00% 0.80% Waiver............................................................ 0.25% 0.05% Net Annual Fund Operating Expenses................................ 0.75% 0.75% Service Class Shareholder Transaction Expenses: Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)........................... None None Maximum Deferred Sales Charge (Load) (as a percentage of the lower of the NAV on the date of original purchase or the NAV on the date of the redemption)... None None Annual Fund Operating Expenses: Management fee.................................................... 0.14% 0.35% Distribution (Rule 12b-1 fee)..................................... 0.00% 0.00% Other expenses.................................................... 0.38% 0.20% Total Annual Fund Operating Expenses(Gross)....................... 0.52% 0.55% Waiver............................................................ 0.02% 0.05% Net Annual Fund Operating Expenses................................ 0.50% 0.50% A-29 EXHIBIT A--FEE TABLES (CONTINUED) Example of Expenses: You would pay the following expenses on a $10,000 investment assuming that the Fund has a 5% annual return and that Fund operating expenses remain the same, and that you redeem your shares at the end of each period. Your actual costs may be higher or lower than those shown. STAGECOACH NORWEST ADVANTAGE WF U.S. GOVERNMENT US GOVERNMENT GOVERNMENT MONEY MARKET MONEY MARKET MONEY MARKET ----------------- ------------------- --------------- Class A One Year.......................................................... $ 77 $ 77 Three Year........................................................ $ 240 $ 240 Five Year......................................................... $ 417 $ 417 Ten Year.......................................................... $ 930 $ 930 Class Service One Year.......................................................... $ 51 $ 51 Three Year........................................................ $ 160 $ 160 Five Year......................................................... $ 280 $ 280 Ten Year.......................................................... $ 628 $ 628 A-30 EXHIBIT B--AGREEMENTS AND PLANS OF REORGANIZATION STAGECOACH FUNDS, INC. AGREEMENT AND PLAN OF REORGANIZATION MARCH 25, 1999 B-1 This AGREEMENT AND PLAN OF REORGANIZATION (the "PLAN") is made as of this 25th day of March, 1999, by and between Wells Fargo Funds Trust ("FUNDS TRUST"), a Delaware business trust, for itself and on behalf of its series listed in the Acquiring Funds column below (each an "ACQUIRING FUND") and Stagecoach Funds, Inc. ("STAGECOACH"), a Delaware business trust, for itself and on behalf of its series listed in the Target Funds column below (each a "TARGET FUND"). TARGET FUNDS ACQUIRING FUNDS - -------------------------------------------------------- -------------------------------------------------------- Asset Allocation Fund Asset Allocation Fund Balanced Fund Asset Allocation Fund Diversified Equity Income Fund Income Equity Fund Equity Index Fund Equity Index Fund Equity Value Fund Equity Value Fund Growth Fund Growth Fund International Equity Fund International Equity Fund Index Allocation Fund Index Allocation Fund Small Cap Fund Small Cap Fund Strategic Growth Fund Small Cap Fund Corporate Bond Fund Corporate Bond Fund Short-Intermediate U.S. Government Income Fund Limited Term Government Income Fund Strategic Income Fund Income Plus Fund U.S. Government Allocation Fund Intermediate Government Income Fund U.S. Government Income Fund Intermediate Government Income Fund Variable Rate Government Fund Variable Rate Government Fund Arizona Tax-Free Fund Arizona Tax-Free Fund California Tax-Free Bond Fund California Tax-Free Bond Fund California Tax-Free Income Fund California Tax-Free Income Fund Oregon Tax-Free Fund Oregon Tax-Free Fund National Tax-Free Fund National Tax-Free Fund California Tax-Free Money Market Fund California Tax-Free Money Market Fund California Tax-Free Money Market Trust California Tax-Free Money Market Trust Prime Money Market Fund (Ad, Svc, Inst'l) Cash Investment Money Market Fund (Svc, Inst'l) Prime Money Market Fund (A) Money Market Fund Money Market Fund Money Market Fund Money Market Trust Money Market Trust National Tax-Free Money Market Fund (A) National Tax-Free Money Market Fund (A) National Tax-Free Money Market Fund (Inst'l) National Tax-Free Institutional Money Market Fund (Svc, Inst'l) National Tax-Free Money Market Trust National Tax-Free Money Market Trust Overland Express Sweep Fund Overland Express Sweep Fund Treasury Plus Money Market Fund (A, E) Treasury Plus Institutional Money Market Fund (A) Treasury Plus Money Market Fund (Ad, Svc, Inst'l) Treasury Plus Institutional Money Market Fund (Svc, Inst'l) Government Money Market Fund Government Money Market Fund WHEREAS, Funds Trust and Stagecoach are open-end management investment companies registered with the Securities and Exchange Commission (the "SEC") under the Investment Company Act of 1940, as amended (the "1940 ACT"); WHEREAS, the parties desire that each Acquiring Fund acquire the assets and assume the liabilities of the Target Fund or, as appropriate, attributable to the class or classes of shares of the Target Fund listed opposite the Acquiring Fund ("CORRESPONDING TARGET") in exchange for shares of equal value of the Acquiring Fund and the distribution of the shares of the Acquiring Fund to the shareholders of the Corresponding Target in connection with the dissolution and liquidation of the Corresponding Target (each transaction between an Acquiring Fund and its Corresponding Target, a "REORGANIZATION"); and B-2 WHEREAS, the parties intend that each Reorganization except the Class Reorganizations (as defined below) qualify as a "reorganization," within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and that each Acquiring Fund and its Corresponding Target be a "party to a reorganization," within the meaning of Section 368(b) of the Code, with respect to that Reorganization; NOW, THEREFORE, in accordance with the mutual promises described herein, the parties agree as follows: 1. DEFINITIONS. The following terms shall have the following meanings: 1933 ACT...................... The Securities Act of 1933, as amended. 1934 ACT...................... The Securities Exchange Act of 1934, as amended. ACTIVE REORGANIZATION......... Each Reorganization set forth in the Active Reorganization Table on Schedule A. ACQUIRING CLASS............... The class of an Acquiring Fund's shares that Funds Trust will issue to the shareholders of the Corresponding Target Class as set forth in the Corresponding Classes Table in Schedule A. ASSETS........................ All property and assets of any kind and all interests, rights, privileges and powers of or attributable to a Target, whether or not determinable at the Target's Effective Time and wherever located. Assets include all cash, cash equivalents, securities, claims (whether absolute or contingent, Known or unknown, accrued or unaccrued or conditional or unmatured), contract rights and receivables (including dividend and interest receivables) owned by or attributable to the Target and any deferred or prepaid expense shown as an asset on the Target Fund's books and, in the case of a Target that is part of a Class Reorganization, attributable to the appropriate class or classes of Target Fund shares. ASSETS LIST................... A list of securities and other Assets and Known Liabilities of or attributable to a Target and, if the Target invests in one or more Portfolios, lists of the securities and other Assets and Known Liabilities of those Portfolios, each as of the date provided to Funds Trust. CLASS REORGANIZATION.......... Each Reorganization set forth in the Class Reorganization Table on Schedule A. CLOSING DATE.................. September 18, 1999 for each Active Reorganization and September 19, 1999 for each Shell Reorganization, or such other date as the parties may agree to in writing with respect to a Reorganization. CORRESPONDING TARGET CLASS.... The Target share class set forth opposite an Acquiring Class in the Corresponding Classes Table on Schedule A. CORE TRUST.................... Core Trust (Delaware), a Delaware business trust. EFFECTIVE TIME................ The business day following the Closing Date of a Reorganization, or such other date as the parties may agree to in writing. FUND.......................... An Acquiring Fund or a Target Fund. B-3 HSR ACT....................... The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. KNOW, KNOWN OR KNOWLEDGE...... Known after reasonable inquiry. LIABILITIES................... All liabilities of or attributable to a Target existing at Target's Effective Time , whether Known or unknown, accrued or unaccrued, absolute or contingent or conditional or unmatured. N-14 REGISTRATION STATEMENT... The Registration Statement of Funds Trust on Form N-14 under the 1940 Act that will register the shares of the Acquiring Funds to be issued in the Active Reorganizations and will include the proxy materials necessary for the shareholders of the Corresponding Targets to approve the Active Reorganizations. MATERIAL AGREEMENTS........... The agreements set forth in Schedule B. PORTFOLIO..................... A series of Core Trust, Schroder Core or Wells Core. SCHEDULE 14A PROXY STATEMENT.................... The proxy materials of Stagecoach on Schedule 14A under the 1934 Act that will seek approval of the Shell Reorganizations by shareholders of the appropriate Target Funds. SCHEDULE A.................... Schedule A to this Plan. SCHEDULE B.................... Schedule B to this Plan. SCHEDULE C.................... Schedule C to this Plan. SCHEDULE D.................... Schedule D to this Plan. SCHEDULE E.................... Schedule E to this Plan. SCHRODER CORE................. Schroder Capital Funds, a Delaware business trust. SHELL REORGANIZATION.......... Each Reorganization set forth in the Shell Reorganization Table on Schedule A. TARGET........................ The Target Fund or the class or classes of the Target Fund whose Assets and Liabilities an Acquiring Fund will acquire. TARGET FINANCIAL STATEMENTS... The audited financial statements of each Target Fund for its most recently completed fiscal year and, if applicable, the unaudited financial statements of each Target Fund for its most recently completed semi-annual period. TRANSFER DOCUMENTS............ Such bills of sale, assignments, certificates and other instruments of transfer as Funds Trust deems desirable to transfer to an Acquiring Fund all right and title to and interest in the Corresponding Target's Assets. B-4 VALUATION TIME................ The time on a Reorganization's Closing Date, or such other date as the parties may agree to in writing, that Funds Trust determines the net asset value of the shares of the Acquiring Fund and Stagecoach determines the net value of the Assets of or attributable to the Corresponding Target. Unless otherwise agreed to in writing, the Valuation Time of a Reorganization shall be at the time of day then set forth in the Acquiring Portfolio's and Target Portfolio's Registration Statement on Form N-1A as the time of day at which net asset value is calculated. WELLS CORE.................... Wells Fargo Core Trust, a Delaware business trust. 2. REGULATORY FILINGS AND SHAREHOLDER ACTION. (a) Funds Trust shall promptly prepare and file the N-14 Registration Statement with the SEC. Funds Trust also shall make any appropriate filings including, without limitation, filings: (i) with state or foreign securities regulatory authorities or (ii) under the HSR Act. (b) Stagecoach shall promptly prepare and file the Schedule 14A Proxy Statement with the SEC. Stagecoach also shall make any appropriate filings, including, without limitation, filings under the HSR Act. (c) The parties shall seek an order of the SEC, if appropriate, providing them with any necessary relief from Section 17 of the 1940 Act to permit them to consummate the transactions contemplated by this Plan. (d) As soon as practicable after the effective dates of the N-14 Registration Statement and Schedule 14A Proxy Statement, Stagecoach shall hold Target Fund shareholder meetings to consider and approve this Plan, the Reorganizations and such other matters as the Board of Trustees of Stagecoach may determine. 3. TRANSFER OF TARGET ASSETS. Stagecoach and Funds Trust shall take the following steps with respect to each Reorganization: (a) On or prior to the Closing Date, Stagecoach shall endeavor to pay or make reasonable provision to pay out of the Target's Assets all of the Liabilities, expenses, costs and charges of or attributable to the Target that are Known to Stagecoach and that are due and payable as of the Closing Date. (b) At the Effective Time, Stagecoach shall assign, transfer, deliver and convey all of the Target's Assets to the Acquiring Fund, subject to all of the Target's Liabilities. Funds Trust shall then accept the Target's Assets and assume the Target's Liabilities such that at and after the Effective Time (i) all of the Target's Assets at or after the Effective Time shall become and be the Assets of the Acquiring Fund and (ii) all of the Target's Liabilities at the Effective Time shall attach to the Acquiring Fund, enforceable against the Acquiring Fund to the same extent as if initially incurred by the Acquiring Fund. (c) Within a reasonable time prior to the Closing Date, Stagecoach shall provide the Target's Assets List to Funds Trust. The parties agree that the Target Fund or any Portfolio in which the Target Fund invests may sell any asset on the Assets List prior to the Target's Effective Time. After Stagecoach provides the Assets List, the Target Fund will not, and Stagecoach will request Core Trust or Schroder Core, as appropriate, to ensure that any Portfolio or Portfolios in which the Target Fund invests do not, acquire any additional securities or permit to exist any encumbrances, rights, restrictions or claims not reflected on the Assets List, without the prior written approval of Funds Trust. Within a reasonable time after receipt of the Assets List and prior to the Closing Date, Funds Trust will advise Stagecoach in writing of any investments shown on the Assets List that Funds Trust has determined to be inconsistent with the investment objective, policies and restrictions of the Acquiring Fund. Stagecoach will dispose of, or, if necessary, will request Core Trust or Schroder Core, as appropriate, to dispose of, any such securities prior to the Closing Date to B-5 the extent practicable and consistent with applicable legal requirements, including the Target Fund's or any Portfolio's investment objectives, policies and restrictions. In addition, if Funds Trust determines that, as a result of the Reorganization, the Acquiring Fund would own an aggregate amount of an investment that would exceed a percentage limitation applicable to the Acquiring Fund, Funds Trust will advise Stagecoach in writing of any such limitation and Stagecoach shall dispose of, or request Core Trust or Schroder Core to dispose of, a sufficient amount of such investment as may be necessary to avoid the limitation as of the Effective Time, to the extent practicable and consistent with applicable legal requirements, including the Target Fund's or any Portfolio's investment objectives, policies and restrictions. (d) Stagecoach shall assign, transfer, deliver and convey the Target's Assets to the Acquiring Fund at the Reorganization's Effective Time on the following basis: (1) In exchange for the transfer of the Assets, Funds Trust shall simultaneously issue and deliver to the Target Fund full and fractional shares of beneficial interest of each Acquiring Class. Funds Trust shall determine the number of shares of each Acquiring Class to issue by dividing the net value of the Assets attributable to the Corresponding Target Class by the net asset value of one Acquiring Class share. Based on this calculation, Funds Trust shall issue shares of beneficial interest of each Acquiring Class with an aggregate net asset value equal to the net value of the Assets of the Corresponding Target Class. (2) The parties shall determine the net asset value of the Acquiring Fund shares to be delivered, and the net value of the Assets to be conveyed, as of the Valuation Time substantially in accordance with Funds Trust's current valuation procedures. The parties shall make all computations to the fourth decimal place or such other decimal place as the parties may agree to in writing. (3) Stagecoach shall transfer the Assets with good and marketable title to the custodian for the account of the Acquiring Fund. Stagecoach shall transfer all cash in the form of immediately available funds payable to the order of the Funds Trust's custodian for the account of the Acquiring Fund. Stagecoach shall transfer any Assets that were not transferred to Funds Trust's custodian at the Effective Time to Funds Trust's custodian at the earliest practicable date thereafter. 4. DISSOLUTION AND LIQUIDATION OF TARGET FUNDS, REGISTRATION OF SHARES AND ACCESS TO RECORDS. Stagecoach and Funds Trust also shall take the following steps for each Reorganization: (a) At or as soon as reasonably practical after the Effective Time, Stagecoach shall dissolve and liquidate the Target by transferring to shareholders of record of each Corresponding Target Class full and fractional shares of beneficial interest of the Acquiring Class equal in value to the shares of the Corresponding Target Class held by the shareholder. Each shareholder also shall have the right to receive any unpaid dividends or other distributions that Stagecoach declared with respect to the shareholder's Corresponding Target Class shares before the Effective Time. Funds Trust shall record on its books the ownership by the shareholders of the respective Acquiring Fund shares; Stagecoach shall simultaneously redeem and cancel on its books all of the issued and outstanding shares of each Corresponding Target Class. Funds Trust shall issue certificates representing the Acquiring Fund shares in accordance with the then current Acquiring Fund prospectuses; PROVIDED, HOWEVER, that Funds Trust shall not issue certificates representing Acquiring Fund shares to replace certificates representing Target Fund shares unless the Target Fund share certificates are first surrendered to Funds Trust. If all classes of a Target Fund have been liquidated at the Reorganization's Effective Time, Stagecoach shall wind up the affairs of the Target Fund and shall take all steps as are necessary and proper to terminate the Target Fund as soon as is reasonably possible after the Effective Time and in accordance with all applicable laws and regulations. The winding-up of the affairs of the Target Fund shall not cause the affairs of any other Target Fund to wind-up. (b) If a former Target shareholder requests a change in the registration of the shareholder's Acquiring Fund shares to a person other than the shareholder, Funds Trust shall require the shareholder to (i) furnish Funds Trust an instrument of transfer properly endorsed, accompanied by any required B-6 signature guarantees and otherwise in proper form for transfer; (ii) if any of the shares are outstanding in certificated form, deliver to Funds Trust the certificate representing such shares; and (iii) pay to the Acquiring Fund any transfer or other taxes required by reason of such registration or establish to the reasonable satisfaction of Funds Trust that such tax has been paid or does not apply. (c) At and after the Closing Date, Stagecoach shall provide Funds Trust and its transfer agent with immediate access to: (i) all records containing the names, addresses and taxpayer identification numbers of all of the Target shareholders and the number and percentage ownership of the outstanding shares of the Corresponding Target Classes owned by each shareholder as of the Effective Time and (ii) all original documentation (including all applicable Internal Revenue Service forms, certificates, certifications and correspondence) relating to the Target shareholders' taxpayer identification numbers and their liability for or exemption from back-up withholding. Stagecoach shall preserve and maintain, or shall direct its service providers to preserve and maintain, records with respect to the Target as required by Section 31 of and Rules 31a-1 and 31a-2 under the 1940 Act. 5. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF STAGECOACH. Stagecoach, on behalf of itself and, as appropriate, the Target Funds, represents and warrants to, and agrees with, Funds Trust as follows: (a) Stagecoach is a corporation duly created, validly existing and in good standing under the laws of the State of Maryland. The Board of Directors of Stagecoach duly established and designated each Target Fund as a series of Stagecoach and each class of a Target Fund as a class of the Target Fund. Stagecoach is registered with the SEC as an open-end management investment company under the 1940 Act, and such registration is in full force and effect. (b) Stagecoach has the power and all necessary federal, state and local qualifications and authorizations to own all of its properties and Assets, to carry on its business as now being conducted and described in its currently effective Registration Statement on Form N-1A, to enter into this Plan and to consummate the transactions contemplated herein. (c) The Board of Directors of Stagecoach has duly authorized the execution and delivery of the Plan and the transactions contemplated herein. Duly authorized officers of Stagecoach have executed and delivered the Plan. The Plan represents a valid and binding contract, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium, and other similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. The execution and delivery of this Plan does not, and, subject to the approval of shareholders referred to in Section 2, the consummation of the transactions contemplated by this Plan will not, violate Stagecoach's Amended and Restated Articles of Incorporation or By-Laws or any Material Agreement. Except for the approval of Target Fund shareholders, Stagecoach does not need to take any other action to authorize its officers to effectuate this Plan and the transactions contemplated herein. (d) Each Target Fund has qualified as a regulated investment company under Part I of Subchapter M of Subtitle A, Chapter 1, of the Code, in respect of each taxable year since the commencement of its operations and qualifies and shall continue to qualify as a regulated investment company for its taxable year ending upon its liquidation. (e) The materials included within the N-14 Registration Statement when filed with the SEC, when Part A of the N-14 Registration Statement is distributed to shareholders, at the time of the Target shareholder meetings for the Active Reorganizations and at the Effective Time of each Active Reorganization, insofar as they relate to Stagecoach, the Target and any Portfolio or Portfolios in which the Target Fund invests: (i) shall comply in all material respects with the applicable provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules and regulations thereunder and state securities laws and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein not misleading. B-7 (f) The materials included within the Schedule 14A Proxy Statement when filed with the SEC, when distributed to shareholders and at the time of the Target shareholder meetings for the Shell Reorganizations, insofar as they relate to Stagecoach, the Target and any Portfolio or Portfolios in which the Target Fund invests: (i) shall comply in all material respects with the applicable provisions of the 1934 Act and the 1940 Act, the rules and regulations thereunder and state securities laws and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein not misleading. (g) Stagecoach has duly authorized and validly issued all of the issued and outstanding shares of each Target Fund and all of the shares are validly outstanding, fully paid and non-assessable, and were offered for sale and sold in conformity with the registration requirements of all applicable federal and state securities laws. There are no outstanding options, warrants or other rights to subscribe for or purchase any Target Fund shares, nor are there any securities convertible into Target Fund shares. (h) Stagecoach shall operate the business of each Target Fund in the ordinary course between the date hereof and the Fund's Effective Time or Effective Times, it being agreed that such ordinary course of business will include the transactions described in Subsection 4(c) and the declaration and payment of customary dividends and distributions and any other dividends and distributions deemed advisable in anticipation of the Fund's Reorganization or Reorganizations. (i) At a Target's Effective Time, the relevant Target Fund will have good and marketable title to the Target's Assets and full right, power and authority to assign, transfer, deliver and convey such Assets. (j) The Target Financial Statements, copies of which have been previously delivered to Funds Trust, fairly present the financial positions of each Target Fund as of the Fund's most recent fiscal year-end and the results of the Fund's operations and changes in the Fund's net Assets for the periods indicated. The Target Financial Statements are in accordance with generally accepted accounting principles consistently applied. (k) To the Knowledge of Stagecoach, no Target Fund has any Liabilities, whether or not determined or determinable, other than the Liabilities disclosed or provided for in the Target Financial Statements, Liabilities incurred in the ordinary course of business subsequent to the date of the Target Financial Statements and Liabilities set forth on Schedule C. (l) Other than the claims, actions, suits, investigations or proceedings set forth on Schedule D, Stagecoach does not Know of any claims, actions, suits, investigations or proceedings of any type pending or threatened against Stagecoach or any Target Fund or its Assets or businesses. Stagecoach does not Know of any facts that it currently has reason to believe are likely to form the basis for the institution of any such claim, action, suit, investigation or proceeding against Stagecoach or any Target Fund. For purposes of this provision, investment underperformance or negative investment performance shall not be deemed to constitute such facts, provided all required performance disclosures have been made. Other than the orders, decrees or judgments set forth on Schedule D, neither Stagecoach nor any Target Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body that adversely affects, or is reasonably likely to adversely affect, its financial condition, results of operations, business, properties or Assets or its ability to consummate the transactions contemplated by the Plan. (m) Except for contracts, agreements, franchises, licenses or permits entered into or granted in the ordinary course of its business, in each case under which no material default exists, Stagecoach is not a party to or subject to any material contract, debt instrument, employee benefit plan, lease, franchise, license or permit of any kind or nature whatsoever on behalf of any Target Fund. (n) Stagecoach has filed the federal income tax returns of each Target Fund, copies of which have been previously delivered to Funds Trust, for all taxable years to and including the Fund's most recent taxable year, and has paid all taxes payable pursuant to such returns. No such return is currently under B-8 audit and no assessment has been asserted with respect to such returns. Stagecoach will file the federal income tax returns of each Target Fund for its next taxable year on or before their due date, as the same may be properly extended. (o) Since the date of the Target Financial Statements, there has been no material adverse change in the financial condition, results of operations, business, properties or Assets of any Target Fund. For all purposes under this Plan, investment underperformance, negative investment performance and/or investor redemptions shall not be considered material adverse changes, provided all required performance disclosures have been made. 6. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF FUNDS TRUST. Funds Trust, on behalf of itself and, as appropriate, the Acquiring Funds, represents and warrants to, and agrees with Stagecoach as follows: (a) Funds Trust is a business trust duly created, validly existing and in good standing under the laws of the State of Delaware. The Board of Trustees of Funds Trust duly established and designated each Acquiring Fund as a series of Funds Trust and each Acquiring Class as a class of the Acquiring Fund. As of the Closing Date, Funds Trust will be registered with the SEC as an open-end management investment company under the 1940 Act. (b) Funds Trust has the power and all necessary federal, state and local qualifications and authorizations to own all of its properties and Assets, to carry on its business as described in its Registration Statement on Form N-1A as filed with the SEC, to enter into this Plan and to consummate the transactions contemplated herein. (c) The Board of Trustees of Funds Trust has duly authorized execution and delivery of the Plan and the transactions contemplated herein. Duly authorized officers of Funds Trust have executed and delivered the Plan. The Plan represents a valid and binding contract, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium and other similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. The execution and delivery of this Plan does not, and the consummation of the transactions contemplated by this Plan will not, violate the Declaration of Trust of Funds Trust or any Material Agreement. Funds Trust does not need to take any other action to authorize its officers to effectuate the Plan and the transactions contemplated herein. (d) Each Acquiring Fund shall qualify as a regulated investment company under Part I of Subchapter M of Subtitle A, Chapter 1, of the Code in respect of its current taxable year. (e) The N-14 Registration Statement, when filed with the SEC, when Part A of the N-14 Registration Statement is distributed to shareholders, at the time of the Target shareholder meetings for the Active Reorganizations and at the Effective Time of each Active Reorganization, insofar as it relates to Norwest Advantage Funds or any series of Norwest Advantage Funds, Funds Trust, the Acquiring Funds, any Portfolios in which the Acquiring Funds will invest or the Acquiring Classes: (i) shall comply in all material respects with the applicable provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules and regulations thereunder and state securities laws and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein not misleading. (f) The Schedule 14A Proxy Statement, when filed with the SEC, when distributed to shareholders and at the time of the Target shareholder meetings for the Shell Reorganizations, insofar as it relates to Norwest Advantage Funds or any series of Norwest Advantage Funds, Funds Trust, the Acquiring Funds, any Portfolios in which the Acquiring Funds will invest or the Acquiring Classes: (i) shall comply in all material respects with the applicable provisions of the 1934 Act and the 1940 Act, the rules and regulations thereunder and state securities laws and (ii) shall not contain any untrue statement of a material fact or B-9 omit to state a material fact required to be stated therein or necessary to make the statements made therein not misleading. (g) There shall be no issued and outstanding shares of any Acquiring Fund prior to the Fund's Closing Date other than those issued to in order to commence the operations of Funds Trust. Funds Trust shall duly authorize the Acquiring Fund shares to be issued and delivered to each Corresponding Target as of the Target's Effective Time. When issued and delivered, the Acquiring Fund shares shall be duly and validly issued, fully paid and non-assessable, and no shareholder of any Acquiring Fund shall have any preemptive right of subscription or purchase in respect of them. There are no outstanding options, warrants or other rights to subscribe for or purchase any Acquiring Fund shares, nor are there any securities convertible into Acquiring Fund shares. (h) Funds Trust has not commenced the operations of any Acquiring Fund. Funds Trust shall not commence the operations of any Acquiring Fund prior to the Fund's Effective Time. (i) No Acquiring Fund has any Liabilities, whether or not determined or determinable, other than the Liabilities set forth on Schedule C. (j) Funds Trust does not Know of any claims, actions, suits, investigations or proceedings of any type pending or threatened against Funds Trust or any Acquiring Fund or its Assets or businesses. There are no facts that Funds Trust currently has reason to believe are likely to form the basis for the institution of any such claim, action, suit, investigation or proceeding against Funds Trust or any Acquiring Fund. Neither Funds Trust nor any Acquiring Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body that adversely affects, or is reasonably likely to adversely affect, its financial condition, results of operations, business, properties or Assets or its ability to consummate the transactions contemplated herein. (k) Except for contracts, agreements, franchises, licenses or permits entered into or granted in the ordinary course of its business, in each case under which no material default exists, Funds Trust is not a party to or subject to any material contract, debt instrument, employee benefit plan, lease, franchise, license or permit of any kind or nature whatsoever on behalf of any Acquiring Fund. (l) Funds Trust shall file the federal income tax returns of each Acquiring Fund for the Fund's current taxable year on or before their due date, as the same may be properly extended. (m) Since March 10, 1999, there has been no material adverse change in the financial condition, business, properties or Assets of any Acquiring Fund. 7. CONDITIONS TO STAGECOACH OBLIGATIONS. The obligations of Stagecoach with respect to each Reorganization shall be subject to the following conditions precedent: (a) The Target's shareholders shall have approved the Reorganization in the manner required by the Amended and Restated Trust Instrument of Stagecoach and applicable law. If Target shareholders fail to approve the Reorganization, that failure shall release Stagecoach of its obligations under this Plan only with respect to that Reorganization and not any other Reorganization. (b) All representations and warranties of Funds Trust made in this Plan that apply to the Reorganization shall be true and correct in all material respects as if made at and as of the Valuation Time and the Effective Time. (c) Funds Trust shall have delivered to Stagecoach a certificate dated as of the Closing Date and executed in its name by its President or Vice President and its Treasurer or Assistant Treasurer, in a form reasonably satisfactory to Stagecoach, stating that the representations and warranties of Funds Trust in this Plan that apply to the Reorganization are true and correct at and as of the Valuation Time and that it has approved the Target's Assets as being consistent with its investment objectives, policies and restrictions and that the Target's Assets may otherwise be lawfully acquired by the Acquiring Fund. B-10 (d) Stagecoach shall have received an opinion of Morrison & Foerster LLP, as counsel to Funds Trust, in form and substance reasonably satisfactory to Stagecoach and dated as of the Closing Date, substantially to the effect that: (1) Funds Trust is a business trust duly created, validly existing and in good standing under the laws of the State of Delaware and is an open-end, management investment company registered under the 1940 Act; (2) the shares of the Acquiring Fund to be delivered as provided for by this Plan are duly authorized and upon delivery will be validly issued, fully paid and non-assessable by Funds Trust; (3) the execution and delivery of this Plan did not, and the consummation of the Reorganization will not, violate the Declaration of Trust of Funds Trust or any Material Agreement to which Funds Trust is a party or by which it is bound; and (4) to the Knowledge of such counsel, no consent, approval, authorization or order of any court or governmental authority is required for the consummation by Funds Trust of the Reorganization, except those that have been obtained under the 1933 Act, the 1934 Act, the 1940 Act and the rules and regulations under those Acts or that may be required under state securities laws, the HSR Act or subsequent to the Effective Time or when the failure to obtain the consent, approval, authorization or order would not have a material adverse effect on the operation of the Acquiring Fund. In rendering such opinion, such counsel may (i) rely on the opinion of other counsel to the extent set forth in such opinion, (ii) make assumptions regarding the authenticity, genuineness and/or conformity of documents and copies thereof without independent verification thereof, (iii) limit such opinion to applicable federal and state law, (iv) define the word "knowledge" and related terms to mean the knowledge of attorneys then with such firm who have devoted substantive attention to matters directly related to this Plan and (v) rely on certificates of officers or trustees of Funds Trust. (e) Stagecoach shall have received an opinion of Richards, Layton & Finger, as special counsel to Funds Trust, in form and substance reasonably satisfactory to Stagecoach and dated as of the Closing Date, substantially to the effect that this Plan has been duly authorized, executed and delivered by Funds Trust, and, assuming due authorization, execution and delivery of this Plan by Stagecoach on behalf of the Target, represents a legal, valid and binding contract, enforceable in accordance with its terms, subject to the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance and transfer and similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto, and further subject to the application of equitable principles in any proceeding whether at law or in equity or with respect to the enforcement of provisions of the Plan and the effect of judicial decisions which have held that certain provisions are unenforceable when their enforcement would violate an implied covenant of good faith and fair dealing or would be commercially unreasonable or when default under the Plan is not material. In rendering such opinion, such counsel may (i) make assumptions regarding the authenticity, genuineness and/or conformity of documents and copies thereof without independent verification thereof, (ii) limit such opinion to applicable federal and state law, and (iii) rely on certificates of officers or trustees of Funds Trust. (f) Stagecoach shall have received an opinion of KPMG LLP addressed to Stagecoach and Funds Trust in form and substance reasonably satisfactory to them, and dated as of the Closing Date, with respect to the tax matters specified in Subsection 8(g) or 8(h), as applicable. (g) Stagecoach shall have received (i) a memorandum addressed to Stagecoach and Funds Trust, in form and substance reasonably satisfactory to them, prepared by Morrison & Foerster LLP, or another person agreed to in writing by the parties, concerning compliance with each relevant jurisdiction's securities laws in connection with Funds Trust's issuance of Acquiring Fund shares, and (ii) assurance reasonably satisfactory to it that all necessary steps have been taken under all relevant jurisdictions' securities laws to consummate the Reorganization. B-11 (h) The N-14 Registration Statement shall have become effective under the 1933 Act or the Schedule 14A Proxy Statement shall have become effective for purposes of the 1940 Act, as appropriate, as to the Acquiring Fund's shares and, if the Reorganization is an Active Reorganization, the SEC shall not have instituted or, to the Knowledge of Funds Trust, contemplated instituting, any stop order suspending the effectiveness of the N-14 Registration Statement. (i) No action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, the Reorganization. (j) The SEC shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the Reorganization under Section 25(c) of the 1940 Act. (k) Funds Trust shall have performed and complied in all material respects with each of its agreements and covenants required by this Plan to be performed or complied with by it prior to or at the Reorganization's Valuation Time and Effective Time. (l) Stagecoach shall have received from Funds Trust a duly executed instrument whereby the Acquiring Fund assumes all of the Liabilities of or attributable to the Target in the form set forth on Schedule F. (m) If the Reorganization is an Active Reorganization, Stagecoach shall have received a letter dated as of the Closing Date from KPMG LLP addressed to Stagecoach and Funds Trust in form and substance reasonably satisfactory to them to the effect that on the basis of limited procedures as agreed to by Stagecoach and Funds Trust and described in such letter (but not an examination in accordance with generally accepted auditing standards): (1) nothing came to their attention that caused them to believe that the relevant unaudited pro forma financial statements included in the N-14 Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X or that the relevant pro forma adjustments have not properly been applied to the historical amounts in the compilation of those amounts; (2) the data used in the calculation of the current and pro forma expense ratios of the Target Fund and the Acquiring Fund appearing in the N-14 Registration Statement, including the proxy materials, agree with the underlying accounting records of the Target Fund and the Acquiring Fund, as appropriate, or with written estimates provided by officers of Stagecoach or Funds Trust, as appropriate, having responsibility for financial and reporting matters and were found to be mathematically correct; and (3) the information relating to the Acquiring Fund and the Target Fund appearing in the N-14 Registration Statement that is expressed in dollars or percentages of dollars has been obtained from the accounting records of the Acquiring Fund or the Target Fund, as appropriate, or from schedules prepared by officers of Stagecoach or Funds Trust, as appropriate, having responsibility for financial and reporting matters and such information is in agreement with such records or schedules or with computations made therefrom. (n) If the Reorganization is a Shell Reorganization, Stagecoach shall have received a letter dated as of the Closing Date from KPMG LLP addressed to Stagecoach and Funds Trust in form and substance reasonably satisfactory to them to the effect that on the basis of limited procedures as agreed to by Stagecoach and Funds Trust and described in such letter (but not an examination in accordance with generally accepted auditing standards): (1) the data used in the calculation of any expense ratios of the Target Fund and the Acquiring Fund appearing in the Schedule 14A Proxy Statement agree with the underlying accounting records of B-12 the Target Fund and the Acquiring Fund, as appropriate, or with written estimates provided by officers of Stagecoach or Funds Trust, as appropriate, having responsibility for financial and reporting matters and were found to be mathematically correct; and (2) the information relating to the Acquiring Fund and the Target Fund appearing in the Schedule 14A Proxy Statement that is expressed in dollars or percentages of dollars has been obtained from the accounting records of the Acquiring Fund or the Target Fund, as appropriate, or from schedules prepared by officers of Stagecoach or Funds Trust, as appropriate, having responsibility for financial and reporting matters and such information is in agreement with such records or schedules or with computations made therefrom. (o) Neither party shall have terminated this Plan with respect to the Reorganization pursuant to Section 11 of this Plan. (p) The parties shall have received any necessary order of the SEC exempting the parties from the prohibitions of Section 17 of the 1940 Act or any similar relief necessary to permit the Reorganization. (q) Stagecoach shall have received such assurances as it deems appropriate from Wells Fargo Bank, N.A. regarding payment of the expenses incurred in connection with the Reorganizations. 8. CONDITIONS TO FUNDS TRUST OBLIGATIONS. The obligations of Funds Trust with respect to each Reorganization shall be subject to the following conditions precedent: (a) The Target's shareholders shall have approved the Reorganization in the manner required by the Amended and Restated Trust Instrument of Stagecoach and applicable law. If Target shareholders fail to approve the Reorganization, that failure shall release Funds Trust of its obligations under this Plan only with respect to that Reorganization, and not any other Reorganization. (b) Stagecoach shall have obtained and delivered to Funds Trust a statement of Assets and Liabilities of the Target Fund and of any Portfolio in which the Target Fund invests, showing the tax costs of such Assets by lot and the holding periods of such Assets, as of the Valuation Time, certified by the Treasurer or Assistant Treasurer of Stagecoach, Core Trust or Schroder Core, as applicable, as having been prepared in accordance with generally accepted accounting principles consistently applied. The statement of Assets and Liabilities shall indicate which Assets, if any, are or, after the Reorganization, will be subject to any restrictions, legal or contractual, on disposition and which Assets, if any, are not readily marketable. The statement of assets and liabilities also shall indicate which portion of the Assets and Liabilities of the Target Fund are attributable to the Target, if the Reorganization is a Class Reorganization. (c) Stagecoach shall have duly executed and delivered the Target's Transfer Documents to Funds Trust. (d) All representations and warranties of Stagecoach made in this Plan that apply to the Reorganization shall be true and correct in all material respects as if made at and as of the Valuation Time and the Effective Time. (e) Stagecoach shall have delivered to Funds Trust a certificate dated as of the Closing Date and executed in its name by its President or Vice President and its Treasurer or Assistant Treasurer, in a form reasonably satisfactory to Funds Trust, stating that the representations and warranties of Stagecoach in this Plan that apply to the Reorganization are true and correct at and as of the Valuation Time. (f) Funds Trust shall have received an opinion of Morrison & Foerster LLP, as counsel to Stagecoach, in form and substance reasonably satisfactory to Funds Trust and dated as of the Closing Date, substantially to the effect that: (1) Stagecoach is a business trust duly created, validly existing and in good standing under the laws of the State of Maryland and is an open-end, management investment company registered under the 1940 Act; B-13 (2) this Plan and the Target's Transfer Documents have been duly authorized, executed and delivered by Stagecoach and, assuming due authorization, execution and delivery of this Plan by Funds Trust on behalf of the Acquiring Fund, represent legal, valid and binding contracts, enforceable in accordance with their terms, subject to the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance and transfer and similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto, and further subject to the application of equitable principles in any proceeding, whether at law or in equity or with respect to the enforcement of provisions of the Plan and the effect of judicial decisions which have held that certain provisions are unenforceable when their enforcement would violate an implied covenant of good faith and fair dealing or would be commercially unreasonable or when default under the Plan is not material; (3) the execution and delivery of this Plan did not, and the consummation of the Reorganization will not, violate the Amended and Restated Articles of Incorporation or By-Laws of Stagecoach or any Material Agreement to which Stagecoach is a party or by which it is bound; (4) the only Target shareholder approval required with respect to the Reorganization is the approval of the Reorganization by the shareholders of the Target; and (5) to the Knowledge of such counsel, no consent, approval, authorization or order of any court or governmental authority is required for the consummation by Stagecoach of the Reorganization, except those that have been obtained under the 1933 Act, the 1934 Act, the 1940 Act and the rules and regulations under those Acts, or that may be required under state securities laws, the HSR Act or subsequent to the Effective Time or when the failure to obtain the consent, approval, authorization or order would not have a material adverse effect on the operation of the Target Fund. In rendering such opinion, such counsel may (i) rely on the opinion of other counsel to the extent set forth in such opinion, (ii) make assumptions regarding the authenticity, genuineness and/or conformity of documents and copies thereof without independent verification thereof, (iii) limit such opinion to applicable federal and state law, (iv) define the word "knowledge" and related terms to mean the knowledge of attorneys then with such firm who have devoted substantive attention to matters directly related to this Plan and (v) rely on certificates of officers or trustees of Stagecoach. (g) Unless the Reorganization is a Class Reorganization, Funds Trust shall have received an opinion of KPMG LLP addressed to Stagecoach and Funds Trust in form and substance reasonably satisfactory to them, based upon representations made in certificates provided by Stagecoach and Funds Trust, their affiliates and/or principal shareholders and dated as of the Closing Date, substantially to the effect that, for federal income tax purposes: (1) the transfer to the Acquiring Fund by the Target Fund of all of its Assets in exchange for shares of the Acquiring Fund, and the distribution of the shares to the shareholders of the Target Fund, as provided in this Plan, will constitute a reorganization within the meaning of Section 368(a) of the Code and the Acquiring Fund and the Target Fund will each be a "party to a reorganization," within the meaning of Section 368(b) of the Code, with respect to this Plan; (2) in accordance with Sections 361(a), 361(c)(1) and 357(a) of the Code, the Target Fund will recognize no gain or loss as a result of such transactions; (3) in accordance with Section 1032(a) of the Code, the Acquiring Fund will recognize no gain or loss as a result of such transactions; (4) in accordance with Section 354(a)(1) of the Code, the shareholders of the Target Fund will recognize no gain or loss on the distribution to them by the Target Fund of shares of the Acquiring Fund in exchange for their shares of the Target Fund; B-14 (5) in accordance with Section 358(a)(1) of the Code, the basis of the Acquiring Fund shares received by each shareholder of the Target Fund will be the same as the basis of the shareholder's Target Fund shares immediately prior to the transactions; (6) in accordance with Section 362(b) of the Code, the basis of the Assets received by the Acquiring Fund will be the same as the basis of such Assets in the hands of the Target Fund immediately prior to the transactions; (7) in accordance with Section 1223(l) of the Code, a shareholder's holding period for the Acquiring Fund shares will be determined by including the period for which the shareholder held the shares of the Target Fund exchanged therefor, provided that the shareholder held such shares of the Target Fund as a capital asset at the Effective Time; (8) in accordance with Section 1223(2) of the Code, the holding period of the Acquiring Fund with respect to the Assets will include the period for which such Assets were held by the Target Fund; and (9) in accordance with Section 381(a) of the Code, the Acquiring Fund will succeed to the capital loss carryovers, if any, of the Target Fund, but the use by the Acquiring Fund of any such capital loss carryovers may be subject to limitation under Section 383 of the Code. (h) If the Reorganization is a Class Reorganization, Funds Trust shall have received an opinion of KPMG LLP addressed to Stagecoach and Funds Trust in form and substance reasonably satisfactory to them, based upon representations made in certificates provided by Stagecoach and Funds Trust, their affiliates and/or principal shareholders and dated as of the Closing Date, substantially to the effect that, for federal income tax purposes: (1) the Class Reorganization will not constitute a reorganization within the meaning of Section 368(a) of the Code; (2) in accordance with Section 1032(a) of the Code, the Acquiring Fund will recognize no gain or loss as a result of the Class Reorganization; (3) the basis of the Acquiring Fund shares received by each shareholder of the Target Fund will be the fair market value of those shares as of the Valuation Time; (4) the basis of the Assets received by the Acquiring Fund will be their fair market value as of the Valuation Time; (5) a shareholder's holding period for the Acquiring Fund shares received in the Class Reorganization will begin on the day following the Effective Time; and (6) the holding period of the Acquiring Fund with respect to the Assets received in the Class Reorganization will begin on the day following the Effective Time. (i) The Target's Assets shall include only Assets that Funds Trust has determined to be in accordance with the Acquiring Fund's investment objective, policies and restrictions and shall include no Assets which the Acquiring Fund may not otherwise lawfully acquire. If the Assets include Assets that Funds Trust determines not to be in accordance with the Acquiring Fund's investment objective, policies and restrictions or to be Assets which the Acquiring Fund may not otherwise lawfully acquire, that failure shall release Funds Trust of its obligations under this Plan only with respect to that Reorganization and not any other Reorganization. (j) The N-14 Registration Statement shall have become effective under the 1933 Act or the Schedule 14A Proxy Statement shall have become effective for purposes of the 1940 Act, as applicable, as to the Acquiring Fund's shares and, if the Reorganization is an Active Reorganization, no stop order suspending B-15 the effectiveness of the N-14 Registration Statement shall have been instituted or, to the Knowledge of Funds Trust, contemplated by the SEC. (k) No action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit or obtain damages or other relief in connection with the Reorganization. (l) The SEC shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the Reorganization under Section 25(c) of the 1940 Act. (m) Stagecoach shall have performed and complied in all material respects with each of its agreements and covenants required by this Plan to be performed or complied with by it prior to or at the Reorganization's Valuation Time and Effective Time. (n) Funds Trust shall have received a letter from KPMG LLP addressed to Stagecoach and Funds Trust as described in Subsection 7(m) or 7(n), as appropriate. (o) If the Reorganization is an Active Reorganization, except to the extent prohibited by Rule 19b-1 under the 1940 Act, the Target Fund shall have declared a dividend or dividends that, together with all previous such dividends, shall have the effect of distributing to the Target shareholders substantially all investment company taxable income of or attributable to the Target earned prior to the Closing Date and substantially all of its net capital gain of or attributable to the Target realized prior to such date. (p) Neither party shall have terminated this Plan with respect to the Reorganization pursuant to Section 10 of this Plan. (q) The parties shall have received any necessary order of the SEC exempting the parties from the prohibitions of Section 17 of the 1940 Act or any similar relief necessary to permit the Reorganization. (r) Funds Trust shall have received such assurances as it deems appropriate from Wells Fargo Bank, N.A. regarding payment of the expenses incurred in connection with the Reorganizations. 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of the parties hereto shall survive the completion of the transactions contemplated herein. 10. TERMINATION OF PLAN. A majority of a party's Board of Directors/Trustees may terminate this Plan with respect to any Acquiring Fund or Target, as appropriate, at any time before the applicable Effective Time if: (i) the party's conditions precedent set forth in Sections 7 or 8, as appropriate, are not satisfied or (ii) the Board of Trustees determines that the consummation of the applicable Reorganization is not in the best interests of shareholders and gives notice to the other party. The termination of this Plan with respect to an Acquiring Fund and its Corresponding Target shall not affect the survival of the Plan with respect to any other Acquiring Fund or Target. 11. GOVERNING LAW. This Plan and the transactions contemplated hereby shall be governed, construed and enforced in accordance with the laws of the State of Delaware, except to the extent preempted by federal law, without regard to other conflicts of law. 12. BROKERAGE FEES. Each party represents and warrants that there are no brokers or finders entitled to receive any payments in connection with the transactions provided for in the Plan. 13. AMENDMENTS. The parties may, by agreement in writing authorized by their respective Boards of Trustees, amend this Plan with respect to any Reorganization at any time before or after the Target's shareholders approve the Reorganization. However, after a Target's shareholders approve a Reorganization, the parties may not amend this Plan in a manner that materially alters the obligations of either party with respect to that Reorganization. The parties shall not deem this Section to preclude them from changing the Closing Date or the Effective Time of a Reorganization by mutual agreement. B-16 14. WAIVERS. At any time prior to the Closing Date, either party may by written instrument signed by it (i) waive the effect of any inaccuracies in the representations and warranties made to it contained herein and (ii) waive compliance with any of the agreements, covenants or conditions made for its benefit contained herein. The parties agree that any waiver shall apply only to the particular inaccuracy or requirement for compliance waived, and not any other or future inaccuracy or lack of compliance. 15. INDEMNIFICATION OF DIRECTORS. Funds Trust agrees that it will assume all liabilities and obligations of Stagecoach relating to any obligation of Stagecoach to indemnify its current and former Trustees and officers, acting in their capacities as such, to the fullest extent permitted by law and Stagecoach's Amended and Restated Trust Instrument, as in effect as of the date of this Plan. Funds Trust also agrees that all rights to indemnification and all limitations of liability existing in favor of the current and former Trustees and officers, acting in their capacities as such, under the Stagecoach Amended and Restated Trust Instrument as in effect as of the date of this Plan shall survive the Reorganizations and shall continue in full force and effect, without any amendment thereto, and shall constitute rights which may be asserted against Funds Trust, its successors and assigns. 16. COOPERATION AND FURTHER ASSURANCES. Each party will cooperate with the other in fulfilling its obligations under this Plan and will provide such information and documentation as is reasonably requested by the other in carrying out this Plan's terms. Each party will provide such further assurances concerning the performance of obligations under this Plan and the consummation of the Reorganizations as the other shall deem necessary, advisable or appropriate. 17. UPDATING OF N-14 REGISTRATION STATEMENT AND SCHEDULE 14A PROXY STATEMENT. If at any time prior to the Target Fund shareholder meetings referred to in Section 2, in the case of Shell Reorganizations, or the Effective Time of a Reorganization, in the case of an Active Reorganization, a party becomes aware of any material information that is not reflected in the Schedule 14A Proxy Statement or the N-14 Registration Statement, as appropriate, the party discovering the information shall notify the other party and the parties shall cooperate in promptly preparing, filing and clearing with the SEC and, if appropriate, distributing to shareholders appropriate disclosure with respect to the information. 18. LIMITATION ON LIABILITIES. The obligations of Stagecoach, Funds Trust and each Fund shall not bind any of the Trustees, shareholders, nominees, officers, agents, or employees of Stagecoach or Funds Trust personally, but shall bind only the Assets and property of the Acquiring Funds and Target Funds. The execution and delivery of this Plan by the parties' officers shall not be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the Assets and the property of the Acquiring Funds or Target Funds, as appropriate. 19. TERMINATION OF STAGECOACH. If the parties complete every Reorganization, Stagecoach shall terminate its registration under the 1940 Act and dissolve. B-17 20. NOTICES. Any notice, report, statement, certificate or demand required or permitted by any provision of this Plan shall be in writing and shall be given by prepaid telegraph, telecopy, certified mail or overnight express courier to: For Stagecoach: Elizabeth A. Gottfried Wells Fargo Bank, N.A. 525 Market Street San Francisco, CA 94163 With copies to: Robert M. Kurucza Marco E. Adelfio Morrison & Foerster LLP 2000 Pennsylvania Avenue, N.W. Suite 5500 Washington, D.C. 20006 For Funds Trust: Richard H. Blank, Jr. Wells Fargo Funds Trust 111 Center Street Little Rock, AR 72201 With copies to: Robert M. Kurucza Marco E. Adelfio Morrison & Foerster LLP 2000 Pennsylvania Avenue, N.W., Suite 5500 Washington, D.C. 20006 21. GENERAL. This Plan supersedes all prior agreements between the parties (written or oral), is intended as a complete and exclusive statement of the terms of the agreement between the parties and may not be changed or terminated orally. The parties may execute this Plan in counterparts, which shall be considered one and the same agreement, and shall become effective when the counterparts have been executed by and delivered to both parties. The headings contained in this Plan are for reference only and shall not affect in any way the meaning or interpretation of this Plan. Nothing in this Plan, expressed or implied, confers upon any other person any rights or remedies under or by reason of this Plan. Neither party may assign or transfer any right or obligation under this Plan without written consent of the other party. B-18 IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers designated below to execute this Plan as of the date first written above. WELLS FARGO FUNDS TRUST ATTEST: By: - ----------------------------------------- Name: Title: STAGECOACH FUNDS, INC. ATTEST: By: - ----------------------------------------- Name: Title: ATTEST: - ----------------------------------------- ----------------------------------------- Name: Name: Richard H. Blank, Jr. Title: Title: SECRETARY ATTEST: - ----------------------------------------- ----------------------------------------- Name: Name: Richard H. Blank, Jr. Title: Title: SECRETARY B-19 SCHEDULE A I. CORRESPONDING CLASSES TABLE: CORRESPONDING TARGET ACQUIRING FUND CLASSES CLASSES --------------------------- --------------------- Asset Allocation Fund Asset Allocation Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares Balanced Fund Asset Allocation Fund A Shares A Shares B Shares B Shares I Shares* C Shares I Shares Diversified Equity Income Fund Income Equity Fund A Shares A Shares B Shares B Shares C Shares I Shares Equity Index Fund Equity Index Fund A Shares A Shares B Shares B Shares O Shares O Shares Equity Value Fund Equity Value Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares I Shares Growth Fund Growth Fund A Shares A Shares B Shares B Shares I Shares I Shares International Equity Fund International Equity Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares Index Allocation Fund Index Allocation Fund A Shares A Shares B Shares B Shares C Shares C Shares Small Cap Fund Small Cap Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares I Shares - -------------------------- * I shares are Institutional Class shares. B-20 CORRESPONDING TARGET ACQUIRING FUND CLASSES CLASSES --------------------------- --------------------- Strategic Growth Fund Small Cap Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares Corporate Bond Fund Corporate Bond Fund A Shares A Shares B Shares B Shares C Shares C Shares Short-Intermediate U.S. Government Income Fund Limited Term Government Income Value Fund A Shares A Shares B Shares B Shares I Shares I Shares Strategic Income Fund Strategic Income Fund A Shares A Shares B Shares B Shares C Shares C Shares U.S. Government Allocation Fund Intermediate Government Income Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares I Shares U.S. Government Income Fund Intermediate Government Income Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares I Shares Variable Rate Government Fund Variable Rate Government Fund A Shares A Shares Arizona Tax-Free Fund Arizona Tax-Free Fund A Shares A Shares B Shares B Shares I Shares I Shares California Tax-Free Bond Fund California Tax-Free Bond Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares I Shares California Tax-Free Income Fund California Tax-Free Income Fund A Shares A Shares I Shares I Shares Oregon Tax-Free Fund Oregon Tax-Free Fund A Shares A Shares B Shares B Shares I Shares I Shares National Tax-Free Fund National Tax-Free Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares I Shares California Tax-Free Money Market Fund California Tax-Free Money Market Fund A Shares A Shares Service Shares B-21 CORRESPONDING TARGET CLASSES ACQUIRING FUND CLASSES --------------------------- ------------------------ California Tax-Free Money Market Trust California Tax-Free Money Market Trust A Shares A Shares Prime Money Market Fund Cash Investment Money Market Fund Administrative Shares Administrative Shares Service Shares Service Shares I Shares I Shares Prime Money Market Fund Money Market Fund A Shares A Shares Money Market Fund Money Market Fund A Shares A Shares S Shares B Shares Money Market Trust Money Market Trust A Shares A Shares National Tax-Free Money Market Fund National Tax-Free Money Market Fund A Shares A Shares National Tax-Free Money Market Fund National Tax-Free Institutional Money Market Fund I Shares I Shares National Tax-Free Money Market Trust National Tax-Free Money Market Trust Shares Shares Overland Express Sweep Fund Overland Express Sweep Fund Shares Shares Treasury Plus Money Market Fund Treasury Plus Money Market Fund A Shares A Shares E Shares A Shares Treasury Plus Money Market Fund Treasury Plus Institutional Money Market Fund Administrative Shares Service Shares Service Shares Service Shares I Shares I Shares Government Money Market Fund Government Money Market Fund A Shares A Shares B-22 II. ACTIVE REORGANIZATION TABLE: CORRESPONDING TARGETS ACQUIRING FUNDS - --------------------------------------------------------- --------------------------------------------------------- Asset Allocation Fund Asset Allocation Fund Balanced Fund Asset Allocation Fund Growth Fund Income Equity Fund Diversified Equity Income Fund Income Equity Fund Small Cap Fund Small Cap Fund Strategic Growth Fund Small Cap Fund Short-Intermediate U.S. Government Income Fund Limited Term Government Income Fund U.S. Government Allocation Fund Intermediate Government Income Fund U.S. Government Income Fund Intermediate Government Income Fund National Tax-Free Fund Tax-Free Income Fund Prime Money Market Fund (Ad, Svc, I) Cash Investment Money Market Fund (Svc, I) Prime Money Market Fund (A) Money Market Fund (A) Money Market Fund (A, S) Money Market Fund (A, B) National Tax-Free Money Market Fund (A) National Tax-Free Money Market Fund (A) National Tax-Free Money Market Fund (I) National Tax-Free Institutional Money Market Fund (I) Treasury Plus Money Market Fund (Ad, Svc, I) Treasury Plus Institutional Money Market Fund (Svc, I) Government Money Market Fund Government Money Market Fund III. SHELL REORGANIZATION TABLE: TARGET FUNDS ACQUIRING FUNDS - ------------------------------------------------------ ------------------------------------------------------ Equity Index Fund Equity Index Fund Equity Value Fund Equity Value Fund International Equity Fund International Equity Fund Index Allocation Fund Index Allocation Fund Corporate Bond Fund Corporate Bond Fund Strategic Income Fund Income Plus Fund Variable Rate Government Fund Variable Rate Government Fund Arizona Tax-Free Fund Arizona Tax-Free Fund California Tax-Free Bond Fund California Tax-Free Bond Fund California Tax-Free Income Fund California Tax-Free Income Fund Oregon Tax-Free Fund Oregon Tax-Free Fund California Tax-Free Money Market Fund California Tax-Free Money Market Fund California Tax-Free Money Market Trust California Tax-Free Money Market Trust Money Market Trust Money Market Trust National Tax-Free Money Market Trust National Tax-Free Money Market Trust Overland Express Sweep Fund Overland Express Sweep Fund Treasury Plus Money Market Fund (A, E) Treasury Plus Money Market Fund (A) IV. CLASS REORGANIZATION TABLE: CORRESPONDING TARGET FUNDS ACQUIRING CLASSES - ------------------------------------------------------ ------------------------------------------------------ Prime Money Market Fund (Administrative) Prime Money Market Fund (Service) Prime Money Market Fund (A) Money Market Fund (A) Money Market Fund (S) Money Market Fund (B) Treasury Plus Money Market Fund (Administrative) Treasury Plus Institutional Money Market Fund (Service) B-23 SCHEDULE B MATERIAL AGREEMENTS The following agreements shall be Material Agreements for Stagecoach: Investment Advisory Agreement between Wells Fargo Bank, N.A. ("WELLS FARGO") and Stagecoach dated July 28, 1998. Investment Subadvisory Agreement between Wells Fargo and Wells Capital Management, Inc. dated May 1, 1998. Investment Subadvisory Agreement between Wells Fargo and Barclays Global Fund Advisors dated April 28, 1996. Distribution Agreement between Stephens Inc. and Stagecoach dated December 15, 1994, as amended February , 1999. Custody Agreements between Wells Fargo and Stagecoach dated August 1, 1993, as amended July 28, 1998. Agency Agreement between Wells Fargo and Stagecoach dated August 1, 1993. Administration Agreement between Wells Fargo and Stagecoach dated March 25, 1999. Fund Accounting Agreement between Wells Fargo and Stagecoach on behalf of the Equity Index, Asset Allocation, Index Allocation, International Equity and U.S. Government Allocation Funds dated June 1, 1997, as amended July 28, 1998. Distribution Plan of Stagecoach (permitting reimbursement only) dated July 28, 1998. Distribution Plan of Stagecoach (permitting compensation and reimbursement) dated July 28, 1998. Distribution Plan (defensive) of Stagecoach dated July 28, 1998. Multiclass (Rule 18f-3) Plan of Stagecoach dated May 1, 1995, as amended July 28, 1998. Shareholder Servicing Plan (and Form of Shareholder Servicing Agreement) for Stagecoach dated April 30, 1998. The following agreements shall be Material Agreements for Funds Trust: [Agreements to be inserted] B-24 SCHEDULE C Liabilities of Stagecoach: Liabilities of Target Funds: Liabilities of Funds Trust: Liabilities of Acquiring Funds: B-25 SCHEDULE D I. Claims, actions, suits, investigations or proceedings pending or threatened against Stagecoach or any Target Fund or its Assets or businesses: [VARIABLE RATE GOVERNMENT FUND OPT-OUTS CLAIM?] II. Orders, decrees or judgments to which Stagecoach or a Target Fund is a party that adversely affect, or are reasonably likely to adversely affect, Stagecoach's or the Target Fund's financial condition, results of operations, business, properties or Assets or ability to consummate the transactions contemplated by the Plan: NONE. B-26 SCHEDULE E FORM OF LIABILITY ASSUMPTION INSTRUMENT ACKNOWLEDGEMENT OF RECEIPT OF ASSETS AND STATEMENT OF ASSUMPTION OF LIABILITIES For purposes of this document, the terms "ASSETS" and "LIABILITIES" shall have the meanings given them in the Agreement and Plan of Reorganization dated March 25, 1999 by and between Wells Fargo Funds Trust ("FUNDS TRUST"), for itself and on behalf of certain of its series, and Stagecoach Funds, Inc. ("STAGECOACH"), for itself and on behalf of certain of its series. Funds Trust, on behalf of (the "FUND"), acknowledges receipt, as of [p.m.], Eastern time, on September , 1999 (the "EFFECTIVE TIME"), of the Assets [of][attributable to] (the "TARGET"). In addition, Funds Trust, on behalf of the Portfolio, assumes, as of the Effective Time, all the Liabilities of the Target at the Effective Time. WELLS FARGO FUNDS TRUST By: -------------------------------------- Name: Title: B-27 NORWEST ADVANTAGE FUNDS FORM OF AGREEMENT AND PLAN OF REORGANIZATION MARCH 25, 1999 B-28 This AGREEMENT AND PLAN OF REORGANIZATION (the "PLAN") is made as of this 25th day of March, 1999, by and between Wells Fargo Funds Trust ("NEWTRUST"), a Delaware business trust, for itself and on behalf of its series listed in the Acquiring Funds column below (each an "ACQUIRING FUND") and Norwest Advantage Funds ("NORWEST TRUST"), a Delaware business trust, for itself and on behalf of its series listed in the Target Funds column below (each a "TARGET FUND"). ACQUIRING FUNDS TARGET FUNDS - -------------------------------------------------------- -------------------------------------------------------- Diversified Equity Fund Diversified Equity Fund Disciplined Growth Fund Performa Disciplined Growth Fund Diversified Small Cap Fund Diversified Small Cap Fund Growth Equity Fund Growth Equity Fund Growth Fund Valugrowth Stock Fund Small Cap Fund Small Company Stock Fund Income Equity Fund Income Equity Fund Index Fund Index Fund International Fund International Fund Large Company Growth Fund Large Company Growth Fund Small Cap Opportunities Fund Small Cap Opportunities Fund Small Cap Value Fund Performa Small Cap Value Fund Small Company Growth Fund Small Company Growth Fund Wealthbuilder II Growth Portfolio Wealthbuilder II Growth Portfolio Wealthbuilder II Growth and Income Portfolio Wealthbuilder II Growth and Income Portfolio Aggressive Balanced-Equity Fund Aggressive Balanced-Equity Fund Growth Balanced Fund Growth Balanced Fund Moderate Balanced Fund Moderate Balanced Fund Wealthbuilder II Growth Balanced Portfolio Wealthbuilder II Growth Balanced Portfolio Diversified Bond Fund Diversified Bond Fund Limited-Term Government Income Fund Limited-Term Government Income Fund Intermediate Government Income Fund Intermediate Government Income Fund Stable Income Fund Stable Income Fund Income Plus Fund Strategic Income Fund Income Fund Income Fund Income Fund Performa Strategic Value Bond Fund Income Fund Total Return Bond Fund Tax-Free Income Fund Tax-Free Income Fund Colorado Tax-Free Fund Colorado Tax-Free Fund Limited Term Tax-Free Fund Limited Term Tax-Free Fund Minnesota Intermediate Tax-Free Fund Minnesota Intermediate Tax-Free Fund Minnesota Tax-Free Fund Minnesota Tax-Free Fund Money Market Fund Investor Shares and Exchange Shares of Ready Cash Investment Fund Prime Investment Money Market Fund Public Entities Shares of Ready Cash Investment Fund National Tax-Free Money Market Fund (Class A) Investor Shares of Municipal Money Market Fund National Tax-Free Institutional Money Market Fund Institutional Shares of Municipal Money Market Fund Treasury Plus Money Market Fund Treasury Plus Fund 100% Treasury Money Market Fund Treasury Fund Government Money Market Fund U.S. Government Fund Cash Investment Money Market Fund Cash Investment Fund WHEREAS, Newtrust and Norwest Trust are open-end management investment companies registered with the Securities and Exchange Commission (the "SEC") under the Investment Company Act of 1940, as amended (the "1940 ACT"); WHEREAS, the parties desire that each Acquiring Fund acquire the assets and assume the liabilities of the Target Fund or, as appropriate, attributable to the class or classes of shares of the Target Fund listed opposite the Acquiring Fund ("CORRESPONDING TARGET") in exchange for shares of equal value of the B-29 Acquiring Fund and the distribution of the shares of the Acquiring Fund to the shareholders of the Corresponding Target in connection with the dissolution and liquidation of the Corresponding Target (each transaction between an Acquiring Fund and its Corresponding Target, a "REORGANIZATION"); and WHEREAS, the parties intend that each Reorganization except the Class Reorganizations (as defined below) qualify as a "REORGANIZATION,"within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "CODE"), and that each Acquiring Fund and its Corresponding Target be a "party to a reorganization," within the meaning of Section 368(b) of the Code, with respect to that Reorganization; NOW, THEREFORE, in accordance with the mutual promises described herein, the parties agree as follows: 1. DEFINITIONS. The following terms shall have the following meanings: 1933 ACT...................... The Securities Act of 1933, as amended. 1934 ACT...................... The Securities Exchange Act of 1934, as amended. ACTIVE REORGANIZATION......... Each Reorganization set forth in the Active Reorganization Table on Schedule A. ACQUIRING CLASS............... The class of an Acquiring Fund's shares that Newtrust will issue to the shareholders of the Corresponding Target Class as set forth in the Corresponding Classes Table in Schedule A. ASSETS........................ All property and assets of any kind and all interests, rights, privileges and powers of or attributable to a Target, whether or not determinable at the Target's Effective Time and wherever located. Assets include all cash, cash equivalents, securities, claims (whether absolute or contingent, Known or unknown, accrued or unaccrued or conditional or unmatured), contract rights and receivables (including dividend and interest receivables) owned by or attributable to the Target and any deferred or prepaid expense shown as an asset on the Target Fund's books and, in the case of a Target that is part of a Class Reorganization, attributable to the appropriate class or classes of Target Fund shares. ASSETS LIST................... A list of securities and other Assets and Known Liabilities of or attributable to a Target and, if the Target invests in one or more Portfolios, lists of the securities and other Assets and Known Liabilities of those Portfolios, each as of the date provided to Newtrust. CLASS REORGANIZATION.......... Each Reorganization set forth in the Class Reorganization Table on Schedule A. CLOSING DATE.................. [September 18, 1999 for each Active Reorganization and the Reorganization of Public Entities Shares of Ready Cash Investment Fund and Prime Investment Money Market Fund and September 19, 1999 for each Shell Reorganization other than the Reorganization of Public Entities Shares of Ready Cash Investment Fund and Prime Investment Money Market Fund], or such other date as the parties may agree to in writing with respect to a Reorganization. B-30 CORRESPONDING TARGET CLASS.... The Target share class set forth opposite an Acquiring Class in the Corresponding Classes Table on Schedule A. CORE TRUST.................... Core Trust (Delaware), a Delaware business trust. EFFECTIVE TIME................ The business day following the Closing Date of a Reorganization, or such other date as the parties may agree to in writing. FUND.......................... An Acquiring Fund or a Target Fund. HSR ACT....................... The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. KNOW, KNOWN OR KNOWLEDGE...... Known after reasonable inquiry. LIABILITIES................... All liabilities of or attributable to a Target existing at Target's Effective Time , whether Known or unknown, accrued or unaccrued, absolute or contingent or conditional or unmatured. N-14 REGISTRATION STATEMENT... The Registration Statement of Newtrust on Form N-14 under the 1940 Act that will register the shares of the Acquiring Funds to be issued in the Active Reorganizations and will include the proxy materials necessary for the shareholders of the Corresponding Targets to approve the Active Reorganizations. MATERIAL AGREEMENTS........... The agreements set forth in Schedule B. PORTFOLIO..................... A series of Core Trust, Schroder Core or Wells Core. SCHEDULE 14A PROXY The proxy materials of Norwest Trust on Schedule 14A under STATEMENT.................... the 1934 Act that will seek approval of the Shell Reorganizations by shareholders of the appropriate Target Funds. SCHEDULE A.................... Schedule A to this Plan. SCHEDULE B.................... Schedule B to this Plan. SCHEDULE C.................... Schedule C to this Plan. SCHEDULE D.................... Schedule D to this Plan. SCHEDULE E.................... Schedule E to this Plan. SCHEDULE F.................... Schedule F to this Plan. SCHRODER CORE................. Schroder Capital Funds, a Delaware business trust. SHELL REORGANIZATION.......... Each Reorganization set forth in the Shell Reorganization Table on Schedule A. TARGET........................ The Target Fund or the class or classes of the Target Fund whose Assets and Liabilities an Acquiring Fund will acquire. TARGET FINANCIAL STATEMENTS... The audited financial statements of each Target Fund for its most recently completed fiscal year and, if applicable, the unaudited financial statements of each Target Fund for its most recently completed semi-annual period. B-31 TRANSFER DOCUMENTS............ Such bills of sale, assignments, certificates and other instruments of transfer as Newtrust deems desirable to transfer to an Acquiring Fund all right and title to and interest in the Corresponding Target's Assets. VALUATION TIME................ The time on a Reorganization's Closing Date, or such other date as the parties may agree to in writing, that Newtrust determines the net asset value of the shares of the Acquiring Fund and Norwest Trust determines the net value of the Assets of or attributable to the Corresponding Target. Unless otherwise agreed to in writing, the Valuation Time of a Reorganization shall be at the time of day then set forth in the Acquiring Portfolio's and Target Portfolio's Registration Statement on Form N-1A as the time of day at which net asset value is calculated. WELLS CORE.................... Wells Fargo Core Trust, a Delaware business trust. 2. REGULATORY FILINGS AND SHAREHOLDER ACTION. (a) Newtrust shall promptly prepare and file the N-14 Registration Statement with the SEC. Newtrust also shall make any appropriate filings including, without limitation, filings: (i) with state or foreign securities regulatory authorities or (ii) under the HSR Act. (b) Norwest Trust shall promptly prepare and file the Schedule 14A Proxy Statement with the SEC. Norwest Trust also shall make any appropriate filings, including, without limitation, filings under the HSR Act. (c) The parties shall seek an order of the SEC, if appropriate, providing them with any necessary relief from Section 17 of the 1940 Act to permit them to consummate the transactions contemplated by this Plan. (d) As soon as practicable after the effective dates of the N-14 Registration Statement and Schedule 14A Proxy Statement, Norwest Trust shall hold Target Fund shareholder meetings to consider and approve this Plan, the Reorganizations and such other matters as the Board of Trustees of Norwest Trust may determine. 3. REDEMPTION FROM PORTFOLIOS. Norwest Trust shall redeem the interests of Small Company Stock Fund, Small Cap Opportunities Fund, Total Return Bond Fund, Performa Strategic Value Bond Fund, Ready Cash Investment Fund and Cash Investment Fund in Portfolios at or before the applicable Closing Dates. 4. TRANSFER OF TARGET ASSETS. Norwest Trust and Newtrust shall take the following steps with respect to each Reorganization: (a) On or prior to the Closing Date, Norwest Trust shall endeavor to pay or make reasonable provision to pay out of the Target's Assets all of the Liabilities, expenses, costs and charges of or attributable to the Target that are Known to Norwest Trust and that are due and payable as of the Closing Date. (b) At the Effective Time, Norwest Trust shall assign, transfer, deliver and convey all of the Target's Assets to the Acquiring Fund, subject to all of the Target's Liabilities. Newtrust shall then accept the Target's Assets and assume the Target's Liabilities such that at and after the Effective Time (i) all of the Target's Assets at or after the Effective Time shall become and be the Assets of the Acquiring Fund and (ii) all of the Target's Liabilities at the Effective Time shall attach to the Acquiring Fund, enforceable against the Acquiring Fund to the same extent as if initially incurred by the Acquiring Fund. B-32 (c) Within a reasonable time prior to the Closing Date, Norwest Trust shall provide the Target's Assets List to Newtrust. The parties agree that the Target Fund or any Portfolio in which the Target Fund invests may sell any asset on the Assets List prior to the Target's Effective Time. After Norwest Trust provides the Assets List, the Target Fund will not, and Norwest Trust will request Core Trust or Schroder Core, as appropriate, to ensure that any Portfolio or Portfolios in which the Target Fund invests do not, acquire any additional securities or permit to exist any encumbrances, rights, restrictions or claims not reflected on the Assets List, without the prior written approval of Newtrust. Within a reasonable time after receipt of the Assets List and prior to the Closing Date, Newtrust will advise Norwest Trust in writing of any investments shown on the Assets List that Newtrust has determined to be inconsistent with the investment objective, policies and restrictions of the Acquiring Fund. Norwest Trust will dispose of, or, if necessary, will request Core Trust or Schroder Core, as appropriate, to dispose of, any such securities prior to the Closing Date to the extent practicable and consistent with applicable legal requirements, including the Target Fund's or any Portfolio's investment objectives, policies and restrictions. In addition, if Newtrust determines that, as a result of the Reorganization, the Acquiring Fund would own an aggregate amount of an investment that would exceed a percentage limitation applicable to the Acquiring Fund, Newtrust will advise Norwest Trust in writing of any such limitation and Norwest Trust shall dispose of, or request Core Trust or Schroder Core to dispose of, a sufficient amount of such investment as may be necessary to avoid the limitation as of the Effective Time, to the extent practicable and consistent with applicable legal requirements, including the Target Fund's or any Portfolio's investment objectives, policies and restrictions. (d) Norwest Trust shall assign, transfer, deliver and convey the Target's Assets to the Acquiring Fund at the Reorganization's Effective Time on the following basis: (1) In exchange for the transfer of the Assets, Newtrust shall simultaneously issue and deliver to the Target Fund full and fractional shares of beneficial interest of each Acquiring Class. Newtrust shall determine the number of shares of each Acquiring Class to issue by dividing the net value of the Assets attributable to the Corresponding Target Class by the net asset value of one Acquiring Class share. Based on this calculation, Newtrust shall issue shares of beneficial interest of each Acquiring Class with an aggregate net asset value equal to the net value of the Assets of the Corresponding Target Class. (2) The parties shall determine the net asset value of the Acquiring Fund shares to be delivered, and the net value of the Assets to be conveyed, as of the Valuation Time substantially in accordance with Newtrust's current valuation procedures. The parties shall make all computations to the fourth decimal place or such other decimal place as the parties may agree to in writing. (3) Norwest Trust shall transfer the Assets with good and marketable title to the custodian for the account of the Acquiring Fund. Norwest Trust shall transfer all cash in the form of immediately available funds payable to the order of the Newtrust's custodian for the account of the Acquiring Fund. Norwest Trust shall transfer any Assets that were not transferred to Newtrust's custodian at the Effective Time to Newtrust's custodian at the earliest practicable date thereafter. 5. DISSOLUTION AND LIQUIDATION OF TARGET FUNDS, REGISTRATION OF SHARES AND ACCESS TO RECORDS. Norwest Trust and Newtrust also shall take the following steps for each Reorganization: (a) At or as soon as reasonably practical after the Effective Time, Norwest Trust shall dissolve and liquidate the Target by transferring to shareholders of record of each Corresponding Target Class full and fractional shares of beneficial interest of the Acquiring Class equal in value to the shares of the Corresponding Target Class held by the shareholder. Each shareholder also shall have the right to receive any unpaid dividends or other distributions that Norwest Trust declared with respect to the shareholder's Corresponding Target Class shares before the Effective Time. Newtrust shall record on its books the ownership by the shareholders of the respective Acquiring Fund shares; Norwest Trust shall simultaneously redeem and cancel on its books all of the issued and outstanding shares of each Corresponding Target Class. Newtrust shall issue certificates representing the Acquiring Fund shares in accordance with the then B-33 current Acquiring Fund prospectuses; provided, however, that Newtrust shall not issue certificates representing Acquiring Fund shares to replace certificates representing Target Fund shares unless the Target Fund share certificates are first surrendered to Newtrust. If all classes of a Target Fund have been liquidated at the Reorganization's Effective Time, Norwest Trust shall wind up the affairs of the Target Fund and shall take all steps as are necessary and proper to terminate the Target Fund as soon as is reasonably possible after the Effective Time and in accordance with all applicable laws and regulations. The winding-up of the affairs of the Target Fund shall not cause the affairs of any other Target Fund to wind-up. (b) If a former Target shareholder requests a change in the registration of the shareholder's Acquiring Fund shares to a person other than the shareholder, Newtrust shall require the shareholder to (i) furnish Newtrust an instrument of transfer properly endorsed, accompanied by any required signature guarantees and otherwise in proper form for transfer; (ii) if any of the shares are outstanding in certificated form, deliver to Newtrust the certificate representing such shares; and (iii) pay to the Acquiring Fund any transfer or other taxes required by reason of such registration or establish to the reasonable satisfaction of Newtrust that such tax has been paid or does not apply. (c) At and after the Closing Date, Norwest Trust shall provide Newtrust and its transfer agent with immediate access to: (i) all records containing the names, addresses and taxpayer identification numbers of all of the Target shareholders and the number and percentage ownership of the outstanding shares of the Corresponding Target Classes owned by each shareholder as of the Effective Time and (ii) all original documentation (including all applicable Internal Revenue Service forms, certificates, certifications and correspondence) relating to the Target shareholders' taxpayer identification numbers and their liability for or exemption from back-up withholding. Norwest Trust shall preserve and maintain, or shall direct its service providers to preserve and maintain, records with respect to the Target as required by Section 31 of and Rules 31a-1 and 31a-2 under the 1940 Act. 6. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF NORWEST TRUST. Norwest Trust, on behalf of itself and, as appropriate, the Target Funds, represents and warrants to, and agrees with, Newtrust as follows: (a) Norwest Trust is a business trust dulycreated, validly existing and in good standing under the laws of the State of Delaware. The Board of Trustees of Norwest Trust duly established and designated each Target Fund as a series of Norwest Trust and each class of a Target Fund as a class of the Target Fund. Norwest Trust is registered with the SEC as an open-end management investment company under the 1940 Act, and such registration is in full force and effect. (b) Norwest Trust has the power and all necessary federal, state and local qualifications and authorizations to own all of its properties and Assets, to carry on its business as now being conducted and described in its currently effective Registration Statement on Form N-1A, to enter into this Plan and to consummate the transactions contemplated herein. (c) The Board of Trustees of Norwest Trust has duly authorized the execution and delivery of the Plan and the transactions contemplated herein. Duly authorized officers of Norwest Trust have executed and delivered the Plan. The Plan represents a valid and binding contract, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium, and other similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. The execution and delivery of this Plan does not, and, subject to the approval of shareholders referred to in Section 2, the consummation of the transactions contemplated by this Plan will not, violate Norwest Trust's Amended and Restated Trust Instrument or By-Laws or any Material Agreement. Except for the approval of Target Fund shareholders, Norwest Trust does not need to take any other action to authorize its officers to effectuate this Plan and the transactions contemplated herein. B-34 (d) Each Target Fund has qualified as a regulated investment company under Part I of Subchapter M of Subtitle A, Chapter 1, of the Code, in respect of each taxable year since the commencement of its operations and qualifies and shall continue to qualify as a regulated investment company for its taxable year ending upon its liquidation. (e) The materials included within the N-14 Registration Statement when filed with the SEC, when Part A of the N-14 Registration Statement is distributed to shareholders, at the time of the Target shareholder meetings for the Active Reorganizations and at the Effective Time of each Active Reorganization, insofar as they relate to Norwest Trust, the Target and any Portfolio or Portfolios in which the Target Fund invests: (i) shall comply in all material respects with the applicable provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules and regulations thereunder and state securities laws and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein not misleading. (f) The materials included within the Schedule 14A Proxy Statement when filed with the SEC, when distributed to shareholders and at the time of the Target shareholder meetings for the Shell Reorganizations, insofar as they relate to Norwest Trust, the Target and any Portfolio or Portfolios in which the Target Fund invests: (i) shall comply in all material respects with the applicable provisions of the 1934 Act and the 1940 Act, the rules and regulations thereunder and state securities laws and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein not misleading. (g) Norwest Trust has duly authorized and validly issued all of the issued and outstanding shares of each Target Fund and all of the shares are validly outstanding, fully paid and non-assessable, and were offered for sale and sold in conformity with the registration requirements of all applicable federal and state securities laws. There are no outstanding options, warrants or other rights to subscribe for or purchase any Target Fund shares, nor are there any securities convertible into Target Fund shares. (h) Norwest Trust shall operate the business of each Target Fund in the ordinary course between the date hereof and the Fund's Effective Time or Effective Times, it being agreed that such ordinary course of business will include the transactions described in Subsection 4(c) and the declaration and payment of customary dividends and distributions and any other dividends and distributions deemed advisable in anticipation of the Fund's Reorganization or Reorganizations. (i) At a Target's Effective Time, the relevant Target Fund will have good and marketable title to the Target's Assets and full right, power and authority to assign, transfer, deliver and convey such Assets. (j) The Target Financial Statements, copies of which have been previously delivered to Newtrust, fairly present the financial positions of each Target Fund as of the Fund's most recent fiscal year-end and the results of the Fund's operations and changes in the Fund's net Assets for the periods indicated. The Target Financial Statements are in accordance with generally accepted accounting principles consistently applied. (k) To the Knowledge of Norwest Trust, no Target Fund has any Liabilities, whether or not determined or determinable, other than the Liabilities disclosed or provided for in the Target Financial Statements, Liabilities incurred in the ordinary course of business subsequent to the date of the Target Financial Statements and Liabilities set forth on Schedule C. (l) Other than the claims, actions, suits, investigations or proceedings set forth on Schedule D, Norwest Trust does not Know of any claims, actions, suits, investigations or proceedings of any type pending or threatened against Norwest Trust or any Target Fund or its Assets or businesses. Norwest Trust does not Know of any facts that it currently has reason to believe are likely to form the basis for the institution of any such claim, action, suit, investigation or proceeding against Norwest Trust or any Target Fund. For purposes of this provision, investment underperformance or negative investment performance shall not be deemed to constitute such facts, provided all required performance disclosures have been B-35 made. Other than the orders, decrees or judgments set forth on Schedule D, neither Norwest Trust nor any Target Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body that adversely affects, or is reasonably likely to adversely affect, its financial condition, results of operations, business, properties or Assets or its ability to consummate the transactions contemplated by the Plan. (m) Except for contracts, agreements, franchises, licenses or permits entered into or granted in the ordinary course of its business, in each case under which no material default exists, Norwest Trust is not a party to or subject to any material contract, debt instrument, employee benefit plan, lease, franchise, license or permit of any kind or nature whatsoever on behalf of any Target Fund. (n) Norwest Trust has filed the federal income tax returns of each Target Fund, copies of which have been previously delivered to Newtrust, for all taxable years to and including the Fund's most recent taxable year, and has paid all taxes payable pursuant to such returns. No such return is currently under audit and no assessment has been asserted with respect to such returns. Norwest Trust will file the federal income tax returns of each Target Fund for its next taxable year on or before their due date, as the same may be properly extended. (o) Since the date of the Target Financial Statements, there has been no material adverse change in the financial condition, results of operations, business, properties or Assets of any Target Fund. For all purposes under this Plan, investment underperformance, negative investment performance and/or investor redemptions shall not be considered material adverse changes, provided all required performance disclosures have been made. (p) Within a reasonable time prior to the redemption provided for in Section 3, Norwest Trust shall have entered into an Interest Redemption Agreement in the form set forth in Schedule E on behalf of Small Company Stock Fund, Small Cap Opportunities Fund, Total Return Bond Fund, Performa Strategic Value Bond Fund, Ready Cash Investment Fund and Cash Investment Fund. 7. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF NEWTRUST. Newtrust, on behalf of itself and, as appropriate, the Acquiring Funds, represents and warrants to, and agrees with Norwest Trust as follows: (a) Newtrust is a business trust duly created, validly existing and in good standing under the laws of the State of Delaware. The Board of Trustees of Newtrust duly established and designated each Acquiring Fund as a series of Newtrust and each Acquiring Class as a class of the Acquiring Fund. As of the Closing Date, Newtrust will be registered with the SEC as an open-end management investment company under the 1940 Act. (b) Newtrust has the power and all necessary federal, state and local qualifications and authorizations to own all of its properties and Assets, to carry on its business as described in its Registration Statement on Form N-1A as filed with the SEC, to enter into this Plan and to consummate the transactions contemplated herein. (c) The Board of Trustees of Newtrust has duly authorized execution and delivery of the Plan and the transactions contemplated herein. Duly authorized officers of Newtrust have executed and delivered the Plan. The Plan represents a valid and binding contract, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium and other similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. The execution and delivery of this Plan does not, and the consummation of the transactions contemplated by this Plan will not, violate the Declaration of Trust of Newtrust or any Material Agreement. Newtrust does not need to take any other action to authorize its officers to effectuate the Plan and the transactions contemplated herein. (d) Each Acquiring Fund shall qualify as a regulated investment company under Part I of Subchapter M of Subtitle A, Chapter 1, of the Code in respect of its current taxable year. B-36 (e) The N-14 Registration Statement, when filed with the SEC, when Part A of the N-14 Registration Statement is distributed to shareholders, at the time of the Target shareholder meetings for the Active Reorganizations and at the Effective Time of each Active Reorganization, insofar as it relates to Stagecoach Funds, Inc., Stagecoach Trust, any series of Stagecoach Funds, Inc. or Stagecoach Trust, Newtrust, the Acquiring Funds, any Portfolios in which the Acquiring Funds will invest or the Acquiring Classes: (i) shall comply in all material respects with the applicable provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules and regulations thereunder and state securities laws and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein not misleading. (f) The Schedule 14A Proxy Statement, when filed with the SEC, when distributed to shareholders and at the time of the Target shareholder meetings for the Shell Reorganizations, insofar as it relates to Stagecoach Funds, Inc., Stagecoach Trust, any series of Stagecoach Funds, Inc. or Stagecoach Trust, Newtrust, the Acquiring Funds, any Portfolios in which the Acquiring Funds will invest or the Acquiring Classes: (i) shall comply in all material respects with the applicable provisions of the 1934 Act and the 1940 Act, the rules and regulations thereunder and state securities laws and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein not misleading. (g) There shall be no issued and outstanding shares of any Acquiring Fund prior to the Fund's Closing Date other than those issued to in order to commence the operations of Newtrust. Newtrust shall duly authorize the Acquiring Fund shares to be issued and delivered to each Corresponding Target as of the Target's Effective Time. When issued and delivered, the Acquiring Fund shares shall be duly and validly issued, fully paid and non-assessable, and no shareholder of any Acquiring Fund shall have any preemptive right of subscription or purchase in respect of them. There are no outstanding options, warrants or other rights to subscribe for or purchase any Acquiring Fund shares, nor are there any securities convertible into Acquiring Fund shares. (h) Newtrust has not commenced the operations of any Acquiring Fund. Newtrust shall not commence the operations of any Acquiring Fund prior to the Fund's Effective Time. (i) No Acquiring Fund has any Liabilities, whether or not determined or determinable, other than the Liabilities set forth on Schedule C. (j) Newtrust does not Know of any claims, actions, suits, investigations or proceedings of any type pending or threatened against Newtrust or any Acquiring Fund or its Assets or businesses. There are no facts that Newtrust currently has reason to believe are likely to form the basis for the institution of any such claim, action, suit, investigation or proceeding against Newtrust or any Acquiring Fund. Neither Newtrust nor any Acquiring Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body that adversely affects, or is reasonably likely to adversely affect, its financial condition, results of operations, business, properties or Assets or its ability to consummate the transactions contemplated herein. (k) Except for contracts, agreements, franchises, licenses or permits entered into or granted in the ordinary course of its business, in each case under which no material default exists, Newtrust is not a party to or subject to any material contract, debt instrument, employee benefit plan, lease, franchise, license or permit of any kind or nature whatsoever on behalf of any Acquiring Fund. (l) Newtrust shall file the federal income tax returns of each Acquiring Fund for the Fund's current taxable year on or before their due date, as the same may be properly extended. (m) Since [March 10, 1999], there has been no material adverse change in the financial condition, business, properties or Assets of any Acquiring Fund. B-37 8. CONDITIONS TO NORWEST TRUST OBLIGATIONS. The obligations of Norwest Trust with respect to each Reorganization shall be subject to the following conditions precedent: (a) The Target's shareholders shall have approved the Reorganization in the manner required by the Amended and Restated Trust Instrument of Norwest Trust and applicable law. If Target shareholders fail to approve the Reorganization, that failure shall release Norwest Trust of its obligations under this Plan only with respect to that Reorganization and not any other Reorganization. (b) All representations and warranties of Newtrust made in this Plan that apply to the Reorganization shall be true and correct in all material respects as if made at and as of the Valuation Time and the Effective Time. (c) Newtrust shall have delivered to Norwest Trust a certificate dated as of the Closing Date and executed in its name by its President or Vice President and its Treasurer or Assistant Treasurer, in a form reasonably satisfactory to Norwest Trust, stating that the representations and warranties of Newtrust in this Plan that apply to the Reorganization are true and correct at and as of the Valuation Time and that it has approved the Target's Assets as being consistent with its investment objectives, policies and restrictions and that the Target's Assets may otherwise be lawfully acquired by the Acquiring Fund. (d) Norwest Trust shall have received an opinion of Morrison & Foerster LLP, as counsel to Newtrust, in form and substance reasonably satisfactory to Norwest Trust and dated as of the Closing Date, substantially to the effect that: (1) Newtrust is a business trust duly created, validly existing and in good standing under the laws of the State of Delaware and is an open-end, management investment company registered under the 1940 Act; (2) the shares of the Acquiring Fund to be delivered as provided for by this Plan are duly authorized and upon delivery will be validly issued, fully paid and non-assessable by Newtrust, provided that the payments for transfer taxes by shareholders provided for in Section 5(b) of this Plan shall not be deemed to render the shares issued assessable; (3) the execution and delivery of this Plan did not, and the consummation of the Reorganization will not, violate the Declaration of Trust of Newtrust or any Material Agreement to which Newtrust is a party or by which it is bound; and (4) to the Knowledge of such counsel, no consent, approval, authorization or order of any court or governmental authority is required for the consummation by Newtrust of the Reorganization, except those that have been obtained under the 1933 Act, the 1934 Act, the 1940 Act and the rules and regulations under those Acts or that may be required under state securities laws, the HSR Act or subsequent to the Effective Time or when the failure to obtain the consent, approval, authorization or order would not have a material adverse effect on the operation of the Acquiring Fund. In rendering such opinion, such counsel may (i) rely on the opinion of other counsel to the extent set forth in such opinion, (ii) make assumptions regarding the authenticity, genuineness and/or conformity of documents and copies thereof without independent verification thereof, (iii) limit such opinion to applicable federal and state law, (iv) define the word "knowledge" and related terms to mean the knowledge of attorneys then with such firm who have devoted substantive attention to matters directly related to this Plan and (v) rely on certificates of officers or trustees of Newtrust. (e) Norwest Trust shall have received an opinion of Richards, Layton & Finger, as special counsel to Newtrust, in form and substance reasonably satisfactory to Norwest Trust and dated as of the Closing Date, substantially to the effect that this Plan has been duly authorized, executed and delivered by Newtrust, and, assuming due authorization, execution and delivery of this Plan by Norwest Trust on behalf of the Target, represents a legal, valid and binding contract, enforceable in accordance with its terms, subject to the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance and transfer and similar laws relating to or B-38 affecting creditors' rights generally and court decisions with respect thereto, and further subject to the application of equitable principles in any proceeding whether at law or in equity or with respect to the enforcement of provisions of the Plan and the effect of judicial decisions which have held that certain provisions are unenforceable when their enforcement would violate an implied covenant of good faith and fair dealing or would be commercially unreasonable or when default under the Plan is not material. In rendering such opinion, such counsel may (i) make assumptions regarding the authenticity, genuineness and/or conformity of documents and copies thereof without independent verification thereof, (ii) limit such opinion to applicable federal and state law, and (iii) rely on certificates of officers or trustees of Newtrust. (f) Norwest Trust shall have received an opinion of KPMG Peat Marwick LLP addressed to Norwest Trust and Newtrust in form and substance reasonably satisfactory to them, and dated as of the Closing Date, with respect to the tax matters specified in Subsection 9(g) or 9(h), as applicable. (g) Norwest Trust shall have received (i) a memorandum addressed to Norwest Trust and Newtrust, in form and substance reasonably satisfactory to them, prepared by Morrison & Foerster LLP, or another person agreed to in writing by the parties, concerning compliance with each relevant jurisdiction's securities laws in connection with Newtrust's issuance of Acquiring Fund shares, and (ii) assurance reasonably satisfactory to it that all necessary steps have been taken under all relevant jurisdiction's securities laws to consummate the Reorganization. (h) The N-14 Registration Statement shall have become effective under the 1933 Act or the Schedule 14A Proxy Statement shall have become effective for purposes of the 1940 Act, as appropriate, as to the Acquiring Fund's shares and, if the Reorganization is an Active Reorganization, the SEC shall not have instituted or, to the Knowledge of Newtrust, contemplated instituting, any stop order suspending the effectiveness of the N-14 Registration Statement. (i) No action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, the Reorganization. (j) The SEC shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the Reorganization under Section 25(c) of the 1940 Act. (k) Newtrust shall have performed and complied in all material respects with each of its agreements and covenants required by this Plan to be performed or complied with by it prior to or at the Reorganization's Valuation Time and Effective Time. (l) Norwest Trust shall have received from Newtrust a duly executed instrument whereby the Acquiring Fund assumes all of the Liabilities of or attributable to the Target in the form set forth on Schedule F. (m) If the Reorganization is an Active Reorganization, Norwest Trust shall have received a letter dated as of the Closing Date from KPMG Peat Marwick LLP addressed to Norwest Trust and Newtrust in form and substance reasonably satisfactory to them to the effect that on the basis of limited procedures as agreed to by Norwest Trust and Newtrust and described in such letter (but not an examination in accordance with generally accepted auditing standards): (1) nothing came to their attention that caused them to believe that the relevant unaudited pro forma financial statements included in the N-14 Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X or that the relevant pro forma adjustments have not properly been applied to the historical amounts in the compilation of those amounts; B-39 (2) the data used in the calculation of the current and pro forma expense ratios of the Target Fund and the Acquiring Fund appearing in the N-14 Registration Statement, including the proxy materials, agree with the underlying accounting records of the Target Fund and the Acquiring Fund, as appropriate, or with written estimates provided by officers of Norwest Trust or Newtrust, as appropriate, having responsibility for financial and reporting matters and were found to be mathematically correct; and (3) the information relating to the Acquiring Fund and the Target Fund appearing in the N-14 Registration Statement that is expressed in dollars or percentages of dollars has been obtained from the accounting records of the Acquiring Fund or the Target Fund, as appropriate, or from schedules prepared by officers of Norwest Trust or Newtrust, as appropriate, having responsibility for financial and reporting matters and such information is in agreement with such records or schedules or with computations made therefrom. (n) If the Reorganization is a Shell Reorganization, Norwest Trust shall have received a letter dated as of the Closing Date from KPMG Peat Marwick LLP addressed to Norwest Trust and Newtrust in form and substance reasonably satisfactory to them to the effect that on the basis of limited procedures as agreed to by Norwest Trust and Newtrust and described in such letter (but not an examination in accordance with generally accepted auditing standards): (1) the data used in the calculation of any expense ratios of the Target Fund and the Acquiring Fund appearing in the Schedule 14A Proxy Statement agree with the underlying accounting records of the Target Fund and the Acquiring Fund, as appropriate, or with written estimates provided by officers of Norwest Trust or Newtrust, as appropriate, having responsibility for financial and reporting matters and were found to be mathematically correct; and (2) the information relating to the Acquiring Fund and the Target Fund appearing in the Schedule 14A Proxy Statement that is expressed in dollars or percentages of dollars has been obtained from the accounting records of the Acquiring Fund or the Target Fund, as appropriate, or from schedules prepared by officers of Norwest Trust or Newtrust, as appropriate, having responsibility for financial and reporting matters and such information is in agreement with such records or schedules or with computations made therefrom. (o) Neither party shall have terminated this Plan with respect to the Reorganization pursuant to Section 11 of this Plan. (p) The parties shall have received any necessary order of the SEC exempting the parties from the prohibitions of Section 17 of the 1940 Act or any similar relief necessary to permit the Reorganization. (q) Norwest Trust shall have received such assurances as it deems appropriate from Wells Fargo Bank, N.A. regarding payment of the expenses incurred in connection with the Reorganizations. 9. CONDITIONS TO NEWTRUST OBLIGATIONS. The obligations of Newtrust with respect to each Reorganization shall be subject to the following conditions precedent: (a) The Target's shareholders shall have approved the Reorganization in the manner required by the Amended and Restated Trust Instrument of Norwest Trust and applicable law. If Target shareholders fail to approve the Reorganization, that failure shall release Newtrust of its obligations under this Plan only with respect to that Reorganization, and not any other Reorganization. (b) Norwest Trust shall have obtained and delivered to Newtrust a statement of Assets and Liabilities of the Target Fund and of any Portfolio in which the Target Fund invests, showing the tax costs of such Assets by lot and the holding periods of suchAssets, as of the Valuation Time, certified by the Treasurer or Assistant Treasurer of Norwest Trust, Core Trust or Schroder Core, as applicable, as having been prepared in accordance with generally accepted accounting principles consistently applied. The statement of Assets and Liabilities shall indicate which Assets, if any, are or, after the Reorganization, will be subject to any B-40 restrictions, legal or contractual, on disposition and which Assets, if any, are not readily marketable. The statement of assets and liabilities also shall indicate which portion of the Assets and Liabilities of the Target Fund are attributable to the Target, if the Reorganization is a Class Reorganization. (c) Norwest Trust shall have duly executed and delivered the Target's Transfer Documents to Newtrust. (d) All representations and warranties of Norwest Trust made in this Plan that apply to the Reorganization shall be true and correct in all material respects as if made at and as of the Valuation Time and the Effective Time. (e) Norwest Trust shall have delivered to Newtrust a certificate dated as of the Closing Date and executed in its name by its President or Vice President and its Treasurer or Assistant Treasurer, in a form reasonably satisfactory to Newtrust , stating that the representations and warranties of Norwest Trust in this Plan that apply to the Reorganization are true and correct at and as of the Valuation Time. (f) Newtrust shall have received an opinion of Seward & Kissel LLP, as counsel to Norwest Trust, in form and substance reasonably satisfactory to Newtrust and dated as of the Closing Date, substantially to the effect that: (1) Norwest Trust is a business trust duly created, validly existing and in good standing under the laws of the State of Delaware and is an open-end, management investment company registered under the 1940 Act; (2) this Plan and the Target's Transfer Documents have been duly authorized, executed and delivered by Norwest Trust and, assuming due authorization, execution and delivery of this Plan by Newtrust on behalf of the Acquiring Fund, represent legal, valid and binding contracts, enforceable in accordance with their terms, subject to the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance and transfer and similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto, and further subject to the application of equitable principles in any proceeding, whether at law or in equity or with respect to the enforcement of provisions of the Plan and the effect of judicial decisions which have held that certain provisions are unenforceable when their enforcement would violate an implied covenant of good faith and fair dealing or would be commercially unreasonable or when default under the Plan is not material; (3) the execution and delivery of this Plan did not, and the consummation of the Reorganization will not, violate the Amended and Restated Trust Instrument or By-Laws of Norwest Trust or any Material Agreement to which Norwest Trust is a party or by which it is bound; (4) the only Target shareholder approval required with respect to the Reorganization is the approval of the Reorganization by the shareholders of the Target; and (5) to the Knowledge of such counsel, no consent, approval, authorization or order of any court or governmental authority is required for the consummation by Norwest Trust of the Reorganization, except those that have been obtained under the 1933 Act, the 1934 Act, the 1940 Act and the rules and regulations under those Acts, or that may be required under state securities laws, the HSR Act or subsequent to the Effective Time or when the failure to obtain the consent, approval, authorization or order would not have a material adverse effect on the operation of the Target Fund. In rendering such opinion, such counsel may (i) rely on the opinion of other counsel to the extent set forth in such opinion, (ii) make assumptions regarding the authenticity, genuineness and/or conformity of documents and copies thereof without independent verification thereof, (iii) limit such opinion to applicable federal and state law, (iv) define the word "knowledge" and related terms to mean the knowledge of attorneys then with such firm who have devoted substantive attention to matters directly related to this Plan and (v) rely on certificates of officers or trustees of Norwest Trust. B-41 (g) Unless the Reorganization is a Class Reorganization, Newtrust shall have received an opinion of KPMG Peat Marwick LLP addressed to Norwest Trust and Newtrust in form and substance reasonably satisfactory to them, based upon representations made in certificates provided by Norwest Trust and Newtrust, their affiliates and/or principal shareholders and dated as of the Closing Date, substantially to the effect that, for federal income tax purposes: (1) the transfer of substantially all the assets and liabilities of the Target Fund to the Acquiring Fund in exchange solely for shares of the Acquiring Fund and the assumption by the Acquiring Fund of al the liabilities of the Target Fund and the distribution of these Acquiring Fund shares to shareholders of the Target Fund pursuant to this Plan will constitute a "reorganization" within the meaning of Section 368(a) of the Code, and each of the Funds will be a party to the reorganization within the meaning of Section 368 of the Code; (2) in accordance with Section 361 of the Code, no gain or loss shall be recognized by the Target Fund upon the transfer of substantially all of its assets to the Acquiring Fund in exchange for shares of the Acquiring Fund and the assumption by the Acquiring Fund of the liabilities of the Target Fund; (3) pursuant to Section 354 of the Code, no gain or loss will be recognized by the shareholders of the Target Fund upon the exchange of their shares in the Target Fund for shares of the corresponding Acquiring Fund (but shareholders of the Target Fund that are subject to taxation will recognize income upon the receipt of any net investment income or net capital gains of such Funds which are distributed by such Funds prior to the Funds' Reorganization); (4) in accordance with Section 358 of the Code, the basis of the Acquiring Fund shares received by the shareholders of the Target Fund will be the same as the basis of his or her Target Fund shares exchanged therefor; (5) in accordance with Section 1032 of the Code, no gain or loss will be recognized by any Acquiring Fund upon the receipt of the assets of the Target Fund in exchange for Acquiring Fund shares and the assumption by the Acquiring Fund of the liabilities of the Target Fund; (6) in accordance with Section 362 of the Code, the basis in the hands of the Acquiring Fund of the assets of the Target Fund will be the same as the basis of the assets in the hands of the Target Fund immediately prior to the transfer; (7) in accordance with Section 1223(1) of the Code, a Target Fund shareholder's holding period for his or her Acquiring Fund shares will be determined by including the period for which he or she held the Target Fund shares exchanged therefor, provided that he or she held such shares as capital assets; (8) in accordance with Section 1223(2) of the Code, the holding periods of the Target Fund assets in the hands of the Acquiring Fund will include the periods during which the assets were held by the Target Fund; (9) each Acquiring Fund will succeed to and take into account the earnings and profits, or deficit in earnings and profits, of the Target Fund immediately prior to the Reorganization pursuant to Section 381 of the Code; (10) each Acquiring Fund will succeed to and take into account any Section 855(a) dividend of the Target Fund for such Fund's last taxable taxable year immediately prior to the Reorganization; and (11) in accordance with Section 381 of the Code, the Acquiring Fund will succeed to the capital loss carryovers, if any, of the Target Fund, but the use of such carryovers by the Acquiring Fund may be subject to limitation under Section 383 of the Code and applicable regulations thereunder. (h) If the Reorganization is a Class Reorganization, Newtrust shall have received an opinion of KPMG Peat Marwick LLP addressed to Norwest Trust and Newtrust in form and substance reasonably B-42 satisfactory to them, based upon representations made in certificates provided by Norwest Trust and Newtrust, their affiliates and/or principal shareholders and dated as of the Closing Date, substantially to the effect that, for federal income tax purposes: [(1) the Class Reorganization will not constitute a reorganization within the meaning of Section 368(a) of the Code; (2) in accordance with Section 1032(a) of the Code, the Acquiring Fund will recognize no gain or loss as a result of the Class Reorganization; (3) the basis of the Acquiring Fund shares received by each shareholder of the Target Fund will be the fair market value of those shares as of the Valuation Time; (4) the basis of the Assets received by the Acquiring Fund will be their fair market value as of the Valuation Time; (5) a shareholder's holding period for the Acquiring Fund shares received in the Class Reorganization will begin on the day following the Effective Time; and (6) the holding period of the Acquiring Fund with respect to the Assets received in the Class Reorganization will begin on the day following the Effective Time.] (i) The Target's Assets shall include only Assets that Newtrust has determined to be in accordance with the Acquiring Fund's investment objective, policies and restrictions and shall include no Assets which the Acquiring Fund may not otherwise lawfully acquire. If the Assets include Assets that Newtrust determines not to be in accordance with the Acquiring Fund's investment objective, policies and restrictions or to be Assets which the Acquiring Fund may not otherwise lawfully acquire, that failure shall release Newtrust of its obligations under this Plan only with respect to that Reorganization and not any other Reorganization. (j) The N-14 Registration Statement shall have become effective under the 1933 Act or the Schedule 14A Proxy Statement shall have become effective for purposes of the 1940 Act, as applicable, as to the Acquiring Fund's shares and, if the Reorganization is an Active Reorganization, no stop order suspending the effectiveness of the N-14 Registration Statement shall have been instituted or, to the Knowledge of Newtrust, contemplated by the SEC. (k) No action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit or obtain damages or other relief in connection with the Reorganization. (l) The SEC shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the Reorganization under Section 25(c) of the 1940 Act. (m) Norwest Trust shall have performed and complied in all material respects with each of its agreements and covenants required by this Plan to be performed or complied with by it prior to or at the Reorganization's Valuation Time and Effective Time. (n) Newtrust shall have received a letter from KPMG Peat Marwick LLP addressed to Norwest Trust and Newtrust as described in Subsection 8(m) or 8(n), as appropriate. (o) If the Reorganization is an Active Reorganization, except to the extent prohibited by Rule 19b-1 under the 1940 Act, the Target Fund shall have declared a dividend or dividends that, together with all previous such dividends, shall have the effect of distributing to the Target shareholders substantially all investment company taxable income of or attributable to the Target earned prior to the Closing Date and substantially all of its net capital gain of or attributable to the Target realized prior to such date. B-43 (p) Neither party shall have terminated this Plan with respect to the Reorganization pursuant to Section 11 of this Plan. (q) The parties shall have received any necessary order of the SEC exempting the parties from the prohibitions of Section 17 of the 1940 Act or any similar relief necessary to permit the Reorganization. (r) Newtrust shall have received such assurances as it deems appropriate from Wells Fargo Bank, N.A. regarding payment of the expenses incurred in connection with the Reorganizations. 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of the parties hereto shall survive the completion of the transactions contemplated herein. 11. TERMINATION OF PLAN. A majority of a party's Board of Trustees may terminate this Plan with respect to any Acquiring Fund or Target, as appropriate, at any time before the applicable Effective Time if: (i) the party's conditions precedent set forth in Sections 8 or 9, as appropriate, are not satisfied or (ii) the Board of Trustees determines that the consummation of the applicable Reorganization is not in the best interests of shareholders and gives notice to the other party. The termination of this Plan with respect to an Acquiring Fund and its Corresponding Target shall not affect the survival of the Plan with respect to any other Acquiring Fund or Target. 12. GOVERNING LAW. This Plan and the transactions contemplated hereby shall be governed, construed and enforced in accordance with the laws of the State of Delaware, except to the extent preempted by federal law, without regard to other conflicts of law. 13. BROKERAGE FEES. Each party represents and warrants that there are no brokers or finders entitled to receive any payments in connection with the transactions provided for in the Plan. 14. AMENDMENTS. The parties may, by agreement in writing authorized by their respective Boards of Trustees, amend this Plan with respect to any Reorganization at any time before or after the Target's shareholders approve the Reorganization. However, after a Target's shareholders approve a Reorganization, the parties may not amend this Plan in a manner that materially alters the obligations of either party with respect to that Reorganization. The parties shall not deem this Section to preclude them from changing the Closing Date or the Effective Time of a Reorganization by mutual agreement. 15. WAIVERS. At any time prior to the Closing Date, either party may by written instrument signed by it (i) waive the effect of any inaccuracies in the representations and warranties made to it contained herein and (ii) waive compliance with any of the agreements, covenants or conditions made for its benefit contained herein. The parties agree that any waiver shall apply only to the particular inaccuracy or requirement for compliance waived, and not any other or future inaccuracy or lack of compliance. 16. INDEMNIFICATION OF TRUSTEES. Newtrust agrees that it will assume all liabilities and obligations of Norwest Trust relating to any obligation of Norwest Trust to indemnify its current and former Trustees and officers, acting in their capacities as such, to the fullest extent permitted by law and Norwest Trust's Amended and Restated Trust Instrument, as in effect as of the date of this Plan. Newtrust also agrees that all rights to indemnification and all limitations of liability existing in favor of the current and former Trustees and officers, acting in their capacities as such, under the Norwest Trust Amended and Restated Trust Instrument as in effect as of the date of this Plan shall survive the Reorganizations and shall continue in full force and effect, without any amendment thereto, and shall constitute rights which may be asserted against Newtrust, its successors and assigns. 17. COOPERATION AND FURTHER ASSURANCES. Each party will cooperate with the other in fulfilling its obligations under this Plan and will provide such information and documentation as is reasonably requested by the other in carrying out this Plan's terms. Each party will provide such further assurances concerning the performance of obligations under this Plan and the consummation of the Reorganizations as the other shall deem necessary, advisable or appropriate. B-44 18. UPDATING OF N-14 REGISTRATION STATEMENT AND SCHEDULE 14A PROXY STATEMENT. If at any time prior to the Target Fund shareholder meetings referred to in Section 2, in the case of Shell Reorganizations, or the Effective Time of a Reorganization, in the case of an Active Reorganization, a party becomes aware of any material information that is not reflected in the Schedule 14A Proxy Statement or the N-14 Registration Statement, as appropriate, the party discovering the information shall notify the other party and the parties shall cooperate in promptly preparing, filing and clearing with the SEC and, if appropriate, distributing to shareholders appropriate disclosure with respect to the information. 19. LIMITATION ON LIABILITIES. The obligations of Norwest Trust, Newtrust and each Fund shall not bind any of the Trustees, shareholders, nominees, officers, agents, or employees of Norwest Trust or Newtrust personally, but shall bind only the Assets and property of the Acquiring Funds and Target Funds. The execution and delivery of this Plan by the parties' officers shall not be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the Assets and the property of the Acquiring Funds or Target Funds, as appropriate. 20. TERMINATION OF NORWEST TRUST. If the parties complete every Reorganization, Norwest Trust shall terminate its registration under the 1940 Act and dissolve. 21. NOTICES. Any notice, report, statement, certificate or demand required or permitted by any provision of this Plan shall be in writing and shall be given by prepaid telegraph, telecopy, certified mail or overnight express courier to: For Norwest Trust: David I. Goldstein, Esq. Forum Financial Group Two Portland Square Portland, ME 04101 With copies to: Anthony C.J. Nuland Seward & Kissel LLP 1200 G Street, N.W., Suite 350 Washington, DC 20005 For Newtrust: Richard H. Blank, Jr. Stephens Inc. 111 Center Street Little Rock, AR 72201 With copies to: Robert M. Kurucza Marco E. Adelfio Morrison & Foerster LLP 2000 Pennsylvania Avenue, N.W., Suite 5500 Washington, D.C. 20006 22. GENERAL. This Plan supersedes all prior agreements between the parties (written or oral), is intended as a complete and exclusive statement of the terms of the agreement between the parties and may not be changed or terminated orally. The parties may execute this Plan in counterparts, which shall be considered one and the same agreement, and shall become effective when the counterparts have been executed by and delivered to both parties. The headings contained in this Plan are for reference only and shall not affect in any way the meaning or interpretation of this Plan. Nothing in this Plan, expressed or B-45 implied, confers upon any other person any rights or remedies under or by reason of this Plan. Neither party may assign or transfer any right or obligation under this Plan without written consent of the other party. IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers designated below to execute this Plan as of the date first written above. WELLS FARGO FUNDS TRUST ATTEST: By: - ---------------------------------------- ---------------------------------------- Name: Name: Title: Title: NORWEST ADVANTAGE FUNDS ATTEST: By: - ---------------------------------------- ---------------------------------------- Name: Name: Title: Title: B-46 SCHEDULE A I. CORRESPONDING CLASSES TABLE: ACQUIRING FUND CLASSES CORRESPONDING TARGET CLASSES - ------------------------------------------------ ------------------------------------------ Diversified Equity Fund Diversified Equity Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares I Shares Disciplined Growth Fund Performa Disciplined Growth Fund Shares Shares Diversified Small Cap Fund Diversified Small Cap Fund A Shares A Shares B Shares B Shares I Shares I Shares Growth Equity Fund Growth Equity Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares I Shares Growth Fund Valugrowth Stock Fund A Shares A Shares B Shares B Shares I Shares I Shares Small Cap Fund Small Company Stock Fund A Shares A Shares B Shares B Shares I Shares I Shares Income Equity Fund Income Equity Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares I Shares Index Fund Index Fund I Shares I Shares International Fund International Fund A Shares A Shares B Shares B Shares I Shares I Shares Large Company Growth Fund Large Company Growth Fund A Shares A Shares B Shares B Shares I Shares I Shares Small Cap Opportunities Fund Small Cap Opportunities Fund A Shares A Shares B Shares B Shares I Shares I Shares B-47 ACQUIRING FUND CLASSES CORRESPONDING TARGET CLASSES - ------------------------------------------------ ------------------------------------------ Small Cap Value Fund Performa Small Cap Value Fund Shares Shares Small Company Growth Fund Small Company Growth Fund Shares Shares Wealthbuilder II Growth Portfolio Wealthbuilder II Growth Portfolio C Shares C Shares Wealthbuilder II Growth and Income Portfolio Wealthbuilder II Growth and Income Portfolio C Shares C Shares Aggressive Balanced-Equity Fund Aggressive Balanced-Equity Fund I Shares I Shares Growth Balanced Fund Growth Balanced Fund A Shares A Shares B Shares B Shares C Shares C Shares I Shares I Shares Moderate Balanced Fund Moderate Balanced Fund I Shares I Shares Wealthbuilder II Growth Balanced Portfolio Wealthbuilder II Growth Balanced Portfolio C Shares C Shares Diversified Bond Fund Diversified Bond Fund I Shares I Shares Limited-Term Government Income Fund Limited-Term Government Income Fund I Shares I Shares Intermediate Government Income Fund Intermediate Government Income Fund A Shares A Shares B Shares B Shares I Shares I Shares Stable Income Fund Stable Income Fund A Shares A Shares B Shares B Shares I Shares I Shares Income Plus Fund Strategic Income Fund I Shares I Shares Income Fund Income Fund A Shares A Shares B Shares B Shares I Shares I Shares Income Fund Performa Strategic Value Bond Fund I Shares Shares B-48 ACQUIRING FUND CLASSES CORRESPONDING TARGET CLASSES - ------------------------------------------------ ------------------------------------------ Income Fund Total Return Bond Fund A Shares A Shares B Shares B Shares I Shares I Shares Tax-Free Income Fund Tax-Free Income Fund A Shares A Shares B Shares B Shares I Shares I Shares Colorado Tax-Free Fund Colorado Tax-Free Fund A Shares A Shares B Shares B Shares I Shares I Shares Limited Term Tax-Free Fund Limited Term Tax-Free Fund I Shares I Shares Minnesota Intermediate Tax-Free Fund Minnesota Intermediate Tax-Free Fund I Shares I Shares Minnesota Tax-Free Fund Minnesota Tax-Free Fund A Shares A Shares B Shares B Shares I Shares I Shares Money Market Fund Ready Cash Investment Fund A Shares Investor Shares B Shares Exchange Shares Prime Investment Money Market Fund Ready Cash Investment Fund Service Shares Public Entities Shares National Tax-Free Money Market Fund (Class A) Municipal Money Market Fund A Shares Investor Shares National Tax-Free Institutional Money Market Institutional Shares of Municipal Money Fund Market Fund Service Shares Institutional Shares Treasury Plus Money Market Fund Treasury Plus Fund Service Shares Institutional Shares 100% Treasury Money Market Fund Treasury Fund Service Shares Institutional Shares Government Money Market Fund U.S. Government Fund Service Shares Institutional Shares Cash Investment Money Market Fund Cash Investment Fund Service Shares Institutional Shares B-49 II. ACTIVE REORGANIZATION TABLE: ACQUIRING FUNDS CORRESPONDING TARGETS - --------------------------------------------------------- --------------------------------------------------------- Growth Fund Valugrowth Stock Fund Small Cap Fund Small Company Stock Fund Income Equity Fund Income Equity Fund Limited-Term Government Income Fund Limited-Term Government Income Fund Income Fund Intermediate Government Income Fund Intermediate Government Income Fund Income Fund Income Fund Performa Strategic Value Bond Fund Income Fund Total Return Bond Fund Income Fund Tax-Free Income Fund Tax-Free Income Fund Investor Shares and Exchange Shares of Ready Cash Money Market Fund Investment Fund National Tax-Free Money Market Fund (Class A) Investor Shares of Municipal Money Market Fund National Tax-Free Institutional Money Market Fund Institutional Shares of Municipal Money Market Fund Treasury Plus Money Market Fund Treasury Plus Fund Government Money Market Fund U.S. Government Fund Cash Investment Money Market Fund Cash Investment Fund III. SHELL REORGANIZATION TABLE: ACQUIRING FUNDS TARGET FUNDS - ------------------------------------------------------ ------------------------------------------------------ Diversified Equity Fund Diversified Equity Fund Disciplined Growth Fund Performa Disciplined Growth Fund Diversified Small Cap Fund Diversified Small Cap Fund Growth Equity Fund Growth Equity Fund Index Fund Index Fund International Fund International Fund Large Company Growth Fund Large Company Growth Fund Small Cap Opportunities Fund Small Cap Opportunities Fund Small Cap Value Fund Performa Small Cap Value Fund Small Company Growth Fund Small Company Growth Fund Wealthbuilder II Growth Portfolio Wealthbuilder II Growth and Income Portfolio Wealthbuilder II Growth and Income Portfolio Wealthbuilder II Growth Portfolio Aggressive Balanced-Equity Fund Aggressive Balanced-Equity Fund Growth Balanced Fund Growth Balanced Fund Moderate Balanced Fund Moderate Balanced Fund Wealthbuilder II Growth Balanced Portfolio Wealthbuilder II Growth Balanced Portfolio Diversified Bond Fund Diversified Bond Fund Stable Income Fund Stable Income Fund Income Plus Fund Strategic Income Fund Colorado Tax-Free Fund Colorado Tax-Free Fund Limited Term Tax-Free Fund Limited Term Tax-Free Fund Minnesota Intermediate Tax-Free Fund Minnesota Intermediate Tax-Free Fund Minnesota Tax-Free Fund Minnesota Tax-Free Fund 100% Treasury Money Market Fund Treasury Fund Prime Investment Money Market Fund Public Entities Shares of Ready Cash Investment Fund B-50 IV. CLASS REORGANIZATION TABLE: ACQUIRING CLASSES CORRESPONDING TARGET FUNDS - ------------------------------------------------------ ------------------------------------------------------ Money Market Fund Investor Shares and Exchange Shares of Ready Cash Prime Investment Money Market Fund Investment Fund National Tax-Free Money Market Fund (Class A) Public Entities Shares of Ready Cash Investment Fund National Tax-Free Institutional Money Market Fund Investor Shares of Municipal Money Market Fund Institutional Shares of Municipal Money Market Fund B-51 SCHEDULE B MATERIAL AGREEMENTS The following agreements shall be Material Agreements for Norwest Trust: Investment Advisory Agreement between Norwest Investment Management, Inc. ("NIM") and Norwest Trust dated June 1, 1997, as amended July 28, 1998. Investment Subadvisory Agreement among Schroder Capital Management International, Inc. ("SCHRODER"), Norwest Bank Minnesota, N.A. ("NORWEST BANK") and Norwest Trust dated November 11, 1994. Investment Subadvisory Agreement among Norwest Bank, Schroder and Norwest Trust dated April 28, 1996. Investment Subadvisory Agreement among Galliard Capital Management, Inc., NIM and Norwest Trust dated October 1, 1997. Investment Subadvisory Agreement among Smith Asset Management, LP, NIM and Norwest Trust dated October 1, 1997. Investment Subadvisory Agreement among Peregrine Capital Management, Inc., NIM and Norwest Trust dated October 1, 1997, as amended July 28, 1998. Distribution Services Agreement between Forum Financial Services, Inc. ("FORUM") and Norwest Trust dated October 1, 1995, as amended July 28, 1998. Custodian Agreement between Norwest Bank and Norwest Trust dated August 1, 1993, as amended July 28, 1998. Transfer Agency Agreement between Norwest Bank and Norwest Trust dated August 1, 1993. Management Agreement between Forum and Norwest Trust dated August 1, 1997. Fund Accounting Agreement between Forum Accounting Services, Limited Liability Company and Norwest Trust dated June 1, 1997, as amended July 28, 1998. Administration Services Agreement between Norwest Bank and Norwest Trust dated November 11, 1994, as amended July 28, 1998. Administration Agreement between Forum Administrative Services, LLC and Norwest Trust dated October 1, 1996, as amended July 28, 1998. Distribution Plan of Norwest Trust dated August 1, 1993, as amended July 28, 1998. C Shares Distribution Plan of Norwest Trust dated July 28, 1998. Multiclass (Rule 18f-3) Plan of Norwest Trust dated May 1, 1995, as amended July 28, 1998. The following agreements shall be Material Agreements for Newtrust: [Agreements to be inserted] B-52 SCHEDULE C Liabilities of Norwest Trust: Liabilities of Target Funds: Liabilities of Newtrust: Liabilities of Acquiring Funds: B-53 SCHEDULE D I. Claims, actions, suits, investigations or proceedings pending or threatened against Norwest Trust or any Target Fund or its Assets or businesses: II. Orders, decrees or judgments to which Norwest Trust or a Target Fund is a party that adversely affect, or are reasonably likely to adversely affect, Norwest Trust's or the Target Fund's financial condition, results of operations, business, properties or Assets or ability to consummate the transactions contemplated by the Plan: B-54 SCHEDULE E FORM OF INTEREST REDEMPTION AGREEMENT AGREEMENT dated this day of , 1999, by and between Norwest Advantage Funds ("NORWEST TRUST"), a Delaware business trust, for itself and on behalf of its series (the "FUND") and (the "CORE TRUST"), a Delaware business trust for itself and on behalf of its series (the "PORTFOLIO"). WHEREAS, The Fund owns shares of beneficial interest ("INTERESTS") in the Portfolio; and WHEREAS, Norwest Trust wishes to redeem the Fund's interests in the Portfolio and to gain assurances that Core Trust will cooperate with Norwest Trust's reasonable requests as set forth in this Agreement. NOW, THEREFORE, in accordance with the mutual promises described herein, the parties agree as follows: 1. REDEMPTION : (a) On , 1999, or such other date as the parties may agree to in writing, Norwest Trust shall request in the manner specified in Core Trust's currently effective Registration Statement on Form N-1A (the "Registration Statement") that Core Trust redeem the Fund's interests in the Portfolio. (b) Core Trust shall then redeem the Fund's interests in the Portfolio in accordance with the requirements of the Investment Company Act of 1940, as amended (the "Act"), and the Registration Statement. To the extent consistent with the Act and the Registration Statement, Core Trust shall pay the redemption proceeds to Norwest Trust in cash or in kind and on the date and time requested by Norwest Trust in writing. 2. REPRESENTATION, WARRANTY AND COVENANT : Each party represents and warrants to the other that it is registered under the Act as an open-end, management investment company. Each party covenants to maintain its registration under the Act as an open-end, management investment company until the completion of the redemption provided for in this Agreement. 3. COOPERATION : The Core Trust agrees to cooperate with reasonable requests of Norwest Trust arising out of Norwest Trust's obligations under Sections 9(b) and, to the extent consistent with the Portfolio's investment objectives, policies and restrictions, 4(c) of the Agreement and Plan of Reorganization dated , 1999 by and between Wells Fargo Funds Trust, for itself and on behalf of certain series, and Norwest Trust, for itself and on behalf of certain of its series, a copy of which is attached. 4. TERMINATION : Norwest Trust may terminate this Agreement upon written notice to Core Trust. B-55 IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers designated below to execute this Agreement as of the date first written above. NORWEST ADVANTAGE FUNDS ATTEST: - ------------------------------ By: ----------------------------------------- Name: Name: Title: Title: [INSERT NAME OF CORE TRUST] ATTEST: - ------------------------------ By: ----------------------------------------- Name: Name: Title: Title: B-56 SCHEDULE F FORM OF LIABILITY ASSUMPTION INSTRUMENT ACKNOWLEDGEMENT OF RECEIPT OF ASSETS AND STATEMENT OF ASSUMPTION OF LIABILITIES For purposes of this document, the terms "ASSETS" and "LIABILITIES" shall have the meanings given them in the Agreement and Plan of Reorganization dated , 1999 by and between Wells Fargo Funds Trust ("NEWTRUST"), for itself and on behalf of certain of its series, and Norwest Advantage Funds ("NORWEST TRUST"), for itself and on behalf of certain of its series. Newtrust, on behalf of (the "FUND"), acknowledges receipt, as of [p.m.], Eastern time, on September , 1999 (the "EFFECTIVE TIME"), of the Assets [of][attributable to] (the "TARGET"). In addition, Newtrust, on behalf of the Fund, assumes, as of the Effective Time, all the Liabilities of the Target at the Effective Time. WELLS FARGO VARIABLE TRUST By: ----------------------------------------- Name: Title: B-57 EXHIBIT C--COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES EQUITY FUNDS WF ASSET ALLOCATION FUND (Modeled on SC Asset Allocation Fund) Comparison of: SC ASSET ALLOCATION FUND WHICH WILL REORGANIZE INTO AND WF ASSET ALLOCATION FUND SC BALANCED FUND OBJECTIVES: SC ASSET - seeks long-term total return, consistent with reasonable risk. ALLOCATION FUND: SC BALANCED FUND: - seeks current income and long-term total return, consistent with reasonable risk, through a balanced investment approach. WF ASSET - seeks long-term total return, consistent with reasonable risk. ALLOCATION FUND: INVESTMENT STRATEGIES: SC ASSET The Fund's investment strategies are substantially the same as the WF ALLOCATION FUND: Asset Allocation Fund described below. SC BALANCED FUND: The Fund pursues a balanced and diversified investment approach by investing generally between 30% to 70% of its assets in common stocks and the remainder in debt securities. The Fund invests the equity portion of its portfolio: - in common stocks trading at low price-to-earnings ratios, as measured against the stock market as a whole or against the individual stock's own price history; - in securities whose price-to-book and price-to-cash flow ratios indicate attractive valuation; - primarily in common stocks of both large, well-established companies and smaller companies with market capitalization exceeding $50 million at time of purchase; and - in foreign companies through ADRs and similar instruments, up to 25% of total assets. The Fund invests the fixed-income portion of its portfolio in: - corporate bonds, commercial paper, and mortgage-backed and asset-backed securities based on their relatively greater stability of income and principal. The Fund may invest in zero coupon bonds. - The Fund's investments include: -- commercial paper rated A-2 by S&P or Prime-2 by Moody's or better; -- corporate debt securities rated BBB by S&P or Baa by Moody's or better; and -- mortgage-backed and asset-backed securities rated AA by S&P or Aa by Moody's or better. C-1 WF ASSET The WF Asset Allocation Fund allocates and reallocates assets among ALLOCATION FUND: common stocks, U.S. Treasury Bonds and money market instruments. This strategy is based on the premise that asset classes are at times undervalued or overvalued in comparison to one another and that investing in undervalued asset classes offers better long-term, risk-adjusted returns. The Fund manages the allocation of investments in its portfolio assuming a "normal" allocation of 60% stocks and 40% bonds. This is not a "target" allocation but rather is a design feature that is intended to set a level of risk tolerance for the Fund. The Fund does not have a maximum or minimum limit for its investments in any asset class and may invest substantially all of its assets in a single class. The asset classes the Fund invests in are: - STOCK INVESTMENTS--The Fund invests invest in common stocks representative of the S&P 500 Index. The Fund does not individually select common stocks on the basis of traditional investment analysis. Instead, stock investments are made according to a weighted formula intended to match the total return of the S&P 500 Index as closely as possible; - BOND INVESTMENTS--The Fund invests in U.S. Treasury Bonds representative of the Lehman Brothers 20+ Bond Index that have remaining maturities of twenty years or more; and - MONEY MARKET INVESTMENTS--The Fund invests this portion of its assets in high-quality money market instruments, including U.S. Government obligations, obligations of foreign and domestic banks, short-term corporate debt instruments and repurchase agreements. Under normal market conditions, the Fund may invest: - in call and put options on stock indexes, stock index futures, options on stock index futures, and interest rate futures contracts as a substitute for a comparable market position in stocks or bonds; - in interest rate and index swaps; and - up to 25% of its total assets in foreign obligations qualifying as money market instruments. - ------------------------------------------------------------------------------------------- PORTFOLIO MANAGERS - ------------------------------------------------------------------------------------------- SC ASSET ALLOCATION FUND Multiple Managers SC BALANCED FUND Rex Wardlaw and Scott Smith WF ASSET ALLOCATION FUND Multiple Managers C-2 WF GROWTH FUND (Modeled on SC Growth Fund) Comparison of: SC GROWTH FUND WHICH WILL REORGANIZE INTO AND WF GROWTH FUND NAF VALUGROWTH STOCK FUND OBJECTIVES: SC GROWTH FUND: - seeks long-term capital appreciation and current income. NAF VALUGROWTH-SM- STOCK - long-term capital appreciation. FUND: WF GROWTH FUND: - seeks long-term capital appreciation. INVESTMENT STRATEGIES: SC GROWTH FUND: The Fund's investment strategies are substantially the same as the WF Growth Fund described below. NAF The Fund invests primarily in medium- and large-capitalization companies VALUGROWTH-SM- that appear to have above-average growth characteristics and appear to STOCK FUND: be undervalued. The Fund considers such matters as the quality of a company's management, the existence of a leading or dominant position in a major product line or market, the soundness of the company's financial position, and the maintenance of a relatively high rate of return on invested capital and shareholder's equity. The Fund may: - invest up to 20% of its total assets in securities of foreign companies; - write covered call options and purchase call options on equity securities to manage risk or enhance returns; and - invest in "special situations," which are companies that have the potential for significant future earnings growth but have not performed well in the recent past. C-3 WF GROWTH FUND: The Fund primarily invests in common stocks and other equity securities. The Fund looks for companies that have a strong earnings growth trend and that have above-average prospects for future growth. The Fund also may invest in the stocks of medium- to smaller size companies that have the potential to produce high levels of future earnings growth or when the Fund believes the stock is undervalued. The Fund normally invests: - at least 65% of its total assets in equity securities, including common and preferred stocks, and securities convertible into common stocks; - at least 65% of its total assets in income-producing securities; - the majority of its total assets in issues of companies with market capitalization that falls within the range of the Russell 1000 Index; - up to 25% of its total assets in foreign companies through American Depositary Receipts and similar instruments; and - up to 15% of its total assets in emerging markets. Unlike the NAF ValuGrowth-SM- Stock Fund, the WF Growth Fund does not write covered call options or purchase call options on equity securities to manage risk or enhance gains. - ------------------------------------------------------------------------------------------- PORTFOLIO MANAGERS - ------------------------------------------------------------------------------------------- SC GROWTH FUND Kelli Hill NAF VALUGROWTH-SM- STOCK FUND Charlie Mayer, CFA WF GROWTH FUND Kelli Hill C-4 WF INCOME EQUITY FUND (Modeled on NAF Income Equity Fund) Comparison of: SC DIVERSIFIED EQUITY INCOME FUND WHICH WILL REORGANIZE INTO AND WF INCOME EQUITY FUND NAF INCOME EQUITY FUND OBJECTIVES: SC DIVERSIFIED EQUITY - seeks to earn current income and a growing stream of income INCOME FUND: over time, consistent with the preservation of capital. NAF INCOME EQUITY FUND: - long-term capital appreciation and above-average dividend income. WF INCOME EQUITY FUND: - seeks long-term capital appreciation and above-average dividend income. INVESTMENT STRATEGIES: SC DIVERSIFIED EQUITY The Fund actively manages a diversified portfolio of INCOME FUND: income-producing equity securities. In selecting stocks, the Fund emphasizes dividend histories and trends. The Fund also looks for equity securities that it believes are selling for less than their intrinsic or true value and that generally exhibit the following characteristics: above average financial strength, a strong position in their industry, a history of profit growth, and relatively high dividends. The Fund also may invest in U.S. Government obligations, a broad range of debt securities, including bonds and other debt obligations of domestic corporations, U.S. dollar-denominated debt instruments of foreign issuers, including foreign governments and companies, and various asset-backed securities. Under normal market conditions, the Fund may invest: - at least 65% of its total assets in equity securities; - at least 90% of its equity portfolio in issues of companies with market capitalization that falls within the range of the Russell 1000 Index - up to 25% of its total assets in foreign companies through ADRs; - up to 15% of its total assets in emerging markets; - most of its debt portfolio in companies and government entities within the U.S.; - generally all of its debt portfolio in instruments rated at the time acquisition in the four highest credit categories by one or more NSRO or, if unrated, of comparable quality; - up to 20% of its nonconvertible debt portfolio in instruments rated in the four highest credit categories. NAF INCOME EQUITY The Fund's investment strategies are substantially similar to the WF FUND: Income Equity Fund described below. The NAF Income Equity Fund will normally invest no more than 5% of its total assets in the securities of a single issuer. C-5 WF INCOME EQUITY FUND: The Fund invests primarily in the common stock of large, high-quality domestic companies that have above-average return potential based on current market valuations. The Fund primarily emphasizes investments in securities of companies with above-average dividend income. The Fund uses various valuation measures when selecting securities for the portfolio, including above-average dividend yields and below industry average price-to-earnings, price-to-book and price-to-sales ratios. The Fund considers large companies to be those whose market capitalization is greater than the median of the Russell 1000 Index. Under normal market conditions, the Fund invests: - at least 65% of its total assets in equity securities; and - in issues of companies with market capitalization greater than the median of the Russell 1000 Index. The WF Income Equity Fund may invest in preferred stocks, convertible securities, and securities of foreign companies. Unlike the NAF Income Equity Fund, the Fund will normally limit its investment in a single issuer to 10% or less of its total assets. - ------------------------------------------------------------------------------------------- PORTFOLIO MANAGERS - ------------------------------------------------------------------------------------------- SC DIVERSIFIED EQUITY INCOME FUND: Allen Wisniewski and Rex Wardlaw NAF INCOME EQUITY FUND: David L. Roberts, CFA and Gary J. Dunn* WF INCOME EQUITY FUND: David L. Roberts, CFA and Gary J. Dunn C-6 WF SMALL CAP FUND (Modeled on SC Small Cap Fund) Comparison of: SC SMALL CAP FUND WHICH WILL REORGANIZE INTO AND WF SMALL CAP FUND SC STRATEGIC GROWTH FUND AND NAF SMALL COMPANY STOCK FUND OBJECTIVES: SC SMALL CAP FUND: - seeks above-average, long-term capital appreciation. SC STRATEGIC GROWTH FUND: - seeks above-average, long-term capital appreciation. NAF SMALL COMPANY STOCK FUND: - long-term capital appreciation. WF SMALL CAP FUND: - seeks long-term capital appreciation. INVESTMENT STRATEGIES: SC SMALL CAP FUND: The Fund's investment strategies are substantially the same as the WF Small Cap Fund described below. SC STRATEGIC GROWTH The Fund's investment strategies are substantially the same as the FUND: WF Small Cap Fund described below. The Fund invests the majority of its holdings in established growth companies, turnaround or acquisition candidates, or attractive larger capitalization companies. In addition, the Fund may invest: - at least 65% of its assets in common stocks and convertible securities that the Fund believes have better-than-average prospects to increase in value; - at least 65% of its assets in companies whose market capitalization at the time of purchase is within the capitalization range of the companies listed on the Russell MidCap Index; and - up to 15% of its assets in certain call and put options. NAF SMALL COMPANY The Fund invests primarily in the common stock of small- and medium- STOCK FUND: sized domestic companies that have market capitalizations well below that of the average company in the S&P 500 Index. The Fund invests in companies that may be in a relatively early stage of development or may produce goods and services that have favorable prospects for growth due to increasing demand or developing markets. The Fund may invest up to 20% of its total assets in the securities of foreign companies. The Fund may write covered call options and purchase call options on equity securities to manage risk or enhance returns. C-7 WF SMALL CAP FUND: The WF Small Cap Fund actively manages a diversified portfolio of common stocks issued by companies whose market capitalization falls within the range of the Russell 2000 Index. The Fund will sell the stock of any company whose market capitalization exceeds the range of this index for sixty consecutive days. The Fund invests in the common stocks of domestic and foreign companies that the Fund believes have above-average prospects for capital growth, or that may be involved in new or innovative products, services and processes. Under normal market conditions, the Fund invests: - in an actively managed, broadly diversified portfolio of growth- oriented common stocks; - in at least 20 common stock issues spread across multiple industry groups and sectors of the economy; - up to 40% of its assets in initial public offerings or recent start-ups and newer issues; - no more than 25% of its assets in foreign companies through American Depositary Receipts or similar issues; and - up to 15% of its portfolio in emerging markets. - ------------------------------------------------------------------------------------------- PORTFOLIO MANAGERS - ------------------------------------------------------------------------------------------- SC SMALL CAP FUND Kenneth Lee and Thomas Zeifang, CFA SC STRATEGIC GROWTH FUND Chris Greene and Thomas Zeifang, CFA NAF SMALL COMPANY STOCK FUND Kenneth Lee and Thomas Zeifang, CFA WF SMALL CAP FUND Kenneth Lee and Thomas Zeifang, CFA C-8 INCOME FUNDS WF INCOME FUND (Modeled on NAF Income Fund) Comparison of: NAF INCOME FUND WHICH WILL REORGANIZE AND INTO NAF TOTAL RETURN BOND FUND WF INCOME FUND AND NAF PERFORMA STRATEGIC VALUE BOND FUND OBJECTIVES: NAF INCOME FUND: - provide total return consistent with current income. NAF TOTAL RETURN BOND - provide total return. FUND: NAF PERFORMA STRATEGIC - provide total return by investing primarily in income VALUE BOND FUND: producing securities. WF INCOME FUND: - seeks to provide total return consistent with current income. INVESTMENT STRATEGIES: NAF INCOME FUND: The Fund's primary investment strategies are substantially the same as the WF Income Fund described below. NAF TOTAL RETURN BOND The Fund's primary investment strategies are similar to the WF FUND: Income Fund described below. In addition, the Fund particularly seeks strategic diversification. The NAF Total Return Fund generally invests 65% of its total assets in fixed-income securities rated, within the 3 highest rating categories, or, if unrated, of comparable quality. Normally, the Fund limits its investments to: - 75% of its total assets in corporate bonds; - 65% of its total assets in mortgage-backed securities; - 50% of its total assets in asset-backed securities; - 25% of its total assets in a single industry of the corporate market; or - 5% of its total assets in the corporate bonds of any single issuer. The NAF Total Return Fund may invest in U.S. Government Securities. The average maturity of the Fund will vary between 5 and 15 years, and the Fund's duration normally will vary between 3 and 8 years. The Fund may use options, swap agreements, interest rate caps, floors and collars, and futures contracts to manage risk. The Fund also may use options to enhance return. NAF PERFORMA STRATEGIC The Fund's investment strategies are substantially the same as VALUE BOND FUND: the NAF Total Return Bond Fund described above and similar to the WF Income Fund described below. C-9 WF INCOME FUND: The Fund invests in a diversified portfolio of debt and variable-rate debt securities issued by domestic and foreign issuers. The Fund invests in a broad spectrum of U.S. issues, including U.S. Government obligations, mortgage- and other asset-backed securities, and the debt securities of financial institutions, corporations, and others. The Fund attempts to increase its performance by applying various fixed-income management techniques. The Fund combines these techniques with fundamental economic, credit, and market analysis, while at the same time controlling total return volatility by targeting the Fund's duration within a narrow band (between 70% and 130%) around the duration of the Lipper Corporate A-Rated Debt Average. Under normal market conditions, the Fund invests: - up to 70% of its total assets in corporate debt securities such as bonds, debentures and notes, and other debt securities that can be converted into or exchanged for common stocks; - at least 30% of its total assets in U.S. Government obligations; - up to 50% of its total assets in mortgage-backed securities and up to 25% of its assets in asset-backed securities; - at least 80% of its total assets in investment-grade securities; and - up to 20% of its total assets in below investment-grade securities rated, at the time of purchase, in the fifth highest long-term rating category assigned by an NRSRO or, if unrated, of comparable quality. The Fund also may invest in zero coupon securities and enter into dollar roll transactions. The Fund invests primarily in securities with maturities (or average life in the case of mortgage-backed and similar securities) ranging from overnight to 40 years. It is anticipated that the Fund's portfolio will have an average dollar-weighted maturity of between 3 and 15 years. - ------------------------------------------------------------------------------------------- PORTFOLIO MANAGERS - ------------------------------------------------------------------------------------------- NAF INCOME FUND Majorie H. Grace, CFA NAF TOTAL RETURN BOND FUND Richard Merriam, CFA, John Huber, and David Yim* NAF PERFORMA STRATEGIC VALUE BOND FUND Richard Merriam, CFA, John Huber, and David Yim* WF INCOME FUND Majorie H. Grace, CFA C-10 WF INTERMEDIATE GOVERNMENT INCOME FUND (Modeled on NAF Intermediate Government Income Fund) Comparison of: SC U.S. GOVERNMENT INCOME FUND WHICH WILL REORGANIZE INTO AND WF INTERMEDIATE GOVERNMENT SC U.S. GOVERNMENT ALLOCATION FUND INCOME FUND AND NAF INTERMEDIATE GOVERNMENT INCOME FUND OBJECTIVES: SC U.S. GOVERNMENT - seeks a long-term total rate of return through preserving INCOME FUND: capital and earning high interest income by investing principally in a portfolio of U.S. Government mortgage pass-through securities, consisting primarily of securities issued by GNMA, FNMA and FHLMC. SC U.S. GOVERNMENT - seeks over the long-term a high level of total return, ALLOCATION FUND: including net realized an unrealized capital gains and net investment income, consistent with reasonable risk. NAF INTERMEDIATE - provide current income, consistent with safety of principal. GOVERNMENT INCOME FUND: WF INTERMEDIATE - seeks current income, consistent with safety of principal. GOVERNMENT INCOME FUND: INVESTMENT STRATEGIES: SC U.S. GOVERNMENT The Fund actively manages a diversified portfolio of U.S. Government INCOME FUND: mortgage pass-through securities (including those issued by GNMA, FNMA, and FHLMC), U.S. Treasury securities and repurchase agreements. Under normal market conditions, the Fund invests at least 65% of its total assets in mortgage pass-through securities. SC U.S. GOVERNMENT The Fund allocates and reallocates assets among long-term U.S. ALLOCATION FUND: Treasury bonds, intermediate-term U.S. Treasury notes, and short-term money market instruments. This strategy is based on the premise that asset classes are at times undervalued or overvalued in comparison to one another and that investing in undervalued asset classes offers better long-term, risk-adjusted returns. The Fund normally invests at least 65% of its total assets in Government obligations. The Fund has no minimum investment in any of the three asset classes and may invest substantially all of its assets in a single asset class. The allocation may shift at any time. NAF INTERMEDIATE The Fund's investment strategies are substantially the same as the GOVERNMENT INCOME WF Intermediate Income Fund described below. FUND: C-11 WF INTERMEDIATE The Fund invests primarily in fixed and variable rate U.S. GOVERNMENT INCOME Government obligations. Under normal circumstances, the Fund intends FUND: to invest at least 65% of its total assets in U.S. Government obligations and may invest up to 35% of its total assets in debt securities that are not U.S. Government obligations. The Fund emphasizes the use of intermediate maturity securities to reduce interest rate risk and use mortgage-backed securities to enhance yield. Under normal market conditions, the Fund invests: - at least 65% of its total assets in U.S. Government obligations; - up to 50% of its total assets in mortgage-backed securities, and up to 25% of its total assets in asset-backed securities; and - up to 10% of its total assets in zero coupon securities. The Fund may enter into dollar rolls. The Fund may not invest more than 25% of its total assets in securities issued or guaranteed by any single agency or instrumentality of the U.S. Government, except the U.S. Treasury. The Fund will purchase only securities that are rated, at the time of purchase, within the two highest rating categories assigned by an NSRO or, if unrated, of comparable quality. The Fund may use options, swap agreements, interest rate caps, floors and collars, and futures contracts to manage risk. The Fund also may use options to enhance return. - ------------------------------------------------------------------------------------------- PORTFOLIO MANAGERS - ------------------------------------------------------------------------------------------- SC U.S. GOVERNMENT INCOME FUND Scott Smith and Paul Single SC U.S. GOVERNMENT ALLOCATION FUND Multiple Managers NAF INTERMEDIATE GOVERNMENT INCOME FUND Marjorie H. Grace, CFA WF INTERMEDIATE GOVERNMENT INCOME FUND Marjorie H. Grace, CFA C-12 WF LIMITED TERM GOVERNMENT INCOME FUND (Modeled on SC Short-Intermediate U.S. Government Income Fund) Comparison of: SC SHORT-INTERMEDIATE WHICH WILL REORGANIZE INTO U.S. GOVERNMENT INCOME FUND WF LIMITED TERM AND GOVERNMENT INCOME FUND NAF LIMITED TERM GOVERNMENT INCOME FUND OBJECTIVES: SC SHORT-INTERMEDIATE - seeks to provide investors with current income while U.S. GOVERNMENT FUND: preserving capital by investing primarily in a portfolio consisting of short to intermediate-term securities issued or guaranteed by the U.S. Government, its agencies and instrumentalities. NAF LIMITED TERM - provide investors with current income while preserving GOVERNMENT INCOME FUND: capital. WF LIMITED TERM - seeks to provide investors with current income while GOVERNMENT INCOME FUND: preserving capital. INVESTMENT STRATEGIES: SC SHORT-INTERMEDIATE The Fund's investment strategies are substantially the same as the U.S. GOVERNMENT FUND: WF Short-Intermediate U.S Government Income Fund described below. NAF LIMITED TERM The Fund invests primarily in fixed and variable rate U.S. GOVERNMENT INCOME Government securities. The Fund normally invests at least 65% of its FUND: total assets in US. Government securities and may invest up to 35% of its total asset in other fixed-income securities. The Fund emphasizes the use of short maturity securities to lessen interest rate risk and uses mortgage-backed securities to enhance yield. The Fund limits its investments in: - mortgage-backed securities to not more than 50% of its total assets; - other types of asset-backed securities to not more than 25% of its total assets; - zero-coupon securities to not more than 10% of its total assets. Unlike the WF Short-Intermediate U.S. Government Income Fund, the Fund limits its investments in securities issued or guaranteed by any single agency or instrumentality of the U.S. Government, except the U.S. Treasury, to 25% of its total assets. The Fund invests in securities that are rated within the 2 highest rating categories assigned by an NRSRO, or, if unrated, of comparable quality. The Fund will invest primarily in debt obligations with maturities ranging from overnight to ten years. The Fund's portfolio normally has an average dollar-weighted maturity of between 1 and 5 years. The Fund may use options, swap agreements, interest rate caps, floors and collars, and futures contracts to manage risk. The Fund also may use options to enhance return. C-13 WF LIMITED TERM The Fund actively manages a diversified portfolio consisting GOVERNMENT INCOME primarily of short-to intermediate-term U.S. Government obligations. FUND: The Fund may invest in securities of any maturity. Under ordinary circumstances, the Fund expects to maintain a dollar-weighted average maturity of between 2 and 5 years. The Funds seeks to preserve capital by shortening average maturity when interest rates are expected to increase and to increase total return by lengthening maturity when interest rates are expected to fall. Under normal market conditions, the Fund invests: - at least 65% of its total assets in U.S. Government obligations or repurchase agreements collateralized by U.S. Government obligations; - in investment grade corporate debt securities including asset-backed securities; - no more than 5% of its total assets in securities downgraded below investment-grade after acquired; - up to 25% of assets in dollar-denominated debt of U.S. branches of foreign banks or foreign branches of U.S. banks; and - in stripped Treasury securities, adjustable-rate mortgage securities, and adjustable portions of collateralized mortgage obligations. - ------------------------------------------------------------------------------------------- PORTFOLIO MANAGERS - ------------------------------------------------------------------------------------------- SC SHORT-INTERMEDIATE U.S. GOVERNMENT FUND Paul C. Single and Jacqueline A. Flippin NAF LIMITED TERM GOVERNMENT INCOME FUND Marjorie H. Grace, CFA WF LIMITED TERM GOVERNMENT INCOME FUND Paul C. Single and Jacqueline A. Flippin C-14 WF NATIONAL TAX-FREE FUND (Modeled on NAF Tax-Free Income Fund) Comparison of: SC NATIONAL TAX-FREE FUND WHICH WILL REORGANIZE INTO AND WF NATIONAL TAX-FREE FUND NAF TAX-FREE INCOME FUND OBJECTIVES: SC NATIONAL - seeks to provide investors with current income exempt from federal TAX-FREE FUND: income tax. NAF TAX-FREE - provide investors with current income exempt from federal income tax. INCOME FUND: WF NATIONAL TAX- - seeks to provide investors with current income exempt from federal FREE FUND: income tax. INVESTMENT STRATEGIES: SC NATIONAL The Fund's investment strategies are substantially similar to the WF TAX-FREE FUND: National Tax-Free Fund described below. NAF TAX-FREE The Fund's investment strategies are substantially the same as the WF INCOME FUND: National Tax-Free Fund described below. In addition, the Fund normally limits its investments in issuers located in the same state or in securities of issuers of municipal securities that economic, business, or political developments would affect in similar ways to 25% of its total assets. WF NATIONAL TAX- The Fund invests primarily in a portfolio of investment grade municipal FREE FUND: securities. The Fund invests at least 80% of its total assets in municipal securities paying interest exempt from federal income taxes, including the federal AMT. The Fund normally invests in municipal obligations rated in the four highest credit categories by an NSRO. The average dollar-weighted maturity of the Fund's assets normally will be between 10 and 20 years, but may vary depending on market conditions. In general, the longer the maturity of a municipal security, the higher the rate of interest it pays. However, a longer maturity is generally associated with a higher level of volatility in the market value of a security. The Fund emphasizes investments in municipal securities with interest income rather than stability of the Fund's net asset value. - ------------------------------------------------------------------------------------------- PORTFOLIO MANAGERS - ------------------------------------------------------------------------------------------- SC NATIONAL TAX-FREE FUND Stephen Galiani and Anjanett Pena NAF TAX-FREE INCOME FUND William T. Jackson, CFA WF NATIONAL TAX-FREE FUND William T. Jackson, CFA C-15 MONEY MARKET FUNDS All of the Funds are "money market funds" that seek to maintain a stable net asset value of $1.00 per share. Each Fund pursues its strategy by maintaining a portfolio of high-quality money market investments. As money market funds, the Funds must meet the requirements of SEC Rule 2a-7. The Rule imposes strict requirements on the investment quality, maturity and diversification of the Funds' investments. Under Rule 2a-7, the Funds' investments must each have a remaining maturity of no more than 397 days and must maintain an average weighted maturity that does not exceed 90 days. WF CASH INVESTMENT MONEY MARKET FUND (Modeled on NAF Cash Investment Fund) Comparison of: SC PRIME MONEY MARKET FUND (Administrative, WHICH WILL REORGANIZE INTO Service and Institutional Classes) WF CASH INVESTMENT MONEY NAF CASH INVESTMENT FUND MARKET FUND OBJECTIVES: SC PRIME MONEY MARKET - seeks to provide investors with maximized current income to FUND: the extent consistent with the preservation of capital and maintenance of liquidity. NAF CASH INVESTMENT - high current income, preservation of capital and liquidity. FUND: WF CASH INVESTMENT MONEY - seeks high current income, preservation of capital and MARKET FUND: liquidity. INVESTMENT STRATEGIES: SC PRIME MONEY MARKET The Fund's investment strategies are similar to the WF Cash FUND: Investment Money Market Fund described below. NAF CASH INVESTMENT The Fund's investment strategies are substantially the same as the FUND: WF Cash Investment Money Market Fund described below. WF CASH INVESTMENT The Fund invests in obligations of financial institutions. The Fund MONEY MARKET FUND: limits its investments in obligations of financial institutions to institutions that at the time of investment have total assets in excess of $1 billion, or the equivalent in other currencies. These obligations include: - negotiable certificates of deposit; and - bank notes, bankers' acceptances and time deposits of U.S. banks (including savings banks and savings associations), foreign branches of U.S. banks, foreign banks and their non-U.S. branches, U.S. branches and agencies of foreign banks, and wholly owned banking-related subsidiaries of foreign banks. C-16 WF MONEY MARKET FUND (Modeled on SC Money Market Fund) Comparison of: SC MONEY MARKET FUND WHICH WILL REORGANIZE INTO AND WF MONEY MARKET FUND SC PRIME MONEY MARKET FUND (Class A) AND NAF READY CASH INVESTMENT FUND (Investor and Exchange Classes) OBJECTIVES: SC MONEY MARKET FUND: - seeks to provide investors with a high level of current income, while preserving capital and liquidity. NAF READY CASH - high current income, to extent consistent with the INVESTMENT FUND: preservation of capital and the maintenance of liquidity. WF MONEY MARKET FUND: - seeks high current income, while preserving capital and liquidity. INVESTMENT STRATEGIES: SC MONEY MARKET FUND: The Fund's investment strategies are substantially the same as the WF Money Market Fund described below. NAF READY CASH The Fund's investment strategies are similar to the WF Money Market INVESTMENT FUND: Fund described below. The Fund may invest more than 25% of its total assets in obligations of financial institutions, but limits its investments to institutions that have total assets in excess of $1 billion. WF MONEY MARKET FUND: The Fund actively manages a portfolio of U.S. dollar-denominated high- quality money market instruments. Under normal market conditions, the Fund invests in: - high quality commercial paper; - negotiable certificates of deposit and banker's acceptances; - repurchase agreements; - U.S. Government obligations; - short-term, U.S. dollar-denominated debt obligations of U.S. branches of foreign banks and foreign branches of U.S. banks; - municipal obligations; and - shares of other money market funds. C-17 WF NATIONAL TAX-FREE MONEY MARKET FUND (CLASS A) (Modeled on NAF Municipal Money Market Fund) Comparison of: SC NATIONAL TAX-FREE MONEY MARKET FUND WHICH WILL REORGANIZE INTO (Class A) WF NATIONAL TAX-FREE AND MONEY MARKET FUND NAF MUNICIPAL MONEY MARKET FUND (Class A) (Investor Class) OBJECTIVES: SC NATIONAL - seeks to provide investors with a high level of income exempt from TAX-FREE MONEY federal income taxes, while preserving capital and liquidity. MARKET FUND: NAF MUNICIPAL - high current income exempt from federal income taxes, while MONEY MARKET preserving capital and liquidity. FUND: WF NATIONAL - seeks high current income exempt from federal income taxes, while TAX-FREE MONEY preserving capital and liquidity. MARKET FUND: INVESTMENT STRATEGIES: SC NATIONAL TAX-FREE The Fund's investment strategies are similar to the WF National MONEY MARKET FUND: Tax-Free Money Market Fund described below. NAF MUNICIPAL MONEY The Fund's investment strategies are substantially the same as MARKET FUND: the WF National Tax-Free Money Market Fund described below. WF NATIONAL TAX-FREE The Fund invests 100% of its assets in short-term municipal MONEY MARKET FUND: instruments, including leases. These investments may have fixed, variable, or floating rates of interest and may be zero coupon securities. The Fund normally will invest at least 80% of its total assets in federally tax-exempt instruments whose income may be subject to the federal AMT. The Fund may invest up to 20% of its total assets in securities that pay interest income subject to federal income tax. The Fund may invest up to 35% of its assets in issuers located in a single state. The Fund may invest more than 25% of our total assets in industrial development bonds and in participation interests in these types of bonds issued by banks. C-18 WF NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND (INSTITUTIONAL AND SERVICE CLASSES) (Modeled on NAF Municipal Money Market Fund) Comparison of: SC NATIONAL TAX-FREE MONEY WHICH WILL REORGANIZE INTO MARKET FUND WF NATIONAL TAX-FREE (Institutional Class) INSTITUTIONAL MONEY AND MARKET FUND NAF MUNICIPAL MONEY MARKET FUND (Institutional and Service (Institutional Class) Classes) OBJECTIVES: SC NATIONAL TAX-FREE MONEY - seeks to provide investors with a high level of income exempt MARKET FUND: from federal income taxes, while preserving capital and liquidity. NAF MUNICIPAL MONEY MARKET - high current income exempt from federal income taxes, while FUND: preserving capital and liquidity. WF NATIONAL TAX-FREE - seeks high current income exempt from federal income taxes, INSTITUTIONAL MONEY MARKET while preserving capital and liquidity. FUND: INVESTMENT STRATEGIES: SC NATIONAL TAX-FREE MONEY MARKET The Fund's investment strategies are similar to the WF FUND: National Tax-Free Institutional Money Market Fund described below. NAF MUNICIPAL MONEY MARKET FUND: The Fund's investment strategies are substantially the same as the WF National Tax-Free Institutional Money Market Fund described below. WF NATIONAL TAX-FREE The Fund invests 100% of its assets in short-term INSTITUTIONAL MONEY MARKET FUND: municipal instruments, including leases. These investments may have fixed, variable, or floating rates of interest and may be zero coupon securities. The Fund normally will invest at least 80% of its total assets in federally tax-exempt instruments whose income may be subject to the federal AMT. The Fund may invest up to 20% of its total assets in securities that pay interest income subject to federal income tax. Under normal market conditions, the Fund may invest up to 35% of its assets in issuers located in a single state. The Fund may invest more than 25% of our total assets in industrial development bonds and in participation interests in these types of bonds issued by banks. C-19 WF TREASURY PLUS INSTITUTIONAL MONEY MARKET FUND (SERVICE AND INSTITUTIONAL CLASSES) (Modeled on SC Treasury Plus Money Market Fund) Comparison of: SC TREASURY PLUS MONEY MARKET FUND WHICH WILL REORGANIZE INTO (Administrative, Service, and Institutional WF TREASURY PLUS Classes) INSTITUTIONAL MONEY MARKET AND FUND NAF TREASURY PLUS FUND (Service and Institutional (Institutional Class) Classes) OBJECTIVES: SC TREASURY PLUS MONEY MARKET - seeks to provide investors with current income and FUND: stability of principal. NAF TREASURY PLUS FUND: - provide investors with current income and stability of principal. WF TREASURY PLUS - seeks current income and stability of principal. INSTITUTIONAL MONEY MARKET FUND: INVESTMENT STRATEGIES: SC TREASURY PLUS MONEY MARKET The Fund's investment strategies are substantially the FUND: same as the WF Treasury Plus Institutional Money Market Fund described below. NAF TREASURY PLUS FUND: The Fund's investment strategies are substantially the same as the WF Treasury Plus Institutional Money Market Fund described below. WF TREASURY PLUS INSTITUTIONAL The Fund actively manage a portfolio composed of MONEY MARKET FUND: obligations issued or guaranteed by the U.S. Treasury. The Fund also invest in notes, repurchase agreements and other instruments collateralized or secured by Treasury obligations. C-20 WF GOVERNMENT MONEY MARKET FUND (Modeled on NAF U.S. Government Fund) Comparison of: SC GOVERNMENT MONEY MARKET FUND WHICH WILL REORGANIZE INTO AND WF GOVERNMENT MONEY MARKET NAF U.S. GOVERNMENT FUND FUND OBJECTIVES: SC GOVERNMENT MONEY - seeks to provide investors with a high level of current income MARKET FUND: as is consistent with preservation of capital and liquidity. NAF U.S. GOVERNMENT - high current income, while preserving capital and liquidity. FUND: WF GOVERNMENT MONEY - seeks high current income, while preserving capital and MARKET FUND: liquidity. INVESTMENT STRATEGIES: SC GOVERNMENT MONEY MARKET The Fund's investment strategies are substantially the same FUND: as the WF Government Fund described below. NAF U.S. GOVERNMENT FUND: The Fund's investment strategies are similar to the WF Government Fund described below. WF GOVERNMENT MONEY MARKET The Fund actively manages a portfolio composed principally FUND: of U.S. Government obligations, or repurchase agreements collateralized by such obligations. C-21 EXHIBIT D--COMPARISON OF SHAREHOLDER SERVICES AND PROCEDURES The following is a summary comparison of the major shareholder policies and procedures of the SC Funds, NAF Funds and WF Funds. As you will see, the WF Funds have adopted substantially similar policies and procedures as the combining Funds. HOW DO THE FUNDS' PURCHASE PROCEDURES DIFFER? As with the SC Funds and NAF Funds, you may purchase shares of the WF Funds directly from the shareholder servicing and transfer agent by mail and by wire. You also may purchase shares through certain authorized selling agents, broker/dealers, banks and other financial institutions. You will be able to purchase WF Funds by telephone and through a systematic purchase plan. ARE THE FUNDS OPEN ON THE SAME DAYS? Yes, the Funds are open on the same days. Purchases and redemptions of shares of the SC Funds, NAF Funds and WF Funds may be made on any day that the New York Stock Exchange is open for trading. HOW DO THE FUNDS' MINIMUM INVESTMENT AMOUNTS COMPARE? For retail class shares, the Funds have the same minimum initial investment amounts: - Initial: $1,000 - Subsequent: $ 100 For Institutional and Service Class shares, the minimum WF Funds' investment amounts are higher than the NAF Funds minimum investment amount of $100,000. The WF investment amounts are: - Initial: $1,000,000 (Institutional Class) $ 150,000 (Service Class) - Subsequent: $25,000 The WF Funds may waive the minimum for some Funds purchased through certain retirement, benefit and pension plans, through certain packaged investment products, or for certain categories of investors. DO THE FUNDS OFFER THE SAME CLASSES OF SHARES? Yes, generally, all the Funds offer the same classes of shares. However, the SC Funds offer two additional share classes and the NAF Funds offer three additional share classes for certain investment situations. The WF Funds also offer one different class. The SC Funds in this proxy statement/prospectus currently offer seven (7) classes of shares: - CLASS A, B, and C shares are offered to the general public; - ADMINISTRATIVE, SERVICE and INSTITUTIONAL CLASS shares are designed for clients of investment advisors and bank trust departments, trust companies and their affiliates; and - CLASS S shares are offered through certain automatic sweep programs. D-1 The NAF Funds currently offer eight (8) classes of shares. While no one NAF Fund offers more than four classes of shares, each of the classes used in any NAF Fund is listed below: - CLASS A, B, and C shares are offered to the general public; - I CLASS shares are designed for clients of investment advisors and bank trust departments, trust companies and their affiliates, including broker-dealers if the Fund does not offer other classes of shares; - INVESTOR CLASS shares are designed for retail investors; - INSTITUTIONAL CLASS shares are designed for institutional investors; - PUBLIC ENTITY CLASS shares are designed primarily for Minnesota public entities; - EXCHANGE CLASS shares may only be purchased through exchanges of B shares of other NAF Funds. Exchange shares automatically convert to Investor shares when the B shares originally purchased would have converted to A shares had they not been exchanged. All of NAF Funds offer Class A and B shares. Only the NAF Income Equity Fund offers Class C shares. All NAF money market funds, except NAF Ready Cash Investment Fund, offer Institutional Class shares. NAF Ready Cash Investment Fund and NAF Municipal Money Market Fund offer Investor shares. All NAF Funds, other than the NAF Money Market Funds, offer I Class shares. The WF Funds listed in this proxy statement/prospectus currently offer five (5) classes of shares: - CLASS A, B, and C shares are offered to the general public; and - SERVICE and INSTITUTIONAL CLASS shares are designed for clients of investment advisors and bank trust departments, trust companies and their affiliates, including broker-dealers if the Fund does not offer other classes of shares. HOW DO SALES CHARGES AND CONVERSION FEATURES COMPARE? The sales charges for the purchase of the SC Funds and NAF Funds are equal to the sales charges for the purchase of the WF Funds. In addition, the conversion features for each class of the SC Funds and NAF Funds (where applicable) are the same as those of the WF Funds. CLASS A SHARES Generally, Class A shares may be purchased at net asset value or NAV, with an initial sales charge. The following chart shows the sales charges applicable to the WF Funds' Class A shares. SALES CHARGE AS A % OF OFFERING SALES CHARGE AS A % OF NET AMOUNT PRICE INVESTED AMOUNT OF PURCHASE WF EQUITY FUNDS WF INCOME FUNDS WF EQUITY FUNDS WF INCOME FUNDS - ----------------------------------------------------------------------------------------------------- Up to $50,000 5.75% 4.50% 6.10% 4.71% $50,000 up to $99,999 4.75% 4.00% 4.99% 4.17% $100,000 up to $249,999 3.75% 3.50% 3.90% 3.63% $250,000 to $499,999 2.75% 2.50% 2.83% 2.56% $500,000 up to $999,999 2.00% 2.00% 2.04% 2.04% Certain purchases of Class A Shares may qualify for reduced or eliminated sales charges. See the Funds' Prospectuses and SAI's for further information about these options. D-2 CLASS B SHARES You may purchase Class B shares at NAV without an initial sales charge. Class B shares are subject to a CDSC if you redeem your shares within a certain period. The following chart shows the CDSC applicable to Class B shares of the WF Funds. CDSC YEAR SINCE PURCHASE WF FUNDS First 5.0% Second 4.0% Third 3.0% Fourth 3.0% Fifth 2.0% Sixth 1.0% Seventh None The WF Funds' Class B shares convert to Class A shares after seven years. The CDSC for the WF Funds is based on the lower of the NAV of the shares on the date of the original purchase, or the NAV of the shares on the date of redemption. For partial redemptions, the WF Funds redeem the least expensive shares first in order to reduce sales charges. CLASS C SHARES WF Funds' Class C shares may be purchased at NAV without an initial sales charge. Class C shares are subject to a CDSC if you redeem your shares within the first year you own them. DO THE FUNDS HAVE A DISTRIBUTION FEE? Yes, the Funds have adopted plans for the Class B and Class C shares under SEC Rule 12b-1 that allows the Funds to pay asset-based sales charges or distribution fees for the distribution and sale of their shares. The WF Funds have a distribution fee for both classes of shares of 0.75%, which is the same as the SC Funds and NAF Funds. Because these fees are paid out of the Funds' assets on an on-going basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of fees. WILL I PAY A SALES CHARGE IN THE REORGANIZATION? No, the reorganization will not involve any sales charges for the Funds' shareholders. HOW DO EXCHANGE PRIVILEGES COMPARE? The SC Funds, NAF Funds and WF Funds have adopted similar exchange policies. You may exchange Class A, B, and C shares of the SC Funds, NAF Funds and WF Funds for the same share classes of other funds. There is no sales charge on share exchanges. There currently is no limit on the number of exchanges you may make. Each Fund may limit your ability to exchange shares if you exchange too often. All Funds may amend or terminate exchange procedures on 60 days' notice. All exchanges, except for the reorganization exchanges, are taxable transactions for federal income purposes. D-3 HOW DO REDEMPTION PROCEDURES COMPARE? For all Funds, you may "redeem" your shares (i.e., sell your shares to a Funds) on any day the Exchange is open. You may redeem shares by mail, telephone or wire. All redemption orders are effected at the next-determined (usually the close of regular trading on the Exchange) NAV per share after receipt in the proper form. All Funds use reasonable procedures to verify that telephone requests are genuine. DO THE WF FUNDS ALLOW SYSTEMATIC WITHDRAWALS? Yes, similarly to the SC Funds and NAF Funds, the WF Funds allow systematic withdrawals. Under the Systematic Withdrawal Plan for the WF Funds, you can regularly redeem shares and receive the proceeds by check or by transfer to a linked bank account. To participate in this program, you: - must have a Fund account value at $10,000 or more; - must have your distributions reinvested; and - may not simultaneously participate in the Systematic Purchase Plan for WF Funds It generally takes about ten days to establish a plan once a Fund has received your instructions. It generally takes about five days to change or cancel participation in a plan. The Funds automatically cancel your program if the linked bank account you specified is closed. DO THE FUNDS DECLARE AND DISTRIBUTE DIVIDENDS THE SAME WAY? Generally, yes. Similarly to the SC Funds (except for the SC Strategic Growth and SC Small Cap Funds which declare and pay dividends annually) and NAF Funds, the WF equity Funds declare and pay any dividends quarterly. The WF income and money market Funds pay dividends monthly. The WF Funds offer choices for receiving distributions: - AUTOMATIC REINVESTMENT OPTION. All distributions of a Fund are automatically invested in additional shares in the Fund. This option is automatically assigned to your account unless you specify another plan. - CHECK PAYMENT OPTION. Allows you to receive checks for distributions mailed to your address of record or to another address that you have specified in written, signature guaranteed instructions The SC Funds and NAF Funds offer additional distribution options. The SC Funds (Fund Purchase Plan) and NAF Funds (Directed Dividend Option) use distributions to buy shares at NAV of another SC Fund or NAF Fund of the same class or a money market fund. The SC Funds' option requires the minimum investment amount to be satisfied for the Fund in which your distributions are being transferred and the NAF Funds' option requires $10,000 or more of a Fund's shares in a single account, in order to participate. The SC Funds offer an additional option, the Automatic Clearing House Option, which deposits your dividends and capital gains into any bank account you link to your Fund account if it is part of the ACH system. ARE FUND SHARES PRICED THE SAME WAY? Yes. All Funds determine NAV per share by dividing the total market value of a Fund's net assets (i.e., the value of its securities and other assets less its liabilities) by the number of shares outstanding at the time the determination is made. Each Fund, except the money market funds, determines NAV at the close of each business day, which is the close of regular trading on the Exchange (4:00 pm Eastern time/3:00pm Central time/1:00pm Pacific time). The money market funds generally calculate NAV at 3:00p.m. (Eastern time)/2:00p.m. (Central time)/12:00 noon (Pacific time). If the markets close early, the Funds may close early and may value their shares at earlier times under these circumstances. D-4 EXHIBIT E--COMPARISON OF INVESTMENT ADVISORS AND INVESTMENT ADVISORY FEES Wells Fargo Bank serves as investment advisor for each of the SC and WF Funds. Wells Fargo provides portfolio management and fundamental security analysis for the Funds. Wells Fargo Bank is located at 525 Market St., San Francisco, CA 94163. Wells Fargo Bank, founded in 1852, is the oldest bank in the western United States and is one of the largest banks in the United States. Wells Fargo Bank is a wholly-owned subsidiary of Wells Fargo & Company, a national bank holding company. As of December 31, 1998, Wells Fargo and its affiliates provided advisory services for over $290 billion in assets. Wells Capital Management Inc. or WCM, a wholly owned subsidiary of Wells Fargo Bank, is the sub-advisor for each of the SC and WF Funds, except the SC Asset Allocation, SC U.S. Government Allocation and WF Asset Allocation Funds. In this capacity, it is responsible for the day-to-day investment management activities of the Funds. As of December 31, 1998, WCM provided advisory services for over $39.8 billion in assets. Norwest Investment Management, Inc. or NIM, which is now a wholly-owned subsidiary of Wells Fargo & Company, Norwest Center, Sixth Street and Marquette, Minneapolis, MN 55479, is the investment advisor for each NAF Fund. In this capacity, NIM makes investment decisions for and administers the Funds' investment programs. Galliard Capital Management, Inc., an investment advisory subsidiary of Norwest Bank, 800 LaSalle Avenue, Suite 2060, Minneapolis, MN 55479, provides sub-advisory services for the Strategic Value Bond Portfolio in which the Total Return Bond Fund invests. Barclays Global Fund Advisors or BGFA, a wholly owned subsidiary of Barclays Global Investors, N.A. and an indirect subsidiary of Barclays Bank PLC, will be the sub-advisor for the WF Asset Allocation Fund. In this capacity, it is responsible for the model that is used to manage the investment portfolio and the selection of securities for the portfolio. BGFA was created from the reorganization of Wells Fargo Nikko Investment Advisors, a former affiliate of Wells Fargo Bank, and is one of the largest providers of index portfolio management services. As of December 31, 1998, BGFA provided investment advisory services for $27 billion in assets. After the reorganization, WCM will be the sub-advisor for the WF Growth, WF Limited Term Government Income, and WF money market funds, except the WF National Tax-Free Money Market Fund and WF Government Money Market Fund. NIM will be the sub-advisor for the WF Income Equity, WF Small Cap, WF Income, WF Intermediate Government Income, WF Tax-Free Income, WF National Tax-Free Money Market Fund and WF Government Money Market Fund. E-1 The following chart highlights the investment advisory fees charged to each SC Fund, NAF Fund and WF Fund. - ----------------------------------------------------------------------------------------------------- ADVISORY FEE FUND (CONTRACTUAL) SC Asset Allocation Fund 0.36% SC Balanced Fund 0.60% WF ASSET ALLOCATION FUND 0.80% SC Growth Fund 0.50% NAF ValuGrowth-SM- Stock Fund 0.78% WF GROWTH FUND 0.75% SC Diversified Equity Income Fund 0.50% NAF Income Equity Fund 0.50% WF INCOME EQUITY FUND 0.75% SC Small Cap Fund* 0.60% SC Strategic Growth Fund* 0.50% NAF Small Company Stock Fund 0.90% WF SMALL CAP FUND 0.90% NAF Income Fund 0.50% NAF Total Return Bond Fund 0.50% NAF Performa Strategic Value Bond Fund 0.50% WF INCOME FUND 0.50% SC U.S. Government Income Fund 0.50% SC U.S Government Allocation Fund 0.50% NAF Intermediate Government Income Fund 0.33% WF INTERMEDIATE GOVERNMENT INCOME FUND 0.50% SC Short-Intermediate U.S Government Income Fund 0.50% NAF Limited Term Government Income Fund 0.33% WF LIMITED TERM GOVERNMENT INCOME FUND 0.50% SC National Tax-Free Fund 0.50% NAF Tax-Free Income Fund 0.50% WF NATIONAL TAX-FREE FUND 0.40% SC Prime Money Market Fund 0.25% (Administrative, Service and Institutional Classes) NAF Cash Investment Fund* 0.23% WF CASH INVESTMENT MONEY MARKET FUND 0.25% SC Money Market Fund 0.40% SC Prime Money Market Fund (Class A) 0.25% NAF Ready Cash Investment Fund (Investor and Exchange Class)* 0.33% WF MONEY MARKET FUND 0.40% SC Treasury Plus Money Market Fund 0.25% (Administrative, Service and Institutional Classes) NAF Treasury Plus Fund (Institutional Class) 0.20% WF TREASURY PLUS INSTITUTIONAL MONEY MARKET FUND 0.10% SC National Tax-Free Money Market Fund (Class A) 0.30% NAF Municipal Money Market Fund (Investor Class) 0.34% WF NATIONAL TAX-FREE MONEY MARKET FUND (CLASS A) 0.25% SC National Tax-Free Money Market Fund (Institutional Class) 0.30% NAF Municipal Money Market Fund (Institutional Class) 0.34% WF NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND 0.10% (Institutional and Service Class) SC Government Money Market Fund 0.25% NAF U.S. Government Fund 0.14% WF GOVERNMENT MONEY MARKET FUND 0.35% * Reflects Portfolio Investment Advisory Fee E-2 EXHIBIT F--COMPARISON OF OTHER SERVICE PROVIDERS The following is a list of service providers for the SC Funds, NAF Funds and WF Funds: - ------------------------------------------------------------------------------------------- SERVICE PROVIDERS SERVICE SF FUNDS NAF FUNDS WF FUNDS - -------------------------------------------------------------------------------------------- Investment Advisor Wells Fargo Bank NIM Wells Fargo Bank Subadvisor WCM Galliard WCM, NIM, and BGFA Distribution Stephens Inc. Forum Stephens Inc. Administrator Wells Fargo Bank Forum Wells Fargo Bank Co-Administrator Stephens Inc. Custodian Wells Fargo Bank Norwest Bank Norwest Bank Fund Accountant Wells Fargo Bank Forum Forum Transfer Agent and Dividend Wells Fargo Bank Norwest Bank Boston Financial Data Disbursing Agent Services, Inc. Independent Auditors KPMG LLP KPMG LLP KPMG LLP F-1 EXHIBIT G--COMPARISON OF BUSINESS STRUCTURES The following information provides only a summary of the major differences between the organizational structure and governing documents of the Funds. The SC Funds are series of Stagecoach Funds, Inc., which is organized as a Maryland corporation. The NAF Funds are series of the Norwest Advantage Funds, which is organized as a Delaware business trust. The WF Funds are series of Wells Fargo Funds Trust, which is organized as a Delaware business trust. The responsibilities, powers and fiduciary duties of the Directors of the SC Funds and the Trustees of the NAF and WF Funds are substantially similar. Each SC Fund and NAF Fund has procedures available to its respective shareholders for calling shareholders' meetings for the removal of Trustees or Directors. Pursuant to Maryland Law, any Director of the SC Funds may be removed, either with or without cause, at any meeting of shareholders duly called and at which a quorum is present by the affirmative vote of a majority of the votes entitled to be cast for the election of Directors. The Trustees of the NAF Funds and the WF Funds may be removed from office at any meeting of the shareholders by a vote of shareholders owning at least two-thirds of the outstanding shares. Under the Trust Instrument of the WF Funds, shareholders do not have the right to remove Trustees. The Directors or Trustees of the SC Funds and the NAF Funds are required to promptly call a special meeting of shareholders when requested to do so in writing by shareholders owning at least ten percent of the outstanding shares. The Trustees of the WF Funds are not subject to a comparable requirement. None of the Funds is required to hold annual meetings of shareholders. Shareholder meetings normally will be held only when specifically required by federal or state law. Except when a larger vote is required by law or by any provision of the Trust Instrument or By-Laws, the WF Funds, like the SC Funds and NAF Funds, require a majority of the shares voted in person at a meeting or by proxy to decide any question at a shareholder's meeting. Unless otherwise required by law, the SC Funds, NAF Funds and WF Funds require one-third of the shares entitled to vote on a matter to constitute a quorum for the transaction of business at a meeting of the shareholders of a Fund. The Funds can adjourn meetings by the majority vote of any lesser number than that sufficient for a quorum. Unlike the SC Funds or NAF Funds, WF Fund shareholders do not have the right to vote on proposed Fund reorganizations, unless otherwise required by law. As in the case of the SC and NAF Funds, the WF Fund shares have equal dividend, distribution, liquidation and voting rights, except that expenses related to the distribution of the shares of any class (and certain other expenses such as transfer agency and administration expenses) are borne solely by those shares. Generally, shares will be voted in the aggregate without reference to a particular series or class. The SC Funds, NAF Funds and WF Funds indemnify their officers and Directors or Trustees to the full extent permitted by law. This indemnification does not protect these persons against any liability to a Fund or any shareholder to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the satisfaction of such person's office. G-1 APPENDIX [FUNDS] SPECIAL MEETING OF SHAREHOLDERS AUGUST 5, 1999 STAGECOACH FUNDS THE UNDERSIGNED HEREBY APPPOINTS AND PROXIES OF THE 1111 CENTER STREET UNDERSIGNED, WITH POWER OF SUBSTITUTION AND RESUBSTITUTION, LITTLE ROCK, AR 72201 TO ATTEND, VOTE AND ACT FOR THE UNDERSIGNED AT THE SPECIAL NORWEST ADVANTAGE MEETINGS OF SHAREHOLDERS (THE "MEETINGS") OF FUNDS [ ] OF STAGECOACH FUNDS, INC. ("SC FUNDS") 2 PORTLAND SQUARE AND NORWEST ADVANTAGE FUNDS, INC. ("NAF FUNDS") TO BE HELD PORTLAND, ME 041011 AT AND ON THURSDAY, AUGUST 5, 1999, AND AT ANY ADJOURNMENT(S) THEREOF. THE PROXIES SHALL CAST VOTES ACCORDING TO THE NUMBER OF SHARES OF THE PORTFOLIO IDENTIFIED BELOW WHICH THE UNDERSIGNED MAY BE ENTITLED TO VOTE WITH RESPECT TO THE PROPOSALS SET FORTH BELOW, IN ACCORDANCE WITH THE SPECIFICATION INDICATED, IF ANY, AND SHALL HAVE ALL THE POWERS WHICH THE UNDERSIGNED WOULD POSSESS IF PERSONALLY PRESENT. THE UNDERSIGNED HEREBY REVOKES ANY PRIOR PROXY TO VOTE AT SUCH MEETINGS, AND HEREBY RATIFIES AND CONFIRMS ALL THAT SAID PROXIES, OR ANY OF THEM, MAY LAWFULLY DO BY VIRTUE HEREOF OR THEREOF. THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS OF THE PORTFOLIO AND THE COMBINED PROXY STATEMENT/PROSPECTUS, DATED MAY 22, 1999. THIS PROXY IS SOLICITED BY AND THE PROPOSAL IS PROPOSED BY THE BOARDS OF DIRECTORS OF THE SC FUNDS AND THE NAF FUNDS, WHICH UNANIMOUISLY RECOMMENDED THAT YOU VOTE IN FAVOR OF THE PROPOSAL. FOR YOUR CONVENIENCE YOU MAY VOTE BY CALLING D.F. KING & CO., INC TOL-FREE AT 1-800-326-3066 FROM 5 A.M. TO 6:00 P.M. [PACIFIC] TIME. YOU MAY ALSO VOTE BY FAXING THE PROXY BALLOT TO D.F. KING & CO. AT 212-269-2796 OR BY MAILING IT IN THE ENCLOSED POSTAGE PAID ENVELOPE. YOU MAY ALSO VOTE ON THE INTERNET AT www.proxyvote.com. PLEASE MAKE SURE YOU MARK, SIGN AND DATE YOUR PROXY CARD. A CONFIRMATION OF YOUR TELEPHONE OR TELEFACSIMILE VOTE WILL BE MAILED TO YOU. THE PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTIONS TO BE TAKEN ON THE FOLLOWING PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION, THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS. PLEASE SIGN BELOW EXACTLY AS YOUR NAME(S) SHOULD APPEAR(S) HEREON. CORPORATE PROXIES SHOULD BE SINGED IN FULL CORPORATE NAME BY AN AUTHORIZED OFFICER, EACH JOINT OWNER SHOULD SIGN PERSONALLY, FIDUCIARIES SHOULD GIVE FULL TITLES AS SUCH. G-2 PART B STATEMENT OF ADDITIONAL INFORMATION Acquisition of the assets of the Stagecoach Funds and Norwest Advantage Funds by and in exchange for shares of the Wells Fargo Funds as described below: STAGECOACH FUNDS NORWEST ADVANTAGE FUNDS WELLS FARGO FUNDS TRUST 111 Center Street 2 PORTLAND SQUARE 111 CENTER STREET Little Rock, AR 72211 PORTLAND, ME 04101 LITTLE ROCK, AR 72211 - ---------------------------------------------------------------------------------------------------- will reorganize into SC FUND NAF FUND WF FUND - ---------------------------------------------------------------------------------------------------- Asset Allocation Fund Balanced Fund -- Asset Allocation Fund - ---------------------------------------------------------------------------------------------------- Growth Fund ValuGrowth-SM- Stock Fund Growth Fund - ---------------------------------------------------------------------------------------------------- Diversified Equity Income Fund Income Equity Fund Income Equity Fund - ---------------------------------------------------------------------------------------------------- Small Cap Fund Strategic Growth Fund Small Company Stock Fund Small Cap Fund - ---------------------------------------------------------------------------------------------------- Income Fund -- Total Return Bond Fund Performa Strategic Value Bond Fund Income Fund - ---------------------------------------------------------------------------------------------------- U.S. Government Income Fund Intermediate Government Income Intermediate Government U.S. Government Allocation Fund Fund Income Fund - ---------------------------------------------------------------------------------------------------- Short-Intermediate U.S. Limited Term Government Income Limited Term Government Government Income Fund Fund Income Fund - ---------------------------------------------------------------------------------------------------- National Tax-Free Fund Tax-Free Income Fund Tax-Free Income Fund - ---------------------------------------------------------------------------------------------------- Prime Money Market Fund (Administrative, Service and Cash Investment Fund Cash Investment Money Market Institutional Classes) Fund - ---------------------------------------------------------------------------------------------------- Prime Money Market Fund Ready Cash Investment Fund (Class A) (Investor and Exchange Classes) Prime Investment Money Money Market Fund Market Fund - ---------------------------------------------------------------------------------------------------- National Tax-Free Money Market Municipal Money Market Fund National Tax-Free Money Fund (Class A) (Investor Class) Market Fund (Class A) - ---------------------------------------------------------------------------------------------------- National Tax-Free Money Market Municipal Money Market Fund National Tax-Free Fund (Institutional Class) (Institutional Class) Institutional Money Market Fund (Service and Institutional Classes) - ---------------------------------------------------------------------------------------------------- Treasury Plus Money Market Fund Treasury Plus Fund Treasury Plus Institutional (Administrative, Service and (Institutional Class) Money Market Fund Institutional Classes) (Service and Institutional Classes) - ---------------------------------------------------------------------------------------------------- Government Money Market Fund U.S. Government Fund Government Money Market Fund - ---------------------------------------------------------------------------------------------------- This Statement of Additional Information or SAI relating to the proposed transfer of the assets of the SC Funds and NAF Funds to the WF Funds in exchange for shares of the WF Funds consists of this cover page and the following described documents, each of which is attached hereto: (1) The SAIs for the WF Funds dated [________], 1999. (2) Report of Independent Accountants and financial statements of the WF Funds as of [________], 1999, contained in the WF Funds' SAIs. S-1 (3) Unaudited financial statements of the WF Funds as of [________], 1999. (4) Report of Independent Auditors and financial statements of the SC Funds as of [________], 1999. (5) Report of Independent Auditors and financial statements of the NAF Funds as of [________], 1999. (6) Unaudited pro forma combined financial information as of [________], 1999. The pro forma financial statements give effect to the reorganization as if it had occurred for the periods presented. This SAI is not a prospectus and should be read in conjunction with the Funds' Prospectus, dated May 25, 1999. A Prospectus/Proxy Statement dated [________], 1999 relating to the above referenced matter may be obtained without charge by calling 1-800-222-8222 or writing to Wells Fargo Funds Trust, P.O. Box 7066, San Francisco, CA 94120-7066. This SAI relates to and should be read in conjunction with, such Prospectus/Proxy Statement. This SAI is dated [________], 1999. S-2 WELLS FARGO FUNDS - GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 NORWEST ADVANTAGE VALUGROWTH STOCK STAGECOACH PRO FORMA PRO FORMA FUND GROWTH FUND ADJUSTMENTS COMBINED ---------------- --------------- ------------------ --------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $452,435,458 $414,312,228 $866,747,686 Cash 1,927,142 6,471 1,933,613 Receivables: Dividends and Interest 581,527 427,135 1,008,662 Fund shares sold 63,699 2,500 66,199 Investment securities sold 14,022,811 0 14,022,811 Organization expenses, net of amortization 0 3,789 3,789 Prepaid expenses 0 4,584 4,584 TOTAL ASSETS 469,030,637 414,756,707 883,787,344 LIABILITIES Payables: Distribution to shareholders 96,138 0 96,138 Fund shares redeemed 5,949,734 12,882 5,962,616 Due to distributor 5,168 197,743 202,911 Due to advisor 373,063 337,211 710,274 Daily variation margin on futures and options 3,660,000 0 3,660,000 Other 24,945 98,510 123,455 TOTAL LIABILITIES 10,109,048 646,346 10,755,394 TOTAL NET ASSETS $458,921,589 $414,110,361 $873,031,950 Net assets consist of: Paid-in capital $242,956,835 $267,269,767 $510,226,602 Undistributed net investment income (loss) (115,164) (109,000) (224,164) Undistributed net realized gain (loss) on investments 75,316,866 58,013,072 133,329,938 Net unrealized appreciation (depreciation) of investments 140,763,052 88,936,522 229,699,574 TOTAL NET ASSETS $458,921,589 $414,110,361 $873,031,950 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net assets - Class A $ 21,495,822 $342,105,239 $363,601,061 Shares outstanding - Class A 843,935 14,452,942 64,178(a) 15,361,055 Net asset value per share - Class A $ 25.47 $ 23.67 $ 23.67 Maximum offering price per share - Class A $ 26.95 $ 24.98 $ 24.98 Net Assets - Class B $ 8,557,355 $ 16,393,183 $ 24,950,538 Shares outstanding - Class B 344,994 590,536 (36,786)(a) 898,744 Net asset value and offering price per share - Class B $ 24.80 $ 27.76 $ 27.76 Net Assets - Institutional Class $428,868,412 $ 55,611,939 $484,480,351 Shares outstanding - Institutional Class 16,859,467 3,314,817 8,701,012(a) 28,875,296 Net asset value and offering price per share - Institutional Class $ 25.44 $ 16.78 $ 16.78 INVESTMENT AT COST $311,672,406 $325,375,706 $637,048,112 - ------------------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (SEE S-77) S-3 WELLS FARGO FUNDS - GROWTH FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) NORWEST ADVANTAGE VALUGROWTH STAGECOACH PRO FORMA PRO FORMA INVESTMENT INCOME STOCK FUND GROWTH FUND ADJUSTMENTS COMBINED ------------------------------------------------------------------------ Dividends $ 7,985,409 $ 5,618,628 $ 13,604,037 Interest 1,287,634 746,835 2,034,469 Securities lending income 164,319 0 164,319 TOTAL INVESTMENT INCOME 9,437,362 6,365,463 15,802,825 EXPENSES Advisory fees 4,690,810 1,890,240 814,620 (b) 7,395,670 Administration fees 601,424 280,126 597,584 (b) 1,479,134 Custody fees 75,142 68,786 53,290 (b) 197,218 Shareholder serv fees 0 1,221,639 1,307,113 (b) 2,528,752 Portfolio accounting fees 80,000 143,509 (143,509)(b) 80,000 Transfer agency fees 1,503,556 560,421 (1,033,114)(b) 1,030,863 Distribution fees 83,607 426,569 (319,588)(b) 190,588 Organization costs 0 2,701 0 2,701 Legal and audit fees 20,783 69,421 (22,551)(b) 67,653 Registration fees 105,826 71,306 0 177,132 Directors' fees 8,444 3,831 (5,846)(b) 6,429 Shareholder reports 41,006 102,241 (14,325)(b) 128,922 Other 11,987 17,585 (1,479)(b) 28,093 TOTAL EXPENSES 7,222,585 4,858,375 13,313,155 Less: Waived fees and reimbursed expenses fees (1,147,668) (26,901) (1,362,848)(c) (2,537,417) NET EXPENSES 6,074,917 4,831,474 10,775,738 NET INVESTMENT INCOME (LOSS) 3,362,445 1,533,989 5,027,087 REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain (loss) on sale of investments 64,339,625 53,123,219 117,462,844 Net change in unrealized appreciation (depreciation) of investments (24,941,249) 25,159,238 217,989 NET GAIN (LOSS) ON INVESTMENTS 39,398,376 78,282,457 117,680,833 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 42,760,821 $79,816,446 $122,707,920 - ---------------------------------------------------------------------------------------------------------------------------------- * The Stagecoach Growth Fund and Norwest Advantage ValuGrowth Stock Fund are merging to form the Wells Fargo Growth Fund, historical accounting data from the Stagecoach Growth Fund will be kept. (a) Reflects new shares issued, net of retired shares of the respective Funds which are not accounting survivors. (b) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (c) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (SEE S-77) S-4 WELLS FARGO FUNDS - GROWTH FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE VALUGROWTH STOCK FUND AND STAGECOACH GROWTH FUND(a) NORWEST (UNAUDITED) NOVEMBER 30, 1998 ADVANTAGE STAGECOACH PRO FORMA VALUGROWTH STOCK FUND GROWTH FUND COMBINED SHARES/PAR SECURITY DESCRIPTION VALUE(b) VALUE(b) VALUES(b) COMMON STOCKS AEROSPACE 20,084 Boeing Company $ 0 $ 815,913 $ 815,913 AUTOMOBILE & RELATED 195,000 CNF Transportation $ 6,959,063 $ 0 $ 6,959,063 42,400 Ford Motor Company 0 2,342,600 2,342,600 $ 6,959,063 $ 2,342,600 $ 9,301,663 COMPUTER SOFTWARE 18,000 Compuware Corporation $ 0 $ 1,120,500 $ 1,120,500 64,286 Hewlett-Packard Company 0 4,033,940 4,033,940 194,600 HNC Software, Incorporated 6,421,800 0 6,421,800 130,508 Intel Corporation 7,038,675 7,007,249 14,045,924 112,000 Legato Systems, Incorporated 5,355,000 0 5,355,000 175,168 Microsoft Corporation 6,326,920 15,043,576 21,370,496 163,500 National Data Corporation 6,110,813 0 6,110,813 200,000 Parametric Technology Company 3,400,000 0 3,400,000 95,000 Sun Microsystems, Incorporated 7,035,938 0 7,035,938 $ 41,689,146 $ 27,205,265 $ 68,894,411 COMPUTER SYSTEMS 249,551 Cisco Systems Incorporated $ 7,336,776 $ 11,473,130 $ 18,809,906 295,000 Compaq Computer Corporation 6,402,500 3,185,000 9,587,500 243,800 EMC Corporation 8,859,500 8,816,000 17,675,500 59,362 International Business Machines Corporation 0 9,794,730 9,794,730 145,900 Jabil Circuit, Incorporated 8,462,200 0 8,462,200 $ 31,060,976 $ 33,268,860 $ 64,329,836 CONSUMER BASIC 132,000 American Home Products $ 7,029,000 $ 0 $ 7,029,000 39,800 Bestfoods 0 2,313,375 2,313,375 51,400 Colgate-Palmolive Company 0 4,401,125 4,401,125 170,156 Dupont (E.I.) de Nemours 5,885,575 4,111,090 9,996,665 65,400 Home Depot Incorporated 0 3,253,650 3,253,650 141,902 Johnson & Johnson 6,662,500 4,867,038 11,529,538 247,258 Monsanto Corporation 7,354,219 3,849,659 11,203,878 154,844 Procter & Gamble Corporation 8,780,025 4,788,181 13,568,206 74,200 Sara Lee Corporation 0 4,331,425 4,331,425 44,400 Schering-Plough Corporation 0 4,723,050 4,723,050 $ 35,711,319 $ 36,638,593 $ 72,349,912 CONSUMER DISCRETIONARY 155,706 Allied Signal Incorporated $ 0 $ 6,851,064 $ 6,851,064 202,000 Borders Group, Incorporated 4,898,500 0 4,898,500 203,620 Coca-Cola Company 5,121,569 9,144,558 14,266,127 295,836 Gillette Company 9,902,288 3,687,679 13,589,967 367,000 International Home Foods, Incorporated 7,202,375 0 7,202,375 220,400 Mattel Incorporated 6,428,625 1,188,950 7,617,575 185,700 Newell Company 8,217,225 0 8,217,225 232,500 PepsiCo, Incorporated 8,994,844 0 8,994,844 163,850 Service Corporation International 0 6,123,894 6,123,894 $ 50,765,426 $ 26,996,145 $ 77,761,571 ENERGY & RELATED 162,373 Chevron Corporation $ 8,362,500 $ 5,215,942 $ 13,578,442 61,000 Conoco Incorporated 0 1,444,938 1,444,938 118,100 Consolidated Natural Gas Company 6,414,305 0 6,414,305 106,878 Exxon Corporation 0 8,022,530 8,022,530 52,448 FPL Group Incorporated 0 3,212,440 3,212,440 159,874 Mobil Corporation 9,308,250 4,470,890 13,779,140 111,216 Royal Dutch Petroleum ADR 0 5,227,152 5,227,152 222,776 Schlumberger Limited 8,128,656 1,826,646 9,955,302 58,254 Texaco Incorporated 0 3,353,246 3,353,246 82,930 Williams Companies Incorporated 0 2,389,421 2,389,421 $ 32,213,711 $ 35,163,205 $ 67,376,916 ENTERTAINMENT & LEISURE 162,300 Fox Entertainment Group Incorporated $ 0 $ 3,834,338 $ 3,834,338 398,300 Patriot American Hospitality, Incorporated 2,937,463 0 2,937,463 261,819 Walt Disney Company 5,144,174 3,283,125 8,427,299 $ 8,081,637 $ 7,117,463 $ 15,199,100 FINANCE & RELATED 331,296 Allstate Corporation $ 8,806,075 $ 4,694,237 $ 13,500,312 195,614 American International Group Incorporated 5,817,378 12,570,338 18,387,716 109,338 Banc One Corporation 0 5,610,406 5,610,406 179,135 BankAmerica Corporation 11,677,363 0 11,677,363 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-5 WELLS FARGO FUNDS - GROWTH FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE VALUGROWTH STOCK FUND AND STAGECOACH GROWTH FUND(a) NORWEST (UNAUDITED) NOVEMBER 30, 1998 ADVANTAGE STAGECOACH PRO FORMA VALUGROWTH STOCK FUND GROWTH FUND COMBINED SHARES/PAR SECURITY DESCRIPTION VALUE(b) VALUE(b) VALUES(b) 61,864 Charles Schwab Corporation 0 3,487,583 3,487,583 233,960 Chase Manhattan Corporation 3,457,343 11,384,494 14,841,837 79,900 Chubb Corporation 5,597,994 0 5,597,994 181,000 Citigroup, Incorporated 9,083,937 0 9,083,937 135,260 Federal Home Loan Mortgage Corporation 0 8,183,230 8,183,230 191,876 Federal National Mortgage Association 8,118,900 5,840,079 13,958,979 156,580 First Union Corporation 9,512,235 0 9,512,235 157,200 Franklin Resources, Incorporated 6,720,300 0 6,720,300 4,900 General Re Corporation 0 1,144,150 1,144,150 121,826 Household International Incorporated 0 4,766,442 4,766,442 69,000 Merrill Lynch & Company, Incorporated 5,175,000 0 5,175,000 124,450 State Street Corporation 8,540,381 0 8,540,381 40,600 Sunamerica Incorporated 0 3,217,550 3,217,550 255,000 U.S. Bancorp 9,387,188 0 9,387,188 $ 91,894,094 $ 60,898,509 $152,792,603 FOOD & RELATED 29,200 McDonald's Corporation $ 0 $ 2,045,825 $ 2,045,825 129,197 Philip Morris Companies Incorporated 0 7,226,957 7,226,957 46,300 Safeway Incorporated 0 2,445,219 2,445,219 $ 0 $ 11,718,001 $ 11,718,001 GENERAL BUSINESS 237,370 American Power Conversion Corporation $ 9,821,184 $ 0 $ 9,821,184 240,000 Carnival Corporation 8,280,000 0 8,280,000 460,000 CellStar Corporation 2,961,250 0 2,961,250 254,000 Cerner Corporation 6,667,500 0 6,667,500 47,800 Clear Channel Communications 0 2,234,650 2,234,650 139,600 Ecolab, Incorporated 4,318,875 0 4,318,875 487,800 Electronics for Imaging, Incorporated 13,079,137 0 13,079,137 70,000 Emerson Electric Company 4,550,000 0 4,550,000 72,680 Gannett Incorporated 0 4,692,403 4,692,403 320,000 Gartner Group, Incorporated 6,920,000 0 6,920,000 293,142 General Electric Company 9,050,000 17,479,351 26,529,351 422,200 Gentex Corporation 7,757,925 0 7,757,925 106,300 Philips Electronics N.V. 6,730,119 0 6,730,119 11,948 Tribune Company 0 766,166 766,166 24,200 United Technologies Corporation 0 2,593,938 2,593,938 78,800 Xerox Corporation 6,557,500 1,913,500 8,471,000 $ 86,693,490 $ 29,680,008 $116,373,498 INTERNATIONAL STOCKS 47,300 News Corporation Limited ADR $ 0 $ 1,324,400 $ 1,324,400 MANUFACTURING - PROCESSING 76,100 AES Corporation $ 0 $ 3,481,575 $ 3,481,575 91,816 Aluminum Company of America 0 6,805,861 6,805,861 172,488 Danaher Corporation 0 7,869,765 7,869,765 25,000 Ingersoll Rand Company 0 1,170,313 1,170,313 64,100 Tyco International Limited 0 4,218,581 4,218,581 $ 0 $ 23,546,095 $ 23,546,095 MEDICAL EQUIPMENT & SUPPLIES 66,872 Abbott Laboratories $ 0 $ 3,209,856 $ 3,209,856 183,622 Baxter International Incorporated 6,991,875 4,679,598 11,671,473 155,000 Becton, Dickinson & Company 6,587,500 0 6,587,500 101,570 Guidant Corporation 6,865,000 1,850,976 8,715,976 97,374 Honeywell, Incorporated 7,783,834 0 7,783,834 76,800 Medtronic Incorporated 3,804,038 1,394,363 5,198,401 $ 32,032,247 $ 11,134,793 $ 43,167,040 PHARMACEUTICALS 62,292 Bristol Myers Squibb Company $ 0 $ 7,634,663 $ 7,634,663 19,154 Lilly (Eli) & Company 0 1,717,874 1,717,874 102,700 Merck & Company Incorporated 8,518,125 7,387,538 15,905,663 73,890 Pfizer Incorporated 0 8,247,971 8,247,971 140,000 Watson Pharmaceuticals 7,542,500 0 7,542,500 $ 16,060,625 $ 24,988,046 $ 41,048,671 REAL ESTATE INVESTMENT TRUST 242,147 Equity Office Properties $ 6,083,942 $ 0 $ 6,083,942 RETAIL & RELATED 32,000 Consolidated Stores Corporation $ 688,000 $ 0 $ 688,000 106,620 Dayton Hudson Corporation 0 4,797,900 4,797,900 18,200 Gap Incorporated 0 1,338,838 1,338,838 94,900 May Department Stores Company 5,723,656 0 5,723,656 229,352 Wal-Mart Stores Incorporated 6,778,125 10,494,948 17,273,073 $ 13,189,781 $ 16,631,686 $ 29,821,467 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-6 WELLS FARGO FUNDS - GROWTH FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE VALUGROWTH STOCK FUND AND STAGECOACH GROWTH FUND(a) NORWEST (UNAUDITED) NOVEMBER 30, 1998 ADVANTAGE STAGECOACH PRO FORMA VALUGROWTH STOCK FUND GROWTH FUND COMBINED SHARES/PAR SECURITY DESCRIPTION VALUE(b) VALUE(b) VALUES(b) TELECOMMUNICATIONS 57,314 American Telephone & Telegraph Corporation $ 0 $ 3,571,379 $ 3,571,379 93,152 Bell Atlantic Corporation 0 5,181,580 5,181,580 249,994 Ericsson LM ADR 0 6,906,084 6,906,084 83,346 GTE Corporation 0 5,167,452 5,167,452 50,892 Lucent Technologies Incorporated 0 4,379,893 4,379,893 103,124 MCI Worldcom Incorporated 0 6,084,316 6,084,316 $ 0 $ 31,290,704 $ 31,290,704 UTILITIES 108,886 Edison International $ 0 $ 2,994,365 $ 2,994,365 35,000 Houston Industries Incorporated 0 1,106,875 1,106,875 70,735 Northern Telecom Limited ADR 0 3,302,440 3,302,440 134,536 Pacific Gas & Electric Company 0 4,162,208 4,162,208 165,504 SBC Communications 0 7,933,848 7,933,848 $ 0 $ 19,499,736 $ 19,499,736 TOTAL COMMON STOCKS $452,435,457 $400,260,022 $852,695,479 UNIT INVESTMENT TRUSTS 79,800 Standard & Poor's Depositary Receipt $ 0 $ 9,294,206 $ 9,294,206 WARRANTS 28 Jan Bell Marketing, Incorporated $ 1 $ 0 $ 1 REPURCHASE AGREEMENTS Goldman Sachs Pooled Repurchase Agreement - 102% $4,388,000 Collateralized by U.S. Government Securities $ 0 $ 4,388,000 $ 4,388,000 JP Morgan Securities Incorporated Repurchase Agreement - 102% Collateralized by 0 370,000 370,000 370,000 U.S. Government Securities TOTAL SHORT-TERM INVESTMENTS $ 0 $ 4,758,000 $ 4,758,000 TOTAL INVESTMENTS IN SECURITIES $452,435,458 $414,312,228 $866,747,686 (Combined Cost $637,048112) (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-7 WELLS FARGO FUNDS - INCOME EQUITY FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 STAGECOACH NORWEST DIVERSIFIED EQUITY ADVANTAGE INCOME PRO FORMA PRO FORMA INCOME FUND EQUITY FUND ADJUSTMENTS COMBINED --------------------------------------------------------------- --------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $236,473,517 $1,504,268,776 $1,740,742,293 Cash 6,142 0 6,142 Receivables: Dividends and Interest 727,316 13,475 740,791 Fund shares sold 2,095 3,382,414 3,384,509 Investment securities sold 1,799,547 0 1,799,547 Due from advisor 0 0 4,139 (b) 4,139 Organization expenses, net of amortization 4,139 11,357 (4,139)(b) 11,357 TOTAL ASSETS 239,012,756 1,507,676,022 1,746,688,778 LIABILITIES Payables: Investment securities purchased 502,765 0 502,765 Distribution to shareholders 0 8,922 8,922 Fund shares redeemed 32,463 1,672,575 1,705,038 Due to distributor 130,509 76,511 207,020 Due to advisor 196,808 305,380 502,188 Other 82,951 72,171 155,122 TOTAL LIABILITIES 945,496 2,135,559 3,081,055 TOTAL NET ASSETS $238,067,260 $1,505,540,463 $1,743,607,723 NET ASSETS CONSIST OF: Paid-in capital $179,154,905 $1,134,735,612 $1,313,890,517 Undistributed net investment income (loss) 596,421 3,361,806 3,958,227 Undistributed net realized gain (loss) on investments 24,440,949 5,299,867 29,740,816 Net unrealized appreciation (depreciation) of investments 33,874,985 362,143,178 396,018,163 TOTAL NET ASSETS $238,067,260 $1,505,540,463 $1,743,607,723 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net assets - Class A $174,044,375 $ 86,900,348 $ 260,944,723 Shares outstanding - Class A 9,949,056 2,086,097 (5,772,172)(c) 6,262,981 Net asset value per share - Class A $ 17.49 $ 41.66 $ 41.66 Maximum offering price per share - Class A $ 18.46 Net Assets - Class B $ 64,022,885 $ 82,770,746 $ 146,793,631 Shares outstanding - Class B 3,910,859 1,990,547 (2,371,158)(c) 3,530,248 Net asset value and offering price per share - Class B $ 16.37 $ 41.58 $ 41.58 Net Assets - Class C $ 12,002 $ 12,002 Shares outstanding - Class C 281 281 Net asset value and offering price per share - Class C $ 42.58 $ 42.58 Net Assets - Institutional Class $1,335,857,367 $1,335,857,367 Shares outstanding - Institutional Class 32,071,380 32,071,380 Net asset value and offering price per share - Institutional Class $ 41.65 $ 41.65 INVESTMENT AT COST $202,598,532 $1,142,125,598 $1,344,724,130 - ---------------------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-8 WELLS FARGO FUNDS - INCOME EQUITY FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) STAGECOACH NORWEST DIVERSIFIED EQUITY ADVANTAGE INCOME CORE-GATEWAY PRO FORMA PRO FORMA INVESTMENT INCOME INCOME FUND EQUITY FUND ADJUSTMENTS(a) ADJUSTMENTS COMBINED ------------------------------------------------------------------------------------------- Dividends $ 7,016,776 $ 27,518,284 $ 34,535,060 Interest 653,187 1,169,038 1,822,225 Securities lending income 0 215,638 215,638 Net expenses from master/core portfolios 0 (7,003,418) 7,003,418 0 TOTAL INVESTMENT INCOME 7,669,963 21,899,542 36,572,923 EXPENSES Advisory fees 1,318,662 0 6,582,483 3,950,881 (d) 11,852,026 Administration fees 180,065 658,254 658,248 873,838 (d) 2,370,405 Custody fees 55,044 0 142,099 118,911 (d) 316,054 Shareholder serv fees 791,197 0 0 209,577 (d) 1,000,774 Portfolio accounting fees 114,244 39,500 55,383 (129,127)(d) 80,000 Transfer agency fees 369,225 3,291,267 0 (2,295,364)(d) 1,365,128 Distribution fees 504,386 648,382 0 (170,817)(d) 981,951 Organization costs 2,599 11,920 2,065 (4,664)(d) 11,920 Legal and audit fees 69,890 38,487 15,107 (30,871)(d) 92,613 Registration fees 45,940 188,148 0 0 234,088 Directors' fees 3,831 17,491 3,223 (18,116)(d) 6,429 Shareholder reports 94,848 88,016 0 (18,286)(d) 164,578 Other 22,345 13,402 14,060 (2,490)(d) 47,316 TOTAL EXPENSES 3,572,276 4,994,867 18,523,283 Less: Waived fees and reimbursed expenses fees (37,732) (326,200) (469,250) (2,275,079)(e) (3,108,261) NET EXPENSES 3,534,544 4,668,667 15,415,021 NET INVESTMENT INCOME (LOSS) 4,135,419 17,230,875 21,157,902 REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain (loss) on sale of investments 22,837,294 8,579,327 31,416,621 Net change in unrealized appreciation (depreciation) of investments (12,155,524) 170,845,783 158,690,259 NET GAIN (LOSS) ON INVESTMENTS 10,681,770 179,425,110 190,106,880 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 14,817,189 $196,655,985 $211,264,782 - ----------------------------------------------------------------------------------------------------------------------------------- * The Stagecoach Diversified Equity Income Fund and Norwest Advantage Income Equity Fund are merging to form the Wells Fargo Income Equity Fund, historical accounting data from the Norwest Advantage Income Equity Fund will be kept. (a) The Norwest Advantage Income Equity Fund, a "Gateway Fund", invests in securities through a "Core Portfolio", the Norwest Advantage Income Equity Portfolio. Expenses allocated from the Core Portfolio to the Gateway Fund over the year ended November 30, 1998 have been disbursed according to the percentage of each expense at the Core Portfolio level. (b) Wells Fargo Bank will absorb the balance of unamortized organizational costs from Funds which are not accounting survivors. (c) Reflects new shares issued, net of retired shares of the respective Funds which are not accounting survivors. (d) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (e) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-9 WELLS FARGO FUNDS - INCOME EQUITY FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH DIVERSIFIED EQUITY INCOME FUND AND NORWEST ADVANTAGE INCOME EQUITY PORTFOLIO(a) STAGECOACH NORWEST DIVERSIFIED ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 EQUITY INCOME EQUITY PRO FORMA INCOME FUND PORTFOLIO COMBINED SHARES/PAR SECURITY DESCRIPTION VALUE(b) VALUE(b)(c) VALUES(b) COMMON STOCKS AUTOMOBILE & RELATED 115,000 Dana Corporation $ 4,485,000 $ 0 $ 4,485,000 50,000 Eaton Corporation 3,415,625 0 3,415,625 60,000 Ford Motor Company 3,315,000 0 3,315,000 128,000 Genuine Parts Company 4,216,000 0 4,216,000 $ 15,431,625 $ 0 $ 15,431,625 CAPITAL GOODS 575,978 General Electric Company $ 2,262,500 $ 49,863,509 $ 52,126,009 98,000 New Century Energies 4,710,125 0 4,710,125 Incorporated 604,100 Public Service Enterprise 0 23,559,900 23,559,900 Group, Incorporated 50,000 Raytheon Company 2,734,375 0 2,734,375 60,000 Thomas & Betts Corporation 2,598,750 0 2,598,750 98,000 USEC Incorporated 1,329,125 0 1,329,125 719,832 Waste Management Incorporated 1,715,000 29,147,797 30,862,797 $ 15,349,875 $ 102,571,206 $ 117,921,081 CONSUMER - DISCRETIONARY 92,000 Consolidated Stores Corporation $ 1,978,000 $ 0 $ 1,978,000 930,500 Dupont (E.I.) de Nemours 4,700,000 49,966,875 54,666,875 and Company 25,000 Estee Lauder Automatic 1,743,750 0 1,743,750 Common Exchange Securities Trust $ 8,421,750 $ 49,966,875 $ 58,388,625 ENERGY & RELATED 605,200 Atlantic Richfield Corporation $ 4,455,500 $ 35,790,300 $ 40,245,800 458,750 Chevron Corporation 0 38,362,969 38,362,969 139,400 Conoco Incorporated 3,302,038 0 3,302,038 543,000 Consolidated Natural Gas Company 0 29,491,687 29,491,687 541,102 Exxon Corporation 0 40,616,469 40,616,469 305,900 Mobil Corporation 0 26,364,756 26,364,756 740,600 Pacific Gas & Electric Company 0 22,912,313 22,912,313 80,000 Pennzoil Company 2,970,000 0 2,970,000 45,000 Phillips Petroleum Company 1,890,000 0 1,890,000 440,100 Schlumberger Ltd. 0 19,666,969 19,666,969 72,000 Texaco Incorporated 4,144,500 0 4,144,500 120,000 USX-Marathon Group 3,405,000 0 3,405,000 80,000 Williams Companies Incorporated 2,305,000 0 2,305,000 $ 22,472,038 $ 213,205,463 $ 235,677,501 FINANCE & RELATED 412,300 American Express Company $ 0 $ 41,255,769 $ 41,255,769 686,750 American General Corporation 0 48,372,953 48,372,953 40,000 Archstone Communities Trust 835,000 0 835,000 10,000 Arden Realty Group Incorporated 230,000 0 230,000 95,000 Banc One Corporation 4,874,688 0 4,874,688 50,000 BankAmerica Corporation 3,259,375 0 3,259,375 65,000 Charles E. Smith Residential 1,921,563 0 1,921,563 Realty 110,000 Chase Manhattan Corporation 6,978,125 0 6,978,125 85,000 CIGNA Corporation 6,614,063 0 6,614,063 110,000 Duke Realty Investments 2,495,625 0 2,495,625 Incorporated 40,000 Equity Residential Properties 1,692,500 0 1,692,500 Trust 40,000 Felcor Lodging Trust 952,500 0 952,500 Incorporated 84,000 Hartford Financial Services 4,635,750 0 4,635,750 Group 73,000 Highwoods Properties Incorporated 1,984,688 0 1,984,688 85,000 Indymac Mortgage Holdings 818,125 0 818,125 Incorporated 470,650 J.P. Morgan & Company, 0 50,300,719 50,300,719 Incorporated 120,000 Kilroy Realty Corporation 2,685,000 0 2,685,000 50,000 Post Properties Incorporated 1,912,500 0 1,912,500 85,000 Prologis Trust 1,880,625 0 1,880,625 70,000 Simon Property Group 2,073,750 0 2,073,750 Incorporated 120,000 SLM Holding Corporation 5,280,000 0 5,280,000 78,000 Spieker Properties Incorporated 2,817,750 0 2,817,750 105,000 St. Paul Companies Incorporated 3,701,250 0 3,701,250 470,900 Transamerica Corporation 0 50,033,125 50,033,125 1,067,850 U.S. Bancorp 0 39,310,228 39,310,228 150,000 Washington Mutual Incorporated 5,812,500 0 5,812,500 $ 63,455,377 $ 229,272,794 $ 292,728,171 FOOD & RELATED 110,000 American Stores Company $ 3,691,875 $ 0 $ 3,691,875 602,750 McDonald's Corporation 0 42,230,172 42,230,172 1,662,640 PepsiCo, Incorporated 0 64,323,385 64,323,385 1,301,550 Philip Morris Companies 6,992,188 65,813,266 72,805,454 Incorporated THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-10 WELLS FARGO FUNDS - INCOME EQUITY FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH DIVERSIFIED EQUITY INCOME FUND AND NORWEST ADVANTAGE INCOME EQUITY PORTFOLIO(a) STAGECOACH NORWEST DIVERSIFIED ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 EQUITY INCOME EQUITY PRO FORMA INCOME FUND PORTFOLIO COMBINED SHARES/PAR SECURITY DESCRIPTION VALUE(b) VALUE(b)(c) VALUES(b) 877,250 Sara Lee Corporation 0 51,209,469 51,209,469 $ 10,684,063 $ 223,576,292 $ 234,260,355 GENERAL BUSINESS 250,000 Allegheny Teledyne Incorporated $ 5,140,625 $ 0 $ 5,140,625 1,669,972 AMP, Incorporated 0 80,784,895 80,784,895 371,800 Deluxe Corporation 0 12,920,050 12,920,050 1,563,600 Dun & Bradstreet Corporation 0 47,201,175 47,201,175 544,050 Eastman Kodak Company 0 39,477,628 39,477,628 677,000 Emerson Electric Company 0 44,005,000 44,005,000 150,000 Fremont General Corporation 7,556,250 0 7,556,250 1,056,200 Hewlett-Packard Company 0 66,276,550 66,276,550 567,600 Honeywell, Incorporated 0 45,372,525 45,372,525 200,000 Household International 7,825,000 0 7,825,000 Incorporated 520,750 Johnson & Johnson 0 42,310,937 42,310,937 32,000 Loews Corporation 3,200,000 0 3,200,000 497,150 Minnesota Mining & Manufacturing 0 39,927,359 39,927,359 Company 1,604,800 Morton International, Incorporated 0 47,241,300 47,241,300 554,800 Procter & Gamble Company 0 48,614,350 48,614,350 369,300 United Technologies Corporation 0 39,584,344 39,584,344 $ 23,721,875 $ 553,716,113 $ 577,437,988 HEALTHCARE 1,012,800 American Home Products $ 3,993,750 $ 49,937,850 $ 53,931,600 608,900 IMS Health, Incorporated 0 40,415,737 40,415,737 287,400 Merck & Company, Incorporated 0 44,511,075 44,511,075 530,400 Pfizer, Incorporated 0 59,205,900 59,205,900 $ 3,993,750 $ 194,070,562 $ 198,064,312 INTERNATIONAL STOCKS 62,000 Philips Electronics NV $ 3,925,375 $ 0 $ 3,925,375 (Netherlands) 486,600 Royal Dutch Petroleum Company 2,162,000 20,708,200 22,870,200 $ 6,087,375 $ 20,708,200 $ 26,795,575 MANUFACTURING - PROCESSING 38,000 Baxter International $ 2,415,375 $ 0 $ 2,415,375 Incorporated 90,000 El Paso Energy Corporation 3,071,250 0 3,071,250 1,836,600 Fortune Brands, Incorporated 0 62,559,189 62,559,189 100,000 Kimberly-Clark Corporation 5,262,500 0 5,262,500 150,000 Sherwin Williams Company 4,256,250 0 4,256,250 $ 15,005,375 $ 62,559,189 $ 77,564,564 RETAIL & RELATED 965,800 Dayton Hudson Corporation $ 0 $ 43,461,000 $ 43,461,000 738,400 J.C. Penney Company, 0 40,612,000 40,612,000 Incorporated 729,500 May Department Stores Company 0 43,997,969 43,997,969 818,830 Sears Roebuck & Company 2,134,687 36,708,560 38,843,247 $ 2,134,687 $ 164,779,529 $ 166,914,216 TELECOMMUNICATIONS 1,113,200 AT&T Corporation $ 0 $ 69,366,275 $ 69,366,275 857,600 GTE Corporation 4,650,000 48,521,200 53,171,200 783,146 Lucent Technologies, Incorporated 0 67,399,503 67,399,503 $ 4,650,000 $ 185,286,978 $ 189,936,978 UTILITIES 150,000 Alltel Corporation $ 7,950,000 $ 0 $ 7,950,000 97,000 Duke Energy Corporation 6,068,562 0 6,068,562 95,000 Sonat Incorporated 2,820,312 0 2,820,312 180,000 Southern Company 5,310,000 0 5,310,000 946,350 Texas Utilities Company 3,119,374 39,052,347 42,171,721 $ 25,268,248 $ 39,052,347 $ 64,320,595 TOTAL COMMON STOCKS $216,676,038 $2,038,765,548 $2,255,441,586 CONVERTIBLE PREFERRED STOCKS 33,700 Texas Utilities Company $ 1,878,775 $ 0 $ 1,878,775 47,700 Union Pacific Capital Trust 2,224,013 0 2,224,013 $ 4,102,788 $ 0 $ 4,102,788 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-11 WELLS FARGO FUNDS - INCOME EQUITY FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH DIVERSIFIED EQUITY INCOME FUND AND NORWEST ADVANTAGE INCOME EQUITY PORTFOLIO(a) STAGECOACH NORWEST DIVERSIFIED ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 EQUITY INCOME EQUITY PRO FORMA INCOME FUND PORTFOLIO COMBINED SHARES/PAR SECURITY DESCRIPTION VALUE(b) VALUE(b)(c) VALUES(b) CORPORATE BOND INDUSTRIALS $ 500,000 Federated Department 8.13% 10/15/02 $ 538,125 $ 0 $ 538,125 500,000 Occidental Petroleum 6.40 04/01/13 506,875 0 506,875 Corporation 500,000 News America Incorporated 6.70 05/21/04 525,000 0 525,000 $ 1,570,000 $ 0 $ 1,570,000 BANK & FINANCE $ 500,000 Citi Group Holdings 6.38% 10/01/02 $ 511,250 0 $ 511,250 Incorporated 500,000 Household Netherlands 6.20 12/01/03 513,125 0 513,125 500,000 Mellon Financial Company 5.75 11/15/03 506,250 0 506,250 $ 1,530,625 $ 0 $ 1,530,625 TRANSPORTATION $ 500,000 Union Pacific Company 7.25% 11/01/08 $ 518,750 $ 0 $ 518,750 MISCELLANEOUS BONDS $ 500,000 EOP Operating Limited 6.50% 06/15/04 $ 490,760 $ 0 $ 490,760 Partnership 500,000 Ford Motor Credit 6.50 02/28/02 515,625 0 515,625 $ 1,006,385 $ 0 $ 1,006,385 TOTAL CORPORATE BOND $ 4,625,760 $ 0 $ 4,625,760 U.S. TREASURY SECURITIES $ 3,000,000 U.S. Treasury Notes 6.50% 08/31/01 $ 3,142,500 0 $ 3,142,500 4,400,000 U.S. Treasury Notes 5.75 04/30/03 4,590,431 0 4,590,431 TOTAL U.S. TREASURY $ 7,732,931 $ 0 $ 7,732,931 SECURITIES SHORT-TERM INSTRUMENTS REPURCHASE AGREEMENTS Goldman Sachs Pooled Repurchase Agreement - 102% Collateralized by U.S. Government $ 2,482,000 Securities 5.25% 12/01/98 $ 2,482,000 $ 0 $ 2,482,000 JP Morgan Securities Incorporated Repurchase Agreement - 102% Collateralized by U.S. Government 854,000 Securities 5.15 12/01/98 854,000 0 854,000 NationsBanc Montgomery 60,475,583 Securities, Incorporated 5.50 12/01/98 0 $ 60,475,583 60,475,583 TOTAL SHORT-TERM INSTRUMENTS $ 3,336,000 $ 60,475,583 $ 63,811,583 PRO FORMA ADJUSTMENTS(c) To Securities at Market Value $ 0 $ (598,283,722) $ (598,283,722) From Other Assets and 0 3,311,367 3,311,367 Liablities from Core Portfolio $ 0 $ (594,972,355) $ (594,972,355) TOTAL INVESTMENTS IN SECURITIES $236,473,517 $1,504,268,776 $1,740,742,293 (Cost $1,344,724,130) (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. (c) The Norwest Advantage Income Equity Fund invests directly into and comprises 71.5% of the Norwest Advantage Income Equity Portfolio's net assets. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-12 WELLS FARGO FUNDS - SMALL CAP FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 NORWEST ADVANTAGE STAGECOACH SMALL STRATEGIC STAGECOACH COMPANY GROWTH SMALL PRO FORMA PRO FORMA STOCK FUND FUND CAP FUND ADJUSTMENTS (d) COMBINED ----------------------------------------------------------------------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $ 68,524,651 $ 140,399,891 $ 96,620,894 $(57,006,057) $ 248,539,379 Cash 0 4,198 6,632 (3,913) 6,917 Receivables: Dividends and Interest 17,279 9,727 11,929 (7,038) 31,897 Fund shares sold 10,294 6,572 15,793 (9,318) 23,341 Investment securities sold 0 6,205,408 592,228 (349,413) 6,448,223 Due from advisor 0 0 0 545 (e) 545 Organization expenses, net of amortization 545 0 29,392 (17,886)(e) 12,051 Prepaid expenses 7,078 0 7,078 TOTAL ASSETS 68,552,769 146,632,874 97,276,868 255,069,431 LIABILITIES Payables: Investment securities purchased 0 4,630,188 860,191 (507,510) 4,982,869 Distribution to shareholders 5,218 0 0 5,218 Fund shares redeemed 193,353 106,242 9,519 (5,616) 303,498 Due to distributor 985 93,823 31,151 (18,379) 107,580 Due to advisor 5,110 101,206 51,050 (30,119) 127,246 Other 19,758 133,736 141,054 (83,222) 211,326 TOTAL LIABILITIES 224,424 5,065,195 1,092,965 5,737,738 TOTAL NET ASSETS $ 68,328,345 $ 141,567,679 $ 96,183,903 $ 249,331,693 NET ASSETS CONSIST OF: Paid-in capital $ 96,160,748 $ 159,187,421 $111,153,973 (65,580,533) $ 300,921,609 Undistributed net investment income (loss) (31,361) (1,841,555) (227,438) 134,188 (1,966,166) Undistributed net realized gain (loss) on investments (25,631,948) (17,629,128) (15,268,644) 9,008,457 (49,521,263) Net unrealized appreciation (depreciation) of investments (2,169,094) 1,850,941 526,012 (310,346) (102,487) TOTAL NET ASSETS $ 68,328,345 $ 141,567,679 $ 96,183,903 $ 249,331,693 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net assets - Class A $ 5,360,629 $ 101,046,521 $ 11,611,814 $ 118,018,964 Shares outstanding - Class A 578,171 5,570,047 604,591 (592,690)(f) 6,160,119 Net asset value per share - Class A $ 9.27 $ 18.14 $ 19.21 $ 19.21 Maximum offering price per share - Class A $ 9.81 $ 19.15 $ 20.27 $ 20.27 Net Assets - Class B $ 4,164,305 $ 22,324,071 $ 14,181,288 $ 40,669,664 Shares outstanding - Class B 468,049 1,015,803 748,881 (84,993)(f) 2,147,740 Net asset value and offering price per share - Class B $ 8.90 $ 21.98 $ 18.94 $ 18.94 Net Assets - Class C $ 18,197,088 $ 1,485,692 $ 19,682,780 Shares outstanding - Class C 828,774 78,483 132,502(f) 1,039,759 Net asset value and offering price per share - Class C $ 21.96 $ 18.93 $ 18.93 Net Assets - Institutional Class $ 58,803,411 $ 68,905,109 $(56,748,234) $ 70,960,286 Shares outstanding - Institutional Class 6,379,424 3,552,679 (3,346,772)(f) 6,585,331 Net asset value and offering price per share - Institutional Class $ 9.22 $ 19.40 $ 19.40 INVESTMENT AT COST $ 70,693,745 $ 138,548,950 $ 96,094,882 $(56,695,712) $ 248,641,865 - --------------------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-13 WELLS FARGO FUNDS - SMALL CAP FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) NORWEST ADVANTAGE SMALL CORE-GATEWAY STAGECOACH COMPANY STOCK FEEDER STRATEGIC GROWTH MASTER-FEEDER FUND ADJUSTMENTS (a) FUND ADJUSTMENTS (b) -------------------------------------------------------------------- INVESTMENT INCOME Dividends $ 653,843 $ 341,536 Interest 372,208 273,824 Securities lending income 68,022 0 Net expenses from master/core portfolios (1,203,000) 1,203,000 (33,403) 33,403 TOTAL INVESTMENT INCOME (108,927) 581,957 EXPENSES Advisory fees 1,139,063 877,494 27,946 Administration fees 63,228 63,279 123,367 Custody fees 20,364 59,119 1,751 Shareholder serv fees 0 0 442,672 Portfolio accounting fees 37,500 35,518 94,238 2,739 Transfer agency fees 316,149 0 253,400 Distribution fees 52,290 0 521,071 Organization costs 6,539 1,124 4,871 Legal and audit fees 12,706 13,450 53,289 Registration fees 17,092 0 69,822 Directors' fees 1,934 609 3,781 703 Shareholder reports 11,703 0 114,189 Other 3,006 2,738 27,843 264 TOTAL EXPENSES 522,147 2,645,156 Less: Waived fees and reimbursed expenses fees (165,348) (73,144) (45,972) NET EXPENSES 356,799 2,599,184 NET INVESTMENT INCOME (LOSS) (465,726) (2,017,227) REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on sale of investments (21,845,228) (15,180,985) Net change in unrealized appreciation (depreciation) of investments (2,863,407) (759,869) NET GAIN (LOSS) ON INVESTMENTS (24,708,635) (15,940,854) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (25,174,361) $ (17,958,081) - ----------------------------------------------------------------------------------------------------------------------- STAGECOACH SMALL MASTER-FEEDER PRO FORMA PRO FORMA CAP FUND ADJUSTMENTS (c) ADJUSTMENTS (d) COMBINED ----------------------------------------------------------------- INVESTMENT INCOME Dividends $ 194,352 $ 1,189,731 Interest 411,751 1,057,783 Securities lending income 0 68,022 Net expenses from master/core portfolios (17,630) 17,630 0 TOTAL INVESTMENT INCOME 588,473 2,315,536 EXPENSES Advisory fees 541,805 17,060 533,845 (g) 3,137,213 Administration fees 63,783 209,212 (g) 522,869 Custody fees 44,891 653 (57,062)(g) 69,716 Shareholder serv fees 234,139 7,810 (g) 684,621 Portfolio accounting fees 74,960 2,583 (167,538)(g) 80,000 Transfer agency fees 77,927 72,598 (g) 720,074 Distribution fees 131,937 (156,055)(g) 549,243 Organization costs 11,176 (12,534)(g) 11,176 Legal and audit fees 18,631 893 (24,742)(g) 74,227 Registration fees 79,874 0 166,788 Directors' fees 3,819 (4,417)(g) 6,429 Shareholder reports 21,046 (14,694)(g) 132,244 Other 18,456 161 (2,623)(g) 49,845 TOTAL EXPENSES 1,322,444 6,204,446 Less: Waived fees and reimbursed expenses fees (341,024) (3,720) (641,418)(h) (1,270,626) NET EXPENSES 981,420 4,933,820 NET INVESTMENT INCOME (LOSS) (392,947) (2,618,284) REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on sale of investments (18,340,769) (55,366,982) Net change in unrealized appreciation (depreciation) of investments 3,700,824 77,548 NET GAIN (LOSS) ON INVESTMENTS (14,639,945) (55,289,434) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (15,032,892) $(57,907,718) - -------------------------------------------------------------------------------------------------------------------- * The Stagecoach Strategic Growth Fund, Stagecoach Small Cap Fund, and Norwest Advantage Small Company Growth Fund are merging to form the Wells Fargo Small Cap Fund, historical accounting data from the Stagecoach Small Cap Fund will be kept. (a) The Norwest Advantage Small Company Fund, a "Gateway Fund", invests in securities through a "Core Portfolio", the Norwest Advantage Small Company Stock Portfolio. Expenses allocated from the Core Portfolio to the Gateway Fund over the year ended November 30, 1998 have been disbursed according to the percentage of each expense at the Core Portfolio level. (b) Information shown prior to December 12, 1997, is for the Overland Strategic Growth Fund which was a "Feeder Fund" investing in a "Master Portfolio", the Capital Appreciation Master Portfolio, and the expenses allocated to the Feeder have been disbursed according to the percentage of each expense at the Master Portfolio level. On December 12, 1997, the Fund merged with the Stagecoach Aggressive Growth Fund, the Capital Appreciation Master Portfolio was dissolved, and it was renamed the Stagecoach Strategic Growth Fund. (c) Information shown prior to December 12, 1997, is for the Stagecoach Small Cap Fund which was a "Feeder Fund" investing in a "Master Portfolio", the Small Cap Master Portfolio, and the expenses allocated to the Feeder have been disbursed according to the percentage of each expense at the Master Portfolio level. On December 12, 1997, the Fund merged with the Overland Small Cap Strategy Fund, the Small Cap Master Portfolio was dissolved, and it was renamed the Stagecoach Small Cap Fund. (d) Approximately 82% of the Stagecoach Small Cap Fund's Institutional Class shares will be converted into a collective fund prior to the merger. For purposes of this pro forma financial statement approximately 82% of the assets of the Stagecoach Small Cap Fund's Institutional Class have been removed. (e) Wells Fargo Bank will absorb the balance of unamortized organizational costs from Funds which are not accounting survivors. (f) Reflects new shares issued, net of retired shares of the respective Funds which are not accounting survivors. (g) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (h) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-14 WELLS FARGO FUNDS - SMALL CAP FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE SMALL COMPANY STOCK PORTFOLIO, STAGECOACH STRATEGIC GROWTH FUND AND STAGECOACH SMALL CAP FUND(a) NORWEST ADVANTAGE STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 SMALL COMPANY STRATEGIC GROWTH STAGECOACH PRO FORMA STOCK PORTFOLIO FUND SMALL CAP FUND COMBINED SHARES/PAR SECURITY DESCRIPTION VALUE(b)(c) VALUE(b) VALUE(b)(d) VALUES(b) COMMON STOCKS ADVERTISING 108,425 Ha-Lo Industries Incorporated $ 0 $ 1,596,875 $ 1,865,948 $ 3,462,823 CAPITAL GOODS 35,000 Activision Incorporated $ 0 $ 468,125 $ 0 $ 468,125 57,700 Aspect Telecommunications 0 0 1,092,694 1,092,694 17,200 Comverse Technology Incorporated 0 0 989,000 989,000 59,100 Concentric Network Corporation 0 1,276,875 400,088 1,676,963 50,000 Diamond Offshore Drilling Incorporated 0 1,118,750 0 1,118,750 95,750 Henry Schein Incorporated 1,892,150 0 1,506,975 3,399,125 168,000 Keystone Automotive Industries, Incorporated 3,202,500 0 0 3,202,500 30,800 Maxwell Technologies Incorporated 0 0 820,050 820,050 49,320 Media Arts Group Incorporated 0 0 721,305 721,305 48,000 Pacific Gateway Exchange 0 1,118,750 1,029,250 2,148,000 200,300 SCP Pool Corporation 3,104,650 0 0 3,104,650 31,000 Stewart Enterprises Incorporated 0 0 691,688 691,688 25,000 Visual New Works Incorporated 0 868,750 0 868,750 $ 8,199,300 $ 4,851,250 $ 7,251,050 $ 20,301,600 COMPUTER SOFTWARE 110,000 Actuate Software Corporation $ 0 $ 1,003,750 $ 0 $ 1,003,750 85,000 Aris Corporation 0 1,391,875 0 1,391,875 62,300 Axent Technologies Incorporated 0 1,107,656 516,038 1,623,694 11,800 Bindview Development Corporation 0 0 271,400 271,400 35,000 BMC Software Incorporated 0 1,787,188 0 1,787,188 44,000 Broadvision Incorporated 0 1,171,500 0 1,171,500 18,950 Computer Horizons Corporation 0 0 426,375 426,375 36,050 Cotelligent Group Incorporated 0 0 660,166 660,166 82,750 Documentum Incorporated 0 2,523,750 956,922 3,480,672 31,200 Excite Incorporated 0 734,063 792,788 1,526,851 75,000 FVC.Com Incorporated 0 1,087,500 0 1,087,500 20,000 Galileo International Incorporated 0 800,000 0 800,000 13,800 Great Plains Software Incorporated 0 0 541,650 541,650 205,550 IMR Global Corporation 0 3,612,500 755,438 4,367,938 53,300 International Integration Incorporated 0 570,375 209,138 779,513 35,000 Intervu Incorporated 0 564,375 0 564,375 9,250 Ixos Software ADR 0 0 395,438 395,438 60,000 Learning Company Incorporated 0 1,743,750 0 1,743,750 48,800 Legato Systems Incorporated 0 1,314,844 1,018,406 2,333,250 26,550 Lycos Incorporated 0 442,500 1,123,950 1,566,450 92,500 Micromuse Incorporated 0 1,596,875 513,281 2,110,156 44,400 Neomagic Corporation 0 0 838,050 838,050 18,500 Network Appliance Incorporated 0 751,250 638,563 1,389,813 25,550 Nova Corporation 0 0 812,809 812,809 30,000 Phoenix International Limited 0 472,500 0 472,500 36,300 Siebel Systems Incorporated 0 0 880,275 880,275 28,250 Software AG Systems Incorporated 0 0 543,813 543,813 60,000 Sterling Commerce Incorporated 0 2,175,000 0 2,175,000 48,500 Verisign Incorporated 0 1,946,063 0 1,946,063 10,000 Yahoo Incorporated 0 1,920,000 0 1,920,000 $ 0 $ 28,717,314 $ 11,894,500 $ 40,611,814 CONSUMER BASIC 90,600 Capital Senior Living Corporation $ 0 $ 0 $ 1,121,175 $ 1,121,175 CONSUMER - DISCRETIONARY 145,000 Access Worldwide Communication Incorporated $ 0 $ 1,305,000 $ 0 $ 1,305,000 26,800 Amerisource Corporation 0 0 1,715,200 1,715,200 13,150 CMGI Incorporated 0 0 1,019,125 1,019,125 35,550 Equity Corporation International 0 0 919,856 919,856 55,000 Profit Recovery Group Incorporated 0 1,856,250 0 1,856,250 60,000 Republic Services Incorporated 0 1,117,500 0 1,117,500 20,000 Restoration Hardware Incorporated 0 558,750 0 558,750 70,000 Tandy Corporation 0 3,154,375 0 3,154,375 40,450 United Road Services Incorporated 0 0 728,100 728,100 $ 0 $ 7,991,875 $ 4,382,281 $ 12,374,156 ELECTRICAL EQUIPMENT 45,000 ADC Telecommunications Incorporated $ 0 $ 1,344,375 $ 0 $ 1,344,375 15,000 Ascend Communication Incorporated 0 842,813 0 842,813 25,000 C-Cube Microsystems Incorporated 0 654,688 0 654,688 85,600 Celestica Incorporated 0 812,500 926,250 1,738,750 75,000 Galileo Technology Limited 0 1,237,500 0 1,237,500 18,257 Gemstar International Group Limited 0 0 1,109,113 1,109,113 18,785 Lexmark International Group Incorporated 0 1,434,704 0 1,434,704 17,550 PMC - Sierra Incorporated 0 0 945,506 945,506 125,157 Power Integrations Incorporated 0 1,947,768 1,056,000 3,003,768 32,500 Sanmina Corporation 0 1,618,906 0 1,618,906 42,400 Tekelec 0 0 657,200 657,200 $ 0 $ 9,893,254 $ 4,694,069 $ 14,587,323 ENERGY & RELATED 100,000 AGL Resources, Incorporated $ 2,156,250 $ 0 $ 0 $ 2,156,250 32,200 Barret Resource Corporation 0 366,563 420,325 786,888 127,000 Basin Exploration, Incorporated 1,476,375 0 0 1,476,375 39,600 BJ Services Company 0 0 546,975 546,975 39,550 CILCORP, Incorporated 2,392,775 0 0 2,392,775 257,100 EEX Corporation 915,919 0 0 915,919 215,150 El Paso Electric Company 1,990,137 0 0 1,990,137 43,250 Ensco International Incorporated 0 0 413,578 413,578 55,000 Friede Goldman International Incorporated 0 687,500 0 687,500 65,000 Global Industries Limited 0 369,688 0 369,688 56,250 Marine Drilling Company Incorporated 0 0 488,672 488,672 134,100 Ocean Energy, Incorporated 1,089,562 0 0 1,089,562 55,900 Sierra Pacific Resources 2,012,400 0 0 2,012,400 146,964 Stericycle, Incorporated 2,626,982 0 0 2,626,982 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-15 WELLS FARGO FUNDS - SMALL CAP FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE SMALL COMPANY STOCK PORTFOLIO, STAGECOACH STRATEGIC GROWTH FUND AND STAGECOACH SMALL CAP FUND(a) NORWEST ADVANTAGE STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 SMALL COMPANY STRATEGIC GROWTH STAGECOACH PRO FORMA STOCK PORTFOLIO FUND SMALL CAP FUND COMBINED SHARES/PAR SECURITY DESCRIPTION VALUE(b)(c) VALUE(b) VALUE(b)(d) VALUES(b) 210,900 Tetra Technologies, Incorporated 4,428,900 0 0 4,428,900 37,400 Veritas DGC Incorporated 0 0 546,975 546,975 40,000 Weatherford International Incorporated 0 730,000 0 730,000 $ 19,089,300 $ 2,153,751 $ 2,416,525 $ 23,659,576 ENTERTAINMENT & LEISURE 146,300 A.C. Nielson Corporation $ 4,032,394 $ 0 $ 0 $ 4,032,394 188,025 Family Golf Centers Incorporated 0 2,364,688 1,501,577 3,866,265 1,230 Iwerks Entertainment Incorporated 0 1,230 0 1,230 3,000 National Record Mart Incorporated 0 0 40,500 40,500 $ 4,032,394 $ 2,365,918 $ 1,542,077 $ 7,940,389 FINANCE 49,900 Americredit Corporation $ 0 $ 0 $ 689,244 $ 689,244 74,900 BancWest Corporation 3,239,425 0 0 3,239,425 40,000 City National Corporation 0 1,495,000 0 1,495,000 11,200 CNB Bancshares Incorporated 0 0 485,800 485,800 75,000 Coinstar Incorporated 0 478,125 0 478,125 56,100 Community First Bankshares 0 0 1,195,631 1,195,631 30,000 Countrywide Credit Industries 0 1,485,000 0 1,485,000 126,991 Downey Financial Corporation 3,301,766 0 0 3,301,766 69,600 Envoy Corporation 1,180,300 1,595,000 0 2,775,300 14,050 Fidelity National Financial Incorporated 0 0 461,016 461,016 13,000 Firstar Corporation 0 952,250 0 952,250 46,950 Firstfed Financial Corporation 0 0 833,363 833,363 15,000 GBC Bancorp 373,125 0 0 373,125 18,000 Golf Trust of America Incorporated 0 0 470,250 470,250 115,200 HCC Insurance Holdings, Incorporated 2,138,400 0 0 2,138,400 19,100 Healthcare Financial Partners 0 0 627,913 627,913 43,500 Inspire Insurance Solutions Incorporated 0 1,005,000 452,250 1,457,250 177,100 Medallion Financial Corporation 2,745,050 0 0 2,745,050 48,450 Metris Companies Incorporated 0 1,168,125 448,894 1,617,019 70,000 Mid Atlantic Medical Services 0 621,250 0 621,250 9,050 Mony Group Incorporated 0 0 279,984 279,984 10,000 Northern Trust Corporation 0 807,500 0 807,500 22,500 Providian Financial Corporation 0 2,065,781 0 2,065,781 7,750 Reinsurance Group America Incorporated 0 0 507,625 507,625 9,100 SEI Investments Company 0 0 839,475 839,475 18,350 Silicon Valley Bankshares 0 0 458,750 458,750 25,000 SLM Holding Corporation 0 1,100,000 0 1,100,000 50,000 Sovereign Bancorporation 0 640,625 0 640,625 35,000 Towne Services Incorporated 0 262,500 0 262,500 21,000 Waddle & Reed Financial 0 0 501,375 501,375 89,800 Webster Financial Corporation 2,491,950 0 0 2,491,950 78,700 Westamerica Bancorp 2,843,037 0 0 2,843,037 15,000 Zions Bancorporation 0 757,500 0 757,500 $ 18,313,053 $ 14,433,656 $ 8,251,570 $ 40,998,279 FOOD & RELATED 31,750 American Italian Pasta Company $ 0 $ 0 $ 801,688 $ 801,688 65,000 CEC Entertainment, Incorporated 1,925,625 0 0 1,925,625 131,400 CKE Restaurants Incorporated 2,697,900 0 513,188 3,211,088 38,118 Corn Products International, Incorporated 1,069,686 0 0 1,069,686 229,150 Foodmaker, Incorporated 4,439,781 0 0 4,439,781 101,300 Fresh Del Monte Produce 2,228,600 0 0 2,228,600 161,100 Rainforest Cafe, Incorporated 1,117,632 0 0 1,117,632 20,000 Starbucks Corporation 0 922,500 0 922,500 $ 13,479,224 $ 922,500 $ 1,314,876 $ 15,716,600 GENERAL BUSINESS 106,900 Acxiom Corporation $ 2,525,512 $ 0 $ 0 $ 2,525,512 182,050 Administaff Incorporated 0 3,924,063 1,002,666 4,926,729 40,412 Allied Waste Industries Incorporated 0 0 823,395 823,395 112,000 Amdocs Limited 0 1,383,750 338,250 1,722,000 40,900 Avis Rent-a-Car Incorporated 0 0 861,456 861,456 71,300 Barr Laboratories, Incorporated 3,012,425 0 0 3,012,425 30,500 Cambridge Tech Partners Incorporated 0 0 636,688 636,688 66,539 Capstar Broadcasting Corporation 0 536,250 653,135 1,189,385 311,500 Cash America International, Incorporated 5,256,563 0 0 5,256,563 25,000 Chancelor Media Corporation 0 942,188 0 942,188 129,300 Ciber, Incorporated 2,917,331 0 0 2,917,331 60,400 Computer Task Group, Incorporated 1,630,800 0 0 1,630,800 143,750 Convergys Corporation 0 1,556,563 1,075,859 2,632,422 80,000 Cunningham Graphics International Incorporated 0 1,410,000 0 1,410,000 49,000 Cybershop International Incorporated 0 906,500 0 906,500 29,250 Emmis Broadcasting Corporation 0 0 1,007,297 1,007,297 67,781 FelCor Lodging Trust, Incorporated 1,614,035 0 0 1,614,035 131,600 Guitar Center, Incorporated 3,010,350 0 0 3,010,350 48,075 Harman International Industries, Incorporated 2,052,202 0 0 2,052,202 193,975 Ivex Packaging Corporation 3,782,513 0 0 3,782,513 125,550 MAPICS, Incorporated 2,440,378 0 0 2,440,378 141,600 Metamor Worldwide Incorporated 0 2,250,313 1,103,838 3,354,151 135,100 Michael Foods, Incorporated 3,394,387 0 0 3,394,387 100,000 Musicland Stores Corporation 1,693,750 0 0 1,693,750 156,600 OfficeMax, Incorporated 1,663,875 0 0 1,663,875 25,000 Panamsat Corporation 0 840,625 0 840,625 83,000 Parexel International Corporation 0 1,303,125 860,063 2,163,188 66,500 QuadraMed Corporation 1,596,000 0 0 1,596,000 212,300 Rayovac Corporation 4,909,437 0 0 4,909,437 59,750 Regis Corporation 0 0 2,001,625 2,001,625 38,250 Security Dynamics Technologies Incorporated 0 0 583,313 583,313 152,450 Smart Modular Technologies Incorporated 0 2,087,500 1,094,894 3,182,394 50,250 Staffmark Incorporated 0 232,500 935,813 1,168,313 276,500 Sunstone Hotel Investors, Incorporated 2,937,813 0 0 2,937,813 76,000 Swift Transportation, Incorporated 1,667,250 0 0 1,667,250 137,250 Sykes Enterprises, Incorporated 2,779,313 0 0 2,779,313 160,600 Systems & Computers Technologies 2,930,950 0 0 2,930,950 110,000 Teletech Holdings Incorporated 0 1,003,750 0 1,003,750 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-16 WELLS FARGO FUNDS - SMALL CAP FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE SMALL COMPANY STOCK PORTFOLIO, STAGECOACH STRATEGIC GROWTH FUND AND STAGECOACH SMALL CAP FUND(a) NORWEST ADVANTAGE STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 SMALL COMPANY STRATEGIC GROWTH STAGECOACH PRO FORMA STOCK PORTFOLIO FUND SMALL CAP FUND COMBINED SHARES/PAR SECURITY DESCRIPTION VALUE(b)(c) VALUE(b) VALUE(b)(d) VALUES(b) 43,500 TMP Worldwide Incorporated 0 0 1,392,000 1,392,000 93,000 True North Communications, Incorporated 2,615,625 0 0 2,615,625 84,600 United Stationers, Incorporated 2,241,900 0 0 2,241,900 108,950 Valassis Communications, Incorporated 4,671,231 0 0 4,671,231 37,400 Veterinary Centers of America 0 0 687,225 687,225 26,150 Wackenhut Corrections Corporation 0 0 706,050 706,050 44,000 Young & Rubicam Incorporated 0 1,314,500 0 1,314,500 $ 61,343,640 $ 19,691,627 $ 15,763,567 $ 96,798,834 HEALTHCARE 101,900 Access Health, Incorporated $ 3,655,662 $ 0 $ 0 $ 3,655,662 151,200 American Retirement Corporation 2,371,950 0 0 2,371,950 49,000 Covance Incorporated 0 0 1,225,000 1,225,000 45,000 Health Management Associates Incorporated 0 975,938 0 975,938 37,750 Jones Pharmaceutical Incorporated 0 0 1,359,000 1,359,000 65,000 Laser Vision Centers Incorporated 0 1,157,813 0 1,157,813 19,950 Medicis Pharmaceutical 0 0 1,256,850 1,256,850 90,000 Oxford Health Plans Incorporated 0 995,625 0 995,625 60,000 Pharmaceutical Product Development 0 1,717,500 0 1,717,500 294,400 Phycor, Incorporated 1,803,200 0 0 1,803,200 30,341 Renal Care Group Incorporated 0 0 815,414 815,414 66,300 Serologicals Corporation 0 1,028,125 919,438 1,947,563 125,000 Somnus Medical Technologies Incorporated 0 367,188 0 367,188 15,000 Sunrise Assisted Living Incorporated 0 646,875 0 646,875 45,900 Trigon Healthcare, Incorporated 1,701,169 0 0 1,701,169 $ 9,531,981 $ 6,889,064 $ 5,575,702 $ 21,996,747 MANUFACTURING - PROCESSING 20,000 AES Corporation $ 0 $ 915,000 $ 0 $ 915,000 40,000 Biochem Pharmaceutical Incorporated 0 975,000 0 975,000 10,000 Bowater Incorporated 0 395,000 0 395,000 74,700 Brooks Automation, Incorporated 1,195,200 0 0 1,195,200 16,500 Calmat Company 0 0 507,375 507,375 15,400 Cambrex Corporation 0 0 431,200 431,200 28,000 Commercial Fed Corporation 0 0 642,250 642,250 50,000 Compuware Corporation 0 3,112,500 0 3,112,500 20,000 Conseco Incorporated 0 662,500 0 662,500 30,800 CSK Auto Parts 0 0 858,550 858,550 35,000 Electronics For Imaging Incorporated 0 938,438 0 938,438 20,000 General Cable Corporation 0 380,000 0 380,000 15,900 Hubco Incorporated 0 0 429,300 429,300 62,500 Keane Incorporated 0 1,796,875 0 1,796,875 30,000 Mettler-Toledo International Incorporated 0 787,500 0 787,500 26,650 Metzler Group Incorporated 0 0 1,105,975 1,105,975 51,000 OEA Incorporated 0 522,500 143,688 666,188 100,000 Office Depot Incorporated 0 3,250,000 0 3,250,000 46,800 Policy Management System Corporation 0 894,688 1,497,963 2,392,651 35,000 SCI Systems Incorporated 0 1,701,875 0 1,701,875 55,000 Seagate Technology 0 1,622,500 0 1,622,500 6,100 Sepracor Incorporated 0 0 506,300 506,300 11 Tyco International Limited 0 751 0 751 $ 1,195,200 $ 17,955,127 $ 6,122,601 $ 25,272,928 MEDICAL EQUIPMENT & SUPPLIES 25,000 Biomatrix Incorporated $ 0 $ 1,214,054 $ 0 $ 1,214,054 57,350 Closure Medical Corporation 0 920,000 399,050 1,319,050 22,600 Cohu, Incorporated 514,150 0 0 514,150 20,000 Guidant Corporation 0 1,716,250 0 1,716,250 161,450 Maxxim Medical Incorporated 3,847,700 0 551,813 4,399,513 48,950 Ocular Sciences Incorporated 0 337,500 763,875 1,101,375 40,000 PSS World Medical Incorporated 0 830,000 0 830,000 $ 4,361,850 $ 5,017,804 $ 1,714,738 $ 11,094,392 PHARMACEUTICALS 22,500 Cardinal Health Incorporated $ 0 $ 1,544,063 $ 0 $ 1,544,063 44,300 Coulter Pharmaceutical Incorporated 0 851,250 405,763 1,257,013 12,500 Elan PLC ADR 0 851,563 0 851,563 6,850 MedImmune Incorporated 0 0 458,094 458,094 42,650 Pharmacyclics Incorporated 0 0 741,044 741,044 $ 0 $ 3,246,876 $ 1,604,901 $ 4,851,777 RETAIL & RELATED 24,801 99 Cents Only Stores $ 0 $ 0 $ 1,066,441 $ 1,066,441 24,400 Ames Department Stores Incorporated 0 0 579,500 579,500 49,450 Barnes & Noble Incorporated 0 828,125 809,906 1,638,031 20,000 Circuit City Stores Incorporated 0 723,750 0 723,750 46,675 Claire's Stores, Incorporated 793,475 0 0 793,475 35,950 Cost Plus Incorporated 0 0 1,186,350 1,186,350 30,000 Hollywood Entertainment Corporation 0 720,000 0 720,000 40,100 Just for Feet Incorporated 0 0 907,263 907,263 124,975 Oshkosh B'Gosh, Incorporated 2,999,400 0 0 2,999,400 10,000 Rite-Aid Corporation 0 463,750 0 463,750 20,000 Ross Stores Incorporated 0 727,500 0 727,500 32,492 Zale Corporation 0 0 930,084 930,084 $ 3,792,875 $ 3,463,125 $ 5,479,544 $ 12,735,544 SHELTER 11,750 BJ's Wholesale Club Incorporated $ 0 $ 0 $ 453,109 $ 453,109 122,000 Brookdale Living Communities Incorporated 0 1,638,750 465,750 2,104,500 28,100 Dal-Tile International Incorporated 0 0 242,363 242,363 10,000 Martin Mareitta Materials Incorporated 0 485,000 0 485,000 $ 0 $ 2,123,750 $ 1,161,222 $ 3,284,972 TELECOMMUNICATIONS 41,300 Applied Micro Circuits Corporation $ 0 $ 0 $ 1,383,550 $ 1,383,550 114,400 COMSAT Corporation 4,075,500 0 0 4,075,500 99,250 International Telecommunication Data Systems Incorporated 1,617,863 0 826,169 2,444,032 34,500 ITC Deltacom Incorporated 0 0 541,219 541,219 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-17 WELLS FARGO FUNDS - SMALL CAP FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE SMALL COMPANY STOCK PORTFOLIO, STAGECOACH STRATEGIC GROWTH FUND AND STAGECOACH SMALL CAP FUND(a) NORWEST ADVANTAGE STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 SMALL COMPANY STRATEGIC GROWTH STAGECOACH PRO FORMA STOCK PORTFOLIO FUND SMALL CAP FUND COMBINED SHARES/PAR SECURITY DESCRIPTION VALUE(b)(c) VALUE(b) VALUE(b)(d) VALUES(b) 15,650 L-3 Communications Corporation 0 0 729,681 729,681 33,950 Level One Communications Incorporated 0 0 1,050,316 1,050,316 48,800 MasTec, Incorporated 1,134,600 0 0 1,134,600 26,500 National Data Corporation 0 0 990,438 990,438 98,550 Star Telecommunications Incorporated 0 675,000 655,425 1,330,425 24,000 Superior Telecom Incorporated 0 0 1,044,000 1,044,000 $ 6,827,963 $ 675,000 $ 7,220,798 $ 14,723,761 TRANSPORTATION 64,000 Atlantic Coast Airlines Incorporated $ 0 $ 761,250 $ 862,750 $ 1,624,000 25,900 MotivePower Industries, Incorporated 788,331 0 0 788,331 50,000 Wisconsin Central Transportation Corporation 0 906,250 0 906,250 $ 788,331 $ 1,667,500 $ 862,750 $ 3,318,581 UTILITIES 20,000 Frontier Corporation $ 0 $ 602,500 $ 0 $ 602,500 70,000 R&B Falcon Corporation 0 643,125 0 643,125 $ 0 $ 1,245,625 $ 0 $ 1,245,625 TOTAL COMMON STOCKS $150,955,111 $134,901,891 $ 90,239,894 $ 376,096,896 REPURCHASE AGREEMENTS $10,318,000 Goldman Sachs Pooled Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.25% 12/1/98 $ 0 $ 5,494,000 $ 4,824,000 $ 10,318,000 1,014,000 HSBC Securities Incorporated Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.15 12/1/98 0 0 1,014,000 1,014,000 389,000 JP Morgan Securities Incorporated Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.15 12/1/98 0 4,000 385,000 389,000 158,000 Morgan Stanley & Company Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.23 12/1/98 0 0 158,000 158,000 15,309,274 NationsBanc Montgomery Securities, Incorporated 5.50 12/1/98 $ 15,309,274 $ 0 $ 0 $ 15,309,274 $ 15,309,274 $ 5,498,000 $ 6,381,000 $ 27,188,274 INVESTMENTS IN SECURITIES PRIOR TO PRO FORMA ADJUSTMENTS $166,264,385 $140,399,891 $ 96,620,894 $ 403,285,170 PRO FORMA ADJUSTMENTS To Securities at Market Value $(97,264,665) $ 0 $(57,006,327) $(154,270,992) From Other Assets and Liablities from Core Portfolio (475,069) 0 0 (475,069) $(97,739,734)(c) $ 0 $(57,006,327)(d) $(154,746,061) TOTAL INVESTMENTS IN SECURITIES $ 68,524,651 $140,399,891 $ 39,614,567 $ 248,539,109 (Cost $305,337,577) (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. (c) The Norwest Advantage Small Company Stock Fund invests directly into and comprises 41.5% of the Norwest Small Company Stock Portfolio's net assets. (d) Approximately 82% of the Stagecoach Small Cap Fund's Institutional Class shares will be converted into a collective fund prior to the merger. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-18 WELLS FARGO FUNDS - INCOME FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 NORWEST ADVANTAGE NORWEST NORWEST STRATEGIC VALUE ADVANTAGE TOTAL ADVANTAGE INCOME PRO FORMA PRO FORMA BOND FUND RETURN BOND FUND FUND ADJUSTMENTS COMBINED ------------------------------------------------------------------------------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $ 9,529,319 $ 108,662,726 $ 358,962,476 $ 477,154,521 Cash 0 0 18 18 Receivables: Dividends and Interest 0 0 4,360,240 4,360,240 Fund shares sold 130 57,946 494,466 552,542 Investment securities sold 0 0 36,342 36,342 Due from advisor 0 0 0 4,699 (c) 4,699 Organization expenses, net of amortization 4,154 545 0 (4,699)(c) 0 TOTAL ASSETS 9,533,603 108,721,217 363,853,542 482,108,362 LIABILITIES Payables: Investment securities purchased 0 0 3,018,247 3,018,247 Distribution to shareholders 0 413,738 1,503,079 1,916,817 Fund shares redeemed 35,036 36,030 496,347 567,413 Due to distributor 0 4,961 36,784 41,745 Due to advisor 766 6,074 174,481 181,321 Other 8,241 12,453 50,640 71,334 TOTAL LIABILITIES 44,043 473,256 5,279,578 5,796,877 TOTAL NET ASSETS $ 9,489,560 $ 108,247,961 $ 358,573,964 $ 476,311,485 NET ASSETS CONSIST OF: Paid-in capital $ 9,311,013 $ 104,965,813 $ 356,662,038 $ 470,938,864 Undistributed net investment income (loss) 10,428 (15,111) 14,155 9,472 Undistributed net realized gain (loss) on investments 7,160 2,400,743 (7,765,074) (5,357,171) Net unrealized appreciation (depreciation) of investments 160,959 896,516 9,662,845 10,720,320 TOTAL NET ASSETS $ 9,489,560 $ 108,247,961 $ 358,573,964 $ 476,311,485 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net assets - Class A $ 1,551,695 $ 10,298,744 $ 11,850,439 Shares outstanding - Class A 158,911 1,027,900 154,788 (d) 1,341,599 Net asset value per share - Class A $ 9.76 $ 10.02 $ 10.02 Maximum offering price per share - Class A $ 10.17 $ 10.44 $ 10.44 Net Assets - Class B $ 3,320,169 $ 6,588,372 $ 9,908,541 Shares outstanding - Class B 339,417 658,616 331,950 (d) 1,329,983 Net asset value and offering price per share - Class B $ 9.78 $ 10.00 $ 10.00 Net Assets - Institutional Class $ 9,489,560 $ 103,376,097 $ 341,686,848 $ 454,552,505 Shares outstanding - Institutional Class 910,170 10,572,792 34,133,994 (204,742)(d) 45,412,214 Net asset value and offering price per share - Institutional Class $ 10.43 $ 9.78 $ 10.01 $ 10.01 INVESTMENT AT COST $ 9,368,360 $ 107,766,210 $ 349,299,631 $ 466,434,201 - ---------------------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-19 WELLS FARGO FUNDS - INCOME FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) NORWEST ADVANTAGE NORWEST NORWEST STRATEGIC VALUE CORE-GATEWAY ADVANTAGE TOTAL CORE-GATEWAY ADVANTAGE INCOME INVESTMENT INCOME BOND FUND ADJUSTMENTS(a) RETURN BOND FUND ADJUSTMENTS(b) FUND ----------------------------------------------------------------------------------------- Interest $ 512,327 $ 7,757,141 $ 21,097,752 Securities lending income 1,375 32,550 82,916 Net expenses from master/core portfolios (43,997) 43,997 (654,508) 654,508 0 TOTAL INVESTMENT INCOME 469,705 7,135,183 21,180,668 EXPENSES Advisory fees 0 38,806 0 577,292 1,540,926 Administration fees 3,898 3,881 58,358 57,728 308,184 Custody fees 0 1,282 0 19,065 45,818 Shareholder serv fees 0 0 0 0 0 Portfolio accounting fees 15,500 2,771 37,500 41,216 83,000 Transfer agency fees 19,494 0 291,787 12,265 770,464 Distribution fees 0 0 27,338 0 49,939 Organization costs 1,096 0 6,539 0 0 Legal and audit fees 5,105 824 19,688 0 18,264 Registration fees 7,383 0 14,773 0 25,943 Directors' fees 99 37 1,633 549 4,102 Shareholder reports 172 0 11,703 0 21,192 Other 44 136 352 2,019 12,716 TOTAL EXPENSES 52,791 469,671 2,880,548 Less: Waived fees and reimbursed expenses fees (30,606) (3,739) (229,312) (55,626) (532,017) NET EXPENSES 22,185 240,359 2,348,531 NET INVESTMENT INCOME (LOSS) 447,520 6,894,824 18,832,137 REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain (loss) on sale of investments 6,537 2,582,335 8,676,066 Net change in unrealized appreciation (depreciation) of investments 143,807 (400,040) 1,907,127 NET GAIN (LOSS) ON INVESTMENTS 150,344 2,182,295 10,583,193 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 597,864 $ 9,077,119 $ 29,415,330 PRO FORMA PRO FORMA INVESTMENT INCOME ADJUSTMENTS COMBINED --------------------------- Interest $ 29,367,220 Securities lending income 116,841 Net expenses from master/core portfolios 0 TOTAL INVESTMENT INCOME 29,484,061 EXPENSES Advisory fees 6,465 (e) 2,163,490 Administration fees 216,998 (e) 649,047 Custody fees 20,375 (e) 86,540 Shareholder serv fees 45,085 (e) 45,085 Portfolio accounting fees (99,987)(e) 80,000 Transfer agency fees (854,844)(e) 239,166 Distribution fees (19,319)(e) 57,958 Organization costs (7,635)(e) 0 Legal and audit fees (10,970)(e) 32,911 Registration fees 0 48,099 Directors' fees 9 (e) 6,429 Shareholder reports (3,307)(e) 29,760 Other (764)(e) 14,502 TOTAL EXPENSES 3,452,989 Less: Waived fees and reimbursed expenses fees 746,590 (f) (104,710) NET EXPENSES 3,348,279 NET INVESTMENT INCOME (LOSS) 26,135,782 REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain (loss) on sale of investments 11,264,938 Net change in unrealized appreciation (depreciation) of investments 1,650,894 NET GAIN (LOSS) ON INVESTMENTS 12,915,832 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 39,051,614 - -------------------------------------------------------------------------------- * The Norwest Advantage Income Fund, Norwest Advantage Total Return Bond Fund, and Norwest Advantage Performa Strategic Value Bond Fund are merging to form the Wells Fargo Income Fund, historical accounting data from the Norwest Advantage Income Fund will be kept. (a) The Norwest AdvantagePerforma Strategic Value Bond Fund, a "Gateway Fund", invests in securities through a "Core Portfolio", the Norwest Advantage Strategic Value Bond Portfolio. Expenses allocated from the Core Portfolio to the Gateway Fund over the year ended November 30, 1998 have been disbursed according to the percentage of each expense at the Core Portfolio level. (b) The Norwest Advantage Total Return Bond Fund, a "Gateway Fund", invests in securities through a "Core Portfolio", the Norwest Advantage Strategic Value Bond Portfolio. Expenses allocated from the Core Portfolio to the Gateway Fund over the year ended November 30, 1998 have been disbursed according to the percentage of each expense at the Core Portfolio level. (c) Wells Fargo Bank will absorb the balance of unamortized organizational costs from Funds which are not accounting survivors. (d) Reflects new shares issued, net of retired shares of the respective Funds which are not accounting survivors. (e) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (f) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-20 WELLS FARGO FUNDS - INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE STRATEGIC VALUE BOND PORTFOLIO AND NORWEST ADVANTAGE INCOME FUND(a) NORWEST ADVANTAGE NORWEST (UNAUDITED) NOVEMBER 30, 1998 STRATEGIC VALUE ADVANTAGE PRO FORMA INTEREST MATURITY BOND PORTFOLIO INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b) VALUES(b) ASSET BACKED SECURITIES $ 3,000,000 Aesop Funding II LLC, Series 1998-1 A, 6.14% 5/20/06 $ 3,049,335 $ 0 $ 3,049,335 3,500,000 Chevy Chase Master Credit Card Trust, 0 Series 1998-6 A 5.54 9/15/04 3,461,172 0 3,461,172 2,000,000 Dollar Thrifty Rent A Car 6.70 9/25/07 2,023,126 0 2,023,126 3,237,000 EQCC Home Equity Loan Trust, 0 Series 1998-1 A6F 6.25 12/15/07 3,257,150 0 3,257,150 4,998,518 First Plus Home Loan Trust, Series 1996-2 A5 7.47 2/20/11 0 5,171,767 5,171,767 3,784,440 First USA Consumer Trust, Class A 6.50 9/15/02 0 3,790,355 3,790,355 7,000,000 Green Tree Financial Corporation, Series 1997-6 A7 7.14 1/15/29 0 7,644,490 7,644,490 2,919,881 Green Tree Financial Corporation, Series 1997-7 A8 6.86 9/15/16 2,958,992 0 2,958,992 2,000,000 Loop Funding Master Trust, Series 1997-AER B1 5.62 12/26/07 1,975,938 0 1,975,938 5,000,000 Premier Auto Trust, Series 1998-2 A3 5.77 1/6/02 0 5,046,800 5,046,800 2,000,000 Oakwood Mortgage Investors, Incorporated, 0 Series 1995-A A3 7.10 9/15/20 2,086,944 0 2,086,944 1,171,873 Sequoia Mortgage Trust, Series 2 A1 6.42 10/25/24 1,161,075 0 1,161,075 TOTAL ASSET BACKED SECURITIES $ 19,973,732 $ 21,653,412 $ 41,627,144 COLLATERALIZED MORTGAGE OBLIGATIONS $ 1,500,000 Bear Stearns Structured Securities, Incorporated, Series 1997-2 1A2 7.00% 8/25/36 $ 1,522,734 $ 0 $ 1,522,734 1,943,777 FAMC, Series CS-1012 1 7.06 7/25/02 2,016,669 0 2,016,669 2,500,000 FHLMC Structured Pass Through Securities, Series T-8 A4 7.00 8/15/13 2,561,550 0 2,561,550 2,300,000 GNMA, Series 1998-14 PD 6.00 6/20/23 2,319,263 0 2,319,263 4,000,000 MLMI, Incorporated, Series 1997-C1 A3 7.12 6/18/29 4,293,220 0 4,293,220 1,571,077 Vendee Mortgage Trust, Series 1992-2 G 7.25 2/15/19 1,648,828 0 1,648,828 4,500,000 Vendee Mortgage Trust, Series 1994-1 2E 6.50 1/15/17 4,577,580 0 4,577,580 3,500,000 Vendee Mortgage Trust, Series 1996-2 1E 6.75 5/15/20 3,591,375 0 3,591,375 TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS $ 22,531,219 $ 0 $ 22,531,219 CORPORATE BONDS & NOTES $ 3,000,000 AEP Resources, Incorporated 6.50% 12/1/03 $ 0 $ 3,024,090 $ 3,024,090 750,000 AK Steel Corporation 9.13 12/15/06 795,000 0 795,000 2,500,000 Alabama Power Company 5.35 11/15/03 0 2,501,000 2,501,000 6,000,000 AMBAC, Incorporated 9.38 8/1/11 0 7,975,200 7,975,200 300,000 American Express Credit 7.38 2/1/99 0 301,010 301,010 6,000,000 American Home Products Corporation 7.25 3/1/23 0 6,767,700 6,767,700 1,250,000 American Standard Cos., Incorporated 7.13 2/15/03 1,257,504 0 1,257,504 3,100,000 Amoco Canada 7.25 12/1/02 0 3,338,111 3,338,111 2,500,000 Applied Materials, Incorporated 7.00 9/6/05 2,640,355 0 2,640,355 525,000 Aramark Services, Incorporated 6.75 8/1/04 528,240 0 528,240 3,000,000 Associates Corp of North America 6.25 11/1/08 0 3,093,660 3,093,660 1,000,000 Atlas Air, Incorporated 9.25 4/15/08 1,002,500 0 1,002,500 4,000,000 Bank of Boston Corporation 6.63 12/1/05 0 4,180,520 4,180,520 1,000,000 Barrett Resources Corporation 7.55 2/1/07 1,020,423 0 1,020,423 2,000,000 Bausch & Lomb, Incorporated 6.75 12/15/04 2,095,896 0 2,095,896 3,000,000 Bayerische Landesbank, New York 6.20 2/9/06 0 3,088,890 3,088,890 2,000,000 Bear Stearns Company, Incorporated 6.13 2/1/03 2,012,008 0 2,012,008 500,000 Buckeye Technologies, Incorporated 8.50 12/15/05 522,500 0 522,500 1,000,000 Calenergy Company, Incorporated 7.23 9/15/05 1,025,929 0 1,025,929 100,000 Central Power & Light Corporation 6.63 7/1/05 0 105,682 105,682 500,000 Chancellor Media Group 9.38 10/1/04 520,000 0 520,000 3,000,000 Charles Schwab Corporation 6.88 9/2/03 3,138,114 0 3,138,114 3,500,000 CIT Group, Incorporated 5.91 11/23/05 0 3,525,725 3,525,725 100,000 Citigroup, Incorporated 8.63 2/1/07 0 117,934 117,934 4,550,000 Clear Channel Communications, Incorporated 7.25 10/15/27 0 4,495,218 4,495,218 3,000,000 Colgate-Palmolive Company 5.58 11/6/08 0 3,038,610 3,038,610 5,000,000 Connecticut Light & Power 7.88 6/1/01 0 5,235,350 5,235,350 3,000,000 Continental Airlines 6.80 7/2/07 3,051,315 0 3,051,315 2,500,000 Corestates Capital Corporation 9.63 2/15/01 2,706,805 0 2,706,805 100,000 Countrywide Funding Corporation 6.05 3/1/01 0 100,009 100,009 2,500,000 Dayton Hudson Company 5.90 6/15/37 2,525,105 0 2,525,105 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-21 WELLS FARGO FUNDS - INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE STRATEGIC VALUE BOND PORTFOLIO AND NORWEST ADVANTAGE INCOME FUND(a) NORWEST ADVANTAGE NORWEST (UNAUDITED) NOVEMBER 30, 1998 STRATEGIC VALUE ADVANTAGE PRO FORMA INTEREST MATURITY BOND PORTFOLIO INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b) VALUES(b) 2,000,000 Dean Witter Discover & Company 6.75 1/1/16 0 2,123,460 2,123,460 4,800,000 Dillard Department Stores, Incorporated 9.13 8/1/11 0 5,908,272 5,908,272 1,420,000 Eli Lilly & Company 6.25 3/15/03 0 1,486,996 1,486,996 3,000,000 Equitable Life Assurance Society 6.95 12/1/05 3,178,857 0 3,178,857 2,000,000 Farmers Exchange Capital 7.20 7/15/48 2,027,058 0 2,027,058 500,000 Federal Mogul Corporation 7.50 7/1/04 496,435 0 496,435 2,500,000 First Bank Systems, Incorporated 8.00 7/2/04 2,780,523 0 2,780,523 1,500,000 Flowers Industries, Incorporated 7.15 4/15/28 0 1,582,035 1,582,035 3,000,000 Ford Motor Credit Company 7.00 9/25/01 0 3,122,520 3,122,520 1,000,000 Fred Meyer, Incorporated 7.38 3/1/05 1,049,004 0 1,049,004 6,000,000 General Electric Capital Corporation 8.70 2/15/03 0 6,787,260 6,787,260 3,000,000 General Motors Acceptance Corporation 5.75 11/10/03 0 3,024,180 3,024,180 2,000,000 Genfinance Luxembourg SA 6.34 5/29/49 1,930,000 0 1,930,000 50,000 Great Atlantic & Pacific Tea 7.70 1/15/04 0 51,263 51,263 3,000,000 Gruma SA de CV 7.63 10/15/07 0 2,746,050 2,746,050 500,000 GS Escrow Corporation 7.13 8/1/05 493,556 0 493,556 305,000 GTE North, Incorporated 5.50 2/15/99 0 305,241 305,241 3,000,000 Hilton Hotels Corporation 7.50 12/15/17 0 2,868,570 2,868,570 500,000 HMH Properties 7.88 8/1/05 498,750 0 498,750 700,000 Imperial Oil Ltd. 8.30 8/20/01 0 753,627 753,627 200,000 Kentucky Utility 5.95 6/15/00 0 202,678 202,678 5,000,000 Key Bank N.A. 6.50 4/15/08 0 5,331,600 5,331,600 1,000,000 Kroger Company 8.15 7/17/06 1,123,848 0 1,123,848 1,200,000 Lehman Brothers Holdings 6.63 12/27/02 0 1,206,912 1,206,912 7,000,000 Lehman Brothers Holdings 8.50 8/1/15 0 7,715,050 7,715,050 2,000,000 Levi Strauss & Company 6.80 11/1/03 2,028,592 0 2,028,592 2,500,000 Lincoln National Corporation 7.00 3/15/18 2,579,448 0 2,579,448 50,000 Louisiana Power & Light 7.50 1/1/02 0 50,358 50,358 500,000 Lyondell Petrochemical 9.80 2/1/20 508,280 0 508,280 1,000,000 Mallinckrodt, Incorporated 6.30 3/15/01 1,004,720 0 1,004,720 2,500,000 Massachusetts Institute of Technology 7.25 11/2/96 2,972,390 0 2,972,390 250,000 McDonald's Corporation 7.38 7/15/02 0 252,690 252,690 6,800,000 Merck & Company, Incorporated 6.40 3/1/28 0 7,330,128 7,330,128 4,000,000 Merrill Lynch & Company, Incorporated 6.88 11/15/18 0 4,212,200 4,212,200 750,000 MGM Grand, Incorporated 6.95 2/1/05 720,243 0 720,243 250,000 Midland Bank plc 6.95 3/15/11 0 265,260 265,260 500,000 Morgan Guaranty Trust Company 7.38 2/1/02 0 530,530 530,530 5,000,000 Motorola, Incorporated 6.50 11/15/28 0 5,161,200 5,161,200 1,000,000 Nabisco, Incorporated 6.00 2/15/11 1,003,564 0 1,003,564 4,650,000 Nabisco, Incorporated 7.05 7/15/07 0 4,760,856 4,760,856 2,000,000 Nabisco, Incorporated 7.55 6/15/15 0 2,013,080 2,013,080 150,000 National Rural Utilities 6.50 9/15/02 0 157,210 157,210 3,000,000 National Rural Utilities 5.00 10/1/02 0 2,983,290 2,983,290 5,000,000 NationsBank Corporation 7.80 9/15/16 0 5,842,000 5,842,000 140,000 New York Telephone Company 6.13 1/15/10 0 145,072 145,072 3,000,000 News America Holdings 8.88 4/26/23 0 3,665,460 3,665,460 500,000 Niagara Mohawk Power 7.38 7/1/03 512,290 0 512,290 250,000 Northern Illinois Gas 5.88 5/1/00 0 250,113 250,113 1,000,000 Northwest Airlines Corporation 8.38 3/15/04 1,019,026 0 1,019,026 400,000 Ohio Bell Telephone Company 5.75 5/1/00 0 402,936 402,936 2,225,000 Old Kent Financial Corporation 6.63 11/15/05 2,329,335 0 2,329,335 7,500,000 Oracle Corporation 6.72 2/15/04 2,609,675 5,219,350 7,829,025 750,000 Outdoor Systems, Incorporated 8.88 6/15/07 798,750 0 798,750 1,000,000 Owens-Illinois, Incorporated 7.85 5/15/04 1,041,011 0 1,041,011 585,000 Pennsylvania Power & Light Company 6.88 3/1/04 0 629,413 629,413 2,000,000 Pep Boys 6.71 11/3/04 2,037,024 0 2,037,024 2,500,000 Philip Morris Cos., Incorporated 7.50 4/1/04 2,684,300 0 2,684,300 100,000 Philip Morris, Incorporated 6.00 7/15/01 0 101,244 101,244 5,000,000 PNC Bank Corporation 6.50 5/1/08 0 5,258,200 5,258,200 1,400,000 Potomac Capital Investment 7.05 10/2/01 1,433,834 0 1,433,834 2,000,000 Premark International, Incorporated 6.88 11/15/08 0 2,038,100 2,038,100 1,250,000 Premier Parks, Incorporated 9.25 4/1/06 1,320,313 0 1,320,313 3,000,000 Province of British Columbia 5.38 10/29/08 0 2,994,150 2,994,150 3,000,000 Province of Ontario 5.50 10/1/08 0 3,022,410 3,022,410 1,750,000 Prudential Insurance Company 7.65 7/1/07 1,909,433 0 1,909,433 1,000,000 R & B Falcon Corporation 6.75 4/15/05 958,963 0 958,963 500,000 Randall's Food Markets 9.38 7/1/07 542,500 0 542,500 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-22 WELLS FARGO FUNDS - INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE STRATEGIC VALUE BOND PORTFOLIO AND NORWEST ADVANTAGE INCOME FUND(a) NORWEST ADVANTAGE NORWEST (UNAUDITED) NOVEMBER 30, 1998 STRATEGIC VALUE ADVANTAGE PRO FORMA INTEREST MATURITY BOND PORTFOLIO INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b) VALUES(b) 2,000,000 Raytheon Company 5.95 3/15/01 2,028,244 0 2,028,244 500,000 Regal Cinemas, Incorporated 9.50 6/1/08 527,500 0 527,500 2,500,000 Reinsurance Group of America 7.25 4/1/06 2,724,525 0 2,724,525 2,500,000 Reliastar Financial Corporation 7.13 3/1/03 2,593,290 0 2,593,290 15,000 Republic of Italy 6.00 9/27/03 0 15,453 15,453 85,000 RJR Nabisco, Incorporated 8.75 8/15/05 0 87,708 87,708 3,000,000 Royal Caribbean Cruises 7.13 9/18/02 3,061,404 0 3,061,404 7,000,000 Royal Caribbean Cruises 7.25 8/15/06 0 7,143,430 7,143,430 500,000 Sinclair Broadcast Group 8.75 12/15/05 507,500 0 507,500 200,000 Southwest Airlines 7.88 9/1/07 0 228,566 228,566 100,000 Southwest Bell Telephone 6.63 7/15/07 0 107,418 107,418 1,500,000 Sprint Capital Corporation 6.88 11/15/28 0 1,579,875 1,579,875 2,500,000 Susa Partnership LP 8.20 6/1/17 2,520,440 0 2,520,440 1,000,000 Teekay Shipping Corporation 8.32 2/1/08 1,002,500 0 1,002,500 1,000,000 Tenet Healthcare Corporation 7.88 1/15/03 1,024,651 0 1,024,651 2,500,000 Tenneco, Incorporated 10.08 2/1/01 2,714,267 0 2,714,267 2,500,000 Terra Nova (U.K.) Holdings 7.20 8/15/07 2,597,740 0 2,597,740 1,875,000 Texas Utilities Company 6.20 10/1/02 1,916,833 0 1,916,833 100,000 Time Warner Entertainment 7.25 9/1/08 0 109,419 109,419 1,400,000 Tommy Hilfiger 6.50 6/1/03 1,381,158 0 1,381,158 7,000,000 Tosco Corporation 7.80 1/1/27 0 7,948,570 7,948,570 1,500,000 Toyota Motor Credit Corporation 5.63 11/13/03 0 1,517,010 1,517,010 1,250,000 Tricon Global Restaurants 7.65 5/15/08 1,294,067 0 1,294,067 1,000,000 Triton Energy Ltd. Corporation 8.75 4/15/02 962,500 0 962,500 4,500,000 Tyco International Group 5.88 11/1/04 0 4,483,125 4,483,125 2,500,000 United Telecommunications, Incorporated 9.50 4/1/03 2,879,247 0 2,879,247 3,500,000 Van Kampen, CLO-I 5.62 10/8/07 3,465,339 0 3,465,339 800,000 Wachovia Corporation 7.00 12/15/99 0 812,672 812,672 5,000,000 Wal-Mart Stores, Incorporated 9.10 7/15/00 0 5,315,700 5,315,700 4,500,000 Walt Disney Company 5.25 12/1/03 0 4,513,725 4,513,725 1,000,000 Western Financial Savings 8.50 7/1/03 845,586 0 845,586 2,000,000 Whitman Corporation 7.29 9/15/26 2,159,668 0 2,159,668 2,000,000 Williams Cos., Incorporated 6.13 2/15/02 2,036,024 0 2,036,024 3,500,000 Wisconsin Power & Light 5.70 10/15/08 0 3,560,480 3,560,480 65,000 WMC Finance USA 6.50 11/15/03 0 67,213 67,213 3,800,000 Worldcom, Incorporated 6.40 8/15/05 0 3,952,456 3,952,456 3,000,000 Yorkshire Power Finance 6.15 2/25/03 0 3,027,810 3,027,810 TOTAL CORPORATE BONDS & NOTES $ 106,675,899 $197,860,303 $ 304,536,202 INVESTMENT IN LIMITED PERTNERSHIP $ 616,000 PPM America CBO II 12/18/04 $ 660,352 $ 0 $ 660,352 MORTGAGE BACKED SECURITIES FFCB $ 250,000 FFCB 6.28% 1/22/01 $ 0 $ 257,017 $ 257,017 FHLMC $ 205,000 FHLMC 7.13% 7/21/99 $ 0 $ 207,688 $ 207,688 100,000 FHLMC 7.05 6/8/05 0 102,594 102,594 8,068,364 FHLMC #C80461 7.00 1/19/05 0 8,242,318 8,242,318 7,744,436 FHLMC #D70924 6.50 4/28/06 0 7,809,799 7,809,799 $ 0 $ 16,362,399 $ 16,362,399 FNMA $ 250,000 FNMA 7.08% 5/6/02 $ 0 $ 252,145 $ 252,145 2,250,000 FNMA 6.85 4/5/04 2,419,821 0 2,419,821 7,350,945 FNMA 6.16 8/7/28 7,974,313 0 7,974,313 8,000,000 FNMA 6.00 5/15/08 0 8,424,160 8,424,160 1,966,778 FNMA #73919 6.80 1/1/04 2,064,249 0 2,064,249 1,975,259 FNMA #375168 7.13 6/1/04 2,110,790 0 2,110,790 2,984,894 FNMA #380268 6.20 5/2/05 3,080,823 0 3,080,823 3,224,508 FNMA #402870 6.50 1/1/28 3,250,981 0 3,250,981 1,959,995 FNMA #408118 6.50 1/3/28 1,976,086 0 1,976,086 2,475,204 FNMA #415414 6.50 2/1/28 2,495,179 0 2,495,179 3,911,118 FNMA #415714 6.00 4/1/28 3,865,358 0 3,865,358 3,022,843 FNMA #417648 6.00 2/1/13 3,029,282 0 3,029,282 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-23 WELLS FARGO FUNDS - INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE STRATEGIC VALUE BOND PORTFOLIO AND NORWEST ADVANTAGE INCOME FUND(a) NORWEST ADVANTAGE NORWEST (UNAUDITED) NOVEMBER 30, 1998 STRATEGIC VALUE ADVANTAGE PRO FORMA INTEREST MATURITY BOND PORTFOLIO INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b) VALUES(b) 5,046,215 FNMA #429604 6.00 6/1/28 4,984,717 0 4,984,717 2,385 FNMA #303414 6.50 7/1/02 0 2,418 2,418 8,930,720 FNMA #398325 6.00 7/3/07 0 8,821,854 8,821,854 $ 37,251,599 $ 17,500,577 $ 54,752,176 GNMA $ 2,938,367 Pool 345066 6.50% 10/15/23 $ 2,976,301 $ 0 $ 2,976,301 2,881,217 Pool 346960 6.50 12/15/23 2,918,414 0 2,918,414 2,695,600 Pool 354692 6.50 11/15/23 2,730,400 0 2,730,400 3,253,279 Pool 361398 6.50 1/15/24 3,293,848 0 3,293,848 3,354,617 Pool 366641 6.50 11/15/23 3,397,925 0 3,397,925 3,605,249 Pool 473918 7.00 5/22/28 3,695,380 0 3,695,380 $ 19,012,268 $ 0 $ 19,012,268 SLMA $ 500,000 SLMA 6.05% 9/14/00 $ 0 $ 509,930 $ 509,930 705,000 SLMA 6.00 1/16/01 0 705,416 705,416 $ 0 $ 1,215,346 $ 1,215,346 TVA $ 6,000,000 TVA 6.00% 3/15/13 $ 0 $ 6,275,400 $ 6,275,400 TOTAL MORTGAGE BACKED SECURITIES $ 56,263,867 $ 41,610,739 $ 97,874,606 MUNICIPAL NOTES $ 4,000,000 Denver, CO, City and County SD #1, Educational Facilities RV, Taxable Pension, School Facilities Lease, AMBAC insured (cost $4,000,000) 6.49% 12/15/02 $ 0 $ 4,167,800 $ 4,167,800 2,000,000 Hudson County, NJ, Import Authority Facilities, Leasing RV, FSA Insured 7.40 12/1/25 2,263,906 0 2,263,906 3,160,000 New York City, GO Bonds, Series K, 6.10 8/1/01 3,257,537 0 3,257,537 1,045,000 Washington State, GO Bonds, State Housing Trust Fund, Series T 6.60 1/1/03 1,101,085 0 1,101,085 2,010,000 Western Minnesota, Power Agency RV, Series A, AMBAC Insured 6.33 1/1/02 2,066,822 0 2,066,822 TOTAL MUNICIPAL NOTES $ 8,689,350 $ 4,167,800 $ 12,857,150 U.S. TREASURY OBLIGATIONS U.S. TREASURY BONDS $ 6,500,000 U.S. Treasury Bonds 10.75% 5/15/03 $ 0 $ 8,046,415 $ 8,046,415 5,000,000 U.S. Treasury Bonds 9.88 11/15/15 0 7,627,500 7,627,500 3,000,000 U.S. Treasury Bonds 8.88 2/15/19 0 4,305,600 4,305,600 15,500,000 U.S. Treasury Bonds 6.75 8/15/26 18,706,563 0 18,706,563 8,700,000 U.S. Treasury Bonds 6.13 11/15/27 0 9,826,389 9,826,389 $ 18,706,563 $ 29,805,904 $ 48,512,467 U.S. TREASURY NOTES $ 1,000,000 U.S. Treasury Notes 5.75% 11/15/00 $ 0 $ 1,021,440 $ 1,021,440 3,500,000 U.S. Treasury Notes 7.88 8/15/01 0 3,786,370 3,786,370 2,000,000 U.S. Treasury Notes 6.25 10/31/01 0 2,086,740 2,086,740 5,500,000 U.S. Treasury Notes 6.00 7/31/02 0 5,747,170 5,747,170 4,000,000 U.S. Treasury Notes 11.88 11/15/03 0 5,241,040 5,241,040 4,000,000 U.S. Treasury Notes 7.25 8/15/04 0 4,500,720 4,500,720 3,000,000 U.S. Treasury Notes 7.50 2/15/05 0 3,436,950 3,436,950 5,000,000 U.S. Treasury Notes 7.00 7/15/06 5,689,065 0 5,689,065 3,000,000 U.S. Treasury Notes 7.00 7/15/06 0 3,412,860 3,412,860 5,000,000 U.S. Treasury Notes 6.50 10/15/06 0 5,541,000 5,541,000 10,000,000 U.S. Treasury Notes 6.63 5/15/07 0 11,233,700 11,233,700 11,800,000 U.S. Treasury Notes 5.63 5/15/08 0 12,551,188 12,551,188 2,000,000 U.S. Treasury Notes 4.75 11/15/08 0 2,003,100 2,003,100 $ 5,689,065 $ 60,562,278 $ 66,251,343 TOTAL U.S. TREASURY OBLIGATIONS $ 24,395,628 $ 90,368,182 $ 114,763,810 SHORT-TERM INSTRUMENTS $ 3,302,040 Norwest Cash Investment Fund $ 0 $ 3,302,040 $ 3,302,040 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-24 WELLS FARGO FUNDS - INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE STRATEGIC VALUE BOND PORTFOLIO AND NORWEST ADVANTAGE INCOME FUND(a) NORWEST ADVANTAGE NORWEST (UNAUDITED) NOVEMBER 30, 1998 STRATEGIC VALUE ADVANTAGE PRO FORMA INTEREST MATURITY BOND PORTFOLIO INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b) VALUES(b) REPURCHASE AGREEMENTS $ 8,001,860 NationsBanc Montgomery Securities, Incorporated, to be repurchased at $8,003,083 5.50% 12/1/98 $ 8,001,860 $ 0 $ 8,001,860 PRO FORMA ADJUSTMENTS (c) To Securities at Market Value $(127,798,216) $ 0 $(127,798,216) From Other Assets and Liablities from Core Portfolio (1,201,646) 0 (1,201,646) $(128,999,862) $ 0 $(128,999,862) TOTAL INVESTMENTS IN SECURITIES $ 118,192,045 $358,962,476 $ 606,154,383 (Cost $466,434,201) (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. (c) The Norwest AdvantageTotal Return Bond Fund and Norwest Advantage Performa Strategic Value Bond Fund invest directly into and comprise 48.3% (44.4% and 3.9%, respectively) of the Norwest Strategic Value Bond Portfolio's net assets. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-25 WELLS FARGO FUNDS - INTERMEDIATE GOVERNMENT INCOME FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 NORWEST ADVANTAGE STAGECOACH U.S STAGECOACH U.S. INTERMEDIATE GOVERNMENT INCOME GOVERNMENT GOVERNMENT PRO FORMA PRO FORMA FUND ALLOCATION INCOME FUND ADJUSTMENTS COMBINED ----------------- --------------- ------------- ------------- -------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $ 227,753,976 $ 95,119,231 $ 447,046,729 $ 769,919,936 Cash 6,664 4,436 0 11,100 Receivables: Dividends and Interest 1,443,919 190,520 4,659,021 6,293,460 Fund shares sold 165,500 0 268,818 434,318 Due from advisor 0 0 0 3,471 (c) 3,471 Organization expenses, net of amortization 0 3,471 11,357 (3,471)(c) 11,357 Prepaid expenses 865 0 0 865 TOTAL ASSETS 229,370,924 95,317,658 451,985,925 776,674,507 LIABILITIES Payables: Distribution to shareholders 921,078 239,631 16,257 1,176,966 Fund shares redeemed 29,092 100 265,342 294,534 Due to distributor 134,960 19,643 33,594 188,197 Due to advisor 153,822 84,753 213,597 452,172 Other 157,383 185,672 44,502 387,557 TOTAL LIABILITIES 1,396,335 529,799 573,292 2,499,426 TOTAL NET ASSETS $ 227,974,589 $ 94,787,859 $ 451,412,633 $ 774,175,081 NET ASSETS CONSIST OF: Paid-in capital $ 240,425,975 $ 116,428,470 $ 455,430,379 $ 812,284,824 Undistributed net investment income (loss) 459,775 459,775 Undistributed net realized gain (loss) on investments (16,062,128) (22,073,129) (18,368,714) (56,503,971) Net unrealized appreciation (depreciation) of investments 3,610,742 432,518 13,891,193 17,934,453 TOTAL NET ASSETS $ 227,974,589 $ 94,787,859 $ 451,412,633 $ 774,175,081 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net assets - Class A $ 180,384,472 $ 76,624,390 $ 17,064,962 $ 274,073,822 Shares outstanding - Class A 16,309,961 5,091,974 1,475,293 811,315 (d) 23,688,543 Net asset value per share - Class A $ 11.06 $ 15.05 $ 11.57 $ 11.57 Maximum offering price per share - Class A $ 11.58 $ 15.76 $ 12.05 Net Assets - Class B $ 35,583,777 $ 18,163,469 $ 9,011,499 $ 62,758,745 Shares outstanding - Class B 3,269,106 1,658,454 779,618 (278,170)(d) 5,429,008 Net asset value and offering price per share - Class B $ 10.88 $ 10.95 $ 11.56 $ 11.56 Net Assets - Class C $ 3,881,752 $ 3,881,752 Shares outstanding - Class C 356,415 356,415 Net asset value and offering price per share - Class C $ 10.89 $ 10.89 Net Assets - Institutional Class $ 8,124,588 $ 425,336,172 $ 433,460,760 Shares outstanding - Institutional Class 508,678 36,756,976 193,531 (d) 27,459,185 Net asset value and offering price per share - Institutional Class $ 15.97 $ 11.57 $ 11.57 INVESTMENT AT COST $ 224,143,234 $ 94,686,714 $ 433,155,536 $ 751,985,484 - ----------------------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (SEE S-77) S-26 WELLS FARGO FUNDS - INTERMEDIATE GOVERNMENT INCOME FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) NORWEST ADVANTAGE STAGECOACH U.S STAGECOACH U.S. INTERMEDIATE GOVERNMENT GOVERNMENT MASTER-FEEDER GOVERNMENT PRO FORMA PRO FORMA INCOME FUND (a) ALLOCATION ADJUSTMENTS (b) INCOME FUND ADJUSTMENTS COMBINED ---------------------------------------------------------------------------------------- INVESTMENT INCOME Interest $ 14,752,918 $ 5,360,799 $ 28,085,899 $ 48,199,616 Securities lending income 0 0 94,059 94,059 Net expenses from master/core portfolios 0 (18,528) 18,528 0 0 TOTAL INVESTMENT INCOME 14,752,918 5,342,271 28,179,958 48,293,675 EXPENSES Advisory fees 1,155,601 458,521 17,898 1,392,170 721,633 (e) 3,745,823 Administration fees 157,954 65,014 421,870 478,909 (e) 1,123,747 Custody fees 107,622 0 0 42,211 (e) 149,833 Shareholder serv fees 676,885 285,847 0 (106,839)(e) 855,893 Portfolio accounting fees 107,732 76,366 82,000 (186,098)(e) 80,000 Transfer agency fees 317,539 133,393 1,054,674 (770,274)(e) 735,332 Distribution fees 257,782 121,430 85,366 (48,303)(e) 416,275 Organization costs 134 2,690 11,920 (2,824)(e) 11,920 Legal and audit fees 52,864 35,755 599 21,676 (27,725)(e) 83,171 Registration fees 74,766 35,114 35,921 0 145,801 Directors' fees 3,819 3,780 5,683 (6,853)(e) 6,429 Shareholder reports 119,581 66,907 34,374 (22,086)(e) 198,776 Other 32,895 16,565 31 9,342 (2,942)(e) 55,891 TOTAL EXPENSES 3,065,174 1,301,382 3,154,996 7,608,890 Less: Waived fees and reimbursed expenses fees (745,868) (96,083) (222,860) (74,885)(f) (1,139,696) NET EXPENSES 2,319,306 1,205,299 2,932,136 6,469,195 NET INVESTMENT INCOME (LOSS) 12,433,612 4,136,972 25,247,822 41,824,480 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on sale of investments 1,996,013 1,724,534 7,985,954 11,706,501 Net change in unrealized appreciation (depreciation) of investments 1,287,680 (308,757) 7,557,509 8,536,432 NET GAIN (LOSS) ON INVESTMENTS 3,283,693 1,415,777 15,543,463 20,242,933 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 15,717,305 $ 5,552,749 $ 40,791,285 $62,067,413 - ------------------------------------------------------------------------------------------------------------------------------------ * The Stagecoach U.S. Government Income Fund, Stagecoach U.S. Government Allocation Fund, and Norwest Advantage Intermediate Government Income Fund are merging to form the Wells Fargo Intermediate Government Income Fund, historical accounting data from the Norwest Advantage Intermediate Government Income Fund will be kept. (a) Information shown prior to December 12, 1997, is for the Overland U.S. Government Income Fund which merged with the Stagecoach Ginne Mae Fund on December 12, 1997, and was renamed. the Stagecoach U.S. Government Income Fund (b) Information shown prior to December 12, 1997, is for the Stagecoach U.S. Government Allocation Fund which was a "Feeder Fund" investing in a "Master Portfolio", the U.S. Government Allocation Master Portfolio, and the expenses allocated to the Feeder have been disbursed according to the percentage of each expense at the Master Portfolio level. On December 12, 1997, the U.S. Government Allocation Master Portfolio was dissolved. (c) Wells Fargo Bank will absorb the balance of unamortized organizational costs from Funds which are not accounting survivors. (d) Reflects new shares issued, net of retired shares of the respective Funds which are not accounting survivors. (e) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (f) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (SEE S-77) S-27 WELLS FARGO FUNDS - INTERMEDIATE GOVERNMENT INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH U.S. GOVERNMENT INCOME FUND, STAGECOACH U.S. GOVERNMENT ALLOCATION FUND AND NORWEST ADVANTAGE INTERMEDIATE GOVERNMENT INCOME FUND(a) STAGECOACH STAGECOACH NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 U.S. GOVERNMENT U.S. GOVERNMENT INTERMEDIATE GOVERNMENT PRO FORMA INTEREST MATURITY INCOME FUND ALLOCATION FUND INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUE(b) VALUES(b) U.S. GOVERNMENT AGENCY SECURITIES FEDERAL AGENCY - OTHER $ 4,000,000 Tennessee Valley Authority 6.38% 06/15/05 $ 4,268,120 $ 0 $ 0 $ 4,268,120 5,000,000 Tennessee Valley Authority 6.75 11/01/25 5,599,350 0 0 5,599,350 8,500,000 Tennessee Valley Authority 6.00 3/15/13 0 0 8,890,150 8,890,150 $ 9,867,470 $ 0 $ 8,890,150 $ 18,757,620 0 FEDERAL AGRICULTURAL MORTGAGE CORPORATION 0 $ 6,183,121 FAMC Series AS-1006-1 7.49% 1/25/12 $ 0 $ 0 $ 6,726,079 $ 6,726,079 4,387,551 FAMC Series BA-1001-1 6.92 1/25/03 0 0 4,528,777 4,528,777 3,101,832 FAMC Series CS-1001-1 7.19 7/25/01 0 0 3,193,919 3,193,919 8,700,028 FAMC Series CS-1010-1 7.42 7/25/02 0 0 9,129,591 9,129,591 $ 0 $ 0 $ 23,578,366 $ 23,578,366 0 FEDERAL HOME LOAN BANK 0 $10,000,000 FHLB 5.13% 9/15/03 $ 0 $ 0 $ 10,047,700 $ 10,047,700 5,000,000 FHLB 7.59 3/10/05 0 0 5,638,000 5,638,000 9,000,000 FHLB 6.41 10/11/05 0 0 9,631,710 9,631,710 7,000,000 FHLB 6.44 12/12/11 0 0 7,664,580 7,664,580 $ 0 $ 0 $ 32,981,990 $ 32,981,990 0 FEDERAL HOME LOAN MORTGAGE CORPORATION 0 $ 4,000,000 FHLMC 8.07% 1/27/05 $ 0 $ 0 $ 4,601,200 $ 4,601,200 10,000,000 FHLMC 7.10 4/10/07 0 0 11,166,100 11,166,100 10,000,000 FHLMC 5.00 12/1/98 0 0 10,000,000 10,000,000 5,000,000 FHLMC 7.10 04/10/07 5,554,700 0 0 5,554,700 14,850,000 FHLMC POOL #C00680 6.00 11/1/28 0 0 14,678,335 14,678,335 19,364,074 FHLMC POOL #C80461 7.00 12/1/26 0 0 19,781,563 19,781,563 7,744,436 FHLMC POOL #D70924 6.50 5/1/26 0 0 7,809,799 7,809,799 1,996,934 FHLMC POOL #G00683 8.50 12/01/25 2,089,452 0 0 2,089,452 $ 7,644,152 $ 0 $ 68,036,997 $ 75,681,149 0 FEDERAL NATIONAL MORTGAGE ASSOCIATION 0 $ 5,000,000 FNMA 5.75% 02/15/08 $ 5,149,200 $ 0 $ 0 $ 5,149,200 10,000,000 FNMA 6.50 7/16/07 0 0 10,761,400 10,761,400 21,500,000 FNMA 6.00 5/15/08 0 0 22,639,930 22,639,930 14,572,872 FNMA POOL #412682 6.00 3/1/28 0 0 14,395,229 14,395,229 9,858,389 FNMA POOL #429182 6.50 5/1/28 0 0 9,932,327 9,932,327 4,920,846 FNMA POOL #73806 7.30 12/1/11 0 0 5,316,040 5,316,040 9,584,946 FNMA POOL# 251700 6.50 05/01/13 9,726,516 0 0 9,726,516 3,391,030 FNMA POOL# 376272 7.00 02/01/12 3,462,242 0 0 3,462,242 9,034,600 FNMA POOL# 415789 6.00 05/01/28 8,917,512 0 0 8,917,512 3,313,748 FNMA POOL# 417768 6.50 03/01/28 3,336,348 0 0 3,336,348 4,797,195 FNMA POOL# 426032 7.50 06/01/28 4,928,015 0 0 4,928,015 8,687,334 FNMA POOL#251615 7.50 04/01/28 8,924,238 0 0 8,924,238 9,686,793 FNMA POOL#251759 6.00 05/01/13 9,702,776 0 0 9,702,776 4,408,056 FNMA POOL#251906 7.50 07/01/28 4,528,264 0 0 4,528,264 437,500 FNMA POOL#421867 6.50 04/01/28 440,484 0 0 440,484 6,112,026 FNMA POOL#424815 6.50 04/01/28 6,153,710 0 0 6,153,710 9,607,134 FNMA POOL#430040 6.50 06/01/28 9,672,654 0 0 9,672,654 9,683,119 FNMA POOL#430194 7.00 06/01/28 9,885,303 0 0 9,885,303 5,304,356 FNMA POOL#430540 7.00 06/01/28 5,415,111 0 0 5,415,111 4,447,910 FNMA POOL#432484 7.00 06/01/28 4,540,782 0 0 4,540,782 9,877,795 FNMA POOL#440447 6.00 09/01/28 9,749,778 0 0 9,749,778 9,888,843 FNMA POOL#443908 6.50 11/01/28 9,956,285 0 0 9,956,285 5,657,067 FNMA POOL#70765 9.00 03/01/21 5,996,830 0 0 5,996,830 $120,486,048 $ 0 $ 63,044,926 $183,530,974 GOVERNMENT NATIONAL MORTGAGE ASSOCIATION $ 78,695 GNMA II POOL#001456 11.00% 08/20/20 $ 86,323 $ 0 $ 0 $ 86,323 20,069 GNMA II #001436 10.00 07/20/20 21,679 0 0 21,679 22,637 GNMA II POOL #000766 9.50 05/20/17 24,241 0 0 24,241 193,196 GNMA II POOL #001420 11.00 06/20/20 211,666 0 0 211,666 85,009 GNMA II POOL #001579 9.50 03/20/21 91,030 0 0 91,030 161,838 GNMA II POOL #1236 9.50 08/20/19 173,301 0 0 173,301 669,967 GNMA II POOL# 1273 9.50 10/20/19 717,421 0 0 717,421 223,917 GNMA II POOL# 1472 10.00 09/20/20 241,877 0 0 241,877 151,363 GNMA II POOL# 1544 10.00 01/20/21 163,503 0 0 163,503 264,149 GNMA II POOL# 418627 8.50 11/20/25 279,211 0 0 279,211 374,311 GNMA II POOL#0058 9.00 07/20/22 398,693 0 0 398,693 146,583 GNMA II POOL#1168 9.00 04/20/19 156,345 0 0 156,345 656,605 GNMA II POOL#1239 11.00 08/20/19 719,843 0 0 719,843 145,810 GNMA II POOL#1454 10.00 08/20/20 157,505 0 0 157,505 162,071 GNMA II POOL#1526 10.00 12/20/20 175,071 0 0 175,071 166,858 GNMA II POOL#157247 9.50 05/20/16 178,722 0 0 178,722 958,663 GNMA II POOL#1580 10.00 03/20/21 1,035,557 0 0 1,035,557 89,214 GNMA II POOL#1596 9.00 04/20/21 95,109 0 0 95,109 686,004 GNMA II POOL#1616 10.00 05/20/21 741,028 0 0 741,028 503,633 GNMA II POOL#170928 9.00 09/20/16 532,748 0 0 532,748 122,805 GNMA II POOL#173 10.00 07/20/14 132,125 0 0 132,125 275,513 GNMA II POOL#1740 9.00 12/20/21 293,460 0 0 293,460 81,555 GNMA II POOL#1848 10.00 06/20/22 88,130 0 0 88,130 1,891,593 GNMA II POOL#2268 7.50 08/20/26 1,946,563 0 0 1,946,563 236,293 GNMA II POOL#227132 9.00 07/20/17 249,953 0 0 249,953 1,661,064 GNMA II POOL#2303 7.50 10/20/26 1,709,335 0 0 1,709,335 3,685,566 GNMA II POOL#2496 7.00 10/20/27 3,755,776 0 0 3,755,776 163,977 GNMA II POOL#340045 8.00 03/20/23 170,382 0 0 170,382 24,382 GNMA II POOL#495 10.00 02/20/16 26,274 0 0 26,274 3,531 GNMA II POOL#60 10.00 12/20/13 3,790 0 0 3,790 65,746 GNMA II POOL#811 8.00 02/20/23 68,314 0 0 68,314 17,573 GNMA POOL #233618 10.00 01/15/19 19,011 0 0 19,011 1,979,648 GNMA POOL #319413 7.25 12/15/18 2,052,638 0 0 2,052,638 1,892,780 GNMA POOL #358863 7.25 01/15/29 1,962,566 0 0 1,962,566 1,571,284 GNMA POOL #362584 6.88 01/15/29 1,614,495 0 0 1,614,495 14,264,430 GNMA POOL #445071 7.50 1/15/27 0 0 14,750,276 14,750,276 62,142 GNMA POOL# 158583 9.00 09/20/16 66,229 0 0 66,229 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-28 WELLS FARGO FUNDS - INTERMEDIATE GOVERNMENT INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH U.S. GOVERNMENT INCOME FUND, STAGECOACH U.S. GOVERNMENT ALLOCATION FUND AND NORWEST ADVANTAGE INTERMEDIATE GOVERNMENT INCOME FUND(a) STAGECOACH STAGECOACH NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 U.S. GOVERNMENT U.S. GOVERNMENT INTERMEDIATE GOVERNMENT PRO FORMA INTEREST MATURITY INCOME FUND ALLOCATION FUND INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUE(b) VALUES(b) 3,068,014 GNMA POOL# 414636 7.50 10/15/25 3,168,185 0 0 3,168,185 3,399,682 GNMA POOL# 450871 8.00 05/15/27 3,535,670 0 0 3,535,670 5,863,640 GNMA POOL# 473573 6.50 06/15/28 5,926,733 0 0 5,926,733 31 GNMA POOL#0070 12.00 01/20/99 32 0 0 32 816 GNMA POOL#0116 12.00 04/20/99 838 0 0 838 256,251 GNMA POOL#0864 6.50 02/20/08 260,574 0 0 260,574 1,350,751 GNMA POOL#291124 7.50 06/15/25 1,406,888 0 0 1,406,888 2,717,221 GNMA POOL#306052 9.00 06/15/21 2,914,600 0 0 2,914,600 858,379 GNMA POOL#336930 7.50 03/15/23 886,938 0 0 886,938 1,131,998 GNMA POOL#352961 6.50 05/15/24 1,144,892 0 0 1,144,892 1,740,843 GNMA POOL#430800 7.00 05/15/26 1,782,710 0 0 1,782,710 8,549,679 GNMA POOL#467791 7.50 04/15/28 8,836,862 0 0 8,836,863 $ 50,224,836 $ 0 $ 14,750,276 $ 64,975,112 STUDENT LOAN MORTGAGE ASSOCIATION $ 1,000,000 SLMA 9.15% 12/1/04 $ 0 $ 0 $ 1,208,820 $ 1,208,820 TOTAL U.S. GOVERNMENT AGENCY SECURITIES $188,222,506 $ 0 $212,491,525 $400,714,031 0 0 U.S. TREASURY SECURITIES 0 0 U.S. TREASURY BONDS 0 $10,000,000 U.S. Treasury Bonds 10.38% 11/15/12 $ 13,834,400 $ 0 $ 0 $ 13,834,400 1,300,000 U.S. Treasury Bonds 8.88 2/15/19 0 1,864,681 0 1,864,681 1,350,000 U.S. Treasury Bonds 8.50 2/15/20 0 1,886,409 0 1,886,409 1,400,000 U.S. Treasury Bonds 8.75 8/15/20 0 2,007,684 0 2,007,684 1,400,000 U.S. Treasury Bonds 8.13 5/15/21 0 1,905,092 0 1,905,092 1,400,000 U.S. Treasury Bonds 8.00 11/15/21 0 1,888,684 0 1,888,684 1,400,000 U.S. Treasury Bonds 7.63 11/15/22 0 1,829,408 0 1,829,408 1,800,000 U.S. Treasury Bonds 6.25 8/15/23 0 2,027,808 0 2,027,808 1,500,000 U.S. Treasury Bonds 6.88 8/15/25 0 1,829,535 0 1,829,535 1,550,000 U.S. Treasury Bonds 6.50 11/15/26 0 1,814,461 0 1,814,461 1,700,000 U.S. Treasury Bonds 6.13 11/15/27 0 1,917,022 0 1,917,022 7,000,000 U.S. Treasury Bonds 5.50 08/15/28 7,401,380 0 0 7,401,380 $ 21,235,780 $ 18,970,784 $ 0 $ 40,206,564 U.S. TREASURY BILLS 0 $76,761,000 U.S. Treasury Bills 4.39*% 2/4/99 $ 0 $ 76,148,447 $ 0 $ 76,148,447 0 U.S. TREASURY NOTES 0 $26,000,000 U.S. Treasury Notes 6.88% 5/15/06 $ 0 $ 0 $ 29,347,240 $ 29,347,240 23,000,000 U.S. Treasury Notes 7.88 11/15/04 0 0 26,689,890 26,689,890 21,000,000 U.S. Treasury Notes 7.00 7/15/06 0 0 23,890,020 23,890,020 17,000,000 U.S. Treasury Notes 6.50 10/15/06 0 0 18,839,400 18,839,400 15,000,000 U.S. Treasury Notes 7.50 5/15/02 0 0 16,339,800 16,339,800 12,500,000 U.S. Treasury Notes 7.50 11/15/01 0 0 13,480,000 13,480,000 12,000,000 U.S. Treasury Notes 6.00 7/31/02 0 0 12,539,280 12,539,280 12,000,000 U.S. Treasury Notes 10.75 8/15/05 0 0 16,051,200 16,051,200 10,000,000 U.S. Treasury Notes 7.25 8/15/04 0 0 11,251,800 11,251,800 10,000,000 U.S. Treasury Notes 5.63 5/15/08 0 0 10,636,600 10,636,600 9,000,000 U.S. Treasury Notes 8.00 5/15/01 0 0 9,698,310 9,698,310 7,500,000 U.S. Treasury Notes 7.50 2/15/05 0 0 8,592,375 8,592,375 7,000,000 U.S. Treasury Notes 6.63 5/15/07 0 0 7,863,590 7,863,590 5,000,000 U.S. Treasury Notes 6.25 8/31/02 0 0 5,268,200 5,268,200 5,000,000 U.S. Treasury Notes 5.75 04/30/03 5,216,400 0 0 5,216,400 3,500,000 U.S. Treasury Notes 6.13 08/15/07 3,818,290 0 0 3,818,290 3,000,000 U.S. Treasury Notes 6.13 8/15/07 0 0 3,270,990 3,270,990 $ 9,034,690 $ 0 $213,758,695 $222,793,385 TOTAL U.S. TREASURY SECURITIES $ 30,270,470 $ 95,119,231 $213,758,695 $339,148,396 SHORT-TERM HOLDINGS $20,796,509 Norwest U.S. Government Fund $ 0 $ 0 $ 20,796,509 $ 20,796,509 REPURCHASE AGREEMENTS $ 9,261,000 Goldman Sachs Pooled Repurchase Agreement- 102% Collateralized by U.S. Government Securities 5.25% 10/31/98 $ 9,261,000 $ 0 $ 0 $ 9,261,000 TOTAL INVESTMENTS IN SECURITIES $227,753,976 $ 95,119,231 $447,046,729 $769,919,936 (Cost $751,985,484) (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. * Yield to maturity. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-29 WELLS FARGO FUNDS - LIMITED TERM GOVERNMENT INCOME FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 NORWEST STAGECOACH SHORT- ADVANTAGE LIMITED INTERMEDIATE U.S. TERM GOVERNMENT GOVERNMENT PRO FORMA PRO FORMA INCOME FUND INCOME FUND ADJUSTMENTS COMBINED ----------------- ----------------- -------------- -------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $75,026,964 $128,451,930 $203,478,894 Cash 0 5,636 5,636 Receivables: Dividends and Interest 818,344 1,565,218 2,383,562 Fund shares sold 59,169 196,000 255,169 Due from advisor 0 0 2,238 (b) 2,238 Organization expenses, net of amortization 2,238 0 (2,238)(b) 0 Prepaid expenses 0 1,651 1,651 TOTAL ASSETS 75,906,715 130,220,435 206,127,150 LIABILITIES Payables: Distribution to shareholders 333,372 601,235 934,607 Fund shares redeemed 55,413 8,031 63,444 Due to distributor 8,832 8,832 Due to advisor 16,876 46,570 63,446 Other 512 112,577 113,089 TOTAL LIABILITIES 406,173 777,245 1,183,418 TOTAL NET ASSETS $75,500,542 $129,443,190 $204,943,732 Net assets consist of: Paid-in capital $73,609,370 $141,288,188 $214,897,558 Undistributed net realized gain (loss) on investments 350,061 (15,395,470) (15,045,409) Net unrealized appreciation (depreciation) of investments 1,541,111 3,550,472 5,091,583 TOTAL NET ASSETS $75,500,542 $129,443,190 $204,943,732 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net assets - Class A $ 36,355,977 $ 36,355,977 Shares outstanding - Class A 3,581,329 3,581,329 Net asset value per share - Class A $ 10.15 $ 10.15 Maximum offering price per share - Class A $ 10.46 $ 10.46 Net Assets - Class B $ 9,047,836 $ 9,047,836 Shares outstanding - Class B 891,366 891,366 Net asset value and offering price per share - Class B $ 10.15 $ 10.15 Net Assets - Institutional Class $75,500,542 $ 84,039,378 $159,539,920 Shares outstanding - Institutional Class 7,512,259 8,438,670 68,795 (c) 16,019,724 Net asset value and offering price per share - Institutional Class $ 10.05 $ 9.96 $ 9.96 INVESTMENT AT COST $73,485,853 $124,901,459 $198,387,312 - ---------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (SEE S-77) S-30 WELLS FARGO FUNDS - LIMITED TERM GOVERNMENT INCOME FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) NORWEST STAGECOACH SHORT- ADVANTAGE LIMITED INTERMEDIATE U.S. TERM GOVERNMENT GOVERNMENT PRO FORMA PRO FORMA INCOME FUND INCOME FUND (a) ADJUSTMENTS COMBINED ----------------------------------------------------------------------- INVESTMENT INCOME Dividends $4,140,336 $ 33,643 $ 4,173,979 Interest 0 6,992,026 6,992,026 Securities lending income 23,713 0 23,713 TOTAL INVESTMENT INCOME 4,164,049 7,025,669 11,189,718 EXPENSES Advisory fees 220,188 542,880 134,257 (d) 897,325 Administration fees 66,724 74,456 128,018 (d) 269,198 Custody fees 13,345 21,930 618 (d) 35,893 Shareholder serv fees 0 289,432 (179,556)(d) 109,876 Portfolio accounting fees 46,000 80,916 (46,916)(d) 80,000 Transfer agency fees 166,808 96,903 (185,997)(d) 77,714 Distribution fees 0 33,506 25,837 (d) 59,343 Organization costs 681 7,201 (681)(d) 7,201 Legal and audit fees 12,757 34,194 (11,738)(d) 35,213 Registration fees 28,516 27,777 0 56,293 Directors' fees 899 3,709 1,821 (d) 6,429 Shareholder reports 2,896 35,262 (3,816)(d) 34,342 Other 4,627 9,409 (702)(d) 13,334 TOTAL EXPENSES 563,441 1,257,575 1,682,161 Less: Waived fees and reimbursed expenses fees (296,559) (253,566) 270,731 (e) (279,394) NET EXPENSES 266,882 1,004,009 1,402,767 NET INVESTMENT INCOME (LOSS) 3,897,167 6,021,660 9,786,951 REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain (loss) on sale of investments 338,450 1,063,089 1,401,539 Net change in unrealized appreciation (depreciation) of investments 1,042,686 1,563,089 2,605,775 NET GAIN (LOSS) ON INVESTMENTS 1,381,136 2,626,178 4,007,314 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $5,278,303 $8,647,838 $13,794,265 - ------------------------------------------------------------------------------------------------------------------------- * The Stagecoach Short-Intermediate U.S. Government Income Fund and Norwest Advantage Limited Term Government Income Fund are merging to form the Wells Fargo Limited Term Government Income Fund, historical accounting data from the Stagecoach Short-Intermediate U.S. Government Income Fund will be kept. (a) Information shown prior to June 14, 1998, is for the Stagecoach Short-Intermediate U.S.Government Income Fund which merged with the Stagecoach Intermediate Bond Fund on June 14, 1998. (b) Wells Fargo Bank will absorb the balance of unamortized organizational costs from Funds which are not accounting survivors. (c) Reflects new shares issued, net of retired shares of the respective Funds which are not accounting survivors. (d) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (e) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (SEE S-77) S-31 WELLS FARGO FUNDS - LIMITED TERM GOVERNMENT INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE LIMITED GOVERNMENT INCOME FUND AND STAGECOACH SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND(a) NORWEST ADVANTAGE STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 GOVERNMENT SHORT-INTERMEDIATE PRO FORMA COUPON MATURITY INCOME FUND INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUES(b) FOREIGN GOVERNMENTS $ 1,300,000 Province of Ontario 7.63% 6/22/04 $ 0 $ 1,436,500 $ 1,436,500 1,500,000 Province of Quebec 8.80 4/15/03 0 1,678,305 1,678,305 TOTAL FOREIGN GOVERNMENTS $ 0 $ 3,114,805 $ 3,114,805 CORPORATE BONDS & NOTES BANK & FINANCE $ 4,000,000 Associates Corporation N.A. 5.75% 11/1/03 $ 0 $ 4,055,000 $ 4,055,000 200,000 Banc One Corporation 7.00 3/25/02 0 211,500 211,500 1,000,000 Nynex Credit Company 6.25 6/13/02 0 1,004,660 1,004,660 5,000,000 First Bank Corporate Card Master Trust 6.40 2/15/03 0 5,113,200 5,113,200 5,000,000 Ford Motor Credit Company 6.13 4/28/03 0 5,150,000 5,150,000 1,000,000 General Motors Acceptance Corporation 6.88 7/15/01 0 1,031,250 1,031,250 1,000,000 Standard Credit Card Master Trust 8.35 1/7/00 0 1,011,260 1,011,260 $ 0 $ 17,576,870 $ 17,576,870 BEVERAGE, BREWING & DISTRIBUTION $ 4,000,000 Anheuser-Busch Companies Incorporated 6.75% 8/1/03 $ 0 $ 4,260,000 $ 4,260,000 INDUSTRIALS $ 4,000,000 Honeywell Incorporated 6.75% 3/15/02 $ 0 $ 4,170,000 $ 4,170,000 1,000,000 Lockheed Marting Company 6.85 5/15/01 0 1,033,750 1,033,750 1,500,000 Mobil Oil Corporation 6.25 8/31/01 0 1,545,000 1,545,000 $ 0 $ 6,748,750 $ 6,748,750 TELECOMMUNICATIONS $ 2,000,000 Cable & Wireless Communications 6.38% 3/6/03 $ 0 $ 2,011,600 $ 2,011,600 2,000,000 Continental Cablevision 8.30 5/15/06 0 2,230,000 2,230,000 $ 0 $ 4,241,600 $ 4,241,600 UTILITIES $ 5,000,000 Pacific Gas & Electric Company 7.88% 3/1/02 $ 0 $ 5,400,000 $ 5,400,000 2,500,000 Worldcom Incorporated 6.13 8/15/01 0 2,537,500 2,537,500 $ 0 $ 7,937,500 $ 7,937,500 TOTAL CORPORATE BONDS & NOTES $ 0 $ 43,879,525 $ 43,879,525 U.S. GOVERNMENT AGENCY SECURITIES FEDERAL AGENCY - OTHER $ 2,000,000 Tennessee Valley Authority 6.50% 8/20/01 $ 0 $ 2,067,500 $ 2,067,500 FEDERAL FARM CREDIT BANK $ 2,000,000 Federal Farm Credit Bank 5.75% 2/9/05 $ 0 $ 2,055,940 $ 2,055,940 FEDERAL HOME LOAN BANKS $ 2,000,000 FHLB 5.63% 3/19/01 $ 2,034,500 $ 0 $ 2,034,500 5,000,000 FHLB 6.37 4/9/01 5,162,950 0 5,162,950 8,000,000 FHLB 5.53 1/15/03 0 8,146,720 8,146,720 2,000,000 FHLB 5.13 9/15/03 2,009,540 0 2,009,540 2,000,000 FHLB 5.13 9/15/03 0 2,005,940 2,005,940 $ 9,206,990 $ 10,152,660 $ 19,359,650 FEDERAL HOME LOAN MORTGAGE CORPORATION $ 2,200,000 FHLMC 8.12% 1/31/05 $ 0 $ 2,532,750 $ 2,532,750 5,000,000 FHLMC 6.79 8/26/05 0 5,442,200 5,442,200 2,000,000 FHLMC 7.10 4/10/07 2,233,220 0 2,233,220 5,000,000 FHLMC 7.01 7/11/07 0 5,250,000 5,250,000 $ 2,233,220 $ 13,224,950 $ 15,458,170 FEDERAL NATIONAL MORTGAGE ASSOCIATION $ 5,000,000 FNMA 6.18% 6/23/00 $ 0 $ 5,097,800 $ 5,097,800 2,900,000 FNMA 6.09 9/12/00 0 2,948,923 2,948,923 2,000,000 FNMA 6.69 8/7/01 0 2,088,800 2,088,800 2,000,000 FNMA 6.85 4/5/04 2,164,660 0 2,164,660 3,000,000 FNMA 7.35 3/28/05 3,347,010 0 3,347,010 4,894,935 FNMA 6.50 7/28/06 4,931,647 0 4,931,647 2,600,000 FNMA 6.50 7/16/07 0 2,796,222 2,796,222 5,000,000 FNMA 6.16 12/18/07 0 5,257,050 5,257,050 3,000,000 FNMA 6.00 5/15/08 3,159,060 0 3,159,060 2,725,338 FNMA POOL#50761 6.00 7/1/08 0 2,727,873 2,727,873 87,203 FNMA REMIC G93-19FJ 6.50 4/25/23 0 92,871 92,871 3,279,881 FNMA POOL#313644 7.00 8/1/27 0 3,348,365 3,348,365 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-32 WELLS FARGO FUNDS - LIMITED TERM GOVERNMENT INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE LIMITED GOVERNMENT INCOME FUND AND STAGECOACH SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND(a) NORWEST ADVANTAGE STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 GOVERNMENT SHORT-INTERMEDIATE PRO FORMA COUPON MATURITY INCOME FUND INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUES(b) GOVERNMENT NATIONAL MORTGAGE ASSOCIATION $ 3,258,433 Pool 22036 8.00% 5/17/03 $ 3,378,604 $ 0 $ 3,378,604 3,298,200 Pool 455464 7.50 1/12/05 3,410,536 0 3,410,536 169,740 GNMA II POOL#157247 9.50 5/20/16 0 181,808 181,808 965,677 GNMA POOL#336930 7.50 3/15/23 0 997,805 997,805 1,360,355 GNMA POOL#418261 6.50 4/15/26 0 1,374,381 1,374,381 1,194,942 GNMA POOL#417389 7.00 5/15/26 0 1,223,680 1,223,680 1,624,319 GNMA POOL#423779 7.00 5/15/26 0 1,663,400 1,663,400 $ 6,789,140 $ 5,441,074 $ 12,230,214 TOTAL U.S. GOVERNMENT AGENCY SECURITIES $31,831,727 $ 57,300,028 $ 89,131,755 U.S. TREASURY SECURITIES U.S. TREASURY BONDS $ 2,500,000 U.S. Treasury Bonds 0.38% 11/15/12 $ 0 $ 3,458,600 $ 3,458,600 U.S. TREASURY NOTES $ 4,000,000 U.S. Treasury Notes 8.88% 2/15/99 $ 4,033,760 $ 0 $ 4,033,760 3,000,000 U.S. Treasury Notes 5.88 11/15/99 3,033,330 0 3,033,330 1,250,000 U.S. Treasury Notes 6.75 4/30/00 0 1,285,550 1,285,550 3,000,000 U.S. Treasury Notes 6.00 8/15/00 3,067,440 0 3,067,440 3,500,000 U.S. Treasury Notes 8.50 11/15/00 0 3,752,105 3,752,105 3,000,000 U.S. Treasury Notes 5.63 11/30/00 3,059,760 0 3,059,760 2,000,000 U.S. Treasury Notes 6.25 4/30/01 2,074,500 0 2,074,500 6,000,000 U.S. Treasury Notes 6.25 1/31/02 6,279,120 0 6,279,120 1,500,000 U.S. Treasury Notes 6.63 3/31/02 1,590,285 0 1,590,285 3,000,000 U.S. Treasury Notes 6.63 4/30/02 3,183,960 0 3,183,960 4,000,000 U.S. Treasury Notes 6.25 8/31/02 4,214,560 0 4,214,560 4,750,000 U.S. Treasury Notes 5.88 9/30/02 0 4,948,882 4,948,882 2,000,000 U.S. Treasury Notes 5.75 4/30/03 2,086,800 0 2,086,800 4,000,000 U.S. Treasury Notes 7.88 11/15/04 $ 0 $ 4,641,880 $ 4,641,880 2,000,000 U.S. Treasury Notes 7.50 2/15/05 2,291,300 0 2,291,300 4,000,000 U.S. Treasury Notes 7.00 7/15/06 4,550,480 0 4,550,480 6,000,000 U.S. Treasury Notes 6.50 10/15/06 0 6,654,360 6,654,360 $39,465,295 $ 21,282,777 $ 60,748,072 TOTAL U.S. TREASURY SECURITIES $39,465,295 $ 24,741,377 $ 64,206,672 SHORT-TERM INSTRUMENTS 69,036 Dreyfus Cash Management Fund $ 69,036 $ 0 $ 69,036 3,660,906 Norwest U.S. Government Fund 3,660,906 0 3,660,906 $ 3,729,942 $ 0 $ 3,729,942 REPURCHASE AGREEMENTS $ 2,531,000 Goldman Sachs Pooled Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.25% 10/31/98 $ 0 $ 2,531,000 $ 2,531,000 TOTAL INVESTMENTS IN SECURITIES $75,026,964 $128,451,930 $203,478,894 (Cost $198,387312) (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-33 WELLS FARGO FUNDS - LIMITED TERM GOVERNMENT INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE LIMITED GOVERNMENT INCOME FUND AND STAGECOACH SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND(a) NORWEST ADVANTAGE STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 GOVERNMENT SHORT-INTERMEDIATE PRO FORMA COUPON MATURITY INCOME FUND INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUES(b) FOREIGN GOVERNMENTS $ 1,300,000 Province of Ontario 7.63% 6/22/04 $ 0 $ 1,436,500 $ 1,436,500 1,500,000 Province of Quebec 8.80 4/15/03 0 1,678,305 1,678,305 TOTAL FOREIGN GOVERNMENTS $ 0 $ 3,114,805 $ 3,114,805 CORPORATE BONDS & NOTES BANK & FINANCE $ 4,000,000 Associates Corporation N.A. 5.75% 11/1/03 $ 0 $ 4,055,000 $ 4,055,000 200,000 Banc One Corporation 7.00 3/25/02 0 211,500 211,500 1,000,000 Nynex Credit Company 6.25 6/13/02 0 1,004,660 1,004,660 5,000,000 First Bank Corporate Card Master Trust 6.40 2/15/03 0 5,113,200 5,113,200 5,000,000 Ford Motor Credit Company 6.13 4/28/03 0 5,150,000 5,150,000 1,000,000 General Motors Acceptance Corporation 6.88 7/15/01 0 1,031,250 1,031,250 1,000,000 Standard Credit Card Master Trust 8.35 1/7/00 0 1,011,260 1,011,260 $ 0 $ 17,576,870 $ 17,576,870 BEVERAGE, BREWING & DISTRIBUTION $ 4,000,000 Anheuser-Busch Companies Incorporated 6.75% 8/1/03 $ 0 $ 4,260,000 $ 4,260,000 INDUSTRIALS $ 4,000,000 Honeywell Incorporated 6.75% 3/15/02 $ 0 $ 4,170,000 $ 4,170,000 1,000,000 Lockheed Marting Company 6.85 5/15/01 0 1,033,750 1,033,750 1,500,000 Mobil Oil Corporation 6.25 8/31/01 0 1,545,000 1,545,000 $ 0 $ 6,748,750 $ 6,748,750 TELECOMMUNICATIONS $ 2,000,000 Cable & Wireless Communications 6.38% 3/6/03 $ 0 $ 2,011,600 $ 2,011,600 2,000,000 Continental Cablevision 8.30 5/15/06 0 2,230,000 2,230,000 $ 0 $ 4,241,600 $ 4,241,600 UTILITIES $ 5,000,000 Pacific Gas & Electric Company 7.88% 3/1/02 $ 0 $ 5,400,000 $ 5,400,000 2,500,000 Worldcom Incorporated 6.13 8/15/01 0 2,537,500 2,537,500 $ 0 $ 7,937,500 $ 7,937,500 TOTAL CORPORATE BONDS & NOTES $ 0 $ 43,879,525 $ 43,879,525 U.S. GOVERNMENT AGENCY SECURITIES FEDERAL AGENCY - OTHER $ 2,000,000 Tennessee Valley Authority 6.50% 8/20/01 $ 0 $ 2,067,500 $ 2,067,500 FEDERAL FARM CREDIT BANK $ 2,000,000 Federal Farm Credit Bank 5.75% 2/9/05 $ 0 $ 2,055,940 $ 2,055,940 FEDERAL HOME LOAN BANKS $ 2,000,000 FHLB 5.63% 3/19/01 $ 2,034,500 $ 0 $ 2,034,500 5,000,000 FHLB 6.37 4/9/01 5,162,950 0 5,162,950 8,000,000 FHLB 5.53 1/15/03 0 8,146,720 8,146,720 2,000,000 FHLB 5.13 9/15/03 2,009,540 0 2,009,540 2,000,000 FHLB 5.13 9/15/03 0 2,005,940 2,005,940 $ 9,206,990 $ 10,152,660 $ 19,359,650 FEDERAL HOME LOAN MORTGAGE CORPORATION $ 2,200,000 FHLMC 8.12% 1/31/05 $ 0 $ 2,532,750 $ 2,532,750 5,000,000 FHLMC 6.79 8/26/05 0 5,442,200 5,442,200 2,000,000 FHLMC 7.10 4/10/07 2,233,220 0 2,233,220 5,000,000 FHLMC 7.01 7/11/07 0 5,250,000 5,250,000 $ 2,233,220 $ 13,224,950 $ 15,458,170 FEDERAL NATIONAL MORTGAGE ASSOCIATION $ 5,000,000 FNMA 6.18% 6/23/00 $ 0 $ 5,097,800 $ 5,097,800 2,900,000 FNMA 6.09 9/12/00 0 2,948,923 2,948,923 2,000,000 FNMA 6.69 8/7/01 0 2,088,800 2,088,800 2,000,000 FNMA 6.85 4/5/04 2,164,660 0 2,164,660 3,000,000 FNMA 7.35 3/28/05 3,347,010 0 3,347,010 4,894,935 FNMA 6.50 7/28/06 4,931,647 0 4,931,647 2,600,000 FNMA 6.50 7/16/07 0 2,796,222 2,796,222 5,000,000 FNMA 6.16 12/18/07 0 5,257,050 5,257,050 3,000,000 FNMA 6.00 5/15/08 3,159,060 0 3,159,060 2,725,338 FNMA POOL#50761 6.00 7/1/08 0 2,727,873 2,727,873 87,203 FNMA REMIC G93-19FJ 6.50 4/25/23 0 92,871 92,871 3,279,881 FNMA POOL#313644 7.00 8/1/27 0 3,348,365 3,348,365 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-34 WELLS FARGO FUNDS - LIMITED TERM GOVERNMENT INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE LIMITED GOVERNMENT INCOME FUND AND STAGECOACH SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND(a) NORWEST ADVANTAGE STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 GOVERNMENT SHORT-INTERMEDIATE PRO FORMA COUPON MATURITY INCOME FUND INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUES(b) GOVERNMENT NATIONAL MORTGAGE ASSOCIATION $ 3,258,433 Pool 22036 8.00% 5/17/03 $ 3,378,604 $ 0 $ 3,378,604 3,298,200 Pool 455464 7.50 1/12/05 3,410,536 0 3,410,536 169,740 GNMA II POOL#157247 9.50 5/20/16 0 181,808 181,808 965,677 GNMA POOL#336930 7.50 3/15/23 0 997,805 997,805 1,360,355 GNMA POOL#418261 6.50 4/15/26 0 1,374,381 1,374,381 1,194,942 GNMA POOL#417389 7.00 5/15/26 0 1,223,680 1,223,680 1,624,319 GNMA POOL#423779 7.00 5/15/26 0 1,663,400 1,663,400 $ 6,789,140 $ 5,441,074 $ 12,230,214 TOTAL U.S. GOVERNMENT AGENCY SECURITIES $31,831,727 $ 57,300,028 $ 89,131,755 U.S. TREASURY SECURITIES U.S. TREASURY BONDS $ 2,500,000 U.S. Treasury Bonds 0.38% 11/15/12 $ 0 $ 3,458,600 $ 3,458,600 U.S. TREASURY NOTES $ 4,000,000 U.S. Treasury Notes 8.88% 2/15/99 $ 4,033,760 $ 0 $ 4,033,760 3,000,000 U.S. Treasury Notes 5.88 11/15/99 3,033,330 0 3,033,330 1,250,000 U.S. Treasury Notes 6.75 4/30/00 0 1,285,550 1,285,550 3,000,000 U.S. Treasury Notes 6.00 8/15/00 3,067,440 0 3,067,440 3,500,000 U.S. Treasury Notes 8.50 11/15/00 0 3,752,105 3,752,105 3,000,000 U.S. Treasury Notes 5.63 11/30/00 3,059,760 0 3,059,760 2,000,000 U.S. Treasury Notes 6.25 4/30/01 2,074,500 0 2,074,500 6,000,000 U.S. Treasury Notes 6.25 1/31/02 6,279,120 0 6,279,120 1,500,000 U.S. Treasury Notes 6.63 3/31/02 1,590,285 0 1,590,285 3,000,000 U.S. Treasury Notes 6.63 4/30/02 3,183,960 0 3,183,960 4,000,000 U.S. Treasury Notes 6.25 8/31/02 4,214,560 0 4,214,560 4,750,000 U.S. Treasury Notes 5.88 9/30/02 0 4,948,882 4,948,882 2,000,000 U.S. Treasury Notes 5.75 4/30/03 2,086,800 0 2,086,800 4,000,000 U.S. Treasury Notes 7.88 11/15/04 $ 0 $ 4,641,880 $ 4,641,880 2,000,000 U.S. Treasury Notes 7.50 2/15/05 2,291,300 0 2,291,300 4,000,000 U.S. Treasury Notes 7.00 7/15/06 4,550,480 0 4,550,480 6,000,000 U.S. Treasury Notes 6.50 10/15/06 0 6,654,360 6,654,360 $39,465,295 $ 21,282,777 $ 60,748,072 TOTAL U.S. TREASURY SECURITIES $39,465,295 $ 24,741,377 $ 64,206,672 SHORT-TERM INSTRUMENTS 69,036 Dreyfus Cash Management Fund $ 69,036 $ 0 $ 69,036 3,660,906 Norwest U.S. Government Fund 3,660,906 0 3,660,906 $ 3,729,942 $ 0 $ 3,729,942 REPURCHASE AGREEMENTS $ 2,531,000 Goldman Sachs Pooled Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.25% 10/31/98 $ 0 $ 2,531,000 $ 2,531,000 TOTAL INVESTMENTS IN SECURITIES $75,026,964 $128,451,930 $203,478,894 (Cost $198,387312) (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-35 WELLS FARGO FUNDS - TAX-FREE INCOME FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 STAGECOACH NORWEST NATIONAL ADVANTAGE TAX-FREE TAX-FREE PRO FORMA PRO FORMA FUND INCOME FUND ADJUSTMENTS COMBINED ------------- -------------- -------------- -------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $ 59,991,110 $ 382,199,656 $ 442,190,766 Cash 5,631 0 5,631 Receivables: Dividends and Interest 899,371 6,420,084 7,319,455 Fund shares sold 0 2,284,593 2,284,593 Investment securities sold 0 501,637 501,637 Prepaid expenses 735 0 735 TOTAL ASSETS 60,896,847 391,405,970 452,302,817 LIABILITIES Payables: Investment securities purchased 3,156,530 21,122,801 24,279,331 Distribution to shareholders 206,286 1,091,209 1,297,495 Fund shares redeemed 7,194 156,470 163,664 Due to distributor 10,746 23,433 34,179 Due to advisor 19,002 154,690 173,692 Other 195,684 62,659 258,343 TOTAL LIABILITIES 3,595,442 22,611,262 26,206,704 TOTAL NET ASSETS $ 57,301,405 $ 368,794,708 $ 426,096,113 Net assets consist of: Paid-in capital $ 55,993,513 $ 349,517,495 $ 405,511,008 Undistributed net investment income (loss) 0 (509,881) (509,881) Undistributed net realized gain (loss) on investments (356,090) (823,608) (1,179,698) Net unrealized appreciation (depreciation) of investments 1,663,982 20,610,702 22,274,684 TOTAL NET ASSETS $ 57,301,405 $ 368,794,708 $ 426,096,113 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net assets - Class A $ 39,010,459 $ 48,876,250 $ 87,886,709 Shares outstanding - Class A 2,422,097 4,565,280 1,220,321 (b) 8,207,698 Net asset value per share - Class A $ 16.11 $ 10.71 $ 10.71 Maximum offering price per share - Class A $ 16.87 $ 11.16 $ 11.16 Net Assets - Class B $ 2,528,660 $ 13,048,093 $ 15,576,753 Shares outstanding - Class B 238,030 1,218,513 (1,929)(b) 1,454,614 Net asset value and offering price per share - Class B $ 10.62 $ 10.71 $ 10.71 Net Assets - Class C $ 6,918,913 $ 6,918,913 Shares outstanding - Class C 651,051 651,051 Net asset value and offering price per share - Class C $ 10.63 $ 10.63 Net Assets - Institutional Class $ 8,843,373 $ 306,870,365 $ 315,713,738 Shares outstanding - Institutional Class 549,244 28,646,014 276,463 (b) 29,471,721 Net asset value and offering price per share - Institutional Class $ 16.10 $ 10.71 $ 10.71 INVESTMENT AT COST $ 58,327,128 $ 361,588,954 $ 419,916,082 - -------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-36 WELLS FARGO FUNDS - TAX-FREE INCOME FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) STAGECOACH NORWEST NATIONAL TAX-FREE ADVANTAGE TAX- PRO FORMA PRO FORMA FUND(a) FREE INCOME FUND ADJUSTMENTS COMBINED -------------------------------------------------------------------- INVESTMENT INCOME Dividends $ 267,600 $ 0 $ 267,600 Interest 2,849,521 18,624,396 21,473,917 TOTAL INVESTMENT INCOME 3,117,121 18,624,396 21,741,517 EXPENSES Advisory fees 275,174 1,679,056 (381,678)(c) 1,572,552 Administration fees 43,849 335,810 210,048 (c) 589,707 Custody fees 9,481 48,582 20,565 (c) 78,628 Shareholder serv fees 101,406 0 141,483 (c) 242,889 Portfolio accounting fees 61,223 87,000 (68,223)(c) 80,000 Transfer agency fees 73,099 839,530 (716,464)(c) 196,165 Distribution fees 126,090 110,422 (83,257)(c) 153,255 Organization costs 1,422 0 (1,422)(c) 0 Legal and audit fees 52,611 17,262 (17,468)(c) 52,405 Registration fees 60,627 34,585 0 95,212 Directors' fees 3,819 4,503 (1,893)(c) 6,429 Shareholder reports 26,747 25,609 (5,236)(c) 47,120 Other 22,381 22,958 (2,267)(c) 43,072 TOTAL EXPENSES 857,929 3,205,317 3,157,433 Less: Waived fees and reimbursed expenses fees (354,199) (1,108,046) 1,011,205 (d) (451,040) NET EXPENSES 503,730 2,097,271 2,706,394 NET INVESTMENT INCOME (LOSS) 2,613,391 16,527,125 19,035,123 REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain (loss) on sale of investments 797,987 3,750,390 4,548,377 Net change in unrealized appreciation (depreciation) of investments 206,643 6,818,032 7,024,675 NET GAIN (LOSS) ON INVESTMENTS 1,004,630 10,568,422 11,573,052 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $3,618,021 $27,095,547 $30,608,175 - ----------------------------------------------------------------------------------------------------------------------- * The Stagecoach National Tax-Free Fund and Norwest Advantage Tax-Free Income Fund are merging to form the Wells Fargo Tax-Free Income Fund, historical accounting data from the Norwest Advantage Tax-Free Fund will be kept. (a) Information shown prior to December 12, 1997, is for the Stagecoach National Tax-Free Bond Fund which merged with the Overland Municipal Income Fund on December 12, 1997. (b) Reflects new shares issued, net of retired shares of the respective Funds which are not accounting survivors. (c) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (d) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-37 WELLS FARGO FUNDS - TAX-FREE INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE INCOME FUND NORWEST ADVANTAGE TAX-FREE INCOME FUND(a) STAGECOACH NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 NATIONAL TAX-FREE PRO FORMA COUPON MATURITY TAX-FREE FUND INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUES(b) MUNICIPAL BONDS ALASKA $ 100,000 Anchorage AK GO 6.75% 7/1/05 $ 107,557 $ 0 $ 107,557 100,000 Valdez AK Marine Term Revenue Pipelines Incorporated 5.85 8/1/25 103,250 0 103,250 $ 210,807 $ 0 $ 210,807 ARIZONA $ 3,000,000 Maricopa County, AZ Union SD #48, GO Bonds, School Improvements 9.00 7/1/05 $ 0 $ 3,855,781 $ 3,855,781 CALIFORNIA $ 20,000 California State GO 6.00% 2/1/01 21,022 0 21,022 1,540,000 California State Veterans Bonds Series BN 5.45 12/1/28 1,577,268 0 1,577,268 1,000,000 California Student Education Loan Marketing Corporation 5.88 1/1/18 951,890 0 951,890 1,910,000 Los Angeles, CA, Community Redevelopment Agency Housing RV, Monterey Hills Redevelopment Project, Series A 8.20 12/1/13 0 2,209,774 2,209,774 7,000,000 Metropolitan Water District, Southern California, Waterworks RV, Regional RIBS; inverse floater 7.41 8/10/18 0 8,776,250 8,776,250 $ 2,550,180 $ 10,986,024 $ 13,536,204 COLORADO $ 4,635,000 Adams County, CO, SFM RV, Series A-2 8.70% 6/1/01 $ 0 $ 5,001,860 $ 5,001,860 1,750,000 Arapahoe County, CO, Utilities RV, Water & Wastewater Authority 6.25 12/1/20 0 1,911,262 1,911,262 2,000,000 Colorado Health Facility Authority Revenue 5.75 9/15/22 2,028,560 0 2,028,560 2,275,000 Colorado HFA SFM RV, Series B2 7.50 12/1/16 0 2,571,569 2,571,569 2,785,000 Colorado HFA SFM RV, Series C 7.90 12/1/24 0 3,079,235 3,079,235 2,475,000 Colorado HFA SFM RV, Series D-1, remarketed 7/15/94 8.00 12/1/24 0 2,727,351 2,727,351 1,810,000 Colorado HFA SFM RV, Series D-II, remarketed 11/15/94 8.13 6/1/25 0 1,982,529 1,982,529 1,440,000 Colorado HFA SFM RV, Series A-2 7.15 11/1/14 0 1,640,405 1,640,405 1,000,000 Colorado HFA, Series A 7.40 5/1/11 0 1,061,140 1,061,140 2,000,000 Denver CO City & County Airport Revenue Series A MBIA Insured 5.60 11/15/20 2,102,340 0 2,102,340 5,200,000 Denver, CO, Urban Renewal Authority, Tax Increment RV, remarketed 6/15/94 9.13 9/1/17 0 6,157,580 6,157,580 270,000 El Paso County CO USD 6.15 12/15/08 312,884 0 312,884 3,500,000 El Paso County, CO, SD #11, Colorado Springs, GO Bonds 7.10 12/1/17 0 4,503,870 4,503,870 495,000 Logan County, CO, SFM RV, Series A 8.50 11/1/11 0 530,259 530,259 1,000,000 Northern Metropolitan District, CO, RV, Adams County 6.50 12/1/16 0 1,080,440 1,080,440 735,000 Vail, CO, SFM RV, Series 1992 A 8.13 6/1/10 0 796,086 796,086 $ 4,443,784 $ 33,043,586 $ 37,487,370 CONNECTICUT $ 655,000 Connecticut State HFA Series B4 7.30% 11/15/03 $ 681,305 $ 0 $ 681,305 FLORIDA $ 140,000 Brevard County FL HFA SFMR Refunded Series B FSA Insured 7.00% 3/1/13 $ 148,400 $ 0 $ 148,400 2,020,000 Florida State Department of Children & Families COP, South Florida State Hospital Project 4.75 7/1/12 0 2,044,179 2,044,179 1,000,000 Florida State Department of Children & Families COP, South Florida State Hospital Project 5.00 7/1/18 0 1,003,890 1,003,890 3,000,000 Lakeland, FL, Electric & Water RV, FGIC insured 6.00 10/1/14 0 3,441,030 3,441,030 2,825,000 Palm Beach County, FL, Health Facilities Authority RV, John F. Kennedy Memorial Hospital, Inc. Project 9.50 8/1/13 0 3,895,675 3,895,675 $ 148,400 $ 10,384,774 $ 10,533,174 GEORGIA $ 2,000,000 Baldwin County GA Hospital 5.38% 12/1/28 $ 1,972,540 $ 0 $ 1,972,540 3,650,000 Georgia Municipal Electric Power Authority RV, Series BB, MBIA insured 5.25 1/1/25 0 3,823,010 3,823,010 1,500,000 Houston County, GA, Development Authority MFHR, Emerald Coast Housing, Series A 7.00 8/1/28 0 1,513,590 1,513,590 $ 1,972,540 $ 5,336,600 $ 7,309,140 HAWAII $ 7,250,000 Hawaii State Department of Budget & Finance, Health Care RV, The Queens Health Systems, Series A 5.75 7/1/26 $ 0 $ 7,736,548 $ 7,736,548 IDAHO $ 900,000 Idaho HFA Revenue 5.45% 7/15/23 $ 897,750 $ 0 $ 897,750 500,000 Pocatello, ID, IDA Allocation Tax Increment Bonds, Series B 7.25 12/1/08 0 524,455 524,455 995,000 Idaho State HFA SFMR Series C-2 AMT 6.35 7/1/15 1,051,675 0 1,051,675 $ 1,949,425 $ 524,455 $ 2,473,880 ILLINOIS $ 1,000,000 Chicago IL Midway Airport Revenue 5.00% 1/1/28 $ 977,700 $ 0 $ 977,700 500,000 Chicago IL O'Hare International Airport Special Facilities Revenue AMT LOC-Bayerische Landesbank 7.13 5/1/18 536,875 0 536,875 200,000 Chicago IL O'Hare International Airport Revenue Series A 6.75 1/1/06 231,218 0 231,218 1,770,000 Illinois Development Financial Authority RV, Community Rehabilitation Providers, Series A 7.88 2/1/05 0 2,174,056 2,174,056 975,000 Illinois Development Financial Authority RV, Community Rehabilitation Providers, Series A, P/R 7/1/05 @ 102 7.88 7/1/20 0 1,098,328 1,098,328 4,940,000 Illinois Educational Facilities Authority RV, Capital Appreciation, ETM, (5.95% to 6.22% effective yield) 0.00 7/1/14 0 2,025,400 2,025,400 1,120,000 Illinois Health Facilities Authority, Health Care RV, Edgewater Medical Center, Series A 9.25 7/1/04 0 1,425,850 1,425,850 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-38 WELLS FARGO FUNDS - TAX-FREE INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE INCOME FUND NORWEST ADVANTAGE TAX-FREE INCOME FUND(a) STAGECOACH NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 NATIONAL TAX-FREE PRO FORMA COUPON MATURITY TAX-FREE FUND INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUES(b) 4,150,000 Illinois State Sales Tax RV, Series P 6.50 6/15/22 0 5,015,399 5,015,399 1,025,000 Lake County, IL, Community Unit SD #116, Educational Facilities RV, Rund Lake 7.60 2/1/13 0 1,308,781 1,308,781 7,350,000 Regional Transportation Authority, IL, Sales Tax RV, Series D, FGIC insured 7.75 6/1/19 0 10,093,608 10,093,608 8,000,000 Regional Transportation Authority, IL, Transportation RV, FGIC insured 6.00 6/1/23 0 9,266,320 9,266,320 1,000,000 Illinois Development Finance Authority Revenue Series A FHA Insured 5.75 7/1/18 1,035,170 0 1,035,170 1,120,000 Illinois Development Finance Authority Revenue Community Rehabilitation Providers Series C 5.65 7/1/19 1,125,163 0 1,125,163 1,000,000 Illinois Development Finance Authority Revenue Community Rehabilitation Providers Series A 5.70 7/1/19 1,004,190 0 1,004,190 1,000,000 Illinois HFFA Revenue Edward Hospital Series A 5.75 2/15/09 1,062,800 0 1,062,800 1,250,000 Illinois HFFA Revenue 5.00 11/15/24 1,219,975 0 1,219,975 $ 7,193,091 $ 32,407,742 $ 39,600,833 INDIANA $ 1,940,000 Howard County IN Jail & Juvenile Detention Center AMBAC Insured 5.25% 1/15/12 $ 2,023,536 $ 0 $ 2,023,536 2,900,000 Indiana Transportation Financial Authority Highway RV, Series A, AMBAC insured 5.25 6/1/15 0 3,066,286 3,066,286 1,000,000 Indiana State Educational Facility Authority Revenue Butler University Project MBIA Insured 5.30 1/1/27 1,026,220 0 1,026,220 $ 3,049,756 $ 3,066,286 $ 6,116,042 IOWA $ 265,000 Iowa State HFA SFMR Series B AMT GNMA/FNMA Collateralized 7.45% 7/1/23 $ 281,327 $ 0 $ 281,327 1,435,000 Iowa State HFA SFMR Series B AMT GNMA/FNMA Collateralized 6.95 7/1/24 1,524,329 0 1,524,329 $ 1,805,656 $ 0 $ 1,805,656 KANSAS $ 3,175,000 Kansas State, DOT, Highway RV, Series A 7.25% 9/1/08 $ 0 $ 3,935,349 $ 3,935,349 4,150,000 Sedgwick & Shawnee Counties, KS, SFM RV, Mortgage Backed Securities, Series A-2, Step Coupon, GNMA COLL 6.70 6/1/29 0 4,731,747 4,731,747 $ 0 $ 8,667,096 $ 8,667,096 KENTUCKY $ 8,800,000 Carrollton & Henderson, KY, Public Energy Authority Gas RV, Series A 4.50% 1/1/00 $ 0 $ 8,898,824 $ 8,898,824 140,000 Kentucky State Housing Corporation Revenue FHA Insured 6.50 7/1/17 149,766 0 149,766 $ 149,766 $ 8,898,824 $ 9,048,590 LOUISIANA $ 310,000 Louisiana State PFA Student Loan Revenue AMT FSA Insured 6.85% 1/1/09 $ 328,470 $ 0 $ 328,470 5,000,000 Rapides Parish, LA, Housing & Mortgage Finance Authority, Capital Appreciation RV, Series C, (7.45% effective yield) 0.00 7/10/14 0 1,762,100 1,762,100 2,900,000 St. Bernard Parish, LA, Housing Mortgage Agency, SFM RV, Series 1992 C, (7.65% effective yield) 0.00 7/10/14 0 917,908 917,908 $ 328,470 $ 2,680,008 $ 3,008,478 MASSACHUSETTS $ 5,325,000 Massachusetts Bay Transportation Authority, General Transportation System RV, Series B 6.20% 3/1/16 $ 0 $ 6,216,511 $ 6,216,511 5,000,000 Massachusetts Bay Transportation Authority, General Transportation System, Series B 5.00 3/1/28 0 4,912,850 4,912,850 2,500,000 Massachusetts State College Building Authority, Educational Facilities RV, Series A 7.50 5/1/14 0 3,248,325 3,248,325 1,000,000 Massachusetts State HFA Residential Development FNMA Collateralized 6.90 11/15/21 1,091,010 0 1,091,010 2,500,000 Massachusetts State Industrial Finance Agency, University Commons Nursing Home, Series A, FHA insured 6.65 8/1/38 0 2,808,925 2,808,925 2,500,000 Massachusetts State, HEHFA RV, Massachusetts Institute of Technology, Series I-1 5.20 1/1/28 0 2,629,500 2,629,500 490,000 New Bedford, MA, IDA RV, Aerovox, Inc. Project, Series 1982 7.42 7/1/02 0 490,907 490,907 $ 1,091,010 $ 20,307,018 $ 21,398,028 MICHIGAN $ 1,435,000 Armada MI Area School 5.63% 5/1/17 $ 1,517,326 $ 0 $ 1,517,326 1,745,000 Michigan State Hospital Finance Authority RV, Grace Hospitals 7.13 5/1/09 0 2,013,974 2,013,974 2,760,000 Wayland, MI, Unified SD, GO Bonds, FGIC insured 8.00 5/1/10 0 3,639,861 3,639,861 $ 1,517,326 $ 5,653,835 $ 7,171,161 MINNESOTA $ 250,000 Minneapolis MN Community Development Agency Series 7-A 5.50% 6/1/12 $ 257,795 $ 0 $ 257,795 375,000 St. Paul MN Housing Finance Board Revenue SFMR Phase IX AMT GNMA Collateralized 7.30 8/1/31 395,374 0 395,374 $ 653,169 $ 0 $ 653,169 MISSISSIPPI $ 500,000 Jones County MS Hospital Revenue South Central Regional Medical Center 4.90% 12/1/04 $ 509,255 $ 0 $ 509,255 1,000,000 Mississippi Development Special Obligation RV, Panola County Hospital Project 5.00 7/1/28 0 964,790 964,790 2,000,000 Mississippi Home Corp., Residual Capital Appreciation RV, Series 1992 II, (7.38% effective yield) 0.00 4/15/12 0 784,140 784,140 $ 509,255 $ 1,748,930 $ 2,258,185 MONTANA $ 1,000,000 Lewis & Clark County MT Environmental Revenue 5.60% 1/1/27 $ 990,310 $ 0 $ 990,310 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-39 WELLS FARGO FUNDS - TAX-FREE INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE INCOME FUND NORWEST ADVANTAGE TAX-FREE INCOME FUND(a) STAGECOACH NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 NATIONAL TAX-FREE PRO FORMA COUPON MATURITY TAX-FREE FUND INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUES(b) NEBRASKA $ 2,580,000 American Public Energy Agency, Nebraska Gas Supply RV, Nebraska Public Gas Agency Project, Series C 4.00% 9/1/07 $ 0 $ 2,535,908 $ 2,535,908 995,000 Nebraska Finance Authority Single Family Housing Series B GNMA/FNMA/FHLMC Collateralized 5.85 9/1/28 1,029,825 0 1,029,825 1,000,000 Nebraska Investment Finance Authority, Hospital RV, Great Plains Regional Medical Center Project 5.45 11/15/17 0 1,030,350 1,030,350 $ 1,029,825 $ 3,566,258 $ 4,596,083 NEW HAMPSHIRE $ 1,095,000 New Hampshire HEHFA RV, New London Hospital Association Project 7.00% 6/1/00 $ 0 $ 1,127,127 $ 1,127,127 NEVADA $ 500,000 Clark County NV Las Vegas Convention & Visitors Authority FSA Insured 6.00% 7/1/26 $ 566,750 $ 0 $ 566,750 500,000 Reno NV Hospital Revenue 5.63 5/15/23 520,040 0 520,040 $ 1,086,790 $ 0 $ 1,086,790 NEW MEXICO $ 5,295,000 Bernalillo County, NM, Gross Receipts Tax RV, Series B 5.70% 4/1/27 $ 0 $ 5,944,167 $ 5,944,167 985,000 Hobbs, NM, SFM RV 8.75 7/1/11 0 1,095,842 1,095,842 1,000,000 New Mexico State Hospital Equipment Council RV, Memorial Medical Center, Inc. Project 4.85 6/1/08 0 995,110 995,110 1,000,000 New Mexico State Hospital Equipment Council RV, Memorial Medical Center, Inc. Project 5.50 6/1/28 0 983,660 983,660 6,585,000 Santa Fe County, NM, Correctional Systems RV, FSA insured 6.00 2/1/27 0 7,701,553 7,701,553 $ 0 $ 16,720,332 $ 16,720,332 NEW JERSEY $ 1,250,000 New Jersey State MFHR FHA Collateralized 7.00% 5/1/30 $ 1,356,988 $ 0 $ 1,356,988 NEW YORK $10,000,000 Long Island Power Authority, New York Electric System RV 4.25% 4/1/00 $ 0 $ 10,088,200 $ 10,088,200 10,000,000 Metropolitan Transporation Authority, NY, Commuter Facilities RV, Series A, MBIA insured 5.63 7/1/27 0 10,699,900 10,699,900 250,000 New York NY FGIC Series E 6.00 8/1/12 279,000 0 279,000 1,200,000 New York State Dorm Authority, Health Care RV, Good Samaritan Hospital Suffern 5.50 7/1/10 0 1,294,428 1,294,428 1,000,000 New York State Dormatory Authority Lease Revenue 4.75 1/15/29 954,010 0 954,010 3,000,000 New York, NY, City Municipal Water Finance Authority, Water & Sewer Systems RV, Series B 5.25 6/15/29 0 3,027,960 3,027,960 1,480,000 New York, NY, GO Bonds, Series B-1, P/R 8/15/04 @ 101 7.30 8/15/10 0 1,746,622 1,746,622 1,340,000 New York, NY, GO Bonds, Series B-1, P/R 8/15/04 @ 101 7.38 8/15/13 0 1,586,506 1,586,506 15,000,000 Port Authority New York & New Jersey, Consolidated Eighty-Fifth Series 5.38 3/1/28 0 16,260,000 16,260,000 $ 1,233,010 $ 44,703,616 $ 45,936,626 OHIO $ 4,200,000 Greater Cleveland, OH, Regional Transportation Authority, Capital Improvement, Series R 4.50% 12/1/12 $ 0 $ 4,167,702 $ 4,167,702 1,000,000 Pike County, OH, Hospital Facility, Pike Health Services, Inc. Project 6.35 7/1/07 0 1,068,990 1,068,990 $ 0 $ 5,236,692 $ 5,236,692 OKLAHOMA $ 200,000 Pryor Creek OK Economic Development Authority Mortgage Revenue Series A FNMA Collateralized 7.13% 7/1/21 $ 209,116 $ 0 $ 209,116 500,000 Tulsa County OK HFA Mortgage Revenue Series B Remarket AMT GNMA Collateralized 7.55 5/1/23 524,355 0 524,355 540,000 Tulsa County OK HFA Mortgage Revenue Series B Remarket AMT GNMA Collateralized 7.10 6/1/22 573,043 0 573,043 1,245,000 Tulsa, OK, IDA RV, University of Tulsa, Series A, MBIA insured 6.00 10/1/16 0 1,423,396 1,423,396 $ 1,306,514 $ 1,423,396 $ 2,729,910 OREGON $ 1,000,000 Oregon State Health Housing Educational & Cultural Facilities Authority 5.25% 10/1/16 $ 971,460 $ 0 $ 971,460 10,000,000 Washington County, OR, GO Bonds 0.00 6/1/03 0 8,260,100 8,260,100 $ 971,460 $ 8,260,100 $ 9,231,560 PENNSYLVANIA $ 1,600,000 Allentown PA, Area Hospital Authority RV, Sacred Heart Hospital 5.00% 7/1/12 $ 0 $ 1,597,584 $ 1,597,584 2,250,000 Chester County PA Health & Education Facilities 5.38 5/15/27 2,272,500 0 2,272,500 500,000 Pennsylvania State Higher EDFA Student Loan Revenue Series D AMT AMBAC Insured 7.05 10/1/16 526,250 0 526,250 1,750,000 Pittsburgh PA Water & Sewer Authority Revenue 5.25 9/1/23 1,782,340 0 1,782,340 $ 4,581,090 $ 1,597,584 $ 6,178,674 SOUTH CAROLINA $10,625,000 Connector 2000 Association, Inc., South Carolina Toll Road RV, Southern Connector Project, Series A 5.38% 1/1/38 $ 0 $ 10,014,912 $ 10,014,912 7,500,000 Piedmont, SC, Municipal Power Agency, Electric RV, Series A 6.55 1/1/16 0 7,512,900 7,512,900 5,725,000 Piedmont, SC, Municipal Power Agency, Electric RV, Series A 6.60 1/1/21 0 5,735,076 5,735,076 $ 0 $ 23,262,888 $ 23,262,888 SOUTH DAKOTA $ 3,500,000 South Dakota State, HEHFA RV, Huron Regional Medical Center 7.30% 4/1/16 $ 0 $ 4,257,820 $ 4,257,820 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-40 WELLS FARGO FUNDS - TAX-FREE INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE INCOME FUND NORWEST ADVANTAGE TAX-FREE INCOME FUND(a) STAGECOACH NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 NATIONAL TAX-FREE PRO FORMA COUPON MATURITY TAX-FREE FUND INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUES(b) TENNESSEE 25,000,000 Nashville & Davidson County, TN, Health & Education Board RV, Sub-Volunteer Healthcare 0.00% 6/1/21 $ 0 $ 7,704,250 $ 7,704,250 1,000,000 Shelby County TN Health Educational & Housing Facility Series A 6.00 7/1/28 1,046,140 0 1,046,140 $ 1,046,140 $ 7,704,250 $ 8,750,390 TEXAS $ 450,000 Baytown, TX, Housing Finance Corp., SFM RV, Series 1992 A 8.50% 9/1/11 $ 0 $ 505,872 $ 505,872 2,065,000 Beaumont, TX, Housing Finance Corp. RV 9.20 9/1/01 0 2,299,935 2,299,935 19,500,000 Brazos River Authority RV, Houston Industries, Inc. Project, Series D 4.90 10/1/15 0 19,801,275 19,801,275 1,650,000 Corpus Christi, TX, HFA, Housing RV, Series A, MBIA insured 7.70 7/1/11 0 1,811,733 1,811,733 2,395,000 De Soto, TX, Housing Finance Corp., MFHR RV, Windsor Foundation Project, Series A 7.00 2/1/25 0 2,794,654 2,794,654 250,000 Decatur TX Indeptness School District 6.13 8/1/25 270,138 0 270,138 250,000 El Paso TX GO 7.00 8/15/06 296,580 0 296,580 225,000 El Paso, TX, Housing Finance Corp., SFM RV, Series A 8.75 4/1/01 0 249,190 249,190 305,000 Galveston County, TX, Property Finance Authority, Inc., SFM RV, Series A 8.50 9/1/11 0 329,446 329,446 2,390,000 Grand Prairie TX, GO Bonds, Series C 5.50 2/15/00 0 2,421,142 2,421,142 1,300,000 Grape Creek-Pulliam, TX, Independent SD Public Facilities Corp., GO Bonds 7.25 5/15/21 0 1,481,142 1,481,142 1,000,000 Gulf Coast Texas Waste Disposal 5.50 9/1/17 1,016,290 0 1,016,290 1,115,000 Harlandale, TX, ISD Public Facilities Corp., Lease RV 5.50 10/15/12 0 1,181,855 1,181,855 2,245,000 Hereford TX, Independent SD RV 5.25 8/15/18 0 2,240,712 2,240,712 6,250,000 Houston TX, Housing Finance Corp. SFM RV, Series A-1 8.00 6/1/14 0 6,778,625 6,778,625 2,250,000 Houston TX, Housing Finance Corp. SFM RV, Series B-1 8.00 6/1/14 0 2,440,305 2,440,305 125,000 Port Arthur TX MBIA Insured 8.50 2/15/03 146,910 0 146,910 1,305,000 Port Arthur, TX, Housing Finance Corp., SFM RV 8.70 3/1/12 0 1,435,487 1,435,487 3,750,000 San Antonio, TX, Electric & Gas RV, Series A 4.50 2/1/21 0 3,507,375 3,507,375 4,180,000 San Antonio, TX, HEHFA RV 7.13 11/1/15 0 4,645,986 4,645,986 2,200,000 Texas State Department of Housing & Community Affairs, SFM RV, Series A 8.10 9/1/15 0 2,513,984 2,513,984 355,000 Travis County TX HFC Residential Mortgage Revenue Series A GNMA/FNMA Collateralized 7.00 12/1/11 379,999 0 379,999 1,000,000 Webb County TX COP Series A 5.25 10/1/22 1,004,010 0 1,004,010 $ 3,113,927 $ 56,438,718 $ 59,552,645 UTAH $ 250,000 Salt Lake City UT RDA Neighborhood Tax Revenue 6.50% 10/1/01 $ 267,365 $ 0 $ 267,365 750,000 Salt Lake County, UT, EFA RV, Westminister College Project 5.75 10/1/27 0 780,510 780,510 500,000 Utah State Board of Regents Student Loan Revenue Series F AMT AMBAC Insured 7.45 11/1/08 529,435 0 529,435 1,100,000 Utah State Board of Regents Student Loan Revenue Series H AMT AMBAC Insured 6.70 11/1/15 1,160,819 0 1,160,819 250,000 Utah State Building Ownership Authority Lease Series A 6.00 5/15/09 276,238 0 276,238 5,000 Utah State HFA SFMR Series D-2 AMT FHA Collateralized 6.45 1/1/11 5,374 0 5,374 $ 2,239,231 $ 780,510 $ 3,019,741 VERMONT $ 500,000 Burlington VT Electricity Revenue Series A MBIA Insured 6.38% 7/1/10 $ 586,200 $ 0 $ 586,200 VIRGINIA $ 3,000,000 Fairfax Co, VA, Redevelopment & Housing Authority, MFHR Bonds, Burke Shire Commons 7.60% 10/1/36 $ 0 $ 3,298,320 $ 3,298,320 2,000,000 Pocahontas VA Parkway Associate 5.50 8/15/28 1,977,460 0 1,977,460 $ 1,977,460 $ 3,298,320 $ 5,275,780 WASHINGTON $ 500,000 Clark County WA Sewer Revenue 6.00% 12/1/06 $ 559,955 $ 0 $ 559,955 2,000,000 Grant County WA Public Hospital District 5.15 12/1/23 1,961,640 0 1,961,640 2,055,000 Grant County, WA, Public Hospital District, GO Bonds 5.50 12/1/13 0 2,162,579 2,162,579 3,000,000 Grant County, WA, Public Hospital District, GO Bonds 5.15 12/1/23 0 2,960,550 2,960,550 100,000 Island County WA USD South Whidbey AMBAC Insured 6.75 12/1/07 118,978 0 118,978 1,748,000 Kitsap County, WA, Housing Authority RV, Low Income Housing, GNMA COLL 7.10 8/20/16 0 2,081,816 2,081,816 100,000 South Colombian Basin WA Irrigation District Revenue 6.00 12/1/02 108,005 0 108,005 350,000 Tacoma WA Solid Waste Utility Revenue Series B AMBAC Insured 6.00 12/1/09 400,264 0 400,264 4,000,000 Washington Public Power Supply System, Power RV, Nuclear Project #1, Series A 6.00 7/1/06 0 4,491,360 4,491,360 2,750,000 Washington Public Power Supply System, Power RV, Nuclear Project #2, Series A 6.00 7/1/07 0 3,056,487 3,056,487 3,500,000 Washington State Housing Finance Commission, Nonprofit Housing RV, VA Mason Research Center Project, Series A U.S. Bank of Washington, LOC 5.70 1/1/24 0 3,680,530 3,680,530 1,620,000 Washington State Housing Finance Commisssion, Nonprofit Housing RV, VA Mason Research Center Project, Series A, U.S. Bank of Washington, LOC 5.65 1/1/19 0 1,696,756 1,696,756 1,000,000 Washington State Public Power Supply System Nuclear Project Number 1 Series B 5.13 7/1/13 1,016,250 0 1,016,250 4,500,000 Washington State Public Power Supply System, Power RV, Nuclear Project #3, Series A 5.13 7/1/18 0 4,477,770 4,477,770 1,440,000 Washington State SFMR Series E AMT GNMA/FNMA Collateralized 7.10 7/1/22 1,509,133 0 1,509,133 3,000,000 Yakima County, WA, SD #007, GO Bonds, MBIA insured 6.75 12/1/06 0 3,529,890 3,529,890 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-41 WELLS FARGO FUNDS - TAX-FREE INCOME FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE INCOME FUND NORWEST ADVANTAGE TAX-FREE INCOME FUND(a) STAGECOACH NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 NATIONAL TAX-FREE PRO FORMA COUPON MATURITY TAX-FREE FUND INCOME FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUES(b) $ 5,674,225 $ 28,137,738 $ 33,811,963 WEST VIRGINIA $ 8,600,000 West Virginia State, GO Bonds, Series A 5.20 11/1/26 $ 0 $ 8,926,284 $ 8,926,284 TOTAL MUNICIPAL BONDS $55,447,110 $370,739,140 $426,186,250 SHORT-TERM INSTRUMENTS 4,544,000 Stagecoach National Tax-Free Money Market Trust 4,544,000 0 4,544,000 6,982,576 Municipal Money Market Fund 0 6,982,576 6,982,576 750,000 Pitkin County, CO MFHR, Centennial, Series A, Credit Lyonnais, LOC, Republic National Bank, LOC 3.35 12/1/24 0 750,000 750,000 3,727,940 US Bank, Series BI 4.30 8/11/99 0 3,727,940 3,727,940 $ 4,544,000 $ 11,460,516 $ 16,004,516 TOTAL INVESTMENTS IN SECURITIES $59,991,110 $382,199,656 $442,190,766 (Cost $419,916,082) (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-42 WELLS FARGO FUNDS - CASH INVESTMENT MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 STAGECOACH PRIME NORWEST MONEY MARKET ADVANTAGE CASH PRO FORMA PRO FORMA FUND INVESTMENT FUND ADJUSTMENTS(b) COMBINED ---------------- ---------------- --------------- ------------ ASSETS INVESTMENTS: In securities, at market value(see cost below) $3,223,637,444 $6,124,988,227 $(570,009,639) $8,778,616,032 Cash 314,576 0 (55,624) 258,952 Receivables: Dividends and Interest 29,129,964 2,454 (5,150,815) 23,981,603 Due from advisor 0 0 20,591 (d) 20,591 Organization expenses, net of amortization 25,014 0 (25,014)(d) 0 Prepaid expenses 101,519 0 (17,951) 83,568 TOTAL ASSETS 3,253,208,517 6,124,990,681 8,802,960,746 LIABILITIES Payables: Distribution to shareholders 12,262,752 12,116,811 (2,168,323) 22,211,240 Due to distributor 303,951 129,376 (53,745) 379,582 Due to advisor 913,750 976,265 (161,571) 1,728,444 Other 417,634 1,971 (73,847) 345,758 TOTAL LIABILITIES 13,898,087 13,224,423 24,665,024 TOTAL NET ASSETS $3,239,310,430 $6,111,766,258 $8,778,295,722 NET ASSETS CONSIST OF: Paid-in capital $3,239,306,328 $6,113,614,310 $(572,780,241) $8,780,140,397 Undistributed net investment income (loss) 0 (147,521) (147,521) Undistributed net realized gain (loss) on investments 4,102 (1,700,531) (725) (1,697,154) TOTAL NET ASSETS $3,239,310,430 $6,111,766,258 $8,778,295,722 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net Assets - Administrative Class $ 562,513,434 $(562,513,434)(e) Shares outstanding - Administrative Class 562,456,538 (562,456,538)(e) Net asset value and offering price per share - Administrative Class $ 1.00 Net Assets - Institutional Class $1,169,269,538 $1,169,269,538 Shares outstanding - Institutional Class 1,169,346,181 1,169,346,181 Net asset value and offering price per share - Institutional Class $ 1.00 $ 1.00 Net Assets - Service Class $ 934,746,492 $ 6,111,766,258 $ 562,513,434 (e) $7,609,026,184 Shares outstanding - Service Class 934,864,723 6,113,539,471 562,456,538 (e) 7,610,860,732 Net asset value and offering price per share - Service Class $ 1.00 $ 1.00 $ 1.00 INVESTMENT AT COST $3,223,637,444 $ 6,124,988,227 $(570,009,639) $8,778,616,032 - --------------------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-43 WELLS FARGO FUNDS - CASH INVESTMENT MONEY MARKET FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) STAGECOACH PRIME NORWEST MONEY MARKET ADVANTAGE CASH CORE-GATEWAY PRO FORMA PRO FORMA INVESTMENT INCOME FUND(a) INVESTMENT FUND ADJUSTMENTS(c) ADJUSTMENTS(b) COMBINED ---------------------------------- ------------------------------------------------- Interest $149,310,711 $279,360,668 $428,671,379 Net expenses from master/core portfolios 0 (12,551,068) 12,551,068 0 TOTAL INVESTMENT INCOME 149,310,711 266,809,600 428,671,379 EXPENSES Advisory fees 6,626,891 0 10,552,191 (10,190,472)(f) 6,988,610 Administration fees 1,816,340 2,451,134 1,596,064 4,619,377 (f) 10,482,915 Custody fees 442,681 0 334,085 620,956 (f) 1,397,722 Shareholder serv fees 3,566,896 0 0 10,292,010 (f) 13,858,906 Portfolio accounting fees 591,649 13,500 56,017 (581,166)(f) 80,000 Transfer agency fees 1,513,463 9,804,529 0 (11,232,852)(f) 488,334 Distribution fees 120,430 0 0 (120,430)(f) 0 Organization costs 13,658 0 3,010 (13,658)(f) 3,010 Legal and audit fees 148,380 88,562 2,328 (79,495)(f) 159,775 Registration fees 350,704 455,304 0 0 (f) 806,008 Directors' fees 3,819 64,029 7,372 (68,791)(f) 6,429 Shareholder reports 73,080 155,608 0 (34,499)(f) 194,189 Other 19,473 85,109 0 (8,500)(f) 96,082 TOTAL EXPENSES 15,287,464 13,117,775 34,561,979 Less: Waived fees and reimbursed expenses fees (3,907,481) (2,072,879) 40,611 (g) (5,939,749) NET EXPENSES 11,379,983 11,044,896 28,622,230 NET INVESTMENT INCOME (LOSS) 137,930,728 255,764,704 400,049,149 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on sale of investments 155,514 37,598 193,112 NET GAIN (LOSS) ON INVESTMENTS 155,514 37,598 193,112 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $138,086,242 $255,802,302 $400,242,261 - --------------------------------------------------------------------------------------------------------------------------------- * The Administrative, Institutional and Service Classes of the Stagecoach Prime Money Market Fund are merging with the Service Class of the Norwest Advantage Cash Investment Fund to form the Wells Fargo Cash Investment Money Market Fund, historical accounting data from the Stagecoach Money Market will be kept. In conjunction with the merger, the Administrative Class shares of the Stagecoach Prime Money Market Fund will be converted to Service Class shares of the Wells Fargo Cash Investment Money Market Fund. (a) Information shown prior to December 12, 1997, is for the Stagecoach Prime Money Market Fund which merged with the Overland Money Market Fund on December 12, 1997. (b) The Administrative Class, Institutional Class, and Service Class shares of the Stagecoach Prime Money Market Fund comprise 82.3% of the Fund's net assets. The remaining 17.7% of the Fund's net assets represent Class A shares of the Stagecoach Prime Money Market Fund. Such Class A shares will be exchanged for shares of a different fund in a separate reorganization. Accordingly the net assets attributable to Class A shares have been removed as an adjustment for purposes of this pro forma financial statement. (c) The Norwest Advantage Cash Investment Fund, a "Gateway Fund", invests in securities through "Core Portfolios", the Norwest Advantage Prime Money Market and Norwest Advantage Money Market Portfolios. Expenses allocated from the Core Portfolios to the Gateway Fund over the year ended November 30, 1998 have been disbursed according to the percentage of each expense at the level of the Core Portfolios. (d) Wells Fargo Bank will absorb the balance of unamortized organizational costs from Funds which are not accounting survivors. (e) Reflects new shares issued, net of retired shares of the respective Funds which are not accounting survivors. (f) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (g) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-44 WELLS FARGO FUNDS - CASH INVESTMENT MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH PRIME MONEY MARKET FUND, NORWEST ADVANTAGE PRIME MONEY MARKET PORTFOLIO AND NORWEST MONEY MARKET PORTFOLIO(a) STAGECOACH NORWEST ADVANTAGE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 PRIME MONEY PRIME MONEY MONEY MARKET PRO FORMA INTEREST MATURITY MARKET FUND MARKET PORTFOLIO PORTFOLIO COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b)(d) VALUE(b)(d) VALUE(b) ASSET BACKED SECURITIES $ 76,207,555 WFP Tower B Finance Corp., Short-Term STEERS Trust , Series A 5.31% 12/8/98 $ 0 $ 42,011,856 $ 34,195,698 $ 76,207,554 CERTIFICATE OF DEPOSITS $ 25,000,000 Abbey National 5.55% 1/26/99 $ 24,998,160 $ 0 $ 0 $ 24,998,160 50,000,000 ANZ Banking Corporation 5.64 2/24/99 50,001,143 0 0 50,001,143 66,000,000 Banco Espirito Santo e Comercial de Lisboa, New York Branch 5.74 3/26/99 0 15,999,033 49,996,982 65,996,015 87,000,000 Banque Paribas, New York Branch, 5.73 36,248 0 46,993,816 39,994,738 86,988,554 29,000,000 Barclays Bank PLC 5.79 5/4/99 29,005,261 0 0 29,005,261 50,000,000 Bayerische Landesbank, New York Branch, 5.65 7/22/99 0 30,132,716 20,088,477 50,221,193 20,000,000 Centari Corporation 5.78 4/19/99 20,000,000 0 0 20,000,000 65,000,000 Chase Manhattan Bank 5.10 4/20/99 65,000,000 0 0 65,000,000 30,000,000 Chase Manhattan Bank 4.87 4/21/99 30,000,000 0 0 30,000,000 30,000,000 Chase Manhattan Bank 5.06 5/12/99 30,000,000 0 0 30,000,000 25,000,000 CIBC YCD 5.01 2/17/99 25,000,000 0 0 25,000,000 100,000,000 CIBC YCD 5.07 4/13/99 100,000,000 0 0 100,000,000 198,000,000 Deutsche Bank, New York Branch, 5.73 4/15/99 0 129,981,577 67,990,365 197,971,942 50,000,000 FCC National Bank 5.63 1/8/99 50,000,000 0 0 50,000,000 30,000,000 FCC National Bank 4.82 4/22/99 30,000,000 0 0 30,000,000 40,000,000 Generale Bank, New York Branch, 6.02 12/16/98 0 25,000,073 15,000,044 40,000,117 40,000,000 Huntington National Bank 5.74 5/5/99 39,992,679 0 0 39,992,679 88,000,000 Natexis Banque, New York Branch, 5.71 8/3/99 0 49,980,713 37,985,342 87,966,055 9,100,000 Northern Trust 4.78 4/5/99 9,100,000 0 0 9,100,000 50,000,000 Old Kent Bank 5.00 8/18/99 50,000,000 0 0 50,000,000 50,000,000 Societe Generale 5.60 1/13/99 49,998,305 0 0 49,998,305 50,000,000 Societe Generale, New York Branch, 5.70 3/23/99 0 24,995,957 24,995,958 49,991,915 55,000,000 Societe Generale, New York Branch, 5.80 4/28/99 0 0 54,991,462 54,991,462 25,000,000 Svenska Handelsbanken, New York Branch 5.65 8/10/99 0 25,126,014 0 25,126,014 18,000,000 Svenska Handelsbanken, New York Branch, 5.67 8/9/99 0 0 18,091,899 18,091,899 35,000,000 Swiss Bank 5.64 3/12/99 34,993,966 0 0 34,993,966 25,000,000 Swiss Bank 5.75 5/7/99 24,994,851 0 0 24,994,851 $ 663,084,365 $ 348,209,899 $ 329,135,267 $ 1,340,429,531 COMMERCIAL PAPER $ 34,000,000 Ace Overseas Corp. 5.51* 1/19/99 $ 0 $ 33,745,010 $ 0 $ 33,745,010 25,000,000 Apreco, Inc. 5.37* 2/8/99 0 9,897,074 14,845,612 24,742,686 50,000,000 Asset Securitization Corporation 5.37* 2/19/99 49,403,333 0 49,403,333 110,000,000 Associates Corporation 5.35* 12/1/98 110,000,000 0 110,000,000 100,000,000 Atlantis One Funding Corp. 5.48* 2/11/99 0 93,963,300 4,945,200 98,908,500 85,000,000 Atlantis One Funding Corp. 5.35* 3/26/99 0 19,658,194 63,889,132 83,547,326 85,000,000 Banco Rio de La Plata S.A., Bayerische Vereinsbank, AG, LOC 5.47* 12/7/98 0 44,959,100 39,963,533 84,922,633 71,077,000 Barton Capital Corp. 5.58* 1/14/99 0 30,865,054 39,727,200 70,592,254 5,659,000 Barton Capital Corp. 5.48* 3/19/99 0 5,565,966 0 5,565,966 5,848,000 Barton Capital Corp. 5.06* 6/8/99 0 5,692,649 0 5,692,649 5,411,000 Barton Capital Corp. 5.04* 8/12/99 0 5,218,585 0 5,218,585 48,500,000 Bavaria Universal Funding Corp. 5.25* 1/19/99 0 0 48,153,427 48,153,427 40,000,000 Bavaria Universal Funding Corp. 5.40* 1/21/99 0 0 39,694,000 39,694,000 155,763,000 Bavaria Universal Funding Corp. 5.25* 1/21/99 0 154,584,325 0 154,584,325 15,500,000 Beta Finance Incorporated 5.36* 1/6/99 15,415,060 0 0 15,415,060 26,000,000 CC (USA), Inc. 5.52* 1/29/99 0 14,864,300 10,900,487 25,764,787 50,000,000 CC (USA), Inc. 4.81* 4/9/99 0 29,482,925 19,655,284 49,138,209 42,872,000 Certain Funding Corp. 5.25* 1/15/99 0 0 42,590,653 42,590,653 15,643,000 Chinatex Capital, Inc., Bank of America N.T. & S.A., L 5.45* 12/2/98 0 10,641,388 4,999,243 15,640,631 31,300,000 City of Austin, TX, Landesbank Hessen - Thueringen Grozentrale, A. G., LOC 5.38* 12/16/98 0 9,977,582 21,252,253 31,229,835 19,000,000 Commercial Credit Corporation 4.42* 12/10/98 18,976,725 0 0 18,976,725 50,000,000 Corporate Asset Funding Incorporated 4.43* 12/7/98 49,957,000 0 0 49,957,000 31,650,000 Corporate Asset Securitization Australia, Ltd., Inc. 5.30* 1/15/99 0 0 31,440,319 31,440,319 75,000,000 Corporate Receivables Corporation 5.27* 2/4/99 74,282,292 0 0 74,282,292 54,182,000 CPI Funding Corp. 5.55* 12/28/98 0 43,998,091 9,958,375 53,956,466 70,000,000 CPI Funding Corp. 5.08* 3/25/99 0 34,436,967 34,436,968 68,873,935 25,000,000 Ford Motor Credit Corporation 4.73* 12/11/98 24,963,889 0 0 24,963,889 20,000,000 General Electric Capital Corporation 5.36* 1/7/99 19,887,561 0 0 19,887,561 110,000,000 General Electric Capital Corporation 5.09* 3/30/99 108,163,764 0 0 108,163,764 15,000,000 General Electric Capital Corporation 4.72* 4/20/99 14,727,583 0 0 14,727,583 20,288,000 Grand Funding Corp. 5.42* 12/15/98 0 20,245,236 0 20,245,236 20,000,000 Grand Funding Corp. 5.60* 1/15/99 0 0 19,860,000 19,860,000 69,019,000 Grand Funding Corp. 5.55* 1/22/99 0 0 68,465,698 68,465,698 108,845,000 Grand Funding Corp. 5.50* 2/5/99 0 73,100,397 34,647,083 107,747,480 40,000,000 Grand Funding Corp. 5.35* 2/26/99 0 39,482,833 0 39,482,833 24,391,000 Grand Funding Corp. 5.60* 1/15/99 0 24,220,262 0 24,220,262 50,000,000 Greyhawk Capital Corp. 5.42* 12/11/98 0 29,954,833 19,969,889 49,924,722 48,825,000 International Securitization Corp. 5.40* 1/14/99 0 29,802,000 18,700,755 48,502,755 57,700,000 International Securitization Corp. 5.30* 2/17/99 0 32,621,050 24,416,362 57,037,412 140,000,000 Lexington Parker Capital Co. LLC., 5.53* 1/4/99 0 84,556,063 54,712,747 139,268,810 80,000,000 Lexington Parker Capital Co. LLC., 5.55* 1/12/99 0 34,773,375 44,708,625 79,482,000 20,000,000 Lexington Parker Capital Co. LLC., 5.47* 1/15/99 0 0 19,863,250 19,863,250 10,317,000 Liberty Lighthouse Funding Co. LLC., 5.52* 1/8/99 0 0 10,256,886 10,256,886 10,000,000 Medical Building Funding III, Allied Irish Bank, LOC 5.21* 5/26/99 0 0 9,745,534 9,745,534 17,355,000 MOAT Funding LLC. 5.42* 12/2/98 0 0 17,352,387 17,352,387 17,457,000 MOAT Funding LLC. 5.42* 12/8/98 0 0 17,438,602 17,438,602 7,384,000 MOAT Funding LLC. 5.42* 12/10/98 0 7,373,994 0 7,373,994 23,052,000 MOAT Funding LLC. 5.42* 12/21/98 0 0 22,982,588 22,982,588 26,033,000 MOAT Funding LLC. 5.39* 1/8/99 0 25,884,887 0 25,884,887 25,000,000 MOAT Funding LLC. 5.70* 1/14/99 0 14,895,500 9,930,333 24,825,833 85,000,000 MOAT Funding LLC. 5.45* 1/27/99 0 47,585,800 36,680,721 84,266,521 37,825,000 MOAT Funding LLC. 5.50* 2/12/99 0 22,570,438 14,832,709 37,403,147 40,000,000 MOAT Funding LLC. 5.35* 2/18/99 0 39,530,389 0 39,530,389 60,721,000 Monte Blanc Capital Corp. 5.45* 1/29/99 0 30,446,602 29,732,042 60,178,644 50,000,000 Monte Rosa Capital Corporation 5.42* 2/16/99 49,419,292 0 0 49,419,292 44,458,000 Monte Rosa Capital Corporation 5.32* 2/23/99 43,906,128 0 0 43,906,128 100,000,000 Morgan Stanley 5.26* 1/22/99 99,231,556 0 0 99,231,556 50,000,000 National City Credit Corporation 4.81* 12/22/98 49,853,583 0 0 49,853,583 80,000,000 Old Line Funding Corp. 5.03* 12/15/98 0 39,921,755 39,921,756 79,843,511 73,891,000 Park Avenue Receivables Corporation 5.37* 2/9/99 0 49,477,916 23,641,538 73,119,454 45,000,000 Park Avenue Receivables Corporation 3.79* 12/4/98 44,981,063 0 0 44,981,063 10,000,000 Park Avenue Receivables Corporation 5.00* 12/18/98 9,975,067 0 0 9,975,067 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-45 WELLS FARGO FUNDS - CASH INVESTMENT MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH PRIME MONEY MARKET FUND, NORWEST ADVANTAGE PRIME MONEY MARKET PORTFOLIO AND NORWEST MONEY MARKET PORTFOLIO(a) STAGECOACH NORWEST ADVANTAGE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 PRIME MONEY PRIME MONEY MONEY MARKET PRO FORMA INTEREST MATURITY MARKET FUND MARKET PORTFOLIO PORTFOLIO COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b)(d) VALUE(b)(d) VALUE(b) 75,000,000 Park Avenue Receivables Corporation 5.42* 1/28/99 74,340,250 0 0 74,340,250 24,494,000 Perry Funding Corp. 5.51* 12/1/98 0 20,000,000 4,494,000 24,494,000 73,714,000 Perry Funding Corp. 5.53* 2/16/99 0 32,609,675 40,232,433 72,842,108 15,157,000 Perry II Funding Corp. 5.53* 2/16/99 0 14,977,722 0 14,977,722 30,000,000 Petrobras International Finance Co., Barclays Bank plc 5.25* 2/8/99 0 0 29,698,125 29,698,125 42,067,000 Pooled Accounts Receivable Capital Corp., 5.40* 2/2/99 0 21,858,466 19,811,000 41,669,466 50,000,000 Province of Quebec 5.36* 1/6/99 49,726,000 0 0 49,726,000 62,196,000 Receivables Capital Corporation 5.33* 1/29/99 61,648,623 0 0 61,648,623 30,116,000 Receivables Capital Corporation 5.39* 2/5/99 29,816,747 0 0 29,816,747 23,774,000 Repeat Offering Securitization Entity 5.35* 1/7/99 0 23,643,276 0 23,643,276 50,000,000 Salomon Smith Barney 4.86* 4/20/99 49,066,667 0 0 49,066,667 120,500,000 Sheffield Receivables Corp. 5.21* 1/29/99 0 93,693,101 25,777,997 119,471,098 100,000,000 Sheffield Receivables Corporation 5.25* 2/12/99 98,931,361 0 0 98,931,361 58,000,000 Sigma Finance Corp. 5.40* 1/28/99 0 29,739,000 27,756,400 57,495,400 20,000,000 Sigma Finance Corp. 5.52* 2/4/99 0 19,800,667 0 19,800,667 42,000,000 Sigma Finance Corp. 5.27* 3/15/99 0 22,649,838 18,710,736 41,360,574 80,000,000 Special Purpose Accounts Receivable Cooperative Corp. 5.30* 1/20/98 0 79,411,111 0 79,411,111 30,000,000 Special Purpose Accounts Receivable Cooperative Corp. 5.54* 12/4/98 0 24,988,458 4,997,692 29,986,150 50,000,000 Special Purpose Accounts Receivable Cooperative Corp. 5.30* 1/28/99 0 0 49,573,056 49,573,056 44,250,000 Special Purpose Accounts Receivable Cooperative Corp. 5.40* 1/29/99 0 9,911,500 33,946,888 43,858,388 50,000,000 Special Purpose Accounts Receivable Cooperative Corp. 5.00* 4/7/99 0 29,470,835 19,647,223 49,118,058 56,697,000 Sydney Capital Corp., Inc. 5.21* 1/8/99 0 33,511,685 22,873,513 56,385,198 17,267,000 Thames Asset Global Securitization, Inc. 5.25* 1/4/99 0 0 17,181,385 17,181,385 62,132,000 Thames Asset Global Securitization, Inc. 5.32* 1/6/99 0 41,907,857 19,893,600 61,801,457 20,545,000 Thames Asset Global Securitization, Inc. 5.25* 1/14/99 0 0 20,413,170 20,413,170 48,000,000 Thames Asset Global Securitization, Inc. 5.25* 1/15/99 0 47,682,187 0 47,682,187 30,000,000 Thames Asset Global Securitization, Inc. 5.40* 1/15/99 0 0 29,797,500 29,797,500 21,317,000 Thames Asset Global Securitization, Inc. 5.15* 2/16/99 0 21,082,187 0 21,082,187 60,000,000 Thames Asset Global Securitization, Inc. 5.35* 2/22/99 0 34,568,285 24,691,633 59,259,918 25,303,000 Three Rivers Funding Corp. 5.45* 12/10/98 0 9,986,375 15,282,150 25,268,525 69,900,000 Trident Capital Finance, Inc. 5.51* 1/8/99 0 39,667,937 29,825,517 69,493,454 42,000,000 U.S. Bancorp 4.69* 12/18/98 41,901,825 0 0 41,901,825 29,362,000 Windmill Funding Corp. 5.40* 1/20/99 0 0 29,141,785 29,141,785 29,300,000 Xerox Corporation 4.75* 4/16/99 28,779,762 0 0 28,779,762 62,650,000 Yamaha Motor Owner Trust 5.43* 1/22/99 0 39,686,266 22,472,349 62,158,615 $1,217,355,131 $1,884,840,268 $1,470,529,343 $ 4,572,724,742 CORPORATE BONDS & NOTES $ 15,000,000 Abbey National Treasury 5.64% 7/15/99 $ 15,027,692 $ 0 $ 0 $ 15,027,692 50,000,000 Asset Backed Trust 1995 Series A-3, 5.28 4/15/99 0 28,000,000 22,000,000 50,000,000 15,000,000 Asset Backed Trust 1996 Series A-4, 5.29 1/15/99 0 10,000,000 5,000,000 15,000,000 50,000,000 Bear Stearns Cos., Inc. 5.61 10/27/99 0 30,000,000 20,000,000 50,000,000 50,000,000 Bear Stearns Cos., Inc. 5.62 11/1/99 0 30,000,000 20,000,000 50,000,000 40,000,000 Bear Stearns Cos., Inc. 5.43 11/15/99 0 30,000,000 9,997,229 39,997,229 25,000,000 Bear Stearns Cos., Inc. 5.55 11/30/99 0 15,000,000 10,000,000 25,000,000 35,000,000 Bear Stearns Cos., Inc. 5.43 12/15/99 0 14,995,844 20,000,000 34,995,844 80,000,000 Beta Finance, Inc. 5.40 11/12/99 0 79,940,437 0 79,940,437 60,000,000 Beta Finance, Inc. 5.19 11/12/99 0 0 59,955,328 59,955,328 45,000,000 BRAVO Trust Series 1997-1 5.40 4/15/99 0 25,000,000 20,000,000 45,000,000 20,190,000 BT Securities Corp. 5.75 3/15/99 0 10,197,119 10,006,986 20,204,105 50,000,000 CC USA MTN 5.78 6/11/99 49,994,768 0 0 49,994,768 25,000,000 Centari Corporation 5.75 4/23/99 25,000,000 0 0 25,000,000 50,000,000 CIT Group Holdings Incorporated 4.82 1/27/99 49,993,753 0 0 49,993,753 6,000,000 Compagnie Bancaire (USA) Funding, Inc. 6.15 12/28/98 0 6,002,059 0 6,002,059 10,000,000 FCC National Bank 5.67 6/1/99 9,994,034 0 0 9,994,034 30,000,000 First Union National Bank 5.73 5/19/99 29,989,331 0 0 29,989,331 100,000,000 First Union National Bank 5.25 9/17/99 100,000,000 0 0 100,000,000 25,000,000 Huntington National Bank 5.14 12/9/98 24,999,921 0 0 24,999,921 50,000,000 Huntington National Bank 5.20 10/26/99 49,986,700 0 0 49,986,700 15,000,000 IBM Credit Corporation 6.12 12/15/98 15,001,323 0 0 15,001,323 40,000,000 IBM Credit Corporation 4.67 10/29/99 39,984,537 0 0 39,984,537 50,000,000 JP Morgan & Company Incorporated 4.86 9/15/99 50,000,000 0 0 50,000,000 100,000,000 Keybank 5.36 10/14/99 0 60,002,552 40,001,699 100,004,251 50,000,000 Liberty Lighthouse U.S. Capital Company, LLC. 5.26 9/1/99 0 29,995,679 19,997,120 49,992,799 100,000,000 Liberty Lighthouse U.S. Capital Company, LLC. 5.26 9/9/99 0 59,990,952 39,993,969 99,984,921 100,000,000 Liberty Lighthouse U.S. Capital Company, LLC. 5.30 10/8/99 0 49,964,956 49,955,729 99,920,685 47,000,000 Medium Term Structured Enhanced Return Trust (STEERS), Series 1997 A-40 5.31 1/15/99 0 28,000,000 19,000,000 47,000,000 40,000,000 Medium Term Structured Enhanced Return Trust (STEERS), Series 1997 A-28 5.06 9/23/99 0 20,000,000 20,000,000 40,000,000 15,255,000 Merita Bank Ltd. 9.75 12/15/98 0 0 15,277,857 15,277,857 25,000,000 Merrill Lynch & Co., Inc. 5.75 4/7/99 0 15,017,625 10,011,750 25,029,375 60,000,000 Morgan Guaranty Trust Company 5.71 1/8/99 59,997,626 0 0 59,997,626 30,000,000 Morgan Stanley Group, Inc. 5.60 11/15/99 0 0 30,000,000 30,000,000 40,000,000 Morgan Stanley Group, Inc. 5.60 12/15/99 0 40,000,000 0 40,000,000 40,000,000 NationsBank Corporation 5.83 12/22/98 39,998,619 0 0 39,998,619 20,000,000 NationsBank Corporation 5.50 2/4/99 20,000,000 0 0 20,000,000 147,500,000 Sigma Finance Corp. 5.14 10/28/99 0 87,500,000 60,000,000 147,500,000 50,000,000 Structured Products Asset 5.47 5/24/99 0 30,000,000 20,000,000 50,000,000 100,000,000 Syndicated Loan Funding 5.78 12/15/99 0 60,000,000 40,000,000 100,000,000 $ 579,968,304 $ 759,607,223 $ 561,197,667 $ 1,900,773,194 VARIABLE AND FLOATING RATE BONDS $ 90,000,000 Abbey National 4.80% 7/15/99 $ 89,964,645 $ 0 $ 0 $ 89,964,645 50,000,000 Allstate Life Insurance Co. 5.44 2/28/99 0 30,000,000 20,000,000 50,000,000 30,000,000 American Express Centurion 5.16 12/21/98 30,000,000 0 0 30,000,000 40,000,000 Commercial Bank 5.16 7/13/99 39,985,485 0 0 39,985,485 30,000,000 First National Bank 4.87 9/28/99 30,000,000 0 0 30,000,000 50,000,000 Ford Motor Credit Corporation 4.95 12/23/98 49,999,126 0 0 49,999,126 60,000,000 Ford Motor Credit Corporation 4.96 1/7/99 60,000,000 0 0 60,000,000 200,000,000 General American Life Insurance Co., 5.40 3/20/30 0 115,000,000 85,000,000 200,000,000 50,000,000 Key Bank 5.14 12/15/98 49,999,816 0 0 49,999,816 75,000,000 Key Bank 4.83 10/4/99 74,975,375 0 0 74,975,375 40,000,000 National Rural Utilities 5.23 11/23/99 40,000,000 0 0 40,000,000 75,000,000 NationsBank Corporation 4.83 4/27/99 74,991,240 0 0 74,991,240 40,000,000 Peoples Benefit Life Insurance Co. 5.33 12/15/99 0 40,000,000 0 40,000,000 20,000,000 Peoples Benefit Life Insurance Co., 5.28 12/15/99 0 0 20,000,000 20,000,000 30,000,000 Providian Life & Health Insurance Co. 5.28 12/15/99 0 30,000,000 0 30,000,000 35,000,000 Providian Life & Health Insurance Co., 5.33 12/15/99 0 0 35,000,000 35,000,000 25,000,000 Sigma Finance 5.08 8/23/99 25,000,000 0 0 25,000,000 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-46 WELLS FARGO FUNDS - CASH INVESTMENT MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH PRIME MONEY MARKET FUND, NORWEST ADVANTAGE PRIME MONEY MARKET PORTFOLIO AND NORWEST MONEY MARKET PORTFOLIO(a) STAGECOACH NORWEST ADVANTAGE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 PRIME MONEY PRIME MONEY MONEY MARKET PRO FORMA INTEREST MATURITY MARKET FUND MARKET PORTFOLIO PORTFOLIO COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b)(d) VALUE(b)(d) VALUE(b) 35,000,000 Sigma Finance 5.13 8/26/99 35,000,000 0 0 35,000,000 50,000,000 Transamerica Life Insurance & Annuity Co., 5.22 4/12/99 0 30,000,000 20,000,000 50,000,000 $ 599,915,687 $ 245,000,000 $ 180,000,000 $ 1,024,915,687 MASTER NOTES $ 13,000,000 American General Finance, Inc. $ 0 $ 10,000,000 $ 3,000,000 $ 13,000,000 20,000,000 General Electric Co. 0 10,000,000 10,000,000 20,000,000 $ 0 $ 20,000,000 $ 13,000,000 $ 33,000,000 MUNICIPAL BONDS & NOTES $ 8,300,000 Durham, NC, COP, Series B, Wachovia Bank of North Carolina, LOC 4.87 7/1/03 $ 0 $ 4,700,000 $ 3,600,000 $ 8,300,000 11,225,000 Kalamazoo Funding Co., Old Kent Bank & Trust Co. 5.15 12/15/26 0 5,715,000 5,510,000 11,225,000 7,310,000 New York City, GO 5.76 12/21/98 0 7,310,000 0 7,310,000 2,000,000 Prince William County, VA, Taxable Notes, Series A, Wachovia Bank of North Carolina, LOC 4.87 3/1/17 0 1,100,000 900,000 2,000,000 $ 0 $ 18,825,000 $ 10,010,000 $ 28,835,000 SHORT TERM FEDERAL AGENCIES $ 51,900,000 Federal Home Loan Mortgage Corporation 4.95*% 3/19/99 $ 51,133,957 $ 0 $ 0 $ 51,133,957 REPURCHASE AGREEMENTS $ 64,127,000 Goldman Sachs Pooled Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.25% 12/1/98 $ 64,127,000 $ 0 $ 0 $ 64,127,000 31,790,000 Morgan Stanley & Company Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.23 12/1/98 31,790,000 0 0 31,790,000 12,843,000 JP Morgan Securities Incorporated Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.15 12/1/98 12,843,000 0 0 12,843,000 3,420,000 HSBC Securities Incorporated Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.15 12/1/98 3,420,000 0 0 3,420,000 291,029,855 NationsBanc Montgomery Securities, Inc., to be repurchased at $139,629,682 5.50 12/1/98 0 139,608,354 151,421,501 151,421,501 $ 112,180,000 $ 139,608,354 $ 151,421,501 $ 263,601,501 TIME DEPOSITS $190,000,000 Bank of America N.T. & S.A., Toronto Branch, 5.56 12/1/98 $ 0 $ 190,000,000 $ 0 $ 190,000,000 41,400,000 Banque Paribas, Toronto Branch, 5.63 12/1/98 0 41,400,000 0 41,400,000 150,000,000 Deutsche Bank AG, Toronto Branch, 6.00 12/1/98 0 150,000,000 0 150,000,000 150,000,000 Bank of America N.T. & S.A., Toronto Branch, 5.56 12/1/98 0 0 150,000,000 150,000,000 30,000,000 Banque Paribas, Toronto Branch, 5.63 12/1/98 0 0 30,000,000 30,000,000 125,000,000 Deutsche Bank AG, Toronto Branch, 6.00 12/1/98 0 0 125,000,000 125,000,000 15,000,000 Dresdner Bank AG, Toronto Branch, 5.56 12/1/98 0 0 15,000,000 15,000,000 75,000,000 Dresdner Bank AG, Toronto Branch, 5.56 12/2/98 0 75,000,000 0 75,000,000 $ 0 $ 456,400,000 $ 320,000,000 $ 776,400,000 INVESTMENTS IN SECURITIES PRIOR TO PRO FORMA ADJUSTMENTS $3,223,637,444 $3,914,502,600 $3,069,489,476 $10,207,629,520 PRO FORMA ADJUSTMENTS To Securities at Market Value $ (570,009,639) $ (880,763,085) (24,555,916) (1,475,328,640) From Other Assets and Liablities from Core Portfolio $ 0 28,743,216 17,571,936 46,315,152 $ (570,009,639)(c) $ (852,019,869)(d) $ (6,983,980)(d) $(1,429,013,488) TOTAL INVESTMENTS IN SECURITIES $2,653,627,805 $3,062,482,731 $3,062,505,496 $ 8,778,616,032 (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. (c) The Administrative Class, Institutional Class and Service Class shares of the Prime Money Market Fund comprise 82.3% of the Fund. (d) The Norwest Advantage Cash Investment Fund invests directly into and comprises 77.5% and 99.2% of the Norwest Prime Money Market and Money Market Portfolios' net assets, respectively. * Yield to maturity. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-47 WELLS FARGO FUNDS - PRIME INVESTMENT MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 NORWEST ADVANTAGE READY STAGECOACH PRIME STAGECOACH CASH INVESTMENT MONEY MARKET MONEY MARKET PRO FORMA PRO FORMA FUND FUND FUND ADJUSTMENTS(b)(d) COMBINED --------------- ---------------- --------------- ----------------- ----------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $888,173,248 $3,223,637,444 $9,139,364,490 $(2,697,621,511) $10,553,553,671 Cash 0 314,576 399,740 (258,952) 455,364 Receivables: Dividends and Interest 0 29,129,964 82,604,674 (23,979,149) 87,755,489 Due from advisor 0 0 0 4,423 (e) 4,423 Organization expenses, net of amortization 0 25,014 6,745 (25,014)(e) 6,745 Prepaid expenses 0 101,519 361,172 (83,568) 379,123 TOTAL ASSETS 888,173,248 3,253,208,517 9,222,736,821 10,642,154,815 LIABILITIES Payables: Distribution to shareholders 19,974 12,262,752 33,687,374 (10,095,418) 35,874,682 Due to distributor 0 303,951 1,533,327 (250,206) 1,587,072 Due to advisor 173,327 913,750 4,914,334 (760,764) 5,240,647 Other 92,614 417,634 31,521 (348,375) 193,394 TOTAL LIABILITIES 285,915 13,898,087 40,166,556 42,895,795 TOTAL NET ASSETS $887,887,333 $3,239,310,430 $9,182,570,265 $10,599,259,020 NET ASSETS CONSIST OF: Paid-in capital $887,898,079 $3,239,306,328 $9,182,915,994 $(2,710,506,164) $10,599,614,237 Undistributed net investment income (loss) (3,100) 0 0 154 $ (2,946) Undistributed net realized gain (loss) on investments (7,646) 4,102 (345,729) (2,998) $ (352,271) TOTAL NET ASSETS $887,887,333 $3,239,310,430 $9,182,570,265 $10,599,259,020 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net assets - Class A $842,877,199 $ 572,780,966 $8,040,849,890 $ 9,456,508,055 Shares outstanding - Class A 842,897,224 572,886,864 8,040,454,142 9,456,238,230 Net asset value and offering price per share - Class A $ 1.00 $ 1.00 $ 1.00 $ 1.00 Net Assets - Class B $ 1,030,590 $ 1,141,720,375 (h) $ 1,142,750,965 Shares outstanding - Class B 1,030,598 1,141,670,830 (h) 1,142,701,428 Net asset value and offering price per share - Class B $ 1.00 $ 1.00 Net Assets - Class S $1,141,720,375 $(1,141,720,375)(h) Shares outstanding - Class S 1,141,670,830 $(1,141,670,830)(h) Net asset value and offering price per share - Class S $ 1.00 INVESTMENT AT COST $888,173,248 $3,223,637,444 $9,139,364,490 $(2,697,621,511) $10,553,553,671 - ------------------------------------------------------------------------------------------------------------------------------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-48 WELLS FARGO FUNDS - PRIME INVESTMENT MONEY MARKET FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) NORWEST ADVANTAGE STAGECOACH READY CASH PRIME STAGECOACH INVESTMENT CORE-GATEWAY MONEY MARKET MONEY PRO FORMA PRO FORMA FUND ADJUSTMENTS (a) FUND (c) MARKET FUND ADJUSTMENTS(b)(d) COMBINED ----------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest $43,108,032 $149,310,711 $445,712,014 $638,130,757 Net expenses from master/core portfolios (2,983,265) 2,983,265 0 0 0 TOTAL INVESTMENT INCOME 40,124,767 149,310,711 445,712,014 638,130,757 EXPENSES Advisory fees 2,508,151 6,626,891 31,610,247 (3,721,521)(f) 37,023,768 Administration fees 1,134,062 379,369 1,816,340 5,410,577 5,143,565 (f) 13,883,913 Custody fees 0 79,409 442,681 1,325,226 3,872 (f) 1,851,188 Shareholder serv fees 0 0 3,566,896 23,199,554 (3,626,595)(f) 23,139,855 Portfolio accounting fees 26,500 13,315 591,649 1,642,006 (2,193,470)(f) 80,000 Transfer agency fees 1,880,392 0 1,513,463 7,553,647 (2,490,218)(f) 8,457,284 Distribution fees 6,674 0 120,430 8,022,219 (512,676)(f) 7,636,647 Organization costs 0 715 13,658 4,900 (14,770)(f) 4,503 Legal and audit fees 17,804 553 148,380 266,779 (200,648)(f) 232,868 Registration fees 126,379 0 350,704 637,750 0 1,114,833 Directors' fees 10,019 1,752 3,819 3,853 (13,014)(f) 6,429 Shareholder reports 25,622 0 73,080 362,833 (101,438)(f) 360,097 Other 4,177 0 19,473 144,297 (23,822)(f) 144,125 TOTAL EXPENSES 3,231,629 15,287,464 80,183,888 93,935,511 Less: Waived fees and reimbursed expenses fees (21,381) (3,907,481) (13,986,097) 1,961,254 (g) (15,953,705) NET EXPENSES 3,210,248 11,379,983 66,197,791 77,981,806 NET INVESTMENT INCOME (LOSS) 36,914,519 137,930,728 379,514,223 560,148,951 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on sale of investments 3,109 155,514 391,855 550,478 NET GAIN (LOSS) ON INVESTMENTS 3,109 155,514 391,855 550,478 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $36,917,628 $138,086,242 $379,906,078 $560,699,429 - ---------------------------------------------------------------------------------------------------------------------------------- * The Class A of the Stagecoach Prime Money Market Fund and Classes A and B of the Norwest Advantage Ready Cash Investment Fund are merging with the Stagecoach Money Market Fund to form the Wells Fargo Prime Investment Money Market Fund, historical accounting data from the Stagecoach Money Market Fund will be kept. (a) The Norwest Advantage Ready Cash Investment Fund, a "Gateway Fund", invests in securities through a "Core Portfolio", the Norwest Advantage Prime Money Market Portfolio. Expenses allocated from the Core Portfolio to the Gateway Fund over the year ended November 30, 1998 have been disbursed according to the percentage of each expense at the Core Portfolio level. (b) The Class A and Class B shares of the Norwest Advantage Ready Cash Investment Fund comprises 95.0% of the Fund's net assets. The remaining 5.0% of the Fund's net asset represent Institutional Class shares of the Norwest Advantage Ready Cash Investment Fund. Such Instituional Class shares will be exchanged for shares of a different fund in a separate reorganization. Accordingly the net assets attributable to Insitutional Class shares have been removed as an adjustment for purposes of this pro forma financial statement. (c) Information shown prior to December 12, 1997, is for the Stagecoach Prime Money Market Fund which merged with the Overland Money Market Fund on December 12, 1997. (d) The Class A shares of the Stagecoach Prime Money Market Fund comprise 17.7% of the Fund's net assets. The remaining 82.3% of the Fund's net assets represent Administrative, Institutional, and Service Class shares of the Stagecoach Prime Money Market Fund. Such shares will be exchanged for respective shares of a different fund in a separate reorganization. Accordingly, the net assets attributable to Administrative, Institutional and Service class shares have been removed as an adjustment for purposes of this pro forma financial statement. (e) Wells Fargo Bank will absorb the balance of unamortized organizational costs from Funds which are not accounting survivors. (f) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (g) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. (h) Reflects new shares issued, net of retired shares of the respective Funds which are not accounting survivors. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-49 WELLS FARGO FUNDS - PRIME INVESTMENT MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE PRIME MONEY MARKET PORTFOLIO, STAGECOACH PRIME MONEY MARKET FUND AND STAGECOACH MONEY MARKET FUND(a) NORWEST ADVANTAGE PRIME MONEY STAGECOACH STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 MARKET PRIME MONEY MONEY MARKET PRO FORMA INTEREST MATURITY PORTFOLIO MARKET FUND FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b)(d) VALUE(b) VALUES(b) ASSET BACKED SECURITIES $ 76,207,555 WFP Tower B Finance Corporation, Short-Term STEERS Trust, Series A 5.31% 12/8/98 $ 42,011,856 $ 0 $ 0 $ 42,011,856 CERTIFICATE OF DEPOSITS $ 44,000,000 Abbey National 5.55% 1/26/99 $ 0 $ 24,998,160 $ 18,998,602 $ 43,996,762 100,000,000 American Express Centurion Bank 5.42 12/16/98 0 0 100,000,000 100,000,000 40,000,000 American Express Centurion Bank 5.14 1/28/99 0 0 40,000,000 40,000,000 50,000,000 ANZ Banking Corporation 5.64 2/24/99 0 50,001,143 0 50,001,143 66,000,000 Banco Espirito Santo e Comercial de Lisboa, New York Branch 5.74 3/26/99 15,999,033 0 0 15,999,033 87,000,000 Banque Paribas, New York Branch, 5.73 36,248 46,993,816 0 0 46,993,816 29,000,000 Barclays Bank PLC 5.79 5/4/99 0 29,005,261 0 29,005,261 50,000,000 Bayerische Landesbank 5.65 7/22/99 30,132,716 0 0 30,132,716 50,000,000 Bayerische Landsbank 5.34 3/23/99 0 0 49,988,080 49,988,080 20,000,000 Centari Corporation 5.78 4/19/99 0 20,000,000 0 20,000,000 165,000,000 Chase Manhattan Bank 5.10 4/20/99 0 65,000,000 100,000,000 165,000,000 175,000,000 Chase Manhattan Bank 4.87 4/21/99 0 30,000,000 145,000,000 175,000,000 150,000,000 Chase Manhattan Bank 5.06 5/12/99 0 30,000,000 120,000,000 150,000,000 65,000,000 CIBC 5.01 2/17/99 0 0 65,000,000 65,000,000 92,200,000 CIBC 5.07 4/13/99 0 0 92,200,000 92,200,000 175,000,000 CIBC 4.86 4/20/99 0 0 175,000,000 175,000,000 75,000,000 CIBC 5.08 5/4/99 0 0 75,000,000 75,000,000 25,000,000 CIBC YCD 5.01 2/17/99 0 25,000,000 0 25,000,000 100,000,000 CIBC YCD 5.07 4/13/99 0 100,000,000 0 100,000,000 198,000,000 Deutsche Bank, New York Branch, 5.73 4/15/99 129,981,577 0 0 129,981,577 50,000,000 FCC National Bank 5.63 1/8/99 0 50,000,000 0 50,000,000 30,000,000 FCC National Bank 4.82 4/22/99 0 30,000,000 0 30,000,000 40,000,000 Generale Bank, New York Branch, 6.02 12/16/98 25,000,073 0 0 25,000,073 75,000,000 Harris Trust & Savings 5.05 5/5/99 0 0 75,000,000 75,000,000 40,000,000 Huntington National Bank 5.74 5/5/99 0 39,992,679 0 39,992,679 88,000,000 Natexis Banque, New York Branch, 5.71 8/3/99 49,980,713 0 0 49,980,713 9,100,000 Northern Trust 4.78 4/5/99 0 9,100,000 0 9,100,000 75,000,000 Old Kent Bank 4.83 4/28/99 0 0 75,000,000 75,000,000 50,000,000 Old Kent Bank 5.06 6/14/99 0 0 50,000,000 50,000,000 25,000,000 Old Kent Bank 5.04 8/13/99 0 0 25,000,000 25,000,000 50,000,000 Old Kent Bank 5.00 8/18/99 0 50,000,000 0 50,000,000 50,000,000 Old Kent Bank 4.90 10/6/99 0 0 50,000,000 50,000,000 65,500,000 Rabobank Nederland 5.71 5/5/99 0 0 65,475,350 65,475,350 70,000,000 Rabobank Nederland 5.74 5/19/99 0 0 69,978,277 69,978,277 192,000,000 Societe Generale 5.60 1/13/99 0 49,998,305 141,995,186 191,993,491 50,000,000 Societe Generale, New York Branch, 5.70 3/23/99 24,995,957 0 0 24,995,957 25,000,000 Svenska Handelsbanken, New York Branch 5.65 8/10/99 25,126,014 0 0 25,126,014 135,000,000 Swiss Bank 5.64 3/12/99 0 34,993,966 99,982,760 134,976,726 25,000,000 Swiss Bank 5.75 5/7/99 0 24,994,851 0 24,994,851 $ 348,209,899 $ 663,084,365 $1,633,618,255 2,644,912,519 COMMERCIAL PAPER $ 34,000,000 Ace Overseas Corporation 5.51*% 1/19/99 $ 33,745,010 $ 0 $ 0 $ 33,745,010 70,000,000 American Express 2.44* 12/2/98 0 0 69,990,511 69,990,511 25,000,000 Apreco, Incorporated 5.37* 2/8/99 9,897,074 0 0 9,897,074 100,000,000 Asset Securitization Corporation 4.82* 12/11/98 0 0 99,853,056 99,853,056 113,500,000 Asset Securitization Corporation 5.27* 2/12/99 0 0 112,283,029 112,283,029 50,000,000 Asset Securitization Corporation 5.37* 2/19/99 0 49,403,333 0 49,403,333 79,000,000 Asset Securitization Corporation 5.37* 2/19/99 0 0 78,057,267 78,057,267 110,000,000 Associates Corporation 5.35* 12/1/98 0 110,000,000 0 110,000,000 80,000,000 Associates First Capital 5.35* 12/1/98 0 0 80,000,000 80,000,000 50,000,000 Associates First Capital 4.74* 12/22/98 0 0 49,855,625 49,855,625 100,000,000 Atlantis One Funding Corporation 5.48* 2/11/99 93,963,300 0 0 93,963,300 85,000,000 Atlantis One Funding Corporation 5.35* 3/26/99 19,658,194 0 0 19,658,194 118,535,000 Atlantis One Funding Corporation 5.41* 2/10/99 0 0 117,265,589 117,265,589 43,421,000 Atlantis One Funding Corporation 5.20* 3/15/99 0 0 42,772,483 42,772,483 85,000,000 Banco Rio de La Plata S.A., Bayerische Vereinsbank, AG, LOC 5.47* 12/7/98 44,959,100 0 0 44,959,100 71,077,000 Barton Capital Corporation 5.58* 1/14/99 30,865,054 0 0 30,865,054 5,659,000 Barton Capital Corporation 5.48* 3/19/99 5,565,966 0 0 5,565,966 5,848,000 Barton Capital Corporation 5.06* 6/8/99 5,692,649 0 0 5,692,649 5,411,000 Barton Capital Corporation 5.04* 8/12/99 5,218,585 0 0 5,218,585 155,763,000 Bavaria Universal Funding Corporation 5.25* 1/21/99 154,584,325 0 0 154,584,325 15,500,000 Beta Finance Incorporated 5.36* 1/6/99 0 15,415,060 0 15,415,060 26,000,000 CC (USA), Incorporated 5.52* 1/29/99 14,864,300 0 0 14,864,300 50,000,000 CC (USA), Incorporated 4.81* 4/9/99 29,482,925 0 0 29,482,925 39,500,000 CC Incorporated 5.37* 1/8/99 0 0 39,271,514 39,271,514 43,500,000 CC USA Incorporated 5.36* 1/6/99 0 0 43,261,620 43,261,620 15,643,000 Chinatex Capital, Incorporated, Bank of America N.T. & S.A., LOC 5.45* 12/2/98 10,641,388 0 0 10,641,388 31,300,000 City of Austin, TX, Landesbank Hessen - Thueringen Grozentrale, A. G., LOC 5.38* 12/16/98 9,977,582 0 0 9,977,582 50,000,000 Commercial Credit Company 4.71* 12/11/98 0 0 49,928,194 49,928,194 19,000,000 Commercial Credit Corporation 4.42* 12/10/98 0 18,976,725 0 18,976,725 50,000,000 Corporate Asset Funding Incorporated 4.43* 12/7/98 0 49,957,000 0 49,957,000 100,000,000 Corporate Asset Funding Incorporated 5.27* 2/1/99 0 0 99,085,500 99,085,500 75,000,000 Corporate Asset Funding Incorporated 5.35* 2/5/99 0 0 74,260,250 74,260,250 100,000,000 Corporate Receivables Corporation 4.68* 12/15/98 0 0 99,805,556 99,805,556 100,000,000 Corporate Receivables Corporation 5.40* 1/25/99 0 0 99,167,361 99,167,361 75,000,000 Corporate Receivables Corporation 5.27* 2/4/99 0 74,282,292 0 74,282,292 99,000,000 Corporate Receivables Corporation 5.27* 2/4/99 0 0 98,052,625 98,052,625 54,182,000 CPI Funding Corporation 5.55* 12/28/98 43,998,091 0 0 43,998,091 70,000,000 CPI Funding Corporation 5.08* 3/25/99 34,436,967 0 0 34,436,967 50,000,000 CXC Incorporated 5.37* 2/10/99 0 0 49,468,486 49,468,486 40,000,000 CXC Incorporated 5.24* 2/18/99 0 0 39,539,167 39,539,167 71,000,000 Daimler Benz America Corporation 4.26* 12/8/98 0 0 70,932,905 70,932,905 200,000,000 Ford Motor Credit Corporation 3.27* 12/3/98 0 0 199,945,556 199,945,556 25,000,000 Ford Motor Credit Corporation 4.73* 12/11/98 0 24,963,889 0 24,963,889 170,000,000 Ford Motor Credit Corporation 5.44* 2/2/99 0 0 168,372,675 168,372,675 100,000,000 General Electric Capital Corporation 5.36* 1/5/99 0 0 99,467,222 99,467,222 145,000,000 General Electric Capital Corporation 5.36* 1/7/99 0 19,887,561 124,297,257 144,184,818 55,000,000 General Electric Capital Corporation 5.46* 2/11/99 0 0 54,397,200 54,397,200 75,000,000 General Electric Capital Corporation 4.94* 3/8/99 0 0 74,005,750 74,005,750 110,000,000 General Electric Capital Corporation 5.09* 3/30/99 0 108,163,764 0 108,163,764 35,000,000 General Electric Capital Corporation 4.72* 4/20/99 0 14,727,583 19,636,778 34,364,361 65,000,000 General Electric Financial Assurance Holdings Incorporated 4.74* 12/22/98 0 0 64,812,313 64,812,313 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-50 WELLS FARGO FUNDS - PRIME INVESTMENT MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE PRIME MONEY MARKET PORTFOLIO, STAGECOACH PRIME MONEY MARKET FUND AND STAGECOACH MONEY MARKET FUND(a) NORWEST ADVANTAGE PRIME MONEY STAGECOACH STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 MARKET PRIME MONEY MONEY MARKET PRO FORMA INTEREST MATURITY PORTFOLIO MARKET FUND FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b)(d) VALUE(b) VALUES(b) 20,288,000 Grand Funding Corporation 5.42* 12/15/98 20,245,236 0 0 20,245,236 24,391,000 Grand Funding Corporation 5.60* 1/15/99 24,220,262 0 0 24,220,262 108,845,000 Grand Funding Corporation 5.50* 2/5/99 73,100,397 0 0 73,100,397 40,000,000 Grand Funding Corporation 5.35* 2/26/99 39,482,833 0 0 39,482,833 80,000,000 Greenwich Asset Funding Incorporated 4.67* 12/7/98 0 0 79,927,467 79,927,467 49,976,000 Greenwich Asset Funding Incorporated 4.74* 12/16/98 0 0 49,870,842 49,870,842 50,000,000 Greyhawk Capital Corporation 5.42* 12/11/98 29,954,833 0 0 29,954,833 48,825,000 International Securitization Corporation 5.40* 1/14/99 29,802,000 0 0 29,802,000 57,700,000 International Securitization Corporation 5.30* 2/17/99 32,621,050 0 0 32,621,050 50,000,000 Johnson & Johnson 4.79* 4/5/99 0 0 49,175,347 49,175,347 140,000,000 Lexington Parker Capital Company LLC., 5.53* 1/4/99 84,556,063 0 0 84,556,063 80,000,000 Lexington Parker Capital Company LLC., 5.55* 1/12/99 34,773,375 0 0 34,773,375 7,384,000 MOAT Funding LLC. 5.42* 12/10/98 7,373,994 0 0 7,373,994 26,033,000 MOAT Funding LLC. 5.39* 1/8/99 25,884,887 0 0 25,884,887 25,000,000 MOAT Funding LLC. 5.70* 1/14/99 14,895,500 0 0 14,895,500 85,000,000 MOAT Funding LLC. 5.45* 1/27/99 47,585,800 0 0 47,585,800 37,825,000 MOAT Funding LLC. 5.50* 2/12/99 22,570,438 0 0 22,570,438 40,000,000 MOAT Funding LLC. 5.35* 2/18/99 39,530,389 0 0 39,530,389 60,721,000 Monte Blanc Capital Corporation 5.45* 1/29/99 30,446,602 0 0 30,446,602 50,000,000 Monte Rosa Capital Corporation 5.42* 2/16/99 0 49,419,292 0 49,419,292 50,000,000 Monte Rosa Capital Corporation 5.30* 2/19/99 0 0 49,411,111 49,411,111 44,458,000 Monte Rosa Capital Corporation 5.32* 2/23/99 0 43,906,128 0 43,906,128 225,000,000 Morgan Stanley 5.26* 1/22/99 0 99,231,556 124,039,444 223,271,000 20,000,000 National City Credit Corporation 4.87* 12/21/98 0 0 19,943,333 19,943,333 50,000,000 National City Credit Corporation 4.81* 12/22/98 0 49,853,583 0 49,853,583 40,000,000 Nations Bank 5.37* 1/6/99 0 0 39,780,400 39,780,400 80,000,000 Old Line Funding Corporation 5.03* 12/15/98 39,921,755 0 0 39,921,755 81,499,000 Park Avenue Receivables Corporation 3.79* 12/4/98 0 44,981,063 36,483,640 81,464,703 10,000,000 Park Avenue Receivables Corporation 5.00* 12/18/98 0 9,975,067 0 9,975,067 65,927,000 Park Avenue Receivables Corporation 5.41* 1/28/99 0 0 65,348,124 65,348,124 75,000,000 Park Avenue Receivables Corporation 5.42* 1/28/99 0 74,340,250 0 74,340,250 73,891,000 Park Avenue Receivables Corporation 5.37* 2/9/99 49,477,916 0 0 49,477,916 86,014,000 Park Avenue Receivables Corporation 5.32* 2/12/99 0 0 85,084,356 85,084,356 24,494,000 Perry Funding Corporation 5.51* 12/1/98 20,000,000 0 0 20,000,000 73,714,000 Perry Funding Corporation 5.53* 2/16/99 32,609,675 0 0 32,609,675 15,157,000 Perry II Funding Corporation 5.53* 2/16/99 14,977,722 0 0 14,977,722 42,067,000 Pooled Accounts Receivable Capital Corporation, 5.40* 2/2/99 21,858,466 0 0 21,858,466 50,000,000 Province of Quebec 5.36* 1/6/99 0 49,726,000 0 49,726,000 62,196,000 Receivables Capital Corporation 5.33* 1/29/99 0 61,648,623 0 61,648,623 30,116,000 Receivables Capital Corporation 5.39* 2/5/99 0 29,816,747 0 29,816,747 23,774,000 Repeat Offering Securitization Entity 5.35* 1/7/99 23,643,276 0 0 23,643,276 50,000,000 Salomon Smith Barney 4.86* 4/20/99 0 49,066,667 0 49,066,667 120,500,000 Sheffield Receivables Corporation 5.21* 1/29/99 93,693,101 0 0 93,693,101 200,000,000 Sheffield Receivables Corporation 5.25* 2/12/99 0 98,931,361 98,931,361 197,862,722 58,000,000 Sigma Finance Corporation 5.40* 1/28/99 29,739,000 0 0 29,739,000 20,000,000 Sigma Finance Corporation 5.52* 2/4/99 19,800,667 0 0 19,800,667 42,000,000 Sigma Finance Corporation 5.27* 3/15/99 22,649,838 0 0 22,649,838 50,000,000 Sigma Finance Corporation 5.45* 1/26/99 0 0 49,572,222 49,572,222 80,000,000 Special Purpose Accounts Receivable Cooperative Corporation 5.30* 1/20/98 79,411,111 0 0 79,411,111 30,000,000 Special Purpose Accounts Receivable Cooperative Corporation 5.54* 12/4/98 24,988,458 0 0 24,988,458 44,250,000 Special Purpose Accounts Receivable Cooperative Corporation 5.40* 1/29/99 9,911,500 0 0 9,911,500 50,000,000 Special Purpose Accounts Receivable Cooperative Corporation 5.00* 4/7/99 29,470,835 0 0 29,470,835 56,697,000 Sydney Capital Corporation, Incorporated 5.21* 1/8/99 33,511,685 0 0 33,511,685 62,132,000 Thames Asset Global Securitization, Incorporated 5.32* 1/6/99 41,907,857 0 0 41,907,857 48,000,000 Thames Asset Global Securitization, Incorporated 5.25* 1/15/99 47,682,187 0 0 47,682,187 21,317,000 Thames Asset Global Securitization, Incorporated 5.15* 2/16/99 21,082,187 0 0 21,082,187 60,000,000 Thames Asset Global Securitization, Incorporated 5.35* 2/22/99 34,568,285 0 0 34,568,285 25,303,000 Three Rivers Funding Corporation 5.45* 12/10/98 9,986,375 0 0 9,986,375 69,900,000 Trident Capital Finance, Incorporated 5.51* 1/8/99 39,667,937 0 0 39,667,937 42,000,000 U.S. Bancorp 4.69* 12/18/98 0 41,901,825 0 41,901,825 14,866,000 Variable Funding Capital Corporation 4.76* 12/21/98 0 0 14,824,871 14,824,871 50,000,000 Windmill Funding Corporation 4.73* 12/10/98 0 0 49,934,375 49,934,375 27,370,000 Windmill Funding Corporation 4.83* 12/11/98 0 0 27,329,629 27,329,629 85,747,000 Windmill Funding Corporation 4.70* 12/16/98 0 0 85,568,360 85,568,360 100,000,000 Windmill Funding Corporation 4.75* 12/18/98 0 0 99,762,944 99,762,944 36,468,000 Windmill Funding Corporation 5.27* 2/4/99 0 0 36,119,022 36,119,022 50,000,000 Windmill Funding Corporation 5.38* 2/9/99 0 0 49,475,000 49,475,000 40,172,000 Windmill Funding Corporation 5.43* 2/11/99 0 0 39,734,125 39,734,125 29,300,000 Xerox Corporation 4.75* 4/16/99 0 28,779,762 0 28,779,762 62,650,000 Yamaha Motor Owner Trust 5.43* 1/22/99 39,686,266 0 0 39,686,266 $ 1,884,840,268 $ 1,217,355,131 $3,368,101,462 $ 6,470,296,861 CORPORATE BONDS & NOTES $ 15,000,000 Abbey National Treasury 5.64% 7/15/99 $ 0 $ 15,027,692 $ 0 $ 15,027,692 50,000,000 Asset Backed Trust 1995 Series A-3, 5.28 4/15/99 28,000,000 0 0 28,000,000 15,000,000 Asset Backed Trust 1996 Series A-4, 5.29 1/15/99 10,000,000 0 0 10,000,000 50,000,000 Bear Stearns Cos., Incorporated 5.61 10/27/99 30,000,000 0 0 30,000,000 50,000,000 Bear Stearns Cos., Incorporated 5.62 11/1/99 30,000,000 0 0 30,000,000 40,000,000 Bear Stearns Cos., Incorporated 5.43 11/15/99 30,000,000 0 0 30,000,000 25,000,000 Bear Stearns Cos., Incorporated 5.55 11/30/99 15,000,000 0 0 15,000,000 35,000,000 Bear Stearns Cos., Incorporated 5.43 12/15/99 14,995,844 0 0 14,995,844 80,000,000 Beta Finance, Incorporated 5.40 11/12/99 79,940,437 0 0 79,940,437 45,000,000 BRAVO Trust Series 1997-1 5.40 4/15/99 25,000,000 0 0 25,000,000 20,190,000 BT Securities Corporation 5.75 3/15/99 10,197,119 0 0 10,197,119 65,000,000 CC USA MTN 5.78 6/11/99 0 49,994,768 14,998,431 64,993,199 70,000,000 Centari Corporation 5.75 4/23/99 0 25,000,000 45,000,000 70,000,000 50,000,000 CIT Group Holdings Incorporated 4.82 1/27/99 0 49,993,753 0 49,993,753 6,000,000 Compagnie Bancaire (USA) Funding, Incorporated 6.15 12/28/98 6,002,059 0 0 6,002,059 50,000,000 FCC National Bank 5.63 1/8/99 0 0 50,000,000 50,000,000 10,000,000 FCC National Bank 5.67 6/1/99 0 9,994,034 0 9,994,034 46,000,000 First National Bank of Chicago 5.75 5/10/99 0 0 45,990,348 45,990,348 70,000,000 First National Bank of Chicago 5.73 5/19/99 0 0 69,975,174 69,975,174 115,000,000 First Union National Bank 5.63 2/4/99 0 0 115,000,000 115,000,000 30,000,000 First Union National Bank 5.73 5/19/99 0 29,989,331 0 29,989,331 100,000,000 First Union National Bank 5.25 9/17/99 0 100,000,000 0 100,000,000 25,000,000 Huntington National Bank 5.14 12/9/98 0 24,999,921 0 24,999,921 48,000,000 Huntington National Bank 5.74 5/5/99 0 0 47,991,215 47,991,215 50,000,000 Huntington National Bank 5.20 10/26/99 0 49,986,700 0 49,986,700 15,000,000 IBM Credit Corporation 6.12 12/15/98 0 15,001,323 0 15,001,323 95,500,000 IBM Credit Corporation 5.58 8/27/99 0 0 95,463,401 95,463,401 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-51 WELLS FARGO FUNDS - PRIME INVESTMENT MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE PRIME MONEY MARKET PORTFOLIO, STAGECOACH PRIME MONEY MARKET FUND AND STAGECOACH MONEY MARKET FUND(a) NORWEST ADVANTAGE PRIME MONEY STAGECOACH STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 MARKET PRIME MONEY MONEY MARKET PRO FORMA INTEREST MATURITY PORTFOLIO MARKET FUND FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b)(d) VALUE(b) VALUES(b) 100,000,000 IBM Credit Corporation 4.67 10/29/99 0 39,984,537 59,976,805 99,961,342 50,000,000 JP Morgan & Company Incorporated 4.86 9/15/99 0 50,000,000 0 50,000,000 100,000,000 Keybank 5.36 10/14/99 60,002,552 0 0 60,002,552 50,000,000 Liberty Lighthouse U.S. Capital Company, LLC. 5.26 9/1/99 29,995,679 0 0 29,995,679 100,000,000 Liberty Lighthouse U.S. Capital Company, LLC. 5.26 9/9/99 59,990,952 0 0 59,990,952 100,000,000 Liberty Lighthouse U.S. Capital Company, LLC. 5.30 10/8/99 49,964,956 0 0 49,964,956 40,000,000 Medium Term Structured Enhanced Return Trust (STEERS), Series 1997 A-28 5.06 9/23/99 20,000,000 0 0 20,000,000 47,000,000 Medium Term Structured Enhanced Return Trust (STEERS), Series 1997 A-40 5.31 1/15/99 28,000,000 0 0 28,000,000 25,000,000 Merrill Lynch & Company, Incorporated 5.75 4/7/99 15,017,625 0 0 15,017,625 50,000,000 Morgan Guaranty Company 5.55 2/4/99 0 0 49,976,523 49,976,523 60,000,000 Morgan Guaranty Trust Company 5.71 1/8/99 0 59,997,626 0 59,997,626 40,000,000 Morgan Stanley Group, Incorporated 5.60 12/15/99 40,000,000 0 0 40,000,000 40,000,000 NationsBank Corporation 5.83 12/22/98 0 39,998,619 0 39,998,619 20,000,000 NationsBank Corporation 5.50 2/4/99 0 20,000,000 0 20,000,000 147,500,000 Sigma Finance Corporation 5.14 10/28/99 87,500,000 0 0 87,500,000 50,000,000 Structured Products Asset 5.47 5/24/99 30,000,000 0 0 30,000,000 100,000,000 Syndicated Loan Funding 5.78 12/15/99 60,000,000 0 0 60,000,000 $ 759,607,223 $ 579,968,304 $ 594,371,897 $ 1,933,947,424 VARIABLE AND FLOATING RATE BONDS $ 90,000,000 Abbey National 4.80% 7/15/99 $ 0 $ 89,964,645 $ 0 $ 89,964,645 50,000,000 Abbey National 5.64 7/15/99 0 0 50,092,307 50,092,307 60,000,000 Abbey National 4.80 7/15/99 0 0 59,976,430 59,976,430 150,000,000 Abbey National 4.79 7/26/99 0 0 149,917,663 149,917,663 65,000,000 Abbey National 5.26 8/17/99 0 0 64,964,485 64,964,485 50,000,000 Allstate Life Insurance Company 5.44 2/28/99 30,000,000 0 0 30,000,000 30,000,000 American Express Centurion 5.16 12/21/98 0 30,000,000 0 30,000,000 30,000,000 American Express Centurion 5.16 12/15/98 0 0 30,000,000 30,000,000 25,000,000 American Express Centurion 4.97 4/26/99 0 0 25,000,000 25,000,000 50,000,000 American Express Centurion 4.86 9/10/99 0 0 50,000,000 50,000,000 60,000,000 Bank America 5.60 1/12/99 0 0 60,000,000 60,000,000 78,000,000 CIT Group 4.82 1/27/99 0 0 77,990,255 77,990,255 100,000,000 CIT Group 4.82 2/10/99 0 0 99,990,535 99,990,535 97,000,000 Comerica Bank 5.13 12/14/98 0 0 96,999,351 96,999,351 74,000,000 Commercial Bank 5.16 7/13/99 0 39,985,485 33,987,662 73,973,147 99,300,000 FCC National Bank 5.45 3/10/99 0 0 99,300,000 99,300,000 50,000,000 FCC National Bank 5.67 6/1/99 0 0 49,970,170 49,970,170 125,000,000 Federal Home Loan Mortgage Corporation 4.95* 3/19/99 0 0 123,155,000 123,155,000 50,000,000 Federal Home Loan Mortgage Corporation 4.81* 4/6/99 0 0 49,165,250 49,165,250 50,000,000 Federal National Mortgage Association 4.85* 6/14/99 0 0 48,713,542 48,713,542 26,000,000 Federal National Mortgage Association 5.02* 8/19/99 0 0 25,986,335 25,986,335 120,000,000 First National Bank 5.05 4/8/99 0 0 120,000,000 120,000,000 85,000,000 First National Bank 4.87 9/28/99 0 30,000,000 55,000,000 85,000,000 180,000,000 First Union National Bank 5.35 9/9/99 0 0 180,000,000 180,000,000 75,000,000 First Union National Bank 5.25 9/17/99 0 0 75,000,000 75,000,000 50,000,000 Ford Motor Credit Corporation 4.95 12/23/98 0 49,999,126 0 49,999,126 100,000,000 Ford Motor Credit Corporation 4.96 1/7/99 0 60,000,000 40,000,000 100,000,000 200,000,000 General American Life Insurance Company, 5.40 3/20/30 115,000,000 0 0 115,000,000 19,000,000 Huntington National Bank 5.14 12/9/98 0 0 18,999,940 18,999,940 100,000,000 IBM Credit Corporation 4.79 2/22/99 0 0 99,985,576 99,985,576 50,000,000 JP Morgan & Company Incorporated 5.50 12/16/98 0 0 50,000,000 50,000,000 165,000,000 JP Morgan & Company Incorporated 4.86 9/15/99 0 0 165,000,000 165,000,000 100,000,000 Key Bank 5.14 12/15/98 0 49,999,816 49,999,816 99,999,632 200,000,000 Key Bank 4.83 10/4/99 0 74,975,375 124,958,959 199,934,334 80,000,000 Key Bank 4.88 10/13/99 0 0 79,971,675 79,971,675 150,000,000 Key Bank 4.88 10/14/99 0 0 149,987,272 149,987,272 100,000,000 Morgan Guaranty Trust Company 5.71 1/8/99 0 0 99,996,044 99,996,044 40,000,000 National Rural Utilities 5.23 11/23/99 0 40,000,000 0 40,000,000 60,000,000 Nations Bank 5.32 6/25/99 0 0 59,983,834 59,983,834 160,000,000 Nationsbank Corporation 5.83 12/22/98 0 0 159,994,477 159,994,477 140,000,000 Nationsbank Corporation 5.83 12/29/98 0 0 139,991,781 139,991,781 20,000,000 Nationsbank Corporation 5.50 2/4/99 0 0 20,000,000 20,000,000 75,000,000 NationsBank Corporation 4.83 4/27/99 0 74,991,240 0 74,991,240 40,000,000 Peoples Benefit Life Insurance Company 5.33 12/15/99 40,000,000 0 0 40,000,000 75,000,000 Pepsico Incorporated 5.21 8/19/99 0 0 74,936,834 74,936,834 30,000,000 Providian Life & Health Insurance Company 5.28 12/15/99 30,000,000 0 0 30,000,000 150,000,000 Royal Bank of Canada 4.79 2/9/99 0 0 149,980,438 149,980,438 100,000,000 Sigma Finance 5.08 8/23/99 0 25,000,000 75,000,000 100,000,000 90,000,000 Sigma Finance 5.13 8/26/99 0 35,000,000 65,000,000 100,000,000 2,000,000 Student Loan Mortgage Association 5.63 6/2/99 0 0 2,007,180 2,007,180 50,000,000 Transamerica Life Insurance & Annuity Company, 5.22 4/12/99 30,000,000 0 0 30,000,000 78,000,000 Wachovia Corporation 5.14 5/14/99 0 0 77,975,818 77,975,818 100,000,000 Walt Disney 4.87 2/10/99 0 0 99,995,247 99,995,247 $ 245,000,000 $ 599,915,687 $3,428,973,876 $ 4,273,889,563 MASTER NOTES $ 13,000,000 American General Finance, Incorporated $ 10,000,000 $ 0 $ 0 $ 10,000,000 20,000,000 General Electric Company 10,000,000 0 0 10,000,000 $ 20,000,000 $ 0 $ 0 $ 20,000,000 MUNICIPAL BONDS & NOTES $ 8,300,000 Durham, NC, COP, Series B, Wachovia Bank of North Carolina, LOC 4.87 7/1/03 $ 4,700,000 $ 0 $ 0 $ 4,700,000 11,225,000 Kalamazoo Funding Company, Old Kent Bank & Trust Company 5.15 12/15/26 5,715,000 0 0 5,715,000 7,310,000 New York City, GO 5.76 12/21/98 7,310,000 0 0 7,310,000 2,000,000 Prince William County, VA, Taxable Notes, Series A, Wachovia Bank of North Carolina, LOC 4.87 3/1/17 1,100,000 0 0 1,100,000 $ 18,825,000 $ 0 $ 0 $ 18,825,000 SHORT TERM FEDERAL AGENCIES $ 51,900,000 Federal Home Loan Mortgage Corporation 4.95*% 3/19/99 $ 0 $ 51,133,957 $ 0 $ 51,133,957 REPURCHASE AGREEMENTS $102,389,000 Goldman Sachs Pooled Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.25% 12/1/98 $ 0 $ 64,127,000 $ 38,262,000 $ 102,389,000 98,748,000 Morgan Stanley & Company Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.23 12/1/98 0 31,790,000 66,958,000 98,748,000 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-52 WELLS FARGO FUNDS - PRIME INVESTMENT MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR NORWEST ADVANTAGE PRIME MONEY MARKET PORTFOLIO, STAGECOACH PRIME MONEY MARKET FUND AND STAGECOACH MONEY MARKET FUND(a) NORWEST ADVANTAGE PRIME MONEY STAGECOACH STAGECOACH (UNAUDITED) NOVEMBER 30, 1998 MARKET PRIME MONEY MONEY MARKET PRO FORMA INTEREST MATURITY PORTFOLIO MARKET FUND FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b)(d) VALUE(b) VALUES(b) 13,637,000 JP Morgan Securities Incorporated Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.15 12/1/98 0 12,843,000 794,000 13,637,000 11,705,000 HSBC Securities Incorporated Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.15 12/1/98 0 3,420,000 8,285,000 11,705,000 291,029,855 NationsBanc Montgomery Securities, Incorporated, to be repurchased at $139,629,682 5.50 12/1/98 139,608,354 0 0 139,608,354 $ 139,608,354 $ 112,180,000 $ 114,299,000 $ 366,087,354 TIME DEPOSITS $190,000,000 Bank of America N.T. & S.A., Toronto Branch, 5.56 12/1/98 $ 190,000,000 $ 0 $ 0 $ 190,000,000 41,400,000 Banque Paribas, Toronto Branch, 5.63 12/1/98 41,400,000 0 0 41,400,000 150,000,000 Deutsche Bank AG, Toronto Branch, 6.00 12/1/98 150,000,000 0 0 150,000,000 75,000,000 Dresdner Bank AG, Toronto Branch, 5.56 12/2/98 75,000,000 0 0 75,000,000 $ 456,400,000 $ 0 $ 0 $ 456,400,000 0 INVESTMENTS IN SECURITIES PRIOR TO PRO FORMA ADJUSTMENTS $ 3,914,502,600 $3,223,637,444 $9,139,364,490 $16,277,504,534 PRO FORMA ADJUSTMENTS To Securities at Market Value $(3,033,739,515) $(2,697,621,511) $ 0 $(5,731,468,747) From Other Assets and Liablities from Core Portfolio 7,410,163 0 0 7,517,884 $(3,026,329,352)(c)$(2,697,621,511)(d)$ 0 $(5,723,950,863) TOTAL INVESTMENTS IN SECURITIES $ 888,173,248 $ 526,015,933 $9,139,364,490 $10,553,553,671 (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. (c) The Norwest Advantage Ready Cash Fund invests directly into and comprises 22.5% of the Norwest Prime Money Market Portfolio (d) The Class A shares of the Stagecoach Prime Money Market Fund comprise 17.7% of the Fund. * Yield to maturity. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-53 WELLS FARGO FUNDS - NATIONAL TAX-FREE MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 STAGECOACH NORWEST NATIONAL TAX-FREE ADVANTAGE MONEY MARKET MUNICIPAL MONEY PRO FORMA PRO FORMA FUND MARKET FUND ADJUSTMENTS ADJUSTMENTS (b)(c) ----------------------------------------------------------------------------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $90,560,966 $1,316,241,190 $(1,305,834,461) $100,967,695 Cash 568,855 446 (200,525) 368,776 Receivables: Dividends and Interest 681,381 11,554,729 (11,423,409) 812,701 Due from advisor 0 0 11,083 (d) 11,083 Organization expenses, net of amortization 17,096 0 (17,096)(d) 0 TOTAL ASSETS 91,828,298 1,327,796,365 102,160,255 LIABILITIES Payables: Distribution to shareholders 211,134 2,430,751 (2,426,971) 214,914 Due to distributor 24,272 36,997 (44,347) 16,922 Due to advisor 25,405 453,898 (448,261) 31,042 Other 130,498 3,841 (49,620) 84,719 TOTAL LIABILITIES 391,309 2,925,487 347,597 TOTAL NET ASSETS $91,436,989 $1,324,870,878 $101,812,658 NET ASSETS CONSIST OF: Paid-in capital $91,447,469 $1,326,197,247 $(1,315,782,678) $101,862,038 Undistributed net investment income (loss) 0 (198,272) 191,906 (6,366) Undistributed net realized gain (loss) on investments (10,480) (1,128,097) 1,095,563 (43,014) TOTAL NET ASSETS $91,436,989 $1,324,870,878 $101,812,658 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net assets - Class A $59,274,251 $ 42,538,407 $101,812,658 Shares outstanding - Class A 59,278,088 42,546,122 101,824,210 Net asset value and offering price per share - Class A $ 1.00 $ 1.00 $ 1.00 INVESTMENT AT COST $90,560,966 $1,316,241,190 $(1,305,834,461) $100,967,695 - --------------------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-54 WELLS FARGO FUNDS - NATIONAL TAX-FREE MONEY MARKET FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) STAGECOACH NORWEST NATIONAL TAX-FREE ADVANTAGE MONEY MARKET MASTER-FEEDER MUNICIPAL MONEY PRO FORMA PRO FORMA FUND ADJUSTMENTS (a) MARKET FUND ADJUSTMENTS (b)(c) COMBINED --------------------------------------------------------------------------------- INVESTMENT INCOME Interest $4,259,147 $38,737,459 42,996,606 Net expenses from master/core portfolios (3,237) 3,237 0 0 TOTAL INVESTMENT INCOME 4,255,910 38,737,459 42,996,606 EXPENSES Advisory fees 370,263 4,632 3,572,783 (3,843,319)(e) 104,359 Administration fees 85,198 1,112,876 (1,041,535)(e) 156,539 Custody fees 20,671 270 121,698 (121,767)(e) 20,872 Shareholder serv fees 145,309 0 115,589 (e) 260,898 Portfolio accounting fees 83,282 1,204 98,000 (102,486)(e) 80,000 Transfer agency fees 71,573 1,135,824 (1,183,813)(e) 23,584 Distribution fees 10,693 0 (10,693)(e) 0 Organization costs 8,801 12 0 (12)(e) 8,801 Legal and audit fees 31,054 243 30,294 (45,581)(e) 16,010 Registration fees 55,058 152,139 0 207,197 Directors' fees 3,802 13,737 (11,110)(e) 6,429 Shareholder reports 56,951 33,467 (56,224)(e) 34,194 Other 20,376 29 40,547 (47,140)(e) 13,812 TOTAL EXPENSES 963,031 6,311,365 932,696 Less: Waived fees and reimbursed expenses fees (356,557) (3,153) (1,418,068) 1,575,597 (f) (202,182) NET EXPENSES 606,474 4,893,297 730,514 NET INVESTMENT INCOME (LOSS) 3,649,436 33,844,162 42,266,092 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on sale of investments (3,692) 6,814 3,122 NET GAIN (LOSS) ON INVESTMENTS (3,692) 6,814 3,122 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $3,645,744 $33,850,976 $42,269,214 - ---------------------------------------------------------------------------------------------------------------------------------- * The Class A of the Stagecoach National Tax-Free Money Market Fund and Class A of the Norwest Advantage Municipal Money Market Fund are merging to form the Wells Fargo National Tax-Free Money Market Fund, historical accounting data from the Norwest Advantage Municipal Money Market Fund will be kept. (a) Information shown prior to December 12, 1997, is for the Stagecoach National Tax-Free Money Market Fund which was a 'Feeder Fund' investing in a "Master Portfolio", the National Tax-Free Money Market Master Portfolio, and the expenses allocated to the Feeder have been disbursed according to the percentage of each expense at the Master Portfolio level. On December 12, 1997, the Fund merged with the Overland National Tax-Free Institutional Money Market Fund, the National Tax-Free Money Market Master Portfolio was dissolved. (b) The Class A shares of the Stagecoach National Tax-Free Money Market Fund comprise 64.8% of the Fund's net assets. The remaining 35.2% of the Fund Institutional Class's net assets represent Institutional Class shares of the Stagecoach National Tax-Free Money Market Fund. Such Insituttional Class shares will be exchanged for shares of a different fund in a separate organization. Accordingly the net assets attributable to Institutional Class shares have been removed as an adjustment for purposes of this pro forma financial statement. (c) The Class A shares of the Norwest Advantage Municipal Money Market Fund comprise 3.2% of the Fund's net assets. The remaining 96.8% of the Fund's net assets represent Institutional Class shares of the Norwest Advantage Municipal Money Market Fund. Such Institutional Class shares will be exchangeable for shares of a different fund in a separate reorganization. Acordingly the net assets attributable to Institutional Class shares have been removed as an adjustment for purposes of this pro forma financial statement. (d) Wells Fargo Bank will absorb the balance of unamortized organizational costs from Funds which are not accounting survivors. (e) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (f) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-55 \ WELLS FARGO FUNDS - NATIONAL TAX-FREE MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) ALASKA $ 4,900,000 Anchorage, AK, Higher Education RV, Alaska Pacific University, First National Bank, LOC 3.20% 7/1/17 $ 0 $ 4,900,000 $ 4,900,000 3,500,000 North Slope Boro, AK, GO Bonds, Series B, FSA insured 6.10 6/30/99 0 3,548,224 3,548,224 $ 0 $ 8,448,224 $ 8,448,224 ARIZONA $ 2,000,000 Arizona School District COP Series A 4.10% 7/30/99 $ 2,006,782 $ 0 $ 2,006,782 4,400,000 Chandler, AZ, IDA Bonds, Parsons Municipal Services, Inc., National Westminster Bank, USA, LOC 3.25 12/15/09 0 4,400,000 $ 4,400,000 2,000,000 Maricopa AZ CP 3.50 12/15/98 2,000,000 0 2,000,000 2,755,000 Salt River AZ Agricultural Improvement & Power District Series A 7.00 1/1/99 2,762,705 0 2,762,705 $ 6,769,487 $ 4,400,000 $ 11,169,487 ARKANSAS $ 1,000,000 Little Rock, AR, IDR Bonds, GTD by CPC International 4.96% 12/1/03 $ 0 $ 1,000,000 $ 1,000,000 CALIFORNIA $ 500,000 California HFFA Revenue Series C 3.00% 7/1/22 $ 500,000 $ 0 $ 500,000 2,000,000 California Higher Education Student Loan Revenue Series E-5 3.80 12/1/25 2,000,000 0 2,000,000 15,000,000 California School Cash Reserve Program Authority, Revenue Notes, Series A 4.50 7/2/99 0 15,064,075 15,064,075 1,250,000 California Statewide GO 3.00 8/15/27 1,250,000 0 1,250,000 $ 3,750,000 $ 15,064,075 $ 18,814,075 COLORADO $ 1,200,000 Colorado HFFA Revenue Series C MBIA Insured 3.15% 10/1/14 $ 1,200,000 $ 0 $ 1,200,000 5,700,000 Denver, CO, City & County Apartment RV, Sub-Series B, Westdeutsche Landesbank, LOC 3.10 12/1/20 0 5,700,000 5,700,000 2,500,000 Lowry, CO, Economic Redevelopment Authority RV, Series B, Canadian Imperial Bank, LOC 3.15 12/1/20 0 2,500,000 2,500,000 1,700,000 Moffat County, CO, PCR Bonds, AMBAC insured 3.20 7/1/10 0 1,700,000 1,700,000 1,930,000 Parkview Metropolitan District, CO, Arapahoe County, GO Bonds, Central Bank, LOC 3.25 12/1/12 0 1,930,000 1,930,000 $ 1,200,000 $ 11,830,000 $ 13,030,000 CONNECTICUT $ 3,000,000 Connecticut State Development Authority, Industrial Development RV, GTD by General Accident Insurance 3.75% 12/1/13 $ 0 $ 3,000,000 $ 3,000,000 2,870,000 Connecticut State HFA 3.05 5/15/18 2,870,000 0 2,870,000 $ 2,870,000 $ 3,000,000 $ 5,870,000 DISTRICT OF COLUMBIA 17,700,000 District of Columbia RV, George Washington University, First National Bank of Chicago, LOC 3.20% 3/1/06 $ 0 $ 17,700,000 $ 17,700,000 FLORIDA $ 500,000 Dade County FL MFHR 3.10% 7/1/06 $ 500,000 $ 0 $ 500,000 2,000,000 Dade County, FL, IDA RV, GTD by ADP, Inc. 3.53 11/15/17 0 2,000,000 2,000,000 8,120,000 Florida HFA, MFHR Bonds, Country Club Project, Bankers Trust, LOC 3.20 12/1/07 0 8,120,000 8,120,000 7,140,000 Florida HFA, MFHR Bonds, First Union National Bank, LOC, mandatory put 11/1/99 @ 100 3.00 11/1/07 0 7,140,000 7,140,000 1,710,000 Florida HFA, MFHR Bonds, South Trust Alabama, LOC 3.25 6/1/07 0 1,710,000 1,710,000 1,600,000 Hillsborough County, FL, IDA, Port Facilities RV, Seaboard System Railroad, Inc. Project, National Bank Detroit, LOC 3.25 10/15/99 0 1,600,000 1,600,000 1,000,000 Indian River FL CP 3.60 1/7/99 1,000,000 0 1,000,000 18,900,000 Laurel Club Certificate Trust, COP, Series A, Swiss Bank, LOC 3.30 6/1/25 0 18,900,000 18,900,000 3,500,000 Palm Beach FL CP 3.40 12/3/98 3,500,000 0 3,500,000 $ 5,000,000 $ 39,470,000 $ 44,470,000 GEORGIA $ 2,695,000 Fulton County, GA, IDR Bonds, GTD by ADP 3.25% 9/1/12 $ 0 $ 2,695,000 $ 2,695,000 700,000 Georgia Municipal Gas Authority Revenue 3.05 11/1/06 700,000 0 700,000 3,995,000 Georgia Municipal Gas CP 3.35 12/1/98 3,995,000 0 3,995,000 1,000,000 Georgia State Municipal Electric Authority 3.55 1/7/99 1,000,000 0 1,000,000 6,000,000 Marietta, GA, MFHR Bonds, Falls at Bells Ferry, Guardian Savings & Loan, LOC, optional put 1/15/99 @ 100 3.95 1/15/09 0 6,000,717 6,000,717 $ 5,695,000 $ 8,695,717 $ 14,390,717 HAWAII $ 4,950,000 Hawaii State Department of Budget & Finance, Special Purpose Mortgage RV, Kuakini Medical Center Project, Bank of Hawaii, LOC 3.20% 7/1/04 $ 0 $ 4,950,000 $ 4,950,000 ILLINOIS $ 1,000,000 Bedford Park, IL, IDR Bonds, CPC International, Inc. Project, GTD by Firemen's Insurance Co. 4.96% 11/1/08 $ 0 $ 1,000,000 $ 1,000,000 4,000,000 Chigago, IL, GO Bonds, Equipment Notes, Harris Trust & Savings, LOC, mandatory tender 12/3/98 @100 3.60 1/1/06 0 4,000,000 4,000,000 1,000,000 Chicago, IL, GO Bonds, Greater Chicago Metropolitan Water Reclamation District 4.15 12/1/99 0 1,010,698 1,010,698 6,135,000 Chicago, IL, GO Bonds, Morgan Guaranty, LOC, mandatory tender 2/4/99 @100 3.55 1/31/00 0 6,135,000 6,135,000 15,000,000 Chicago, IL, GO Bonds, Series PT 1054 3.30 1/1/28 0 15,000,000 15,000,000 15,000,000 Chicago, IL, Sales Tax RV, Floating Rate Receipts, Series SSP-9 3.35 1/1/27 0 15,000,000 15,000,000 3,885,000 Cook County, IL, Municipal Trust Receipts, Series SG-7, MBIA insured 3.30 11/15/23 0 3,885,000 3,885,000 890,000 Illinois Development Finance Authority, Development RV, North Wacker Drive 3.75 12/1/15 0 890,000 890,000 6,000,000 Illinois Development Finance Authority, MFHR Bonds, Garden Glen Apartments, GTD by Continental Casualty Co. 3.30 12/1/13 0 6,000,000 6,000,000 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-56 WELLS FARGO FUNDS - NATIONAL TAX-FREE MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) 15,000,000 Illinois Development Finance Authority, Pollution Control RV, Illinois Power Co. Project, Series C, ABN AMRO Bank N.V., LOC, mandatory put 8/26/99 @ 100 3.00 11/1/28 0 15,000,000 15,000,000 15,000,000 Illinois EFA RV, Cultural Pool, American National Bank & Trust, LOC 3.15 3/1/28 0 15,000,000 15,000,000 2,170,000 Illinois EFA RV, Cultural Pool, First National Bank of Chicago, LOC 3.15 12/1/25 0 2,170,000 2,170,000 6,400,000 Illinois EFA RV, John F. Kennedy Healthcare Foundation, LaSalle National Bank, LOC, mandatory put 5/11/99 @ 100 3.60 12/1/25 0 6,400,000 6,400,000 8,200,000 Illinois Health Facilities Authority RV 3.30 4/1/07 0 8,200,000 8,200,000 10,000,000 Illinois Health Facilities Authority RV, Evanston Hospital Corp., mandatory put 7/15/99 @ 100 3.70 8/15/30 0 10,000,000 10,000,000 3,495,000 Illinois Health Facilities Authority RV, Health Care, Series PA 195, AMBAC insured 3.35 8/1/17 0 3,495,000 3,495,000 6,930,000 Illinois Housing Development Authority RV, Homeowner Mortgage, Subseries D-1, mandatory put 6/29/99 @ 100 3.80 8/1/17 0 6,930,000 6,930,000 3,170,000 Illinois Housing Development Authority RV, Homeowner Mortgage, Subseries E-1 3.70 12/17/98 0 3,170,000 3,170,000 6,800,000 Lombard, IL, IDR Bonds, 2500 Highland Avenue, Mid-America Federal Savings & Loan, LOC 3.60 12/1/06 0 6,800,000 6,800,000 9,870,000 Lombard, IL, MFHR Bonds, Clover Creek Apartments, Continental Casualty Surety Bond, LOC, mandatory put 12/15/98 @ 100 4.00 12/15/06 0 9,870,000 9,870,000 5,200,000 Mount Morris, IL, Housing RV, Brethren Home Project, La Salle National Bank, Chicago, LOC 3.15 6/1/27 0 5,200,000 5,200,000 11,500,000 Oak Forest, IL, Other RV, Homewood Pool, First National Bank of Chicago, LOC 3.15 7/1/24 0 11,500,000 11,500,000 19,970,000 Regional Transportation Authority, IL, Transportation RV 3.30 6/1/24 0 19,970,000 19,970,000 2,000,000 South Barrington, IL, GO Bonds, Cook County, Harris Trust, LOC 3.15 12/1/15 0 2,000,000 2,000,000 4,100,000 Springfield, IL, Transportation RV, GTD by Allied Signal 3.25 10/15/16 0 4,100,000 4,100,000 1,500,000 Will & Kendall Counties, IL, GO Bonds, Community Consolidated SD #202, Series A, FSA insured, 6.38 12/30/98 0 1,503,137 1,503,137 8,700,000 Will County, IL, GO Bonds, Forest Preservation District, AMBAC insured, P/R 12/1/98 @ 102 7.63 12/1/08 0 8,874,000 8,874,000 $ 0 $ 193,102,835 $ 193,102,835 INDIANA $ 1,000,000 Gary, IN, Environmental Improvement, PCR Bonds, U.S. Steel Group Project, Bank of Nova Scotia, LOC 3.25% 7/15/02 $ 0 $ 1,000,000 $ 1,000,000 2,000,000 Indiana Bond Bank, Construction Loan RV 4.13 8/1/99 0 2,014,614 2,014,614 12,000,000 Indiana Health Facility Financing Authority RV, St. Anthony Medical Center 3.15 12/1/17 0 12,000,000 12,000,000 2,500,000 Indiana HFFA Revenue 3.10 1/1/22 2,500,000 0 2,500,000 18,200,000 Indiana Hospital Equipment Financing Authority RV, Series A, MBIA insured 3.20 12/1/15 0 18,200,000 18,200,000 4,865,000 Indiana State Development Financial Authority, Educational Facilities RV, Lutheran Project, First of America, LOC 3.30 10/1/17 0 4,865,000 4,865,000 8,000,000 Indiana State Educational Facilities Authority, Educational Facilities RV, Indiana Wesleyan University, NBD, LOC 3.15 6/1/28 0 8,000,000 8,000,000 3,600,000 Indianapolis, IN, EDA RV, Visiting Nurse Service Foundation, First of America, LOC 3.30 3/1/13 0 3,600,000 3,600,000 $ 2,500,000 $ 49,679,614 $ 52,179,614 IOWA $ 4,600,000 Des Moines, IA, IDR Bonds, Grand Office Park, GTD by Principal Mutual Life 3.20% 4/1/15 $ 0 $ 4,600,000 $ 4,600,000 10,600,000 Iowa Finance Authority RV, Obligation Group, FSA insured 3.25 6/1/27 0 10,600,000 10,600,000 1,000,000 Iowa Finance Authority, SFM RV, Series A, FGIC insured, mandatory put 2/24/99 @ 100 3.65 1/1/24 0 1,000,000 1,000,000 4,635,000 Iowa State School Cash Anticipitory Program, Warrants Certificates, Iowa School Corp., Series A, FSA insured 4.50 6/25/99 0 4,656,947 4,656,947 4,000,000 Urbandale, IA, IDR Bonds, Aurora Business Park Association Project, GTD by Principal Mutual Life Insurance 3.20 10/1/15 0 4,000,000 4,000,000 6,000,000 Urbandale, IA, IDR Bonds, Interstate Acres L.P. Project, GTD by Pricipal Mutual Life Insurance 3.35 12/1/14 0 6,000,000 6,000,000 4,605,000 Urbandale, IA, IDR Bonds, Meredith Drive Association Project, GTD by Principal Mutual Life Insurance 3.20 11/1/15 0 4,605,000 4,605,000 $ 0 $ 35,461,947 $ 35,461,947 KANSAS $ 2,660,000 Lawrence, KS, GO Notes, Series 1998-II 3.45% 10/1/99 $ 0 2,660,000 2,660,000 1,200,000 Prairie Village, KS, MFHR Bonds, J.C. Nichols Co. Project, GTD by Principal Mutual Life Insurance 3.20 12/1/15 0 1,200,000 1,200,000 $ 0 $ 3,860,000 $ 3,860,000 KENTUCKY $10,000,000 Jefferson County, KY, Anticipitory Revenue Notes, Board of Education, Series N 3.66% 6/30/99 $ 0 $ 10,001,109 $ 10,001,109 9,100,000 Jefferson County, KY, MFHR Bonds, Canter Chase, First of America, LOC 3.30 12/1/26 0 9,100,000 9,100,000 6,800,000 Kentucky Asset/Liability Community General Fund, Revenue Notes 3.50 11/1/99 0 6,833,316 6,833,316 3,300,000 Kentucky Higher Education Student Loan Corporation 3.20 6/1/26 3,300,000 0 3,300,000 7,300,000 Kentucky Infrastructure Authority, Revenue Notes, Series A, PNC Bank N.A., LOC 3.35 6/30/00 0 7,300,000 7,300,000 7,745,000 Kentucky State Turnpike Authority RV, Resource Recovery Road, Series 17, FSA insured 3.45 7/1/03 0 7,745,000 7,745,000 3,000,000 Mayfield, KY, Multi-City Lease RV, PNC Bank, LOC 3.25 7/1/26 0 3,000,000 3,000,000 2,000,000 University of Kentucky, University RV, Consolidated Educational Buildings, MBIA insured 4.50 5/1/99 0 2,006,008 2,006,008 $ 3,300,000 $ 45,985,433 $ 49,285,433 LOUISIANA $ 1,000,000 De Soto Parish LA PCR 3.10% 7/1/18 $ 1,000,000 $ 0 $ 1,000,000 1,535,000 Louisana Public Facilities Authority, Advance Funding Revenue Notes, Series B, American International Group insured 3.35 10/25/99 0 1,535,000 1,535,000 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-57 WELLS FARGO FUNDS - NATIONAL TAX-FREE MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) 2,060,000 Louisiana Public Facilities Authority, Advance Funding Notes, School Board, Series D 4.40 12/10/98 0 2,060,279 2,060,279 1,980,000 Louisiana Public Facilities Authority, Advance Funding Revenue Notes, Series D, American International Group insured 3.35 10/25/99 0 1,980,000 1,980,000 9,300,000 West Baton Rouge Parish, LA, Industrial District #3 RV, Dow Chemical Co., Series B 3.40 12/1/16 0 9,300,000 9,300,000 $ 1,000,000 $ 14,875,279 $ 15,875,279 MARYLAND $ 2,000,000 Community Development Revenue 3.10% 6/15/26 $ 2,000,000 $ 0 $ 2,000,000 1,500,000 Howard County MD MFHR 3.10 6/15/26 1,500,000 0 1,500,000 7,000,000 Howard County, MD, MFHR Bonds, Sherwood Crossing Ltd. Project, Guardian Savings & Loan, LOC, mandatory put 6/1/99 @ 100 3.85 6/1/15 0 7,000,000 7,000,000 2,500,000 Maryland State HFFA Revenue 3.15 12/1/15 2,500,000 0 2,500,000 2,500,000 Maryland State Industrial Authority, Economic Development RV, Johnson Controls, Inc., LOC 3.50 12/1/03 0 2,500,000 2,500,000 $ 6,000,000 $ 9,500,000 $ 15,500,000 MASSACHUSETTS 15,500,000 Massachusetts State HFA, Housing RV, Series A10 3.45% 6/1/14 $ 0 $ 15,500,000 $ 15,500,000 MICHIGAN $ 5,000,000 Detroit, MI, School Aid GO Notes, City School District 4.50% 7/1/99 $ 0 $ 5,023,797 $ 5,023,797 1,700,000 Grand Rapids MI GO 3.05 1/1/20 1,700,000 0 1,700,000 11,335,000 Grand Rapids MI, Water Supply RV, 3.45% V/R, 1/1/15 3.45 1/1/15 0 11,335,000 11,335,000 3,500,000 Michigan State Hospital Finance Authority RV, Hospital Equipment Loan Program, Series A, First of America, LOC 3.25 12/1/23 0 3,500,000 3,500,000 2,200,000 Michigan State Hospital Finance Authority RV, Hospital Equipment Loan Program, Series A, First of America, LOC 3.25 12/1/23 0 2,200,000 2,200,000 $ 1,700,000 $ 22,058,797 $ 23,758,797 MINNESOTA $ 5,715,000 Cohasset, MN, RV, Minnesota Power & Light Co., Series B, ABN AMRO Bank N.V., LOC 3.25% 6/1/13 $ 0 $ 5,715,000 $ 5,715,000 5,000,000 Crystal, MN, MFHR Bonds, Crystal Apartments L.P. Project 3.35 5/1/27 0 5,000,000 5,000,000 1,000,000 Hennepin County, MN, GO Notes 4.13 12/1/99 0 1,011,081 1,011,081 4,900,000 Mankato, MN, MFHR Bonds, Highland Hills Project, First Bank, LOC 3.35 5/1/27 0 4,900,000 4,900,000 2,465,000 Minnesota SD, Tax & Aid COP, Anticipatory Borrowing Program, Series A 3.67 8/20/99 0 2,465,000 2,465,000 5,000,000 Minnesota SD, Tax & Aid COP, Anticipatory Borrowing Program, Series B 3.90 3/4/99 0 5,004,307 5,004,307 5,000,000 Minnesota SD, Tax & Aid COP, Anticipatory Borrowing Program, Series B 3.63 8/27/99 0 5,000,000 5,000,000 4,000,000 Minnesota State HFA, SFM RV, Series F 3.65 1/1/17 0 4,000,000 4,000,000 5,000,000 Minnesota State HFA, SFM RV, Series G, P/R 12/1/98 @ 100 4.15 1/1/18 0 5,000,000 5,000,000 1,705,000 St. Paul, MN, Housing & Redevelopment Authority, Commercial Development RV, Park Development Association Project, First Star Milwaukee, LOC 3.45 12/1/15 0 1,705,000 1,705,000 15,300,000 St. Paul, MN, Housing & Redevelopment Authority, Heating RV, St. Paul Energy District, remarketed 1/3/94 3.30 12/1/12 0 15,300,000 15,300,000 1,000,000 St. Paul, MN, Port Authority IDR Bonds, Texas Project, Series A, U.S. Bank N.A., LOC 3.30 6/1/10 0 1,000,000 1,000,000 3,500,000 St. Paul, MN, Sewer RV, Series A, AMBAC insured, crossover refunding 12/1/98 @ 101 8.00 12/1/08 0 3,535,000 3,535,000 2,700,000 Stillwater, MN, GO Bonds, ISD #834, FGIC insured, crossover refunding 2/1/99 @ 100 6.75 2/1/09 0 2,713,201 2,713,201 $ 0 $ 62,348,589 $ 62,348,589 MISSISSIPPI $ 1,430,000 Shaw, MS, Urban Renewal RV, Phase I Redevelopment Project, Sunlife of America, LOC, mandatory put 12/28/98 @ 100 4.40% 12/28/18 $ 0 $ 1,430,668 $ 1,430,668 MISSOURI $ 6,700,000 Independence, MO, IDA RV, Groves & Graceland Project, Series A, Credit Local de France, LOC 3.25% 11/1/27 $ 0 $ 6,700,000 $ 6,700,000 1,300,000 Kansas City, MO, IDA RV, Ewing Marion Kauffman, Series A 3.30 4/1/27 0 1,300,000 1,300,000 13,975,000 Kansas City, MO, IDA, MFHR Bonds, Coach House II Project, GTD by Principal Mutual Life Insurance 3.20 12/1/15 0 13,975,000 13,975,000 2,200,000 Kansas City, MO, IDA, MFHR Bonds, JC Nichols Co. Project, GTD by Principal Mutual Life Insurance 3.20 5/1/15 0 2,200,000 2,200,000 1,250,000 Missouri State Health & Educational Facilities Authority Revenue Christian Health Services Series A 3.05 11/1/19 1,250,000 0 1,250,000 5,000,000 Missouri State HEHFA Anticipation Notes, Series E 4.25 4/7/99 0 5,008,890 5,008,890 900,000 Missouri State HEHFA Anticipation Notes, Series H 4.25 4/7/99 0 901,600 901,600 8,190,000 Missouri State HEHFA RV, St. Francis Medical Center, Series A, Credit Local de France, LOC 3.25 6/1/26 0 8,190,000 8,190,000 $ 1,250,000 $ 38,275,490 $ 39,525,490 MONTANA $ 7,200,000 Montana State Board of Investments, Municipal Finance Construction RV, Intercap Program 3.60% 3/1/09 $ 0 7,208,438 7,208,438 10,000,000 Montana State Board of Investments, Municipal Finance Construction RV, Intercap Program 3.60 3/1/18 0 10,000,000 10,000,000 $ 0 $ 17,208,438 $ 17,208,438 NEBRASKA $ 1,980,000 Nebraska Investment Financial Authority RV, Catholic Health Initiatives, Series A 4.25% 12/1/98 $ 0 $ 1,980,000 $ 1,980,000 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-58 WELLS FARGO FUNDS - NATIONAL TAX-FREE MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) 1,900,000 Norfolk, NE, IDR Bonds, Supervalu Inc. Project, Wachovia Bank of Georgia, LOC 3.30 11/1/14 0 1,900,000 1,900,000 $ 0 $ 3,880,000 $ 3,880,000 NEVADA $ 6,500,000 Clark County, NV, GO Bonds, FGIC insured 6.90% 9/1/99 $ 0 $ 6,679,391 $ 6,679,391 3,775,000 Henderson, NV, Health Care Facilities RV, PT 134, AMBAC insured 3.35 7/1/20 0 3,775,000 3,775,000 5,000,000 Nevada State Trust Receipts, GO Bonds, Series 36 D 3.45 11/1/25 0 5,000,000 5,000,000 $ 0 $ 15,454,391 $ 15,454,391 NEW JERSEY $ 9,800,000 Hudson County, NJ, COP, Correctional Facilities, BIG insured, P/R 12/1/98 @ 102 7.60% 12/1/21 $ 0 $ 9,996,000 $ 9,996,000 2,400,000 New Jersey State Educational Facilities Authority RV, Series SG 48, MBIA insured 3.25 7/1/26 0 2,400,000 2,400,000 $ 0 $ 12,396,000 $ 12,396,000 NEW MEXICO $ 2,500,000 Bloomfield, NM, GO Bonds, Series A, La Salle National Bank, LOC 3.35% 11/15/10 $ 0 $ 2,500,000 $ 2,500,000 2,760,000 Espanola, NM, Health Care RV, Series A, La Salle National Bank, LOC 3.35 11/15/10 0 2,760,000 2,760,000 7,995,000 Farmington, NM, PCR RV 3.35 12/1/16 0 7,995,000 7,995,000 1,000,000 New Mexico State Severance Tax RV, Series B 5.00 7/1/99 0 1,007,475 1,007,475 1,735,000 Silver City, NM, GO Bonds, Series A, La Salle National Bank, LOC 3.35 11/15/10 0 1,735,000 1,735,000 $ 0 $ 15,997,475 $ 15,997,475 NEW YORK $ 9,700,000 Allegany-Limestone, NY, GO Bonds, Century SD 4.00% 1/29/99 $ 0 $ 9,704,672 $ 9,704,672 16,235,000 Long Island, NY, Power Authority RV, New York Electrical System 3.35 12/1/11 0 16,235,000 16,235,000 11,340,000 Long Island, NY, Power Authority RV, New York Electrical System 3.35 12/1/12 0 11,340,000 11,340,000 8,600,000 Long Island, NY, Power Authority RV, New York Electrical System 3.35 12/1/13 0 8,600,000 8,600,000 3,500,000 New York NY GO 2.95 2/15/26 3,500,000 0 3,500,000 1,500,000 New York NY GO 2.90 2/15/26 1,500,000 0 1,500,000 1,000,000 New York NY GO 2.90 11/15/19 1,000,000 0 1,000,000 6,995,000 New York State Dormitory Authority RV, Floater Trusts 3.30 5/15/15 0 6,995,000 6,995,000 8,425,000 New York State Dormitory Authority RV, Floater Trusts 3.30 2/15/28 0 8,425,000 8,425,000 11,335,000 New York State Dormitory Authority RV, Floater Trusts 3.30 8/1/32 0 11,335,000 11,335,000 12,050,000 New York State Dormitory Authority RV, Floater Trusts, AMBAC insured 3.40 7/1/25 0 12,050,000 12,050,000 5,200,000 New York State Dormitory Authority, Municipal Securities Receipts RV, Series CMC1B 3.20 2/15/08 0 5,200,000 5,200,000 3,900,000 New York State Dormitory Authority, Municipal Securities Receipts RV, Series CMC2A 3.20 2/1/06 0 3,900,000 3,900,000 3,900,000 New York State Dormitory Authority, Municipal Securities Receipts RV, Series CMC2B 3.20 2/1/07 0 3,900,000 3,900,000 3,000,000 New York State Government Assistance 2.95 4/1/23 3,000,000 0 3,000,000 2,500,000 New York State Local Government Assistance Corp.,RV, Series SG 99, AMBAC insured 3.30 4/1/11 0 2,500,000 2,500,000 3,130,000 New York State Medical Care Facilities Finance Agency, Health Care RV 3.30 2/15/27 0 3,130,000 3,130,000 6,620,000 New York State Medical Care Facilities Finance Agency, Health Care RV, FHA insured, mandatory put 12/3/98 @ 100 3.90 2/15/05 0 6,620,000 6,620,000 6,545,000 New York State Medical Care Facilities Finance Agency, Health Care RV, FHA insured, mandatory put 12/3/98 @ 100 3.90 2/15/05 0 6,545,000 6,545,000 8,960,000 New York State Medical Care Facilities Finance Agency, Health Care RV, mandatory put 12/3/98 @100 3.90 2/1/13 0 8,960,000 8,960,000 9,995,000 New York State, Development RV, Urban Development Corp., Series PT 147, Hypo Bayersche Bank, LOC 3.30 7/1/16 0 9,995,000 9,995,000 60,000,000 New York, NY, Series A78 2.90 4/13/99 0 60,000,000 60,000,000 3,895,000 New York, NY, Series PA 278 3.40 8/1/12 0 3,895,000 3,895,000 11,985,000 New York, NY, Series PT 1038 3.35 8/1/16 0 11,985,000 11,985,000 1,000,000 Suffolk County NY IDA 2.70 2/1/07 1,000,000 0 1,000,000 3,325,000 Triborough Bridge & Tunnel Authority, NY, Transportation RV, PA 200 3.30 1/1/12 0 3,325,000 3,325,000 $ 10,000,000 $ 214,639,672 $ 224,639,672 NORTH CAROLINA $ 600,000 North Carolina CP 3.60% 1/4/99 $ 600,000 $ 0 $ 600,000 2,000,000 North Carolina CP 3.35 12/1/98 2,000,000 0 2,000,000 250,000 North Carolina CP 3.15 6/1/22 250,000 0 250,000 3,000,000 Person County, NC, Industrial Facilities & Pollution Control Financing Authority, PCR Bonds, GTD by Carolina Power & Light Co. 3.25 11/1/19 0 3,000,000 3,000,000 2,000,000 Wake County GO 3.25 9/1/15 2,000,000 0 2,000,000 $ 4,850,000 $ 3,000,000 $ 7,850,000 NORTH DAKOTA $ 1,500,000 Bismarck, ND, IDR Bonds, Supervalu Inc. Project, Wachovia Bank & Trust, LOC 3.30% 4/1/09 $ 0 $ 1,500,000 $ 1,500,000 OHIO $ 6,700,000 Cincinnati, OH, GO Notes 4.38% 12/1/99 0 6,791,940 6,791,940 1,650,000 Erie County, OH, GO Bonds 4.25 6/1/99 0 1,653,957 1,653,957 1,000,000 Franklin County, OH, Convention Facilities Authority Tax & Lease RV 6.70 12/1/99 0 1,036,649 1,036,649 5,200,000 Hamilton County, OH, IDR Bonds, Community Urban Redevelopment Project, National Westminster, LOC 3.15 10/15/12 0 5,200,000 5,200,000 1,000,000 Ohio State Air Quality Control CP 3.55 1/7/99 1,000,000 0 1,000,000 10,000,000 Ohio State Water Development Authority, PCR Bonds, First National Bank of Chicago, LOC, mandatory put 1/29/99 @ 100 3.20 10/1/28 0 10,000,000 10,000,000 4,400,000 Wooster, OH, IDR Bonds, Allen Group Inc., NBD, LOC 3.40 12/1/10 0 4,400,000 4,400,000 1,000,000 Worthington, OH, GO Bonds, City SD, FGIC insured 3.65 12/1/98 0 1,000,000 1,000,000 $ 1,000,000 $ 30,082,546 $ 31,082,546 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-59 WELLS FARGO FUNDS - NATIONAL TAX-FREE MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) OKLAHOMA $ 2,615,000 Oklahoma County, OK, Finance Authority, IDR Bonds, Perrine Office Project, FGIC insured 3.20% 12/1/14 $ 0 $ 2,615,000 $ 2,615,000 2,625,000 Oklahoma County, OK, IDR Bonds, Carbon Office, FGIC insured 3.20 12/1/14 0 2,625,000 2,625,000 $ 0 $ 5,240,000 $ 5,240,000 OREGON $ 9,350,000 Klamath Falls, OR, Electric RV, Salt Caves Hydroelectric, mandatory put 5/3/99 @ 100 3.80% 5/1/23 $ 0 $ 9,355,565 $ 9,355,565 1,225,000 Multnomah County OR COP 6.50 12/15/98 1,225,502 0 1,225,502 1,000,000 Multnomah County OR School District #1J 6.60 12/15/98 1,000,397 0 1,000,397 7,100,000 Oregon State HEHFA RV, Quatama Crossing Housing Project, U.S. Bank N.A., LOC 3.10 1/1/31 0 7,100,000 7,100,000 $ 2,225,899 $ 16,455,565 $ 18,681,464 PENNSYLVANIA $11,600,000 Allegheny County, PA, IDR Bonds, Longwood at Oakmont Inc., Dresdner Bank AG, LOC 3.25% 7/1/27 $ 0 $ 11,600,000 $ 11,600,000 9,000,000 Allegheny County, PA, PCR Bonds 3.30 1/22/99 0 9,000,000 9,000,000 1,000,000 Berks County, PA, IDR Bonds, GTD by CNA Insurance 3.25 7/1/16 0 1,000,000 1,000,000 1,100,000 Butler County, PA, IDA, PCR Bonds, Pennzoil Co. Project, Mellon Bank, LOC 3.45 12/1/12 0 1,100,000 1,100,000 5,245,000 Chartiers Valley, PA, Industrial & Commercial Development Authority, IDR Bonds, GTD by ADP, Inc. 4.30 11/15/17 0 5,245,000 5,245,000 28,400,000 Harrisburg, PA, Authority RV, Adjusted PA Pool Financing Fund 3.30 7/1/21 0 28,400,000 28,400,000 2,590,000 Pennsylvania Intergovernmental Cooperative Authority, Special Tax RV, MBIA insured 3.25 6/15/23 0 2,590,000 2,590,000 5,500,000 Quakertown, PA, Health Care RV, Hospital Group Pooled Financing, PNC Bank, LOC 3.25 7/1/05 0 5,500,000 5,500,000 4,100,000 Quakertown, PA, Health Care RV, Hospital Group Pooled Financing, Series A, PNC Bank, LOC 3.25 7/1/26 0 4,100,000 4,100,000 $ 0 $ 68,535,000 $ 68,535,000 PUERTO RICO $ 2,000,000 Puerto Rico Highway 2.75% 7/1/28 $ 2,000,000 $ 0 $ 2,000,000 SOUTH CAROLINA $20,700,000 Piedmont, SC, Municipal Power Agency Electric RV, Series B, MBIA insured 3.10% 1/1/19 $ 0 $ 20,700,000 $ 20,700,000 1,500,000 South Carolina Educational Revenue 3.10 10/1/26 1,500,000 0 1,500,000 4,485,000 South Carolina Housing Finance & Development Authority, Mortgage RV, Series A, mandatory put 7/1/99 @ 100 3.65 7/1/32 0 4,485,000 4,485,000 400,000 South Carolina Jobs 3.15 11/1/25 400,000 0 400,000 2,000,000 South Carolina State GO Bonds 6.40 2/1/99 0 2,011,188 2,011,188 2,865,000 South Carolina State Public Service Authority Revenue 4.00 1/1/99 2,865,918 0 2,865,918 8,355,000 South Carolina State Public Service Authority RV, Series SG-2, MBIA insured 3.30 7/1/21 0 8,355,000 8,355,000 5,855,000 South Carolina State Public Service Authority, Utilities RV, FGIC insured 3.30 1/1/23 0 5,855,000 5,855,000 1,000,000 York County, SC, PCR Bonds, CFC insured 3.55 8/15/14 0 1,000,000 1,000,000 $ 4,765,918 $ 42,406,188 $ 47,172,106 TENNESSEE $ 1,200,000 Memphis TN GO 3.30% 8/1/07 $ 1,200,000 $ 0 $ 1,200,000 2,235,000 Memphis, TN, Capital Outlay GO Notes 5.50 7/1/99 0 2,258,572 2,258,572 1,600,000 Metro Nashville TN GO 3.20 9/1/06 1,600,000 0 1,600,000 1,095,000 Shelby County, TN, GO Bonds, ETM, USG COLL 6.00 3/1/99 0 1,101,059 1,101,059 $ 2,800,000 $ 3,359,631 $ 6,159,631 TEXAS $ 1,100,000 Bexar County, TX, MFHR Bonds, Creightons Mill Development Project, Series A, GTD by New England Mutual Life Insurance Co. 3.25% 8/1/06 $ 0 $ 1,100,000 $ 1,100,000 4,950,000 Bexar County, TX, MFHR Bonds, Park Hill Development Project, Series B, GTD by New England Mutual Life Insurance Co. 3.25 6/1/05 0 4,950,000 4,950,000 500,000 Brazos River TX Authority 3.45 3/1/26 500,000 0 500,000 2,500,000 Brazos River TX Higher Education AMT 3.15 6/1/23 2,500,000 0 2,500,000 1,000,000 Gulf Coast TX CP 3.50 12/9/98 1,000,000 0 1,000,000 3,500,000 Gulf Coast TX CP 3.50 12/9/98 3,500,000 0 3,500,000 15,000,000 Harris County, TX, Health Care Facilities RV, mandatory put 12/1/98 @ 100 3.60 12/1/25 0 15,000,000 15,000,000 5,290,000 Harris County, TX, Housing Finance Corp., MFHR Bonds, Arbor II Ltd. Project, Guardian Savings & Loan, LOC, 3.05% V/R, 10/1/05, optional PUT 1/15/99 @ 100 3.05 10/1/05 0 5,290,000 5,290,000 3,770,000 Houston, TX, Water & Sewer Systems RV, Municipal Trust Receipts, Series SG 120, FGIC insured 3.30 12/1/23 0 3,770,000 3,770,000 3,300,000 Sabine River TX AMT 3.35 3/1/26 3,300,000 0 3,300,000 1,000,000 Sabine River, TX, IDA RV, CFC insured 3.55 8/15/14 0 1,000,000 1,000,000 8,155,000 Tarrant County, TX, Housing Finance Corp., MFHR Bonds, Bear Creek Apartments Inc., KBC Bank N.V., LOC 3.20 11/1/07 0 8,155,000 8,155,000 920,000 Tarrant County, TX, MFHR Bonds, SF Apartments Project, Suntrust Bank, LOC 3.20 11/1/17 0 920,000 920,000 10,000,000 Texas Municipal Gas Corp., Gas Reserve RV, FSA insured 3.15 1/15/23 0 10,000,000 10,000,000 2,420,000 Texas Municipal Power Agency, Power RV, FGIC insured, USG COLL, P/R 9/1/99 @ 102 7.00 9/1/02 0 2,534,110 2,534,110 3,000,000 Texas State Department of Housing and Community Affairs, SFM RV, Series PT 136, MBIA insured 3.35 3/1/17 0 3,000,000 3,000,000 10,000,000 Texas State GO Notes, Series A55, GTD by National Westminster Bank 3.70 8/31/99 0 10,000,000 10,000,000 $ 10,800,000 $ 65,719,110 $ 76,519,110 UTAH $ 4,240,000 Davis County, UT, MFHR Bonds, Fox Creek Apartments, Series A 3.25% 7/15/27 $ 0 $ 4,240,000 $ 4,240,000 3,140,000 Jordan, UT, SD GO Bonds, GTD by School Board 5.00 6/15/99 0 3,174,063 3,174,063 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-60 WELLS FARGO FUNDS - NATIONAL TAX-FREE MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) 2,500,000 Utah State CP 3.35 12/9/98 2,500,000 0 2,500,000 $ 2,500,000 $ 7,414,063 $ 9,914,063 VIRGINIA $12,500,000 Harrisonburg, VA, MFHR Bonds, Rolling Brook Village Apartments, Series A, Guardian Savings & Loan, LOC, mandatory put 2/1/99 @ 100 3.70% 2/1/26 $ 0 $ 12,500,000 $ 12,500,000 3,500,000 Virginia College 3.45 1/1/31 3,500,000 0 3,500,000 2,000,000 Virginia State Public School Authority, School Finance RV 4.25 8/1/99 0 2,016,249 2,016,249 $ 3,500,000 $ 14,516,249 $ 18,016,249 WASHINGTON $ 5,800,000 Port Seattle, WA, IDR Bonds, Sysco Food Services Project 3.25% 11/1/25 $ 0 $ 5,800,000 $ 5,800,000 2,500,000 Seattle, WA, IDR Bonds, Longview Fibre Co. 3.30 1/1/03 0 2,500,000 2,500,000 815,000 Washington State GO 5.75 7/1/99 824,662 0 824,662 3,380,000 Washington State Health Care Facilities Authority RV, Catholic Health Initiatives, Series B, MBIA insured 4.25 12/1/98 0 3,380,000 3,380,000 2,205,000 Washington State Health Care Facilities Authority RV, Children's Hospital & Regional Medical Center, FSA insured 4.00 10/1/99 0 2,222,936 2,222,936 3,315,000 Washington State HFA, Community Nonprofit Housing RV, Crista Ministries, U.S. Bank N.A., LOC 3.20 7/1/11 0 3,315,000 3,315,000 7,900,000 Washington State Public Power Supply System, Power RV, Nuclear Project #1, Series CMC2 3.30 7/1/07 0 7,900,000 7,900,000 9,900,000 Washington State Public Power Supply System, Power RV, Nuclear Project #2, AMBAC insured 3.30 7/1/07 0 9,900,000 9,900,000 4,635,000 Washington State Public Power Supply System, Power RV, Nuclear Project #3, BIG insured, COLL, P/R 7/1/99 @ 100 6.00 7/1/18 0 4,710,794 4,710,794 1,000,000 Washington State Public Power Supply System, Power RV, Nuclear Project #3, Series 13, MBIA insured 3.30 7/1/15 0 1,000,000 1,000,000 $ 824,662 $ 40,728,730 $ 41,553,392 WISCONSIN $ 1,000,000 Beloit & Rock Counties, WI, IDR Bonds, GTD by CPC International 5.12% 4/1/19 $ 0 $ 1,000,000 $ 1,000,000 1,405,000 Johnson Controls, Inc., Other RV, Grantor Trust, Wachovia Corp., LOC 4.40 10/1/01 0 1,405,000 1,405,000 2,500,000 Kenosha, WI, TRAN 4.00 6/30/99 0 2,504,885 2,504,885 6,535,000 Kenosha, WI, TRAN, SD #1 3.38 9/28/99 0 6,535,000 6,535,000 1,060,000 Milwaukee, WI, IDR Bonds, Longview Fibre Co. Project 3.30 1/1/03 0 1,060,000 1,060,000 12,000,000 Oshkosh, WI, Area SD TRAN 4.00 8/24/99 0 12,038,373 12,038,373 10,000,000 Racine, WI, United SD TRAN 4.00 7/7/99 0 10,024,904 10,024,904 10,000,000 Wausau, WI, IDR Bonds, Joint Venture Partnership, U.S. Bank N.A., LOC 3.10 10/1/02 0 10,000,000 10,000,000 7,100,000 Wisconsin State HEHFA RV, Alverno College Project, Allied Irish Bank, LOC 3.30 11/1/17 0 7,100,000 7,100,000 3,475,000 Wisconsin State HEHFA RV, Series PA 183, MBIA Insured 3.30 8/15/98 0 3,475,000 3,475,000 $ 0 $ 55,143,162 $ 55,143,162 WYOMING $ 1,000,000 Green River, WY, PCR Bonds, Allied Corp. Project, GTD by Allied Signal Corp. 3.30% 12/1/12 $ 0 $ 1,000,000 $ 1,000,000 4,260,000 Uinta County WY PCR 3.25 8/15/20 4,260,000 0 4,260,000 $ 4,260,000 $ 1,000,000 $ 5,260,000 SHORT-TERM INSTRUMENTS 29,613,524 Federated Tax-Free Obligations Fund $ 0 $ 29,613,524 $ 29,613,524 17,000,000 Fidelity Tax Exempt Money Market Fund 0 17,000,000 17,000,000 514,778 Provident Municipal Fund 0 514,778 514,778 $ 0 $ 47,128,302 $ 47,128,302 COMMERCIAL PAPER 13,600,000 City of Austin TX CP $ 0 $ 13,600,000 $ 13,600,000 14,200,000 Hospital Board FL CP 0 14,200,000 14,200,000 $ 0 $ 27,800,000 $ 27,800,000 INVESTMENTS IN SECURITIES PRIOR TO PRO FORMA ADJUSTMENTS $ 90,560,966 $ 1,316,241,190 $ 1,406,802,156 PRO FORMA ADJUSTMENTS To Securities at Market Value $(31,557,473)(c) $(1,274,276,988)(d) $(1,305,834,461) TOTAL INVESTMENTS IN SECURITIES $ 59,003,493 $ 41,964,202 $ 100,967,695 (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. (c) The Class A shares of the Stagecoach National Tax-Free Money Market Fund comprise 64.8% of the Fund. (d) The Class A shares of the Norwest Advantage Municipal Money Market Fund comprise 3.2% of the Fund. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-61 WELLS FARGO FUNDS - NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 STAGECOACH NORWEST NATIONAL TAX-FREE ADVANTAGE MONEY MARKET MUNICIPAL MONEY PRO FORMA PRO FORMA FUND MARKET FUND ADJUSTMENTS (b)(c) COMBINED ----------------------------------------------------------------------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $90,560,966 $1,316,241,190 $(100,967,695) $1,305,834,461 Cash 568,855 446 (368,776) 200,525 Receivables: Dividends and Interest 681,381 11,554,729 (812,701) 11,423,409 Due from advisor 0 0 6,013 (d) 6,013 Organization expenses, net of amortization 17,096 0 (17,096)(d) 0 TOTAL ASSETS 91,828,298 1,327,796,365 1,317,464,408 LIABILITIES Payables: Distribution to shareholders 211,134 2,430,751 (214,914) 2,426,971 Due to distributor 24,272 36,997 (16,922) 44,347 Due to advisor 25,405 453,898 (31,042) 448,261 Other 130,498 3,841 (84,719) 49,620 TOTAL LIABILITIES 391,309 2,925,487 2,969,199 TOTAL NET ASSETS $91,436,989 $1,324,870,878 $1,314,495,209 NET ASSETS CONSIST OF: Paid-in capital $91,447,469 $1,326,197,247 (101,862,038) $1,315,782,678 Undistributed net investment income (loss) 0 (198,272) 6,366 (191,906) Undistributed net realized gain (loss) on investments (10,480) (1,128,097) 43,014 (1,095,563) TOTAL NET ASSETS $91,436,989 $1,324,870,878 $1,314,495,209 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net Assets - Institutional Class $32,162,738 $ 32,162,738 Shares outstanding - Institutional Class 32,169,381 32,169,381 Net asset value and offering price per share - Institutional Class $ 1.00 $ 1.00 Net Assets - Service Class $1,282,332,471 $1,282,332,471 Shares outstanding - Service Class 1,282,327,994 1,282,327,994 Net asset value and offering price per share - Service Class $ 1.00 $ 1.00 INVESTMENT AT COST $90,560,966 $1,316,241,190 $(100,967,695) $1,305,834,461 - ---------------------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-62 WELLS FARGO FUNDS - NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE MONEY MARKET MASTER-FEEDER MUNICIPAL MONEY PRO FORMA PRO FORMA FUND ADJUSTMENTS MARKET FUND ADJUSTMENTS (b)(c) COMBINED --------------------------------------------------------------------------------- INVESTMENT INCOME Interest $4,259,147 $38,737,459 $42,996,606 Net expenses from master/core portfolios (3,237) 3,237 0 0 TOTAL INVESTMENT INCOME 4,255,910 38,737,459 42,996,606 EXPENSES Advisory fees 370,263 4,632 3,572,783 (2,856,912)(e) 1,090,766 Administration fees 85,198 1,112,876 438,074 (e) 1,636,148 Custody fees 20,671 270 121,698 75,514 (e) 218,153 Shareholder serv fees 145,309 2,407,421 (e) 2,552,730 Portfolio accounting fees 83,282 1,204 98,000 (102,486)(e) 80,000 Transfer agency fees 71,573 1,135,824 (695,663)(e) 511,734 Distribution fees 10,693 (10,693)(e) 0 Organization costs 8,801 12 (12)(e) 8,801 Legal and audit fees 31,054 243 30,294 (31,225)(e) 30,366 Registration fees 55,058 152,139 0 207,197 Directors' fees 3,802 13,737 (11,110)(e) 6,429 Shareholder reports 56,951 33,467 (43,236)(e) 47,182 Other 20,376 29 40,547 (16,833)(e) 44,119 TOTAL EXPENSES 963,031 6,311,365 6,433,625 6,433,625 Less: Waived fees and reimbursed expenses fees (356,557) (3,153) (1,418,068) 148,088 (f) (1,629,690) NET EXPENSES 606,474 4,893,297 4,803,935 NET INVESTMENT INCOME (LOSS) 3,649,436 33,844,162 38,192,671 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on sale of investments (3,692) 6,814 3,122 NET GAIN (LOSS) ON INVESTMENTS (3,692) 6,814 3,122 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $3,645,744 $33,850,976 $38,195,793 - ----------------------------------------------------------------------------------------------------------------------------------- * The Institutional Class of the Stagecoach National Tax-Free Money Market Fund and Service Class of the Norwest Advantage Municipal Money Market Fund are merging to form the Wells Fargo National Tax-Free Institutional Money Market Fund, historical accounting data from the Norwest Advantage Municipal Money Market Fund will be kept. (a) Information shown prior to December 12, 1997, is for the Stagecoach National Tax-Free Money Market Fund which was a 'Feeder Fund' investing in a "Master Portfolio", the National Tax-Free Money Market Master Portfolio, and the expenses allocated to the Feeder have been disbursed according to the percentage of each expense at the Master Portfolio level. On December 12, 1997, the Fund merged with the Overland National Tax-Free Institutional Money Market Fund, the National Tax-Free Money Market Master Portfolio was dissolved. (b) The Institutional Class shares of the Stagecoach National Tax-Free Money Market Fund comprise 35.2% of the Fund's net assets. The remaining 64.8% of the Fund's net assets represent Class A shares of the Stagecoach National Tax-Free Money Market Fund. Such Class A shares will be exchanged for shares of a different fund in a separate reorganization. Accordingly the net assets attributable to Class A shares have been removed as an adjustment for purposes of this pro forma financial statement. (c) The Service Class shares of the Norwest Advantage Municipal Money Market Fund comprise 96.8% of the Fund's net assets. The remaining 3.2% of the Fund's net assets represent Class A shares of the Norwest Advantage Municipal Money Market Fund. Such Class A shares will be exchanged for shares of a different fund in a separate reorganization. Accordingly the net assets attributable to Class A shares have been removed as an adjustment for purposes of this pro forma financial statement. (d) Wells Fargo Bank will absorb the balance of unamortized organizational costs from Funds which are not accounting survivors. (e) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (f) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. S-63 WELLS FARGO FUNDS - NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) ALASKA $ 4,900,000 Anchorage, AK, Higher Education RV, Alaska Pacific University, First National Bank, LOC 3.20% 7/1/17 $ 0 $ 4,900,000 $ 4,900,000 3,500,000 North Slope Boro, AK, GO Bonds, Series B, FSA insured 6.10 6/30/99 0 3,548,224 3,548,224 $ 0 $ 8,448,224 $ 8,448,224 ARIZONA $ 2,000,000 Arizona School District COP Series A 4.10% 7/30/99 $ 2,006,782 $ 0 $ 2,006,782 4,400,000 Chandler, AZ, IDA Bonds, Parsons Municipal Services, Inc., National Westminster Bank, USA, LOC 3.25 12/15/09 0 4,400,000 $ 4,400,000 2,000,000 Maricopa AZ CP 3.50 12/15/98 2,000,000 0 2,000,000 2,755,000 Salt River AZ Agricultural Improvement & Power District Series A 7.00 1/1/99 2,762,705 0 2,762,705 $ 6,769,487 $ 4,400,000 $ 11,169,487 ARKANSAS $ 1,000,000 Little Rock, AR, IDR Bonds, GTD by CPC International 4.96% 12/1/03 $ 0 $ 1,000,000 $ 1,000,000 CALIFORNIA $ 500,000 California HFFA Revenue Series C 3.00% 7/1/22 $ 500,000 $ 0 $ 500,000 2,000,000 California Higher Education Student Loan Revenue Series E-5 3.80 12/1/25 2,000,000 0 2,000,000 15,000,000 California School Cash Reserve Program Authority, Revenue Notes, Series A 4.50 7/2/99 0 15,064,075 15,064,075 1,250,000 California Statewide GO 3.00 8/15/27 1,250,000 0 1,250,000 $ 3,750,000 $ 15,064,075 $ 18,814,075 COLORADO $ 1,200,000 Colorado HFFA Revenue Series C MBIA Insured 3.15% 10/1/14 $ 1,200,000 $ 0 $ 1,200,000 5,700,000 Denver, CO, City & County Apartment RV, Sub-Series B, Westdeutsche Landesbank, LOC 3.10 12/1/20 0 5,700,000 5,700,000 2,500,000 Lowry, CO, Economic Redevelopment Authority RV, Series B, Canadian Imperial Bank, LOC 3.15 12/1/20 0 2,500,000 2,500,000 1,700,000 Moffat County, CO, PCR Bonds, AMBAC insured 3.20 7/1/10 0 1,700,000 1,700,000 1,930,000 Parkview Metropolitan District, CO, Arapahoe County, GO Bonds, Central Bank, LOC 3.25 12/1/12 0 1,930,000 1,930,000 $ 1,200,000 $ 11,830,000 $ 13,030,000 CONNECTICUT $ 3,000,000 Connecticut State Development Authority, Industrial Development RV, GTD by General Accident Insurance 3.75% 12/1/13 $ 0 $ 3,000,000 $ 3,000,000 2,870,000 Connecticut State HFA 3.05 5/15/18 2,870,000 0 2,870,000 $ 2,870,000 $ 3,000,000 $ 5,870,000 DISTRICT OF COLUMBIA 17,700,000 District of Columbia RV, George Washington University, First National Bank of Chicago, LOC 3.20% 3/1/06 $ 0 $ 17,700,000 $ 17,700,000 FLORIDA $ 500,000 Dade County FL MFHR 3.10% 7/1/06 $ 500,000 0 $ 500,000 2,000,000 Dade County, FL, IDA RV, GTD by ADP, Inc. 3.53 11/15/17 0 2,000,000 2,000,000 8,120,000 Florida HFA, MFHR Bonds, Country Club Project, Bankers Trust, LOC 3.20 12/1/07 0 8,120,000 8,120,000 7,140,000 Florida HFA, MFHR Bonds, First Union National Bank, LOC, mandatory put 11/1/99 @ 100 3.00 11/1/07 0 7,140,000 7,140,000 1,710,000 Florida HFA, MFHR Bonds, South Trust Alabama, LOC 3.25 6/1/07 0 1,710,000 1,710,000 1,600,000 Hillsborough County, FL, IDA, Port Facilities RV, Seaboard System Railroad, Inc. Project, National Bank Detroit, LOC 3.25 10/15/99 0 1,600,000 1,600,000 1,000,000 Indian River FL CP 3.60 1/7/99 1,000,000 0 1,000,000 18,900,000 Laurel Club Certificate Trust, COP, Series A, Swiss Bank, LOC 3.30 6/1/25 0 18,900,000 18,900,000 3,500,000 Palm Beach FL CP 3.40 12/3/98 3,500,000 0 3,500,000 $ 5,000,000 $ 39,470,000 $ 44,470,000 GEORGIA $ 2,695,000 Fulton County, GA, IDR Bonds, GTD by ADP 3.25% 9/1/12 $ 0 $ 2,695,000 $ 2,695,000 700,000 Georgia Municipal Gas Authority Revenue 3.05 11/1/06 700,000 0 700,000 3,995,000 Georgia Municipal Gas CP 3.35 12/1/98 3,995,000 0 3,995,000 1,000,000 Georgia State Municipal Electric Authority 3.55 1/7/99 1,000,000 0 1,000,000 6,000,000 Marietta, GA, MFHR Bonds, Falls at Bells Ferry, Guardian Savings & Loan, LOC, optional put 1/15/99 @ 100 3.95 1/15/09 0 6,000,717 6,000,717 $ 5,695,000 $ 8,695,717 $ 14,390,717 HAWAII $ 4,950,000 Hawaii State Department of Budget & Finance, Special Purpose Mortgage RV, Kuakini Medical Center Project, Bank of Hawaii, LOC 3.20% 7/1/04 $ 0 $ 4,950,000 $ 4,950,000 ILLINOIS $ 1,000,000 Bedford Park, IL, IDR Bonds, CPC International, Inc. Project, GTD by Firemen's Insurance Co. 4.96% 11/1/08 $ 0 $ 1,000,000 $ 1,000,000 4,000,000 Chigago, IL, GO Bonds, Equipment Notes, Harris Trust & Savings, LOC, mandatory tender 12/3/98 @100 3.60 1/1/06 0 4,000,000 4,000,000 1,000,000 Chicago, IL, GO Bonds, Greater Chicago Metropolitan Water Reclamation District 4.15 12/1/99 0 1,010,698 1,010,698 6,135,000 Chicago, IL, GO Bonds, Morgan Guaranty, LOC, mandatory tender 2/4/99 @100 3.55 1/31/00 0 6,135,000 6,135,000 15,000,000 Chicago, IL, GO Bonds, Series PT 1054 3.30 1/1/28 0 15,000,000 15,000,000 15,000,000 Chicago, IL, Sales Tax RV, Floating Rate Receipts, Series SSP-9 3.35 1/1/27 0 15,000,000 15,000,000 3,885,000 Cook County, IL, Municipal Trust Receipts, Series SG-7, MBIA insured 3.30 11/15/23 0 3,885,000 3,885,000 890,000 Illinois Development Finance Authority, Development RV, North Wacker Drive 3.75 12/1/15 0 890,000 890,000 6,000,000 Illinois Development Finance Authority, MFHR Bonds, Garden Glen Apartments, GTD by Continental Casualty Co. 3.30 12/1/13 0 6,000,000 6,000,000 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-64 WELLS FARGO FUNDS - NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) 15,000,000 Illinois Development Finance Authority, Pollution Control RV, Illinois Power Co. Project, Series C, ABN AMRO Bank N.V., LOC, mandatory put 8/26/99 @ 100 3.00 11/1/28 0 15,000,000 15,000,000 15,000,000 Illinois EFA RV, Cultural Pool, American National Bank & Trust, LOC 3.15 3/1/28 0 15,000,000 15,000,000 2,170,000 Illinois EFA RV, Cultural Pool, First National Bank of Chicago, LOC 3.15 12/1/25 0 2,170,000 2,170,000 6,400,000 Illinois EFA RV, John F. Kennedy Healthcare Foundation, LaSalle National Bank, LOC, mandatory put 5/11/99 @ 100 3.60 12/1/25 0 6,400,000 6,400,000 8,200,000 Illinois Health Facilities Authority RV 3.30 4/1/07 0 8,200,000 8,200,000 10,000,000 Illinois Health Facilities Authority RV, Evanston Hospital Corp., mandatory put 7/15/99 @ 100 3.70 8/15/30 0 10,000,000 10,000,000 3,495,000 Illinois Health Facilities Authority RV, Health Care, Series PA 195, AMBAC insured 3.35 8/1/17 0 3,495,000 3,495,000 6,930,000 Illinois Housing Development Authority RV, Homeowner Mortgage, Subseries D-1, mandatory put 6/29/99 @ 100 3.80 8/1/17 0 6,930,000 6,930,000 3,170,000 Illinois Housing Development Authority RV, Homeowner Mortgage, Subseries E-1 3.70 12/17/98 0 3,170,000 3,170,000 6,800,000 Lombard, IL, IDR Bonds, 2500 Highland Avenue, Mid-America Federal Savings & Loan, LOC 3.60 12/1/06 0 6,800,000 6,800,000 9,870,000 Lombard, IL, MFHR Bonds, Clover Creek Apartments, Continental Casualty Surety Bond, LOC, mandatory put 12/15/98 @ 100 4.00 12/15/06 0 9,870,000 9,870,000 5,200,000 Mount Morris, IL, Housing RV, Brethren Home Project, La Salle National Bank, Chicago, LOC 3.15 6/1/27 0 5,200,000 5,200,000 11,500,000 Oak Forest, IL, Other RV, Homewood Pool, First National Bank of Chicago, LOC 3.15 7/1/24 0 11,500,000 11,500,000 19,970,000 Regional Transportation Authority, IL, Transportation RV 3.30 6/1/24 0 19,970,000 19,970,000 2,000,000 South Barrington, IL, GO Bonds, Cook County, Harris Trust, LOC 3.15 12/1/15 0 2,000,000 2,000,000 4,100,000 Springfield, IL, Transportation RV, GTD by Allied Signal 3.25 10/15/16 0 4,100,000 4,100,000 1,500,000 Will & Kendall Counties, IL, GO Bonds, Community Consolidated SD #202, Series A, FSA insured, 6.38 12/30/98 0 1,503,137 1,503,137 8,700,000 Will County, IL, GO Bonds, Forest Preservation District, AMBAC insured, P/R 12/1/98 @ 102 7.63 12/1/08 0 8,874,000 8,874,000 $ 0 $ 193,102,835 193,102,835 INDIANA $ 1,000,000 Gary, IN, Environmental Improvement, PCR Bonds, U.S. Steel Group Project, Bank of Nova Scotia, LOC 3.25% 7/15/02 $ 0 $ 1,000,000 $ 1,000,000 2,000,000 Indiana Bond Bank, Construction Loan RV 4.13 8/1/99 0 2,014,614 2,014,614 12,000,000 Indiana Health Facility Financing Authority RV, St. Anthony Medical Center 3.15 12/1/17 0 12,000,000 12,000,000 2,500,000 Indiana HFFA Revenue 3.10 1/1/22 2,500,000 0 2,500,000 18,200,000 Indiana Hospital Equipment Financing Authority RV, Series A, MBIA insured 3.20 12/1/15 0 18,200,000 18,200,000 4,865,000 Indiana State Development Financial Authority, Educational Facilities RV, Lutheran Project, First of America, LOC 3.30 10/1/17 0 4,865,000 4,865,000 8,000,000 Indiana State Educational Facilities Authority, Educational Facilities RV, Indiana Wesleyan University, NBD, LOC 3.15 6/1/28 0 8,000,000 8,000,000 3,600,000 Indianapolis, IN, EDA RV, Visiting Nurse Service Foundation, First of America, LOC 3.30 3/1/13 0 3,600,000 3,600,000 $ 2,500,000 $ 49,679,614 $ 52,179,614 IOWA $ 4,600,000 Des Moines, IA, IDR Bonds, Grand Office Park, GTD by Principal Mutual Life 3.20% 4/1/15 $ 0 $ 4,600,000 $ 4,600,000 10,600,000 Iowa Finance Authority RV, Obligation Group, FSA insured 3.25 6/1/27 0 10,600,000 10,600,000 1,000,000 Iowa Finance Authority, SFM RV, Series A, FGIC insured, mandatory put 2/24/99 @ 100 3.65 1/1/24 0 1,000,000 1,000,000 4,635,000 Iowa State School Cash Anticipitory Program, Warrants Certificates, Iowa School Corp., Series A, FSA insured 4.50 6/25/99 0 4,656,947 4,656,947 4,000,000 Urbandale, IA, IDR Bonds, Aurora Business Park Association Project, GTD by Principal Mutual Life Insurance 3.20 10/1/15 0 4,000,000 4,000,000 6,000,000 Urbandale, IA, IDR Bonds, Interstate Acres L.P. Project, GTD by Pricipal Mutual Life Insurance 3.35 12/1/14 0 6,000,000 6,000,000 4,605,000 Urbandale, IA, IDR Bonds, Meredith Drive Association Project, GTD by Principal Mutual Life Insurance 3.20 11/1/15 0 4,605,000 4,605,000 $ 0 35,461,947 35,461,947 KANSAS $ 2,660,000 Lawrence, KS, GO Notes, Series 1998-II 3.45% 10/1/99 $ 0 2,660,000 2,660,000 1,200,000 Prairie Village, KS, MFHR Bonds, J.C. Nichols Co. Project, GTD by Principal Mutual Life Insurance 3.20 12/1/15 0 1,200,000 1,200,000 $ 0 $ 3,860,000 $ 3,860,000 KENTUCKY $10,000,000 Jefferson County, KY, Anticipitory Revenue Notes, Board of Education, Series N 3.66% 6/30/99 $ 0 $ 10,001,109 $ 10,001,109 9,100,000 Jefferson County, KY, MFHR Bonds, Canter Chase, First of America, LOC 3.30 12/1/26 0 9,100,000 9,100,000 6,800,000 Kentucky Asset/Liability Community General Fund, Revenue Notes 3.50 11/1/99 0 6,833,316 6,833,316 3,300,000 Kentucky Higher Education Student Loan Corporation 3.20 6/1/26 3,300,000 0 3,300,000 7,300,000 Kentucky Infrastructure Authority, Revenue Notes, Series A, PNC Bank N.A., LOC 3.35 6/30/00 0 7,300,000 7,300,000 7,745,000 Kentucky State Turnpike Authority RV, Resource Recovery Road, Series 17, FSA insured 3.45 7/1/03 0 7,745,000 7,745,000 3,000,000 Mayfield, KY, Multi-City Lease RV, PNC Bank, LOC 3.25 7/1/26 0 3,000,000 3,000,000 2,000,000 University of Kentucky, University RV, Consolidated Educational Buildings, MBIA insured 4.50 5/1/99 0 2,006,008 2,006,008 $ 3,300,000 $ 45,985,433 $ 49,285,433 LOUISIANA $ 1,000,000 De Soto Parish LA PCR 3.10% 7/1/18 $ 1,000,000 $ 0 $ 1,000,000 1,535,000 Louisana Public Facilities Authority, Advance Funding Revenue Notes, Series B, American International Group insured 3.35 10/25/99 0 1,535,000 1,535,000 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-65 WELLS FARGO FUNDS - NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) 2,060,000 Louisiana Public Facilities Authority, Advance Funding Notes, School Board, Series D 4.40 12/10/98 0 2,060,279 2,060,279 1,980,000 Louisiana Public Facilities Authority, Advance Funding Revenue Notes, Series D, American International Group insured 3.35 10/25/99 0 1,980,000 1,980,000 9,300,000 West Baton Rouge Parish, LA, Industrial District #3 RV, Dow Chemical Co., Series B 3.40 12/1/16 0 9,300,000 9,300,000 $ 1,000,000 $ 14,875,279 $ 15,875,279 MARYLAND $ 2,000,000 Community Development Revenue 3.10% 6/15/26 $ 2,000,000 $ 0 $ 2,000,000 1,500,000 Howard County MD MFHR 3.10 6/15/26 1,500,000 0 1,500,000 7,000,000 Howard County, MD, MFHR Bonds, Sherwood Crossing Ltd. Project, Guardian Savings & Loan, LOC, mandatory put 6/1/99 @ 100 3.85 6/1/15 0 7,000,000 7,000,000 2,500,000 Maryland State HFFA Revenue 3.15 12/1/15 2,500,000 0 2,500,000 2,500,000 Maryland State Industrial Authority, Economic Development RV, Johnson Controls, Inc., LOC 3.50 12/1/03 0 2,500,000 2,500,000 $ 6,000,000 $ 9,500,000 $ 15,500,000 MASSACHUSETTS 15,500,000 Massachusetts State HFA, Housing RV, Series A10 3.45% 6/1/14 $ 0 $ 15,500,000 $ 15,500,000 MICHIGAN $ 5,000,000 Detroit, MI, School Aid GO Notes, City School District 4.50% 7/1/99 $ 0 $ 5,023,797 $ 5,023,797 1,700,000 Grand Rapids MI GO 3.05 1/1/20 1,700,000 0 1,700,000 11,335,000 Grand Rapids MI, Water Supply RV, 3.45% V/R, 1/1/15 3.45 1/1/15 0 11,335,000 11,335,000 3,500,000 Michigan State Hospital Finance Authority RV, Hospital Equipment Loan Program, Series A, First of America, LOC 3.25 12/1/23 0 3,500,000 3,500,000 2,200,000 Michigan State Hospital Finance Authority RV, Hospital Equipment Loan Program, Series A, First of America, LOC 3.25 12/1/23 0 2,200,000 2,200,000 $ 1,700,000 $ 22,058,797 $ 23,758,797 MINNESOTA $ 5,715,000 Cohasset, MN, RV, Minnesota Power & Light Co., Series B, ABN AMRO Bank N.V., LOC 3.25% 6/1/13 $ 0 $ 5,715,000 $ 5,715,000 5,000,000 Crystal, MN, MFHR Bonds, Crystal Apartments L.P. Project 3.35 5/1/27 0 5,000,000 5,000,000 1,000,000 Hennepin County, MN, GO Notes 4.13 12/1/99 0 1,011,081 1,011,081 4,900,000 Mankato, MN, MFHR Bonds, Highland Hills Project, First Bank, LOC 3.35 5/1/27 0 4,900,000 4,900,000 2,465,000 Minnesota SD, Tax & Aid COP, Anticipatory Borrowing Program, Series A 3.67 8/20/99 0 2,465,000 2,465,000 5,000,000 Minnesota SD, Tax & Aid COP, Anticipatory Borrowing Program, Series B 3.90 3/4/99 0 5,004,307 5,004,307 5,000,000 Minnesota SD, Tax & Aid COP, Anticipatory Borrowing Program, Series B 3.63 8/27/99 0 5,000,000 5,000,000 4,000,000 Minnesota State HFA, SFM RV, Series F 3.65 1/1/17 0 4,000,000 4,000,000 5,000,000 Minnesota State HFA, SFM RV, Series G, P/R 12/1/98 @ 100 4.15 1/1/18 0 5,000,000 5,000,000 1,705,000 St. Paul, MN, Housing & Redevelopment Authority, Commercial Development RV, Park Development Association Project, First Star Milwaukee, LOC 3.45 12/1/15 0 1,705,000 1,705,000 15,300,000 St. Paul, MN, Housing & Redevelopment Authority, Heating RV, St. Paul Energy District, remarketed 1/3/94 3.30 12/1/12 0 15,300,000 15,300,000 1,000,000 St. Paul, MN, Port Authority IDR Bonds, Texas Project, Series A, U.S. Bank N.A., LOC 3.30 6/1/10 0 1,000,000 1,000,000 3,500,000 St. Paul, MN, Sewer RV, Series A, AMBAC insured, crossover refunding 12/1/98 @ 101 8.00 12/1/08 0 3,535,000 3,535,000 2,700,000 Stillwater, MN, GO Bonds, ISD #834, FGIC insured, crossover refunding 2/1/99 @ 100 6.75 2/1/09 0 2,713,201 2,713,201 $ 0 $ 62,348,589 $ 62,348,589 MISSISSIPPI $ 1,430,000 Shaw, MS, Urban Renewal RV, Phase I Redevelopment Project, Sunlife of America, LOC, mandatory put 12/28/98 @ 100 4.40% 12/28/18 $ 0 $ 1,430,668 $ 1,430,668 MISSOURI $ 6,700,000 Independence, MO, IDA RV, Groves & Graceland Project, Series A, Credit Local de France, LOC 3.25% 11/1/27 $ 0 $ 6,700,000 $ 6,700,000 1,300,000 Kansas City, MO, IDA RV, Ewing Marion Kauffman, Series A 3.30 4/1/27 0 1,300,000 1,300,000 13,975,000 Kansas City, MO, IDA, MFHR Bonds, Coach House II Project, GTD by Principal Mutual Life Insurance 3.20 12/1/15 0 13,975,000 13,975,000 2,200,000 Kansas City, MO, IDA, MFHR Bonds, JC Nichols Co. Project, GTD by Principal Mutual Life Insurance 3.20 5/1/15 0 2,200,000 2,200,000 1,250,000 Missouri State Health & Educational Facilities Authority Revenue Christian Health Services Series A 3.05 11/1/19 1,250,000 0 1,250,000 5,000,000 Missouri State HEHFA Anticipation Notes, Series E 4.25 4/7/99 0 5,008,890 5,008,890 900,000 Missouri State HEHFA Anticipation Notes, Series H 4.25 4/7/99 0 901,600 901,600 8,190,000 Missouri State HEHFA RV, St. Francis Medical Center, Series A, Credit Local de France, LOC 3.25 6/1/26 0 8,190,000 8,190,000 $ 1,250,000 $ 38,275,490 $ 39,525,490 MONTANA $ 7,200,000 Montana State Board of Investments, Municipal Finance Construction RV, Intercap Program 3.60% 3/1/09 $ 0 7,208,438 7,208,438 10,000,000 Montana State Board of Investments, Municipal Finance Construction RV, Intercap Program 3.60 3/1/18 0 10,000,000 10,000,000 $ 0 17,208,438 17,208,438 NEBRASKA $ 1,980,000 Nebraska Investment Financial Authority RV, Catholic Health Initiatives, Series A 4.25% 12/1/98 $ 0 $ 1,980,000 $ 1,980,000 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-66 WELLS FARGO FUNDS - NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) 1,900,000 Norfolk, NE, IDR Bonds, Supervalu Inc. Project, Wachovia Bank of Georgia, LOC 3.30 11/1/14 0 1,900,000 1,900,000 $ 0 $ 3,880,000 $ 3,880,000 NEVADA $ 6,500,000 Clark County, NV, GO Bonds, FGIC insured 6.90% 9/1/99 $ 0 $ 6,679,391 $ 6,679,391 3,775,000 Henderson, NV, Health Care Facilities RV, PT 134, AMBAC insured 3.35 7/1/20 0 3,775,000 3,775,000 5,000,000 Nevada State Trust Receipts, GO Bonds, Series 36 D 3.45 11/1/25 0 5,000,000 5,000,000 $ 0 $ 15,454,391 $ 15,454,391 NEW JERSEY $ 9,800,000 Hudson County, NJ, COP, Correctional Facilities, BIG insured, P/R 12/1/98 @ 102 7.60% 12/1/21 $ 0 $ 9,996,000 $ 9,996,000 2,400,000 New Jersey State Educational Facilities Authority RV, Series SG 48, MBIA insured 3.25 7/1/26 0 2,400,000 2,400,000 $ 0 $ 12,396,000 $ 12,396,000 NEW MEXICO $ 2,500,000 Bloomfield, NM, GO Bonds, Series A, La Salle National Bank, LOC 3.35% 11/15/10 $ 0 $ 2,500,000 $ 2,500,000 2,760,000 Espanola, NM, Health Care RV, Series A, La Salle National Bank, LOC 3.35 11/15/10 0 2,760,000 2,760,000 7,995,000 Farmington, NM, PCR RV 3.35 12/1/16 0 7,995,000 7,995,000 1,000,000 New Mexico State Severance Tax RV, Series B 5.00 7/1/99 0 1,007,475 1,007,475 1,735,000 Silver City, NM, GO Bonds, Series A, La Salle National Bank, LOC 3.35 11/15/10 0 1,735,000 1,735,000 $ 0 $ 15,997,475 $ 15,997,475 NEW YORK $ 9,700,000 Allegany-Limestone, NY, GO Bonds, Century SD 4.00% 1/29/99 $ 0 $ 9,704,672 $ 9,704,672 16,235,000 Long Island, NY, Power Authority RV, New York Electrical System 3.35 12/1/11 0 16,235,000 16,235,000 11,340,000 Long Island, NY, Power Authority RV, New York Electrical System 3.35 12/1/12 0 11,340,000 11,340,000 8,600,000 Long Island, NY, Power Authority RV, New York Electrical System 3.35 12/1/13 0 8,600,000 8,600,000 3,500,000 New York NY GO 2.95 2/15/26 3,500,000 0 3,500,000 1,500,000 New York NY GO 2.90 2/15/26 1,500,000 0 1,500,000 1,000,000 New York NY GO 2.90 11/15/19 1,000,000 0 1,000,000 6,995,000 New York State Dormitory Authority RV, Floater Trusts 3.30 5/15/15 0 6,995,000 6,995,000 8,425,000 New York State Dormitory Authority RV, Floater Trusts 3.30 2/15/28 0 8,425,000 8,425,000 11,335,000 New York State Dormitory Authority RV, Floater Trusts 3.30 8/1/32 0 11,335,000 11,335,000 12,050,000 New York State Dormitory Authority RV, Floater Trusts, AMBAC insured 3.40 7/1/25 0 12,050,000 12,050,000 5,200,000 New York State Dormitory Authority, Municipal Securities Receipts RV, Series CMC1B 3.20 2/15/08 0 5,200,000 5,200,000 3,900,000 New York State Dormitory Authority, Municipal Securities Receipts RV, Series CMC2A 3.20 2/1/06 0 3,900,000 3,900,000 3,900,000 New York State Dormitory Authority, Municipal Securities Receipts RV, Series CMC2B 3.20 2/1/07 0 3,900,000 3,900,000 3,000,000 New York State Government Assistance 2.95 4/1/23 3,000,000 0 3,000,000 2,500,000 New York State Local Government Assistance Corp., RV, Series SG 99, AMBAC insured 3.30 4/1/11 0 2,500,000 2,500,000 3,130,000 New York State Medical Care Facilities Finance Agency, Health Care RV 3.30 2/15/27 0 3,130,000 3,130,000 6,620,000 New York State Medical Care Facilities Finance Agency, Health Care RV, FHA insured, mandatory put 12/3/98 @ 100 3.90 2/15/05 0 6,620,000 6,620,000 6,545,000 New York State Medical Care Facilities Finance Agency, Health Care RV, FHA insured, mandatory put 12/3/98 @ 100 3.90 2/15/05 0 6,545,000 6,545,000 8,960,000 New York State Medical Care Facilities Finance Agency, Health Care RV, mandatory put 12/3/98 @100 3.90 2/1/13 0 8,960,000 8,960,000 9,995,000 New York State, Development RV, Urban Development Corp., Series PT 147, Hypo Bayersche Bank, LOC 3.30 7/1/16 0 9,995,000 9,995,000 60,000,000 New York, NY, Series A78 2.90 4/13/99 0 60,000,000 60,000,000 3,895,000 New York, NY, Series PA 278 3.40 8/1/12 0 3,895,000 3,895,000 11,985,000 New York, NY, Series PT 1038 3.35 8/1/16 0 11,985,000 11,985,000 1,000,000 Suffolk County NY IDA 2.70 2/1/07 1,000,000 0 1,000,000 3,325,000 Triborough Bridge & Tunnel Authority, NY, Transportation RV, PA 200 3.30 1/1/12 0 3,325,000 3,325,000 $ 10,000,000 $ 214,639,672 $ 224,639,672 NORTH CAROLINA $ 600,000 North Carolina CP 3.60% 1/4/99 $ 600,000 $ 0 $ 600,000 2,000,000 North Carolina CP 3.35 12/1/98 2,000,000 0 2,000,000 250,000 North Carolina CP 3.15 6/1/22 250,000 0 250,000 3,000,000 Person County, NC, Industrial Facilities & Pollution Control Financing Authority, PCR Bonds, GTD by Carolina Power & Light Co. 3.25 11/1/19 0 3,000,000 3,000,000 2,000,000 Wake County GO 3.25 9/1/15 2,000,000 0 2,000,000 $ 4,850,000 $ 3,000,000 $ 7,850,000 NORTH DAKOTA $ 1,500,000 Bismarck, ND, IDR Bonds, Supervalu Inc. Project, Wachovia Bank & Trust, LOC 3.30% 4/1/09 $ 0 $ 1,500,000 $ 1,500,000 OHIO $ 6,700,000 Cincinnati, OH, GO Notes 4.38% 12/1/99 0 6,791,940 6,791,940 1,650,000 Erie County, OH, GO Bonds 4.25 6/1/99 0 1,653,957 1,653,957 1,000,000 Franklin County, OH, Convention Facilities Authority Tax & Lease RV 6.70 12/1/99 0 1,036,649 1,036,649 5,200,000 Hamilton County, OH, IDR Bonds, Community Urban Redevelopment Project, National Westminster, LOC 3.15 10/15/12 0 5,200,000 5,200,000 1,000,000 Ohio State Air Quality Control CP 3.55 1/7/99 1,000,000 0 1,000,000 10,000,000 Ohio State Water Development Authority, PCR Bonds, First National Bank of Chicago, LOC, mandatory put 1/29/99 @ 100 3.20 10/1/28 0 10,000,000 10,000,000 4,400,000 Wooster, OH, IDR Bonds, Allen Group Inc., NBD, LOC 3.40 12/1/10 0 4,400,000 4,400,000 1,000,000 Worthington, OH, GO Bonds, City SD, FGIC insured 3.65 12/1/98 0 1,000,000 1,000,000 $ 1,000,000 $ 30,082,546 $ 31,082,546 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-67 WELLS FARGO FUNDS - NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) OKLAHOMA $ 2,615,000 Oklahoma County, OK, Finance Authority, IDR Bonds, Perrine Office Project, FGIC insured 3.20% 12/1/14 $ 0 $ 2,615,000 $ 2,615,000 2,625,000 Oklahoma County, OK, IDR Bonds, Carbon Office, FGIC insured 3.20 12/1/14 0 2,625,000 2,625,000 $ 0 5,240,000 5,240,000 OREGON $ 9,350,000 Klamath Falls, OR, Electric RV, Salt Caves Hydroelectric, mandatory put 5/3/99 @ 100 3.80% 5/1/23 $ 0 $ 9,355,565 $ 9,355,565 1,225,000 Multnomah County OR COP 6.50 12/15/98 1,225,502 0 1,225,502 1,000,000 Multnomah County OR School District #1J 6.60 12/15/98 1,000,397 0 1,000,397 7,100,000 Oregon State HEHFA RV, Quatama Crossing Housing Project, U.S. Bank N.A., LOC 3.10 1/1/31 0 7,100,000 7,100,000 $ 2,225,899 $ 16,455,565 $ 18,681,464 PENNSYLVANIA $11,600,000 Allegheny County, PA, IDR Bonds, Longwood at Oakmont Inc., Dresdner Bank AG, LOC 3.25% 7/1/27 $ 0 $ 11,600,000 $ 11,600,000 9,000,000 Allegheny County, PA, PCR Bonds 3.30 1/22/99 0 9,000,000 9,000,000 1,000,000 Berks County, PA, IDR Bonds, GTD by CNA Insurance 3.25 7/1/16 0 1,000,000 1,000,000 1,100,000 Butler County, PA, IDA, PCR Bonds, Pennzoil Co. Project, Mellon Bank, LOC 3.45 12/1/12 0 1,100,000 1,100,000 5,245,000 Chartiers Valley, PA, Industrial & Commercial Development Authority, IDR Bonds, GTD by ADP, Inc. 4.30 11/15/17 0 5,245,000 5,245,000 28,400,000 Harrisburg, PA, Authority RV, Adjusted PA Pool Financing Fund 3.30 7/1/21 0 28,400,000 28,400,000 2,590,000 Pennsylvania Intergovernmental Cooperative Authority, Special Tax RV, MBIA insured 3.25 6/15/23 0 2,590,000 2,590,000 5,500,000 Quakertown, PA, Health Care RV, Hospital Group Pooled Financing, PNC Bank, LOC 3.25 7/1/05 0 5,500,000 5,500,000 4,100,000 Quakertown, PA, Health Care RV, Hospital Group Pooled Financing, Series A, PNC Bank, LOC 3.25 7/1/26 0 4,100,000 4,100,000 $ 0 $ 68,535,000 $ 68,535,000 PUERTO RICO $ 2,000,000 Puerto Rico Highway 2.75% 7/1/28 $ 2,000,000 $ 0 $ 2,000,000 SOUTH CAROLINA $20,700,000 Piedmont, SC, Municipal Power Agency Electric RV, Series B, MBIA insured 3.10% 1/1/19 $ 0 $ 20,700,000 $ 20,700,000 1,500,000 South Carolina Educational Revenue 3.10 10/1/26 1,500,000 0 1,500,000 4,485,000 South Carolina Housing Finance & Development Authority, Mortgage RV, Series A, mandatory put 7/1/99 @ 100 3.65 7/1/32 0 4,485,000 4,485,000 400,000 South Carolina Jobs 3.15 11/1/25 400,000 0 400,000 2,000,000 South Carolina State GO Bonds 6.40 2/1/99 0 2,011,188 2,011,188 2,865,000 South Carolina State Public Service Authority Revenue 4.00 1/1/99 2,865,918 0 2,865,918 8,355,000 South Carolina State Public Service Authority RV, Series SG-2, MBIA insured 3.30 7/1/21 0 8,355,000 8,355,000 5,855,000 South Carolina State Public Service Authority, Utilities RV, FGIC insured 3.30 1/1/23 0 5,855,000 5,855,000 1,000,000 York County, SC, PCR Bonds, CFC insured 3.55 8/15/14 0 1,000,000 1,000,000 $ 4,765,918 $ 42,406,188 $ 47,172,106 TENNESSEE $ 1,200,000 Memphis TN GO 3.30% 8/1/07 $ 1,200,000 $ 0 $ 1,200,000 2,235,000 Memphis, TN, Capital Outlay GO Notes 5.50 7/1/99 0 2,258,572 2,258,572 1,600,000 Metro Nashville TN GO 3.20 9/1/06 1,600,000 0 1,600,000 1,095,000 Shelby County, TN, GO Bonds, ETM, USG COLL 6.00 3/1/99 0 1,101,059 1,101,059 $ 2,800,000 $ 3,359,631 $ 6,159,631 TEXAS $ 1,100,000 Bexar County, TX, MFHR Bonds, Creightons Mill Development Project, Series A, GTD by New England Mutual Life Insurance Co. 3.25% 8/1/06 $ 0 $ 1,100,000 $ 1,100,000 4,950,000 Bexar County, TX, MFHR Bonds, Park Hill Development Project, Series B, GTD by New England Mutual Life Insurance Co. 3.25 6/1/05 0 4,950,000 4,950,000 500,000 Brazos River TX Authority 3.45 3/1/26 500,000 0 500,000 2,500,000 Brazos River TX Higher Education AMT 3.15 6/1/23 2,500,000 0 2,500,000 1,000,000 Gulf Coast TX CP 3.50 12/9/98 1,000,000 0 1,000,000 3,500,000 Gulf Coast TX CP 3.50 12/9/98 3,500,000 0 3,500,000 15,000,000 Harris County, TX, Health Care Facilities RV, mandatory put 12/1/98 @ 100 3.60 12/1/25 0 15,000,000 15,000,000 5,290,000 Harris County, TX, Housing Finance Corp., MFHR Bonds, Arbor II Ltd. Project, Guardian Savings & Loan, LOC, 3.05% V/R, 10/1/05, optional PUT 1/15/99 @ 100 3.05 10/1/05 0 5,290,000 5,290,000 3,770,000 Houston, TX, Water & Sewer Systems RV, Municipal Trust Receipts, Series SG 120, FGIC insured 3.30 12/1/23 0 3,770,000 3,770,000 3,300,000 Sabine River TX AMT 3.35 3/1/26 3,300,000 0 3,300,000 1,000,000 Sabine River, TX, IDA RV, CFC insured 3.55 8/15/14 0 1,000,000 1,000,000 8,155,000 Tarrant County, TX, Housing Finance Corp., MFHR Bonds, Bear Creek Apartments Inc., KBC Bank N.V., LOC 3.20 11/1/07 0 8,155,000 8,155,000 920,000 Tarrant County, TX, MFHR Bonds, SF Apartments Project, Suntrust Bank, LOC 3.20 11/1/17 0 920,000 920,000 10,000,000 Texas Municipal Gas Corp., Gas Reserve RV, FSA insured 3.15 1/15/23 0 10,000,000 10,000,000 2,420,000 Texas Municipal Power Agency, Power RV, FGIC insured, USG COLL, P/R 9/1/99 @ 102 7.00 9/1/02 0 2,534,110 2,534,110 3,000,000 Texas State Department of Housing and Community Affairs, SFM RV, Series PT 136, MBIA insured 3.35 3/1/17 0 3,000,000 3,000,000 10,000,000 Texas State GO Notes, Series A55, GTD by National Westminster Bank 3.70 8/31/99 0 10,000,000 10,000,000 $ 10,800,000 $ 65,719,110 $ 76,519,110 UTAH $ 4,240,000 Davis County, UT, MFHR Bonds, Fox Creek Apartments, Series A 3.25% 7/15/27 $ 0 $ 4,240,000 $ 4,240,000 3,140,000 Jordan, UT, SD GO Bonds, GTD by School Board 5.00 6/15/99 0 3,174,063 3,174,063 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-68 WELLS FARGO FUNDS - NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH NATIONAL TAX-FREE MONEY MARKET FUND AND NORWEST MUNICIPAL MONEY MARKET FUND(a) STAGECOACH NATIONAL TAX-FREE NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY MARKET MUNICIPAL MONEY PRO FORMA INTEREST MATURITY FUND MARKET FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUES(b)(d) VALUES(b) 2,500,000 Utah State CP 3.35 12/9/98 2,500,000 0 2,500,000 $ 2,500,000 $ 7,414,063 $ 9,914,063 VIRGINIA $12,500,000 Harrisonburg, VA, MFHR Bonds, Rolling Brook Village Apartments, Series A, Guardian Savings & Loan, LOC, mandatory put 2/1/99 @ 100 3.70% 2/1/26 $ 0 $ 12,500,000 $ 12,500,000 3,500,000 Virginia College 3.45 1/1/31 3,500,000 0 3,500,000 2,000,000 Virginia State Public School Authority, School Finance RV 4.25 8/1/99 0 2,016,249 2,016,249 $ 3,500,000 $ 14,516,249 $ 18,016,249 WASHINGTON $ 5,800,000 Port Seattle, WA, IDR Bonds, Sysco Food Services Project 3.25% 11/1/25 $ 0 $ 5,800,000 $ 5,800,000 2,500,000 Seattle, WA, IDR Bonds, Longview Fibre Co. 3.30 1/1/03 0 2,500,000 2,500,000 815,000 Washington State GO 5.75 7/1/99 824,662 0 824,662 3,380,000 Washington State Health Care Facilities Authority RV, Catholic Health Initiatives, Series B, MBIA insured 4.25 12/1/98 0 3,380,000 3,380,000 2,205,000 Washington State Health Care Facilities Authority RV, Children's Hospital & Regional Medical Center, FSA insured 4.00 10/1/99 0 2,222,936 2,222,936 3,315,000 Washington State HFA, Community Nonprofit Housing RV, Crista Ministries, U.S. Bank N.A., LOC 3.20 7/1/11 0 3,315,000 3,315,000 7,900,000 Washington State Public Power Supply System, Power RV, Nuclear Project #1, Series CMC2 3.30 7/1/07 0 7,900,000 7,900,000 9,900,000 Washington State Public Power Supply System, Power RV, Nuclear Project #2, AMBAC insured 3.30 7/1/07 0 9,900,000 9,900,000 4,635,000 Washington State Public Power Supply System, Power RV, Nuclear Project #3, BIG insured, COLL, P/R 7/1/99 @ 100 6.00 7/1/18 0 4,710,794 4,710,794 1,000,000 Washington State Public Power Supply System, Power RV, Nuclear Project #3, Series 13, MBIA insured 3.30 7/1/15 0 1,000,000 1,000,000 $ 824,662 $ 40,728,730 $ 41,553,392 WISCONSIN $ 1,000,000 Beloit & Rock Counties, WI, IDR Bonds, GTD by CPC International 5.12% 4/1/19 $ 0 $ 1,000,000 $ 1,000,000 1,405,000 Johnson Controls, Inc., Other RV, Grantor Trust, Wachovia Corp., LOC 4.40 10/1/01 0 1,405,000 1,405,000 2,500,000 Kenosha, WI, TRAN 4.00 6/30/99 0 2,504,885 2,504,885 6,535,000 Kenosha, WI, TRAN, SD #1 3.38 9/28/99 0 6,535,000 6,535,000 1,060,000 Milwaukee, WI, IDR Bonds, Longview Fibre Co. Project 3.30 1/1/03 0 1,060,000 1,060,000 12,000,000 Oshkosh, WI, Area SD TRAN 4.00 8/24/99 0 12,038,373 12,038,373 10,000,000 Racine, WI, United SD TRAN 4.00 7/7/99 0 10,024,904 10,024,904 10,000,000 Wausau, WI, IDR Bonds, Joint Venture Partnership, U.S. Bank N.A., LOC 3.10 10/1/02 0 10,000,000 10,000,000 7,100,000 Wisconsin State HEHFA RV, Alverno College Project, Allied Irish Bank, LOC 3.30 11/1/17 0 7,100,000 7,100,000 3,475,000 Wisconsin State HEHFA RV, Series PA 183, MBIA Insured 3.30 8/15/98 0 3,475,000 3,475,000 $ 0 $ 55,143,162 $ 55,143,162 WYOMING $ 1,000,000 Green River, WY, PCR Bonds, Allied Corp. Project, GTD by Allied Signal Corp. 3.30% 12/1/12 $ 0 $ 1,000,000 $ 1,000,000 4,260,000 Uinta County WY PCR 3.25 8/15/20 4,260,000 0 4,260,000 $ 4,260,000 $ 1,000,000 $ 5,260,000 SHORT-TERM INSTRUMENTS 29,613,524 Federated Tax-Free Obligations Fund $ 0 $ 29,613,524 $ 29,613,524 17,000,000 Fidelity Tax Exempt Money Market Fund 0 17,000,000 17,000,000 514,778 Provident Municipal Fund 0 514,778 514,778 $ 0 $ 47,128,302 $ 47,128,302 COMMERCIAL PAPER 13,600,000 City of Austin TX CP $ 0 $ 13,600,000 $ 13,600,000 14,200,000 Hospital Board FL CP 0 14,200,000 14,200,000 $ 0 $ 27,800,000 $ 27,800,000 INVESTMENTS IN SECURITIES PRIOR TO PRO FORMA ADJUSTMENTS $ 90,560,966 $1,316,241,190 $1,406,802,156 PRO FORMA ADJUSTMENTS To Securities at Market Value $(58,706,367) $ (42,261,328)(d) $ (100,967,695) TOTAL INVESTMENTS IN SECURITIES $ 31,854,599 $1,273,979,862 $1,305,834,461 (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. (c) The Institutional Class shares of the Stagecoach National Tax-Free Money Market Fund comprise 35.2% of the Fund. (d) The Institutional Class shares of the Norwest Advantage Municipal Money Market Fund comprise 96.8% of the Fund. (d) The Institutional Class shares of the Norwest Advantage Municipal Money Market Fund comprise 96.8% of the Fund. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-69 WELLS FARGO FUNDS - TREASURY PLUS INSTITUTIONAL MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 NORWEST STAGECOACH ADVANTAGE TREASURY PLUS TREASURY PLUS MONEY MARKET PRO FORMA PRO FORMA FUND FUND ADJUSTMENTS (b) COMBINED ---------------------------------------------------------------------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $ 9,874 $ 2,223,029,863 $(1,117,084,974) $ 1,105,954,763 Cash 0 2,120,597 (1,065,612) 1,054,985 Receivables: Dividends and Interest 1,018 7,722,392 (3,880,545) 3,842,865 Investment securities sold 33,415,244 0 33,415,244 Organization expenses, net of amortization 0 46,410 (23,321) 23,089 Prepaid expenses 0 35,180 (17,679) 17,501 TOTAL ASSETS 33,426,136 2,232,954,442 1,144,308,447 LIABILITIES Payables: Distribution to shareholders 21,752 7,459,495 (3,748,438) 3,732,809 Due to distributor 263,348 (132,334) 131,014 Due to advisor 381 738,029 (370,864) 367,546 Other 4,900 295,693 (148,587) 152,006 TOTAL LIABILITIES 27,033 8,756,565 4,383,375 TOTAL NET ASSETS $ 33,399,103 $ 2,224,197,877 $ 1,139,925,072 Net assets consist of: Paid-in capital $ 33,398,649 $ 2,224,193,644 $(1,117,669,781) $ 1,139,922,512 Undistributed net realized gain (loss) on investments 454 4,233 (2,127) 2,560 TOTAL NET ASSETS $ 33,399,103 $ 2,224,197,877 $ 1,139,925,072 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net Assets - Administrative Class $ 110,453,559 $ (110,453,559) (c) Shares outstanding - Administrative Class 110,438,900 (110,438,900) (c) Net asset value and offering price per share - Administrative Class $ 1.00 Net Assets - Institutional Class $ 513,211,631 $ 513,211,631 Shares outstanding - Institutional Class 513,347,732 513,347,732 Net asset value and offering price per share - Institutional Class $ 1.00 $ 1.00 Net Assets - Service Class $ 33,399,103 $ 482,860,779 $ 110,453,559 (c) $ 626,713,441 Shares outstanding - Service Class 33,398,649 482,877,097 110,438,900 (c) 626,714,646 Net asset value and offering price per share - Service Class $ 1.00 $ 1.00 $ 1.00 INVESTMENT AT COST $ 9,874 $ 2,223,029,863 $(1,117,084,974) $ 1,105,954,763 - -------------------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-70 WELLS FARGO FUNDS - TREASURY PLUS INSTITUTIONAL MONEY MARKET FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) NORWEST STAGECOACH ADVANTAGE TREASURY PLUS TREASURY PLUS MONEY MARKET PRO FORMA PRO FORMA FUND (f) FUND (a) ADJUSTMENTS (b) COMBINED --------------------------------------------------------------------------- INVESTMENT INCOME Interest $ 219,687 $ 118,223,832 $ 118,443,519 TOTAL INVESTMENT INCOME 219,687 118,223,832 118,443,519 EXPENSES Advisory fees 8,883 5,454,458 (4,364,975) (d) 1,098,366 Administration fees 4,442 1,489,801 153,306 (d) 1,647,549 Custody fees 888 364,362 (145,577) (d) 219,673 Shareholder serv fees 0 4,262,498 (2,778,135) (d) 1,484,363 Portfolio accounting fees 16,419 497,853 (434,272) (d) 80,000 Transfer agency fees 11,104 1,659,314 (1,621,688) (d) 48,730 Distribution fees 0 100,013 (100,013) (d) 0 Organization costs 0 25,215 0 25,215 Legal and audit fees 8,022 162,302 (103,749) (d) 66,575 Registration fees 1,925 239,262 0 241,187 Directors' fees 32 3,817 2,580 (d) 6,429 Shareholder reports 5 56,515 (31,211) (d) 25,309 Other 414 96,933 (51,186) (d) 46,161 TOTAL EXPENSES 52,134 14,412,343 4,989,557 Less: Waived fees and reimbursed expenses fees (29,926) (3,479,164) 2,512,313 (e) (996,777) NET EXPENSES 22,208 10,933,179 3,992,780 NET INVESTMENT INCOME (LOSS) 197,479 107,290,653 114,450,739 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on sale of investments 454 126,995 127,449 Net change in unrealized appreciation (depreciation) of investments (7,757) (7,757) NET GAIN (LOSS) ON INVESTMENTS 454 119,238 119,692 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 197,933 $ 107,409,891 $ 114,570,431 - ---------------------------------------------------------------------------------------------------------------------------------- * The Administrative, Institutional, and Service Classes of the Stagecoach Treasury Plus Money Market Fund and Servic eClass of the Norwest Advantage Treasury Plus Fund are meerging to form the Wells Fargo Treasury Plus Institutional Money Market Fund, historical accounting data from the Stagecoach Treasury Plus Money Market Fund will be kept. (a) Information shown prior to December 12, 1997, is for the Stagecoach Treasury Plus Money Market Fund which merged with the Overland U.S. Treasury Money Market Fund on December 12, 1997. (b) The Administrative Class, Institutional Class, and Service Class shares of the StagecoachTreasury Plus Money Market Fund comprise 49.7% of the Fund's net assets. The remaining 50.3% of the Funds net assets represent Class A and Class E share of the Stagecoach Treasury Plus Money Market Fund. Such Class A and Class E shares will be exchanged for respective shares of a different fund in a separate reorganization. Accordingly the net assets attributable to Class A and Class E shares have been removed as an adjustment for purposes of this pro forma financial statement. (c) Reflects new shares issued, net of retired shares of the respective Funds which are not accounting survivors. (d) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (e) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. (f) This Fund commenced operations on July 6, 1998. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-71 WELLS FARGO FUNDS - TREASURY PLUS INSTITUTIONAL MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH TREASURY PLUS MONEY MARKET FUND AND NORWEST ADVANTAGE TREASURY PLUS FUND(a) NORWEST STAGECOACH ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 TREASURY PLUS TREASURY PLUS PRO FORMA INTEREST MATURITY MONEY MARKET FUND FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b)(c) VALUE(b) VALUE (b) U.S. TREASURY SECURITIES U.S. TREASURY NOTES $ 30,000,000 U.S. Treasury Notes 5.88% 8/31/99 $ 30,154,264 $ 0 $ 30,154,264 44,640,000 U.S. Treasury Notes 6.38 1/15/99 44,694,071 0 44,694,071 25,000,000 U.S. Treasury Notes 7.00 4/15/99 25,135,029 0 25,135,029 60,000,000 U.S. Treasury Notes 6.38 7/15/99 60,347,854 0 60,347,854 84,635,000 U.S. Treasury Notes 6.50 4/30/99 84,964,301 0 84,964,301 50,000,000 U.S. Treasury Notes 6.75 6/30/99 50,592,635 0 50,592,635 49,775,000 U.S. Treasury Notes 6.25 3/31/99 49,896,205 0 49,896,205 69,300,000 U.S. Treasury Notes 6.38 4/30/99 69,524,413 0 69,524,413 60,000,000 U.S. Treasury Notes 6.00 6/30/99 60,557,361 0 60,557,361 $ 475,866,133 $ 0 $ 475,866,133 U.S. TREASURY BILLS $ 100,000,000 U.S. Treasury Bills 4.38% 2/11/99 $ 99,120,000 $ 0 99,120,000 50,000,000 U.S. Treasury Bills 4.51 5/27/99 48,909,729 0 48,909,729 $ 148,029,729 $ 0 $ 148,029,729 TOTAL U.S. TREASURY SECURITIES $ 623,895,862 $ 0 $ 623,895,862 REPURCHASE AGREEMENTS NationsBanc Montgomery Securities, Inc.,to $ 9,874 be repurchased at $9,875 5.30% 12/1/98 $ 0 $9,874 $ 9,874 Goldman Sachs Pooled Repurchase Agreement - 102% Collateralized 316,178,000 by U.S. Government Securities 5.25 12/1/98 316,178,000 0 316,178,000 HSBC Securities Incorporated Repurchase Agreement - 102% Collateralized by U.S. 443,968,000 Government Securities 5.15 12/1/98 443,968,000 0 443,968,000 JP Morgan Securities Incorporated Repurchase Agreement - 102% Collateralized by U.S. 397,323,000 Government Securities 5.15 12/1/98 397,323,000 0 397,323,000 Morgan Stanley & Company Repurchase Agreement - 102% Collateralized by U.S. 441,665,000 Government Securities 5.23 12/1/98 441,665,000 0 441,665,000 $ 1,599,134,000 $9,874 $ 1,599,143,874 INVESTMENTS IN SECURITIES PRIOR TO PRO FORMA ADJUSTMENTS $ 2,223,029,862 $9,874 $ 2,223,039,736 PRO FORMA ADJUSTMENTS (c) To Securities at Market Value $(1,117,084,973) $ 0 $(1,117,084,973) TOTAL INVESTMENTS IN SECURITIES $ 1,105,944,889 $9,874 $ 1,105,954,763 (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. (c) The Administrative Class, Institutional Class and Service Class shares of the Treasury Plus Money Market Fund comprise 49.7% of the Fund. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-72 WELLS FARGO FUNDS - GOVERNMENT MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) - NOVEMBER 30, 1998 STAGECOACH GOVERNMENT NORWEST MONEY MARKET ADVANTAGE U.S. PRO FORMA PRO FORMA FUND GOVERNMENT FUND ADJUSTMENTS COMBINED ------------------------------------------------------------------------- ASSETS INVESTMENTS: In securities, at market value (see cost below) $ 69,854,936 $ 2,633,930,266 $ 2,703,785,202 Cash 74,290 0 74,290 Receivables: Dividends and Interest 266,506 10,097,194 10,363,700 Prepaid expenses 1,115 0 1,115 TOTAL ASSETS 70,196,847 2,644,027,460 2,714,224,307 LIABILITIES Payables: Cash overdraft due to custodian 0 10,379,140 10,379,140 Distribution to shareholders 244,567 9,594,614 9,839,181 Due to distributor 50,079 286,065 336,144 Due to advisor 15,153 937,970 953,123 Other 41,391 5,216 46,607 TOTAL LIABILITIES 351,190 21,203,005 21,554,195 TOTAL NET ASSETS $ 69,845,657 $ 2,622,824,455 $ 2,692,670,112 Net assets consist of: Paid-in capital $ 69,845,477 $ 2,622,876,720 $ 2,692,722,197 Undistributed net investment income (loss) 0 (56,270) (56,270) Undistributed net realized gain (loss) on investments 180 4,005 4,185 TOTAL NET ASSETS $ 69,845,657 $ 2,622,824,455 $ 2,692,670,112 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE Net assets - Class A $ 69,845,657 $ 69,845,657 Shares outstanding - Class A 69,846,691 69,846,691 Net asset value and offering price per share - Class A $ 1.00 $ 1.00 Net assets - Service Class $ 2,622,824,455 $ 2,622,824,455 Shares outstanding - Service Class 2,622,920,232 2,622,920,232 Net assets value and offering price per share - Service Class $ 1.00 $ 1.00 INVESTMENT AT COST $ 69,854,936 $ 2,633,930,266 $ 2,703,785,202 - --------------------------------------------------------------------------------------------------------------------------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-73 WELLS FARGO FUNDS - GOVERNMENT MONEY MARKET FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED NOVEMBER 30, 1998 (UNAUDITED) STAGECOACH GOVERNMENT NORWEST MONEY MARKET ADVANTAGE U.S. PRO FORMA PRO FORMA FUND GOVERNMENT FUND ADJUSTMENTS COMBINED ------------------------------------------------------------------------ INVESTMENT INCOME Interest $ 3,875,036 $ 138,210,049 $ 142,085,085 TOTAL INVESTMENT INCOME 3,875,036 138,210,049 142,085,085 EXPENSES Advisory fees 175,686 3,414,336 5,447,213 (a) 9,037,235 Administration fees 47,889 2,511,944 1,313,268 (a) 3,873,101 Custody fees 11,736 266,194 238,483 (a) 516,413 Shareholder serv fees 175,686 0 (382)(a) 175,304 Portfolio accounting fees 68,122 68,500 (56,622)(a) 80,000 Transfer agency fees 70,274 6,279,865 (6,189,209)(a) 160,930 Distribution fees 14,902 0 (14,902)(a) Legal & audit fees 33,315 55,522 (22,209)(a) 66,628 Registration fees 33,216 158,112 0 191,328 Directors' fees 3,853 33,186 (30,610)(a) 6,429 Shareholder reports 29,525 85,390 (11,491)(a) 103,424 Other 9,439 68,009 (3,872)(a) 73,576 TOTAL EXPENSES 673,643 12,941,058 14,284,367 Less: Waived fees and reimbursed expenses fees (147,503) (298,369) (752,855)(b) (1,198,727) NET EXPENSES 526,140 12,642,689 13,085,640 NET INVESTMENT INCOME (LOSS) 3,348,896 125,567,360 122,719,581 REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain (loss) on sale of investments 5,410 260,304 265,714 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,354,306 $ 125,827,664 $ 122,985,295 - --------------------------------------------------------------------------------------------------------------------------------- * The Stagecoach Government Money Market Fund and Norwest Advantage U.S. Government Fund are merging to form the Wells Fargo Government Money Market Fund, historical accounting data from the Norwest Advantage U.S. Government Fund will be kept. (a) Reflects adjustment in expenses due to elimination of duplicate services or effect of purposed contract rate. (b) Reflects a change in the amount Wells Fargo would have waived to keep the Fund at its purposed expense limit. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-74 WELLS FARGO FUNDS - GOVERNMENT MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH GOVERNMENT MONEY MARKET FUND, AND NORWEST ADVANTAGE U.S. GOVERNMENT FUND(a) STAGECOACH GOVERNMENT NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY U.S. GOVERNMENT PRO FORMA INTEREST MATURITY MARKET FUND FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUES(b) U.S. GOVERNMENT AGENCY SECURITIES FFCB $ 45,000,000 FFCB 5.65% 1/4/99 $ 0 $ 44,997,511 $ 44,997,511 16,365,000 FFCB 5.30 2/2/99 0 16,355,176 16,355,176 25,000,000 FFCB 5.38 3/2/99 0 24,991,337 24,991,337 12,400,000 FFCB 5.60 5/3/99 0 12,411,258 12,411,258 3,000,000 FFCB 4.74 2/25/99 2,999,654 0 2,999,654 $ 2,999,654 $ 98,755,282 $ 101,754,936 FHLB $ 5,000,000 FHLB 2.68*% 12/2/98 $ 4,999,257 $ 0 $ 4,999,257 50,000,000 FHLB 5.19 12/7/98 0 50,000,000 50,000,000 25,000,000 FHLB 5.83 12/17/98 0 24,999,551 24,999,551 2,000,000 FHLB 5.83 12/17/98 2,000,055 0 2,000,055 50,000,000 FHLB 4.94 1/22/99 0 49,643,222 49,643,222 4,000,000 FHLB 4.90* 2/12/99 3,960,093 0 3,960,093 8,500,000 FHLB 5.03 2/23/99 0 8,488,699 8,488,699 3,000,000 FHLB 5.57 3/9/99 2,999,984 0 2,999,984 17,000,000 FHLB 5.58 3/11/99 0 17,035,363 17,035,363 28,250,000 FHLB 5.60 3/30/99 0 28,250,000 28,250,000 3,285,000 FHLB 5.51 4/1/99 0 3,292,842 3,292,842 2,000,000 FHLB 5.57 4/7/99 1,999,375 0 1,999,375 50,000,000 FHLB 5.03 4/9/99 0 49,991,165 49,991,165 1,370,000 FHLB 5.63 4/9/99 1,369,498 0 1,369,498 3,000,000 FHLB 4.68* 4/21/99 2,945,598 0 2,945,598 3,650,000 FHLB 6.20 5/14/99 0 3,673,957 3,673,957 12,750,000 FHLB 5.61 6/18/99 0 12,800,317 12,800,317 30,000,000 FHLB 5.51 7/6/99 0 29,987,236 29,987,236 2,000,000 FHLB 5.54 7/13/99 2,009,135 0 2,009,135 1,515,000 FHLB 5.54 7/15/99 1,520,476 0 1,520,476 5,000,000 FHLB 5.01 8/19/99 4,994,273 0 4,994,273 50,000,000 FHLB 4.84 11/12/99 0 49,972,036 49,972,036 25,000,000 FHLB 4.84 11/16/99 0 24,983,221 24,983,221 $ 28,797,744 $ 353,117,609 $ 381,915,353 FHLMC $100,000,000 FHLMC 4.86% 4/21/99 $ 0 $ 99,977,206 $ 99,977,206 20,590,000 FHLMC 7.13 7/21/99 0 20,883,204 20,883,204 35,000,000 FHLMC 4.96 8/27/99 0 34,963,271 34,963,271 50,000,000 FHLMC 4.76 12/18/98 0 49,887,729 49,887,729 36,450,000 FHLMC 5.08 12/23/98 0 36,336,843 36,336,843 50,000,000 FHLMC 5.04 1/15/99 0 49,685,000 49,685,000 35,000,000 FHLMC 4.80 1/22/99 0 34,757,334 34,757,334 50,000,000 FHLMC 5.01 1/28/99 0 49,596,417 49,596,417 25,000,000 FHLMC 5.00 1/29/99 0 24,795,139 24,795,139 68,766,000 FHLMC 4.75 2/17/99 0 68,036,617 68,036,617 50,000,000 FHLMC 4.94 2/22/99 0 49,431,105 49,431,105 35,000,000 FHLMC 4.89 3/5/99 0 34,552,652 34,552,652 25,000,000 FHLMC 4.83 3/12/99 0 24,661,230 24,661,230 10,000,000 FHLMC 4.82 3/22/99 0 9,851,384 9,851,384 10,000,000 FHLMC 4.82 3/26/99 0 9,846,029 9,846,029 $ 0 $ 597,261,160 $ 597,261,160 FNMA $ 30,000,000 FNMA 5.25% 1/19/99 $ 0 $ 30,000,000 $ 30,000,000 75,000,000 FNMA 4.79 12/14/98 0 74,870,271 74,870,271 30,000,000 FNMA 5.04 1/8/99 0 29,840,400 29,840,400 13,641,000 FNMA 4.80 2/2/99 0 13,526,416 13,526,416 9,800,000 FNMA 5.33 2/12/99 0 9,805,204 9,805,204 5,000,000 FNMA 5.38 2/12/99 0 4,998,850 4,998,850 10,000,000 FNMA 4.95 2/22/99 0 9,985,193 9,985,193 4,000,000 FNMA 5.15* 2/25/99 3,950,789 0 3,950,789 75,000,000 FNMA 4.50 4/1/99 0 73,865,625 73,865,625 50,000,000 FNMA 5.03 4/9/99 0 49,991,165 49,991,165 10,000,000 FNMA 6.42 4/15/99 0 10,051,993 10,051,993 16,300,000 FNMA 5.63 5/6/99 0 16,299,030 16,299,030 20,000,000 FNMA 5.57 5/7/99 0 19,985,548 19,985,548 5,000,000 FNMA 5.65 5/7/99 0 4,998,468 4,998,468 1,300,000 FNMA 5.27* 5/19/99 1,268,449 0 1,268,449 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-75 WELLS FARGO FUNDS - GOVERNMENT MONEY MARKET FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR STAGECOACH GOVERNMENT MONEY MARKET FUND, AND NORWEST ADVANTAGE U.S. GOVERNMENT FUND(a) STAGECOACH GOVERNMENT NORWEST ADVANTAGE (UNAUDITED) NOVEMBER 30, 1998 MONEY U.S. GOVERNMENT PRO FORMA INTEREST MATURITY MARKET FUND FUND COMBINED PRINCIPAL SECURITY DESCRIPTION RATE DATE VALUE(b) VALUE(b) VALUES(b) U.S. GOVERNMENT AGENCY SECURITIES 50,000,000 FNMA 5.01 5/28/99 0 49,978,446 49,978,446 1,300,000 FNMA 5.48 7/9/99 1,299,106 0 1,299,106 1,300,000 FNMA 5.39* 8/4/99 1,253,629 0 1,253,629 10,000,000 FNMA 5.47 8/16/99 0 10,047,294 10,047,294 4,000,000 FNMA 5.02 8/19/99 3,997,898 0 3,997,898 87,500,000 FNMA 5.79 10/12/99 0 87,989,682 87,989,682 25,000,000 FNMA 4.54 4/7/99 0 24,599,598 24,599,598 $ 11,769,871 $ 520,833,183 $ 532,603,054 SLMA $ 15,510,000 SLMA 5.58% 3/11/99 $ 0 $ 15,509,013 $ 15,509,013 25,000,000 SLMA 5.58 8/11/99 0 24,993,156 24,993,156 7,000,000 SLMA 4.85 11/4/99 6,986,697 0 6,998,667 $ 6,998,667 $ 40,502,169 $ 47,500,836 TOTAL U.S. GOVERNMENT AGENCY SECURITIES $ 50,565,936 $1,610,469,403 $1,661,035,339 OTHER AGENCY NOTES $ 50,000,000 Israel Aid 7.13% 8/15/99 $ 0 $ 50,730,785 $ 50,730,785 20,200,000 State of Israel A125 6.00 2/15/99 0 20,212,735 20,212,735 $ 0 $ 70,943,520 $ 70,943,520 CASH MANAGEMENT ACCOUNTS $ 35,000,000 AIM Short-Term Investment Government Fund $ 0 $ 35,000,000 $ 35,000,000 COMMERCIAL PAPER $ 72,073,000 USA Group, Secondary Market Services, SLMA LOC 5.03% 12/2/98 $ 0 72,062,930 72,062,930 27,525,000 USA Group, Secondary Market Services, SLMA LOC 5.03 12/4/98 0 27,513,462 27,513,462 $ 0 $ 99,576,392 $ 99,576,392 REPURCHASE AGREEMENTS $500,000,000 Bear, Stearns & Co., Inc., collateralized by U.S. Government Securities 5.50% 12/1/98 $ 0 $ 500,000,000 $ 500,000,000 9,990,126 NationsBanc Montgomery Securities, Inc., collateralized by U.S. Government Securities 5.30% 12/1/98 0 9,990,126 9,990,126 195,450,825 NationsBanc Montgomery Securities, Inc., collateralized by U.S. Government Securities 5.50 12/1/98 0 195,450,825 195,450,825 123,251,000 Goldman Sachs Pooled Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.25 12/1/98 10,751,000 0 123,251,000 50,000,000 Goldman Sachs Pooled Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.19 12/1/98 0 50,000,000 50,000,000 62,500,000 Goldman Sachs Pooled Repurchase Agreement - 102% Collateralized by U.S. Government Securities 4.85 12/1/98 0 62,500,000 62,500,000 8,538,000 JP Morgan Securities Incorporated Repurchase Agreement - 102% Collateralized by U.S. Government Securities 5.15 12/1/98 8,538,000 0 8,538,000 $ 19,289,000 $ 817,940,951 $ 837,229,951 TOTAL INVESTMENTS IN SECURITIES $ 69,854,936 $2,633,930,266 $2,703,785,202 (a) Due to different investment objectives, certain of these securities may be sold by the Investment Manager once the Funds are Merged. (b) See historical financial statements and footnotes thereto of each of the Funds regarding valuation of securities. * Yield to Maturity. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. (See S-77) S-76 WELLS FARGO FUNDS Notes to Pro Forma Financial Statements (Unaudited) 1. BASIS OF COMBINATION The accompanying unaudited Pro Forma Combining Portfolio of Investments and Statement of Assets and Liabilities and the Statement of Operations reflect the accounts of Norwest Advantage Funds ("Advantage") and Stagecoach Funds, Inc. ("Stagecoach") for the year ended November 30, 1998. These statements have been derived from the annual and semi-annual reports of Advantage, and the underlying accounting records of Stagecoach that were utilized in calculating the daily net asset values for the year ended November 30, 1998. The pro forma statements give effect to the proposed transfer of the assets and stated liabilities as follows: Stagecoach Fund Norwest Advantage Fund Combined Fund - ------------------------------------ ------------------------------------ -------------------------------------- Growth Fund ValuGrowth Stock Fund Growth Fund - ------------------------------------ ------------------------------------ -------------------------------------- Diversified Equity Income Equity Fund Income Equity Fund - ------------------------------------ ------------------------------------ -------------------------------------- Small Cap Fund Strategic Growth Fund Small Company Stock Fund Small Cap Fund - ------------------------------------ ------------------------------------ -------------------------------------- Income Fund -- Total Return Bond Fund Performa Strategic Value Bond Fund Income Fund - ------------------------------------ ------------------------------------ -------------------------------------- U.S. Government Income Fund U.S. Government Allocation Fund Intermediate Government Income Fund Intermediate Government Income Fund - ------------------------------------ ------------------------------------ -------------------------------------- Short-Intermediate U.S. Government Income Fund Limited Term Government Income Fund Limited Term Government Income Fund - ------------------------------------ ------------------------------------ -------------------------------------- National Tax-Free Fund Tax-Free Income Fund Tax-Free Income Fund - ------------------------------------ ------------------------------------ -------------------------------------- Prime Money Market Fund (Administrative, Institutional, and Service Classes) Cash Investment Fund Cash Investment Money Market Fund - ------------------------------------ ------------------------------------ -------------------------------------- Prime Money Market Fund (Class A) Ready Cash Fund Money Market Fund (Investor and Exchange Classes) Prime Investment Money Market Fund - ------------------------------------ ------------------------------------ -------------------------------------- National Tax-Free Money Market Fund Municipal Money Market Market Fund National Tax-Free Money Fund (Class A) (Class A) (Class A) - ------------------------------------ ------------------------------------ -------------------------------------- National Tax-Free Institutional Money National Tax-Free Money Market Fund Municipal Money Market Fund Market Fund (Institutional Class) (Service Class) (Institutional and Service Classes) - ------------------------------------ ------------------------------------ -------------------------------------- Treasury Plus Money Market Fund Treasury Plus Institutional Money (Administrative, Institutional, and Treasury Plus Fund Market Fund Service Classes) (Institutional Class) (Institutional, and Service Classes) - ------------------------------------ ------------------------------------ -------------------------------------- Government Money Market Fund U.S. Government Fund Government Money Market Fund Under generally accepted accounting principles, the historical cost of the investment securities will be carried forward to the surviving entity. The pro forma combining statements have been prepared based upon the proposed structure of the new Wells Fargo Funds (the "Funds") utilizing proposed fee data and historical data of the Stagecoach and Norwest Advantage Funds (the "Predecessor Funds"). The Pro Forma Combining Portfolio of Investments, Statement of Assets and Liabilities and Statement of Operations should be read in conjunction with the historical financial statements of the Predecessor Funds. S-77 For the year ended November 30, 1998, the pro forma adjusted investment advisory fees for the Funds are as follows: Fund % of Average Daily Net Assets -------------------------------------------- ----------------------------- Growth Fund 0.75 Income Equity Fund 0.75 Small Cap Fund 0.90 Income Fund 0.50 Intermediate Government Income Fund 0.50 Limited Term Government Income Fund 0.50 Tax-Free Income Fund 0.40 Cash Investment Money Market Fund 0.10 Prime Investment Money Market Fund 0.40 National Tax-Free Money Market Fund 0.25 National Tax-Free Institutional Money Market 0.10 Fund Treasury Plus Institutional Money Market Fund 0.10 Government Money Market Fund 0.35 For the year ended November 30, 1998, the pro forma adjusted administration fees were computed based on the annual rate of 0.15% of the average daily net assets of the Funds. The pro forma adjusted transfer agency fees for the year ended November 30, 1998, were calculated on a per shareholder account basis. For the year ended November 30, 1998, the pro forma shareholder servicing fees were computed based on an annual rate of 0.25% for Classes A, B, C and Service, and 0.10% for the Institutional Class. For the year ended November 30, 1998, the pro forma custody fees were computed based on an annual rate of 0.02%. Stagecoach has adopted Distribution Plans pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, whereby the Distribution Plans for the Class B and C shares provide that the Funds may pay as reimbursement or compensation for distribution related services, a monthly fee at an annual rate of up to 0.75% of the average net assets attributable to the those Classes. The pro forma adjustments to portfolio accounting and directors' fees reflect contracts of the Funds. The pro forma adjustments to legal and audit, registration, and shareholder reports fees reflect the estimated differences resulting from having a single entity with a greater level of net assets and number of shareholders, savings due to economies of scale and decreases in certain expenses duplicated between the funds. 2. PORTFOLIO VALUATION Investments in securities in the pro forma financial statements are valued in accordance with the description of their respective prospectuses. 3. CAPITAL SHARES S-78 The Pro Forma Combining Statement of Assets and Liabilities assumes the issuance or reduction of shares of each of the Predecessor Funds merging into the Funds as if the reorganization had taken place on November 30, 1998, and is based on the net asset value of the surviving legal entity. The pro forma number of shares of each of the consolidated funds is as follows: Pro Forma Pro Forma Pro Forma Pro Forma Shares Pro Forma Shares Shares Shares Outstanding Shares Outstanding Outstanding Outstanding Institutional Outstanding Fund Class A Class B Class C Class Service Class -------------------------------------------- ------------ ----------- ----------- ------------- ------------- Growth Fund 15,361,055 898,744 -- 28,875,296 -- Income Equity Fund 6.262.981 3,530,248 12,002 32,071,380 -- Small Cap Fund 6,160,119 2,147,740 1,039,759 6,585,331 -- Income Fund 1,341,599 1,329,983 -- 45,412,214 -- Intermediate Government Income Fund 23,688,543 5,429,008 356,415 27,459,185 -- Limited Term Government Income Fund 3,581,329 891,366 -- 16,019,724 -- Tax-Free Income Fund 8,207,698 1,454,614 651,051 29,471,721 -- Cash Investment Money Market Fund -- -- -- 1,169,346,181 7,610,860,732 Prime Investment Money Market Fund 9,456,238,230 1,142,701,428 -- -- -- National Tax-Free Money Market Fund 101,824,210 -- -- -- -- National Tax-Free Institutional Money Market Fund -- -- -- 32,169,381 1,282,327,994 Treasury Plus Institutional Money Market Fund -- -- -- 513,347,732 626,714,646 Government Money Market Fund 2,692,766,923 -- -- -- -- 4. INVESTMENT OBJECTIVE AND POLICIES These statements do not reflect the effects of the proposed differing investment objectives and policies of certain of the Funds. S-79 PART C ITEM 15. INDEMNIFICATION. Incorporated by reference to Item 25 of Post Effective Amendment No.[ ] to Registrant's Registration Statement on Form N-1A (File Nos. [333-74295; 811-09253], filed [ , 1999] (accession number [ - - ]). ITEM 16. EXHIBITS. (1) Incorporated by reference to Item 23, Exhibit 1 of [ ] Effective Amendment No.[ ] to Registrant's Registration Statement on Form N-1A (File Nos. [333-74295; 811-09253], filed [ , 1999] (accession number [ - - ]). (2) Incorporated by reference to Item 23, Exhibit 2 of [ ] Effective Amendment No.[ ] to Registrant's Registration Statement on Form N-1A (File Nos. [333-74295; 811-09253], filed [ , 1999] (accession number [ - - ]). (3) Not applicable. (4) Agreements and Plans of Reorganization as Filed herewith as Exhibit B to Part A. (5) Not Applicable. (6) Incorporated by reference to Item 23, Exhibits 4(a), (b)(i), and (b)(ii) of [ ] Effective Amendment No.[ ] to Registrant's Registration Statement on Form N-1A (File Nos. [333-74295; 811-09253], filed [ , 1999] (accession number [ - - ]). (7) Incorporated by reference to Item 23, Exhibit 5(a) and (b) of [ ] Effective Amendment No.[ ] to Registrant's Registration Statement on Form N-1A (File Nos. [333-74295; 811-09253], filed [ , 1999] (accession number [ - - ]). (8) Not applicable. (9) Incorporated by reference to Item 23, Exhibit 7 of [ ] Effective Amendment No.[ ] to Registrant's Registration Statement on Form N-1A (File Nos. [333-74295; 811-09253], filed [ , 1999] (accession number [ - - ]). (10) Incorporated by reference to Item 23, Exhibit 13 of [ ] Effective Amendment No.[ ] to Registrant's Registration Statement on Form N-1A (File Nos. [333-74295; 811-09253], filed [ , 1999] (accession number [ - - ]). (11) Incorporated by reference to Item 23, Exhibit 9 of [ ] Effective Amendment No.[ ] to Registrant's Registration Statement on Form N-1A (File Nos. [333-74295; 811-09253], filed [ , 1999] (accession number [ - - ]). (12) Opinion of KPMG LLP as to the tax consequences of the reorganization, to be Filed by Post-Effective Amendment within a reasonably prompt amount of time after the closing date of the reorganization. (13) Incorporated by reference to Item 23, Exhibit 8(a), (b), (c) and (d) of [ ] Effective Amendment No.[ ] to Registrant's Registration Statement on Form N-1A (File Nos. [333-74295; 811-09253], filed [ , 1999] (accession number [ - - ]). (14) Not applicable. (15) Not applicable. (16) Powers of Attorney. Filed herewith. (17) Not applicable. ITEM 17. UNDERTAKINGS. (1) Not applicable. (2) Not applicable. C-1 SIGNATURES As required by the Securities Act of 1933, this Registration Statement has been signed on behalf of the Registrant in the City of San Francisco and State of California on the 22nd day of April, 1999. WELLS FARGO FUNDS TRUST By: /s/ ----------------------------------------- Richard H. Blank, Jr. Secretary and Treasurer (Principal Financial Officer) Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons on the 22nd day of April, 1999. SIGNATURES TITLE -------------------------- -------------------------- 1) Principal Executive Officer /s/ Chairman and President -------------------------- [ ] 2) Principal Financial and Accounting Officer /s/ Secretary and Treasurer -------------------------- Richard H. Blank, Jr. 3) A Majority of the Trustees /s/ Chairman -------------------------- [ ] [ ] Trustee [ ] Trustee [ ] Trustee [ ] Trustee [ ] Trustee [ ] Trustee [ ] Trustee By: /s/ -------------------------- [ ] (Attorney-in-fact) C-2 SIGNATURES As required by the Securities Act of 1933, this Registration Statement of Wells Fargo Funds Trust has been signed on behalf of Wells Fargo Core Trust (Delaware) in the San Francisco and State of California on the 22nd day of April, 1999. WELLS FARGO FUNDS TRUST By: /s/ ----------------------------------------- [ ] President This Registration Statement has been signed by the following persons on the 21st day of September, 1998. SIGNATURES TITLE -------------------------- -------------------------- 1) Principal Executive Officer /s/ Chairman and President -------------------------- [ ] 2) Principal Financial and Accounting Officer /s/ Secretary and Treasurer -------------------------- Richard H. Blank, Jr. 3) A Majority of the Trustees /s/ Chairman -------------------------- [ ] [ ] Trustee [ ] Trustee [ ] Trustee By: /s/ -------------------------- [ ] (Attorney-in-fact) C-3 INDEX TO EXHIBITS EXHIBIT NUMBER DESCRIPTION OF EXHIBIT (16) Powers of Attorney. C-4