LIPPER FUNDS INC, N-1A EL/A, 1995-12-20

LIPPER FUNDS INC
N-1A EL/A, 1995-12-20

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As filed with the Securities and Exchange Commission on
December 20 , 1995.

Registration Nos. 33-97984
811-9108

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /

Pre-Effective Amendment No. 1 / X /

Post-Effective Amendment No. / /

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 / X /

Amendment No. 1 / X /

THE LIPPER FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)

101 Park Avenue
New York, NY 10178
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: (212) 883-6333

ABRAHAM BIDERMAN
THE LIPPER FUNDS, INC.
101 Park Avenue
New York, NY 10178
(Name and Address of Agent for Service)

Copies to:

James J. Burns, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017

Page 1 of ___ Sequentially Numbered Pages
Exhibit Index begins on Page ___
<PAGE>
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of the Registration Statement.

Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
the Registrant has elected to register an indefinite number of shares of
Capital Stock, $.001 par value per share, of all series of the Registrant,
now existing or hereafter created. The amount of the registration fee
required by Rule 24f-2 is $500 and has been paid previously.

The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
THE LIPPER FUNDS, INC.

Registration Statement on Form N-1A

CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933

N-1A Item No. Location

Part A Prospectus Caption

Item 1. Cover Page . . . . . . . Cover Page

Item 2. Synopsis . . . . . . . . Prospectus Summary; Company Expenses

Item 3. Condensed Financial
Information . . . . . . Not Applicable

Item 4. General Description of
Registrant . . . . . . . Prospectus Summary; Investment Objectives
and Policies; Investment Limitations;
Additional Information

Item 5. Management of the Fund . Management of the Company

Item 5A. Management's Discussion
of Fund Performance . . Not Applicable

Item 6. Capital Stock and Other
Securities . . . . . . . Additional Information; Distribution and
Service Plans; Dividends; Exchange
Privilege

Item 7. Purchase of Securities
Being Offered . . . . . Purchase of Shares; Exchange Privilege;
Distribution and Service Plans; Valuation
of Shares

Item 8. Redemption or
Repurchase . . . . . . . Redemption of Shares; Exchange Privilege

Item 9. Legal Proceedings . . . Not Applicable

N-1A Item No. Location

Part B

Item 10. Cover Page . . . . . . . Cover Page

Item 11. Table of
Contents . . . . . . . . Table of Contents

Item 12. General Information
and History . . . . . . Not Applicable
<PAGE>
Item 13. Investment Objectives and
Policies . . . . . . . . Investment Objectives and Policies;
Investment Limitations

Item 14. Management of the
Fund . . . . . . . . . . Management of the Company

Item 15. Control Persons and
Principal Holders
of Securities . . . . . Not Applicable

Item 16. Investment Advisory and
Other Services . . . . . Management of the Company; Distribution
and Service Plans; Counsel; Auditors

Item 17. Brokerage Allocation and
Other Practices . . . . Investment Objectives and Policies

Item 18. Capital Stock and Other
Securities . . . . . . . Additional Information Concerning Fund
Shares; Distribution and Service Plans

Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered . . . . . Additional Purchase Information;
Additional Redemption Information;
Valuation of Shares

Item 20. Tax Status . . . . . . . Additional Information Concerning Taxes

Item 21. Underwriters . . . . . . Additional Purchase Information;
Management of the Company

Item 22. Calculation of
Performance Data . . . . Performance Data

Item 23. Financial
Statements . . . . . . . Financial Statements

Part C

Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of this Registration Statement.

<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
_______________________________________________________________________________

Subject to Completion, December 19, 1995

P R O S P E C T U S

LIPPER HIGH INCOME BOND FUND
LIPPER U.S. EQUITY FUND
PRIME LIPPER EUROPE EQUITY FUND

Each a no-load portfolio of
The Lipper Funds, Inc.
101 Park Avenue
New York, NY 10178
For information call 1-800-LIPPER9

The Lipper Funds, Inc. (the "Company") is an open-end management
investment company which offers three diversified no-load portfolios: Lipper
High Income Bond Fund (the "High Income Fund"), Lipper U.S. Equity Fund (the
"U.S. Equity Fund") and Prime Lipper Europe Equity Fund (the "Europe Equity
Fund" and, together with the High Income Fund and the U.S. Equity Fund, the
"Funds"). As described in this Prospectus, the Company offers the shares of
each Fund in three classes: Premier Shares, Retail Shares and Group Retirement
Plan Shares. Shares of each Fund are available without any sales charge through
Lipper & Company, L.P., the Company's distributor (referred to herein as
"Lipper" or the "Distributor"), the Company's transfer agent and certain
investment dealers, banks and financial services firms that provide
distribution, administrative or shareholder services to the Funds.

. The High Income Fund's investment objective is high current
income, which it seeks to achieve by investing primarily in
a diversified portfolio of high yield fixed income
securities with maturities of less than 10 years rated in
medium to lower rating categories or determined to be
comparable to securities rated in medium to lower rating
categories.

. The U.S. Equity Fund's investment objective is capital
appreciation, which it seeks to achieve by investing
primarily in a diversified portfolio of common stocks of
issuers with market capitalization in excess of $500
million believed to be selling below their inherent value
based on factors such as fundamental business and financial
<PAGE>
prospects, economic forecasts, political factors and market
conditions.
. The Europe Equity Fund's investment objective is capital
appreciation, which it seeks to achieve by investing
primarily in a diversified portfolio of common stocks of
issuers located in Europe believed to have the capacity for
strong levels of growth based on factors such as liquidity,
financial strength, earnings growth, industry position and
management.

Shares of the Vista Federal Money Market Fund are also made available by
the Distributor to qualified investors who are investors in the Funds. Further
information regarding the Vista Federal Money Market Fund and its current
prospectus may be obtained by writing or calling the Distributor at the address
and telephone number set forth above.

The High Income Fund invests predominantly in medium and lower rated and
comparable unrated debt securities, commonly referred to as "junk bonds." Bonds
of this type are considered to be speculative with regard to the payment of
interest and are subject to greater risk of loss of principal. Purchasers
should carefully assess the risks associated with an investment in the High
Income Fund. See "Risk Factors and Special Considerations - High Yield
Securities."

Lipper & Company, L.L.C., an affiliate of Lipper, serves as the investment
adviser to the High Income Fund and the U.S. Equity Fund (the "U.S. Adviser").
Prime Lipper Asset Management serves as the investment adviser to the Europe
Equity Fund (the "European Adviser" and, together with the U.S. Adviser, the
"Advisers").

The High Income Fund and the Europe Equity Fund have each been formed as a
successor investment vehicle for a corresponding limited partnership for which
Lipper or the European Adviser has acted as general partner and investment
adviser since inception. Each such Fund will exchange Premier Shares for
certain portfolio securities of its corresponding partnership (the "Transfers")
prior to the public offering of its shares. The Transfers are subject to
receipt by such Funds, the Advisers, the partnerships and Lipper of appropriate
exemptive relief from the Securities and Exchange Commission (the "SEC"). For
further discussion of the Transfers and the potential tax consequences to new
investors in the High Income Fund and the Europe Equity Fund associated with
the Transfers, see "The Transfers" and "Taxes - The Transfers."

This Prospectus sets forth concisely the information about the Company and
the Funds that a prospective investor should know before investing and it
should be retained for future reference. Additional information about the
Company and the Funds is contained in the Company's Statement of Additional
Information, dated December , 1995 (which may be amended or supplemented from
time to time), which is incorporated herein in its entirety by reference. The
Statement of Additional Information is available upon request and without
charge by writing or calling the Company at the address and telephone number
set forth above.

Shares of the Funds are not deposits or obligations of, or guaranteed or
endorsed by, any bank, and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. Shares
<PAGE>
of the Funds involve certain investment risks, including the possible loss of
principal.

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

December , 1995
<PAGE>
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and in the
Statement of Additional Information. Cross references in this summary are to
headings in the Prospectus.

The Company

The Company consists of three no-load portfolios and offers investors a
range of investment choices. Each Fund has its own investment objective and
policies designed to meet specific goals. The investment objective of each of
the Funds is as follows:

. The High Income Fund's investment objective is high current
income, which it seeks to achieve by investing primarily in a
diversified portfolio of high yield fixed income securities with
maturities of less than 10 years rated in medium to lower rating
categories or determined to be comparable to securities rated in
medium to lower rating categories.

. The Europe Equity Fund's investment objective is capital
appreciation, which it seeks to achieve by investing primarily
in a diversified portfolio of common stocks of European
Companies (as defined below) believed to have the capacity for
strong levels of growth based on factors such as liquidity,
financial strength, earnings growth, industry position and
management.

Investment Advisers

Lipper & Company, L.L.C. serves as the investment adviser to the High
Income Fund and the U.S. Equity Fund. The U.S. Adviser is a recently formed
affiliate of Lipper, the Fund's distributor. The U.S. Adviser was organized by
Lipper in connection with the expansion of its investment management business
to include the management of registered investment companies. Each of the U.S.
Adviser's officers or employees involved in managing the High Income Fund and
the U.S. Equity Fund is also an employee of Lipper. Lipper is a privately
owned investment management and investment banking firm founded in 1987. At
September 30, 1995, Lipper managed assets having an aggregate market value on a
gross basis of $2.8 billion on behalf of more than 225 institutional and high
net worth clients. Lipper offers complementary investment strategies in
intermediate term high yield bonds, hedged convertible securities, investment
grade bonds, U.S. and European equities and preferred stocks. Lipper serves as
<PAGE>
the general partner to the limited partnership corresponding to the High Income
Fund.

Prime Lipper Asset Management serves as the investment adviser to the
Europe Equity Fund and is the general partner and investment adviser to the
limited partnership corresponding to the Europe Equity Fund. The European
Adviser is a joint venture between Lipper and Prime S.p.A. Prime, through
subsidiaries and affiliates, is among the largest asset managers in Italy, and
specializes in management of portfolios invested in European issuers, with
approximately $4 billion in assets under management at September 30, 1995 from
domestic and international investors. See "The Investment Advisers" and
"Management of the Company."

How to Invest

Premier Shares, Retail Shares and Group Retirement Plan Shares of each
Fund may be purchased without any sales charge at their next determined net
asset value through the Distributor, through certain investment dealers, banks
and financial services firms that provide distribution, administrative or
shareholder services to the Funds, or by mailing a purchase order directly to
Chase Global Funds Services Company, the Company's transfer agent (the
"Transfer Agent"). See "Purchase of Shares."

Premier Shares of each Fund are offered for sale to purchasers (other than
purchasers eligible to purchase Group Retirement Plan Shares) who invest a
minimum of $1,000,000 in the Fund. The Company and the Distributor reserve the
right to waive or reduce the minimum initial investment with respect to certain
accounts. In addition, Premier Shares of the High Income Fund and the Europe
Equity Fund are offered for sale (with no minimum investment requirement) in
connection with the Transfers to persons or entities who are limited partners
in each such Fund's corresponding limited partnership and elect to participate
in the Transfers. See "The Transfers."

Retail Shares of a Fund are offered for sale to purchasers who invest a
minimum of $10,000 in the Fund. Retail Shares of each Fund are subject to an
ongoing 12b-1 fee at an annual rate of up to 0.25% of their average daily net
assets. See "Distribution and Service Plans."

Group Retirement Plan Shares of a Fund are offered for sale with no
minimum investment requirement to retirement plans including, but not limited
to, qualified 401(k) plans, provided such plans meet the required number of
eligible employees or the required amount of assets, and deferred compensation
plans under 403(b)(7) of the Internal Revenue Code, as amended (the "Code").
Group Retirement Plan Shares of each Fund are subject to a service fee of up to
0.25% of their average daily net assets. See "Distribution and Service Plans."
Investors should contact the Distributor at the address and telephone number
set forth on the cover of this Prospectus for further information regarding the
eligibility requirements for Group Retirement Plan Shares.

Each Fund has established a subsequent investment minimum of $2,500 for
its Premier and Retail Shares. Group Retirement Plan Shares are not subject to
a subsequent investment minimum. Each Fund reserves the right to vary any
initial or subsequent investment minimum at any time.
<PAGE>
How to Redeem

Shares of each class may be redeemed at their net asset value next
determined after receipt of the redemption request. The redemption price may be
more or less than the purchase price. There is no deferred sales charge imposed
on redemptions. If an investor in Premier Shares or Retail Shares of any Fund
reduces the value of his or her account to below $500,000, in the case of
Premier Shares, or $1,000, in the case of Retail Shares, such account may be
subject to redemption by the Fund, but only after the investor has been given
at least 30 days in which to increase his or her account balance to more than
such required minimum account balance. Investors in Group Retirement Plan
Shares are not subject to such a minimum account balance requirement. To the
extent that shares in an investor's account are redeemed by a Fund, the
investor could reinvest in any class of shares of the Fund at a later date
provided that any eligibility requirements with respect to investing in the
Fund were met at such time. See "Redemption of Shares" and "Valuation of
Shares."

Dividends and Capital Gains

The Company maintains different dividend and distribution policies for
each of its Funds. They are as follows:

The High Income Fund intends to distribute substantially all of its net
investment income, if any, in the form of quarterly dividends.

The U.S. Equity Fund and the Europe Equity Fund intend to distribute
substantially all of their net investment income, if any, in the form of annual
dividends.

Each Fund intends to distribute its net realized capital gains, if any, at
least annually.

Unless a shareholder in a Fund instructs that dividend and capital gain
distributions be paid in cash, dividend and capital gain distributions will be
reinvested automatically in additional shares of the same class of shares of
the Fund at the net asset value of that class at the time of reinvestment.

Dividends paid by each class of a Fund's shares will be calculated at the
same time and in the same manner and will be in the same amount, except that
the expenses attributable solely to a particular class will be borne
exclusively by that class. Retail Shares and Group Retirement Plan Shares of
each Fund will receive lower per share dividends than Premier Shares because of
the distribution and service fees borne by the Retail and Group Retirement Plan
Shares, respectively. See "Distribution and Service Plans."

Risk Factors and Special Considerations

Prospective investors should consider certain risks associated with an
investment in each Fund. There is no assurance that a Fund will achieve its
investment objective. The value of each Fund's investments, and thus the net
asset value of each class of each Fund's shares, can be expected to fluctuate
in response to changes in market and economic conditions, as well as the
<PAGE>
financial conditions and prospects of the issuers in which a Fund invests.
Certain Funds may use various investment practices that involve special
considerations, including investing in high yield and/or illiquid securities,
investing in foreign securities, and engaging in hedging and derivatives, each
of which involves special risks. See "Risk Factors and Special Considerations."
<PAGE>
COMPANY EXPENSES

Each Fund offers multiple classes of shares. Each share of a Fund accrues
income in the same manner, but certain expenses differ based upon the class.
The following tables are intended to assist investors in understanding the
various costs and expenses applicable to each class of shares of the Funds:

<S> High U.S. Europe
Income Equity Equity
Shareholder Transaction Expenses Fund Fund Fund
<C> <C> <C>

Maximum Sales Charge Imposed on Purchases
Premier Shares None None None
Retail Shares None None None
Group Retirement Plan Shares None None None

Maximum Sales Charge Imposed on Reinvested
Dividends
Premier Shares None None None
Retail Shares None None None
Group Retirement Plan Shares None None None

Maximum Contingent Deferred Sales Charge
Premier Shares None None None
Retail Shares None None None
Group Retirement Plan Shares None None None

Exchange Fees
Premier Shares None None None
Retail Shares None None None
Group Retirement Plan Shares None None None

Annual Operating Expenses
(as a percentage of average daily net
assets)

Investment Advisory Fees

Premier Shares 0.75% 0.85% 1.10%
Retail Shares 0.75% 0.85% 1.10%
Group Retirement Plan Shares 0.75% 0.85% 1.10%

Administrative Fees
Premier Shares 0.20% 0.20% 0.20%
Retail Shares 0.20% 0.20% 0.20%
Group Retirement Plan Shares 0.20% 0.20% 0.20%

12b-1 Fees
Premier Shares None None None
Retail Shares 0.25% 0.25% 0.25%
Group Retirement Plan Shares None None None
<PAGE>
Service Fees
Premier Shares None None None
Retail Shares None None None
Group Retirement Plan Shares 0.25% 0.25% 0.25%

Other Expenses (estimated, after reimbursement)<F1>

Premier Shares 0.05% 0.05% 0.30%
Retail Shares 0.05% 0.05% 0.30%
Group Retirement Plan Shares 0.05% 0.05% 0.30%

Total Annual Operating Expenses (estimated, after
reimbursement)<F2>
Premier Shares 1.00% 1.10% 1.60%
Retail Shares 1.25% 1.35% 1.85%

Group Retirement Plan Shares 1.25% 1.35% 1.85%
__________________________________
<FN>

<F1> "Other Expenses" reflects voluntary reimbursement by each Fund's
Adviser of "Other Expenses" in excess of the amounts set forth in the
table, which voluntary reimbursement is limited to the extent of such
Adviser's investment advisory fee. Each Adviser reserves the right to
terminate any voluntary reimbursement at any time in its sole
discretion. Absent voluntary reimbursement, the ratio of "Other
Expenses" to average daily net assets of (i) High Income Fund would
be []%, []% and []% for Premier Shares, Retail Shares and Group
Retirement Shares, respectively, (ii) U.S. Equity Fund would be []%,
[]% and []% for Premier Shares, Retail Shares and Group Retirement
Shares, respectively and (iii) Europe Equity Fund would be []%, []%
and []% for Premier Shares, Retail Shares and Group Retirement
Shares, respectively. The amounts set forth for "Other Expenses" are
based on estimates for the current fiscal year. "Other Expenses"
includes custodial and transfer agency fees, directors' fees and
expenses, amortization of organizational costs, filing fees,
professional fees, and the costs for reports to shareholders.

<F2> Absent voluntary reimbursements, the ratio of "Total Annual Operating
Expenses" to average daily net assets of (i) High Income Fund would
be []%, []% and []% for Premier Shares, Retail Shares and Group
Retirement Shares, respectively, (ii) U.S. Equity Fund would be []%,
[]% and []% for Premier Shares, Retail Shares and Group Retirement
Shares, respectively and (iii) Europe Equity Fund would be []%, []%
and []% for Premier Shares, Retail Shares and Group Retirement
Shares, respectively.
</TABLE>

Based upon payment by each Fund of operating expenses at the levels set
forth in the table above, the following example illustrates the projected
<PAGE>
dollar amount of cumulative expenses an investor would pay on a $1,000
investment in each Fund, assuming (1) a 5% annual rate of return and (2)
redemption at the end of each time period:

<TABLE>
<CAPTION>
High U.S. Europe
Income Equity Equity
Fund Fund Fund
<S> <C> <C> <C>

Premier Shares
1 Year $___ $___ $___
3 Years $___ $___ $___

Retail Shares
1 Year $___ $___ $___
3 Years $___ $___ $___

Group Retirement Shares
1 Year $___ $___ $___
3 Years $___ $___ $___
</TABLE>

This example should not be considered a representation of past or future
expenses or rate of return. Actual expenses may be greater or less than those
shown. Moreover, while the example assumes a 5% annual return for each Fund,
each Fund's performance will vary and may result in a return greater or less
than 5%. Each Adviser in its discretion may terminate voluntary reimbursements
at any time.

Due to the continuous nature of Rule 12b-1 fees, long-term shareholders
may pay more than the equivalent of the maximum front-end sales charges
otherwise permitted by the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. (the "NASD").

Certain investment dealers, banks and financial services firms may charge
their customers direct fees for effecting transactions in Fund shares; such
fees are not reflected in the foregoing tables. See "Purchase of Shares,"
"Redemption of Shares" and "Distribution and Service Plans."

INVESTMENT OBJECTIVES AND POLICIES

The investment objective of each Fund is described below, together with
the policies it employs in seeking to achieve its objective. There is no
assurance that a Fund will attain its objective. Each Fund's investment
objective and the investment policies described below are not fundamental and
may be changed by the Company's Board of Directors without shareholder
approval. In addition to the investment policies described below, each Fund's
Adviser may utilize certain investment strategies and techniques in managing
the Fund, as described below under "Other Investments and Investment
Strategies."
<PAGE>
The Funds

The High Income Fund

The High Income Fund's investment objective is high current income. The
High Income Fund seeks to achieve its investment objective by investing
primarily in a diversified portfolio of high yield fixed income securities with
maturities of less than 10 years rated in medium to lower rating categories or
determined by the U.S. Adviser to be of comparable quality to securities rated
in medium to lower rating categories.

The Fund intends to invest, under normal market conditions, at least 80%
of its total assets in "bonds" rated at the time of investment "Baa" to "B" by
Moody's Investors Service, Inc. ("Moody's") or "BBB" to "B" by Standard &
Poor's Corporation ("S&P"), or in securities determined by the U.S. Adviser to
be of comparable quality. For purposes of the foregoing policy, the Fund
defines "bonds" to include bonds, notes and debentures issued by U.S. and non-
U.S. issuers. The Fund will not invest any of its assets in securities which,
at the time of investment, are rated "Caa" or lower by Moody's or "CCC" or
lower by S&P, or in comparable unrated securities. To the extent that the
rating of any security held by the Fund falls below "B" by Moody's or S&P, the
U.S. Adviser intends to dispose of such security within a reasonable period of
time depending on market and issuer-specific conditions. The U.S. Adviser
believes that medium- and low-rated and comparable unrated securities offer
yields that fluctuate over time but that are generally superior to the yields
offered by higher rated securities. However, such securities also involve
significantly greater risks than higher rated securities, including price
volatility and risk of default in the payment of interest and principal. See
"Risk Factors and Special Considerations - High Yield Securities."

The Fund may invest up to 15% of its total assets in non-U.S. dollar-
denominated securities. To the extent that the Fund invests in non-U.S. dollar-
denominated securities, changes in foreign currency exchange rates will affect
the value of the securities in its portfolio and the unrealized appreciation
and depreciation of investments. See "Risk Factors and Special Considerations -
Risk of Investment in Foreign Securities."

As used in this Prospectus, "high yield securities" includes debt
obligations of all types issued by U.S. and non-U.S. corporate and governmental
issuers, including bonds, debentures and notes, and stocks, such as preferred
stocks, having priority over any other class of stock as to the distribution of
assets or payment of dividends. A high yield security itself may be convertible
into or exchangeable for equity securities, or it may carry with it the right
to acquire equity securities evidenced by the warrants attached to the security
or acquired as part of a unit with the security.

Debt securities differ in their interest rates and maturities, among other
factors. The maturity of the debt securities in the Fund's portfolio will be
based in large part on the U.S. Adviser's expectations as to future changes in
interest rates. For example, if the U.S. Adviser expects interest rates to
rise, the Fund might invest more heavily in securities with shorter maturities,
enabling the Fund to benefit from purchases of longer-term securities after
rates have risen. Conversely, if the U.S. Adviser expects interest rates to
<PAGE>
fall, the Fund might invest more heavily in securities with longer maturities,
in order to take advantage of the higher rates then available. However, under
normal market conditions, the U.S. Adviser anticipates that the Fund's
portfolio will have a dollar-weighted average maturity of approximately five
years.

In light of the risks associated with investing in high yield securities,
the U.S. Adviser will take various factors into consideration in evaluating
securities for purchase by the Fund. Those factors will typically include one
or more of the following: (i) yield to maturity, yield to call (where
appropriate), current yield and the price of the security relative to other
securities of comparable quality and maturity, (ii) the issuer's financial
resources, its sensitivity to economic conditions and trends and its operating
history, (iii) review of the terms under which securities are issued and the
nature of and coverage under financial covenants and (iv) the experience and
track record of the issuer's management. In addition, the U.S. Adviser expects
to invest the assets of the Fund in a broad range of issuers and industries.

The Fund may invest up to 10% of its total assets in common stock,
preferred stock, convertible securities, warrants or other equity securities.
The Fund will generally hold such equity investments as a result of purchases
of unit offerings of fixed income securities which include such securities or
in connection with actual or proposed conversion or exchange of fixed income
securities, but may also purchase equity securities not associated with fixed-
income securities when, in the opinion of the U.S. Adviser, such purchase is
appropriate.

There may be times when, in the judgment of the U.S. Adviser, conditions
in the securities markets would make pursuing the Fund's basic investment
strategy inconsistent with the best interests of the Fund's shareholders. At
such times, the U.S. Adviser may employ alternative strategies, including
investment of a substantial portion of the Fund's assets in securities rated
higher than "Baa" by Moody's or "BBB" by S&P, or in securities of comparable
quality to securities with such ratings.

The U.S. Equity Fund

The U.S. Equity Fund's investment objective is capital appreciation. The
Fund seeks to achieve its investment objective by investing in a diversified
portfolio of common stocks of issuers with market capitalization in excess of
$500 million which the U.S. Adviser believes are selling below their inherent
value based on factors such as fundamental business and financial prospects,
economic forecasts, political factors and market conditions. Under normal
market conditions, at least 65% of the Fund's total assets will be invested in
common stocks issued by U.S. issuers. The portion of the Fund's assets not
invested in common stocks of U.S. issuers may be invested in preferred stock,
convertible securities, rights and warrants, depositary receipts, and Temporary
Investments as described below. Up to 15% of the Fund's total assets may be
invested in equity securities issued by non-U.S. issuers and depositary
receipts with respect to such securities.

Although the Fund's portfolio is expected to be comprised primarily of
securities that are publicly traded and registered under the Securities Act of
<PAGE>
1933, as amended (the "Securities Act"), and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Fund may also from time to time
invest in securities for which a public market does not exist or whose transfer
will be restricted under the Securities Act. See "Other Investments and
Investment Strategies - Illiquid Securities".

In managing the Fund, the U.S. Adviser will utilize a value-oriented,
"bottom-up" investment approach, focusing on attractive valuations relative to
earnings growth and business prospects. In addition to the Fund's bottom-up
approach to stock selection, the U.S. Adviser may also employ a "Buy-Write"
strategy for equity securities which are trading within a range which the U.S.
Adviser believes already reflects a fair value for such securities. Under such
circumstances, the Fund may write a call option equal to the number of shares
of the underlying security it has purchased, thereby generating income from the
sale of the call option. This strategy is intended to both enhance the Fund's
returns and reduce some of its risk by lowering the break-even point of the
Fund's individual underlying security position. A "Buy-Write" strategy is
generally considered more conservative than an outright purchase of the
underlying security, but limits potential capital gains by the sale of the call
option. For a discussion of the Fund's use of call options and other hedging
and derivatives transactions, see "Other Investments and Investment Strategies
- - Hedging and Derivatives" below and "Investment Objectives and Policies-
Additional Information on Portfolio Instruments and Certain Investment
Strategies" in the Statement of Additional Information.

The Europe Equity Fund

The Europe Equity Fund's investment objective is long-term capital
appreciation. The Fund intends to invest primarily in a diversified portfolio
of common stocks of "European Companies." Under normal market conditions, at
least 65% of the total assets of the Fund will be invested in common stocks of
"European Companies." "European Companies" include companies that (i) are
organized under the laws of a European country, (ii) regardless of where
organized, derive at least 50% of their revenues from goods produced or sold,
investments made or services performed, in or with a European country or
countries, or have at least 50% of their assets in a European country or
countries, or (iii) have securities which are traded principally on a stock
exchange in a European country. The European Adviser intends under current
market conditions to focus on companies organized under the laws of Austria,
Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, the Netherlands,
Spain, Sweden, Switzerland and the United Kingdom. The Fund may also invest
from time to time in common stocks of issuers organized under the laws of
Greece, Ireland, Norway and Portugal. The European Adviser has no present
intention to invest in common stocks of issuers organized under the laws of
Eastern European countries. The portion of the Fund's assets not invested in
common stocks may be invested in preferred stock, convertible securities,
rights and warrants, depositary receipts, and Temporary Investments as
described below. Although the Fund intends to invest primarily in securities
listed on foreign stock exchanges, it will also invest in securities traded in
over-the-counter markets, and may also from time to time invest in securities
for which a public market does not exist or whose transfer will be restricted.
See "Other Investments and Investment Strategies - Illiquid Securities."
<PAGE>
The Fund does not intend to concentrate its investments in a particular
industry or group of industries, and expects to invest its assets in a broad
range of issuers. While the Fund is not subject to any specific geographic
diversification requirements, the Fund emphasizes investment in the more liquid
European markets in an effort to reduce risk. In addition, the European Adviser
currently intends to allocate the Fund's investments among major European
markets to reduce currency risk. The Fund will not, under normal circumstances,
invest in the stocks of U.S. issuers. For a description of special
considerations and certain risks associated with investments in foreign
issuers, see "Risk Factors and Special Considerations - Risk of Investment in
Foreign Securities." The Fund has no current intention of investing in
companies principally based in emerging European countries.

Temporary Investments

For temporary defensive purposes, each Fund may vary from its investment
objective and may invest, without limit (except for the limitations described
under "Investment Limitations"), in cash and/or certain high quality short-term
debt instruments described below. A Fund may also at any time invest its assets
in such instruments for cash management purposes, pending investment in
accordance with the Fund's investment objective and policies and to meet
operating expenses.

The short-term debt instruments in which a Fund may invest include
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities ("U.S. Government Securities"); obligations issued or
guaranteed by other governments or one of their agencies or instrumentalities;
obligations issued or guaranteed by international organizations designed or
supported by multiple foreign government entities to promote economic
reconstruction or development; bank obligations, such as certificates of
deposit, time deposits and bankers' acceptances; corporate debt obligations,
including commercial paper; and repurchase agreements. To be eligible for
investment under the circumstances described above, such instruments (other
than U.S. Government Securities) must be issued by an issuer having a
short-term debt rating of A-1 or better by S&P, a rating of Prime-1 by Moody's,
a comparable rating from another nationally recognized statistical rating
organization or, if unrated, deemed to be of equivalent quality by the Fund's
Adviser.

Other Investments and Investment Strategies

Depositary Receipts. Each Fund may invest in Depositary Receipts. American
Depositary Receipts ("ADRs"), Global Depositary Receipts ("GDRs"), European
Depositary Receipts ("EDRs") and other types of depositary receipts (which,
together with ADRs, GDRs, and EDRs, are collectively referred to as "Depositary
Receipts") evidence ownership of underlying securities issued by either a non-
U.S. or a U.S. corporation that have been deposited with a depositary or
custodian bank. Depositary Receipts may be issued in connection with an
offering of securities by the issuer of the underlying securities or issued by
a depositary bank as a vehicle to promote investment and trading in the
underlying securities. ADRs are receipts issued by U.S. banks or trust
<PAGE>
companies in respect of securities of non-U.S. issuers held on deposit for use
in the U.S. securities markets. GDRs, EDRs and other types of Depositary
Receipts are typically issued by a U.S. bank or trust company and traded
principally in the U.S. and other international markets. Each Fund will treat
Depositary Receipts as interests in the underlying securities for purposes of
its investment policies. While Depositary Receipts may not necessarily be
denominated in the same currency as the securities into which they may be
converted, they entail certain of the risks associated with investments in
foreign securities. See "Risk Factors and Special Considerations - Risk of
Investments in Foreign Securities." Each Fund will limit its investment in ADRs
not sponsored by the issuer of the underlying securities to no more than 5% of
the value of its net assets (at the time of investment). See the Statement of
Additional Information for certain risks related to unsponsored ADRs.

Convertible Securities. Each Fund may invest in convertible securities,
which are bonds, debentures, notes, preferred stocks or other securities that
may be converted into or exchanged for a prescribed amount of equity securities
(generally common stock) of the same or a different issuer within a particular
period of time at a specified price or formula. Convertible securities have
general characteristics similar to both fixed income and equity securities.
Although to a lesser extent than with fixed income securities generally, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest rates decline. In
addition, because of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value of the
underlying security and therefore also will react to variations in the general
market for equity securities. While no securities investments are without risk,
investments in convertible securities generally entail less risk than
investments in common stock of the same issuer.

Warrants. Each Fund may invest up to 5% of the value of its net assets
(valued at the lower of cost or market) in warrants, which are securities
permitting, but not obligating, their holder to subscribe for other securities.
Warrants do not carry with them the right to dividends or voting rights with
respect to the securities that they entitle their holder to purchase, and they
do not represent any rights in the assets of the issuer. As a result, an
investment in warrants may be considered speculative. In addition, the value of
a warrant does not necessarily change with the value of the underlying
securities and a warrant ceases to have value if it is not exercised prior to
its expiration date. Each Fund will not invest more than 2% of the value of its
net assets (valued as described above) in warrants which are not listed on the
New York or American Stock Exchanges or traded on the NASD National Market
System.

Zero Coupon Securities, Pay-in-Kind Bonds and Discount Obligations. The
High Income Fund may invest in zero coupon securities and pay-in-kind bonds. In
addition, certain of the High Income Fund's debt securities may be acquired at
a discount ("Discount Obligations"). These investments involve special risk
considerations. Zero coupon securities are debt securities that pay no cash
income but are sold at substantial discounts from their value at maturity. When
a zero coupon security is held to maturity, its entire return, which consists
<PAGE>
of the amortization of the discount, comes from the difference between its
purchase price and its maturity value. This difference is known at the time of
purchase, so that investors holding zero coupon securities until maturity know
at the time of their investment what the expected return on their investment
will be. Certain zero coupon securities, sold at substantial discounts from
their maturity value, provide for the commencement of regular interest payments
at a deferred date. The High Income Fund also may purchase pay-in-kind bonds.
Pay-in-kind bonds pay all or a portion of their interest in the form of
additional debt or equity securities.

Zero coupon securities, pay-in-kind bonds and Discount Obligations tend to
be subject to greater price fluctuations in response to changes in interest
rates than are ordinary interest-paying debt securities with similar
maturities. The value of zero coupon securities and Discount Obligations
appreciates more during periods of declining interest rates and depreciates
more during periods of rising interest rates than ordinary interest-paying debt
securities with similar maturities. Under current federal income tax law, the
High Income Fund is required to accrue as income each year the value of
securities received in respect of pay-in-kind bonds and a portion of the
original issue discount with respect to zero coupon securities and other
securities issued at a discount to the stated redemption price. In addition,
the High Income Fund will elect similar treatment for any market discount with
respect to Discount Obligations. Accordingly, the High Income Fund may have to
dispose of portfolio securities under disadvantageous circumstances in order to
generate current cash to satisfy certain distribution requirements. See
"Taxes."

Illiquid Securities. Each Fund will not invest more than 15% of the value
of its total assets in illiquid securities. Illiquid securities are securities
which may not be sold or disposed of in the ordinary course of business within
seven days at approximately the value at which the Fund has valued the
investments. Illiquid securities include securities with legal or contractual
restrictions on resale, time deposits, repurchase agreements having maturities
longer than seven days and securities that do not have readily available market
quotations. In addition, each Fund may invest in securities that are sold in
private placement transactions between their issuers and their purchasers and
that are neither listed on an exchange nor traded over-the-counter. These
factors may have an adverse effect on the Fund's ability to dispose of
particular securities and may limit the Fund's ability to obtain accurate
market quotations for purposes of valuing securities and calculating net asset
value and to sell securities at fair value. If any privately placed securities
held by the Fund are required to be registered under the securities laws of one
or more jurisdictions before being resold, the Fund may be required to bear the
expenses of registration. A Fund may also purchase securities that are not
registered under the Securities Act of 1933 (the "Securities Act") but which
can be sold to qualified institutional buyers in accordance with Rule 144A
under the Securities Act ("Rule 144A securities"). Rule 144A securities
generally must be sold to other qualified institutional buyers. A Fund may also
invest in commercial obligations issued in reliance on the so-called "private
placement" exemption from registration afforded by Section 4(2) of the
Securities Act ("Section 4(2) paper"). Section 4(2) paper is restricted as to
disposition under the federal securities laws, and generally is sold to
<PAGE>
institutional investors such as the Funds who agree that they are purchasing
the paper for investment and not with a view to public distribution. Any resale
by the purchaser must be in an exempt transaction. Section 4(2) paper normally
is resold to other institutional investors like the Funds through or with the
assistance of the issuer or investment dealers who make a market in the Section
4(2) paper, thus providing liquidity. If a particular investment in Rule 144A
securities, Section 4(2) paper or private placement securities is not
determined to be liquid, that investment will be included within the 15%
limitation on investment in illiquid securities. The ability to sell Rule 144A
securities to qualified institutional buyers is a relatively recent development
and it is not possible to predict how this market will mature. A Fund's Adviser
will monitor the liquidity of such restricted securities under the supervision
of the Board of Directors of the Company. See "Investment Objective and
Policies - Additional Information on Portfolio Instruments and Certain
Investment Strategies - Illiquid and Restricted Securities" in the Statement of
Additional Information.

Preferred Stock. Each Fund may invest in preferred stocks. Generally,
preferred stocks are non-voting shares of a corporation which pay a fixed or
variable stream of dividends. Preferred stock has a preference over common
stock in liquidation and generally in dividends as well, but is subordinated to
the liabilities of the issuer in all respects. Preferred stock may be or may
not be convertible into common stock. As a general rule, the market value of
preferred stock with a fixed dividend rate and no conversion element varies
inversely with interest rates and perceived credit risk. Because preferred
stock is junior to debt securities and other obligations of the issuer,
deterioration in the credit quality of the issuer will cause greater changes in
the value of a preferred stock than in a more senior debt security with similar
stated yield characteristics.

Repurchase Agreements. Each Fund may purchase instruments from financial
institutions, such as banks and broker-dealers, subject to the seller's
agreement to repurchase them at an agreed upon time and price ("repurchase
agreements"). A Fund would enter into repurchase agreements to generate
additional income. The seller under a repurchase agreement will be required to
maintain the value of the securities subject to the agreement at not less than
the repurchase price. Default by the seller would, however, expose the Fund to
possible loss because of adverse market action or delay in connection with the
disposition of the underlying obligations.

Other Investment Funds. Each Fund may invest in the securities of other
investment funds to the extent permitted by the Investment Company Act of 1940,
as amended (the "1940 Act"). Under the 1940 Act, a Fund may invest up to 10% of
its total assets in shares of other investment funds and up to 5% of its total
assets in any one investment fund, provided that the investment does not
represent more than 3% of the voting stock of the acquired investment fund. By
investing in another investment fund, a Fund bears a ratable share of the other
investment fund's expenses, as well as continuing to bear the Fund's advisory
and administrative fees with respect to the amount of the investment. In
addition, each Fund may, in the future, seek to achieve its investment
objective by investing all of its assets in a no-load, open-end management
<PAGE>
investment company having the same investment objective and policies and
substantially the same investment restrictions as those applicable to the Fund,
as described below under "Investment Limitations."

When-Issued and Delayed Delivery Securities. Each Fund may purchase
securities on a "when-issued" or delayed delivery basis. When-issued and
delayed delivery securities are securities purchased for delivery beyond the
normal settlement date at a stated price. A Fund will generally not pay for
such securities or start earning income on them until they are received. Fixed
income securities purchased on a when-issued or delayed delivery basis are
recorded as an asset and are subject to changes in value based, among other
factors, upon changes in the general level of interest rates. Each Fund will
make commitments to purchase when-issued or delayed delivery securities with
the intention of actually acquiring the securities, but may sell them before
the settlement date if it is deemed advisable. When a Fund purchases securities
on a when-issued or delayed delivery basis, it will set aside securities or
cash with its custodian equal to the payment that will be due.

Borrowing. Each Fund may borrow only from banks or by entering into
reverse repurchase agreements, in aggregate amounts not to exceed 33-1/3% of
its total assets (including the amount borrowed) less its liabilities
(excluding the amount borrowed), and only for temporary or emergency purposes.
Bank borrowings may be from U.S. or foreign banks and may be secured or
unsecured. A Fund may also borrow by entering into reverse repurchase
agreements, pursuant to which it would sell portfolio securities to financial
institutions, such as banks and broker-dealers, and agree to repurchase them at
an agreed upon date and price. A Fund would also consider entering into reverse
repurchase agreements to avoid otherwise selling securities during unfavorable
market conditions to meet redemptions. Reverse repurchase agreements involve
the risk that the market value of the portfolio securities sold by the Fund may
decline below the price at which the Fund is obligated to repurchase such
securities.

Loans of Fund Securities. Each Fund may lend its portfolio securities
consistent with its investment policies, in order to generate additional
income. A Fund may lend portfolio securities against collateral, consisting of
cash or securities which are consistent with its permitted investments, which
is equal at all times to at least 100% of the value of the securities loaned.
There is no limitation on the amount of securities that may be loaned. Such
loans would involve risks of delay in receiving additional collateral or in
recovering the securities loaned or even loss of rights in the collateral
should the borrower of the securities fail financially. However, loans will be
made only to borrowers deemed by the Fund's Adviser to be of good standing and
only when, in the judgment of the Adviser, the income to be earned from the
loans justifies the attendant risks.

Short Sales. Each Fund may make short sales of securities "against the
box." A short sale is a transaction in which the Fund sells a security it does
not own in anticipation that the market price of that security will decline. In
a short sale "against the box," at the time of sale, the Fund owns or has the
<PAGE>
immediate and unconditional right to acquire the identical security. Short
sales against the box are a form of hedging to offset potential declines in
long positions in similar securities.

Hedging and Derivatives. Each Fund is authorized to use various hedging
and investment strategies described below to hedge market risks (such as broad
or specific market movements and interest rates or other factors relevant to
the Fund's investments, such as commodity prices or rates of inflation), to
manage the effective maturity or duration of securities held by the Fund, or to
seek to increase the Fund's income or capital appreciation. Over time,
techniques and instruments may change as new instruments and strategies are
developed or regulatory changes occur. Limitations on the portion of each
Fund's assets that may be used in connection with the investment strategies
described below appear in the Statement of Additional Information.

Subject to the constraints described above, each Fund may purchase and
sell (or write) exchange listed and over-the-counter put and call options on
securities, securities indices, currencies and other financial instruments and
enter into currency forward contracts (collectively, these transactions are
referred to in this Prospectus as "Derivatives"). The Funds will not engage in
transactions in futures or options on futures.

Derivatives may be used to attempt to protect against possible changes in
the market value of securities held in or to be purchased by a Fund resulting
from securities markets or currency exchange rate fluctuations, to protect a
Fund's unrealized gains in the value of its securities, to facilitate the sale
of those securities for investment purposes, to manage the effective maturity
or duration of a Fund's portfolio, to establish a position in the derivatives
markets as a substitute for purchasing or selling particular securities or to
seek to enhance a Fund's income or gain. A Fund may use any or all types of the
above-described Derivatives at any time; no particular strategy will dictate
the use of one type of transaction rather than another, as use of any
authorized Derivative will be a function of numerous variables, including
market conditions. The ability of a Fund to utilize Derivatives successfully
will depend on its Adviser's ability to predict pertinent market movements,
which cannot be assured. These skills are different from those needed to select
securities. The use of Derivatives in certain circumstances will require a Fund
to segregate cash, liquid high-grade debt obligations or other assets to the
extent a Fund's obligations are not otherwise "covered" through ownership of
the underlying security or financial instrument. See "Risk Factors and Special
Considerations - Other Investments and Investment Strategies."

A detailed discussion of Derivatives, including the requirement to
segregate assets with respect to these transactions and special risks
associated with such strategies, appears in the Statement of Additional
Information.

The degree of each Fund's use of Derivatives may be limited by certain
provisions of the Code. See "Taxes."
<PAGE>
INVESTMENT LIMITATIONS

The investment limitations enumerated below are fundamental and may not be
changed by the Company's Board of Directors without the affirmative vote of
the holders of a majority of the affected Fund's outstanding shares. However,
each Fund's investment objective and the other investment policies described
herein may be changed by the Board of Directors without shareholder approval at
any time. The percentage limitations set forth below, as well as those
contained elsewhere in this Prospectus and the Statement of Additional
Information, apply at the time a transaction is effected. Subsequent changes in
a percentage resulting from market fluctuations or any other cause other than a
direct action by the Fund will not require the Fund to dispose of Fund
securities or to take other action to satisfy the percentage limitation. If
there is a change in the investment objective of a Fund, shareholders of the
affected Fund should consider whether the Fund remains an appropriate
investment for them in light of their then current financial position and
needs. (A complete list of each Fund's investment limitations that cannot be
changed without a vote of shareholders is contained in the Statement of
Additional Information under "Investment Limitations.")

Each Fund may not purchase the securities of any one issuer if as a result
of such purchase more than 5% of the value of its total assets would be
invested in the securities of such issuer, except that up to 25% of the value
of a Fund's total assets may be invested without regard to this 5% limitation;
provided that there is no limitation with respect to investments in U.S.
Government Securities; and provided further, that each Fund may invest all or
substantially all of its assets in another registered investment company having
the same investment objective and policies and substantially the same
investment restrictions as those with respect to the Fund.

Each Fund may not borrow money, except that each Fund may borrow money
from banks or enter into reverse repurchase agreements, in each case for
temporary or emergency purposes only (not for leveraging or investment), in
aggregate amounts not exceeding 33-1/3% (including the amount borrowed) of the
value of its total assets at the time of such borrowing. For purposes of the
foregoing investment limitation, the term "total assets" shall be calculated
after giving effect to the net proceeds of any borrowings and reduced by any
liabilities and indebtedness other than such borrowings. Additional investments
will not be made by a Fund when borrowings exceed 5% of total net assets.

A Fund may not purchase any securities which would cause 25% or more of
the value of its total assets at the time of such purchase to be invested in
the securities of one or more issuers conducting their principal business
activities in the same industry; provided that there is no limitation with
respect to investments in U.S. Government Securities; and provided further,
that the Fund may invest all or substantially all of its assets in another
registered investment company having the same investment objective and policies
and substantially the same investment restrictions as those with respect to the
Fund.

Each Fund may, in the future, seek to achieve its investment objective by
investing all of its assets in a no-load, open-end management investment
company having the same investment objective and policies and substantially the
<PAGE>
same investment restrictions as those applicable to the Fund. In such event,
the Fund's investment advisory agreement would be terminated since the
investment management would be performed by or on behalf of such other
investment company.

THE TRANSFERS

Each of the High Income Fund and the Europe Equity Fund has been formed as
a successor investment vehicle for a corresponding limited partnership (each
individually a "Partnership" and, collectively, the "Partnerships") for which
Lipper or the European Adviser has acted as general partner and investment
adviser since inception. Each such Fund will exchange Premier Shares for
certain portfolio securities of its corresponding Partnership (individually a
"Transfer" and, collectively, the "Transfers"). The Transfers are subject to
receipt by the Funds, the Advisers, the Partnerships and Lipper of appropriate
exemptive relief from the SEC. Premier Shares received in the Transfers will be
distributed to each Partnership's limited partners who elect to participate in
the Transfers. To the extent that a Fund acquires securities in a Transfer that
have appreciated in value from the date originally acquired by its
corresponding Partnership, the Transfer may have adverse tax consequences to
investors who acquire shares of the Fund in the continuous offering after the
Transfer. If a Fund sells securities acquired in a Transfer that have
appreciated in value from the date they were acquired by its corresponding
Partnership, the amount of any gain with respect to such securities (including
any appreciation in value from the date they were acquired by the Partnership
through the date of the Transfer) would be taxable to all shareholders,
including new shareholders as well as those shareholders who were former
limited partners of the Partnership. The effect of this would be to tax new
shareholders on a distribution that economically represents a return of a
portion of the purchase price of their shares rather than on an increase in the
value of their investment. The amount of any such gain that would be taxable to
a shareholder is dependent on a number of factors, and there is no assurance
that any gains existing at the time of the Transfer would in fact be
recognized. Moreover, any tax liability would affect shareholders differently,
depending on, among other things, individual decisions to redeem or continue to
hold shares, the timing of such decisions, and applicable tax rates. See
"Taxes-The Transfers."

RISK FACTORS AND SPECIAL CONSIDERATIONS

Net Asset Value Fluctuation; Changes in Interest Rates

Each Fund's net asset value, and hence the value of its shares, will
fluctuate, reflecting fluctuations in the market value of its portfolio
positions. To the extent that a Fund invests in fixed income securities, the
Fund's net asset value can be expected to change as general levels of interest
rates fluctuate. Except to the extent that values are affected independently by
other factors such as developments relating to a specific issuer, when interest
rates decline, the value of a fixed income investment can generally be expected
<PAGE>
to rise. Conversely, when interest rates rise, the value of a fixed income
investment can generally be expected to decline. These fluctuations can be
expected to be greater with respect to investments in fixed income securities
with longer maturities than investments in securities with shorter maturities.
Other factors affecting the value of a Fund's securities include, among other
things, (1) changes in the actual and perceived creditworthiness of the issuers
of such securities, (2) social, economic or political factors, (3) factors
affecting the industry in which the issuer operates, such as competition or
technological advances and (4) factors affecting the issuer directly, such as
management changes, labor relations, collapse of key suppliers or customers, or
material changes in overhead. There is no assurance that the Funds will achieve
their investment objectives.

High Yield Securities

The High Income Fund will invest all or substantially all of its assets in
high yield debt securities, commonly known as "junk bonds". High yield debt
securities are those debt securities rated below investment grade (i.e., rated
below "Baa" by Moody's or below "BBB" by S&P) and unrated securities of
comparable quality. Securities rated below investment grade and comparable
unrated securities involve greater risk, including greater price volatility and
a greater risk of default in the timely payment of principal and interest, than
higher rated securities. Under rating agency guidelines, bonds which are rated
in the category "B" (the lowest category in which the High Income Fund may make
an initial investment) generally lack characteristics of a desirable
investment, and assurance of interest and principal payments or of maintenance
and other terms of the contract over any long period of time may be small. Such
securities are considered speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the
obligations. Unrated securities deemed comparable to these rated securities
will have similar characteristics. Accordingly, it is possible that these types
of factors could, in certain instances, reduce the value of securities held by
the Fund with a commensurate effect on the value of Fund shares. Therefore, an
investment in the Fund should not be considered as a complete investment
program.

The secondary markets for high yield debt securities are not as liquid as
the secondary markets for higher rated securities. The secondary markets for
high yield debt securities are characterized by relatively few market makers
and participants in the market are mostly institutional investors, including
insurance companies, banks, other financial institutions and mutual funds. In
addition, the trading volume for high yield debt securities is generally lower
than that for higher-rated securities. Moreover, the secondary markets for high
yield debt securities could contract under adverse market or economic
conditions independent of any specific adverse changes in the condition of a
particular issuer. These factors may have an adverse effect on the High Income
Fund's ability to dispose of particular portfolio investments and may limit its
ability to obtain accurate market quotations for purposes of valuing securities
and calculating net asset value. If the High Income Fund is not able to obtain
precise or accurate market quotations for a particular security, it will become
more difficult for the Board of Directors to value the High Income Fund's
portfolio securities and the Directors may have to use a greater degree of
<PAGE>
judgment in making such valuations. Furthermore, adverse publicity and investor
perceptions about lower-rated securities, whether or not based on fundamental
analysis, may tend to decrease the market value and liquidity of such
lower-rated securities. Less liquid secondary markets may also affect the High
Income Fund's ability to sell securities at their fair value. In addition, the
High Income Fund is permitted to invest up to 15% of its net assets in illiquid
securities, which may be more difficult to value and to sell at fair value. If
the secondary markets for high yield debt securities contract due to adverse
economic conditions or for other reasons, certain previously liquid securities
in the High Income Fund's portfolio may become illiquid and the proportion of
the High Income Fund's assets invested in illiquid securities may increase.

The ratings of fixed income securities by Moody's and S&P are a generally
accepted barometer of credit risk. They are, however, subject to certain
limitations from an investor's standpoint. The rating of an issuer is heavily
weighted by past developments and does not necessarily reflect probable future
conditions. There is frequently a lag between the time a rating is assigned and
the time it is updated. In addition, there may be varying degrees of difference
in credit risk of securities within each rating category in which the High
Income Fund may invest. See Appendix A to this Prospectus for a description of
such ratings. Achievement of the High Income Fund's investment objective may be
more dependent on the U.S. Adviser's credit analysis of issuers than would be
the case if the Fund invested in higher quality debt securities.

While the market values of securities rated below investment grade and
comparable unrated securities tend to react less to fluctuations in interest
rate levels than do those of higher-rated securities, the market values of
certain of these securities also tend to be more sensitive to individual issuer
developments and changes in economic conditions than higher-rated securities.
In addition, such securities generally present a higher degree of credit risk.
Issuers of these securities are often highly leveraged and may not have more
traditional methods of financing available to them, so that their ability to
service their debt obligations during an economic downturn or during sustained
periods of rising interest rates may be impaired. The risk of loss due to
default in payment of interest or principal by such issuers is significantly
greater than with investment grade securities because such securities
frequently are subordinated to the prior payment of senior indebtedness.

Many fixed income securities contain call or buy-back features which
permit the issuer of the security to call or repurchase it. Such securities may
present risks based on payment expectations. If an issuer exercises such a
"call option" and redeems the security, a Fund may have to replace the called
security with a lower yielding security, resulting in a decreased rate of
return for the Fund.

Risks of Investment in Foreign Securities

The Europe Equity Fund will primarily invest, and the High Income Fund and
the U.S. Equity Fund will from time to time invest, in obligations of foreign
corporate and government issuers. Securities of non-U.S. issuers may trade in
U.S. or foreign securities markets. Securities of non-U.S. issuers involve
certain considerations and risks not typically associated with investing in
securities of U.S. companies or the U.S. Government, including uncertainties
<PAGE>
regarding future social, political and economic developments, the possible
imposition of foreign withholding taxes on interest income payable on
securities held by a Fund, the possible seizure or nationalization of foreign
assets and the possible establishment of foreign government laws or
restrictions that might adversely affect the payment of interest on debt
securities held by the Fund. Foreign securities markets may have substantially
less volume and may be smaller, less liquid and subject to greater price
volatility than U.S. markets. Delays or problems with settlement in foreign
markets could affect the liquidity of a Fund's foreign investments and
adversely affect performance. Investment in foreign securities also may result
in higher brokerage and other costs and the imposition of transfer taxes or
transaction charges. Investment by a Fund in non-U.S. issuers may be restricted
or controlled to varying degrees. These restrictions may limit or preclude
investment in certain issuers or countries and may increase the costs and
expenses of the Fund. In addition, the repatriation of both investment income
and capital from some countries requires governmental approval and if there is
a deterioration in a country's balance of payments or for other reasons, a
country may impose temporary restrictions on foreign capital remittances
abroad. Even where there is no outright restriction on repatriation of capital,
the mechanics of repatriation may affect certain aspects of the operation of a
Fund. A Fund could be adversely affected by delays in, or a refusal to grant
any required governmental approval for repatriation of capital, as well as by
the application to the Fund of any restrictions on investments. In addition,
there may be less publicly available information about a non-U.S. issuer than
about a U.S. issuer, and non-U.S. issuers may not be subject to the same
accounting, auditing and financial recordkeeping standards and requirements as
U.S. issuers. Finally, in the event of a default in any such foreign
obligations, it may be more difficult for a Fund to obtain or enforce a
judgment against the issuers of such securities. Because a Fund may invest in
the securities of foreign issuers which are denominated in foreign currencies,
the strength or weakness of the U.S. dollar against such foreign currencies
will account for part of the Funds' investment performance. A decline in the
value of any particular currency against the U.S. dollar will cause a decline
in the U.S. dollar value of a Fund's holdings of securities denominated in such
currency and, therefore, will cause an overall decline in the Funds' net asset
value and any net investment income and capital gains to be distributed in U.S.
dollars to shareholders of the Fund.

Other Investments, Investment Policies and Investment Strategies; Prior History

Certain risks and special considerations of certain of the investment
practices in which the Funds may engage are described above under "Investment
Objectives and Policies - Other Investments and Investment Strategies."

Derivatives involve special risks, including possible default by the other
party to the transaction, illiquidity and, to the extent the Adviser's view as
to certain market movements is incorrect, the risk that the use of Derivatives
could result in greater losses than if they had not been used. Use of put and
call options could result in losses to a Fund, force the purchase or sale of
portfolio securities at inopportune times or for prices higher or lower than
current market values, or cause a Fund to hold a security it might otherwise
not purchase or sell. The use of currency transactions could result in a Fund's
<PAGE>
incurring losses as a result of the imposition of exchange contracts or the
inability to deliver or receive a specified currency in addition to exchange
rate fluctuations. Losses resulting from the use of Derivatives will reduce a
Fund's net asset value, and possibly income, and the losses may be greater than
if Derivatives had not been used. Additional information regarding the risks
and special considerations associated with Derivatives appears in the Statement
of Additional Information.

As stated above under "The Transfers," each of the High Income Fund and
the Europe Equity Fund has been formed as a successor investment vehicle for a
corresponding Partnership. Neither Partnership was registered under, and
therefore unlike the Fund was not subject to the provisions of, the 1940 Act,
pursuant to an exemption from registration for entities which have fewer than
100 holders. As unregistered entities, neither Partnership was required to
comply with the requirements of the 1940 Act, or the diversification,
distribution and other requirements imposed by the Code. The U.S. Equity Fund
has no prior operating history. See "Performance Information" below for further
information regarding the historical investment performance of the Partnerships
as well as that of certain U.S. equity oriented accounts managed by Lipper.

PURCHASE OF SHARES

Shares of each class of each Fund may be purchased without any sales
charge through the Distributor, through certain investment dealers, banks and
financial services firms that provide distribution, administrative or
shareholder services to the Funds ("Participating Dealers"), or by mailing a
purchase order directly to the Transfer Agent, at their net asset value next
determined after the purchase order is received. The Distributor and
Participating Dealers are responsible for forwarding orders they receive to the
Transfer Agent by the applicable times described below on the same day as their
receipt of the orders to permit purchase of shares as described above, and
their failure to do so will result in investors not receiving that day's net
asset value. See "Valuation of Shares."

Group Retirement Plan Shares of a Fund are offered for sale with no
minimum investment requirement to retirement plans, including, but not limited
to, qualified 401(k) plans, provided such plans meet the required number of
eligible employees or the required amount of assets, and deferred compensation
<PAGE>
plans under 403(b)(7) of the Code. Group Retirement Plan Shares of each Fund
are subject to a service fee of up to 0.25% of their average daily net assets.
See "Distribution and Service Plans." Investors should contact the Distributor
at the address and telephone number set forth on the cover of this Prospectus
for further information regarding the eligibility requirements for Group
Retirement Plan Shares.

Each Fund has established a subsequent investment minimum of $2,500 for
its Premier and Retail Shares. Group Retirement Plan Shares are not subject to
any subsequent investment minimum. Each Fund reserves the right to vary any
initial or subsequent investment minimum at any time.

Purchase orders received by the Distributor or a Participating Dealer and
transmitted to the Transfer Agent prior to the close of regular trading on the
New York Stock Exchange, Inc. (the "NYSE"), generally 4:00 p.m., New York time,
on any day net asset value is calculated are priced according to the net asset
value of the purchased class of shares determined on that day. Purchase orders
received by the Transfer Agent after the close of regular trading on the NYSE
are priced as of the time the net asset value per share of the relevant class
is next determined. See "Valuation of Shares." Payment is generally due to the
Distributor or a Participating Dealer on the third business day (the
"Settlement Date") after the trade date. Investors who make payment prior to a
Settlement Date may permit the payment to be held in their brokerage accounts
or may designate a temporary investment for such payment until the Settlement
Date. Each Fund reserves the right to reject any purchase order and to suspend
the offering of its shares for a period of time.

Initial Investments by Mail

Shares of a Fund may be purchased by completing and signing an account
application and mailing it, together with a check payable to "The Lipper Funds,
Inc.", to:
The Lipper Funds, Inc.
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798

Payment for the purchase of shares received by mail will be credited to an
investor's account at the net asset value per share of the purchased class of
shares of a Fund next determined after receipt.

Initial Investment by Wire

Shares of a Fund may also be purchased by wiring Federal Funds to the
Company's custodian (see instructions below). In order to insure prompt
crediting of the Federal Funds wire, it is important to follow these steps:

(a) The investor must telephone the Transfer Agent (toll-free 1-800-
LIPPER9) and provide name, address, telephone number, social security or tax
I.D. number, the Fund and class of shares to be purchased, the amount being
wired and the name of the bank wiring the funds. (Investors with existing
<PAGE>
accounts should also notify the Transfer Agent prior to wiring funds). An
account number will then be provided;

(b) The investor must instruct his or her bank to wire the specified
amount to the Company's custodian as follows:

The Chase Manhattan Bank, N.A.
New York, N.Y. 10003
ABA # []
DDA Acct. #001-44-896
F/B/O The Lipper Funds, Inc.
Ref: [Name of Fund]
Account Number ______________
Account Name _______________

(c) The investor must forward a completed and signed account application
to the Transfer Agent, and mail a carbon copy of the account application
(manually signed) to the Company at the address set forth above under "Initial
Investments by Mail" as soon as possible. It is important that investors
forward the account application to the Transfer Agent and the Company in a
timely manner, since shares of the Funds will not be redeemed, exchanged or
transferred until the Transfer Agent receives the shareholder's account
application. Federal Funds purchases will be accepted only on days on which
both the NYSE and the Company's custodian are open for business.

Additional Investments

An investor may add to his or her account by purchasing additional shares
of the same class of a Fund's shares by mailing a check to the Transfer Agent
(payable to "The Lipper Funds, Inc.") at its address set forth above under
"Initial Investments by Mail" or by wiring funds to the Company's custodian
using the procedures set forth above under "Initial Investment by Wire." It is
important that the account number, account name, and the Fund and class of
shares to be purchased are specified on the check or wire to ensure proper
crediting to the investor's account.

In order to ensure that wire orders are invested promptly, investors are
requested to notify the Transfer Agent prior to the wire date. Mail orders must
include the "Invest by Mail" stub which accompanies each Fund's confirmation
statement.

Other Purchase Information

Each Fund reserves the right, in its sole discretion, to suspend the
offering of its shares or reject purchase orders when, in the judgment of
management, such suspension or rejection is in the best interests of the Fund.

Purchases of shares will be made in full and fractional shares calculated
to three decimal places. In the interest of economy and convenience,
certificates for shares will not be issued except at the written request of the
shareholder. Certificates for fractional shares, however, will not be issued
under any circumstances. Investors should note that it is considerably more
difficult to redeem shares held in certificate form.
<PAGE>
As stated above, shares of each Fund may be purchased by customers of
Participating Dealers. Participating Dealers may impose additional or different
conditions or other account fees on the purchase and redemption of Fund shares.
Each Participating Dealer is responsible for transmitting to its customers a
schedule of any such fees and information regarding any additional or different
conditions regarding purchases and redemptions. Shareholders who are customers
of Participating Dealers should consult their Participating Dealer for
information regarding these fees and conditions. Certain Participating Dealers
may receive compensation from the Company, the Distributor, the Advisers, or
any of the Advisers' affiliates. A salesperson and any other person entitled to
receive compensation for selling or servicing Fund shares may receive different
compensation with respect to sales of one class of shares over another.

Participating Dealers may enter confirmed purchase orders on behalf of
their customers. If you buy shares of a Fund in this manner, your Participating
Dealer must transmit your investment order to the Transfer Agent prior to 4:00
p.m. on a business day to receive the net asset value of the purchased class
determined on the same day. Participating Dealers are solely responsible to
their customers for the timely transmission of all purchase and redemption
requests, investment information, documentation and money.

DISTRIBUTION AND SERVICE PLANS

The Company's Board of Directors has adopted a distribution plan for the
Retail Shares of each Fund pursuant to Rule 12b-1 under the 1940 Act (the
"Retail Distribution Plan"), and a shareholder servicing plan for the Group
Retirement Plan Shares of each Fund (the "Group Retirement Servicing Plan").
Potential investors should read this Prospectus in light of the terms governing
the agreement between their Participating Dealers and the Distributor.

Retail Distribution Plan

Under the Retail Distribution Plan, each Fund, at the expense of its
Retail Shares, pays the Distributor for distributing the Fund's Retail Shares
at an annual rate of up to 0.25 of 1% of the value of the average daily net
assets of such Fund's Retail Shares. The Distributor may pay one or more
Participating Dealers a fee in respect of distribution of a Fund's Retail
Shares. The Distributor determines the amounts, if any, to be paid to
Participating Dealers under the Retail Distribution Plan and the basis on which
such payments are made. The Retail Distribution Plan also provides that the
Advisers may pay Participating Dealers out of their investment advisory fees,
their past profits or any other source available to them. From time to time the
Distributor may defer or waive receipt of fees under the Retail Distribution
Plan while retaining the ability to be paid under the Retail Distribution Plan
thereafter. The foregoing fees payable under the Retail Distribution Plan are
payable without regard to actual expenses incurred.

Group Retirement Servicing Plan

The Company intends to enter into servicing agreements pursuant to which
Participating Dealers and sometimes the Distributor will render certain support
services to their customers who are beneficial owners of Group Retirement Plan
<PAGE>
Shares. Such services are intended to supplement the services provided by the
Company's administrator and Transfer Agent. Under the Group Retirement
Servicing Plan, each Fund, at the expense of its Group Retirement Plan Shares,
may pay one or more Participating Dealers and/or the Distributor up to 0.25 of
1% (on an annualized basis) of the value of the average daily net assets of
such Fund's Group Retirement Plan Shares for providing one or more of the
following services to such customers: establishing and maintaining accounts and
records relating to customers that invest in Group Retirement Plan Shares;
processing dividend and distribution payments from a Fund on behalf of
customers; arranging for bank wires; providing sub-accounting with respect to
Group Retirement Plan Shares beneficially owned by customers or the information
necessary for sub-accounting; forwarding shareholder communications from the
Funds (such as proxies, shareholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices) to customers; assisting
in processing purchase, exchange and redemption requests from customers and in
placing such orders with the Company's service contractors; assisting customers
in changing dividend options, account designations and addresses; providing
customers with a service that invests the assets of their accounts in Group
Retirement Plan Shares pursuant to specific or pre-authorized instructions;
providing information periodically to customers showing their positions in
Group Retirement Plan Shares and integrating such statements with those of
other transactions and balances in customers' other accounts with the
Participating Dealer; responding to customer inquiries relating to the services
performed by the Participating Dealer or the Distributor; responding to
customer inquiries concerning their investments in Group Retirement Plan
Shares; and providing other similar shareholder liaison services. Fees payable
under the Group Retirement Servicing Plan are not paid to Participating Dealers
or the Distributor with respect to other classes of shares of the Funds.
Investors who are or anticipate becoming beneficial owners of Group Retirement
Plan Shares should read this Prospectus in light of the terms and fees
governing their accounts with Participating Dealers.

Other

Banking laws and regulations, including the Glass-Steagall Act as
currently interpreted by the Board of Governors of the Federal Reserve System,
prohibit banks generally from issuing, underwriting, selling or distributing
securities. Accordingly, banks will be engaged to act as Participating Dealers
only to perform administrative and shareholder servicing functions. The Company
believes that banks, subject to banking laws and regulations, may perform such
administrative and shareholder servicing functions without violation of such
banking laws or regulations. However, future changes in legal requirements
relating to the permissible activities of banks and their affiliates, as well
as future interpretations of present requirements, could require banks to
discontinue providing such administrative and shareholder servicing functions.
If banks were required to discontinue providing all or a part of such
functions, their customers would be permitted to remain the beneficial owners
of shares of the Funds and alternative means for continuing the servicing of
such customers would be sought. The Company does not anticipate that investors
would suffer any adverse financial consequences as a result of these
occurrences.
<PAGE>
In addition, state securities laws on this issue may differ from
interpretations of federal law expressed herein and banks and other financial
institutions may be required to register as dealers pursuant to state laws.

REDEMPTION OF SHARES

Shareholders may request redemption of their shares at any time. When a
redemption request is received in proper form, a Fund will redeem the shares at
the next determined net asset value of the class of shares being redeemed. The
proceeds paid to a shareholder upon redemption may be more or less than the
amount invested depending upon the net asset value of the shares being redeemed
at the time of redemption. If a shareholder holds shares in more than one class
or Fund, any request for redemption must specify the Fund and class of shares
being redeemed. In the event of a failure to specify which Fund and class, or
if the investor owns fewer shares of a class than specified, the redemption
request will be delayed until the Transfer Agent receives further instructions
from the Distributor or a Participating Dealer, or if the shareholder's account
is not with the Distributor or a Participating Dealer, from the shareholder
directly.

Each Fund normally transmits redemption proceeds for credit to the
shareholder's account at the Distributor or a Participating Dealer at no charge
within seven days after receipt of a redemption request. Generally, these funds
will not be invested for the shareholder's benefit without specific
instruction, and the Distributor will benefit from the use of temporarily
uninvested funds. A shareholder who pays for shares by personal check will be
credited with the proceeds of a redemption of those shares only after the
purchase check has been collected, which may take up to 15 days or more. A
shareholder who anticipates the need for more immediate access to his or her
investment should purchase shares with Federal Funds, by bank wire or with a
certified or cashier's check. Shares will not be redeemed until the Transfer
Agent has received the shareholder's account application.

If an investor in Premier Shares or Retail Shares of any Fund reduces the
value of his or her account to below $500,000, in the case of Premier Shares,
or $1,000, in the case of Retail Shares, such account may be subject to
redemption by the Fund, but only after the investor has been given at least 30
days in which to increase his or her account balance to more than such required
minimum account balance. Investors in Group Retirement Plan Shares are not
subject to such a minimum account balance requirement. To the extent that
shares in an investor's account are redeemed by a Fund, the investor could
reinvest in any class of shares of the Fund at a later date provided that any
eligibility requirements with respect to investing in the Fund were met at such
time. In addition, a Fund may redeem shares involuntarily or suspend the right
of redemption as permitted under the 1940 Act, or under certain special
circumstances described in the Statement of Additional Information under
"Additional Redemption Information."

<PAGE>
Shares of each Fund may be redeemed in one of the following ways:

Redemption through the Distributor or a Participating Dealer

Redemption requests may be made through the Distributor or a Participating
Dealer. A shareholder desiring to redeem shares represented by certificates
must also present such certificates to the Distributor or a Participating
Dealer endorsed for transfer (or accompanied by an endorsed stock power),
signed exactly as the shares are registered. Redemption requests involving
shares represented by certificates will not be deemed received until such
certificates are received by the Transfer Agent in proper form. The Transfer
Agent is located at 73 Tremont Street, Boston, MA. 02208.

Redemption by Mail

Redemption requests also may be mailed to the Transfer Agent at the
following address:

The Lipper Funds, Inc.
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, Massachusetts 02208-2798
A mailed request to redeem shares must include the following:

(a) Stock certificates representing the shares redeemed, if issued;

(b) A letter of instruction or a stock assignment specifying the number
of shares or dollar amount to be redeemed, as well as the Fund and class being
redeemed, signed by all registered owners of the shares in the exact names in
which they are registered;

(c) Any required signature guarantees (see "Signature Guarantees" below);
and
(d) Other supporting legal documents in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit sharing plans
and other organizations.

Shareholders who are uncertain of the requirements for redemption should
call 1-800-LIPPER9.

Signature Guarantee

To protect investors, the Company and the Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guarantees
are required for (1) redemptions where the proceeds are to be sent to someone
other than the registered shareholder(s) or the registered address, or (2) when
the registered shareholder requests a transfer of shares to another person(s).
The purpose of signature guarantees is to verify the identity of the party who
has authorized a redemption.

Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 under the Exchange Act. Eligible guarantor institutions
include banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations.
<PAGE>
A complete definition of eligible guarantor institutions is available from the
Transfer Agent. Broker-dealers guaranteeing signatures must be a member of a
clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees. Signature guarantees
will be accepted from any eligible guarantor institution which participates in
a signature guarantee program.

The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
must specify the total number of shares, Fund and class of shares to be
redeemed; or (3) on all stock certificates tendered for redemption (in the
event that all shares being redeemed are held in certificated form).

Redemption by Telephone

Provided that an investor has previously established a telephone
redemption privilege when completing an account application, a request for
redemption of shares may be made by calling the Transfer Agent at 1-800-LIPPER9
and requesting that redemption proceeds be mailed to the investor or wired to
his or her bank. If an investor selects a telephone redemption privilege, the
investor authorizes the Transfer Agent to act on telephone instructions from
any person representing himself or herself to be the investor or a
representative of the investor's Participating Dealer, and reasonably believed
by the Transfer Agent to be genuine. The Company will require the Transfer
Agent to employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, it may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Company nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be genuine.
When redeeming shares by telephone, an investor must have ready his or her name
and account number, as well as Fund name, Social Security number or tax I.D.
number and account address.

To change the name of the commercial bank or the account designated to
receive redemption proceeds, a written request must be sent to the Transfer
Agent at its address set forth above under "Redemption by Mail." Requests to
change the bank or account must be signed by each shareholder and each
signature must be guaranteed. An investor cannot redeem shares by telephone if
he or she holds stock certificates for the shares. Please contact 1-800-LIPPER9
for further details.

Redemption in Kind

If the Board of Directors of the Company determines that it would be
detrimental to the best interests of the remaining shareholders of a Fund to
make payment wholly or partly in cash, a Fund may pay redemption proceeds in
whole or in part by a distribution of securities or other assets held by the
Fund in lieu of cash in conformity with applicable rules of the SEC. Investors
may incur brokerage charges on the sale of securities so received in payment of
redemptions.
<PAGE>
EXCHANGE PRIVILEGE

The Exchange Privilege enables investors to purchase, in exchange for
shares of a Fund, shares of certain other funds in the Lipper Group of Funds,
to the extent such shares are offered for sale in the investor's state of
residence and the purchase meets the minimum investment and other eligibility
requirements of the Fund into which the investor is exchanging. If an investor
desires to use the Exchange Privilege, he or she should consult the Distributor
or his or her Participating Dealer to determine if it is available and whether
any other conditions are imposed on its use.

To use the Exchange Privilege, an investor or his or her Participating
Dealer acting on his or her behalf must give exchange instructions to the
Transfer Agent by mail, or by telephone if the investor has previously
established the telephone exchange privilege, as further described below.
Shares will be exchanged at the next determined net asset value. No fees
currently are charged to shareholders directly in connection with exchanges,
although the Company reserves the right, upon not less than 60 days' written
notice, to charge shareholders a nominal fee in accordance with rules
promulgated by the SEC.

Before any exchange, an investor should carefully read the portions of
this Prospectus relating to the new Fund in which he or she wishes to invest
or, if the investor wishes to exchange into a fund not described in this
Prospectus, he or she must obtain and should carefully review a copy of the
current prospectus of the fund into which he or she wishes to exchange.

Exchanges may be subject to limitations as to amounts or frequency, and to
other restrictions established by the Company's Board of Directors to assure
that exchanges do not disadvantage the Funds or their shareholders. Shares held
in broker "street name" may not be exchanged by mail or telephone; an investor
must contact his or her Participating Dealer to exchange such shares. The
Company reserves the right to reject any exchange request in whole or in part.
The Exchange Privilege may be modified or terminated at any time upon notice to
shareholders.

The exchange of shares of one Fund for shares of another is treated for
federal income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize a taxable
gain or loss.

Exchange By Mail

In order to exchange shares by mail, an investor must include in the
exchange request his or her account number for his or her current Fund, the
name of his or her current Fund and the class which he or she wishes to
exchange from, the name of the Fund into which he or she wishes to exchange,
and the documents described in the procedures set forth above under "Redemption
of Shares - Redemption by Mail." The request to exchange shares must be sent
to:

The Lipper Funds, Inc.
c/o Chase Global Funds Services Company
73 Tremont Street
Boston, MA 02208
<PAGE>
Exchange By Telephone

Provided that an investor has previously established the telephone
exchange privilege when completing an account application, he or she may
request an exchange of shares by calling the Transfer Agent at 1-800-LIPPER9.
If an investor selects a telephone exchange privilege, he or she authorizes the
Transfer Agent to act on telephone instructions from any person representing
himself or herself to be the investor or a representative of the investor's
Participating Dealer, and reasonably believed by the Transfer Agent to be
genuine. The Company will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification, to confirm
that instructions are genuine and, if it does not follow such procedures, it
may be liable for any losses due to unauthorized or fraudulent instructions.
Neither the Company nor the Transfer Agent will be liable for following
telephone instructions reasonably believed to be genuine. When exchanging
shares by telephone, an investor should have ready his or her name and account
number with the current Fund, the name of the current Fund and the class of
such Fund which he or she wishes to exchange, the name of the Fund into which
he or she wishes to exchange, his or her Social Security number or tax I.D.
number and account address.

Transfer of Registration

An investor may transfer the registration of any Fund shares to another
person by writing to the Transfer Agent at the address set forth above under
"Redemption of Shares-Redemption by Mail."

VALUATION OF SHARES

The net asset value per share of each class of shares of each Fund is
calculated Monday through Friday, except on days on which the NYSE is closed.
Currently, the NYSE is closed on New Year's Day, Presidents' Day, Good Friday,
Memorial Day (observed), Independence Day (observed), Labor Day, Thanksgiving
Day and Christmas Day.

The net asset value per share of each class of shares of a Fund is
determined as of the close of regular trading on the NYSE, and is computed by
dividing the value of the net assets of the Fund attributable to that class by
the total number of shares of that class outstanding. Generally, a Fund's
investments are valued at market value or, in the absence of a market value
with respect to any securities, at fair value as determined by or under the
direction of the Company's Board of Directors. Short-term investments that
mature in 60 days or less are valued at amortized cost whenever the Board of
Directors determines that amortized cost reflects the fair value of those
investments. Occasionally, events which affect the values of such securities
may occur between the times at which they are determined and the close of the
NYSE and will therefore not be reflected in the computation of a Fund's net
asset value. If events materially affecting the value of such securities occur
during such period, then these securities will be valued at their fair value as
<PAGE>
determined in good faith by or under procedures established by the Company's
Board of Directors. Further information regarding the Company's valuation
policies is contained in the Statement of Additional Information.

MANAGEMENT OF THE COMPANY

General

The business and affairs of the Company are managed under the direction of
the Company's Board of Directors. The Board of Directors approves all
significant agreements between the Company and the persons or companies that
furnish services to the Company, including agreements with the Distributor,
Advisers, administrator, custodian and Transfer Agent. The day-to-day
operations of the Company are delegated to the Advisers with respect to each
Fund and to the Company's administrator. The Statement of Additional
Information contains general background information regarding each director and
executive officer of the Company.

Investment Advisers

Each of the Advisers is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"). Neither of
the Advisers has previously served as an investment adviser to an investment
company registered under the 1940 Act.

The U.S. Adviser.

Lipper & Company, L.L.C., located at 101 Park Avenue, New York, New York
10178, serves as investment adviser to the High Income Fund and the U.S. Equity
Fund (the "U.S. Adviser"). The U.S. Adviser is a recently formed affiliate of
Lipper, which acts as the Fund's distributor. The U.S. Adviser was organized
by Lipper in connection with the expansion of its investment management
business to include the management of registered investment companies. Each of
the U.S. Adviser's officers or employees involved in managing the High Income
Fund and the U.S. Equity Fund is also an officer or employee of Lipper. Lipper
is a privately owned investment management and investment banking firm founded
in 1987. At September 30, 1995, Lipper managed assets having an aggregate
market value on a gross basis of $2.8 billion on behalf of more than 225
institutional and high net worth clients. Lipper offers complementary
investment strategies in intermediate term high yield bonds, hedged convertible
securities, investment grade bonds, U.S. and European equities and preferred
stocks. Lipper has served as the general partner and investment adviser to the
Partnership corresponding to the High Income Fund since the inception of the
Partnership. Lipper also serves as the general partner to several other
private investment partnerships organized in the U.S. or offshore. Lipper is
also registered as a broker-dealer with the SEC and the NASD.

Kenneth Lipper is the President of the U.S. Adviser, and has been
President of Lipper (together with its predecessor, Lipper & Company, Inc.)
since 1986. Mr. Lipper was a General Partner of Lehman Brothers Inc. from 1969
to 1975 and a General Partner and Managing Director of Salomon Brothers Inc
<PAGE>
from 1976 to 1982. He subsequently served as Deputy Mayor of New York City from
1983 to 1985. Mr. Lipper is the author of the novel "Wall Street" and the
screenplay "City Hall". He graduated from Columbia University and Harvard Law
School and is a member of the New York State Bar. As a specialist in corporate
finance since 1969, Mr. Lipper has held all levels of responsibility as an
adviser to corporations in mergers, tender offers, convertible issues, asset
valuations and other investment banking transactions. Since 1986, Mr. Lipper
has supervised the investment management and investment banking operations of
the U.S. Adviser. He is a trustee of the Rockefeller Brothers Fund, a member of
the Federal Reserve Bank of New York's International Advisory Board and a
Senior Financial Adviser to the New York City Council. Mr. Lipper also serves
on the Harvard Executive Committee on University Resources, and the Visitor's
Committee of the Kennedy School of Government at Harvard University.

Abraham Biderman, a certified public accountant, is an Executive Vice
President of the U.S. Adviser and of Lipper and Co-Manager of Lipco Partners,
L.P., a limited partnership under management by the U.S. Adviser. Mr. Biderman
joined Lipper & Company, Inc. in 1990. He was the Commissioner of the New York
City Department of Housing, Preservation and Development from 1988 to 1989, and
in that capacity was responsible for the largest housing development project in
the United States. He was the Commissioner of the New York City Department of
Finance from 1986 to 1988, responsible for the collection of over $20 billion a
year in tax and other revenues. Mr. Biderman also served as a Special Advisor
to former Mayor Edward I. Koch from 1985 to 1987 and was an Assistant to then-
Deputy Mayor Kenneth Lipper from 1983 to 1985.

Edward Strafaci is the Director of Fixed Income Money Management for the
U.S. Adviser and for Lipper. Mr. Strafaci is principally responsible for the
trading operations of Lipco Partners. He has managed Lipco Partner's
convertible and fixed income activities since 1989, and has been a trader with
Lipco Partners since its inception in 1985. Prior to joining Lipco Partners,
Mr. Strafaci was a trader at Dean Witter Reynolds Inc. from 1984 to 1985. Mr.
Strafaci received his M.B.A. and B.A. from St. John's University.

Wayne Plewniak is responsible for the day-to-day investment activities of
the High Income Fund. Mr. Plewniak is an employee of the U.S. Adviser and
joined Lipper in 1991. Prior to joining Lipper, he served as a Senior
Investment Analyst for Bell Atlantic Corporation from 1988 to 1991,
concentrating on private placement and high-yield investments. From 1986 to
1988, Mr. Plewniak worked for Paribas North America in its Merchant Banking
department. Mr. Plewniak holds an M.B.A. from Georgetown University and a B.S.
in Industrial Engineering from Rochester Institute of Technology.

The U.S. Equity Fund is managed by an Investment Committee comprised of
Mr. Lipper, Nancy Friedman and Michael Visovsky. Nancy Friedman is an employee
of the U.S. Adviser. Ms. Friedman joined Lipper in 1993 and is a Vice President
in charge of equity research for Lipper. Prior to joining Lipper, she served as
a Securities Analyst at Lehman Brothers Inc. from 1985 to 1993. From 1982 to
1985, Ms. Friedman worked for Merrill Lynch & Co. as a Securities Analyst in
its Capital Markets department. Ms. Friedman received her B.A. from Barnard
College, Columbia University and her M.B.A. from New York University. Michael
Visovsky is an employee of the U.S. Adviser and is the Director of Research for
Lipper. Mr. Visovsky is responsible for all of the U.S. Adviser's and Lipper's
<PAGE>
equity research operations. Mr. Visovsky has been responsible for research for
the convertible arbitrage portfolio of Lipco Partners since its inception in
1985, including all equity research related to the management of such
portfolio. Previously, Mr. Visovsky was a research analyst at Dean Witter
Reynolds Inc. He received a law degree from Brooklyn Law School and is a member
of the New York State Bar. Mr. Visovsky received his M.B.A. from New York
University and his B.B.A. from Baruch College (CUNY).

The European Adviser.

Prime Lipper Asset Management, located at 101 Park Avenue, New York, New
York 10178, serves as investment adviser to the Europe Equity Fund (the
"European Adviser" and, together with the U.S. Adviser, the "Advisers"). The
European Adviser has been the general partner and investment adviser to the
Partnership corresponding to the Europe Equity Fund since the inception of the
Partnership. The European Adviser is a joint venture between subsidiaries of
Lipper & Company, L.P. and Prime S.p.A. ("Prime"). Prime is a subsidiary of
Fidis S.p.A., the financial services company controlled by Fiat S.p.A. Prime,
through subsidiaries and affiliates, is among the largest asset managers in
Italy, and specializes in management of portfolios invested in European
issuers, with approximately $4 billion of assets under management as of
September 30, 1995 from domestic and international investors.

Francesco Taranto, the Managing Director of Prime, joined the Prime Group
in 1987 as a Managing Director of PrimeGest S.p.A. Mr. Taranto's market
experience dates from 1959, and he is responsible for the overall supervision
of portfolio management of all mutual funds advised by Prime. As Chairman of
the Investment Committee of Prime, Mr. Taranto oversees the development and
implementation of investment strategy and asset allocation policy. Prior to
joining the Prime Group, he served for four years as the General Manager of
Interbancaria Gestione, a prominent Milan-based mutual fund company.

Guido Guzzetti is responsible for the day-to-day investment activities of
the Europe Equity Fund. Mr. Guzzetti has been associated with Prime since 1987.
He is responsible for the overall investment process of Prime's Europe Growth
investment strategy and for the research and development of structured asset
management products for institutional investors. Mr. Guzzetti is also Managing
Director and Chief Investment Officer of UniGest S.p.A., a mutual fund
management company with approximately $200 million under management. From 1982-
1986, Mr. Guzzetti was an information system analyst and sales representative
at IBM. Prior to that he was a researcher on mathematical and numerical
modeling at ENI. Mr. Guzzetti holds a B.A. in Physics from Milan University.

Compensation

For its services under its investment advisory agreement with the Company
with respect to each Fund, each Adviser is entitled to receive an annual fee
computed daily and paid monthly at the annual rates set forth below. From time
to time, an Adviser may voluntarily waive for a period of time all or a portion
of the fee to which it is entitled under its investment advisory agreement with
the Company with respect to a particular Fund.

<PAGE>
<TABLE>
<CAPTION>
<S>
Fund Advisory Fee
<C>

High Income Fund 0.75%
U.S. Equity Fund 0.85%
Europe Equity Fund 1.10%
</TABLE>

Distributor

Lipper & Company, L.P., located at 101 Park Avenue, New York, New York
10178, serves as the Company's distributor. The Distributor is entitled to
receive an annual distribution fee with respect to each Fund's Retail Shares,
and may receive all or a portion of the annual service fee, if any, paid with
respect to a Fund's Group Retirement Plan Shares. See "Distribution and
Services Plans."

Administrator

Chase Global Funds Services Company, a wholly owned subsidiary of The
Chase Manhattan Bank N.A., serves as the Company's administrator (the
"Administrator"). The Administrator calculates the net asset value of each
class of shares of each Fund's shares and generally assists in all aspects of
the Company's administration and operation. As compensation for its services,
the Company pays the Administrator a monthly fee at the annual rate of 0.20% of
the value of the Company's average daily net assets up to and including $200
million; 0.10% of the Company's average daily net assets in excess of $200
million up to and including $400 million; and 0.05% of the Company's average
daily net assets in excess of $400 million. The Administrator is located at 73
Tremont Street, Boston, MA 02208.

Expenses

Each Fund's expenses include taxes, interest, fees and salaries of the
Company's directors and officers who are not directors, officers or employees
of the Company's service contractors, SEC fees, state securities qualification
fees, costs of preparing and printing prospectuses for regulatory purposes and
for distribution to existing shareholders, advisory and administration fees,
charges of the custodian and of the transfer and dividend disbursing agent,
certain insurance premiums, outside auditing and legal expenses, costs of
shareholder reports and shareholder meetings and any extraordinary expenses.
Each Fund also pays for brokerage fees and commissions (if any) in connection
with the purchase and sale of portfolio securities. Each Fund's expenses are
allocated to a particular class of its shares based on either expenses
identifiable to such class or the relative net assets of such class and the
other classes of its shares. The Advisers have agreed to reimburse the Funds to
the extent required by applicable state law for certain expenses that are
described in the Statement of Additional Information.

DIVIDENDS

The policy of each Fund is to distribute its investment income and net
realized capital gains, if any. Shares of a Fund begin accruing dividends on
the business day following the day a purchase order is priced and continue to
accrue dividends up to and including the day that such shares are redeemed.
<PAGE>
Unless a shareholder instructs that dividends and capital gains distributions
on shares of a class be paid in cash and credited to the shareholder's account
at the Distributor or a Participating Dealer, dividends and capital gains
distributions will be reinvested automatically in additional shares of the same
class at the net asset value of that class at the time of reinvestment.

The High Income Fund intends to distribute substantially all of its net
investment income to shareholders quarterly. The U.S. Equity Fund and the
Europe Equity Fund intend to distribute substantially all of their net
investment income annually. Each Fund intends to distribute net realized
capital gains, if any, with the last dividend for the calendar year.

Dividends paid by each class of a Fund's shares will be calculated at the
same time and in the same manner and will be in the same amount, except that
the expenses attributable solely to a particular class will be borne
exclusively by that class. Shares subject to payments under a Fund's
Distribution or Service Plan will receive lower per-share dividends than shares
not subject to such payment because of the higher expenses borne by such
shares.

Each shareholder or its authorized representative will receive an annual
statement detailing the amount of any dividends and distributions made during
each year and their federal tax qualification.

TAXES

Each Fund intends to qualify and elect to be treated as a regulated
investment company for federal income tax purposes under Subchapter M of the
Code. If so qualified, a Fund will not be subject to federal income taxes on
its investment company taxable income (as that term is defined in the Code,
determined without regard to the deduction for dividends paid) and net capital
gain (the excess of a Fund's net long-term capital gain over its net short-term
capital loss), if any, that it distributes to its shareholders in each taxable
year. To qualify as a regulated investment company, a Fund must, among other
things, distribute to its shareholders at least 90% of its net investment
company taxable income for such taxable year. However, a Fund would be subject
to corporate income tax at a rate of 35% on any undistributed income or net
capital gain. A Fund must also derive less than 30% of its gross income in each
taxable year from the sale or other disposition of certain securities held for
less than three months (the "30% limitation"). If in any year a Fund should
fail to qualify as a regulated investment company, the Fund would be subject to
federal income tax in the same manner as an ordinary corporation, and
distributions to shareholders would be taxable to such holders as ordinary
income to the extent of the earnings and profits of the Fund. Distributions in
excess of earnings and profits will be treated as a tax-free return of capital,
to the extent of a holder's basis in its shares, and any excess, as a long- or
short-term capital gain.

Each Fund intends to distribute substantially all of its investment
company taxable income each year. Such distributions, whether paid in cash or
reinvested in additional shares, of net investment income will be taxable as
ordinary income. Federal income taxes for distributions to an IRA or a
qualified retirement plan are deferred under the Code. A portion of such
<PAGE>
dividends may qualify for the dividends-received deduction generally available
for corporate shareholders under the Code. Distributions to shareholders of net
capital gain that are designated by a Fund as "capital gains dividends,"
whether paid in cash or reinvested in additional shares, will be taxable as
long-term capital gains regardless of how long the shares have been held by
such shareholders. Shareholders receiving distributions from in the form of
additional shares will be treated for federal income tax purposes as receiving
a distribution in an amount equal to the fair market value of the additional
shares on the date of such a distribution.

Gain or loss, if any, recognized on the sale or other disposition of
shares of a Fund will be taxed as capital gain or loss if the shares are
capital assets in the shareholder's hands. Generally, a shareholder's gain or
loss will be a long-term gain or loss if the shares have been held for more
than one year. If a shareholder sells or otherwise disposes of a share of a
Fund before holding it for more than six months, any loss on the sale or other
disposition of such share shall be treated as a long-term capital loss to the
extent of any capital gain dividends received by the shareholder with respect
to such share. A loss realized on a sale or exchange of shares may be
disallowed if other shares are acquired within a 61-day period beginning 30
days before and ending 30 days after the date that the shares are disposed of.

Dividends and distributions by a Fund are generally taxable to the
shareholders at the time the dividend or distribution is made. Any dividend
declared by a Fund in October, November or December of any calendar year,
however, which is payable to shareholders of record on a specified date in such
a month and not paid on or before December 31 of such year will be treated as
received by the shareholders as of December 31 of such year, provided that the
dividend is paid during January of the following year.

Each Fund may engage in hedging. See "Investment Objective and Policies -
Other Investments and Investment Strategies - Hedging and Derivatives." Such
transactions will be subject to special provisions of the Code that, among
other things, may affect the character of gains and losses realized by a Fund
(that is, may affect whether gains or losses are ordinary or capital),
accelerate recognition of income to a Fund and defer recognition of certain of
a Fund's losses. These rules could therefore affect the character, amount and
timing of distributions to shareholders. In addition, these provisions (1) will
require a Fund to "mark-to-market" certain types of positions in its portfolio
(that is, treat them as if they were closed out) and (2) may cause a Fund to
recognize income without receiving cash with which to pay dividends or make
distributions in amounts necessary to satisfy the distribution requirements for
avoiding income and excise taxes. The extent to which a Fund may be able to use
such hedging techniques and continue to qualify as a regulated investment
company may be limited by the 30% limitation discussed above. Each Fund intends
to monitor its transactions, will make the appropriate tax elections and will
make the appropriate entries in its books and records when it acquires any
forward contracts, options or hedged investment in order to mitigate the effect
of these rules and prevent disqualification of the Fund as a regulated
investment company.

Each Fund may be required to withhold federal income tax at a rate of 31%
("backup withholding") from dividends and redemption proceeds paid to non-
<PAGE>
corporate shareholders. This tax may be withheld from dividends if (i) the
shareholder fails to furnish the Fund with the shareholder's correct taxpayer
identification number, (ii) the Internal Revenue Service ("IRS") notifies the
Fund that the shareholder has failed to report properly certain interest and
dividend income to the IRS and to respond to notices to that effect, or (iii)
when required to do so, the shareholder fails to certify that he or she is not
subject to backup withholding.

Ordinary income dividends paid by a Fund to shareholders who are non-
resident aliens or foreign entities will be subject to a 30% withholding tax
unless a reduced rate of withholding or a withholding exemption is provided
under applicable treaty law or the income is "effectively connected" with a
U.S. trade or business. Generally, subject to certain exceptions, capital gain
dividends paid to non-resident shareholders or foreign entities will not be
subject to U.S. tax. Non-resident shareholders are urged to consult their own
tax advisers concerning the applicability of the U.S. withholding tax.

The foregoing discussion is only a brief summary of the important federal
tax considerations generally affecting each Fund and its shareholders. As noted
above, IRAs receive special tax treatment. No attempt is made to present a
detailed explanation of the federal, state or local income tax treatment of
each Fund or its shareholders, and this discussion is not intended as a
substitute for careful tax planning. Accordingly, potential investors in each
Fund should consult their tax advisers with specific reference to their own tax
situation.

The Transfers

As discussed above under "The Transfers," to the extent that the High
Income Fund or the Europe Equity Fund acquires securities in a Transfer that
have appreciated in value from the date originally acquired by its
corresponding Partnership, the Transfer may have adverse tax consequences to
investors who acquire shares of the Fund in the continuous offering after the
Transfer. If either such Fund sells securities acquired in a Transfer that have
appreciated in value from the date they were acquired by its corresponding
Partnership, the amount of any gain with respect to such securities (including
any appreciation in value from the date they were acquired by the Partnership
through the date of the Transfer) would be taxable to all shareholders,
including new shareholders as well as those shareholders who were former
limited partners of the Partnership.

PERFORMANCE INFORMATION

From time to time, the "total return," "yield" and "effective yield" of a
Fund may be quoted in advertisements or reports to shareholders. Total return
figures show the average percentage change in the value of an investment from
the beginning date of the measuring period to the end of the measuring period.
These figures reflect changes in the price of a Fund's class of shares and
assume that any income dividends and/or capital gains distributions made by the
Fund during the period were reinvested. These figures also take into account
the distribution fee payable with respect to each Fund's Retail Shares and the
<PAGE>
service fee, if any, payable with respect to each Fund's Group Retirement Plan
Shares. See "Distribution and Service Plans."

Total return figures will be given for the recent one-, five- and ten-year
periods, and may be given for other periods as well, such as on a year-by-year
basis. With respect to the High Income Fund and the Europe Equity Fund, total
return figures will include the performance of the predecessor Partnership to
each such Fund, as described below. When considering average annual total
return figures for periods longer than one year, it is important to note that
the total return for any one year in the period might have been greater or less
than the average for the entire period. "Aggregate total return" figures may be
used for various periods, representing the cumulative change in value of an
investment for the specific period (again reflecting changes in prices and
assuming reinvestment of dividends and distributions. Aggregate total return
may be shown by means of schedules, charts or graphs and may indicate subtotals
of the various components of total return (that is, change in the value of
initial investment, income dividends and capital gains distributions). Because
of the differences in distribution and service fees and certain other expenses,
the performance of each of the classes of each Fund will differ.

The Company may make available information as to the yield and effective
yield on a Fund over a thirty-day period, as calculated in accordance with the
SEC's prescribed formula. The effective yield assumes that the income earned by
an investment in shares of the Fund is reinvested in shares of the same class
and will therefore be slightly higher than the yield because of the compounding
effect of this assumed reinvestment.

In reports or other communications to shareholders or in advertising
materials, performance of a Fund may be compared with that of other mutual
funds or classes of shares of other mutual funds, as listed in the rankings
prepared by independent services that monitor the performance of mutual Funds,
or other industry or financial publications such as Barron's, Business Week,
CDA Investment Technologies, Inc., Changing Times, Forbes, Fortune,
Institutional Investor, Investors Business Daily, Money, Morningstar Mutual
Company Values, The New York Times, USA Today and The Wall Street Journal.
Performance figures are based on historical earnings and are not intended to
indicate future performance. The Statement of Additional Information contains a
further description of the methods used to determine performance. Investors may
contact the Distributor to obtain current performance figures.

Performance of the Predecessor Partnerships

The investment performance of Lipper Intermediate Investment Fund No. 2,
L.P. (the corresponding Partnership to the High Income Fund) and of Prime
Lipper Europe Equities Fund, L.P. (the corresponding Partnership to the Europe
Equity Fund) is illustrated below. The investment objectives and policies of
the High Income Fund and the Europe Equity Fund are in all material respects
equivalent to those of the corresponding Partnerships. While the High Income
Fund and the Europe Equity Fund will be managed in a manner that is in all
material respects equivalent to the management of the corresponding
Partnership, each such Fund is subject to certain restrictions on its
activities under the 1940 Act and the Code to which its corresponding
Partnership was not subject. Had the Partnerships been registered under the
<PAGE>
1940 Act and subject to the provisions of the Code, their investment
performance may have been adversely affected. Operating expenses incurred by
each Fund (before any voluntary fee waivers and reimbursements) are expected to
be higher than the expenses that would have been incurred by its corresponding
Partnership. Past performance of a Partnership should not be considered as
indicative of the corresponding Fund's future performance.

<TABLE>
Total Rates of Return<F1><F2>

<CAPTION>
January 1, Twelve Average
Years Ended December 31, through Months Ended Cumulative Annual
September 30, September 30, Return Since Return Since
1992<F3> 1993 1994 1995 1995 Inception Inception
<S> <C> <C> <C> <C> <C> <C> <C>

Lipper Intermediate
Investment
Fund No. 2, L.P.<F4> 10.71% 14.24% 0.51% 10.91% 11.10% 40.99% 9.81%

Prime Lipper Europe
Equities Fund, L.P.<F5> -2.58% 19.78% -1.86% 20.06% 19.02% 40.11% 9.52%

____________________
<FN>
<F1> The annual total rates of return for each Partnership are net of fees
and expenses of such Partnership, and represent the change in value of a
hypothetical Partnership account for the year, assuming reinvestment at
unit value of any distributions.
<F2> Compounded annual rates of return presented for each Partnership are the
rates of return on a compounded basis that would be earned on an
investment over a specific time period expressed in annualized form.
<F3> Represents return for 1992 year from commencement of operations of the
High Income Fund on February 1, 1992 and of the Europe Equity Fund on
January 13, 1992.
<F4> The expense ratio of Lipper Intermediate Investment Fund No. 2, L.P. for
the years ended December 31, 1992, 1993 and 1994, and for the period
January 1, 1995 through September 30, 1995 were 1.26%, 1.13%, 1.02% and
1.05%, respectively. For information with respect to the estimated
expense ratio for the High Income Fund, see "Company Expenses."
<F5> The expense ratio of Prime Lipper Europe Equities Fund, L.P. for the
years ended December 31, 1992, 1993 and 1994, and for the period January
1, 1995 through September 30, 1995 were 1.77%, 1.68%, 1.62% and 1.63%.
For information with respect to the estimated expense ratio for the
Europe Equity Fund, see "Company Expenses."
/TABLE
<PAGE>
Performance of U.S. Equity Accounts

The Schedule of Rates of Return which follows represents the investment
performance record for certain U.S. equity oriented accounts managed by Lipper
on a fully discretionary basis over the periods presented.

<TABLE>
Schedule of Rates of Return
for the Composite of U.S. Equity Accounts
Managed by Lipper & Company, L.P.

Annual Rate of Return for the Year Ending

<CAPTION>
Year-to-Date
Period 6/10/92-12/31/92 12/31/93 12/30/94 through Nov. 30, 1995
<S> <C> <C> <C> <C>

Rate of Return
for the Period -8.25% 5.49% 10.04% 21.75%

Cumulative
Rate of Return -8.25% -3.22% 6.50% 29.66%

Number of Accounts 1 1 2 2

Market Value of Accounts
included in Composite $22,622,481 $26,772,549 $80,864,220 $118,344,214
</TABLE>

Notes for the U.S. Equity Composite Rates of Returns:

1. Accounts Included in the Lipper U.S. Equity Composite:

The Composite represents all discretionary U.S. equity-oriented accounts
managed in a manner similar to the investment strategy and approach to be
utilized by the U.S. Adviser in managing the U.S. Equity Fund. The Composite
includes one domestic limited investment partnership and one offshore
investment limited partnership. The domestic investment limited partnership
commenced investment operations on June 10, 1992; the offshore limited
investment partnership commenced investment operations on February 1, 1994.
Performance for the offshore limited investment partnership was included in the
Composite in the first month of operation.

The accounts included in the Composite have been managed using similar but
not identical investment techniques and strategies to be utilized with respect
<PAGE>
to the Fund, since these accounts were not managed subject to certain
investment restrictions applicable to the Fund under the Code and the 1940 Act.
Had the accounts been registered under the 1940 Act and subject to the
provisions of the Code, their investment performance may have been adversely
affected. The accounts have engaged from time to time in certain short-selling
and short-term trading activities which currently are not permissible for the
Fund. Moreover, the Fund is a "diversified" portfolio under the 1940 Act and
thus, as to 75% of its assets, may not invest more than 5% of its assets in the
securities of any one issuer. The accounts are not limited in the percentage of
assets that may be invested in the securities of any one issuer and from time
to time have invested in a relatively small number of issuers.

Performance results presented do not necessarily equate with the return
experienced by any one account, or to be experienced by the Fund due to
differences in brokerage commissions, account expenses, including advisory
fees, the size of the positions taken in relation to account size,
diversification of securities, timing of purchases and sales, and the
availability of cash for new investments.

2. Calculation Methodology:

The Composite is calculated by taking the dollar-weighted average of
monthly performance of the two investment limited partnerships. Each investment
partnership's performance results have been calculated in accordance with the
Performance Presentation Standards for Investment Performance established by
the Association of Investment Management and Research ("AIMR").

The partnership returns are time-weighted rates of return, net of
commissions and transaction costs. Each partnership was valued at each capital
contribution and withdrawal date, as well as each month end. Monthly returns
were calculated by dividing the partnership's total return each month by its
average monthly capital balance, calculated as the opening capital balance plus
the time-weighted effect of capital contributions and withdrawals.

The Composite rates of return have been calculated in accordance with the
standards set forth by AIMR by taking the dollar-weighted average of monthly
performance of the two limited investment partnerships. Investment performance
results are net of investment management and profit participation fees. Each
partnership's investment performance was reduced by an investment management
fee of one eighth of one percent of opening capital balances, at the beginning
of each quarter. The Composite return for each period presented was further
reduced by a profit participation fee of 15% of net profits.

Annual rates of return are calculated by compounding monthly returns.
Cumulative returns are obtained by linking the annual returns through compound
multiplication.

ADDITIONAL INFORMATION

The Company was incorporated in Maryland on August 23, 1995. The
authorized capital stock of the Company consists of 10,000,000,000 shares
having a par value of $.001 per share. The Company's Charter currently
authorizes the issuance of three series of shares, one series corresponding to
<PAGE>
each of the Funds, and three classes of shares with respect to each series,
Premier Shares, Retail Shares and Group Retirement Plan Shares. The Company's
Board of Directors may, in the future, authorize the issuance of additional
series of capital stock representing shares of additional investment Funds or
additional classes of shares of the Funds.

Shares of each class of the Fund represent interests in the Fund in
proportion to the net asset value of each class. Certain Fund expenses, such as
distribution and transfer agency expenses, are allocated separately to each
class of the Fund's shares based upon expenses identifiable by class.

All shares of the Company have equal voting rights and will be voted in
the aggregate, and not by series or class, except where voting by series or
class is required by law or where the matter involved affects one series or
class. Under the corporate law of Maryland, the Company's state of
incorporation, and the Company's By-Laws (except as required under the 1940
Act), the Company is not required and does not currently intend to hold annual
meetings of shareholders for the election of directors. Shareholders, however,
do have the right to call for a meeting to consider the removal of one or more
of the Company's directors if such a request is made, in writing, by the
holders of at least 10% of the Company's outstanding voting securities.

All shares of the Company, when issued, will be fully paid and
nonassessable.

The Chase Manhattan Bank, N.A. is located at 4 Chase MetroTech Center,
Brooklyn, NY 11245, and serves as custodian of the Company's investments.

Chase Global Funds Services Company is located at 73 Tremont Street
Boston, MA 02208, and serves as the Company's transfer agent.

The Company sends shareholders a semi-annual and audited annual report,
which includes listings of investment securities held by the Company at the end
of the period covered. In an effort to reduce the Company's printing and
mailing costs, the Company may consolidate the mailing of its semi-annual and
annual reports by household. This consolidation means that a household having
multiple accounts with the identical address of record would receive a single
copy of each report. In addition, the Company may consolidate the mailing of
its Prospectus so that a shareholder having multiple accounts would receive a
single Prospectus annually. Any shareholder who does not want this
consolidation to apply to his or her account should contact the Transfer Agent.
Shareholders may direct inquiries regarding the Company to 1-800-LIPPER9.
<PAGE>
APPENDIX A

DESCRIPTION OF RATINGS

A description of the rating policies of Moody's and S&P with respect to
bonds and commercial paper appears below.

Moody's Investors Service's Corporate Bond Ratings

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

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

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

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

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

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

Caa - Bonds which are rated "Caa" are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
<PAGE>
Ca - Bonds which are rated "Ca" represent obligations which are
speculative in high degree. Such issues are often in default or have other
marked shortcomings.

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

Moody's applies numerical modifiers "1", "2" and "3" to certain of its
rating classifications. The modifier "1" indicates that the security ranks in
the higher end of its generic rating category; the modifier "2" indicates a
mid-range ranking; and the modifier "3" indicates that the issue ranks in the
lower end of its generic rating category.

Standard & Poor's Ratings Group Corporate Bond Ratings

AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to repay principal and
pay interest.

AA - Bonds rated "AA" also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and differs from "AAA"
issues only in small degree.

A - Bonds rated "A" have a strong capacity to repay principal and pay
interest, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.

BBB - Bonds rated "BBB" are regarded as having an adequate capacity to
repay principal and pay interest. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to repay principal and pay
interest for bonds in this category than for higher rated categories.

BB-B-CCC-CC-C - Bonds rated "BB", "B", "CCC", "CC" and "C" are regarded,
on balance, as predominantly speculative with respect to the issuer's capacity
to pay interest and repay principal in accordance with the terms of the
obligations. BB indicates the lowest degree of speculation and C the highest
degree of speculation. While such bonds will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.

CI - Bonds rated "CI" are income bonds on which no interest is being paid.

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

The ratings set forth above may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
<PAGE>
Moody's Investors Service's Commercial Paper Ratings

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

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

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

Not Prime - Issuers rated "Not Prime" do not fall within any of the Prime
rating categories.

Standard & Poor's Ratings Group Commercial Paper Ratings

A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
Ratings are graded into several categories, ranging from "A-1" for the highest
quality obligations to "D" for the lowest. The four categories are as follows:

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

A-2 - Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1".
A-3 - Issues carrying this designation have adequate capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.

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

C - This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.
<PAGE>
D - Debt rated "D" is in payment default. The "D" rating category is used
when interest payments or principal payments are not made on the date due, even
if the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period.
<PAGE>
Prospectus

December , 1995
No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in the Statement of
Additional Information incorporated herein by reference, in connection with the
offering made by this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company or its Distributor. This Prospectus does not constitute an offering by
the Company or by the Distributor in any jurisdiction in which such offering
may not lawfully be made.

Table of Contents

Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Company Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Investment Objectives and Policies . . . . . . . . . . . . . . . . . . . . 10

Investment Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . 20

The Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Risk Factors and Special Considerations . . . . . . . . . . . . . . . . . . 21

Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Distribution and Service Plans . . . . . . . . . . . . . . . . . . . . . . 28

Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Exchange Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Valuation of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Management of the Company . . . . . . . . . . . . . . . . . . . . . . . . . 35

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . 41

1. Accounts Included in the Lipper U.S. Equity Composite: . . . 44
2. Calculation Methodology: . . . . . . . . . . . . . . . . . . 45

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Description of Ratings . . . . . . . . . . . . . . . . . . . . . . Appendix A

<PAGE>
__________________________________________________________________________

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This statement of additional information
shall not constitute an offer to sell or the solicitation of an offer to
buy nor shall there be any sale of these securities in any State in which
such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such State.
__________________________________________________________________________

Subject to Completion, December 20, 1995
Lipper High Income Bond Fund

Lipper U.S. Equity Fund

Prime Lipper Europe Equity Fund

The Lipper Funds, Inc.
101 Park Avenue

New York, NY 10178

For information call 1-800-LIPPER 9

December , 1995

The Lipper Funds, Inc. (the "Company") is an open-end management
investment company which offers three diversified portfolios: Lipper High
Income Bond Fund (the "High Income Fund"), Lipper U.S. Equity Fund (the
"U.S. Equity Fund") and Prime Lipper Europe Equity Fund (the "Europe
Equity Fund" and, together with the High Income Fund and the U.S. Equity
Fund, the "Funds"). This Statement of Additional Information should be
read in conjunction with the Funds' Prospectus dated December , 1995
(which may be amended or supplemented from time to time) (the
"Prospectus"), and is incorporated by reference in its entirety into the
Prospectus.

This Statement of Additional Information is not itself a prospectus
and is authorized for distribution only when preceded or accompanied by a
prospectus. No investment in shares of the Funds should be made solely
upon the information contained herein. Copies of the Prospectus may be
obtained without charge by writing or calling the Company at the address
and telephone number set forth above. Capitalized terms used but not
defined herein have the same meanings as in the Prospectus.

<PAGE>
TABLE OF CONTENTS

Investment Objectives and Policies . . . . . . . . . . . . . . . . . . 2

Investment Limitations . . . . . . . . . . . . . . . . . . . . . . . . 8

Additional Purchase Information . . . . . . . . . . . . . . . . . . . . 10

Additional Redemption Information . . . . . . . . . . . . . . . . . . . 10

Valuation of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Management of The Company . . . . . . . . . . . . . . . . . . . . . . . 11

Distribution and Service Plans . . . . . . . . . . . . . . . . . . . . 13

Additional Information Concerning Taxes . . . . . . . . . . . . . . . . 14

Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Additional Information Concerning Fund Shares . . . . . . . . . . . . . 17

Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES

The investment objective of the High Income Fund is high current
income. The investment objective of the U.S. Equity Fund and the Europe
Equity Fund is capital appreciation. The following policies supplement the
description of each Fund's investment objective and policies in the
Prospectus.

Portfolio Transactions

Subject to the general control of the Company's Board of Directors,
Lipper & Company, L.L.C., the investment adviser to the High Income Fund
and the U.S. Equity Fund (the "U.S. Adviser"), and Prime Lipper Asset
Management, the investment adviser to the Europe Equity Fund (the
"European Adviser" and, together with the U.S. Adviser, the "Advisers")
are responsible for making decisions with respect to, and placing orders
for, all purchases and sales of portfolio securities for the Fund(s) for
which each serves as investment adviser. The High Income Fund's portfolio
transactions will occur primarily with issuers, underwriters and major
dealers acting as principals, and the U.S. Equity Fund's and the Europe
Equity Fund's portfolio transactions may consist of such transactions.
Such transactions are normally on a net basis which does not involve
payment of brokerage commissions. The cost of securities purchased from
underwriters includes an underwriter's commission or concession, and the
prices at which securities are purchased from and sold to dealers include
an undisclosed dealer spread. Transactions on foreign securities exchanges
may involve the payment of negotiated brokerage commissions, which may
vary among different brokers, or the payment of fixed brokerage
commissions. In making portfolio investments, the Advisers seek to obtain
the best net price and the most favorable execution of orders. To the
extent that the execution and price offered by more than one broker or
dealer are comparable, the Advisers may, in their discretion, effect
transactions in portfolio securities with brokers or dealers who provide
the Advisers with research advice or other services. Research advice and
other services furnished by brokers through whom the Funds effect
securities transactions may be used by the Advisers in servicing accounts
in addition to the Funds, and not all such services will necessarily
benefit the Funds.

With respect to over-the-counter transactions, the Funds, where
possible, will deal directly with the dealers who make a market in the
securities involved except in those circumstances where better prices and
execution are available elsewhere.

Investment decisions for each Fund are made independently from those
for the other Funds or other investment company portfolios or accounts
advised by the Advisers. Such other portfolios may also invest in the same
securities as the Funds. When purchases or sales of the same security are
made at substantially the same time on behalf of such other portfolios,
transactions are averaged as to price, and available investments allocated
as to amount, in a manner which the Advisers believe to be equitable to
each portfolio, including the Funds. In some instances, this investment
procedure may adversely affect the price paid or received by the Funds or
the size of the position obtainable for a Fund. To the extent permitted by
law, the Advisers may aggregate the securities to be sold or purchased for
the Funds with those to be sold or purchased for such other portfolios in
order to obtain best execution.
<PAGE>
The Funds will not execute portfolio transactions through, acquire
portfolio securities issued by, make savings deposits in, or enter into
repurchase agreements with the Advisers or any affiliated person (as such
term is defined in the Investment Company Act of 1940, as amended (the
"1940 Act")) of the Advisers, except to the extent permitted by the
Securities and Exchange Commission (the "SEC"). The Funds will not
purchase securities during the existence of any underwriting or selling
group relating thereto of which the Advisers or any affiliate thereof is a
member, except to the extent permitted by the SEC. Under certain
circumstances, the Funds may be at a disadvantage because of these
limitations in comparison with other investment company portfolios which
have similar investment objectives but are not subject to such
limitations.

It is anticipated that each Fund's annual portfolio turnover rate
generally will not exceed []. This rate is calculated by dividing the
lesser of sales or purchases of portfolio securities for any given year by
the average monthly value of the Fund's portfolio securities for that
year. For purposes of this calculation, no regard is given to securities
having a maturity or expiration date at the time of acquisition of one
year or less. Portfolio turnover directly affects the amount of
transaction costs that are borne by each Fund. In addition, the sale of
securities held by a Fund for not more than one year will give rise to
short-term capital gain or loss for federal income tax purposes. The
federal income tax requirement that each Fund derive less than 30% of its
gross income from the sale or other disposition of stock or securities
held less than three months may limit a Fund's ability to dispose of its
securities. See "Additional Information Concerning Taxes."

Additional Information on Portfolio Instruments and Certain Investment
Strategies

U.S. Government Obligations. Examples of the types of U.S. government
securities that may be held by the Funds include, in addition to U.S.
Treasury Bills, the obligations of the Federal Housing Administration,
Farmers Home Administration, Export-Import Bank of the United States,
Small Business Administration, Government National Mortgage Association,
Federal National Mortgage Association, Federal Financing Bank, General
Services Administration, Student Loan Marketing Association, Central Bank
for Cooperatives, Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation, Federal Intermediate Credit Banks, Federal Land Banks,
Federal Farm Credit Banks, Maritime Administration, Resolution Trust
Corporation, Tennessee Valley Authority, U.S. Postal Service and
Washington D.C. Armory Board.

Depositary Receipts. A purchaser of unsponsored Depositary Receipts
may not have unlimited voting rights and may not receive as much
information about the issuer of the underlying security as with sponsored
Depositary Receipts. Depositary Receipts evidence ownership of underlying
securities issued by either a non-U.S. or a U.S. corporation that have
been deposited with a depositary or custodian bank. Depositary Receipts
may be issued in connection with an offering of securities by the issuer
of the underlying securities or issued by a depositary bank as a vehicle
to promote investment and trading in the underlying securities. ADRs are
receipts issued by U.S. banks or trust companies in respect of securities
of non-U.S. issuers held on deposit for use in the U.S. securities
markets. GDRs, EDRs and other types of Depositary Receipts are typically
issued by a U.S. bank or trust company and traded principally in the U.S.
and other international markets.
<PAGE>
Bank Obligations. Bank obligations include negotiable certificates of
deposit, bankers' acceptances, fixed time deposits and deposit notes. A
certificate of deposit is a short-term negotiable certificate issued by a
commercial bank against funds deposited in the bank and is either
interest-bearing or purchased on a discount basis. A bankers' acceptance
is a short-term draft drawn on a commercial bank by a borrower, usually in
connection with an international commercial transaction. The borrower is
liable for payment as is the bank, which unconditionally guarantees to pay
the draft at its face amount on the maturity date. Fixed time deposits are
obligations of branches of United States banks or foreign banks which are
payable at a stated maturity date and bear a fixed rate of interest.
Although fixed time deposits do not have a market, there are no
contractual restrictions on the right to transfer a beneficial interest in
the deposit to a third party. Fixed time deposits subject to withdrawal
penalties and with respect to which a Fund cannot realize the proceeds
thereon within seven days are deemed "illiquid" for the purposes of the
ninth investment limitation set forth under "Investment Objective and
Policies--Investment Limitations" below. Deposit notes are notes issued by
commercial banks which generally bear fixed rates of interest and
typically have original maturities ranging from eighteen months to five
years.

Banks are subject to extensive governmental regulations that may
limit both the amounts and types of loans and other financial commitments
that may be made and the interest rates and fees that may be charged. The
profitability of this industry is largely dependent upon the availability
and cost of capital funds for the purpose of financing lending operations
under prevailing money market conditions. Also, general economic
conditions play an important part in the operations of this industry and
exposure to credit losses arising from possible financial difficulties of
borrowers might affect a bank's ability to meet its obligations. Bank
obligations may be general obligations of the parent bank or may be
limited to the issuing branch by the terms of the specific obligations or
by government regulation. Investors should also be aware that securities
of foreign banks and foreign branches of U.S. banks may involve investment
risks in addition to those relating to domestic bank obligations. Such
risks include future political and economic developments, the possible
seizure or nationalization of foreign deposits, and the possible adoption
of foreign governmental restrictions which might adversely affect the
payment of principal and interest on such obligations. In addition,
foreign branches of U.S. banks and foreign banks may be subject to less
stringent reserve requirements and non-U.S. issuers generally are subject
to different accounting, auditing, reporting and recordkeeping standards
than those applicable to U.S. issuers.

Convertible Securities. A unique feature of convertible securities is
that as the market price of the underlying security declines, convertible
securities tend to trade increasingly on a yield basis, and so may not
experience market value declines to the same extent as the underlying
security. When the market price of the underlying security increases, the
price of the convertible securities tends to rise as a reflection of the
value of the underlying security. Fixed income convertible securities are
investments that provide for a stable stream of income with generally
higher yields than common stocks. Of course, like all fixed income
securities, there can be no assurance of current income because the
issuers of the fixed income convertible securities may default on their
obligations. Convertible securities, however, generally offer lower
interest or dividend yields than non-convertible securities of similar
quality because of the potential for capital appreciation. A fixed income
<PAGE>
convertible security, in addition to providing fixed income, offers the
potential for capital appreciation through the conversion feature, which
enables the holder to benefit from increases in the market price of the
underlying security. There can be no assurance of capital appreciation,
however, because securities prices fluctuate. Convertible securities
generally are subordinated to other similar but non-convertible securities
of the same issuer, although convertible bonds, as corporate debt
obligations, enjoy seniority in right of payment to all equity securities,
and convertible preferred stock is senior to common stock of the same
issuer. Because of the subordination feature, however, convertible
securities typically have lower ratings than similar non-convertible
securities.

Repurchase Agreements. The repurchase price under the repurchase
agreements described in the Prospectus generally equals the price paid by
a Fund plus interest negotiated on the basis of current short-term rates
(which may be more or less than the rate on the securities underlying the
repurchase agreement). Securities subject to repurchase agreements will be
held by the Company's custodian, sub-custodian or in the Federal
Reserve/Treasury book-entry system. Repurchase agreements are considered
to be loans by a Fund under the 1940 Act. Each Fund will enter into
repurchase agreements only with counterparties determined to be
creditworthy in accordance with standards adopted by the Company's Board
of Directors.

Reverse Repurchase Agreements. Reverse repurchase agreements are
considered to be borrowings by a Fund under the 1940 Act. Reverse
repurchase agreements involve the risk that the market value of the
portfolio securities sold by a Fund may decline below the price of the
securities such Fund is obligated to repurchase. Each Fund will enter into
reverse repurchase agreements only with counterparties determined to be
creditworthy by its Adviser.

Loans of Portfolio Securities. Each Fund has the ability to lend
securities from its portfolio to brokers, dealers and other financial
organizations. There is no investment restriction on the amount of
securities that may be loaned. The Funds may not lend their portfolio
securities to the Advisers or their affiliates without specific
authorization from the SEC. Loans of portfolio securities by the a Fund
will be collateralized by cash, letters of credit or securities which are
consistent with its permitted investments, which will be maintained at all
times in an amount equal to at least 100% of the current market value of
the loaned securities. From time to time, the Funds may return a part of
the interest earned from the investment of collateral received for
securities loaned to the borrower and/or a third party, which is
unaffiliated with the Funds or the Advisers, and which is acting as a
"finder." With respect to loans by a Fund of its portfolio securities,
such Fund would continue to accrue interest on loaned securities and would
also earn income on loans. Any cash collateral received by a Fund in
connection with such loans would be invested in securities in which such
Fund is permitted to invest.

When-Issued and Delayed Delivery Securities. Each Fund may purchase
securities on a "when issued" or delayed delivery basis (i.e., for
delivery beyond the normal settlement date at a stated price). When a Fund
agrees to purchase when-issued or delayed delivery securities, the
custodian will set aside cash or liquid portfolio securities equal to the
amount of the commitment in a separate account. Normally, the custodian
will set aside portfolio securities to satisfy a purchase commitment, and
<PAGE>
in such a case a Fund may be required subsequently to place additional
assets in the separate account in order to ensure that the value of the
account remains equal to the amount of a Fund's commitment. It may be
expected that a Fund's net assets will fluctuate to a greater degree when
it sets aside portfolio securities to cover such purchase commitments than
when it sets aside cash. When a Fund engages in when-issued or delayed
delivery transactions, it relies on the seller to consummate the trade.
Failure of the seller to do so may result in such Fund incurring a loss or
missing an opportunity to obtain a price considered to be advantageous.

Illiquid and Restricted Securities. Each Fund may not invest more
than 15% of its assets in illiquid securities, including securities that
are illiquid by virtue of the absence of a readily available market or
legal or contractual restrictions on resale. Securities that have legal or
contractual restrictions on resale but have a readily available market are
not considered illiquid for purpose of this limitation.

The SEC has adopted Rule 144A under the Securities Act of 1933, as
amended (the "1933 Act"), which allows for a broader institutional trading
market for securities otherwise subject to restrictions on resale to the
general public. Rule 144A establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain
securities to qualified institutional buyers. The Advisers anticipate that
the market for certain restricted securities such as institutional
commercial paper and institutional municipal securities will expand
further as a result of this regulation and the development of automated
systems for the trading, clearance and settlement of unregistered
securities of domestic and non-U.S. issuers, such as the PORTAL System
sponsored by the National Association of Securities Dealers, Inc.

Each Adviser will monitor the liquidity of restricted and other
illiquid securities under the supervision of the Board of Directors. In
reaching liquidity decisions with respect to Rule 144A securities, the
Advisers will consider, among others, the following factors: (1) the
unregistered nature of a Rule 144A security; (2) the frequency of trades
and quotes for a Rule 144A security; (3) the number of dealers wishing to
purchase or sell the Rule 144A security and the number of other potential
purchasers; (4) dealer undertakings to make a market in the Rule 144A
security; (5) the trading markets for the Rule 144A security; and (6) the
nature of the Rule 144A security and the nature of the marketplace trades
(e.g., the time needed to dispose of the Rule 144A security, the method of
soliciting offers and the mechanics of the transfer).

Appendix A to the Prospectus contains a description of the relevant
rating symbols used by nationally recognized rating agencies for
obligations that may be purchased by the Funds.

Additional Information Regarding Hedging and Derivatives

As described in the Prospectus, each Fund is authorized to use
various hedging and investment strategies to hedge market risks (such as
broad or specific market movements and interest rates, or other factors
relevant to the Fund's investments, such as commodity prices or rates of
inflation), to manage the effective maturity or duration of debt
instruments held by the Fund, or to seek to increase the Fund's income or
gain. A detailed discussion of Derivatives (as defined below) that may be
used by the Advisers on behalf of the Funds follows below. The Funds will
not be obligated, however, to use any Derivatives and make no
representations as to the availability or use of these techniques at this
<PAGE>
time or at any time in the future. "Derivatives," as used herein, refers
to the purchase and sale (or writing) of exchange listed and
over-the-counter ("OTC") put and call options on securities, securities
indices, currencies and other financial instruments, and entering into
currency forward contracts.

General Characteristics of Options. Put options and call options
typically have similar structural characteristics and operational
mechanics regardless of the underlying instrument on which they are
purchased or sold. Thus, the following general discussion relates to each
of the particular types of options discussed in greater detail below. In
addition, many Derivatives involving options require segregation of Fund
assets in special accounts, as described below under "Use of Segregated
and Other Special Accounts."

A put option gives the purchaser of the option, upon payment of a
premium, the right to sell, and the writer the obligation to buy, the
underlying security, index or other instrument at the exercise price. A
Fund's purchase of a put option on a security, for example, might be
designed to protect its holdings in the underlying instrument (or, in some
cases, a similar instrument) against a substantial decline in the market
value of such instrument by giving such Fund the right to sell the
instrument at the option exercise price. A call option, upon payment of a
premium, gives the purchaser of the option the right to buy, and the
seller the obligation to sell, the underlying instrument at the exercise
price. A Fund's purchase of a call option on a security, index or other
instrument might be intended to protect such Fund against an increase in
the price of the underlying instrument that it intends to purchase in the
future by fixing the price at which it may purchase the instrument. An
"American" style put or call option may be exercised at any time during
the option period, whereas a "European" style put or call option may be
exercised only upon expiration or during a fixed period prior to
expiration. Exchange-listed options are issued by a regulated intermediary
such as the Options Clearing Corporation ("OCC"), which guarantees the
performance of the obligations of the parties to the options. The
discussion below uses the OCC as an example, but is also applicable to
other similar financial intermediaries.

OCC-issued and exchange-listed options, with certain exceptions,
generally settle by physical delivery of the underlying security, although
in the future, cash settlement may become available. Index options are
cash settled for the net amount, if any, by which the option is "in-the-
money" (that is, the amount by which the value of the underlying
instrument exceeds, in the case of a call option, or is less than, in the
case of a put option, the exercise price of the option) at the time the
option is exercised. Frequently, rather than taking or making delivery of
the underlying instrument through the process of exercising the option,
listed options are closed by entering into offsetting purchase or sale
transactions that do not result in ownership of the new option.

A Fund's ability to close out its position as a purchaser or seller
of an OCC-issued or exchange-listed put or call option is dependent, in
part, upon the liquidity of the particular option market. Among the
possible reasons for the absence of a liquid option market on an exchange
are: (1) insufficient trading interest in certain options, (2)
restrictions on transactions imposed by an exchange, (3) trading halts,
suspensions or other restrictions imposed with respect to particular
classes or series of options or underlying securities, including reaching
daily price limits, (4) interruption of the normal operations of the OCC
<PAGE>
or an exchange, (5) inadequacy of the facilities of an exchange or the OCC
to handle current trading volume or (6) a decision by one or more
exchanges to discontinue the trading of options (or a particular class or
series of options), in which event the relevant market for that option on
that exchange would cease to exist, although any such outstanding options
on that exchange would continue to be exercisable in accordance with their
terms.

The hours of trading for listed options may not coincide with the
hours during which the underlying financial instruments are traded. To the
extent that the option markets close before the markets for the underlying
financial instruments, significant price and rate movements can take place
in the underlying markets that would not be reflected in the corresponding
option markets.

OTC options are purchased from or sold to securities dealers,
financial institutions or other parties (collectively referred to as
"Counterparties" and individually referred to as a "Counterparty") through
a direct bilateral agreement with the Counterparty. In contrast to
exchange-listed options, which generally have standardized terms and
performance mechanics, all of the terms of an OTC option, including such
terms as method of settlement, term, exercise price, premium, guarantees
and security, are determined by negotiation of the parties. It is
anticipated that any Fund authorized to use OTC options will generally
only enter into OTC options that have cash settlement provisions, although
it will not be required to do so.

Unless the parties provide for it, no central clearing or guarantee
function is involved in an OTC option. As a result, if a Counterparty
fails to make or take delivery of the security or other instrument
underlying an OTC option it has entered into with a Fund or fails to make
a cash settlement payment due in accordance with the terms of that option,
such Fund will lose any premium it paid for the option as well as any
anticipated benefit of the transaction. Thus, a Fund's Adviser must assess
the creditworthiness of each such Counterparty or any guarantor or credit
enhancement of the Counterparty's credit to determine the likelihood that
the terms of the OTC option will be met. A Fund will enter into OTC option
transactions only with U.S. Government securities dealers recognized by
the Federal Reserve Bank of New York as "primary dealers," or broker-
dealers, domestic or foreign banks, or other financial institutions that
its Adviser deems to be creditworthy. In the absence of a change in the
current position of the staff of the SEC, OTC options purchased by a Fund
and the amount of such Fund's obligation pursuant to an OTC option sold by
such Fund (the cost of the sell-back plus the in-the-money amount, if any)
or the value of the assets held to cover such options will be deemed
illiquid.

If a Fund sells a call option, the premium that it receives may serve
as a partial hedge, to the extent of the option premium, against a
decrease in the value of the underlying securities or instruments held by
such Fund or will increase such Fund's income. Similarly, the sale of put
options can also provide gains.

A Fund may purchase and sell call options on securities that are
traded on U.S. and foreign securities exchanges and in the OTC markets,
and on securities indices. All calls sold by a Fund must be "covered"
(that is, such Fund must own the securities subject to the call), or must
otherwise meet the asset segregation requirements described below for so
long as the call is outstanding. Even though a Fund will receive the
option premium to help protect it against loss, a call sold by such Fund
<PAGE>
will expose such Fund during the term of the option to possible loss of
opportunity to realize appreciation in the market price of the underlying
security or instrument and may require such Fund to hold a security or
instrument that it might otherwise have sold.

Each Fund reserves the right to purchase or sell options on
instruments and indices which may be developed in the future to the extent
consistent with applicable law, such Fund's investment objective and the
restrictions set forth herein.

Each Fund may purchase and sell put options on securities (whether or
not it holds the securities in its portfolio) and on securities indices. A
Fund will not sell put options if, as a result, more than 50% of such
Fund's assets would be required to be segregated to cover its potential
obligations under put options. In selling put options, a Fund faces the
risk that it may be required to buy the underlying security at a
disadvantageous price above the market price.

Options on Securities Indices and Other Financial Indices. Each Fund
may purchase and sell call and put options on securities indices and other
financial indices. In so doing, a Fund can achieve many of the same
objectives it would achieve through the sale or purchase of options on
individual securities or other instruments. Options on securities indices
and other financial indices are similar to options on a security or other
instrument except that, rather than settling by physical delivery of the
underlying instrument, options on indices settle by cash settlement; that
is, an option on an index gives the holder the right to receive, upon
exercise of the option, an amount of cash if the closing level of the
index upon which the option is based exceeds, in the case of a call, or is
less than, in the case of a put, the exercise price of the option (except
if, in the case of an OTC option, physical delivery is specified). This
amount of cash is equal to the excess of the closing price of the index
over the exercise price of the option, which also may be multiplied by a
formula value. The seller of the option is obligated, in return for the
premium received, to make delivery of this amount. The gain or loss on an
option on an index depends on price movements in the instruments
comprising the market, market segment, industry or other composite on
which the underlying index is based, rather than price movements in
individual securities, as is the case with respect to options on
securities.

Options on Currencies. Each Fund may purchase and sell put and call
options on foreign currencies for the purposes of protecting against
declines in the U.S. dollar value of foreign portfolio securities and
anticipated dividends on such securities and against increases in the U.S.
dollar cost of foreign securities to be acquired. Each Fund may use
options on currency to cross-hedge, which involves writing or purchasing
options of one currency to hedge against changes in exchange rates for a
different currency, if there is a pattern of correlation between the two
currencies. As with other kinds of options transactions, however, the
writing of an option on foreign currency will constitute only a partial
hedge, up to the amount of the premium received. A Fund could be required
to purchase or sell foreign currencies at disadvantageous exchange rates,
thereby incurring losses. The purchase of an option on foreign currency
may constitute an effective hedge against exchange rate fluctuations;
however, in the event of exchange rate movements adverse to a Fund's
position, the Fund may forfeit the entire amount of the premium plus
related transactions costs. In addition, a Fund may purchase call or put
options on a currency for non-hedging purposes when its Adviser
<PAGE>
anticipates that the currency will appreciate or depreciate in value, but
securities denominated in that currency do not present attractive
investment opportunities. A Fund may not enter into options transactions
if more than []% of the Fund's total assets in the aggregate are invested
in options. Currency transactions are subject to risks different from
other portfolio transactions, as discussed below under "Risk Factors."

Forward Foreign Currency Exchange Contracts. Each Fund may enter into
forward foreign currency exchange contracts ("forward contracts") which
provide for the purchase or sale of an amount of a specified currency at a
future date. Purposes for which such contracts may be used include
protecting against fluctuations in the value of a foreign currency against
the U.S. dollar between the trade date and settlement date when a Fund
purchases or sells securities, locking in the U.S. dollar value of
dividends declared on securities held by a Fund and generally protecting
the U.S. dollar value of securities held by a Fund against exchange rate
fluctuation.

Combined Transactions. A Fund may enter into multiple transactions,
including multiple options transactions, multiple interest rate
transactions and any combination of options and interest rate
transactions, instead of a single Derivative, as part of a single or
combined strategy when, in the judgment of its Adviser, it is in the best
interests of such Fund to do so. A combined transaction will usually
contain elements of risk that are present in each of its component
transactions. Although combined transactions will normally be entered into
by a Fund based on its Adviser's judgment that the combined strategies
will reduce risk or otherwise more effectively achieve the desired
portfolio management goal, it is possible that the combination will
instead increase the risks or hinder achievement of such Fund's management
objective.

Risk Factors. Derivatives have special risks associated with them,
including possible default by the Counterparty to the transaction,
illiquidity and, to the extent an Adviser's view as to certain market
movements is incorrect, the risk that the use of the Derivatives could
result in losses greater than if they had not been used. Use of put and
call options could result in losses to a Fund, force the sale or purchase
of portfolio securities at inopportune times or for prices higher than (in
the case of put options) or lower than (in the case of call options)
current market values, or cause a Fund to hold a security it might
otherwise sell.

The use of options transactions entails certain special risks. In
particular, options markets could be illiquid in some circumstances and
certain over-the-counter options could have no markets. As a result, in
certain markets, a Fund might not be able to close out a transaction
without incurring substantial losses. Although a Fund's use of options
transactions for hedging should tend to minimize the risk of loss due to a
decline in the value of the hedged position, at the same time it will tend
to limit any potential gain to the Fund that might result from an increase
in value of the position.

Currency hedging involves some of the same risks and considerations
as other transactions with similar instruments. Currency transactions can
result in losses to a Fund if the currency being hedged fluctuates in
value to a degree or in a direction that is not anticipated. Further, the
risk exists that the perceived linkage between various currencies may not
be present or may not be present during the particular time that a Fund is
engaging in hedging. Currency transactions are also subject to risks
<PAGE>
different from those of other portfolio transactions. Because currency
control is of great importance to the issuing governments and influences
economic planning and policy, purchases and sales of currency and related
instruments can be adversely affected by government exchange controls,
limitations or restrictions on repatriation of currency, and manipulations
or exchange restrictions imposed by governments. Currency exchange rates
may fluctuate based on factors extrinsic to the issuing countries'
economies.

Losses resulting from the use of Derivatives will reduce a Fund's net
asset value, and possibly income, and the losses can be greater than if
Derivatives had not been used.

Risks of Derivatives Outside the United States. When conducted
outside the United States, Derivatives may not be regulated as rigorously
as in the United States, may not involve a clearing mechanism and related
guarantees, and will be subject to the risk of governmental actions
affecting trading in, or the prices of, foreign securities and other
instruments. The value of positions taken as part of non-U.S. Derivatives
also could be adversely affected by: (1) other complex foreign political,
legal and economic factors, (2) lesser availability of data on which to
make trading decisions than in the United States, (3) delays in a Fund's
ability to act upon economic events occurring in foreign markets during
non-business hours in the United States, (4) the imposition of different
exercise and settlement terms and procedures and margin requirements than
in the United States and (5) lower trading volume and liquidity.

Use of Segregated and Other Special Accounts. Use of many Derivatives
by a Fund will require, among other things, that such Fund segregate cash,
liquid high grade debt obligations or other assets with its custodian, or
a designated sub-custodian, to the extent such Fund's obligations are not
otherwise "covered" through ownership of the underlying security or
financial instrument. In general, either the full amount of any obligation
by a Fund to pay or deliver securities or assets must be covered at all
times by the securities or instruments required to be delivered, or,
subject to any regulatory restrictions, an amount of cash or liquid high
grade debt obligations at least equal to the current amount of the
obligation must be segregated with the custodian or sub-custodian. The
segregated assets cannot be sold or transferred unless equivalent assets
are substituted in their place or it is no longer necessary to segregate
them. A call option on securities written by a Fund, for example, will
require such Fund to hold the securities subject to the call (or
securities convertible into the needed securities without additional
consideration) or to segregate liquid high grade debt obligations
sufficient to purchase and deliver the securities if the call is
exercised. A call option sold by a Fund on an index will require such Fund
to own portfolio securities that correlate with the index or to segregate
liquid high grade debt obligations equal to the excess of the index value
over the exercise price on a current basis. A put option on securities
written by a Fund will require such Fund to segregate liquid high grade
debt obligations equal to the exercise price.

OTC options entered into by a Fund, including those on securities,
financial instruments or indices, and OCC-issued and exchange-listed index
options will generally provide for cash settlement, although such Fund
will not be required to do so. As a result, when a Fund sells these
instruments it will segregate an amount of assets equal to its obligations
under the options. OCC-issued and exchange-listed options sold by such
Fund other than those described above generally settle with physical
<PAGE>
delivery, and such Fund will segregate an amount of assets equal to the
full value of the option. OTC options settling with physical delivery or
with an election of either physical delivery or cash settlement will be
treated the same as other options settling with physical delivery.

Derivatives may be covered by means other than those described above
when consistent with applicable regulatory policies. A Fund may also enter
into offsetting transactions so that its combined position, coupled with
any segregated assets, equals its net outstanding obligation in related
Derivatives. A Fund could purchase a put option, for example, if the
strike price of that option is the same or higher than the strike price of
a put option sold by such Fund. Moreover, instead of segregating assets if
it holds a forward contract, a Fund could purchase a put option on the
same forward contract with a strike price as high or higher than the price
of the contract held. Other Derivatives may also be offset in
combinations. If the offsetting transaction terminates at the time of or
after the primary transaction, no segregation is required, but if it
terminates prior to that time, assets equal to any remaining obligation
would need to be segregated.

INVESTMENT LIMITATIONS

The Prospectus summarizes certain investment limitations that may not
be changed without the affirmative vote of the holders of a majority of a
Fund's outstanding shares (as defined below under "Additional Information
Concerning Fund Shares"). Investment limitations numbered 1 through 8
below may not be changed with respect to a Fund without such vote of
shareholders; investment limitations 9 through 12 may be changed at any
time with respect to a Fund by a vote of the Company's Board of Directors
without shareholder approval.

1. A Fund may not purchase the securities of any one
issuer if as a result more than 5% of the value of its total assets
would be invested in the securities of such issuer, except that up to
25% of the value of its total assets may be invested without regard
to this 5% limitation and provided that there is no limitation with
respect to investments in U.S. Government Securities, and provided
further that a Fund may invest all or substantially all of its assets
in another registered investment company having the same investment
objective and policies and substantially the same investment
restrictions as those with respect to such Fund.

2. A Fund may not borrow money, except that each
Fund may borrow money from banks or enter into reverse repurchase
agreements, in each case for temporary or emergency purposes only
(not for leveraging or investment), in aggregate amounts not
exceeding 33-1/3% of the value of its total assets at the time of
such borrowing. For purposes of the foregoing investment limitation,
the term "total assets" shall be calculated after giving effect to
the net proceeds of any borrowings and reduced by any liabilities and
indebtedness other than such borrowings. Additional investments will
not be made by a Fund when borrowings exceed 5% of its total net
assets.

3. A Fund may not issue senior securities, except as
permitted under the 1940 Act.

4. A Fund may not purchase any securities which
would cause 25% or more of the value of its total assets at the time
<PAGE>
of such purchase to be invested in the securities of one or more
issuers conducting their principal business activities in the same
industry; provided that there is no limitation with respect to
investments in U.S. Government Securities, and provided further, that
a Fund may invest all or substantially all of its assets in another
registered investment company having the same investment objective
and policies and substantially the same investment restrictions as
those with respect to such Fund.

5. A Fund may not make loans, except that it may
purchase or hold debt instruments in accordance with its investment
objective and policies, may lend its portfolio securities as
described in its Prospectus and may enter into repurchase agreements
with respect to portfolio securities.

6. A Fund may not act as an underwriter of
securities, except insofar as it may be deemed an underwriter under
applicable securities laws in selling portfolio securities.

7. A Fund may not purchase or sell real estate or
real estate limited partnerships, provided that it may purchase
securities of issuers which invest in real estate or interests
therein.

8. A Fund may not purchase or sell commodities
unless acquired as a result of ownership of securities or other
instruments (but this shall not prevent a Fund from purchasing or
selling options and futures contracts or from investment in
securities or other instruments backed by or indexed to, or
representing interests in, physical commodities or investing or
trading in Derivatives), or invest in oil, gas or mineral exploration
or development programs or in mineral leases.

9. A Fund may not invest more than 15% of the value
of its assets in securities that are illiquid, provided, however,
that a Fund may invest all or substantially all of its assets in
another registered investment company having the same investment
objective and policies and substantially the same investment
restrictions as those with respect to such Fund.

10. A Fund may not purchase securities on margin,
make short sales of securities or maintain a short position, except
that a Fund may make short sales against the box and except in
connection with Derivatives.

11. A Fund may not write or sell puts, calls,
straddles, spreads or combinations thereof except in connection with
Derivatives.

12. A Fund may not purchase securities of other
investment companies except as permitted under the 1940 Act or in
connection with a merger, consolidation, acquisition or
reorganization.

In order to permit the sale of a Fund's shares in certain states,
such Fund may make commitments more restrictive than the investment
policies and limitations above. Should a Fund determine that any such
commitments are no longer in its best interest, it will revoke the
commitment by terminating sales of its shares in the state involved. If a
percentage restriction set forth above is adhered to at the time a
transaction is effected, later changes in percentages resulting from
<PAGE>
changes in value or in the number of outstanding securities of an issuer
will not be considered a violation. However, with respect to investment
restriction 2 above, to the extent that asset coverage with respect to
borrowings falls at any time below 300%, then the Fund will within three
business days or such longer period as the SEC may prescribe, reduce the
amount of borrowings so that asset coverage shall be at least 300%.

ADDITIONAL PURCHASE INFORMATION

Information on how to purchase and redeem shares of each Fund is
included in the Prospectus. The issuance of a Fund's shares is recorded on
such Fund's books, and certificates for shares are not issued unless
expressly requested in writing to the Transfer Agent. Certificates are not
issued for fractional shares.

ADDITIONAL REDEMPTION INFORMATION

Under the 1940 Act, a Fund may suspend the right of redemption or
postpone the date of payment upon redemption for any period during which
the New York Stock Exchange is closed, other than customary weekend and
holiday closings, or during which trading on said Exchange is restricted,
or during which (as determined by the SEC by rule or regulation) an
emergency exists as a result of which disposal or valuation of portfolio
securities is not reasonably practicable, or for such other periods as the
SEC may permit. (A Fund may also suspend or postpone the recordation of
the transfer of its shares upon the occurrence of any of the foregoing
conditions.) Each Fund is obligated to redeem shares solely in cash up to
$250,000 or 1% of such Fund's net asset value, whichever is less, for any
one shareholder within a 90-day period. Any redemption beyond this amount
will also be in cash unless the Board of Directors determines that
conditions exist which make payment of redemption proceeds wholly in cash
unwise or undesirable. In such a case, a Fund may make payment wholly or
partly in readily marketable securities or other property, valued in the
same way as such Fund determines net asset value. Redemption in kind is
not as liquid as a cash redemption. Shareholders who receive a redemption
in kind may incur transaction costs, if they sell such securities or
property, and may receive less than the redemption value of such
securities or property upon sale, particularly where such securities are
sold prior to maturity.

VALUATION OF SHARES

Because of the differences in distribution fees, service fees and
class-specific expenses, the per share net asset value of each class of
each Fund may differ. The following is a description of the procedures
used by each Fund in valuing its assets.

Securities traded on an exchange will be valued on the basis of the
last sale price on the principal market on which such securities are
traded, on the date on which the valuation is made or, in the absence of
sales in such market, at the mean between the closing bid and asked
prices. Over-the-counter securities will be valued on the basis of the
<PAGE>
mean between the bid and ask prices at the close of business on each day,
or, if market quotations for those securities are not readily available,
at fair value, as determined in good faith by the Company's Board of
Directors. Securities which are traded both in the over-the-counter market
and on a stock exchange will be valued according to the broadest and most
representative market. Securities may be valued by independent pricing
services which use prices provided by market-makers or estimates of market
values obtained from yield data relating to instruments or securities with
similar characteristics. Short-term obligations with maturities of 60 days
or less are valued at amortized cost, which constitutes fair value as
determined by the Company's Board of Directors. Amortized cost involves
valuing an instrument at its original cost to a Fund and thereafter
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value
of the instrument. All other securities and other assets of a Fund will be
valued at fair value as determined in good faith by the Company's Board of
Directors.
<PAGE>
MANAGEMENT OF THE COMPANY

Directors and Officers

The Board of Directors of the Company is responsible for the overall
management and operations of each Fund. The Company's directors and
executive officers, their addresses, ages, principal occupations during
the past five years and other affiliations are as follows:

Principal Occupations During
Position with the Past 5 Years and Other
Name, Address and Age Company Affiliations

Kenneth Lipper(1) Director, President of Lipper &
101 Park Avenue Chairman of the Company, L.L.C. since 1995;
New York, N.Y. 10178 Board and President of Lipper &
President Company, Inc. since 1986;
President of Lipper &
Company, L.P. since 1991;
trustee of the Rockefeller
Brothers Fund; member of the
Federal Reserve Bank of New
York's International Advisory
Board; Senior Financial
Adviser to the New York City
Counsel; member of the
Harvard Executive Committee
on University Resources;
member of the Visitor's
Committee of the Kennedy
School of Government at
Harvard University.

Abraham Biderman(1) Director, Executive Vice President of
101 Park Avenue Treasurer and Lipper & Company, L.L.C.
New York, NY 10178 Secretary since 1995; Executive Vice
President of Lipper &
Company, Inc. since 1990;
Executive Vice President of
Lipper & Company, L.P. since
1991.

Martin Maltz(2)(3) Director Principal Scientist, Xerox
54 Corporation.
25 Dunrovin Lane
Rochester, NY 14618

Irwin Russell(2)(3) Director Attorney, Law Offices of
69 Irwin E. Russell since
433 North Camden Drive, #1200 November 1992; Of Counsel,
Los Angeles, CA 90210 Rudin and Appel (November
1989 to November 1992);
Director, The Walt Disney
Company.
<PAGE>
Stanley Brezenoff(2)(3) Director Chief Executive Officer,
58 Maimonides Medical Center,
510 E. 23rd Street since February 1995;
New York, NY 10010 Executive Director, Port
Authority of New York and New
Jersey (September 1990 to
February 1995).
_______________________
(1) Director considered by the Company to be an "interested person" of the
Company as defined in the 1940 Act.
(2) Audit Committee Member.
(3) Nominating Committee Member.

For so long as the Retail Distribution Plan remains in effect, the
directors of the Company who are not "interested persons" of the Company,
as defined in the 1940 Act, will be selected and nominated by the
directors who are not "interested persons" of the Company.

No officer or employee of either Adviser or Chase Global Fund
Services Company, the Company's administrator, receives any compensation
from the Company for acting as an officer or director of the Company. The
Company pays each director who is not a director, officer or employee of
either Adviser or any of their affiliates, a fee of $8,000 per annum plus
$500 per quarterly meeting attended and reimburses them for travel and
out-of-pocket expenses.

By virtue of the responsibilities assumed by the Advisers, Chase
Global Funds Services Company and their affiliates under their respective
agreements with the Company, the Company itself requires no employees
other than its officers.

Investment Advisers

Each Fund's Adviser serves as its investment adviser pursuant to a
separate written advisory agreement approved by the Company's Board of
Directors, including a majority of the directors who are not "interested
persons" (as defined in the 1940 Act) of the Company or the Adviser, on
December 14, 1995. The services provided by each Fund's Adviser under its
advisory agreement with such Fund and the fees paid to each Adviser are
described in the Prospectus under "Management of the Company." The
Advisers bear all expenses in connection with the performance of their
services and pay the salaries of all officers or employees who are
employed by the Advisers and the Company. Unless sooner terminated, each
advisory agreement will continue in effect until [], 1997 and from year to
year thereafter if such continuance is approved at least annually by the
Company's Board of Directors or by a vote of a majority (as defined under
"Additional Information Concerning Fund Shares") of the outstanding shares
of the relevant Fund and, in either case, by a majority of the directors
who are not parties to such agreement or "interested persons" of any party
by votes cast in person at a meeting called for such purpose. Each
advisory agreement is terminable by the Company or the Adviser on 60 days'
written notice, and will terminate immediately in the event of its
assignment.
<PAGE>
Administrator

Chase Global Funds Services Company (the "Administrator"), a wholly
owned subsidiary of The Chase Manhattan Bank, N.A., has agreed to provide
the following services: (i) assist generally in supervising each Fund's
operations, providing and supervising the operation of an automated data
processing system to process purchase and redemption orders, providing
information concerning the Funds to their shareholders of record, handling
shareholder problems, supervising the services of employees whose
principal responsibility and function is to preserve and strengthen
shareholder relations and monitoring the arrangements pertaining to the
Company's agreements with Participating Dealers; (ii) prepare reports to
the Funds' shareholders and prepare tax returns and reports to and filings
with the SEC; (iii) compute the net asset value per share of each class of
each Fund; (iv) provide the services of certain persons who may be elected
as directors or appointed as officers of the Company by the Board of
Directors; and (v) maintain the registration or qualification of each
Fund's shares for sale under state securities laws.

Distributor

Lipper & Company, L.P. (the "Distributor") distributes the Funds'
shares continuously on a best efforts basis pursuant to an agreement which
is renewable annually. The Distributor pays the cost of printing and
distributing prospectuses to persons who are not shareholders of the Funds
(excluding preparation and printing expenses necessary for the continued
registration of the Funds' shares) and of preparing, printing and
distributing all sales literature. See "Distribution and Service Plans."
The Distributor may act as distributor for other investment companies.

Payment for Fund shares is due and shares of the Funds are issued
generally on the third business day following the day the public offering
price is next determined after a purchase order is received (the
"Settlement Date"). When payment is made by the investor prior to a
Settlement Date, unless otherwise directed by the investor, the funds will
be held as a free credit balance in the investor's brokerage account, and
the Distributor or a Participating Dealer may benefit from the temporary
use of the funds. The investor may designate another use for the funds
prior to the Settlement Date. If the investor instructs the Distributor or
a Participating Dealer to invest the funds in a money market fund, the
amount of the investment will be included as part of the average daily net
assets of both the relevant Fund and the money market fund, and in the
event the Distributor or its affiliates serve both funds in an investment
advisory capacity, the Distributor will benefit from the fact that it (or
its affiliates) is receiving fees from both such funds for managing these
assets computed on the basis of their average daily net assets. The
Company's Board of Directors has been advised of the benefits to the
Distributor and Participating Dealers resulting from delayed settlement
procedures and will take such benefits into consideration when reviewing
the advisory and distribution and service agreements for continuance.

Custodian and Transfer Agent

The Chase Manhattan Bank, N.A. (the "Custodian"), is located at 4
Chase MetroTech Center, Brooklyn, N.Y. 11245, and serves as the Company's
custodian pursuant to a custody agreement. Under the custody agreement,
the Custodian holds the Fund's portfolio securities and keeps all
necessary accounts and records. For its services, the Custodian
receives a
<PAGE>
monthly fee based upon the month-end market value of securities held in
custody and also receives securities transaction charges, including
out-of-pocket expenses. The assets of the Company are held under bank
custodianship in compliance with the 1940 Act.

Chase Global Funds Services Company is located at 73 Tremont Street,
Boston, MA 02108, and serves as the Company's transfer agent. Under the
transfer agency agreement, the Transfer Agent maintains the shareholder
account records for the Company, handles certain communications between
shareholders and the Company, distributes dividends and distributions
payable by the Company and produces statements with respect to account
activity for the Company and its shareholders. For these services, the
Transfer Agent receives a monthly fee computed separately for each class
of each Fund's shares and is reimbursed separately by each class for
out-of-pocket expenses.

Expenses

Each Fund's expenses include taxes, interest, fees and salaries of
the Company's trustees and officers who are not directors, officers or
employees of the Company's service contractors, SEC fees, state securities
qualification fees, costs of preparing and printing prospectuses for
regulatory purposes and for distribution to existing shareholders,
advisory and administration fees, charges of the custodian and of the
transfer and dividend disbursing agent, certain insurance premiums,
outside auditing and legal expenses, costs of shareholder reports and
shareholder meetings and any extraordinary expenses. Each Fund also pays
for brokerage fees and commissions (if any) in connection with the
purchase and sale of portfolio securities. Each Fund's expenses are
allocated to a particular class of its shares based on either expenses
identifiable to such class or the relative net assets of such class and
the other classes of its shares. In addition, the Retail Shares of each
Fund bear a distribution fee in accordance with the Retail Servicing Plan,
and the Group Retirement Plan Shares of each Fund may bear a service fee
in accordance with the Group Retirement Servicing Plan. See "Distribution
and Service Plans." Each Adviser has agreed that if, in any fiscal year,
the expenses borne by the Fund(s) it advises exceed the applicable expense
limitations imposed by the securities regulations of any state in which
shares of such Fund(s) are registered or qualified for sale to the public,
it will reimburse such Fund(s) for any excess to the extent required by
such regulations. Unless otherwise required by law, such reimbursement
would be accrued and paid on the same basis that the advisory fees are
accrued and paid by such Fund(s). California is the only state which
currently imposes such an expense limitation. The limitation is 2.5% of
the first $30 million of average net assets, 2.0% of the next $70 million
of average net assets and 1.5% of the remaining average net assets.

DISTRIBUTION AND SERVICE PLANS

Retail Distribution Plan

Rule 12b-1 (the "Rule") adopted by the SEC under the 1940 Act
provides, among other things, that an investment company may bear expenses
of distributing its shares only pursuant to a plan adopted in accordance
with the Rule. Because some or all of the fees paid by the Retail Shares
of each Fund to the Distributor and to certain Participating Dealers could
be deemed to be payment of distribution expenses, the Company's Board of
<PAGE>
Directors has adopted such a plan with respect to the Retail Shares of
each Fund (the Retail Distribution Plan). The Company's Board of Directors
believes that there is a reasonable likelihood that the Retail
Distribution Plan will benefit each Fund and the holders of its Retail
Shares. In some states, banks or other financial services firms effecting
transactions in Retail Shares may be required to register as dealers
pursuant to state law. The Funds' Premier Shares and Group Retirement
Plan Shares do not bear distribution fees.

Quarterly reports of the amounts expended under the Retail
Distribution Plan with respect to each Fund, and the purposes for which
such expenditures were incurred, must be made to the Board of Directors of
the Company for its review. In addition, the Retail Distribution Plan
provides that it may not be amended to increase materially the costs which
the Retail Shares of any Fund may bear pursuant to such plan without
shareholder approval of the holders of such Fund's Retail Shares, and that
other material amendments of the Retail Distribution Plan must be approved
by the Board of Directors of the Company, and by the directors who are
neither interested persons of the Company nor have any direct or indirect
financial interest in the operation of such plan or in any agreements
entered into in connection with such plan, by vote cast in person at a
meeting called for the purpose of considering such amendments. The Retail
Distribution Plan and any agreements entered into in connection with such
plan are subject to annual approval with respect to each Fund by such vote
of the Board of Directors of the Company cast in person at a meeting
called for the purpose of voting on the Retail Distribution Plan. The
Retail Distribution Plan may be terminated at any time with respect to any
Fund by vote of a majority of the directors who are not interested persons
and have no direct or indirect financial interest in the operation of such
plan or in any agreements entered into in connection with such plan or by
vote of a majority of the Retail Shares of a Fund. Any agreement entered
into in connection with the Retail Distribution Plan may be terminated
without penalty at any time, by such vote. Each such agreement will
terminate automatically in the event of its assignment (as defined in the
1940 Act).

Group Retirement Servicing Plan

As stated in the Prospectus, in accordance with the Group Retirement
Servicing Plan, the Company intends to enter into servicing agreements
pursuant to which Participating Dealers and sometimes the Distributor
will, as agent for their customers, render certain support services to
their customers who are beneficial owners of Group Retirement Plan Shares.
Such services are intended to supplement the services provided by the
Company's Administrator and Transfer Agent, and are described in the
Prospectus. Servicing agreements between the Company and Participating
Dealers and/or the Distributor with respect to a Fund's Group Retirement
Plan Shares will be terminable by either party at any time without
penalty. As of the date of this Statement of Additional Information, the
Company has not entered into any such servicing agreements.

Conflict of interest restrictions may apply to an institution's
receipt of compensation paid by the Funds in connection with the
investment of fiduciary monies in the Funds. Institutions, including
banks regulated by state banking authorities and the Board of Governors of
the Federal Reserve System and investment advisers and other money
managers subject to the jurisdiction of the SEC, the Department of Labor
or state securities commissions are urged to consult their legal advisers
before investing fiduciary monies in the Funds.
<PAGE>
ADDITIONAL INFORMATION CONCERNING TAXES

The following discussion is only a brief summary of certain
additional tax considerations affecting the Funds and their shareholders.
No attempt is made to present a detailed explanation of all federal, state
and local tax concerns, and the discussion set forth here and in the
Prospectus is not intended as a substitute for careful tax planning.
Investors are urged to consult their own tax advisers with specific
questions relating to federal, state or local taxes.

In General

Each Fund intends to qualify as a regulated investment company (a
"RIC") under Subchapter M of the Code and to continue to so qualify.
Qualification as a RIC requires, among other things, that a Fund: (a)
derive at least 90% of its gross income in each taxable year from
dividends, interest, payments with respect to securities loans and gains
from the sale or other disposition of stock, securities or foreign
currencies, or other income (including gains from options, futures or
forward contracts) derived with respect to its business of investing in
such stocks or securities; (b) derive less than 30% of its gross income in
each taxable year from the sale or other disposition of any of the
following held for less than three months: (i) stock or securities, (ii)
options, futures, or forward contracts, or (iii) foreign currencies (or
foreign currency options, futures or forward contracts) that are not
directly related to its principal business of investing in stock or
securities (or options and futures with respect to stocks or securities)
(the "30% limitation"); and (c) diversify its holdings so that, at the end
of each quarter of each taxable year, (i) at least 50% of the market value
of such Fund's assets is represented by cash, cash items, U.S. government
securities, securities of other regulated investment companies and other
securities with such other securities limited, in respect of any issuer,
to an amount not greater than 5% of the value of such Fund's assets and
10% of the outstanding voting securities of such issuer, and (ii) not more
than 25% of the value of its assets is invested in the securities (other
than U.S. government securities or the securities of other regulated
investment companies) of any one issuer.

Investors should consider the tax implications of buying shares just
prior to distribution. Although the price of shares purchased at that time
may reflect the amount of the forthcoming distribution, those purchasing
just prior to a distribution will receive a distribution which will
nevertheless be taxable to them.

Gain or loss, if any, on the sale or other disposition of shares of a
Fund will generally result in capital gain or loss to shareholders.
Generally, a shareholder's gain or loss will be a long-term gain or loss
if the shares have been held for more than one year. If a shareholder
sells or otherwise disposes of a share of a Fund before holding it for
more than six months, any loss on the sale or other disposition of such
share shall be treated as a long-term capital loss to the extent of any
capital gain dividends received by the shareholder with respect to such
share, or shall be disallowed to the extent of any exempt-interest
dividend. Currently, the maximum federal income tax rate imposed on
individuals with respect to net realized long-term capital gains is
limited to 28%, whereas the maximum federal income tax rate imposed on
<PAGE>
individuals with respect to net realized short-term capital gains (which
are taxed at the same rates as ordinary income) is 39.6%.

A 4% non-deductible excise tax is imposed on regulated investment
companies that fail currently to distribute an amount equal to specified
percentages of their ordinary taxable income and capital gain net income
(excess of capital gains over capital losses). Each Fund intends to make
sufficient distributions or deemed distributions of its ordinary taxable
income and any capital gain net income prior to the end of each calendar
year to avoid liability for this excise tax.

Each Fund may make investments that produce income that is not
matched by a corresponding cash distribution to such Fund, such as
investments in obligations that have original issue discount (i.e., an
amount equal to the excess of the stated redemption price of the security
at maturity over its issue price), or market discount (i.e., an amount
equal to the excess of the stated redemption price of the security at
maturity over its basis immediately after it was acquired if such Fund
elects to accrue market discount on a current basis. Because such income
may not be matched by a corresponding cash distribution to a Fund, such
Fund may be required to dispose of other securities to be able to make
distributions to its investors. The extent to which a Fund may liquidate
securities at a gain may be limited by the 30% limitation discussed above.

If for any taxable year a Fund does not qualify for tax treatment as
a regulated investment company, all of such Fund's taxable income will be
subject to tax at regular corporate rates without any deduction for
distributions to such Fund's shareholders. In such event, dividend
distributions to shareholders would be taxable as ordinary income to the
extent of such Fund's earnings and profits, and would be eligible for the
dividends received deduction in the case of corporate shareholders.

Each Fund will be required in certain cases to withhold and remit to
the U.S. Treasury 31% of taxable dividends or 31% of gross proceeds
realized upon sale paid to its shareholders who have failed to provide a
correct tax identification number in the manner required, who are subject
to backup withholding by the Internal Revenue Service for failure properly
to include on their return payments of taxable interest or dividends, or
who have failed to certify to such Fund that they are not subject to
backup withholding when required to do so or that they are "exempt
recipients."

Each Fund's net long-term capital gains will be distributed at least
annually. The Funds will generally have no tax liability with respect to
such gains, and the distributions, whether paid in cash or reinvested in
additional shares, will be taxable to each Fund's shareholders as long-
term capital gains, regardless of how long a shareholder has held such
Fund's shares. Such distributions will be designated as a capital gain
dividend in a written notice mailed by a Fund to its shareholders not
later than 60 days after the close of such Fund's taxable year.

Investment company taxable income earned by a Fund will be
distributed to its shareholders. In general, a Fund's investment company
taxable income will be its taxable income (for example, any short-term
capital gains) subject to certain adjustments and excluding the excess of
any net long-term capital gain for the taxable year over the net short-
term capital loss, if any, for such year. A Fund will be taxed on any
undistributed investment company taxable income of such Fund. To the
extent such income is distributed by a Fund, it will be taxable to such
<PAGE>
Fund's shareholders as ordinary income, whether paid in cash or reinvested
in additional shares.

PERFORMANCE DATA

From time to time, each Fund may quote total return information, and
the High Income Fund may quote yield information, for one or more classes
of its shares in advertisements or in reports and other communications to
shareholders and compare total return and yield on one or more classes of
its shares to that of other funds or accounts with a similar objective and
to relevant indices. Total return for each of the High Income Fund and the
Europe Equity Fund will include the performance of a corresponding limited
partnership which was the predecessor entity to each Fund.

Average Annual Total Return

Under the rules of the SEC, funds advertising performance must
include "average annual total return" figures computed according to a
formula prescribed by the SEC. The formula can be expressed as follows:
P(1 + T)n=ERV

Where: P = a hypothetical initial payment of $1,000.
T = average annual total return
n = number of year
ERV = Ending Redeemable Value of hypothetical $1,000
investment made at the beginning of a 1-,5-, or 10 year
period at the end of the 1-,5-, or 10-year period (or
fractional portion thereof), assuming reinvestment of
all dividends and distributions.

Aggregate Total Return

"Aggregate total return" figures represent the cumulative change in
the value of an investment in a class of a Fund's shares for the specified
period and are computed by the following formula:

AGGREGATE TOTAL RETURN = ERV - P
P

Where: P = a hypothetical initial payment of $10,000.

ERV = Ending Redeemable Value of a hypothetical $10,000
investment made at the beginning of a 1-, 5-, or 10-year
period at the end of the 1-, 5-, or 10-year period (or
fractional portion thereof), assuming reinvestment of
all dividends and distributions.

Thirty Day Yield

The High Income Fund may advertise the yield on one or more classes
of its shares based on a 30-day (or one month) period, computed by
dividing the net investment income per share earned during the period by
the maximum offering price per share on the last day of the period,
according to the following formula:

Yield 2[(a-b+1)6-1]
cd
<PAGE>
Where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends
d = the maximum offering price per share on the last day of
the period

Under this formula, interest earned on debt obligations for purposes
of "a" above, is calculated by (1) computing the yield to maturity of each
obligation held by the High Income Fund based on the market value of the
obligation (including actual accrued interest) at the close of business on
the last day of each month, or, with respect to obligations purchased
during the month, the purchase price (plus actual accrued interest), (2)
dividing that figure by 360 and multiplying the quotient by the market
value of the obligation (including actual accrued interest as referred to
above) to determine the interest income on the obligation in the High
Income Fund's portfolio (assuming a month of 30 days) and (3) computing
the total of the interest earned on all debt obligations during the 30-day
or one month period. Undeclared earned income, computed in accordance with
generally accepted accounting principles, may be subtracted from the
maximum offering price calculation required pursuant to "d" above.

Each Fund may also from time to time include in advertisements a
total return figure that is not calculated according to the formulas set
forth above. Any such figure, and any quotation of the High Income Fund's
performance stated in terms of yield (whether or not based on a 30-day
period)l, will be given no greater prominence than the information
prescribed under SEC rules.

Each Fund's performance will vary from time to time depending upon
market conditions, the composition of such Fund's portfolio and operating
expenses. Consequently, any given performance quotations should not be
considered representative of the performance of any class of a Fund's
shares for any specified period in the future. Because performance will
vary, it may not provide a basis for comparing an investment in a Fund's
shares with certain bank deposits or other investments that pay a fixed
yield for a stated period of time. Investors comparing a Fund's
performance with that of other mutual funds should give consideration to
the nature, quality and maturity of the respective investment companies'
portfolio securities and market conditions.

ADDITIONAL INFORMATION CONCERNING FUND SHARES

As used in this Statement of Additional Information and the
Prospectus, a "majority of the outstanding shares," when referring to the
1940 Act approvals to be obtained from shareholders in connection with
matters affecting any particular portfolio of the Company (such as each
Fund) (e.g., approval of investment advisory contracts) or any particular
class (e.g., approval of the plan of distribution with respect to the
Retail Shares of each Fund) means the lesser of (1) 67% of the shares of
that particular portfolio or class, as appropriate, represented at a
meeting at which the holders of more than 50% of the outstanding shares of
such portfolio or class, as appropriate, are present in person or by
proxy, or (2) more than 50% of the outstanding shares of such portfolio or
class, as appropriate.

The By-Laws of the Company provide that the Company shall not be
required to hold an annual meeting of shareholders in any year in which
the election of directors to the Company's Board of Directors is not
<PAGE>
required to be acted upon under the 1940 Act. The law under certain
circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the
extent required by law, the Company will assist in shareholder
communication in such matters.

Shares of each class of a particular portfolio of the Company (such
as each Fund) are entitled to such dividends and distributions out of the
assets belonging to that class as are declared in the discretion of the
Company's Board of Directors. In determining the net asset value of a
class of a portfolio, assets belonging to a particular class are credited
with a proportionate share of any general assets of the Company not
belonging to a particular class of a portfolio and are charged with the
direct liabilities in respect of that class of the portfolio and with a
share of the general liabilities of the Company which are normally
allocated in proportion to the relative net asset values of the respective
classes of the portfolios of the Company at the time of allocation.

In the event of the liquidation or dissolution of the Company, shares
of each class of a portfolio are entitled to receive the assets
attributable to it that are available for distribution, and a
proportionate distribution, based upon the relative net assets of the
classes of each portfolio, of any general assets not attributable to a
portfolio that are available for distribution. Shareholders are not
entitled to any preemptive rights.

Subject to the provisions of the Company's Charter, determinations by
the Board of Directors as to the direct and allocable liabilities and the
allocable portion of any general assets of the Company with respect to a
particular portfolio or class are conclusive.

COUNSEL

Simpson Thacher & Bartlett (a partnership which includes professional
corporations), 425 Lexington Avenue, New York, New York 10017-3954, serves
as counsel to the Company. The validity of the shares under Maryland law
will be passed upon for the Company by Piper & Marbury, Baltimore,
Maryland.

AUDITORS

Price Waterhouse L.L.P. acts as the Company's independent auditors
and has offices at 1177 Avenue of the Americas, New York, New York 10036.

<PAGE>
THE LIPPER FUNDS, INC.

PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

Included in Part A of the Registration Statement:

None.

Included in Part B of the Registration Statement:

Statement of Assets and Liabilities dated December , 1995

Independent Auditors' Report dated December , 1995

(b) Exhibits:

Exhibits
Number Description

1 - - Registrant's Amended and Restated Articles of
Incorporation.

2 - - Registrant's Amended and Restated By-Laws.

3 - - None.

4(a) - - Form of Stock Certificate for Premier Shares of common
stock.**

4(b) - - Form of Stock Certificate for Retail Shares of common
stock.**

4(c) - - Form of Stock Certificate for Group Retirement Plan
Shares of common stock.**

5(a) - - Form of Investment Advisory Agreement between
Registrant and Lipper & Company, L.L.C. relating to
the High Income Fund.*

5(b) - - Form of Investment Advisory Agreement between
Registrant and Lipper & Company, L.L.C. relating to
the U.S. Equity Fund.*

5(c) - - Form of Investment Advisory Agreement between
Registrant and Prime Lipper Asset Management relating
to the Europe Equity Fund.*

6 - - Form of Distribution Agreement between Registrant and
Lipper & Company, L.P.*
<PAGE>
7 - - None.

8 - - Form of Custody Agreement between Registrant and The
Chase Manhattan Bank, N.A.

9 - - Form of Administration Agreement between Registrant
and Chase Global Funds Services Company.

10 - - Opinion and Consent of Piper & Marbury.**

11 - - Independent Auditors' Consent.**

12 - - None.

13 - - Form of Purchase Agreement among Registrant, Lipper &
Company, L.L.C. and Prime Lipper Asset Management.**

14 - - None.

15(a)- - Form of Retail Distribution Plan.*

15(b)- - Form of Group Retirement Servicing Plan.

16 - - Total Return.**

17 - - Not applicable.

18 - - Form of Multiclass Plan.*

19 - - Powers of Attorney for Kenneth Lipper, Abraham
Biderman and Stanley Brezenoff.

* Previously Filed.
** To be filed by amendment.

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

None.

Item 26. Number of Holders of Securities

Number of Record
Holders at
Title of Class December , 1995

Premier Shares of the Lipper High
Income Bond Fund,
par value $.001 per share . . . . . . . . . . . . 0

Retail Shares of the Lipper High
Income Bond Fund,
par value $.001 per share . . . . . . . . . . . . 0
<PAGE>
Group Retirement Plan Shares
of the Lipper High Income Bond Fund,
par value $.001 per share. . . . . . . . . . . . . 0

Premier Shares of the Lipper
U.S. Equity Fund,
par value $.001 per share . . . . . . . . . . . . 0

Retail Shares of the Lipper U.S.
Equity Fund,
par value $.001 per share . . . . . . . . . . . . 0

Group Retirement Plan Shares of
the Lipper U.S. Equity Fund,
par value $.001 per share. . . . . . . . . . . . . 0

Premier Shares of the Prime
Lipper Europe Equity Fund,
par value $.001 per share . . . . . . . . . . . . 0

Retail Shares of the Prime
Lipper Europe Equity Fund,
par value $.001 per share . . . . . . . . . . . . 0

Group Retirement Plan Shares of
the Prime Lipper Europe Equity Fund,
par value $.001 per share. . . . . . . . . . . . . 0

Item 27. Indemnification

Reference is made to Article VII of Registrant's Articles of
Incorporation, Article IV of Registrant's By-laws, and subsections 4.1 and 4.2
of the Distribution Agreement between the Registrant and Lipper & Company, L.P.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant understands that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.

Item 28. Business and Other Connections of Investment Advisers

Reference is made to the Sections entitled "Management Arrangements"
in the Prospectus and the Statement of Additional Information.
<PAGE>
The list required by this Item 28 of officers and directors of
Lipper & Company, L.L.C., together with information as to any other business,
profession, vocation or employment of a substantial nature engaged in by such
officers, directors and partners during the past two years, is incorporated by
reference to Schedules to Form ADV filed by Lipper & Company, L.L.C. pursuant
to the Investment Advisers Act of 1940, as amended (the "Advisers Act") (SEC
File No. 801-50666).

The list required by this Item 28 of officers, directors and partners
of Prime Lipper Asset Management, together with information as to any other
business, profession, vocation or employment of a substantial nature engaged in
by such officers, directors and partners during the past two years, is
incorporated by reference to Schedules B and D of Form ADV filed by Prime
Lipper Asset Management pursuant to the Advisers Act (SEC File No. 801-41430).

Item 29. Principal Underwriters

(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or exclusive
distributor: None.

(b) The information required by this Item 29(b) with respect to each
director, officer and partner of Lipper & Company, L.P. is incorporated by
reference to the Form BD filed by Lipper & Company, L.P. pursuant to the
Securities Act of 1934, as amended (SEC File No. 8-030161).

Item 30. Location of Accounts and Records

All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules thereunder
will be maintained at the offices of:

Lipper & Company, L.L.C., 101 Park Avenue, New York, New York 10178;
The Chase Manhattan Bank, N.A., 4 Chase MetroTech Center, Brooklyn, New
York 11245; Chase Global Funds Service Company, 73 Tremont Street,
Boston, Massachusetts 02208

Item 31. Management Services

Not applicable.

Item 32. Undertakings

(a) Not applicable.

(b) Registrant hereby undertakes to file a post-effective amendment,
containing financial statements as of a reasonably current date which
need not be certified, within four to six months from the effective
date of this Registration Statement under the Securities Act of 1933.

(c) Registrant hereby undertakes to call a meeting of shareholders
for the purpose of voting upon the question of removal of one or more
of Registrant's directors when requested in writing to do so by the
holders of at least 10% of Registrant's outstanding shares of common
stock and, in connection with such meeting, to assist in
<PAGE>
communications with other shareholders in this regard, as provided
under Section 16(c) of the Investment Company Act of 1940.
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Registrant certifies that Registrant has duly
caused this Pre-Effective Amendment to the Registration Statement to be signed
on its behalf by the undersigned thereunto duly authorized, in the City of New
York and State of New York on the 19th day of December, 1995.

THE LIPPER FUNDS, INC.

By
Abraham Biderman
Executive Vice President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.

Signature Title Date

* Chairman of the Board December 19, 1995
Kenneth Lipper (principal executive
officer), President and
Director

/s/ Abraham Biderman Executive Vice President, December 19, 1995
Abraham Biderman Treasurer (principal
financial and accounting
officer) and Director

* Director December 19, 1995
Stanley Brezenoff

Director
Martin Maltz

Director
Irwin E. Russell

*By: /s/ Abraham Biderman December 19, 1995
Abraham Biderman as
Attorney-in-Fact
<PAGE>
THE LIPPER FUNDS, INC.

INDEX TO EXHIBITS

Exhibit Sequentially
Number Description of Exhibit Numbered Page

1 Registrant's Amended and Restated Articles
of Incorporation.

2 Registrant's Amended and Restated By-Laws.

8 Form of Custody Agreement between Registrant
and The Chase Manhattan Bank, N.A.

9 Form of Administration Agreement between
Registrant and Chase Global Funds Services
Company.

15(b) Form of Group Retirement Servicing Plan.

19 Powers of Attorney for Kenneth Lipper,
Abraham Biderman and Stanley Brezenoff.
<PAGE>
Exhibit 1
<PAGE>
Exhibit 2
<PAGE>
Exhibit 8
<PAGE>
Exhibit 9
<PAGE>
Exhibit 15(b)
<PAGE>
Exhibit 19

ARTICLES OF AMENDMENT AND RESTATEMENT

THE LIPPER FUNDS, INC.

The Lipper Funds, Inc., a Maryland corporation having its principal
place of business in Baltimore City, Maryland (which is hereinafter called the
"Corporation") hereby certifies to the State Department of Assessments and
Taxation of Maryland that:

FIRST: The Charter of the Corporation is hereby amended and
restated in its entirety as follows:

ARTICLE I

Incorporator

The undersigned Robert D. Goldbaum, whose address is 425 Lexington
Avenue, New York, New York 10017, being at least 18 years of age, as an
incorporator, hereby forms a corporation under and by virtue of the laws of the
State of Maryland.

ARTICLE II

Name

The name of the corporation is The Lipper Funds, Inc. (the
"Corporation").

ARTICLE III

Corporate Purposes

The purposes for which the Corporation is formed and the business and
objects to be carried on and promoted by it are:

1. To engage generally in the business of investing,
reinvesting, owning, holding or trading in securities, as defined in
the Investment Company Act of 1940, as from time to time amended
(hereinafter referred to as the "Investment Company Act"), as an
investment company classified under the Investment Company Act as an
open-end, management company.

2. To engage in any one or more businesses or transactions, or
to acquire all or any portion of any entity engaged in any one or
more businesses or transactions, which the Board of Directors may
from time to time authorize or approve, whether or not related to the
business described elsewhere in this Article or to any other business
at the time or theretofore engaged in by the Corporation.

The foregoing enumerated purposes and objects shall be in no way
limited or restricted by reference to, or inference from, the terms of any
<PAGE>
other clause of this or any other Article of the charter of the Corporation,
and each shall be regarded as independent; and they are intended to be and
shall be construed as powers as well as purposes and objects of the Corporation
and shall be in addition to and not in limitation of the general powers of
corporations under the General Laws of the State of Maryland.

ARTICLE IV

Principal Office and Resident Agent

The address of the principal office of the Corporation in Maryland is
c/o The Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland
21202. The name of the resident agent of the Corporation in Maryland is The
Corporation Trust Incorporated, a Maryland corporation, and the address of the
resident agent is 32 South Street, Baltimore, Maryland 21202.

ARTICLE V

Capital Stock

Section 1. Authorized Shares. (a) The total number of shares of
stock of all classes and series which the Corporation initially has authority
to issue is one billion (1,000,000,000) shares of capital stock (par value $.01
per share), amounting in aggregate par value to Ten Million Dollars
($10,000,000). All of such shares are initially classified as "Common Stock".
The Board of Directors may classify or reclassify any unissued shares of
capital stock (whether or not such shares have been previously classified or
reclassified) from time to time by setting or changing in any one or more
respects the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption of such shares of stock.

(b) Unless otherwise prohibited by law, so long as the Corporation
is registered as an open-end company under the Investment Company Act, the
Board of Directors shall have the power and authority, without the approval of
the holders of any outstanding shares, to increase or decrease the number of
shares of capital stock or the number of shares of capital stock of any class
or series that the Corporation has authority to issue.

(c) Of the authorized shares of Common Stock, 333,333,333 shares are
initially classified as a series of Common Stock designated as "Lipper High
Income Bond Fund" series, 333,333,333 shares are initially classified as a
series of Common Stock designated as "Lipper U.S. Equity Fund" series and
333,333,334 shares are initially classified as a series of Common Stock
designated as "Lipper Europe Equity Fund" series. A series of Common Stock
shall be referred to individually as a "Series" and collectively, together with
any future series from time to time established, as the "Series".

(d) The following is a description of the preferences, conversion
and other rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the shares of Common
Stock classified as the Lipper High Income Bond Fund Series, the Lipper U.S.
Equity Fund Series and the Lipper Europe Equity Fund Series and any additional
Series of Common Stock of the Corporation (unless provided otherwise by the
<PAGE>
Board of Directors with respect to any such additional Series at the time it is
established and designated):

(1) Assets Belonging to Series. All consideration
received by the Corporation from the issue or sale of shares of a
particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings,
profits and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or
payments derived from any investment or reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to that
Series for all purposes, subject only to the rights of creditors, and
shall be so recorded upon the books of account of the Corporation.
Such consideration, assets, income, earnings, profits and proceeds,
together with any General Items allocated to that Series as provided
in the following sentence, are herein referred to collectively as
"assets belonging to" that Series. In the event that there are any
assets, income, earnings, profits or proceeds which are not readily
identifiable as belonging to any particular Series (collectively,
"General Items"), such General Items shall be allocated by or under
the supervision of the Board of Directors to and among any one or
more of the Series established and designated from time to time in
such manner and on such basis as the Board of Directors, in its sole
discretion, deems fair and equitable; and any General Items so
allocated to a particular Series shall belong to that Series. Each
such allocation by the Board of Directors shall be conclusive and
binding for all purposes.

(2) Liabilities of Series. The assets belonging to each
particular Series shall be charged with the liabilities of the
Corporation in respect of that Series and all expenses, costs,
charges and reserves attributable to that Series, and any general
liabilities, expenses, costs, charges or reserves of the Corporation
which are not readily identifiable as pertaining to any particular
Series, shall be allocated and charged by or under the supervision of
the Board of Directors to and among any one or more of the Series
established and designated from time to time in such manner and on
such basis as the Board of Directors, in its sole discretion, deems
fair and equitable. The liabilities, expenses, costs, charges and
reserves allocated and so charged to a Series are herein referred to
collectively as "liabilities of" that Series. Each allocation of
liabilities, expenses, costs, charges and reserves by or under the
supervision of the Board of Directors shall be conclusive and binding
for all purposes.

(3) Dividends and Distributions. Dividends and capital
distributions on shares of a particular Series may be paid with such
frequency, in such form and in such amount as the Board of Directors
may determine by resolution adopted from time to time, or pursuant to
a standing resolution or resolutions adopted only once or with such
frequency as the Board of Directors may determine, after providing
for actual and accrued liabilities of that Series. All dividends on
shares of a particular Series shall be paid only out of the income
belonging to that Series and all capital gains distributions on
shares of a particular Series shall be paid only out of the capital
gains belonging to that Series. All dividends and distributions on
shares of a particular Series shall be distributed pro rata to the
<PAGE>
holders of that Series in proportion to the number of shares of that
Series held by such holders at the date and time of record
established for the payment of such dividends or distributions,
except that in connection with any dividend or distribution program
or procedure, the Board of Directors may determine that no dividend
or distribution shall be payable on shares as to which the
stockholder's purchase order and/or payment have not been received by
the time or times established by the Board of Directors under such
program or procedure.

Dividends and distributions may be paid in cash, property
or additional shares of the same or another Series, or a combination
thereof, as determined by the Board of Directors or pursuant to any
program that the Board of Directors may have in effect at the time
for the election by stockholders of the form in which dividends or
distributions are to be paid. Any such dividend or distribution paid
in shares shall be paid at the net asset value thereof.

(4) Voting. On each matter submitted to a vote of the
stockholders, each holder of shares shall be entitled to one vote for
each share standing in his name on the books of the Corporation,
irrespective of the Series thereof, and all shares of all Series
shall vote as a single class ("Single Class Voting"); provided,
however, that (i) as to any matter with respect to which a separate
vote of any Series is required by the Investment Company Act or by
the Maryland General Corporation Law, such requirement as to a
separate vote by that Series shall apply in lieu of Single Class
Voting; (ii) in the event that the separate vote requirement referred
to in clause (i) above applies with respect to one or more Series,
then, subject to clause (iii) below, the shares of all other Series
shall vote as a single class; and (iii) as to any matter which does
not affect the interest of a particular Series, including liquidation
of another Series as described in subsection (7) below, only the
holders of shares of the one or more affected Series shall be
entitled to vote.

(5) Redemption by Stockholders. Each holder of shares of
a particular Series shall have the right at such times as may be
permitted by the Corporation to require the Corporation to redeem all
or any part of his shares of that Series, at a redemption price per
share equal to the net asset value per share of that Series next
determined after the shares are properly tendered for redemption,
less such redemption fee or sales charge, if any, as may be
established by the Board of Directors in its sole discretion.
Payment of the redemption price shall be in cash; provided, however,
that if the Board of Directors determines, which determination shall
be conclusive, that conditions exist which make payment wholly in
cash unwise or undesirable, the Corporation may, to the extent and in
the manner permitted by the Investment Company Act, make payment
wholly or partly in securities or other assets belonging to the
Series of which the shares being redeemed are a part, at the value of
such securities or assets used in such determination of net asset
value.

Notwithstanding the foregoing, the Corporation may postpone payment
of the redemption price and may suspend the right of the holders of
shares of any Series to require the Corporation to redeem shares of
<PAGE>
that Series during any period or at any time when and to the extent
permissible under the Investment Company Act.

(6) Redemption by Corporation. The Board of Directors may
cause the Corporation to redeem at their net asset value the shares
of any Series held in an account having, because of redemptions or
exchanges, a net asset value on the date of the notice of redemption
less than the minimum initial investment in that Series specified by
the Board of Directors from time to time in its sole discretion,
provided that at least 60 days prior written notice of the proposed
redemption has been given to the holder of any such account by mail,
postage prepaid, at the address contained in the books and records of
the Corporation and such holder has been given an opportunity to
purchase the required value of additional shares.

(7) Liquidation. In the event of the liquidation of a
particular Series, the stockholders of the Series that is being
liquidated shall be entitled to receive, as a class, when and as
declared by the Board of Directors, the excess of the assets
belonging to that Series over the liabilities of that Series. The
holders of shares of any particular Series shall not be entitled
thereby to any distribution upon liquidation of any other Series.
The assets so distributable to the stockholders of any particular
Series shall be distributed among such stockholders in proportion to
the number of shares of that Series held by them and recorded on the
books of the Corporation. The liquidation of any particular Series
in which there are shares then outstanding may be authorized by vote
of a majority of the Board of Directors then in office, subject to
the approval of a majority of the outstanding voting securities of
that Series, as defined in the Investment Company Act, and without
the vote of the holders of shares of any other Series. The
liquidation of a particular Series may be accomplished, in whole or
in part, by the transfer of assets of such Series to another Series
or by the exchange of shares of such Series for the shares of another
Series.

(8) Net Asset Value Per Share. The net asset value per share
of any Series shall be the quotient obtained by dividing the value of
the net assets of that Series (being the value of the assets
belonging to that Series less the liabilities of that Series) by the
total number of shares of that Series outstanding, all as determined
by or under the direction of the Board of Directors in accordance
with generally accepted accounting principles and the Investment
Company Act. Subject to the applicable provisions of the investment
Company Act, the Board of Directors, in its sole discretion, may
prescribe and shall set forth in the By-Laws of the Corporation or in
a duly adopted resolution of the Board of Directors such bases and
times for determining the value of the assets belonging to, and the
net asset value per share of outstanding shares of, each Series, or
the net income attributable to such shares, as the Board of Directors
deems necessary or desirable. The Board of Directors shall have full
discretion, to the extent not inconsistent with the Maryland General
Corporation Law and the Investment Company Act, to determine which
items shall be treated as income and which items as capital, and
whether any item of expense shall be charged to income or capital.
Each such determination and allocation shall be conclusive and
binding for all purposes.
<PAGE>
The Board of Directors may determine to maintain the net asset
value per share of any Series at a designated constant dollar
amount and in connection therewith may adopt procedures not
inconsistent with the Investment Company Act for the continuing
declaration of income attributable to that Series as dividends
and for the handling of any losses attributable to that Series.
Such procedures may provide that in the event of any loss, each
stockholder shall be deemed to have contributed to the capital
of the Corporation attributable to that Series his pro rata
portion of the total number of shares required to be canceled
in order to permit the net asset value per share of that Series
to be maintained, after reflecting such loss, at the designated
constant dollar amount. Each stockholder of the Corporation
shall be deemed to have agreed, by his investment in any Series
with respect to which the Board of Directors shall have adopted
any such procedure, to make the, contribution referred to in
the preceding sentence in the event of any such loss.

(9) Equality. All shares of each particular
Series shall represent an equal proportionate interest in the
assets belonging to that Series (subject to the liabilities of
that Series), and each share of any particular Series shall be
equal to each other share of that Series. The Board of
Directors may from time to time divide or combine the shares of
any particular Series into a greater or lesser number of shares
of that Series without thereby changing the proportionate
interest in the assets belonging to that Series or in any way
affecting the rights of holders of shares of any other Series.

(10) Conversion or Exchange Rights. Subject to
compliance with the requirements of the Investment Company Act,
the Board of Directors shall have the authority to provide that
holders of shares of any Series shall have the right to convert
or exchange said shares into shares of one or more other Series
of shares in accordance with such requirements and procedures
as may be established by the Board of Directors.

(e) The Lipper High Income Bond Fund Series, the Lipper
U.S. Equity Fund Series and the Lipper Europe Equity Fund Series and any
additional Series of Common Stock (unless otherwise specified in the articles
supplementary designating such Series) shall each initially have three classes
of shares, which shall be designated "Premier Shares", "Retail Shares" and
"Group Retirement Plan Shares", each consisting, until further changed, of the
lesser of (x) [number] shares or (y) the number of shares that could be issued
by issuing all of the shares of that Series currently or hereafter classified
less the total number of shares of all classes of such Series then issued and
outstanding. Any class of a Series of Common Stock shall be referred to herein
individually as a "Class" and collectively, together with any further class or
classes of such Series from time to time established, as the "Classes".

(f) All Classes of a particular Series of Common Stock of
the Corporation shall represent the same interest in the Corporation and have
identical voting, dividend, liquidation and other rights with any other shares
of Common Stock of that Series; provided, however, that notwithstanding
anything in the charter of the Corporation to the contrary.
<PAGE>
(1) Expenses related solely to a particular Class
of a Series (including, without limitation, distribution
expenses under a Rule 12b-1 plan and administrative expenses
under an administration or service agreement, plan or other
arrangement, however designated) shall be borne by that Class
and shall be appropriately reflected (in the manner determined
by the Board of Directors) in the net asset value, dividends,
distribution and liquidation rights of the shares of that
Class.

(2) As to any matter with respect to which a
separate vote of any Class of a Series is required by the
Investment Company Act or by the Maryland General Corporation
Law (including, without limitation, approval of any plan,
agreement or other arrangement referred to in subsection (1)
above), such requirement as to a separate vote by that Class
shall apply in lieu of Single Class Voting, and if permitted by
the Investment Company Act or the Maryland General Corporation
Law, the Classes of more than one Series shall vote together as
a single class on any such matter which shall have the same
effect on each such Class. As to any matter which does not
affect the interest of a particular Class of a Series, only the
holders of shares of the affected Classes of that Series shall
be entitled to vote.

(g) The Corporation shall not be obligated to issue
certificates representing shares of any Class or Series of capital stock. At
the time of issue or transfer of shares without certificates, the Corporation
shall provide the stockholder with such information as may be required under
the Maryland General Corporation Law.

Section 2. Fractional Shares. The Corporation may
issue and sell fractions of shares of capital stock having pro rata all the
rights of full shares, including, without limitation, the right to vote and the
right to receive dividends, and wherever the words "share" or "shares" are used
in the charter or By-laws of the Corporation, they shall be deemed to include
fractions of shares where the context does not clearly indicate that only full
shares are intended.

Section 3. Quorum Requirements and Voting Rights.
Notwithstanding any provision of law requiring the authorization of any action
by a greater proportion than a majority of the total number of shares of all
classes and series of capital stock or of the total number of shares of any
class or series of capital stock entitled to vote as a separate class, such
action shall be valid and effective if authorized by the affirmative vote of
the holders of a majority of the total number of shares of all classes and
series outstanding and entitled to vote thereon, or of the class or series
entitled to vote thereon as a separate class, as the case may be, except as
otherwise provided in the charter of the Corporation. At a meeting of
stockholders the presence in person or by proxy of stockholders entitled to
cast a majority of all the votes entitled to be cast on any matter with respect
to which one or more classes or series of capital stock are entitled to vote as
a separate class shall constitute a quorum of such separate class for action on
that matter. Whether or not a quorum of such a separate class for action on
any such matter is present, a meeting of stockholders convened on the date for
which it was called may be adjourned as to that matter from time to time
without further notice by a majority vote of the stockholders of the separate
<PAGE>
class present in person or by proxy to a date not more than 120 days after the
original record date.

Section 4. No Preemptive Rights. No holder of shares of
capital stock or other securities of the Corporation, whether now or hereafter
authorized, shall have any right to purchase or subscribe for any shares of any
stock or other securities of the Corporation other than such, if any, as the
Board of Directors, in its sole discretion, may determine and at such price or
prices and upon such other terms as the Board of Directors, in its sole
discretion , may fix; and any stock or other securities which the Board of
Directors may determine to offer for subscription may, as the Board of
Directors in its sole discretion shall determine, be offered to the holders of
any class, series or type of stock or other securities at the time outstanding
to the exclusion of the holders of any or all other classes, series or types of
stock or other securities at the time outstanding.

Section 5. Determination Made by the Board of Directors. Any
determination made in good faith by or pursuant to the direction of the Board
of Directors, as to the amount of assets, debts, obligations, or liabilities of
the Corporation, as to the amount of any reserves or charges set up and the
propriety thereof, as to the time of or purpose for creating such reserves or
charges, as to the use, alteration or cancellation of any reserves or charges
(whether or not any debt, obligation or liability for which such reserves or
charges shall have been created shall have been paid or discharged or shall be
then or thereafter required to be paid or discharged), as to the value of or
the method of valuing any investment or other asset owned or held by the
Corporation, as to the allocation of any asset or liability of the Corporation
to a particular class or classes of the Corporation's stock, as to the number
of shares of any class of stock outstanding, as to the estimated expense to the
Corporation in connection with purchases of its shares, as to the ability to
liquidate investments in orderly fashion, or as to any other matters relating
to the issue, sale, purchase or other acquisition or disposition of investments
or shares of the Corporation, shall be final and conclusive and shall be
binding upon the Corporation and all holders of its shares, past, present and
future, and shares of the Corporation are issued and sold on the condition and
understanding that any and all such determinations shall be binding as
aforesaid.

Section 6. All Shares of Capital Stock Subject to Articles of
Incorporation. All persons who shall acquire shares of capital stock of the
Corporation shall acquire those shares subject to the provisions of these
Articles of Incorporation and the By-Laws of the Corporation.

ARTICLE VI

Directors

Section 1. Initial Board of Directors. The number of
Directors of the Corporation shall initially be two. The names of the
Directors who shall hold office until the first annual meeting of stockholders
or until their successors are duly chosen and qualified are:

Kenneth Lipper
Abraham Biderman
<PAGE>
Section 2. Number of Directors. The number of Directors in
office may be changed from time to time in the manner specified in the By-Laws
of the Corporation, but this number shall never be less than the minimum number
required under the Maryland General Corporation Law.

Section 3. Certain Powers of Board of Directors. The Board of
Directors is hereby empowered to authorize the issuance from time to time of
shares of its stock of any class or series, whether now or hereafter
authorized, or securities convertible into shares of its stock of any class or
series, whether now or hereafter authorized, for such consideration as may be
deemed advisable by the Board of Directors and without any action by the
stockholders. The Board of Directors of the Corporation shall, consistent with
applicable law, have power in its sole discretion to determine from time to
time in accordance with sound accounting practice or other reasonable valuation
methods what constitutes annual or other net profits, earnings, surplus, or net
assets in excess of capital; to determine that retained earnings or surplus
shall remain in the hands of the Corporation; to set apart out of any funds of
the Corporation such reserve or reserves in such amount or amounts and for such
proper purpose or purposes as it shall determine and to abolish any such
reserve or any part thereof; to distribute and pay distributions or dividends
in stock, cash or other securities or property, out of surplus or any other
funds or amounts legally available therefor, at such times and to the
stockholders of record on such dates as it may, from time to time, determine;
and to determine whether and to what extent and at what times and places and
under what conditions and regulations the books, accounts and documents of the
Corporation, or any of them, shall be open to the inspection of stockholders,
except as otherwise provided by statute or by the By-laws, and, except as so
provided, no stockholder shall have any right to inspect any book, account or
document of the Corporation unless authorized so to do by resolution of the
Board of Directors. The enumeration and definition of particular powers of the
Board of Directors included in the foregoing shall in no way be limited or
restricted by reference to or inference from the terms of any other clause of
this or any other Article of the charter of the Corporation, or construed as or
deemed by inference or otherwise in any manner to exclude or limit any powers
conferred upon the Board of Directors under the General Laws of the State of
Maryland now or hereafter in force.

ARTICLE VII

Liability and Indemnification

The Corporation shall indemnify (i) its directors and officers,
whether serving the Corporation or at its request any other entity, to the full
extent required or permitted by the General Laws of the State of Maryland now
or hereafter in force, including the advance of expenses under the procedures
and to the full extent permitted by law, and (ii) other employees and agents to
such extent as shall be authorized by the Board of Directors or the By-Laws and
as permitted by law. Nothing contained herein shall be construed to protect
any director or officer of the Corporation against any liability to the
Corporation or its security holders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office, The foregoing
rights of indemnification shall not be exclusive of any other rights to which
those seeking indemnification may be entitled. The Board of Directors may take
such action as is necessary to carry out these indemnification provisions and
is expressly empowered to adopt, approve and amend from time to time such
<PAGE>
by-laws, resolutions or contracts implementing such provisions or such further
indemnification on arrangements as may be permitted by law. No amendment of
the charter of the Corporation or repeal of any of its provisions shall limit
or eliminate the right of indemnification provided hereunder with respect to
acts or omissions occurring prior to such amendment or repeal.

To the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, and the Investment Company Act, no
director or officer of the Corporation shall be personally liable to the
Corporation or its stockholders for money damages; provided, however, that
nothing herein shall be construed to protect any director or officer of the
Corporation against any liability to the Corporation or its security holders to
which he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of his office. No amendment of the charter of the Corporation or
repeal of any of its provisions shall limit or eliminate the limitation of
liability provided to directors and officers hereunder with respect to any act
or omission occurring prior to such amendment or repeal.

ARTICLE VIII

Amendments

The Corporation reserves the right from time to time to make
any amendment of its charter which may be now or hereafter authorized by law,
including any amendments changing the terms or contract rights, as expressly
set forth in its charter, of any of its outstanding capital stock by
classification, reclassification or otherwise.

ARTICLE IX

Perpetual Existence

The duration of the Corporation shall be perpetual.

SECOND: The provisions hereinabove set forth are all the
provisions of the Charter of the Corporation currently in effect.

THIRD: The amendment does not increase the authorized stock of
the Corporation.

FOURTH: In accordance with the provisions of Section 2-603 of
the General Corporation Law of the State of Maryland, the foregoing amendment
was duly approved by a majority of the entire Board of Directors and no stock
entitled to be voted on the matter was outstanding or subscribed for at the
time of approval.

FIFTH: The current address of the principal office of the
Corporation, the name and address of the Corporation's current resident agent,
and the number of directors of the Corporation and the names of the directors
currently in office are as set forth in the amended and restated Charter of the
Corporation.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these presents
to be signed in its name and on its behalf by its President and witnessed by
its Secretary on this __ day of December, 1995.

THE LIPPER FUNDS,
INC.

By:______________________
Kenneth
Lipper
President

ATTEST

_____________________
Abraham Biderman
Secretary

THE UNDERSIGNED, the President of The Lipper Funds, Inc. who
executed on behalf of the Corporation the foregoing Articles of Amendment and
Restatement of which this certificate is made a part, hereby acknowledges in
the name and on behalf of the Corporation the foregoing Articles of Amendment
and Restatement to be the corporate act of the Corporation and hereby certifies
to the best of his knowledge, information and belief the matters set forth
therein with respect to the authorization and approval thereof are true in all
material respects under the penalties of perjury.

_________________________
Kenneth Lipper
President

AMENDED AND RESTATED BY-LAWS
of

THE LIPPER FUNDS, INC.

ARTICLE I

Stockholders

SECTION 1. Place of Meeting. Meetings of stockholders shall be held
at such place in the United States as the Board of Directors may determine.

SECTION 2. Annual Meetings. The Corporation shall not be required
to hold an annual meeting of its stockholders in any year in which the election
of directors is not required to be acted upon under the Investment Company Act
of 1940. In the event that the Corporation shall hold an annual meeting of
stockholders, such meeting shall be held at a date and time set by the Board of
Directors; provided, however, that if the purpose of the meeting is to elect
directors or to approve an investment advisory agreement or distribution
agreement, then the date and time of such meeting shall be set in accordance
with the Investment Company Act of 1940 and no later than 120 days after the
occurrence of the event requiring the meeting. Any stockholders' meeting held
in accordance with the preceding sentence may constitute the annual meeting of
stockholders for the fiscal year of the Corporation in which the meeting is
held.

SECTION 3. Special Meetings. Special meetings of the stockholders
for any purpose or purposes, unless otherwise prescribed by statute or by the
Corporation's Charter, may be held at any place within the United States, and
may be called at any time by the Board of Directors or by the Chairman or the
President, and shall be called by the Secretary (or in his absence, an
Assistant Secretary) at the request in writing
of a majority of the Board of Directors or at the request
in writing of stockholders entitled to cast at least
twenty-five percent (25%) of the votes entitled to be cast at the meeting upon
payment by such stockholders to the Corporation of the reasonably estimated
cost of preparing and mailing a notice of the meeting (which estimated cost
shall be provided to such stockholders by the Secretary of the Corporation).
Notwithstanding the foregoing, unless requested by stockholders entitled to
cast a majority of the votes entitled to be cast at the meeting, a special
meeting of the stockholders need not be called at the request of stockholders
to consider any matter that is substantially the same as a matter voted on at
any special meeting of the stockholders held during the preceding twelve (12)
months. A written request shall state the purpose or purposes of the proposed
meeting.

SECTION 4. Record Dates. The Board of Directors may fix, in
advance, a date as the record date for the purpose of determining stockholders
entitled to notice of, or to vote at, any meeting of stockholders, or
stockholders entitled to receive payment of any dividend or the allotment of
any other rights, or in order to make a determination of stockholders for any
other proper purpose. Such date in any case shall be not more than 90 days,
and in case of a meeting of stockholders, not less than 10 days, prior to the
<PAGE>
date on which the particular action, requiring such determination of
stockholders, is to be taken.

SECTION 5. Notice of Meeting; Waiver of Notice. Not less than 10
and not more than 90 days before each meeting of stockholders, the Secretary
shall give to each stockholder entitled to vote at the meeting and to each
other stockholder entitled to notice of such meeting, written notice of the
time, date, place, and, in the case of a special meeting or when otherwise
required by the laws of the State of Maryland, the purpose or purposes of the
meeting. Notice is given to a stockholder when it is personally delivered to
him, left at his residence or usual place of business, or mailed to him at his
address as it appears on the records of the Corporation. Notice of any meeting
of stockholders shall be deemed waived by any stockholder who attends the
meeting in person or by proxy, or who before or after the meeting submits a
signed waiver of notice that is filed with the records of the meeting.

SECTION 6. Notice of Stockholder Business.

(a) At any annual or special meeting of the stockholders, only such
business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual or special meeting, the
business must be (i) (A) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (B) otherwise
properly brought before the meeting by or at the direction of the Board of
Directors, or (C) otherwise properly brought before the meeting by a
stockholder and (ii) a proper subject under applicable law for stockholder
action.

(b) For business to be properly brought before an annual or special
meeting by a stockholder, the stockholder must have given timely notice thereof
in writing to the Secretary of the Corporation. To be timely, any such notice
must be delivered to or mailed and received at the principal executive offices
of the Corporation not later than 60 days prior to the date of the meeting;
provided, however, that if less than 70 days notice or prior public disclosure
of the date of the meeting is given or made to stockholders, any such notice by
a stockholder to be timely must be so received not later than the close of
business on the tenth day following the day on which notice of the date of the
annual or special meeting was given or such public disclosure was made.

(c) Any such notice by a stockholder shall set forth as to each
matter the stockholder proposes to bring before the annual or special meeting
(i) a brief description of the business desired to be brought before the annual
or special meeting and the reasons for conducting such business at the annual
or special meeting, (ii) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business, (iii) the
class and number of shares of the capital stock of the Corporation which are
beneficially owned by the stockholder, and (iv) any material interest of the
stockholder in such business.

(d) Notwithstanding anything in the By-Laws to the contrary, no
business shall be conducted at any annual or special meeting except in
accordance with the procedures set forth in this Section 4. The Chairman of
the annual or special meeting shall, if the facts warrant, determine and
declare to the meeting that business was not properly brought before the
meeting and in accordance with the provisions of this Section 4, and if he
should so determine, he shall so declare to the meeting that any such business
not properly brought before the meeting shall not be considered or transacted.
<PAGE>
SECTION 7. Quorum; Voting. Unless statute or the charter provides
otherwise, at a meeting of stockholders the presence in person or by proxy of
stockholders entitled to cast a majority of all the votes entitled to be cast
at the meeting constitutes a quorum, except that where the holders of shares of
any class or sub-class thereof are entitled to a separate vote as a class or
sub-class (such class or sub class being referred to as a "Separate Class") or
where the holders of shares of two or more (but not all) classes or sub-classes
thereof are required to vote as a single class or sub-class (such classes or
sub-classes being referred to as a "Combined Class"), the presence in person or
by proxy of the holders of a majority of the shares of that Separate Class or
Combined Class, as the case may be, issued and outstanding and entitled to vote
thereat shall constitute a quorum for such vote. A majority of all the votes
cast at a meeting at which a quorum is present is sufficient to approve any
matter which properly comes before the meeting, except that a plurality of all
the votes cast at a meeting at which a quorum is present is sufficient to elect
a director.

SECTION 8. Adjournment. Whether or not a quorum is present, a
meeting of stockholders convened on the date for which it was called may be
adjourned from time to time without further notice by a majority vote of the
stockholders present in person or by proxy to a date not more than 120 days
after the original record date. If a quorum with respect to a Separate Class
or a Combined Class, as the case may be, shall not be present or represented at
any meeting of stockholders, the holders of a majority of the shares of such
Separate Class or such Combined Class, as the case may be, present in person or
by proxy and entitled to vote shall have power to adjourn the meeting from time
to time as to such Separate Class or such Combined Class, as the case may be,
without notice other than announcement at the meeting, until the requisite
number of shares entitled to vote at such meeting shall be present. Any
business which might have been transacted at the meeting as originally notified
may be deferred and transacted at any such adjourned meeting at which a quorum
shall be present.

SECTION 9. Conduct of Meetings. Each meeting of stockholders shall
be presided over by the Chairman of the Board or, if he or she is not present,
by the Vice Chairman of the Board or, if neither of them are present, by a
chairman to be elected at the meeting. The Secretary shall act as secretary of
the meeting or, if he or she is not present, an Assistant Secretary shall so
act. If neither the Secretary nor an Assistant Secretary is present, the
chairman of the meeting shall appoint a Secretary.

SECTION 10. Order of Business. The order of business at all
meetings of the stockholders shall be as determined by the chairman of the
meeting.

SECTION 11. Proxies. A stockholder may vote the stock he owns of
record either in person or by written proxy signed by the stockholder or by his
duly authorized attorney-in-fact. No proxy shall be valid after the expiration
of eleven (11) months from the date thereof, unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the stockholder
executing it, except in those cases in which the proxy states that it is
irrevocable and in which an irrevocable proxy is permitted by law.

SECTION 12. Inspectors. The Board of Directors may, in advance of
any meeting of stockholders, appoint one (1) or more inspectors to act at the
meeting or at any adjournment of the meeting. If the inspectors shall not be
so appointed or if any of them shall fail to appear or act, the chairman of the
<PAGE>
meeting may appoint inspectors. Each inspector, before entering upon the
discharge of his duties, shall, if required by the chairman of the meeting,
take and sign an oath to execute faithfully the duties of inspector at the
meeting with strict impartiality and according to the best of his ability. The
inspectors, if appointed, shall determine the number of shares outstanding and
the voting power of each share, the number of shares represented at the
meeting, the existence of a quorum and the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and tabulate all
votes, ballots or consents, determine the result, and do those acts as are
proper to conduct the election or vote with fairness to all stockholders. On
request of the chairman of the meeting or any stockholder entitled to vote at
the meeting, the inspectors shall make a report in writing of any challenge,
request or matter determined by them and shall execute a certificate of any
fact found by them. No director or candidate for the office of director shall
act as inspector of an election of directors. Inspectors need not be
stockholders of the Corporation.

SECTION 13. Consent of Stockholders in Lieu of Meeting. Except as
otherwise provided by statute or the Corporation's Charter, any action required
or permitted to be taken at any annual or special meeting of stockholders may
be taken without a meeting, without prior notice and without a vote, if the
following are filed with the records of stockholders' meetings: (a) a
unanimous written consent that sets forth the action and is signed by each
stockholder entitled to vote on the matter and (b) a written waiver of any
right to dissent signed by each stockholder entitled to notice of the meeting
but not entitled to vote at the meeting.

ARTICLE II

Board of Directors

SECTION 1. Powers. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors, which may
exercise all powers of the corporation and do all lawful acts and things that
are not by law, the Articles of Incorporation of the Corporation or these
By-Laws directed or required to be done by the stockholders.

SECTION 2. Number and Tenure. The number of Directors fixed by the
Articles of Incorporation of the Corporation (which initially was fixed at one
(1)) as the number which shall constitute the whole Board may be changed by a
vote of a majority of the entire Board of directors from time to time, provided
that this number shall in no event be fewer than that required by law, nor more
than 21. Each director shall hold office until his successor is elected and
qualifies or until his earlier resignation or removal.

SECTION 3. Vacancies. Vacancies in the Board of
Directors for any cause, except an increase in the authorized number of
directors, may, subject to the Investment Company Act of 1940, be filled by a
majority of the Directors then in office, although less than a quorum, or by a
sole remaining Director. A vacancy resulting from an increase in the
authorized number of directors may, subject to the Investment Company Act of
1940, be filled by a majority of the entire Board of Directors. A director
elected by the Board of Directors to fill a vacancy serves until his successor
is elected and qualifies or until his earlier resignation or removal.
<PAGE>
SECTION 4. Resignation. A director of the Corporation may resign at
any time by giving written notice of his resignation to the Board of Directors
or the Chairman of the Board or to the Vice-Chairman of the Board or the
President or the Secretary of the Corporation. Any resignation shall take
effect at the time specified in it or, should the time when it is to become
effective not be specified in it, immediately upon its receipt. Acceptance of
a resignation shall not be necessary to make it effective unless the
resignation states otherwise.

SECTION 5. Removal of Directors. Unless statute or the charter
provides otherwise, the stockholders may remove any director, with or without
cause, by the affirmative vote of a majority of all the votes entitled to be
cast for the election of directors. The Board of Directors shall promptly call
a meeting of stockholders for the purpose of voting upon the question of
removal of any director or directors when requested in writing to do so by the
record holders of not less than ten percent of the outstanding shares.

Whenever ten or more stockholders of record who have been such for at
least six months preceding the date of application, and who hold in the
aggregate either shares having a net asset value of at least $25,000 or at
least one percent of the outstanding shares, whichever is less, shall apply to
the Board of Directors in writing, stating that they wish to communicate with
other stockholders with a view to obtaining signatures to a request for a
meeting to vote on the removal of any director and accompanied by a form of
communication and request which they wish to transmit, the Board shall within
five business days after receipt of such application either (i) afford to such
applicants access to a list of the names and addresses of all stockholders as
recorded on the books of the Corporation; or (ii) inform such applicants as to
the approximate number of stockholders of record, and the approximate cost of
mailing to them the proposed communication and form of request. If the Board
elects to follow the course specified in clause (ii) above, the Board, upon the
written request of such applicants accompanied by a tender of the material to
be mailed and of the reasonable expenses of mailing, shall, with reasonable
promptness, mail such material to all stockholders of record at their addresses
as recorded on the books, unless within five business days after such tender
the Board shall mail to such applicants and file with the Securities and
Exchange Commission (the "Commission"), together with a copy of the material to
be mailed, a written statement signed by at least a majority of the directors
to the effect that in their opinion either such material contains untrue
statements of fact or omits to state facts necessary to make the statements
contained therein not misleading, or would be in violation of applicable law,
and specifying the basis of such opinion. If the commission shall enter an
order refusing to sustain any of such objections, or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all objections so sustained have
been met and shall enter an order so declaring, the Board shall mail copies of
such material to all stockholders with reasonable promptness after the entry of
such order and the renewal of such tender.

SECTION 6. Place of Meetings. Meetings of the Board of Directors,
regular or special, may be held at any place within or without the State of
Maryland as the Board of Directors may determine.

SECTION 7. Regular Meetings. Regular Meetings of the Board of
Directors shall be held at the conclusion of each annual meeting of
stockholders and at any other time fixed by the Board of Directors. No notice
of regular meetings shall be required.
<PAGE>
SECTION 8. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board, the President
or a majority of the Directors. Written notice of the time and place of any
special meeting shall be delivered or telegraphed to each director not less
than one day before the meeting or mailed to each director not less than three
days before the meeting. Notice of any special meeting need not be given to
any director who shall, either before or after the meeting, sign a written
waiver of notice that is filed with the records of the meeting or who shall
attend the meeting.

SECTION 9. Telephone Meetings. Members of the Board of Directors or
any committee hereof may participate in a meeting by means of conference
telephone or similar communications equipment if all persons participating in
the meeting can hear each other at the same time.

SECTION 10. Quorum. A majority of the total number of directors
shall constitute a quorum for the transaction of business, provided that a
quorum shall be no less than two directors, except where the Board consists of
only one Director, a quorum shall be one director. If at any meeting of the
Board of Directors there shall be less than a quorum present, a majority of
those present may adjourn the meeting until a quorum shall have been obtained.
Except as otherwise provided by law, the Articles of Incorporation of the
Corporation, these By-Laws or any contract or agreement to which the
Corporation is a party, the act of a majority of the directors present at any
meeting at which there is a quorum shall be the act of the Board of Directors.

SECTION 11. Committees. The Board of Directors may designate an
executive committee and other committees composed of two or more directors, and
the members thereof, and each committee shall have the powers, authority and
duties specified in the resolution creating the same and permitted by law. If
a member of a committee is absent or disqualified, the members present at a
meeting, whether or not constituting a quorum, may appoint another member of
the Board of Directors to act at the meeting in place of the absent or
disqualified member.

SECTION 12. Organization. The Chairman of the Board shall preside
at each meeting of the Board. In the absence or inability of the Chairman of
the Board to act, the President (if he is a director), or, in his absence or
inability to act, another director chosen by a majority of the directors
present, shall act as chairman of the meeting and preside at the meeting. The
Secretary (or, in his or her absence or inability to act, any person appointed
by the chairman) shall act as secretary of the meeting and keep the minutes of
the meeting.

SECTION 13. Written Consent of Directors in Lieu of a Meeting.
Subject to the provisions of the 1940 Act, any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee of the
Board may be taken without a meeting if all members of the Board or committee,
as the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of the proceedings of the Board or committee.

SECTION 14. Telephone Conference. Members of the Board of Directors
or any committee of the Board may participate in any Board or committee meeting
by means of a conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other at the
same time. Participation by such means shall constitute presence in person at
the meeting, provided, however, that such participation shall not constitute
<PAGE>
presence in person with respect to matters which the 1940 Act, and the rules
thereunder require the approval of directors by vote cast in person at a
meeting.

SECTION 15. Compensation of Directors. The Board of Directors may
authorize reasonable compensation to Directors for their services as Directors
and as members of committees of the Board of Directors and may authorize the
reimbursement of reasonable expenses incurred by Directors in connection with
rendering those services.

ARTICLE III

Officers

SECTION 1. Election and Removal. The Board of Directors shall elect
a President, a Secretary and a Treasurer. The Board of Directors may also in
its discretion elect a Chairman of the Board, a Vice Chairman of the Board, one
or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other
officers, agents and employees. Any two or more offices, except those of
President and Vice President, may be held by the same person. The Board of
Directors may fill any vacancy which may occur in any office. All officers
shall hold office at the pleasure of the Board of Directors, and any officer
may be removed from office at any time with or without cause by the Board of
Directors whenever, in the judgment of the Board of Directors, the best
interests of the Corporation will be served thereby.

SECTION 2. Powers and Duties. The officers of the Corporation shall
have such powers and duties as generally pertain to their respective offices as
well as such powers and duties as may from time to time be conferred by
resolution of the Board of Directors.

ARTICLE IV

INDEMNIFICATION AND INSURANCE

SECTION 1. Indemnification of Directors and Officers. Any person
who was or is a party or is threatened to be made a party in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than a proceeding by or in the right of
the Corporation in which such person shall have been adjudged to be liable to
the Corporation), by reason of the fact that such person is a current or former
director or officer of the Corporation, or is or was serving while a director
or officer of the Corporation at the request of the Corporation as a director,
officer, partner, trustee, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust, enterprise or employee benefit plan, shall
be indemnified by the Corporation against judgments, penalties, fines, excise
taxes, settlements and reasonable expenses (including attorneys' fees) actually
incurred by such person in connection with such action, suit or proceeding to
the full extent permissible under the Maryland General Corporation Law, the
Securities Act of 1933, as amended (the "1933 Act"), and the 1940 Act, as those
statutes are now or hereafter in force, except that such indemnity shall not
protect any such person against any liability to the Corporation or any
stockholder thereof to which such person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office ("disabling conduct").
<PAGE>
SECTION 2. Advances. Any current or former director or officer of
the Corporation claiming indemnification within the scope of this Article IV
shall be entitled to advances from the Corporation for payment of the
reasonable expenses incurred by him in connection with proceedings to which he
is a party in the manner and to the full extent permissible under the Maryland
General Corporation Law, the 1933 Act, and the 1940 Act, as those statutes are
now or hereafter in force; provided, however, that the person seeking
indemnification shall provide to the Corporation a written affirmation of his
good faith belief that the standard of conduct necessary for indemnification by
the Corporation has been met and a written undertaking to repay any such
advance, if it should ultimately be determined that the standard of conduct has
not been met, and provided further that at least one of the following
additional conditions is met: (a) the person seeking indemnification shall
provide a security in form and amount acceptable to the Corporation for his
undertaking; (b) the Corporation is insured against losses arising by reason of
the advance; or (c) a majority of a quorum of directors of the Corporation who
are neither "interested persons" as defined in Section 2(a)(19) of the 1940
Act, nor parties to the proceeding ("disinterested non-party directors"), or
independent legal counsel, in a written opinion, shall determine, based on a
review of facts readily available to the Corporation at the time the advance is
proposed to be made, that there is reason to believe that the person seeking
indemnification will ultimately be found to be entitled to indemnification.

SECTION 3. Procedure. At the request of any current or former
director or officer, or any employee or agent whom the Corporation proposes to
indemnify, the Board of Directors shall determine, or cause to be determined,
in a manner consistent with the Maryland General Corporation Law, the 1933 Act,
and the 1940 Act, as those statutes are now or hereafter in force, whether the
standards required by this Article VI have been met; provided, however, that
indemnification shall be made only following: (a) a final decision on the
merits by a court or other body before whom the proceeding was brought, finding
that the person to be indemnified was not liable by reason of disabling conduct
or (b) in the absence of such a decision, a reasonable determination, based
upon a review of the facts, that the person to be indemnified was not liable by
reason of disabling conduct, by (i) the vote of a majority of a quorum of
disinterested non-party directors or (ii) an independent legal counsel in a
written opinion.

SECTION 4. Indemnification of Employees and Agents. Employees and
agents who are not officers or directors of the Corporation may be indemnified,
and reasonable expenses may be advanced to such employees or agents, in
accordance with the procedures set forth in this Article VI to the extent
permissible under the Maryland General Corporation Law, the 1933 Act, and the
1940 Act, as those statutes are now or hereafter in force, and to such further
extent, consistent with the foregoing, as may be provided by action of the
Board of Directors or by contract.

SECTION 5. Other Rights. The indemnification provided by this
Article IV shall not be deemed exclusive of any other right, with respect to
indemnification or otherwise, to which those seeking such indemnification may
be entitled under any insurance or other agreement, vote of stockholders or
disinterested directors or otherwise, both as to action by a director or
officer of the Corporation in his official capacity and as to action by such
person in another capacity while holding such office or position, and shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
<PAGE>
SECTION 6. Insurance. The Corporation shall have the power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or who, while a
director, officer, employee or agent of the Corporation, is or was serving at
the request of the Corporation as a director, officer, partner, trustee,
employee, agent or fiduciary of another corporation, partnership, joint
venture, trust, enterprise or employee benefit plan, against any liability
asserted against and incurred by him in any such capacity, or arising out of
his status as such, provided that no insurance may be obtained by the
Corporation for liabilities against which it would not have the power to
indemnify him under this Article IV or applicable law.

ARTICLE V

Stock

SECTION 1. Certificates of Stock. If the Board of Directors
authorizes the issue of a class or sub-class of stock with certificates, each
holder of shares of that class or sub-class, upon written request therefor in
accordance with such procedures as may be established by the Board from time to
time, is entitled to certificates which represent and certify the shares of
that class or sub-class he holds in the Corporation. Each stock certificate
shall include on its face the name of the Corporation, the name of the
stockholder or other person to whom it is issued, and the class or sub-class of
stock and number of shares it represents. It shall be in such form, not
inconsistent with law or with the charter, as shall be approved by the Board of
Directors or any officer or officers designated for such purpose by resolution
of the Board of Directors. Each stock certificate shall be signed by the
Chairman of the Board, the President, or a Vice-President and countersigned by
the Secretary, an Assistant Secretary, the Treasurer, or an Assistant
Treasurer. Each certificate may be sealed with the actual corporate seal or a
facsimile of it or in any other form and the signatures may be either manual or
facsimile signatures. A certificate is valid and may be issued whether or not
an officer who signed it is still an officer when it is issued. The Board of
Directors may authorize the issue of some or all of the shares of any or all
classes or sub-classes without certificates. Such authorization shall not
affect shares already represented by certificates until they are surrendered to
the Corporation. At the time of issue or transfer of shares without
certificates the Corporation shall send each stockholder a written statement of
the information required by the Maryland General Corporation Law.

SECTION 2. Transfers. The Board of Directors shall have power and
authority to make such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of shares of stock; and may
appoint transfer agents and registrars thereof. The duties of transfer agent
and registrar may be combined.

SECTION 3. Record Date and Closing of Transfer Books. The Board of
Directors may set a record date or direct that the stock transfer books be
closed for a stated period for the purpose of making any proper determination
with respect to stockholders, including which stockholders are entitled to
notice of a meeting, vote at a meeting, receive a dividend, or be allotted
other rights. The record date may not be prior to the close of business on the
day the record date is fixed nor, subject to Article II, Section 8, more than
90 days before the date on which the action requiring the determination will be
taken; the transfer books may not be closed for a period longer than 20 days;
<PAGE>
and, in the case of a meeting of stockholders, the record date of the closing
of the transfer books shall be at least ten days before the date of the
meeting.

SECTION 4. Stock Ledger. The Corporation shall maintain a stock
ledger which contains the name and address of each stockholder and the number
of shares of stock of each class or sub-class which the stockholder holds. The
stock ledger may be in written form or in any other form which can be converted
within a reasonable time into written form for visual inspection. The original
or a duplicate of the stock ledger shall be kept at the offices of a transfer
agent for the particular class or sub-class of stock, or, if none, at the
principal office in the State of Maryland or the principal executive offices of
the Corporation.

SECTION 5. Certification of Beneficial Owners. The Board of
Directors may adopt by resolution a procedure by which a stockholder of the
Corporation may certify in writing to the Corporation that any shares of stock
registered in the name of the stockholder are held for the account of a
specified person other than the stockholder. The resolution shall set forth
the class of stockholders who may certify, the purpose for which the
certification may be made, the form of certification and the information to be
contained in it if the certification is with respect to a record date or
closing of the stock transfer books, the time after the record date or closing
of the stock transfer books within which the certification may be received by
the Corporation, and any other provisions with respect to the procedure which
the Board considers necessary or desirable. On receipt of a certification
which complies with the procedure adopted by the Board in accordance with this
Section, the person specified in the certification is, for the purpose set
forth in the certification, the holder of record of the specified stock in
place of the stockholder who makes the certification.

SECTION 6. Lost Stock Certificates. The Board of Directors of the
Corporation may determine the conditions for issuing a new stock certificate in
place of one which is alleged to have been lost, stolen or destroyed, including
the requirement that the owner furnish a bond as indemnity against any claim
that may be made against the Corporation in respect of the lost, stolen or
destroyed certificate, or the Board of Directors may delegate such power to any
officer or officers of the Corporation. In their discretion, the Board of
Directors or such officer or officers may refuse to issue such new certificate
save upon the order of some court having jurisdiction in the premises.

ARTICLE VI

Finance

SECTION 1. Check, Drafts, Etc. All checks, drafts and orders for
the payment of money, notes and other evidences of indebtedness, issued in the
name of the Corporation, shall, unless otherwise provided by resolution of the
Board of Directors, be signed by the President, a Vice-President or an
Assistant Vice-President and countersigned by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary.

SECTION 2. Annual Statement of Affairs. The President or Treasurer
shall prepare annually a full and correct statement of the affairs of the
Corporation, to include a statement of net assets and a financial statement of
operations for the preceding fiscal year. The statement of affairs shall be
<PAGE>
submitted at the annual meeting of the stockholders, if any, within 20 days
after the meeting (or, in the absence of an annual meeting, within 120 days
after the end of the fiscal year, placed on file at the Corporation's principal
office in the State of Maryland.

SECTION 3. Fiscal Year. The fiscal year of the Corporation shall be
the twelve-calendar-month period ending [December 31] in each year, unless
otherwise provided by the Board of Directors.

SECTION 4. Dividends. If declared by the Board of Directors at any
meeting thereof, the Corporation may pay dividends on its shares in cash,
property, or in shares of the capital stock of the Corporation, unless such
dividend is contrary to law or to a restriction contained in the charter of the
Corporation.

SECTION 5. Net Asset Value. Except in the event of emergency
conditions or as otherwise permitted by the Investment Company Act of 1940, the
net asset value per share of each class or sub-class of stock shall be
determined no less frequently than once daily, Monday through Friday, at such
time or times as the Board of Directors sets at least annually. In valuing
portfolio investments for the determination of the net asset value per share of
any class or sub-class, securities for which market quotations are readily
available shall be valued at prices which, in the opinion of the Board of
Directors or the person designated by the Board of Directors to make the
determination, most nearly represent the current market value of such
securities, and other securities and assets shall be valued on the basis of
their fair value as determined by or pursuant to the direction of the Board of
Directors, which in the case of debt obligations, commercial paper and
repurchase agreements may, but need not, be determined based on yields for
securities of comparable maturity, quality and type, or using the amortized
cost method of valuation.

SECTION 6. Employment of Custodian. The Corporation shall place and
maintain its securities and similar investments in the custody of one or more
custodians meeting the requirements of the Investment Company Act of 1940 or
may serve as its own custodian but only in accordance with such rules and
regulations or orders as the Securities and Exchange Commission may from time
to time prescribe for the protection of investors. Securities held by a
custodian may be registered in the name of the Corporation, including the
designation of the particular class or sub-class to which such assets belong,
or any such custodian, or the nominee of either of them. Subject to such
rules, regulations, and orders as the Commission may adopt as necessary or
appropriate for the protection of investors, the Corporation or any custodian,
with the consent of the Corporation, may deposit all or any part of the
securities owned by the Corporation in a system for the central handling of
securities, pursuant to which system all securities of a particular class or
sub-class of any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical delivery of
such securities.

ARTICLE VII

Sundry Provisions

SECTION 1. Books and Records. The Corporation shall keep correct
and complete books and records of its accounts and transactions and minutes of
<PAGE>
the proceedings of its stockholders and Board of Directors and of any executive
or other committee when exercising any of the powers of the Board of Directors.
The books and records of a Corporation may be in written form or in any other
form which can be converted within a reasonable time into written form for
visual inspection. Minutes shall be recorded in written form but may be
maintained in the form of a reproduction. The original or a certified copy of
these By-Laws shall be kept at the principal office of the Corporation.

SECTION 2. Corporate Seal. The Board of Directors shall provide a
suitable seal, bearing the name of the Corporation, which shall be in the
charge of the Secretary. The Board of Directors may authorize one or more
duplicate seals and provide for the custody thereof. If the Corporation is
required to place its corporate seal to a document, it is sufficient to meet
the requirement of any law, rule or regulation relating to a corporate seal to
place the word "Seal" adjacent to the signature of the person authorized to
sign the document on behalf of the Corporation.

SECTION 3. Bonds. The Board of Directors may require any officer,
agent or employee of the Corporation to give a bond to the Corporation,
conditioned upon the faithful discharge of his duties, with one or more
sureties and in such amount as may be satisfactory to the Board of Directors.

SECTION 4. Voting Shares in Other Corporations. Shares of other
corporations or associations, registered in the name of the Corporation, may be
voted by the President, a Vice President, or a proxy appointed by either of
them. The Board of Directors, however, may by resolution appoint some other
person to vote such shares, in which case such person shall be entitled to vote
such shares upon the production of a certified copy of such resolution.

SECTION 5. Mail. Any notice or other document which is required by
these By-Laws to be mailed shall be deposited in the United States mails,
postage prepaid.

SECTION 6. Execution of Documents. A person who holds more than one
office in the Corporation may not act in more than one capacity to execute,
acknowledge or verify an instrument required by law to be executed,
acknowledged or verified by more than one officer.

SECTION 7. Amendments. Subject to the special provisions of Article
II, Section 2, (i) any and all provisions of these By-Laws may be altered or
repealed and new by-laws may be adopted at any annual meeting of the
stockholders, or at any special meeting called for that purpose, and (ii) the
Board of Directors shall have the power, at any regular or special meeting
thereof, to make and adopt new by-laws, or to amend, alter or repeal any of the
By-Laws of the Corporation.

ADOPTED: December __, 1995

GLOBAL CUSTODY AGREEMENT

This AGREEMENT is effective ______________, 199__, and is between

THE CHASE MANHATTAN BANK, N.A. (the "Bank") and

_____________________________________ (the "Customer").

1. Customer Accounts.

The Bank agrees to establish and maintain the following accounts
("Accounts"):

(a) A custody account in the name of the Customer ("Custody
Account") for any and all stocks, shares, bonds, debentures, notes,
mortgages or other obligations for the payment of money, bullion, coin and
any certificates, receipts, warrants or other instruments representing
rights to receive, purchase or subscribe for the same or evidencing or
representing any other rights or interests therein and other similar
property whether certificated or uncertified as may be received by the
Bank or its subcustodian (as defined in Section 3) for the account of the
Customer ("Securities"); and

(b) A deposit account in the name of the Customer ("Deposit
Account") for any and all cash in any currency received by the Bank or its
Subcustodian for the account of the Customer, which cash shall not be
subject to withdrawal by draft or check.

The Customer warrants its authority to: 1) deposit the cash and
Securities ("Assets") received in the Accounts and 2) give Instructions (as
defined in Section 11) concerning the Accounts. The Bank may deliver
securities of the same class in place of those deposited in the Custody
Account.

Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.

2. Maintenance of Securities and Cash at Bank and Subcustodian Locations.

Unless Instructions specifically require another location acceptable
to the Bank:

(a) Securities will be held in the country or other jurisdiction in
which the principal trading market for such Securities is located, where
such Securities are to be presented for payment or where such Securities
are acquired; and

(b) Cash will be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
<PAGE>
Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular currency.
To the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
the Customer with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Customer may direct, if acceptable to the Bank.

If the Customer wishes to have any of its Assets held in the custody
of an institution other than the established Subcustodians as deemed in Section
3 (or their securities depositories), such arrangement must be authorized by a
written agreement, signed by the Bank and the Customer.

3. Subcustodians and Securities Depositories.

The Bank may act under this Agreement through the subcustodians
listed in Schedule A of this Agreement with which the Bank has entered into
subcustodial agreements ("Subcustodians"). The Customer authorizes the Bank to
hold Assets in the Accounts in accounts which the Bank has established with one
or more of its branches or Subcustodians. The Bank and Subcustodians are
authorized to hold any of the Securities in their account with any securities
depository in which they participate.

The Bank reserves the right to add new, replace or remove
Subcustodians. The Customer will be given reasonable notice by the Bank of any
amendment to Schedule A. Upon request by the Customer, the Bank will identify
the name, address and principal place of business of any Subcustodian of the
Customer's Assets and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such Subcustodian.

4. Use of Subcustodian.

(a) The Bank will identify the Assets on its books as belonging to
the Customer.

(b) A Subcustodian will hold such Assets together with assets
belonging to other customers of the Bank in accounts identified on such
Subcustodian's books as special custody accounts for the exclusive benefit of
customers of the Bank.

(c) Any Assets in the Accounts held by a Subcustodian will be
subject only to the instructions of the Bank or its agent. Any Securities held
in a securities depository for the account of a Subcustodian will be subject
only to the instructions of such Subcustodian.

(d) Any agreement the Bank enters into with a Subcustodian for
holding its customer's assets shall provide that such assets will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of such Subcustodian except for safe custody or administration, and that
the beneficial ownership of such assets will be freely transferable without the
payment of money or value other than for safe custody or administration. The
foregoing shall not apply to the extent of any special agreement or arrangement
made by the Customer with any particular Subcustodian.
<PAGE>
5. Deposit Account Transactions.

(a) The Bank or its Subcustodians will make payments from the
Deposit Account upon receipt of Instructions which include all information
required by the Bank.

(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, the Bank, in its
discretion, may advance the Customer such excess amount which shall be deemed a
loan payable on demand, bearing interest at the rate customarily charged by the
Bank on similar loans.

(c) If the Bank credits the Deposit Account on a payable date, or at
any time prior to actual collection and reconciliation to the Deposit Account,
with interest, dividends, redemptions or any other amount due, the Customer
will promptly return any such amount upon oral or written notification: (i)
that such amount has not been received in the ordinary course of business or
(ii) that such amount was incorrectly credited. If the Customer does not
promptly return any amount upon such notification, the Bank shall be entitled,
upon oral or written notification to the Customer, to reverse such credit by
debiting the Deposit Account for the amount previously credited. The Bank or
its Subcustodian shall have no duty or obligation to institute legal
proceedings, file a claim or a proof of claim in any insolvency proceeding or
take any other action with respect to the collection of such amount, but may
act for the Customer upon Instructions after consultation with the Customer.

6. Custody Account Transactions.

(a) Securities will be transferred, exchanged or delivered by the
Bank or its Subcustodian upon receipt by the Bank of Instructions which include
all information required by the Bank. Settlement and payment for Securities
received for, and delivery of Securities out of, the Custody Account may be
made in accordance with the customary or established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the action occurs, including, without limitation, delivery of Securities
to a purchaser, dealer or their agents against a receipt with the expectation
of receiving later payment and free delivery. Delivery of Securities out of
the Custody Account may also be made in any manner specifically required by
Instructions acceptable to the Bank.

(b) The Bank, in its discretion, may credit or debit the Accounts on
a contractual settlement date with cash or Securities with respect to any sale,
exchange or purchase of Securities. Otherwise, such transactions will be
credited or debited to the Accounts on the date cash or Securities are actually
received by the Bank and reconciled to the Account.

(i) The Bank may reverse credits or debits made to the
Accounts in its discretion if the related transaction fails to settle
within a reasonable period, determined by the Bank in its discretion,
after the contractual settlement date for the related transaction.

(ii) If any Securities delivered pursuant to this Section 6
are returned by the recipient thereof, the Bank may reverse the
credits and debits of the particular transaction at any time.
<PAGE>
7. Actions of the Bank.

The Bank shall follow Instructions received regarding assets held in
the Accounts. However, until it receives Instructions to the contrary, the
Bank will:

(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items
which call for payment upon presentation, to the extent that the Bank or
Subcustodian is actually aware of such opportunities.

(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.

(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or any
Subcustodian.

(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.

The Bank will send the Customer an advice or notification of any
transfers of Assets to or from the Accounts. Such statements, advices or
notifications shall indicate the identity of the entity having custody of the
Assets. Unless the Customer sends the Bank a written exception or objection to
any Bank statement within sixty (60) days of receipt, the Customer shall be
deemed to have approved such statement. In such event, or where the Customer
has otherwise approved any such statement, the Bank shall, to the extent
permitted by law, be released, relieved and discharged with respect to all
matters set forth in such statement or reasonably implied therefrom as though
it had been settled by the decree of a court of competent jurisdiction in an
action where the Customer and all persons having or claiming an interest in the
Customer or the Customer's Accounts were parties.

All collections of funds or other property paid or distributed in
respect of Securities in the Custody Account shall be made at the risk of the
Customer. The Bank shall have no liability for any loss occasioned by delay in
the actual receipt of notice by the Bank or by its Subcustodians of any
payment, redemption or other transaction regarding Securities in the Custody
Account in respect of which the Bank has agreed to take any action under this
Agreement.

8. Corporate Actions; Proxies; Tax Reclaims.

a. Corporate Actions. Whenever the Bank receives information
concerning the Securities which requires discretionary action by the beneficial
owner of the Securities (other than a proxy), such as subscription rights,
bonus issues, stock repurchase plans and rights offerings, or legal notices or
other material intended to be transmitted to securities holders ("Corporate
Actions"), the Bank will give the Customer notice of such Corporate Actions to
the extent that the Bank's central corporate actions department has actual
knowledge of a Corporate Action in time to notify its customers.
<PAGE>
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank will endeavor to obtain
Instructions from the Customer or its Authorized Person, but if Instructions
are not received in time for the Bank to take timely action, or actual notice
of such Corporate Action was received too late to seek Instructions, the Bank
is authorized to sell such rights entitlement or fractional interest and to
credit the Deposit Account with the proceeds or take any other action it deems,
in good faith, to be appropriate in which case it shall be held harmless for
any such action.

b. Proxy Voting. The Bank will deliver proxies to the Customer or
its designated agent pursuant to special arrangements which may have been
agreed to in writing. Such proxies shall be executed in the appropriate
nominee name relating to Securities in the Custody Account registered in the
name of such nominee but without indicating the manner in which such proxies
are to be voted; and where bearer Securities are involved, proxies will be
delivered in accordance with Instructions. Proxy voting services may be
provided by the Bank or, in whole or in part, by one or more third parties
appointed by the Bank (which may be affiliates of the Bank); provided that the
Bank shall be liable for the performance of any such third party to the same
extent as the Bank would have been if it performed such services itself.

c. Tax Reclaims. (i) Subject to the provisions hereof, the Bank
will apply for a reduction of withholding tax and any refund of any tax paid or
tax credits which apply in each applicable market in respect of income payments
on Securities for the benefit of the Customer which the Bank believes may be
available to such Customer.

(ii) The provision of tax reclaim services by the Bank is
conditional upon the Bank receiving from the beneficial owner of Securities (A)
a declaration of its identity and place of residence and (B) certain other
documentation (pro forma copies of which are available from the Bank). The
Customer acknowledges that, if the Bank does not receive such declarations,
documentation and information, additional United Kingdom taxation will be
deducted from all income received in respect of Securities issued outside the
United Kingdom and that U.S. non-resident alien tax or U.S. backup withholding
tax will be deducted from U.S. source income. The Customer shall provide to
the Bank such documentation and information as it may require in connection
with taxation, and warrants that, when given, this information shall be true
and correct in every respect, not misleading in any way, and contain all
material information. The Customer undertakes to notify the Bank immediately
if any such information requires updating or amendment.

(iii) The Bank shall not be liable to the Customer or any third
party for any tax, fines or penalties payable by the Bank or the Customer, and
shall be indemnified accordingly, whether these result from the inaccurate
completion of documents by the Customer or any third party, or as a result of
the provision to the Bank or any third parry of inaccurate or misleading
information or the withholding of material information by the Customer or any
other third party, or as a result of any delay of any revenue authority or any
other matter beyond the control of the Bank.

(iv) The Customer confirms that the Bank is authorized to deduct
from any cash received or credited to the Cash Account any taxes or levies
required by any revenue or governmental authority for whatever reason in
respect of the Securities or Cash Accounts.
<PAGE>
(v) The Bank shall perform tax reclaim services only with respect
to taxation levied by the revenue authorities of the countries notified to the
Customer from time to time and the Bank may, by notification in writing, at its
absolute discretion, supplement or amend the markets in which the tax reclaim
services are offered. Other than as expressly provided in this sub-clause, the
Bank shall have no responsibility with regard to the Customer's tax position or
status in any jurisdiction.

(vi) The Customer confirms that the Bank is authorised to disclose
any information requested by any revenue authority or any governmental body in
relation to the Customer or the Securities and/or Cash held for the Customer.

(vii) Tax reclaim services may be provided by the Bank or, in whole
or in part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank); provided that the Bank shall be liable for the
performance of any such third party to the same extent as the Bank would have
been if it performed such services itself.

9. Nominees.

Securities which are ordinarily held in registered form may be
registered in a nominee name of the Bank, Subcustodian or securities
depository, as the case may be. The Bank may without notice to the Customer
cause any such Securities to cease to be registered in the name of any such
nominee and to be registered in the name of the Customer. In the event that
any Securities registered in a nominee name are called for partial redemption
by the issuer, the Bank may allot the called portion to the respective
beneficial holders of such class of security in any manner the Bank deems to be
fair and equitable. The Customer agrees to hold the Bank, Subcustodians, and
their respective nominees harmless from any liability arising directly or
indirectly from their status as a mere record holder of Securities in the
Custody Account.

10. Authorized Persons.

As used in this Agreement, the term "Authorized Person" means
employees or agents including investment managers as have been designated by
written notice from the Customer or its designated agent to act on behalf of
the Customer under this Agreement. Such persons shall continue to be
Authorized Persons until such time as the Bank receives Instructions from the
Customer or its designated agent that any such employee or agent is no longer
an Authorized Person.

11. Instructions.

The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank believes in good faith to have been given
by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.
<PAGE>
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Customer will hold
the Bank harmless for the failure of an Authorized Person to send such
confirmation in writing, the failure of such confirmation to conform to the
telephone instructions received or the Bank's failure to produce such
confirmation at any subsequent time. The Bank may electronically record any
Instructions given by telephone, and any other telephone discussions with
respect to the Custody Account. The Customer shall be responsible for
safeguarding any testkeys, identification codes or other security devices which
the Bank shall make available to the Customer or its Authorized Persons.

12. Standard of Care; Liabilities.

(a) The Bank shall be responsible for the performance of only such
duties as are set forth in this Agreement or expressly contained in
Instructions which are consistent with the provisions of this Agreement as
follows:

(i) The Bank will use reasonable care with respect to its
obligations under this Agreement and the safekeeping of Assets. The Bank
shall be liable to the Customer for any loss which shall occur as the
result of the failure of a Subcustodian to exercise reasonable care with
respect to the safekeeping of such Assets to the same extent that the Bank
would be liable to the Customer if the Bank were holding such Assets in
New York. In the event of any loss to the Customer by reason of the
failure of the Bank or its Subcustodian to utilize reasonable care, the
Bank shall be liable to the Customer only to the extent of the Customer's
direct damages, to be determined based on the market value of the property
which is the subject of the loss at the date of discovery of such loss and
without reference to any special conditions or circumstances. The Bank
will not be responsible for the insolvency of any Subcustodian which is
not a branch or affiliate of Bank.

(ii) The Bank will not be responsible for any act, omission,
default or the solvency of any broker or agent which it or a Subcustodian
appoints unless such appointment was made negligently or in bad faith.

(iii) The Bank shall be indemnified by, and without liability to the
Customer for any action taken or omitted by the Bank whether pursuant to
Instructions or otherwise with the scope of this Agreement if such act or
omission was in good faith, without negligence. In performing its
obligations under this Agreement, the Bank may rely on the genuineness of
any document which it believes in good faith to have been validly
executed.

(iv) The Customer agrees to pay for and hold the Bank harmless from
any liability or loss resulting from the imposition or assessment of any
taxes or other governmental charges, and any related expenses with respect
to income from or Assets in the Accounts.

(v) The Bank shall be entitled to rely, and may act, upon the
advice of counsel (who may be counsel for the Customer) on all matters and
shall be without liability for any action reasonably taken or omitted
pursuant to such advice.
<PAGE>
(vi) The Bank need not maintain any insurance for the benefit of
the Customer.

(vii) Without limiting the foregoing, the Bank shall not be liable
for any loss which results from: 1) the general risk of investing, or 2)
investing or holding Assets in a particular country including, but not
limited to, losses resulting from nationalization, expropriation or other
governmental actions; regulation of the banking or securities industry;
currency restrictions, devaluations or fluctuations; and market conditions
which prevent the orderly execution of securities transactions or affect
the value of Assets.

(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear
fusion, fission or radiation, or acts of God.

(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no duty or
responsibility to:

(i) question Instructions or make any suggestions to the Customer
or an Authorized Person regarding such Instructions;

(ii) supervise or make recommendations with respect to investments
or the retention of Securities;

(iii) advise the Customer or an Authorized Person regarding any
default in the payment of principal or income of any security other than
as provided in Section 5(c) of this Agreement;

(iv) evaluate or report to the Customer or an Authorized Person
regarding the financial condition of any broker, agent or other party to
which Securities are delivered or payments are made pursuant to this
Agreement;

(v) review or reconcile trade confirmations received from brokers.
The Customer or its Authorized Persons (as defined in Section 10) issuing
Instructions shall bear any responsibility to review such confirmations
against Instructions issued to and statements issued by the Bank.

(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates may have a
material interest in a transaction, or circumstances are such that the Bank may
have a potential conflict of duty or interest including the fact that the Bank
or any of its affiliates may provide brokerage services to other customers, act
as financial advisor to the issuer of Securities, act as a lender to the issuer
of Securities, act in the same transaction as agent for more than one customer,
have a material interest in the issue of Securities, or earn profits from any
of the activities listed herein.

13. Fees and Expenses.

The Customer agrees to pay the Bank for its services under this
Agreement such amount as may be agreed upon in writing, together with the
Bank's reasonable out-of-pocket or incidental expenses, including, but not
<PAGE>
limited to, legal fees. The Bank shall have a lien on and is authorized to
charge any Accounts of the Customer for any amount owing to the Bank under any
provision of this Agreement.

14. Miscellaneous.

(a) Foreign Exchange Transactions. To facilitate the administration
of the Customer's trading and investment activity, the Bank is authorized to
enter into spot or forward foreign exchange contracts with the Customer or an
Authorized Person for the Customer and may also provide foreign exchange
through its subsidiaries, affiliates or Subcustodians. Instructions, including
standing instructions, may be issued with respect to such contracts but the
Bank may establish rules or limitations concerning any foreign exchange
facility made available. In all cases where the Bank, its subsidiaries,
affiliates or Subcustodians enter into a foreign exchange contract related to
Accounts, the terms and conditions of the then current foreign exchange
contract of the Bank, its subsidiary, affiliate or Subcustodian and, to the
extent not inconsistent, this Agreement shall apply to such transaction.

(b) Certification of Residency, etc. The Customer certifies that it
is a resident of the United States and
agrees to notify the Bank of any changes in residency. The Bank may rely upon
this certification or the certification of such other facts as may be required
to administer the Bank's obligations under this Agreement. The Customer will
indemnify the Bank against all losses, liability, claims or demands arising
directly or indirectly from any such certifications.

(c) Access to Records. The Bank shall allow the Customer's
independent public accountant reasonable
access to the records of the Bank relating to the Assets as is required in
connection with their examination of books and records pertaining to the
Customer's affairs. Subject to restrictions under applicable law, the Bank
shall also obtain an undertaking to permit the Customer's independent public
accountants reasonable access to the records of any Subcustodian which has
physical possession of any Assets as may be required in connection with the
examination of the Customer's books and records.

(d) Governing Law; Successors and Assigns. This Agreement shall be
governed by the laws of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Bank.

(e) Entire Agreements Applicable Riders. Customer represents that
the Assets deposited in the Accounts are (Check one):

___ Employee Benefit Plan or other assets subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");

___ Mutual Fund assets subject to certain Securities and Exchange
Commission ("SEC") rules and regulations;

___ Neither of the above.
<PAGE>
This Agreement consists exclusively of this document together with
Schedule A, Exhibits I - ________ and the following Rider(s) [Check
applicable rider(s)]:

___ ERISA

___ MUTUAL FUND

___ SPECIAL TERMS AND CONDITIONS

There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.

(f) Severability. In the event that one or more provisions of this
Agreement are held invalid, illegal or unenforceable in any respect on the
basis of any particular circumstances or in any jurisdiction, the validity,
legality and enforceability of such provision or provisions under other
circumstances or in other jurisdictions and of the remaining provisions will
not in any way be affected or unpaired.

(g) Waiver. Except as otherwise provided in this Agreement, no
failure or delay on the part of either party in exercising any power or right
under this Agreement operates as a waiver, nor does any single or partial
exercise of any power or right preclude any other or further exercise, or the
exercise of any other power or right. No waiver by a party of any provision of
this Agreement, or waiver of any breach or default, is effective unless in
writing and signed by the party against whom the waiver is to be enforced.

(h) Notices. All notices under this Agreement shall be effective
when actually received. Any notices or other communications which may be
required under this Agreement are to be sent to the parties at the following
addresses or such other addresses as may subsequently be given to the other
party in writing:

Bank: The Chase Manhattan Bank, N.A.
4 Chase MetroTech Center
Brooklyn, NY 11245
Attention: Global Custody Division

or telex: _________________________

Customer: _________________________

_________________________

or telex:

(i) Termination. This Agreement may be terminated by the Customer
or the Bank by giving sixty (60) days written notice to the other, provided
that such notice to the Bank shall specify the names of the persons to whom the
Bank shall deliver the Assets in the Accounts. If notice of termination is
given by the Bank, the Customer shall, within sixty (60) days following receipt
<PAGE>
of the notice, deliver to the Bank Instructions specifying the names of the
persons to whom the Bank shall deliver the Assets. In either case the Bank
will deliver the Assets to the persons so specified, after deducting any
amounts which the Bank determines in good faith to be owed to it under Section
13. If within sixty (60) days following receipt of a notice of termination by
the Bank, the Bank does not receive Instructions from the Customer specifying
the names of the persons to whom the Bank shall deliver the Assets, the Bank,
at its election, may deliver the Assets to a bank or trust company doing
business in the State of New York to be held and disposed of pursuant to the
provisions of this Agreement, or to Authorized Persons, or may continue to hold
the Assets until Instructions are provided to the Bank.

CUSTOMER

By:______________________________
Title

THE CHASE MANHATTAN BANK, N.A.

By:______________________________
Title

20576
<PAGE>
STATE OF )
: ss.
COUNTY OF )

On this day of 19 , before me personally came
to me known, who being by me duly sworn, did depose and say that
he/she resides in at that he/she is of
, the entity described in and which executed the foregoing
instrument; that he/she knows the seal of said entity, that the seal affixed to
said instrument is such seal, that it was so affixed by order of said entity,
and that he/she signed his/her name thereto by like order.

_________________________

Sworn to before me this _____

day of ________, 19__.

_______________

Notary
<PAGE>
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )

On this day of 19 , before me personally came
, to me known, who being by me duly sworn, did depose and say that he/she
resides in at ; that he/she is a Vice
President of THE CHASE MANHATTAN BANK, (National Association), the corporation
described in and which executed the foregoing instrument; that he/she knows the
seal of said corporation, that the seal affixed to said instrument is such
corporate seal, that it was so affixed by order of the Board of Directors of
said corporation, and that he/she signed his/her name thereto by like order.

_________________________

Sworn to before me this _____

day of ________, 19__.

_______________

Notary

20576
<PAGE>
Mutual Fund Rider to Global Custody Agreement

Between The Chase Manhattan Bank, N.A. and

____________________

________, effective ____

Customer represents that the Assets being placed in the Bank's

custody are subject to the Investment Company Act of 1940 (the Act), as the

same may be amended from time to time.

Except to the extent that the Bank has specifically agreed to comply

with a condition of a rule, regulation, interpretation promulgated by or under

the authority of the SEC or the Exemptive Order applicable to accounts of this

nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,

November 20, 1981), as amended, or unless the Bank has otherwise specifically

agreed, the Customer shall be solely responsible to assure that the maintenance

of Assets under this Agreement complies with such rules, regulations,

interpretations or exemptive order promulgated by or under the authority of the

Securities Exchange Commission.

The following modifications are made to the Agreement:

Section 3. Subcustodians and Securities Depositories.

Add the following language to the end of Section 3:

The terms Subcustodian and securities depositories as used in this

Agreement shall mean a branch of a qualified U.S. bank, an eligible

foreign custodian or an eligible foreign securities depository, which

are further defined as follows:
<PAGE>
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as

defined in Rule 17f-5 under the Investment Company Act of 1940;

(b) "eligible foreign custodian" shall mean (i) a banking

institution or trust company incorporated or organized under the laws

of a country other than the United States that is regulated as such

by that country's government or an agency thereof and that has

shareholders' equity in excess of $200 million in U.S. currency (or a

foreign currency equivalent thereof), (ii) a majority owned direct or

indirect subsidiary of a qualified U.S. bank or bank holding company

that is incorporated or organized under the laws of a country other

than the United States and that has shareholders' equity in excess of

$100 million in U.S. currency (or a foreign currency equivalent

thereof), (iii) a banking institution or trust company incorporated

or organized under the laws of a country other than the United States

or a majority owned direct or indirect subsidiary of a qualified U.S.

bank or bank holding company that is incorporated or organized under

the laws of a country other than the United States which has such

other qualifications as shall be specified in Instructions and

approved by the Bank; or (iv) any other entity that shall have been

so qualified by exemptive order, rule or other appropriate action of

the SEC; and

depository or clearing agency, incorporated or organized under the

laws of a country other than the United States, which operates (i)

the central system for handling securities or equivalent book-entries

in that country, or (ii) a transnational system for the central

handling of securities or equivalent book-entries.
<PAGE>
The Customer represents that its Board of Directors has approved each

of the Subcustodians listed in Schedule A to this Agreement and the terms of

the subcustody agreements between the Bank and each Subcustodian, which are

attached as Exhibits I through _____ of Schedule A, and further represents that

its Board has determined that the use of each Subcustodian and the terms of

each subcustody agreement are consistent with the best interests of the Fund(s)

and its (their) shareholders. The Bank will supply the Customer with any

amendment to Schedule A for approval. The Customer has supplied or will supply

the Bank with certified copies of its Board of Directors resolution(s) with

respect to the foregoing prior to placing Assets with any Subcustodian so

approved.

Section 11. Instructions.

Add the following language to the end of Section 11:

Deposit Account Payments and Custody Account Transactions made

pursuant to Section 5 and 6 of this Agreement may be made only for

the purposes listed below. Instructions must specify the purpose for

which any transaction is to be made and Customer shall be solely

responsible to assure that Instructions are in accord with any

limitations or restrictions applicable to the Customer by law or as

may be set forth in its prospectus.

(a) In connection with the purchase or sale of Securities at prices

as confirmed by Instructions;

(b) When Securities are called, redeemed or retired, or otherwise

become payable;
<PAGE>
(c) In exchange for or upon conversion into other securities alone

or other securities and cash pursuant to any plan or merger,

consolidation, reorganization, recapitalization or readjustment;

(d) Upon conversion of Securities pursuant to their terms into other

securities;

(e) Upon exercise of subscription, purchase or other similar rights

represented by Securities;

(f) For the payment of interest, taxes, management or supervisory

fees, distributions or operating expenses;

(g) In connection with any borrowings by the Customer requiring a

pledge of Securities, but only against receipt of amounts borrowed;

(h) In connection with any loans, but only against receipt of

adequate collateral as specified in Instructions which shall reflect

any restrictions applicable to the Customer;

(i) For the purpose of redeeming shares of the capital stock of the

Customer and the delivery to, or the crediting to the account of, the

Bank, its Subcustodian or the Customer's transfer agent, such shares

to be purchased or redeemed;

(j) For the purpose of redeeming in kind shares of the Customer

against delivery to the Bank, its Subcustodian or the Customer's

transfer agent of such shares to be so redeemed;
<PAGE>
(k) For delivery in accordance with the provisions of any agreement

among the Customer, the Bank and a broker-dealer registered under the

Securities Exchange Act of 1934 (the "Exchange Act") and a member of

The National Association of Securities Dealers, Inc. ("NASD"),

relating to compliance with the rules of The Options Clearing

Corporation and of any registered national securities exchange, or of

any similar organization or organizations, regarding escrow or other

arrangements in connection with transactions by the Customer;

(l) For release of Securities to designated brokers under covered

call options, provided, however, that such Securities shall be

released only upon payment to the Bank of monies for the premium due

and a receipt for the Securities which are to be held in escrow.

Upon exercise of the option, or at expiration, the Bank will receive

from brokers the Securities previously deposited. The Bank will act

strictly in accordance with Instructions in the delivery of

Securities to be held in escrow and will have no responsibility or

liability for any such Securities which are not returned promptly

when due other than to make proper request for such return;

(m) For spot or forward foreign exchange transactions to facilitate

security trading, receipt of income from Securities or related

transactions;

(n) For other proper purposes as may be specified in Instructions

issued by an officer of the Customer which shall include a statement

of the purpose for which the delivery or payment is to be made, the

amount of the payment or specific Securities to be delivered, the

name of the person or persons to whom delivery or payment is to be
<PAGE>
made, and a certification that the purpose is a proper purpose under

the instruments governing the Customer; and

(o) Upon the termination of this Agreement as set forth in Section

14(i).

Section 12. Standard of Care; Liabilities.

Add the following subsection (c) to Section 12:

after due inquiry, the established procedures to be followed by each

of its branches, each branch of a qualified U.S. bank, each eligible

foreign custodian and each eligible foreign securities depository

holding the Customer's Securities pursuant to this Agreement afford

protection for such Securities at least equal to that afforded by the

Bank's established procedures with respect to similar securities held

by the Bank and its securities depositories in New York.

Section 14. Access to Records.

Add the following language to the end of Section 14(c):

Upon reasonable request from the Customer, the Bank shall furnish the

Customer such reports (or portions thereof) of the Bank's system of

internal accounting controls applicable to the Bank's duties under

this Agreement. The Bank shall endeavor to obtain and furnish the

Customer with such similar reports as it may reasonably request with
<PAGE>
respect to each Subcustodian and securities depository holding the

Customer's assets.
<PAGE>
GLOBAL CUSTODY AGREEMENT

WITH____________________

DATE____________________

SPECIAL TERMS AND CONDITIONS RIDER
<PAGE>
GLOBAL CUSTODY AGREEMENT

WITH____________________

DATE____________________

DOMESTIC

SPECIAL TERMS AND CONDITIONS RIDER

Domestic Corporate Actions and Proxies

With respect to domestic U.S. and Canadian Securities (the latter if held in

DTC), the following provisions will apply rather than the provisions of Section

8 of the Agreement:

The Bank will send to the Customer or the Authorized Person for a

Custody Account, such proxies (signed in blank, if issued in the name

of the Bank's nominee or the nominee of a central depository) and

communications with respect to Securities in the Custody Account as

call for voting or relate to legal proceedings within a reasonable

time after sufficient copies are received by the Bank for forwarding

to its customers. In addition, the Bank will follow coupon payments,

redemptions, exchanges or similar matters with respect to Securities

in the Custody Account and advise the Customer or the Authorized

Person for such Account of rights issued, tender offers or any other

discretionary rights with respect to such Securities, in each case,

of which the Bank has received notice from the issuer of the

Securities, or as to which notice is published in publications

routinely utilized by the Bank for this purpose.
<PAGE>
Fees

The fees referenced in Section 13 of this Agreement cover only domestic and

euro-dollar holdings. There will be no Schedule A to this Agreement, as there

are no foreign assets in the Accounts.

MUTUAL FUNDS SERVICE AGREEMENT

AGREEMENT made as of ____________, 1995 by and between The Lipper Funds,

Inc. (the "Fund"), a Maryland corporation, and The Chase Manhattan Bank, N.A.

("Chase"), a nationally chartered banking association.

WITNESSETH:

WHEREAS, the Fund is registered as an open-end investment company under

the Investment Company Act of 1940, as amended (the "1940 Act");

WHEREAS, the Fund is comprised of several investment portfolios with

separate investment objectives and policies; and

WHEREAS, the Fund wishes to retain Chase to provide certain fund

administration, fund accounting and transfer agent services with respect to the

Fund, such services to be performed by Chase Global Fund Services Company, an

affiliate of Chase;

NOW, THEREFORE, in consideration of the promises and mutual covenants

herein contained, it is agreed between the parties hereto as follows:

1. APPOINTMENT. The Fund hereby appoints Chase to provide fund

administration, fund accounting and transfer agent services for the Fund,

subject to the supervision of the Board of Directors of the Fund (the "Board"),

for the period and on the terms set forth in this Agreement. Chase accepts

such appointment and agrees to furnish the services herein set forth in return

for the compensation as provided in Paragraph 5 of and Schedule A to this

Agreement.

2. REPRESENTATIONS AND WARRANTIES.

(a) Chase represents and warrants to the Fund that:

(i) Chase is a bank duly organized and existing and in good

standing under the laws of the United States;
<PAGE>
(ii) Chase is duly qualified to carry on its business in the

State of New York;

(iii) Chase is empowered under applicable laws and by its charter

documents and by-laws to enter into and perform this Agreement;

(iv) all requisite corporate proceedings have been taken to

authorize Chase to enter into and perform this Agreement;

(v) Chase has, and will continue to have, access to the

facilities, personnel and equipment required to fully perform its duties and

obligations hereunder,

(vi) no legal or administrative proceedings have been instituted

or threatened which would impair Chase's ability to perform its duties and

obligations under this Agreement; and

(vii) Chase's entrance into this Agreement will not cause a

material breach or be in material conflict with any other agreement or

obligation of Chase or any law or regulation applicable to Chase.

(b) The Fund represents and warrants to Chase that:

(i) the Fund is a corporation, duly organized and existing and

in good standing under the laws of Maryland;

(ii) the Fund is empowered under applicable laws and by its

charter documents and by-laws to enter into and perform this Agreement;

(iii) all requisite proceedings have been taken to authorize the

Fund to enter into and perform this Agreement;

(iv) the Fund is an investment company registered under the 1940

Act;

(v) a registration statement under the Securities Act of 1933,

as amended ("1933 Act") and the 1940 Act on Form N-1A has been filed with the

Securities and Exchange Commission ("SEC") and will be effective and will

remain effective during the term of this Agreement;
<PAGE>
(vi) no legal or administrative proceedings have been instituted

or threatened which would impair the Fund's ability to perform its duties and

obligations under this Agreement; and

(vii) the Fund's entrance into this Agreement will not cause a

material breach or be in material conflict with any other agreement or

obligation of the Fund or any law or regulation applicable to it.

3. DELIVERY OF DOCUMENTS. The Fund will promptly furnish to Chase such

copies, properly certified or authenticated, of contracts, documents and other

related information that Chase may reasonably request or require to properly

discharge its duties. Such documents may include but are not limited to the

following:

(a) Resolutions of the Board authorizing the appointment of Chase to

provide certain fund administration, fund accounting and transfer agency

services to the Fund and approving this Agreement;

(b) The Fund's charter documents;

(d) The Fund's Notification of Registration on Form N-8A under the

1940 Act as filed with the SEC;

(e) The Fund's registration statement including exhibits, as

amended, on Form N-1A (the "Registration Statement") under the 1933 Act and the

1940 Act, as filed with the SEC.

(f) Copies of the Investment Advisory Agreements between the Fund

and its investment advisers (the "Advisory Agreements");

(g) Auditors' reports;

(h) The Fund's Prospectus(es) and Statement(s) of Additional

Information relating to all investment portfolios of the Fund and all

amendments and supplements thereto (such Prospectus(es) and Statement(s) of

Additional Information and supplements thereto, as presently in effect and as
<PAGE>
from time to time hereafter amended and supplemented, herein called the

"Prospectuses"); and

(i) Such other agreements as the Fund may enter into from time to

time including securities lending agreements, futures and commodities account

agreements, brokerage agreements, and options agreements.

4. SERVICES PROVIDED.

(a) Chase will provide the following services subject to the

control, direction and supervision of the Board and in compliance with the

objectives, policies and limitations set forth in the Fund's Registration

Statement, charter document and by-laws; applicable laws and regulations; and

all resolutions and policies implemented by the Board:

(i) Fund Administration

(ii) Fund Accounting

(iii) Transfer Agency

A detailed description of each of the above services is contained in Schedules

B, C and D respectively, to this Agreement.

(iv) Dividend Disbursing. Chase will serve as the Fund's

dividend disbursing agent. Chase will prepare and mail checks, place wire

transfers and credit income and capital gain payments to shareholders. The

Fund will advise Chase of the declaration of any dividend or distribution and

the record and payable date thereof at least five (5) days prior to the record

date. Chase will, on or before the payment date of any such dividend or

distribution, notify the Fund's Custodian of the estimated amount required to

pay any portion of such dividend or distribution payable in cash, and on or

before the payment date of such distribution the Fund will instruct its

Custodian to make available to Chase sufficient funds for the cash amount to be

paid out. If a shareholder is entitled to receive additional shares by virtue

of any such distribution or dividend, appropriate credits will be made to each

shareholder's account.
<PAGE>
(b) Chase will also:

(i) provide office facilities with respect to the provision of

the services contemplated herein (which may be in the offices of Chase or a

corporate affiliate of Chase);

(ii) provide the services of individuals to serve as officers of

the Fund who will be designated by Chase and, subject to Board approval,

elected by the Board;

(iii) provide or otherwise obtain personnel sufficient, in

Chase's reasonable discretion, for provision of the services contemplated

herein;

(iv) furnish equipment and other materials, which Chase, in its

reasonable discretion, believes axe necessary or desirable for provision of the

services contemplated herein; and

(v) keep records relating to the services provided hereunder in

such form and manner as set forth in Schedules B, C and D as Chase may

otherwise deem appropriate or advisable, all in accordance with the 1940 Act.

To the extent required by Section 31 of the 1940 Act and the rules thereunder,

Chase agrees that all such records prepared or maintained relating to the

services provided hereunder are the property of the Fund and will be preserved

for the periods prescribed under Rule 31a-2 under the 1940 Act, and made

available in accordance with such Section and rules. Chase further agrees to

surrender promptly to the Fund upon its request and cease to retain in its

records and files those records and documents created and maintained pursuant

to this Agreement.

5. FEES; EXPENSES; EXPENSE REIMBURSEMENT.

(a) As compensation for the services rendered to the Fund pursuant

to this Agreement the Fund shall pay Chase monthly fees determined as set forth

in Schedule A to this Agreement. Upon any termination of this Agreement before

the end of any month, the fee for the part of the month before such termination
<PAGE>
shall be prorated according to the proportion which such part bears to the full

monthly period and shall be payable upon the date of termination of this

Agreement.

(b) For the purpose of determining fees calculated as a function of

the Fund's assets, the value of the Fund's assets and net assets shall be

computed as required by its currently effective Prospectus, generally accepted

accounting principles, and resolutions of the Board.

associate with such person or persons as may be appropriate to assist Chase in

the performance of this Agreement. Such person or persons may be officers and

employees who are employed or designated as officers by both Chase and the

Fund. The compensation of such person or persons for such employment shall be

paid by Chase and no obligation will be incurred by or on behalf of the Fund in

such respect.

(d) The Fund may request additional services, additional processing,

or special reports. The Fund shall submit such requests in writing together

with such specifications and requirements documentation as may be reasonably

required by Chase. If Chase elects to provide such services or arrange

for their provision, it shall be entitled to additional fees and expenses at an

agreed upon rates and charges.

(e) Chase will bear all of its own expenses in connection with the

performance of the services under this Agreement except as otherwise expressly

provided herein. The Fund agrees to promptly reimburse Chase for any equipment

and supplies specially ordered by the Fund through Chase and for any other

expenses not contemplated by this Agreement that Chase may incur on the Fund's

behalf at the Fund's written request or as consented to in writing by the Fund.

The Fund will bear its own expenses associated with operation of the Fund,

including, but not limited to: taxes; interest; brokerage fees and

commissions; salaries and fees of officers and directors of the Fund who are
<PAGE>
not officers, directors, shareholders or employees of Chase or its affiliates,

or the Fund's investment advisers or distributor; SEC and state Blue Sky

registration and qualification fees, levies, fines and other charges; EDGAR

filing fees; advisory fees; charges and expenses of pricing services, including

back up to the Fund's primary pricing services; independent public accountants

and custodians; insurance premiums for the Fund's insurance coverages,

including fidelity bond premiums; legal expenses; costs of maintenance of

corporate existence; expenses of typesetting and printing of prospectuses for

regulatory purposes and for distribution to current shareholders of the Fund;

expenses of typesetting and printing shareholders' reports and proxy statements

and materials; expenses incurred in the transmission of filings (e.g. N-SARs,

Registration Statements and proxy materials) to the SEC via EDGAR; costs and

expenses of Fund stationery and forms; costs and expenses of special telephone

and data lines and devices; trade association dues and expenses; expenses

associated with off-site storage of Fund records, and any extraordinary

expenses and other customary Fund expenses.

(f) All fees, out-of-pocket expenses, or additional charges of Chase

shall be billed on a monthly basis and shall be due and payable within 15 days

of receipt of the invoice.

Chase will render, after the close of each month in which services

have been furnished, a statement reflecting all of the charges for such month.

Charges remaining unpaid after thirty (30) days (with the exception of specific

amounts which may be contested in good faith by the Fund) shall bear interest

in finance charges equivalent to, in the aggregate, the prime rate (as

published by Chase) and all reasonable costs and expenses of effecting

collection of any such sums, including reasonable attorney's fees, shall be

paid by the Fund to Chase.

In the event that the Fund is more than sixty (60) days delinquent in

its payments of monthly billings in connection with this Agreement (with the
<PAGE>
exception of specific amounts which may be contested in good faith by the

Fund), this Agreement may be terminated upon thirty (30) days' written notice

to the Fund by Chase. The Fund must notify Chase in writing of any contested

amounts within thirty (30) days of receipt of a billing for such amounts.

Disputed amounts are not due and payable while they are being investigated.

The fees set forth in Schedule A may be changed from time to time upon prior

written agreement of the parties.

6. PROPRIETARY AND CONFIDENTIAL INFORMATION. Chase agrees on behalf of

itself and its affiliates and employees of Chase and its affiliates, excepted

as required by law, to treat confidentially and as proprietary information of

the Fund, all records and other information relating to the Fund and its prior,

present or potential shareholders, and to not disclose the same to any person

or use such records and information for any purpose other than performance of

Chase's responsibilities and duties hereunder, except at the request or with

the prior written consent of the Fund.

7. DUTIES, RESPONSIBILITIES, AND LIMITATION OF LIABILITY.

(a) In the performance of its duties hereunder, Chase shall be

obligated to act in good faith and use its best judgment in performing the

services provided for under this Agreement. In performing its services

hereunder, Chase shall be entitled to rely on any oral or written instructions,

notices or other communications, including electronic transmissions, from the

Fund and its officers and directors, agents and other service providers which

Chase reasonably believes to be genuine, valid and authorized. Chase shall

also be entitled to consult with and rely in good faith on the advice and

opinions of outside legal counsel retained by the Fund, as necessary or

appropriate.

(b) Chase shall not be liable for any error of judgment or mistake

of law or for any loss or expense suffered by the Fund, in connection with the

matters to which this Agreement relates, except for a loss or expense caused by
<PAGE>
or resulting from willful misfeasance, bad faith or negligence on Chase's (or

any agent or subcontractor of Chase's) part in the performance of its duties or

from reckless disregard by Chase (or any agent or subcontractor of Chase's) of

Chase's obligations and duties under this Agreement. In the event of any loss

to the Fund by reason of Chase (or any agent or subcontractor of Chase) to

perform the services provided under this Agreement, Chase shall be liable to

the Fund only to the extent of the Fund's direct damages to be determined based

on the market value of the loss at the date of discovery and without reference

to any special or consequential damages. Notwithstanding the foregoing, Chase

shall not be liable to the Fund for any loss or expense caused by or resulting

from any agent or subcontractor used by Chase at the request of the Fund. Any

person, even though also an officer, director,

partner, employee or agent of Chase, who may be or become an officer, director,

partner, employee or agent of the Fund, shall be deemed when rendering services

to the Fund or acting on any business of the Fund (other than services or

business in connection with or related to Chase's duties hereunder) to be

rendering such services to or acting solely for the Fund and not as an officer,

director, partner, employee or agent or person under the control or direction

of Chase even though paid by Chase.

for, and the Fund shall indemnify and hold Chase harmless from and against, any

and all losses, damages, costs, reasonable attorneys' fees and expenses,

payments, expenses and liabilities arising out of or attributable to:

(i) all actions of Chase or its officers or agents required to

be taken pursuant to this Agreement;

(ii) the reasonable reliance on or use by Chase or its officers

or agents of information, records, or documents which are received by Chase or

its officers or agents and furnished to it or them by or on behalf of the Fund,
<PAGE>
and which have been prepared or maintained by the Fund or any third party on

behalf of the Fund;

(iii) the Fund's refusal or failure to comply with the terms of

this Agreement or the Fund's lack of good faith or in actions, or lack thereof,

involving negligence or willful misfeasance;

(iv) the breach in any material respect of any representation

or warranty of the Fund hereunder;

(v) the taping or other form of recording of telephone

conversations or other forms of electronic communications with investors and

shareholders of the Fund, or reliance by Chase on telephone or other electronic

instructions of any person acting on behalf of a Fund shareholder or

shareholder account for which telephone or other electronic services have been

authorized, provided that Chase employed reasonable procedures to confirm that

Chase reasonably believes such instructions are genuine;

(vi) the reliance on or the carrying out by Chase or its

officers or agents of any proper instructions reasonably believed to be duly

authorized, or requests of the Fund or recognition by Chase of any share

certificates which are reasonably believed to bear the proper signatures of the

officers of the Fund and the proper countersignature of any transfer agent or

registrar of the Fund;

(vii) any delays, inaccuracies, errors in or omission from date

provided to Chase by the Fund, any of its affiliates, agents subcontractors or

pricing services;

(viii) the offer or sale of shares by the Fund in violation of any

requirement under the Federal securities laws or regulations or the securities

laws or regulations of any state, or in violation of any stop order or other

determination or ruling by any Federal agency or any state agency with respect

to the offer or sale of such shares in such state (1) resulting from

activities, actions, or omissions by the Fund or its other service providers
<PAGE>
and agents, or (2) existing or arising out of activities, actions or omissions

by or on behalf of the Fund prior to the effective date of this Agreement;

(ix) any failure of the Fund's registration statement to comply

in any material respect with the 1933 Act and the 1940 Act (including the rules

and regulations thereunder) and any other applicable laws, or any untrue

statement of a material fact or omission of a material fact necessary to make

any statement therein not misleading in the Fund's prospectus; and

(x) actions taken by the Fund, its investment advisers, and its

distributor in violation of applicable securities, tax, commodities and other

laws, rules and regulations.

Notwithstanding the preceding sentence or anything else contained in

this Agreement, nothing contained herein shall protect or require the

indemnification of Chase for any losses, damages, expenses or liabilities

caused by or resulting from Chase's (or any agent or subcontractor other than

one used by Chase at the request of the Fund) willful misfeasance, bad faith,

negligence or reckless disregard of its obligations and duties hereunder.

8. TERM. This Agreement shall become effective on the date first

hereinabove written. This Agreement may be modified or amended from time to

time by mutual written agreement between the parties hereto. This Agreement

shall continue in effect unless terminated by either party on 60 days' prior

written notice. Upon termination of this Agreement, the Fund shall pay to

Chase such compensation and any out-of-pocket or other reimbursable expenses

which may be due or payable under the terms hereof as of the date of such

termination.

9. NOTICES. Any notice required or permitted hereunder shall be in

writing and shall be deemed to be effective when delivered in person or by

certified mall, return receipt requested, to the parties at the following

addresses (or such other address as a party may specify, by notice to the

other):
<PAGE>
If to the Fund:

Attn: The Lipper Funds, Inc.

101 Park Avenue

New York, NY 10178

Attn: Abraham Biderman

If to Chase :

The Chase Manhattan Bank, N.A.

One Chase Manhattan Plaza

New York, NY 10081

Attention:

Notice shall be effective upon receipt if by mail, on the date of personal

delivery (by private messenger, courier service or otherwise) or upon confirmed

receipt of telex or facsimile, whichever occurs first.

10. ASSIGNABILITY. Except as expressly provided in this Section 10,

neither this Agreement nor any rights or obligation hereunder may be assigned

by either of the parties hereto without the prior consent in writing of the

other party. Chase may, after notice to the Fund, in its own discretion and

without prior consent of the Fund, whenever and on such terms and conditions as

Chase deems necessary or appropriate, delegate or assign its duties and

obligations hereunder to subsidiaries or affiliates of Chase or may subcontract

non-affiliated third parties; provided that Chase, subject to the limitations

set forth in paragraph 7(b), shall remain liable hereunder for any act or

omission of any such entity as if performed by Chase. This Agreement shall be

binding on and shall inure to the benefit of the parties hereto and their

respective successors and permitted assigns. Any purported assignment in

violation of this Agreement shall be void and of no effect.

11. WAIVER. The failure of a party to insist upon strict adherence to

any term of this Agreement on any occasion shall not be considered a waiver nor

shall it deprive such party of the right thereafter to insist upon strict
<PAGE>
adherence to that term or any term of this Agreement. Any waiver must be in

writing signed by the waiving party.

12. FORCE MAJEURE. Chase shall not be responsible or liable for any

failure or delay in performance of its obligation under this Agreement arising

out of or caused, directly or indirectly, by circumstances beyond its control,

including without limitation, acts of God, earthquakes, fires, floods, wars,

acts of civil or military authorities, or governmental actions, nor shall any

such failure or delay give the Fund the right to terminate this Agreement.

13. USE OF NAME. The Fund and Chase agree not to use the other's name

nor the names of such other's affiliates, subcontractors or permitted assignees

in any prospectus, sales literature, or other printed material written in a

manner not previously approved by the other or such other's affiliates,

subcontractors or permitted assignees except where required by the SEC or other

regulatory authorities.

14. AMENDMENTS. This Agreement may be modified or amended from time to

time by mutual written agreement between the parties. No provision of this

Agreement may be changed, discharged, or terminated orally, but only by an

instrument in writing signed by the party against which enforcement of the

change, discharge or termination is sought.

15. SEVERABILITY. If any provision of this Agreement is invalid or

unenforceable, the balance of the Agreement shall remain in effect, and if any

provision is inapplicable to any person or circumstance it shall nevertheless

remain applicable to all other persons and circumstances.

16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE SUBSTANTIVE

LAWS OF THE STATE OF NEW YORK.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be

executed by their officers designated below as of the date first written above.

_____________________________

Attest:________________________ By:__________________________

Name:__________________________ Name:________________________

Title:_______________________

THE CHASE MANHATTAN BANK, N.A.

Attest:________________________ By:____________________________

Name:__________________________ Name:__________________________

Title:_________________________
<PAGE>
Lipper & Company
Proposal
May 9, 1995 (Revised)

Fund Accounting and Administration

For mutual fund accounting and administration services, the Funds shall pay to
Chase a fee based on the following schedule:

20 basis points on the first $200 million is assets, plus
10 basis points on the next $200 million in assets, plus
5 basis points on assets in excess of $400 million.

This calculation is based on the combined daily net assets of all of the funds
and is payable monthly.

There will be a minimum annual fee of $70,000 per fund, exclusive of Out of
Pocket Expenses and Custody Safekeeping and Transaction Fees.

"Out of Pocket" expenses including the cost of security pricing services,
travel and lodging for Fund officers to attend Board Meetings, and preparation
and mailing of Board materials and will be billed to the Funds on a monthly
basis.

Transfer Agency and Shareholder Servicing

Each fund will be billed $20 for each shareholder account maintained in the
system.

"Out of Pocket" expenses including the costs for telephone services (800
numbers and remote dial access to our systems), postage, forms, envelopes, pre-
printed statements and confirms, and proxy processing will be billed to the
fund on a monthly basis.

The above fee schedule applies only to the initial five funds sponsored by
Lipper & Co. Additional funds will be subject to review.
<PAGE>
SCHEDULE B TO ______________
GENERAL DESCRIPTION OF FUND ADMINISTRATION SERVICES

I. Financial and Tax Reporting

A. Prepare agreed upon management reports and Board of Directors materials
such as unaudited financial statements and distribution summaries.

B. Report Fund performance to outside services as directed by Fund
management.

C. Calculate dividend and capital gain distributions in accordance with
distribution policies detailed in the Fund's prospectus(es). Assist Fund
management in making final determinations of distribution amounts.

D. Estimate and recommend year-end dividend and capital gain distributions
necessary to establish each series of the Fund's status as a regulated
investment company ("RIC") under Section 4982 of the Internal Revenue Code
of 1986, as amended (the "Code") regarding minimum distribution
requirements.

E. Work with the Fund's public accountants or other professionals, prepare
and file Fund's Federal tax return on Form 1120-RIC along with all state
and local tax returns where applicable. Prepare and file Federal Excise
Tax Return (Form 8613).

F. Prepare and file Fund's Form N-SAR with the SFC.

G. Prepare and coordinate printing of Fund's Semiannual and Annual Reports to
Shareholders.

H. Notify shareholders as to what portion, if any, of the distributions made
by the Fund during the prior fiscal year were exempt-interest dividends
under Section 852 (b)(5)(A) of the Code.

I. Provide Form 1099-MISC to persons other than corporations (e.g.,
Directors) to whom the Fund paid more than $600 during the year.

J. Prepare and file California State Expense Limitation Report and similar
reports if required by other states, if applicable.

K. Provide financial information for Fund proxies, prospectuses and
Statement(s) of Additional Information.

II. Portfolio Compliance

A. Assist with monitoring each series of the Fund's compliance with
investment restrictions (e.g., issuer or industry diversification, etc.)
listed in the current prospectus(es) and Statement(s) of Additional
Information.

B. Assist with monitoring each series of the Fund's compliance with the
requirements of Section 851 of the Code for qualification as a RIC (i.e.,
90% Income. 30% Income - Short Three, Diversification Tests).
<PAGE>
C. Assist with monitoring investment manager's compliance with Board
directives such as "Approved Issuers Listings for Repurchase Agreements",
Rule 17a-7, Rule 17e-1, Rule 10f-3 and Rule 12d-3 procedures.

D. Mail quarterly requests for "Securities Transaction Reports" to the Fund's
Directors and Officers and "access persons" under the terms of the Fund's
Code of Ethics and SEC regulations, and generally assist in monitoring
compliance with such Code of Ethics.

III. Regulatory Affairs and Corporate Governance

A. Prepare and file via Edgar post-effective amendments to the Fund's
registration statement on Form N-1A and supplements as needed.

B. Prepare and file proxy materials and administer shareholder meetings.

C. Prepare, file and monitor all state registrations of the Fund's
securities, including annual renewals, registering new series of the Fund,
preparing and filing sales reports, filing copies of the registration
statement and final prospectus and statement of additional information,
increasing registered amounts of securities in individual states and
monitoring blue sky compliance.

D. Prepare Board materials and agendas for all Board and Board Committee
meetings and minutes of such meetings.

E. Assist with the review and monitoring of fidelity bond and errors and
omissions insurance coverage and make any related regulatory filings.

F. Prepare and update documents such as charter document, by-laws, and
foreign qualification filings.

G. Prepare and file notices pursuant to Rule 24f-2.

H. Review and provide comments on all sales literature (e.g., advertisements,
brochures and shareholder communications) with respect to each series.

I. Assist in identifying and monitoring pertinent regulatory and legislative
developments which may affect the Fund and. in response to the results of
such monitoring, coordinate and provide support to the Fund and the Fund's
investment adviser with respect to those developments and results,
including support with respect to routine regulatory examinations or
investigations of the Fund, and with respect to such matters, to work in
conjunction with outside counsel, auditors and other professional
organizations engaged by the Fund.

J. File copies of financial reports to shareholders with the SEC under Rule
30b2-1.

IV. General Administration

A. Furnish officers of the Fund, subject to Board approval.

B. Prepare Fund and series expense projections, establish accruals and review
on a periodic basis, including expenses based on a percentage of each
series of the Fund's average daily net assets (advisory and administrative
<PAGE>
fees) and expenses based on actual charges annualized and accrued daily
(audit fees, registration fees, directors' fees, etc.).

C. For new series of the Fund obtain Employer or Taxpayer Identification
Number and CUSIP numbers. Estimate organizational costs and expenses and
monitor against actual disbursements.

D. Coordinate all communications and data collection with regard to any
regulatory examinations and yearly audits by independent accountants.

E. Make staff of Chase and affiliates available to the Fund to assist in or
respond to any reasonable requests for Fund-or-industry related
information.
<PAGE>
SCHEDULE C TO ________________
DESCRIPTION OF FUND ACCOUNTING SERVICES

I. General Description

Chase shall provide the following accounting services to the Fund:

A. Maintenance of the books and records and accounting controls for the
Fund's assets, including records of all securities transactions;

B. Daily pricing of all securities. Calculation of each series of the Fund's
Net Asset Value in accordance with the prospectus and transmission to
NASDAQ and to such other entities as directed by the Fund;

C. Accounting for dividends and interest received and distributions made by
the Fund,

D. Production of transaction data, financial reports and such other periodic
and special reports as the Board may reasonably request;

E. Liaison with the Fund's independent auditors; and

F. A listing of reports that will be available to the Fund is included below.

II. Domestic Series of the Fund Accounting Daily Reports

A. General Ledger Reports

1. Trial Balance Report
2. General Ledger Activity Report

B. Portfolio Reports

1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report

C. Pricing Reports

1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report

D. Accounts Receivable/Payable Reports

1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report Accrual Report
3. Interest
4. Dividend Accrual Report
<PAGE>
E. Other Reports

1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal

III. International Series of the Fund Accounting Daily Reports

A. General Ledger

1. Trial Balance Report
2. General Ledger Activity Report

B. Portfolio Reports

1. Portfolio Report by Sector
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal

C. Currency Reports

1. Currency Purchase /Sales Journal
2. Currency Valuation Report

D. Pricing Reports

1. Pricing Report by Country
2. Pricing Report by Market Value
3. Price Variance by % Change
4. NAV Report
5. NAV Proof Report

E. Accounts Receivable/Payable Reports

1. Accounts Receivable for Investments Sold/Matured
2. Accounts Payable for Investments Purchased
3. Accounts Receivable for Forward Exchange Contracts
4. Accounts Payable for Forward Exchange Contracts
5. Interest Receivable Valuation
6. Interest Recoverable Withholding Tax
7. Dividends Receivable Valuation
8. Dividends Recoverable Withholding Tax

F. Other Reports

1. Exchange Rate Report

IV. Monthly Accounting Reports

A. Standard Reports

1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
<PAGE>
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report

B. International Reports

1. Forward Contract Transaction History Report
2. Currency Gain/Loss Report
<PAGE>
SCHEDULE D TO _____________
DESCRIPTION OF TRANSFER AGENCY SERVICES

The following is a general description of the transfer agency services
Chase shall provide to the Fund.

A. Shareholder Recordkeeping. Maintain records showing for each Fund
shareholder the following: (i) name, address, appropriate tax
certification and tax identifying number; (ii) number of shares of each
series of the Fund; (iii) historical information including, but not
limited to, dividends paid and date and price of all transactions
including individual purchase and redemptions appropriate supporting
documents; and (iv) any dividend reinvestment order, application, dividend
to a specific address and correspondence relating to the current
maintenance of the account.

B. Shareholder Issuance. Record the issuance of shares of each series of the
Fund. Except as specifically agreed in writing between Chase and the
Fund, Chase shall have no obligation when countersigning and issuing
and/or crediting shares to take cognizance of any other laws relating to
the issue and sale of such shares except insofar as policies and
procedures of the Stock Transfer Association recognize such laws.

C. Purchase Orders. Process all orders for the purchase of shares of the
Fund in accordance with the Fund's current prospectus, including
electronic transmissions, which the Fund acknowledges it has authorized.
Upon receipt of any check or other payment for purchase of shares of the
Fund from an investor, Chase will (i) stamp the order or other
documentation with the date and time of receipt, (ii) forthwith process
the same for collection, (iii) determine the amounts thereof due the Fund,
and notify the Fund of such determination and deposit, such notification
to be given on a daily basis of the total amounts determined and deposited
to the Fund's custodian bank account during such day. Chase shall then
credit the share account of the investor with the number of shares to be
purchased made on the date such payment is received, as set forth in the
Fund's current prospectus, and shall promptly mail a confirmation of said
purchase to the investor, all subject to any instructions which the Fund
may give to Chase with respect to the timing or manner of acceptance of
orders for shares relating to payments so received by it. Any purchase
order received by the Chase, which is deemed by Chase not in good order
will be rejected immediately.

D. Redemption Orders. Receive and stamp with the date and time of receipt
all requests for redemptions or repurchase of shares held in certificate
or non-certificate form, and process redemptions and repurchase requests
as follows: (i) if such certificate or redemption request complies with
the applicable standards approved by the Fund, Chase shall on each
business day, notify the Fund of the total number of shares presented and
covered by such requests received by Chase on such day; (ii) on or prior
to the seventh calendar day succeeding any such requests received by Chase
subject to instructions from the Fund, Chase shall transfer monies to such
account as designated by Chase for such payment to the redeeming
shareholder of the applicable redemption or repurchase price; (iii) if any
such certificate or request for redemption of repurchase does not comply
with applicable standards, Chase shall promptly notify the investor of
such fact, together with the reason therefor, and shall effect such
redemption at the Fund's price next determined after receipt of documents
<PAGE>
complying with said standards of, at such other time as the Fund shall so
direct.

E. Telephone Orders. Process redemptions, exchanges and transfers of Fund
shares upon telephone instructions from qualified shareholders in
accordance with the procedures set forth in the Fund's current prospectus.
Chase will employ reasonable procedures, such as requiring a form of
personal identification, so that Chase reasonably believes that such
telephones instructions are genuine. Chase shall be permitted to redeem,
exchange and/or transfer Fund shares from any account for which such
services have been authorized, including electronic transmissions.

F. Transfer of Shares. Upon receipt by Chase of documentation in proper form
to effect a transfer of shares, including in the case of shares for which
certificates have been issued the share certificates in proper form for
transfer, Chase will register such transfer on the Fund's shareholder
records maintained by Chase pursuant to instructions received from the
transferor, cancel the certificates representing such shares, if any, and
if so requested, countersign, register, issue and mail by first class mail
new certificates for the same or a smaller whole number of shares.

G. Shareholder Communications. Address and mail all communications by the
Fund to its shareholders promptly following the delivery by the Fund of
the material to be mailed.

H. Proxy Materials. Prepare shareholder lists, mail and certify as to the
mailing of proxy materials, receive the tabulated proxy cards, render
periodic reports to the Fund on the progress of such tabulation, and
provide the Fund with inspectors of election at any meeting of
shareholders and prepare agendas and minutes for such meetings.

I. Share Certificates. If a shareholder of the Fund requests a certificate
representing his/her shares, Chase, as transfer agent, will countersign
and mail, a share certificate to the investor at his/her address as it
appears on the Fund's transfer books. Chase shall supply, at the expense
of the Fund a supply of blank share certificates. The certificates
shall be properly signed, manually or by facsimile, as authorized by the
Fund, and shall bear the Fund's seal or facsimile; and notwithstanding the
death, resignation or removal of any officers of the Fund authorized to
sign certificates, Chase may, until otherwise directed by the Fund,
continue to countersign certificates which bear the manual or facsimile
signature of such officer.

J. Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, Chase will take such
steps, including redepositing the check for collection or returning the
check to the investor, as Chase may, at its reasonable discretion, deem
appropriate and notify the Fund of such action, or as the Fund may
instruct. However, the Fund remains ultimately liable for any returned
checks of its shareholders.

K. Shareholder Correspondence. Acknowledge all correspondence from
shareholders relating to their share accounts and undertake such other
shareholder correspondence as may from time to time be mutually agreed
upon.
<PAGE>
L. Tax Reporting. Chase shall issue appropriate shareholder tax forms on an
annual basis.

M. Escheatment. All Fund assets shall be subject to the escheatment laws of
the Commonwealth of Massachusetts, including those which relate to
reciprocal agreements with other states.

N. Sub-Transfer Agents. Chase shall cooperate with the Fund and any outside
service provider selected by the Fund in connection with the establishment
of sub-transfer agency and sub-administration arrangements.

O. Telephone Services. Chase shall provide and administer a toll-free number
to be available for shareholder inquiries.
<PAGE>
Rev. December 1, 1995
SUBJECT TO CHANGE

MUTUAL FUNDS SERVICE AGREEMENT

* Fund Administration Services

* Fund Accounting Services

* Transfer Agency Services

THE CHASE MANHATTAN BANK, N.A.

December __, 1995
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT

Table of Contents

Section/Paragraph Page

1. APPOINTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 1

3. DELIVERY OF DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . 3

4. SERVICES PROVIDED . . . . . . . . . . . . . . . . . . . . . . . . . 4

5. FEES; EXPENSES; EXPENSE REIMBURSEMENT . . . . . . . . . . . . . . . 5

6. PROPRIETARY AND CONFIDENTIAL INFORMATION . . . . . . . . . . . . . 8

7. DUTIES, RESPONSIBILITIES, AND LIMITATION OF LIABILITY . . . . . . . 8

8. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

9. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

10. ASSIGNABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

11. WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

12. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

13. USE OF NAME . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

14. AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

15. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

16. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
Schedule A -- Fees and Expenses . . . . . . . . . . . . . . . . . . . . A-1

Schedule B -- Fund Administration Services Description . . . . . . . . B-1

Schedule C -- Fund Accounting Services Description . . . . . . . . . . C-1

Schedule D -- Transfer Agency Services Description . . . . . . . . . . D-1

THE LIPPER FUNDS, INC.

GROUP RETIREMENT SERVICING PLAN

1. The Lipper Funds, Inc. (the "Company") is hereby authorized to
enter into written agreements in substantially the form attached hereto as
Exhibit I or in any other form duly approved by the Board of Directors (the
"Shareholder Servicing Agreement") with institutional shareholders of record or
other financial institutions ("Shareholder Servicing Agents"). A Shareholder
Servicing Agreement shall require the Shareholder Servicing Agent to provide
support services on behalf of the Company as set forth therein to its customers
(the "Customers") who beneficially own shares (the "Shares") in any of the
company's investment portfolios (the "Funds"). For such services, the
Shareholder Servicing Agent shall receive a fee, computed daily and paid
monthly from the assets of each Fund in the manner set forth in the Shareholder
Servicing Agreement, at an annual rate of up to [ ] of 1% of the average
daily net asset value of Shares in such Fund with respect to which the
Shareholder Servicing Agent provides services for its Customers.

2. Each Shareholder Servicing Agreement which varies substantially
from the form attached hereto as Exhibit I or which is proposed to be entered
into with a Shareholder Servicing Agent which is the investment adviser or
principal underwriter of the Company, or an "affiliate," as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), of the Company,
its investment adviser or its principal underwriter, shall be approved by the
Board of Directors and by a vote of a majority of the Directors who are not
"interested persons" of the Company, as defined in the 1940 Act, and who have
no financial interest, direct or indirect, in such Shareholder Servicing
Agreement. Each Shareholder Servicing Agreement which does not vary
substantially from the form attached hereto as Exhibit I and which is not
proposed to be entered into with the investment adviser or principal
underwriter of the Company, or any "affiliate," as defined in the 1940 Act, of
the Company, its investment adviser or its principal underwriter, may be
entered into, executed and delivered in the name and on behalf of the Company,
by the President or any Vice President of the Company, at a fee determined in
accordance with paragraph 1 above by the officer executing such Agreement.

3. This plan (the "Plan"), shall become effective upon the approval
of the Plan (and the form of Shareholder Servicing Agreement attached hereto)
by the Board of Directors and by the vote of the majority of the Directors who
are not "interested persons" of the Company, as defined in the 1940 Act, and
who have no financial interest, direct or indirect, in the Plan or in any
Shareholder Servicing Agreement or other agreement relating to the Plan (the
"Disinterested Directors").

4. The Plan may be amended at any time by the Board of Directors
including the vote of a majority of the Disinterested Directors, without the
consent of any Shareholder Servicing Agent; provided, however, that any such
amendment shall not, without the consent of the affected Shareholder Servicing
Agent, modify the terms of any Shareholder Servicing Agent, modify the terms of
any Shareholder Servicing Agreement to which the company is a party.

5. The Plan may be terminated at any time, without the payment of
any penalty, by a vote of a majority of the Company's entire Board of Directors
on sixty (60) days' written notice to any Shareholder Servicing Agents which ar
parties to any Shareholder Servicing Agreements with the Company. Any notice
<PAGE>
of termination of the Plan shall be deemed to also constitute a notice of
termination of the Plan shall be deemed to also constitute a notice of
termination of the Shareholder Servicing Agreement between the Company and any
Shareholder Servicing Agent to which such notice of termination is delivered.

<PAGE>
SHAREHOLDER SERVICING AGREEMENT

SHAREHOLDER SERVICING AGREEMENT, dated as of December __, 1995, by
and between The Lipper Funds, Inc. (the "Company"), a Maryland corporation, and
[ ] (the "Financial Institution"), as a shareholder servicing agent
hereunder (the "Agent") relating to transactions in shares of capital stock,
$.001 par value (the "Shares"), of any of the three existing investment
portfolios offered by the Company (the "Funds"). In the event that the Company
establishes one or more portfolios other than the Funds with respect to which
it decides to retain the Financial Institution hereunder, the Company shall
promptly notify the Financial Institution in writing. If the Financial
Institution is willing to render such services, it shall notify the Company in
writing whereupon such portfolio shall become a Fund hereunder.

The Company and the Financial Institution hereby agree as follows:

1. Appointment. The Financial Institution, as Agent, hereby agrees
to perform certain services for its customers (the "Customers") as hereinafter
set forth. The Agent's appointment hereunder is non-exclusive, and the parties
recognize and agree that, from time to time, the Company may enter into other
shareholder servicing agreements, in writing, with other financial
institutions.

2. Services to be Performed. The Agent, as agent for its Customers,
shall be responsible for performing shareholder administrative support
services, which will include the following: (i) answering customer inquiries
regarding account status and history, the manner in which purchases, exchanges
and redemptions of shares of the Funds may be effected and certain other
matters pertaining to the Funds; (ii) assisting shareholders in designating and
changing dividend options, account designations and addresses; (iii) providing
necessary personnel and facilities to establish and maintain shareholder
accounts and records; (iv) assisting in aggregating and processing purchase,
exchange and redemption transactions; (v) placing net purchase and redemption
orders with the Company's distributor; (vi) arranging for wiring of funds;
(vii) transmitting and receiving funds in connection with customer orders to
purchase or redeem shares; (viii) processing dividend payments; (ix) verifying
and guaranteeing shareholder signatures in connection with redemption orders
and transfers and changes in shareholder-designated accounts, as necessary; (x)
providing periodic statements showing a customer's account balance and, to the
extent practicable, integrating such information with other customer
transactions otherwise effected through or with the Shareholder Servicing
Agent; (xi) furnishing (either separately or on an integrated basis with other
reports sent to a shareholder by a Shareholder Servicing Agent) monthly and
year-end statement and confirmations of purchases, exchanges and redemptions;
(xii) transmitting on behalf of the Company, proxy statements, annual reports,
updating prospectuses and other communications from the Company to the
shareholders of the Funds; (xiii) receiving, tabulating and transmitting to the
Company proxies executed by shareholders with respect to meetings of
shareholders of the Funds; and (xiv) providing such other related services as
the Company as the Company or a shareholder may request.

The Agent shall provide all personnel and facilities necessary in
order for it to perform the functions described in this paragraph with respect
to its Customers.
<PAGE>
3. Fees.

3.1. Fees from the Company. In consideration for the services
described in Section 2 hereof and the incurring of expenses in connection
therewith, the Agent shall receive a fee, computed daily and payable monthly,
at the annual rate of ___ of 1% of the average daily net asset value of Shares
of each Fund for which the Agent from time to time performs services under this
Agreement on behalf of Customers. Fees with respect to Customers' Shares in
any one Fund will be paid exclusively from the assets of that Fund in which
such Customer's assets are invested. For purposes of determining the fees
payable to the Agent hereunder, the value of the Company's net assets shall be
computed in the manner specified in the Company's then-current prospectus and
statement of additional information (the "Prospectus") for computation of the
net asset value of the Company's Shares.

3.2. Fees from Customers. It is agreed that the Financial
Institution may impose certain conditions on Customers, in addition to or
different from those imposed by the Company, such as requiring a minimum
initial investment or imposing limitations on the amounts of transactions. It
is also understood that the Financial Institution may directly credit or charge
fees to Customers in connection with an investment in the Funds. The Financial
Institution shall credit or bill Customers directly for such credits or fees.
In the event the Financial Institution charges Customers such fees, it shall
make appropriate prior written disclosure (such disclosure to be in accordance
with all applicable laws) to Customers both of any direct fees charged to the
Customer and of the fees received or to be received by it from the Company
pursuant to Section 3.1 of this Agreement. It is understood however, that in
no event shall the Financial Institution have recourse or access as Agent or
otherwise to the account of any shareholder of the Company except to the extent
expressly authorized by law or by such shareholder, or to any assets of the
Company, for payment of any direct fees referred to in this Section 3.2.

4. Approval of Materials to be Circulated. Advance copies or proofs
of all materials which are to be generally circulated or disseminated by the
Agent to Customers or prospective Customers which identify or describe the
Company shall be provided to the Company at least 10 days prior to such
circulation or dissemination (unless the Company consents in writing to a
shorter period), and such materials shall not be circulated or disseminated or
further circulated or disseminated at any time after the Company shall have
given written notice to the Agent of any objection thereto.

Nothing in this Section 4 shall be construed to make the Company
liable for the use of any information about the Company which is disseminated
by the Agent.

5. Compliance with Laws, etc. The Agent shall comply with all
applicable federal and state laws and regulations in the performance of its
duties under this Agreement, including securities laws.

6. Limitation of Agent's Liability. In consideration of the Agent's
undertaking to render the services described in this Agreement, the Company
agrees that the Agent shall not be liable under this Agreement for any error of
judgment or mistake of law or for any loss suffered by the Company in
connection with the performance of this Agreement, provided that nothing in
this Agreement shall be deemed to protect or purport to protect the Agent
against any liability to the Company or its stockholders to which the Agent
would otherwise be subject by reason of willful misfeasance, bad faith or gross
<PAGE>
negligence in the performance of the Agent's duties under this Agreement or by
reason of the Agent's reckless disregard of its obligations and duties
hereunder.

7. Indemnification. The Company agrees to indemnify and hold
harmless the Agent from all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, liabilities arising under the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the Investment Company Act of 1940, as amended, and any state and
foreign securities and blue sky laws, all as or to be amended from time to
time) and expenses, including attorneys' fees and disbursements arising
directly or indirectly from (i) any misstatements or omissions in the Company's
Prospectus, or (ii) any action or thing which the Agent takes or does or omits
to take or do reasonably believed by the Agent to be at the request or
direction or in reliance on the advice or instructions, whether oral or
written, of the Company provided, that the Agent shall not be indemnified
against any liability to the Company or to its shareholders (or any expenses
incident to such liability) arising out of the Agent's own willful misfeasance,
bad faith or gross negligence in the performance of its duties hereunder or by
reason of its reckless disregard of its obligations and duties hereunder. In
order that the indemnification provision contained
in this paragraph shall apply, it is understood that if in any case the Company
may be asked to indemnify or save the Agent harmless, the Company shall be
fully and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the Agent will use all reasonable
care to identify and notify the Company promptly concerning any situation which
presents or appears likely to present the probability of such a claim for
indemnification against the Company. The Company shall have the option to
defend the Agent against any claim which may be the subject of this
indemnification and, in the event that the Company so elects, it will so notify
the Agent and thereupon the Company shall take over complete defense for the
claim, and the Agent shall in such situation incur no further legal or other
expenses for which it shall seek indemnification under this paragraph. The
Agent shall in no case confess any claim or make any compromise or settlement
in any case in which the Company will be asked to indemnify the Agent, except
with the Company's prior written consent.

8. Limitation of Shareholder Liability, etc. The Agent hereby
agrees that obligations assumed by the Company pursuant to this Agreement shall
be limited in all cases to the Company and its assets and that the Agent shall
not seek satisfaction of any such obligation from the shareholders or any
shareholder of the Company. It is further agreed that the Agent shall not seek
satisfaction of any such obligations from the Board of Directors or any
individual Director of the Company.

9. Notices. All notices or other communications hereunder to either
party shall be in writing or by confirming telegram, cable, telex or facsimile
sending device. Notices shall be addressed (a) if to the Company, at the
address of the Company, or (b) if to the Agent, at _______________________.

10. Further Assurances. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.

11. Termination. This Agreement will continue in effect until two
years from the date hereof and thereafter for successive annual periods,
provided that such continuance is specifically approved at least annually (a)
<PAGE>
by the Company's Board of Directors and (b) by the vote, cast in person at a
meeting called for the purpose, of a majority of the Company's directors who
are not parties to this Agreement or "interested persons" (as defined in the
1940 Act) of any such party. This Agreement may be terminated at any time,
without the payment of any penalty, by a vote of a majority of the Company's
outstanding voting securities (as defined in the 1940 Act) or by a vote of a
majority of the Company's entire Board of Directors on 60 days' written notice
to the Agent or by the Agent on (60) days' written notice to the Company.
Notice of termination of the Shareholder Servicing Plan by the Board of
Directors, pursuant to which this Agreement has been entered, shall constitute
a notice of termination of this Agreement.

12. Changes; Amendments. This Agreement may be changed or amended
only by written instrument signed by both parties.

13. Reports. The Agent will provide the Company or its designees
such information as the Company or its designees may reasonably request
(including, without limitation, periodic certifications confirming the
provision to Customers of the services described herein), and will otherwise
cooperate with the Company and its designees (including, without limitation,
any auditors designated by the Company), in connection with the preparation of
reports to its Board of Directors concerning this Agreement and the monies paid
or payable under this Agreement, as well as any other reports or filings that
may be required by law.

14. Subcontracting by Agent. The Agent may subcontract for the
performance of the Agent's obligations hereunder with any one or more persons,
including but not limited to any one or more persons which is an affiliate of
the Agent; provided, however, that the Agent shall be as fully responsible to
the Company for the acts and omissions of any subcontractor as it would be for
its own acts or omissions. The Agent shall notify the Company of any such
arrangements no later than the next meeting of the Company's Board of Directors
following the entry by the Agent into such arrangements. Notwithstanding this
paragraph or paragraph 11 of this Agreement, the Company reserves the right to
terminate this Agreement immediately or upon such notice as the Company, in its
sole discretion, determines to give, and without payment of any penalty, if the
Company notifies the Agent that any subcontractor of the Agent is unacceptable
to the Company for any reason and the Agent does not terminate its arrangements
with such subcontractor as promptly as reasonably practicable.

15. Governing Law. This Agreement shall be governed by the laws of
the State of New York.

16. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement has been executed on behalf of the Company by the undersigned not
individually, but in the capacity indicated.

THE LIPPER FUNDS, INC.

By:____________________
Title:

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned director Kenneth
Lipper of The Lipper Funds, Inc., a Maryland corporation (hereinafter called
the "Fund") does hereby constitute and appoint Abraham Biderman and Steven
Finkel, and each of them, his true and lawful attorneys and agents, with full
power to act without the others, for him and in his name, place and stead, in
any and all capacities, to do any and all acts and things, and execute in his
name any and all instruments, which said attorneys and agents may deem
necessary or advisable in order to enable the Fund to comply with the
Investment Company Act of 1940, Securities Act of 1933, any requirements of the
Securities and Exchange Commission in respect thereof, and any state securities
laws, in connection with the registration under said Acts of the aforesaid Fund
and the offerings of shares by such Fund, including specifically and without
limitation power and authority to sign his name to any and all Notifications of
Registration and Registration Statements to be filed with the Securities and
Exchange Commission under either of said Acts in respect to such Fund and
shares, and any amendments (including post-effective amendments) or
applications for amendment or supplements of or to such Notifications of
Registration and Registration Statements, and to file the same with the
Securities and Exchange Commission; and the undersigned does hereby ratify and
confirm all that said attorneys and agents, and each of them, shall do or cause
to be done by virtue hereof. Any one of said agents and attorneys shall have,
and may exercise, without the others, all the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has signed his name hereto as of
this 29th day of November, 1995.

/s/ Kenneth Lipper
-------------------------
Kenneth Lipper
<PAGE>
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned director Abraham
Biderman of The Lipper Funds, Inc., a Maryland corporation (hereinafter called
the "Fund") does hereby constitute and appoint Kenneth Lipper and Steven
Finkel, and each of them, his true and lawful attorneys and agents, with full
power to act without the others, for him and in his name, place and stead, in
any and all capacities, to do any and all acts and things, and execute in his
name any and all instruments, which said attorneys and agents may deem
necessary or advisable in order to enable the Fund to comply with the
Investment Company Act of 1940, Securities Act of 1933, any requirements of the
Securities and Exchange Commission in respect thereof, and any state securities
laws, in connection with the registration under said Acts of the aforesaid Fund
and the offerings of shares by such Fund, including specifically and without
limitation power and authority to sign his name to any and all Notifications of
Registration and Registration Statements to be filed with the Securities and
Exchange Commission under either of said Acts in respect to such Fund and
shares, and any amendments (including post-effective amendments) or
applications for amendment or supplements of or to such Notifications of
Registration and Registration Statements, and to file the same with the
Securities and Exchange Commission; and the undersigned does hereby ratify and
confirm all that said attorneys and agents, and each of them, shall do or cause
to be done by virtue hereof. Any one of said agents and attorneys shall have,
and may exercise, without the others, all the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has signed his name hereto as of
this 29th day of November, 1995.

/s/ Abraham Biderman
-------------------------
Abraham Biderman
<PAGE>
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned director Stanley
Brezenoff of The Lipper Funds, Inc., a Maryland corporation (hereinafter called
the "Fund") does hereby constitute and appoint Kenneth Lipper, Abraham Biderman
and Steven Finkel, and each of them, his true and lawful attorneys and agents,
with full power to act without the others, for him and in his name, place and
stead, in any and all capacities, to do any and all acts and things, and
execute in his name any and all instruments, which said attorneys and agents
may deem necessary or advisable in order to enable the Fund to comply with the
Investment Company Act of 1940, Securities Act of 1933, any requirements of the
Securities and Exchange Commission in respect thereof, and any state securities
laws, in connection with the registration under said Acts of the aforesaid Fund
and the offerings of shares by such Fund, including specifically and without
limitation power and authority to sign his name to any and all Notifications of
Registration and Registration Statements to be filed with the Securities and
Exchange Commission under either of said Acts in respect to such Fund and
shares, and any amendments (including post-effective amendments) or
applications for amendment or supplements of or to such Notifications of
Registration and Registration Statements, and to file the same with the
Securities and Exchange Commission; and the undersigned does hereby ratify and
confirm all that said attorneys and agents, and each of them, shall do or cause
to be done by virtue hereof. Any one of said agents and attorneys shall have,
and may exercise, without the others, all the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has signed his name hereto as of
this 18th day of December, 1995.

/s/ Stanley Brezenoff
-------------------------
Stanley Brezenoff