<PAGE>
0066841.09
As filed with the Securities and Exchange Commission
on March 6, 1996
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Registration No.333-00625
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[x] Pre-Effective Amendment No. 1 [ ] Post-Effective Amendment No.
Warburg, Pincus Tax Free Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
Area Code and Telephone Number: (212) 878-0600
466 Lexington Avenue
New York, New York 10017-3147
(Address of Principal Executive Offices) (Zip code)
Mr. Eugene P. Grace
Warburg, Pincus Tax Free Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3147
(Name and Address of Agent for Service)
copies to:
Rose F. DiMartino, Esq. John N. Ake, Esq.
Willkie Farr & Gallagher Ballard Spahr Andrews & Ingersoll
One Citicorp Center 1735 Market Street
153 East 53rd Street Philadelphia, PA 19101
New York, NY 10022
Approximate date of proposed public offering: As soon as possible after the
effective date of this Registration Statement.
Registrant has registered an indefinite amount of securities pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended; accordingly, no fee
is payable herewith. Registrant's Rule 24f-2 Notice for the fiscal period ended
August 31, 1996 will be timely filed with the Securities and Exchange
Commission.
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
<PAGE>
in accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
<PAGE>
WARBURG, PINCUS TAX FREE FUND, INC.
CONTENTS OF
REGISTRATION STATEMENT
This Registration Statement contains the following pages and documents:
Front Cover
Contents Page
Cross Reference Sheet
Letter to Shareholders
Notice of Special Meeting
Part A - Prospectus/Proxy Statement
Part B - Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
<PAGE>
Warburg, Pincus Tax Free Fund, Inc.
FORM N-14 CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
<TABLE>
<CAPTION>
Prospectus/Proxy
Part A Item No. and Caption Statement Caption
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<S> <C> <C>
Item 1. Beginning of Registration Statement Cover Page; Cross Reference Sheet
and Outside Front Cover Page of
Prospectus
Item 2. Beginning and Outside Back Cover Page Table of Contents
of Prospectus
Item 3. Fee Table, Synopsis Information, and Fee Table; Summary; Risk Factors; Comparison of
Risk Factors Investment Objectives and Policies
Item 4. Information About the Transaction Summary; Reasons for the Reorganization; Information
About the Reorganization; Information on
Shareholders' Rights; Voting Information; Exhibit A
(Plan of Reorganization)
Item 5. Information About the Registrant Cover Page; Summary; Information About the
Reorganization; Comparison of Investment Objectives
and Policies; Information on Shareholders' Rights;
Management of the Funds; Prospectus of Registrant
Fund dated March 4, 1996
Item 6. Information About the Company Being Summary; Information About the Reorganization;
Acquired Comparison of Investment Objectives and Policies;
Information on Shareholders' Rights; Additional
Information About Warburg Funds
Item 7. Voting Information Summary; Information About the Reorganization;
Information on Shareholders' Rights; Voting
Information
Item 8. Interest of Certain Persons and Experts Financial Statements and Experts; Legal Matters
Item 9. Additional Information Required for Not Applicable
Reoffering By Persons Deemed to be
Underwriters
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Additional
Part B Item No. and Caption Information Caption
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<S> <C> <C>
Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page
Item 12. Additional Information About the Cover Page; Statement of Additional Information of
Registrant Registrant dated March 4, 1996
Item 13. Additional Information About the Statement of Additional Information of the Existing
Company Being Acquired Warburg Funds dated December 29, 1995
Item 14. Financial Statements Annual Report of Existing Warburg Funds for the
fiscal year ended August 31, 1995
Part C Item No. and Caption Other Information Caption
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Item 15. Indemnification Incorporated by reference to Part A caption
"Information on Shareholders' Rights -- Liability of
Directors."
Item 16. Exhibits Exhibits
Item 17. Undertakings Undertakings
</TABLE>
<PAGE>
WARBURG PINCUS GROWTH & INCOME FUND
WARBURG PINCUS BALANCED FUND
WARBURG PINCUS TAX FREE FUND
OF
THE RBB FUND, INC.
Your Vote is Important
Dear Shareholder:
The Board of Directors of The RBB Fund, Inc. (the "RBB Fund") has recently
reviewed and unanimously endorsed proposals for the reorganization of three of
its investment series -- Warburg Pincus Growth & Income Fund, Warburg Pincus
Balanced Fund and Warburg Pincus Tax Free Fund (each, an "Existing Warburg Fund"
and, collectively, the "Existing Warburg Funds"). Under the terms of the
proposals, each of three newly-formed investment companies -- Warburg, Pincus
Growth & Income Fund, Inc., Warburg, Pincus Balanced Fund, Inc. and Warburg,
Pincus Tax Free Fund, Inc. (each, a "New Warburg Fund", and collectively, the
"New Warburg Funds") -- would acquire all or substantially all of the assets and
liabilities of the Existing Warburg Fund with a similar name. We are pleased to
invite you to attend a special meeting (the "Meeting") of the shareholders of
each Existing Warburg Fund to consider the approval of a Plan of Reorganization
(the "Plan") pursuant to which the reorganization of your Fund (the
"Reorganization") would be effected.
Your Board of Directors and Warburg, Pincus Counsellors, Inc. ("Warburg"), each
Fund's investment adviser, believe that the Reorganization is in the best
interests of each Existing Warburg Fund and its shareholders. It will integrate
the Existing Warburg Funds fully into the Warburg Pincus Funds family, thereby,
among other things, reducing confusion in the marketplace and reducing the
possibility of inconsistencies in operations, and may generate economic
efficiencies as well.
The Reorganization will not result in any changes to the investment philosophy
or operations of your Fund, since each New Warburg Fund has the same investment
objective and substantially similar investment policies as the corresponding
Existing Warburg Fund. Each New Warburg Fund will have the same investment
adviser, administrators, custodian and transfer agent as the corresponding
Existing Warburg Fund. In addition, Counsellors Securities Inc. (each Fund's
distributor) and PFPC Inc. (each Fund's co-administrator) (or their affiliates),
have agreed to waive fees and reimburse expenses for the one-year period
following the closing of the Reorganization (the "Closing Date") to the extent
necessary for the net expense ratio of each New Warburg Fund to be no higher
than that of the corresponding Existing Warburg Fund on the Closing Date.
<PAGE>
If shareholders of an Existing Warburg Fund approve the Plan, upon consummation
of the Reorganization of that Fund, the Existing Warburg Fund will be
liquidated. You will become a shareholder of the corresponding New Warburg Fund,
having received shares of the same class with an aggregate value equal to the
aggregate net asset value of your investment in the Existing Warburg Fund at the
time of the transaction. No sales charge will be imposed in the transaction. The
transactions will, in the opinion of counsel, be free from federal income taxes
to you, the Existing Warburg Funds and the New Warburg Funds. Warburg or its
affiliates will bear all expenses incurred in connection with each
Reorganization.
The Meeting will be held on May 1, 1996 to consider this transaction. We
strongly invite your participation by asking you to review, complete and return
your proxy promptly. If you own shares of more than one Existing Warburg Fund, a
separate proxy card is enclosed for each.
Detailed information about the proposed reorganization is described in the
attached combined prospectus/proxy statement. YOUR BOARD OF DIRECTORS HAS
UNANIMOUSLY APPROVED THE REORGANIZATION OF EACH EXISTING WARBURG FUND AND
RECOMMENDS THAT YOU VOTE TO APPROVE THE PLAN. On behalf of the Board of
Directors, I thank you for your participation as a shareholder and urge you to
please exercise your right to vote by completing, dating and signing the
enclosed proxy card(s). A self-addressed, postage-paid envelope has been
enclosed for your convenience; if you prefer, you can fax the proxy card to
Dominick Maurillo at (212) 809-8839.
If you have any questions regarding the proposed reorganization, please call
1-800-755-3107, where an individual will be pleased to assist you.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED PROMPTLY.
Sincerely,
Donald van Roden
Chairman of the Board
March 7, 1996
<PAGE>
Warburg Pincus Funds-Questions and Answers
Q.) What issues am I being asked to vote on?
A.) You are being asked to approve a proposed Reorganization of your
Existing Warburg Fund. As a result of the Reorganization, you will
receive shares of identical value in a corresponding New Warburg Fund
with the same name, investment objective and portfolio manager(s) as
your Existing Warburg Fund.
Q.) Is the proposed Reorganization in my best interest?
A.) Yes. Your Board of Directors and Warburg, Pincus Counsellors, Inc.,
believes that the Reorganization is in the best interests of each
Existing Warburg Fund and its shareholders. It will integrate the
Existing Warburg Funds fully into the Warburg Pincus Funds family,
thereby, among other things, reducing confusion in the marketplace and
reducing the possibility of inconsistencies in operations. The interest
of the shareholders of the Existing Warburg Funds will not be diluted
as a result of the Reorganization.
Q.) Will there be any changes in the investment objectives as a result of
the proposed Reorganization?
A.) The Reorganization will not result in any changes to the investment
philosophy or operations of your Fund, since each New Warburg Fund has
the same investment objective as the corresponding Existing Warburg
Fund. Each New Warburg Fund will have the same portfolio manager(s),
administrators, custodian and transfer agent as the corresponding
Existing Warburg Fund.
Q.) Are there any federal income tax consequences as a result of the
proposed Reorganization?
A.) No. As a result of the Reorganization, no gain or loss will be
recognized by the Existing Warburg Fund or its shareholders for
federal income tax purposes.
Q.) Who will bear the costs associated with the proposed Reorganization?
A.) Warburg or its affiliates will bear all expenses incurred in
connection with each Reorganization.
<PAGE>2
Q.) Is it going to cost me more money because of the Reorganization?
A.) No. As indicated in the proxy material, there is no change in fees
or expenses.
Q.) How do I vote my shares?
A.) You can vote your shares by signing, dating and mailing the enclosed
proxy card in the postage paid envelope. If you have any questions
or need any assistance please call our proxy solicitor, D.F. King &
Co., Inc., at 1(800) 755-3107.
<PAGE>
The RBB Fund, Inc.
Bellevue Park Corporate Center
400 Bellevue Parkway
Suite 100
Wilmington, Delaware 19809
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on May 1, 1996
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Notice is hereby given that a Special Meeting of Shareholders
(the "Meeting") of Warburg Pincus Growth & Income Fund, Warburg Pincus Balanced
Fund and Warburg Pincus Tax Free Fund, each a series of The RBB Fund, Inc., will
be held at the offices of The RBB Fund, Inc., 400 Bellevue Parkway, Wilmington,
Delaware 19809 on May 1, 1996, commencing at 3:00 p.m. for the following
purposes:
1. To approve or disapprove the Plan of Reorganization dated as
of March 6, 1996 (the "Plan") providing (i) that each of
Warburg Pincus Growth & Income Fund, Warburg Pincus Balanced
Fund and Warburg Pincus Tax Free Fund (individually an
"Existing Warburg Fund" and together the "Existing Warburg
Funds") would be reorganized from a series of The RBB Fund,
Inc. into Warburg, Pincus Growth & Income Fund, Inc.,
Warburg, Pincus Balanced Fund, Inc. and Warburg, Pincus Tax
Free Fund, Inc., respectively (individually a "New Warburg
Fund" and together the "New Warburg Funds"), (ii) each
Existing Warburg Fund would transfer to the corresponding
New Warburg Fund all or substantially all of its assets in
exchange for shares of the New Warburg Fund and the
assumption of liabilities, and (iii) the distribution of
such shares of the New Warburg Funds to shareholders of the
Existing Warburg Funds in liquidation of the Existing
Warburg Funds.
2. To transact such other business as may properly come before
the Meeting or any adjournment or adjournments thereof.
THE BOARD OF DIRECTORS OF THE RBB FUND UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS OF EACH EXISTING WARBURG FUND VOTE TO APPROVE THE PLAN.
<PAGE>
The Board of Directors of the RBB Fund has fixed the close of
business on March 1, 1996 as the record date for the determination of
shareholders of the Existing Warburg Funds entitled to notice of and to vote at
the Meeting and any adjournment or adjournments thereof.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING
ARE URGED TO (A) SIGN AND RETURN WITHOUT DELAY THE ENCLOSED PROXY CARD(S) IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, OR
(B) FAX THE ENCLOSED PROXY CARD(S) TO DOMINICK MAURILLO AT (212) 809-8839, SO
THAT THEIR SHARES MAY BE REPRESENTED AT THE MEETING. INSTRUCTIONS FOR THE PROPER
EXECUTION OF PROXY CARDS ARE SET FORTH ON THE FOLLOWING PAGE. PROXIES MAY BE
REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY THE SUBSEQUENT EXECUTION AND
SUBMISSION OF A REVISED PROXY, BY GIVING WRITTEN NOTICE OF REVOCATION TO THE RBB
FUND, INC. AT ANY TIME BEFORE THE PROXY IS EXERCISED OR BY VOTING IN PERSON AT
THE MEETING.
By Order of the Board of Directors
MORGAN R. JONES
Secretary
March 6, 1996
YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO
AVOID THE EXPENSE OF FURTHER SOLICITATION.
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be
of assistance to you and avoid the time and expense involved in validating
your vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears
in the registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the
party signing should conform exactly to the name shown in
the registration on the proxy card.
3. All Other Accounts: The capacity of the individual signing
the proxy card should be indicated unless it is reflected in
the form of registration. For example:
<TABLE>
<CAPTION>
Registration Valid Signatures
<S> <C>
Corporate Accounts
(1) ABC Corp............................................ ABC Corp.
(2) ABC Corp............................................ John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer.......................... John Doe
(4) ABC Corp. Profit Sharing Plan....................... John Doe, Trustee
Trust Accounts
(1) ABC Trust........................................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78................................... Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA.................... John B. Smith
(2) John B. Smith....................................... John B. Smith, Jr., Executor
</TABLE>
<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.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 6, 1996
COMBINED PROSPECTUS/PROXY STATEMENT DATED
MARCH 7, 1996
Acquisition Of The Assets Of
WARBURG PINCUS GROWTH & INCOME FUND
WARBURG PINCUS BALANCED FUND
WARBURG PINCUS TAX FREE FUND
separate investment portfolios of
THE RBB FUND, INC.
400 Bellevue Parkway
Suite 100
Wilmington, Delaware 19809
(302) 792-2555
By And In Exchange For Shares Of
WARBURG, PINCUS GROWTH & INCOME FUND, INC.
WARBURG, PINCUS BALANCED FUND, INC.
WARBURG, PINCUS TAX FREE FUND, INC.
466 Lexington Avenue
New York, New York 10017
1-800-WARBURG
This Combined Prospectus/Proxy Statement is being furnished
to shareholders of Warburg Pincus Growth & Income Fund (the "Existing
Growth & Income Fund"), Warburg Pincus Balanced Fund (the "Existing Balanced
Fund") and Warburg Pincus Tax Free Fund (the "Existing Tax Free Fund,"
together with the Existing Growth & Income Fund and Existing Balanced Fund,
the "Existing Warburg Funds", each an "Existing Warburg Fund"), separate
series of The RBB Fund, Inc. (the "RBB Fund"), in connection with proposed
plan of reorganization (the "Plan") to be submitted to shareholders of
each Existing Warburg Fund for consideration at a Special Meeting of
Shareholders to be held on May 1, 1996 at 3:00 p.m. (the "Meeting"), at the
offices of The RBB Fund, Inc. located at 400 Bellevue Parkway, Wilmington,
Delaware 19809, or any adjournment or adjournments thereof.
Each of Warburg, Pincus Growth & Income Fund, Inc. (the "New
Growth & Income Fund"), Warburg, Pincus Balanced Fund, Inc. (the "New Balanced
Fund") and Warburg, Pincus Tax Free Fund, Inc. (the "New Tax Free Fund" and,
with the New Growth & Income Fund and the New Balanced Fund, the "New Warburg
Funds"; each a "New Warburg Fund") is a newly organized registered investment
company.
The proposed reorganization pursuant to the Plans will
not result in any change in the investment philosophy or operations of the
<PAGE>2
Existing Warburg Funds. The investment objectives and policies of each New
Warburg Fund are the same as those of the corresponding Existing Warburg
Funds except for minor investment policy differences described under
"Comparison of Investment Objectives and Policies" in this Combined
Prospectus/Proxy Statement. The investment adviser, administrators,
custodian, transfer agent and accountant for each New Warburg Fund are the
same as those of the corresponding Existing Warburg Fund.
The Plan provides for all or substantially all of the
assets of an Existing Warburg Fund to be acquired by the corresponding New
Warburg Fund in exchange for shares of the New Warburg Fund and the
assumption by such New Warburg Fund of liabilities of the Existing
Warburg Fund (as regards each Existing Warburg Fund, hereinafter referred
to as the "Reorganization"). (The New Warburg Funds and the Existing
Warburg Funds are sometimes referred to hereinafter as the "Funds" and
individually as a "Fund.") Shares of a New Warburg Fund would be
distributed to shareholders of the corresponding Existing Warburg Fund in
liquidation of the corresponding Existing Warburg Fund and thereafter the
Existing Warburg Fund would be terminated. As a result of the proposed
Reorganization, each shareholder of an Existing Warburg Fund will receive
that number of shares of the corresponding New Warburg Fund having an
aggregate net asset value equal to the aggregate value of such
shareholder's shares of the Existing Warburg Fund immediately prior to the
Reorganization. All expenses of the Reorganization will be borne by Warburg,
Pincus Counsellors, Inc. ("Warburg" or the "Adviser"), the investment
adviser of each Existing Warburg Fund and each New Warburg Fund. No sales
charge will be imposed on the shares of a New Warburg Fund received by the
shareholders of the corresponding Existing Warburg Fund. This transaction is
structured to be tax-free for federal income tax purposes to shareholders
and to both the New Warburg Funds and the Existing Warburg Funds.
This Combined Prospectus/Proxy Statement, which should
be retained for future reference, sets forth concisely the information
about the New Warburg Funds that a prospective investor should know before
voting. This Combined Prospectus/Proxy Statement is expected to first be sent
to shareholders on or about March 8, 1996. A Statement of Additional
Information dated March 7, 1996, relating to this Combined Prospectus/Proxy
Statement and the Reorganizations, has been filed with the Securities and
Exchange Commission (the "SEC") and is incorporated by reference into this
Combined Prospectus/Proxy Statement. A copy of such Statement of
Additional Information is available upon oral or written request and
without charge by writing to the New Warburg Funds at the address listed on
the cover page of this Combined Prospectus/Proxy Statement or by
calling 1-800-WARBURG.
The following documents, which have been filed with the
SEC, are incorporated herein in their entirety by reference.
1. The Prospectus of each class of shares offered by the
New Warburg Funds, each dated March 4, 1996. The New
Warburg Fund Prospectus relating to each class of shares of
each Existing Warburg Fund held by a shareholder
accompanies this Combined Prospectus/Proxy Statement.
<PAGE>3
2. The current Prospectuses of the RBB Fund on behalf of
each class of Shares of the Existing Warburg Funds, each
dated December 29, 1995. These may be obtained without
charge by writing to the address on the cover page of
this Combined Prospectus/Proxy Statement or by calling
1-800-755-3107.
3. The Annual Reports of the Existing Warburg Funds for the
fiscal year ended August 31, 1995.
Accompanying this Combined Prospectus/Proxy Statement
as Exhibit A is a copy of the form of Agreement and Plan of Reorganization
(the "Plan") for the proposed Reorganizations.
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.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
COMBINED PROSPECTUS/PROXY STATEMENT AND IN THE MATERIALS EXPRESSLY
INCORPORATED HEREIN BY REFERENCE AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUNDS.
<PAGE>4
TABLE OF CONTENTS
PAGE
ADDITIONAL MATERIALS.......................................................5
SUMMARY....................................................................6
RISK FACTORS..............................................................10
REASONS FOR THE REORGANIZATIONS..........................................10
FEE TABLES................................................................12
INFORMATION ABOUT THE REORGANIZATIONS.....................................17
COMPARISON OF INVESTMENT OBJECTIVES AND
POLICIES................................................................22
MANAGEMENT OF THE
FUND....................................................................22
INFORMATION ON SHAREHOLDERS'
RIGHTS..................................................................23
ADDITIONAL INFORMATION....................................................26
VOTING INFORMATION........................................................26
FINANCIAL STATEMENTS AND
EXPERTS.................................................................28
LEGAL MATTERS.............................................................28
EXHIBIT A: FORM OF AGREEMENT AND PLAN OF REORGANIZATION ................A-1
<PAGE>5
ADDITIONAL MATERIALS
The following additional materials, which have
been incorporated by reference into the Statement of Additional Information
dated March 7, 1996 relating to this Combined Prospectus/Proxy Statement
and the Reorganizations, will be sent to all shareholders of the relevant
Existing Warburg Fund requesting a copy of such Statement of Additional
Information.
1. The Statement of Additional Information of the relevant New
Warburg Fund, dated March 4, 1996.
2. The Statements of Additional Information for each class of Shares
of the relevant Existing Warburg Fund, dated December 29, 1995.
<PAGE>6
SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE ADDITIONAL INFORMATION CONTAINED ELSEWHERE IN THIS COMBINED
PROSPECTUS/PROXY STATEMENT, THE PLAN, A COPY OF THE FORM OF WHICH IS
ATTACHED TO THIS COMBINED PROSPECTUS/PROXY STATEMENT AS EXHIBIT A, THE
PROSPECTUSES OF THE EXISTING WARBURG FUNDS DATED DECEMBER 29, 1995, THE
STATEMENTS OF ADDITIONAL INFORMATION OF THE EXISTING WARBURG FUNDS DATED
DECEMBER 29, 1995, THE PROSPECTUSES OF THE NEW WARBURG FUNDS DATED MARCH
4, 1996 AND THE STATEMENTS OF ADDITIONAL INFORMATION OF THE NEW WARBURG
FUND DATED MARCH 4, 1996.
PROPOSED REORGANIZATION. The Plan provides for the transfer
of all or substantially all of the assets and liabilities of each Existing
Warburg Fund to the corresponding New Warburg Fund in exchange for shares of
the New Warburg Fund. The Plan also calls for the distribution of shares of a
New Warburg Fund to the corresponding Existing Warburg Fund's shareholders in
liquidation of the Existing Warburg Fund. (The foregoing proposed
transactions as regards each Existing Warburg Fund are referred to in this
Combined Prospectus/Proxy Statement as the "Reorganization"). As a result of
the Reorganization, each shareholder of an Existing Warburg Fund will become
the owner of that number of full and fractional shares of the same class of
the corresponding New Warburg Fund having an aggregate net asset value equal
to the aggregate value of the shareholder's shares of the Existing Warburg
Fund as of the close of business on the date that each Existing Warburg Fund's
assets are exchanged for shares of the corresponding New Warburg Fund.
Holders of common shares of the Existing Warburg Fund will become holders of
common shares of the corresponding New Warburg Fund and holders of Advisor
Shares of the Existing Warburg Fund will become holders of Advisor Shares of
the corresponding New Warburg Fund. See "Information About the Reorganization
- -- Plan of Reorganization."
For the reasons set forth below under "Reasons for
the Reorganization," the Board of Directors of the RBB Fund, including the
Directors of the RBB Fund who are not "interested persons" (the "Independent
Directors"), as that term is defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), has unanimously concluded that the
Reorganization would be in the best interests of the shareholders of each
Existing Warburg Fund and that the interests of each Existing Warburg
Fund's existing shareholders will not be diluted as a result of the
transaction contemplated by the Reorganization. The Board therefore has
submitted the Plan for approval by each Existing Warburg Fund's
shareholders. The Board of Directors of each New Warburg Fund has reached
similar conclusions with respect to the New Warburg Fund and has also approved
the Reorganization with respect to the New Warburg Fund.
Approval of the Reorganization of an Existing Warburg Fund
will require the affirmative vote of the holders of a majority of that
Existing Warburg Fund's outstanding shares. See "Voting Information." No
<PAGE>7
Reorganization of any Existing Warburg Fund is contingent on the approval
and/or closing of the Reorganization of any other Existing Warburg Fund.
In the event that the Plan is not approved by shareholders of one or more
Existing Warburg Funds, the Board will consider what other course of action,
if any, should be taken.
TAX CONSEQUENCES. Prior to completion of the
Reorganization, each Existing Warburg Fund and its corresponding New
Warburg Fund will have received an opinion of counsel that, upon the closing
of the Reorganization and the transfer of the assets of such Existing
Warburg Fund, no gain or loss will be recognized by the Existing Warburg
Fund or its shareholders for federal income tax purposes. The holding
period and aggregate tax basis of the corresponding New Warburg Fund's
shares received by an Existing Warburg Fund shareholder will be the same as
the holding period and aggregate tax basis of the shares of the Existing
Warburg Fund previously held by such shareholder. In addition, the holding
period and tax basis of the assets of each Existing Warburg Fund in the
hands of the corresponding New Warburg Fund as a result of the
Reorganization will be the same as in the hands of the Existing Warburg Fund
immediately prior to the Reorganization.
INVESTMENT OBJECTIVES AND POLICIES. Each New Warburg Fund
was organized for the purpose of acquiring the assets of the corresponding
Existing Warburg Fund and each New Warburg Fund will have the same investment
objective, and, except as noted below under "Comparison of Investment
Objectives and Policies", the same investment policies and limitations as the
corresponding Existing Warburg Fund.
PURCHASE AND REDEMPTION PROCEDURES. The purchase and
redemption procedures available to shareholders of each New Warburg Fund are
virtually identical to those available to shareholders of the corresponding
Existing Warburg Fund. Purchases of shares of each New Warburg Fund and the
corresponding Existing Warburg Fund may be made by mail, or with advance
arrangements, by wire through the Funds' distributor, Counsellors Securities
Inc. ("CSI"). Shares of the Funds are sold at net asset value per share and
without a sales charge. Common Shares of the New and Existing Balanced and
Tax Free Funds are subject to a 12b-1 fee of .25% per annum. Advisor Shares
of the New and Existing Growth & Income and Balanced Funds are subject to a
12b-1 fee of up to .75% per annum.
EXCHANGE PRIVILEGES. The exchange privileges available to
shareholders of each New Warburg Fund are identical to those available to
shareholders of the corresponding Existing Warburg Fund. Shareholders of each
Existing Warburg Fund and the corresponding New Warburg Funds may exchange at
net asset value all or a portion of their shares for shares of the same class
of certain other mutual funds advised by Warburg at their respective net asset
values. However, shareholders may not effect exchanges between Common Shares
and Advisor Shares. Exchanges may be effected by mail or by telephone.
Exchanges will be effected without a sales charge but must satisfy the minimum
dollar amount necessary for new purchases. Due to the costs involved in
effecting exchanges, each Fund reserves the right to refuse to honor more than
three exchange requests by a shareholder in any 30-day period. The exchange
privilege may be modified or terminated at any time upon 60 days' notice to
shareholders. Currently, Common Share exchanges may be made among the Funds
with Common Shares of the following other Warburg Pincus Funds:
<PAGE>8
- WARBURG PINCUS CASH RESERVE FUND--a money market fund
investing in short-term, high quality money market instruments;
- WARBURG PINCUS NEW YORK TAX EXEMPT FUND--a money market
fund investing in short-term, high quality municipal
obligations designed for New York investors seeking income
exempt from federal, New York State and New York City income
tax;
- WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL
FUND--an intermediate-term municipal bond fund designed for
New York investors seeking income exempt from federal, New
York State and New York City income tax;
- WARBURG PINCUS INTERMEDIATE MATURITY GOVERNMENT FUND--an
intermediate-term bond fund investing in obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities;
- WARBURG PINCUS FIXED INCOME FUND--a bond fund seeking
current income and, secondarily, capital appreciation by
investing in a diversified portfolio of fixed-income securities;
- WARBURG PINCUS GLOBAL FIXED INCOME FUND--a bond fund investing
in a portfolio consisting of investment grade fixed income
securities of governmental and corporate issuers
denominated in various currencies, including U.S. dollars;
- WARBURG PINCUS CAPITAL APPRECIATION FUND--an equity fund
seeking long-term capital appreciation by investing in equity
securities of financially strong domestic companies;
- WARBURG PINCUS SMALL COMPANY VALUE FUND--an equity fund
seeking long-term capital appreciation by investing primarily
in equity securities of small companies;
- WARBURG PINCUS EMERGING GROWTH FUND--an equity fund
seeking maximum capital appreciation by investing in
emerging growth companies;
- WARBURG PINCUS POST-VENTURE CAPITAL FUND--an equity fund
seeking long-term growth of capital by investing principally
in equity securities of issuers in their post-venture
capital stage of development;
- WARBURG PINCUS INTERNATIONAL EQUITY FUND--an international
equity fund seeking long-term capital appreciation;
<PAGE>9
WARBURG PINCUS EMERGING MARKETS FUND -- an equity fund
seeking growth of capital by investing primarily in
securities of non-United States issuers consisting of
companies in emerging securities markets;
WARBURG PINCUS JAPAN GROWTH FUND --an equity fund
seeking long-term growth of capital by investing primarily
in equity securities of Japanese issuers; and
WARBURG PINCUS JAPAN OTC FUND--an equity fund seeking
long-term capital appreciation by investing in a portfolio of
securities traded in the Japanese over-the-counter market.
An institutional shareholder of record and certain other
financial intermediaries may exchange Advisor Shares of a Fund for Advisor
Shares of other Warburg Pincus Funds.
The exchange privilege is available to shareholders residing
in any state in which the Fund's shares being acquired may legally be sold.
When an investor effects an exchange of shares, the exchange is treated for
federal income tax purposes as a redemption. Therefore, the investor may
realize a taxable gain or loss in connection with the exchange. No initial
sales charge is imposed on the shares being acquired in an exchange. See "How
to Redeem and Exchange Shares" in the accompanying Prospectuses of the New
Warburg Funds.
DIVIDENDS. Each New Warburg Fund and each Existing Warburg
Fund will distribute substantially all of the net investment income and net
realized capital gains, if any, of the Fund to the Fund's shareholders. All
distributions are reinvested in the form of additional full and fractional
shares unless a shareholder elects otherwise. The Existing and New Growth &
Income and Balanced Funds declare and pay dividends, if any, from net
investment income quarterly. The Existing and New Tax Free Funds declare
dividends from net investment income daily and pay such dividends monthly.
Net realized capital gains (including net short-term capital gains), if any,
of each New Warburg Fund, like each Existing Warburg Fund, will be distributed
at least annually. See "Dividends, Distributions and Taxes" in the
accompanying Prospectuses of the New Warburg Funds.
SHAREHOLDER VOTING RIGHTS. The New Warburg Funds are
registered with the Securities and Exchange Commission as open-end management
investment companies. The Existing Warburg Funds are each a separate series
of RBB Fund which is also registered as an open-end management investment
company. The RBB Fund and the New Warburg Funds are Maryland corporations,
each having a Board of Directors. Shareholders of both the New Warburg Funds
and the Existing Warburg Funds have similar voting rights. Neither the New
Warburg Fund nor the RBB Fund on behalf of the Existing Warburg Funds holds a
meeting of shareholders annually, except as required by the 1940 Act or other
applicable law. Each New Warburg Fund's By-Laws provides that shareholders
collectively owning at least ten percent of the outstanding shares of all
classes of stock of the Fund have 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 New Warburg Funds will assist in shareholder
communication in such matters.
<PAGE>10
In addition, under the laws of the State of Maryland,
shareholders of the New Warburg Funds and the Existing Warburg Funds do not
have appraisal rights in connection with a combination or acquisition of the
assets of the Fund by another entity. Shareholders of an Existing Warburg
Fund may, however, redeem their shares at net asset value prior to the date of
the Reorganization. See "Information on Shareholders' Rights -- Voting
Rights."
RISK FACTORS
Due to the fact that the investment objectives and policies
of each New Warburg Fund are virtually identical to those of the corresponding
Existing Warburg Fund, the investment risks are substantially similar. See
the accompanying Prospectuses of the applicable New Warburg Fund for a
complete discussion of the risks of investing in that Fund.
REASONS FOR THE REORGANIZATIONS
The Board of Directors of the RBB Fund has determined that
it is in the best interest of each Existing Warburg Fund to effect the
Reorganization. In reaching this conclusion, the Board considered a number of
factors, including the following:
1. the terms and conditions of the Reorganizations;
2. the identical investment objectives and
substantially identical policies and restrictions of each
New Warburg Fund in relation to those of the corresponding Existing
Warburg Fund;
3. that the investment advisor, co-administrators,
custodian, transfer agent and accountant for each New Warburg Fund
are the same as those of the corresponding Existing Warburg Fund;
4. the federal tax consequences of the Reorganizations to
the Existing Warburg Funds, the New Warburg Funds and the
shareholders of each, and that a legal opinion will be rendered that
no recognition of income, gain or loss for federal income tax
purposes will occur as a result of the Reorganizations to any of
them;
5. that the interests of shareholders of the Existing
Warburg Funds will not be diluted as a result of the Reorganizations;
6. that CSI and PFPC Inc., the Fund's co-administrator
("PFPC"), (or their affiliates) have agreed to waive fees and
reimburse expenses for the one-year period following the closing of
the Reorganizations to the extent necessary for the net
<PAGE>11
expense ratio of each New Warburg Fund to be no higher than that of
the corresponding Existing Warburg Fund on May 3, 1996, or such
date as may be agreed upon by the parties to the Reorganizations (the
"Closing Date");
7. that the expenses of the Reorganizations will be
borne by Warburg;
8. that no sales charge will be imposed in connection
with the Reorganizations;
9. that the Reorganizations would integrate the
Existing Warburg Funds fully into the Warburg Pincus Funds family,
thereby, among other things, reducing confusion in the marketplace
and reducing the possibility of inconsistencies in operations;
10. that the Reorganizations may increase economic
efficiencies of the Existing Warburg Funds; and
11. that the Reorganizations would remove certain
regulatory limitations on the ability of the Existing Warburg Funds
to effect certain transactions with parties that are affiliated
persons of the RBB Fund.
In light of the foregoing, the Board of Directors of the RBB
Fund, including the Independent Directors, has determined that it is in the
best interest of each Existing Warburg Fund and its shareholders to effect the
Reorganization. The Board of Directors has also determined that the
Reorganization of an Existing Warburg Fund and the corresponding New Warburg
Fund would not result in a dilution of the interests of the Existing Warburg
Fund's shareholders.
The Board of Directors of each New Warburg Fund has also
determined that it is advantageous to the New Warburg Fund to effect the
Reorganization. The Board of Directors also considered the terms and
conditions of the Reorganization and representations that the Reorganization
would be effected as a tax-free reorganization. Accordingly, the Board of
Directors of each New Warburg Fund, including a majority of the Independent
Directors, has determined that the Reorganization is in the best interests of
the New Warburg Fund's shareholders and that the interests of the New Warburg
Fund's shareholders would not be diluted as a result of the Reorganization.
<PAGE>12
FEE TABLES
Following are tables showing current costs and expenses of
the Existing Warburg Funds and the costs and expenses expected to be incurred
by the New Warburg Funds after giving effect to the Reorganizations. The
tables do not reflect charges that institutions and financial intermediaries
may impose on their customers.
GROWTH & INCOME FUND -- Common Shares
<TABLE>
<CAPTION>
====================================================== -------------------- ==================
Existing New
Warburg Fund Warburg Fund*
==================
====================================================== -------------------- ==================
<S> <C> <C>
Shareholder Transaction Expenses
Maximum sales charge imposed on purchases (as a
percentage of offering
price)........................................ None None
==================
====================================================== -------------------- ==================
Annual Operating Expenses (after fee waivers and
expense reimbursements)
Management fees.............................. .75% .75%
12b-1 fees**................................. 0 0
Other expenses............................... .49 .49
==================
====================================================== ==================== ==================
Total Operating Expenses (after waivers
and expense reimbursements).................. 1.24% 1.24%
====================================================== ==================== ==================
</TABLE>
GROWTH & INCOME FUND -- Advisor Shares
<TABLE>
<CAPTION>
====================================================== -------------------- ==================
Existing New
Warburg Fund Warburg Fund*
==================
====================================================== -------------------- ==================
<S> <C> <C>
Shareholder Transaction Expenses
Maximum sales charge imposed on purchases (as a
percentage of offering price)................. None None
==================
====================================================== -------------------- ==================
Annual Operating Expenses (after fee waivers and
expense reimbursements)
Management fees.............................. .75% .75%
12b-1 fees**................................. .50 .50
Other expenses............................... .38 .38
==================
- ------------------------------------------------------ -------------------- ==================
Total Operating Expenses (after waivers 1.63% 1.63%
and expense reimbursements)..................
- ------------------------------------------------------ -------------------- ==================
====================================================== ==================== ==================
====================================================== ==================== ==================
</TABLE>
<PAGE>13
BALANCED FUND -- Common Shares
<TABLE>
<CAPTION>
====================================================== -------------------- ==================
Existing New
Warburg Fund Warburg Fund
==================
====================================================== -------------------- ==================
<S> <C> <C>
Shareholder Transaction Expenses
Maximum sales charge imposed on purchases (as a
percentage of offering
price)........................................ None None*
==================
====================================================== -------------------- ==================
Annual Operating Expenses (after fee waivers and
expense reimbursements)
Management fees.............................. 0 0
12b-1 fees**................................. .25% .25%
Other expenses............................... 1.35 1.35
==================
====================================================== ==================== ==================
Total Operating Expenses (after waivers 1.60% 1.60%
and expense reimbursements).................
====================================================== ==================== ==================
</TABLE>
BALANCED FUND -- Advisor Shares
<TABLE>
<CAPTION>
====================================================== ------------------- ===================
Existing New
Warburg Fund Warburg Fund*
===================
====================================================== ------------------- ===================
<S> <C> <C>
Shareholder Transaction Expenses
Maximum sales charge imposed on purchases (as a
percentage of offering
price)........................................ None None
===================
====================================================== ------------------- ===================
Annual Operating Expenses (after fee waivers and
expense reimbursements)
Management fees.............................. 0 0
12b-1 fees**................................. .50% .50%
Other expenses............................... 1.35 1.35
===================
====================================================== =================== ===================
Total Operating Expenses (after waivers 1.85% 1.85%
and expense reimbursements).................
====================================================== =================== ===================
</TABLE>
<PAGE>14
TAX FREE FUND -- Common Shares
<TABLE>
<CAPTION>
====================================================== ------------------- ===================
Existing New
Warburg Fund Warburg Fund*
===================
====================================================== ------------------- ===================
<S> <C> <C>
Shareholder Transaction Expenses
Maximum sales charge imposed on purchases (as a
percentage of offering
price)........................................ None None
===================
====================================================== ------------------- ===================
Annual Operating Expenses (after fee waivers and
expense reimbursements)
Management fees.............................. 0 0
12b-1 fees**................................. .25% .25%
Other expenses............................... .25 .25
===================
====================================================== =================== ===================
Total Operating Expenses (after waivers .50% .50%
and expense reimbursements)..................
====================================================== =================== ===================
</TABLE>
* CSI and PFPC Inc. (or their affiliates) have agreed to waive fees and
reimburse expenses of each New Warburg Fund for a one-year period following
the closing of a Reorganization so that the expense ratio of each New
Warburg Fund will be no higher than that of the corresponding Existing
Warburg Fund on or before the Closing Date of the Reorganization.
** The Advisor Shares impose a 12b-1 fee of up to .75% per annum, which is the
economic equivalent of a sales charge. Long-term shareholders of the
Balanced Fund, the Tax Free Fund or Advisor Shares may pay more than the
economic equivalent of the maximum front-end sales charges permitted by the
National Association of Securities Dealers, Inc. (the "NASD").
Expenses for the Funds reflect current expense levels as of March 1,
1996. In addition, the Fee Tables reflect a voluntary waiver of Management
Fees and the reimbursement of a portion of the expenses of the
Existing Balanced and Tax Free Funds by Warburg. Absent such waivers
and expense reimbursements, Management Fees for the Existing Balanced Fund
and Existing Tax Free Fund would have equaled .90% and .50%, respectively;
Other Expenses for the Common Shares of the Existing Balanced and Tax
Free Funds would have equaled 1.71% and 2.86%, respectively, and, with respect
to the Existing Balanced Fund Advisor Shares, Other Expenses would have
equaled 1.71%; and Total Fund Operating Expenses for the Common Shares
of the Existing Balanced and Tax Free Funds would have equaled 2.86% and
3.61%, respectively, and with respect to Existing Balanced Fund Advisor
Shares, would have equaled 3.11%.
<PAGE>15
Examples
The following examples are intended to assist an investor
in understanding the various costs that an investor in the New Warburg Funds
will bear directly or indirectly. The examples assume payment of operating
expenses at the levels set forth in the tables above.
<TABLE>
<CAPTION>
=========================================================== --------------- ===============
1 Year 3 Years
===============
=========================================================== --------------- ===============
An investor would pay the following expenses on a $1,000
investment, assuming (1) 5.00% annual return and (2) redemption
at the end of each time period:
===============
=========================================================== --------------- ===============
<S> <C> <C>
Growth & Income Fund - Common Shares
Existing Warburg Fund.............................. $13 $39
New Warburg Fund................................... $13 $39
Growth & Income Fund - Advisor Shares
Existing Warburg Fund.............................. $17 $51
New Warburg Fund................................... $17 $51
===============
=========================================================== --------------- ===============
Balanced Fund - Common Shares
Existing Warburg Fund.............................. $16 $50
New Warburg Fund................................... $16 $50
Balanced Fund - Advisor Shares
Existing Warburg Fund.............................. $19 $58
New Warburg Fund................................... $19 $58
===============
----------------------------------------------------------- --------------- ===============
Tax Free Fund - Common Stock
Existing Warburg Fund.............................. $5 $16
New Warburg Fund................................... $5 $16
----------------------------------------------------------- --------------- ===============
</TABLE>
<PAGE>16
The examples in the Fee Tables assume that all dividends
and distributions are reinvested.
The examples provide a means for the investor to compare expense
levels of funds with different fee structures over
varying investment periods. To facilitate such comparison, all funds are
required to utilize a 5.00% annual return assumption. However, each Fund's
actual return will vary and may be greater or less than 5.00%. These
examples should not be considered representations of past or future
expenses and actual expenses may be greater or lesser than those shown.
<PAGE>17
INFORMATION ABOUT THE REORGANIZATIONS
AGREEMENT AND PLAN OF REORGANIZATION. The following summary of
each Plan is qualified in its entirety by reference to the form of Plan (Exhibit
A hereto). Each Plan provides that the relevant New Warburg Fund will acquire
all or substantially all of the assets of the corresponding Existing Warburg
Fund in exchange for shares of the New Warburg Fund and the assumption by the
New Warburg Fund of the liabilities of the Existing Warburg Fund on the Closing
Date.
Prior to the Closing Date, the RBB Fund on behalf of
each Existing Warburg Fund will endeavor to discharge all of its known
liabilities and obligations. The New Warburg Fund shall assume all
liabilities, expenses, costs, charges and reserves reflected on an
unaudited statement of assets and liabilities of the corresponding Existing
Warburg Fund prepared by PFPC as of the close of regular trading on the New
York Stock Exchange, Inc., currently 4:00 p.m. New York City time, on the
Closing Date, in accordance with generally accepted accounting principles
consistently applied from the prior audited period. The New Warburg
Fund shall also assume any liabilities of the corresponding Existing
Warburg Fund arising from the operations and/or transactions of the
Existing Warburg Fund prior to and including the Closing Date. The net
asset value per share of each class of each Fund will be determined by
adding the relevant class' pro rata share of the Fund's securities, cash and
other assets, deducting the relevant class' pro rata share of the actual
and accrued liabilities and the liabilities specifically allocated to that
class of shares, and dividing the result by the total number of outstanding
shares of the relevant class. Each Existing Warburg Fund and the
corresponding New Warburg Fund will utilize the procedures set forth in
their respective current Prospectuses or Statements of Additional
Information to determine the value of their respective portfolio securities
and to determine the aggregate value of each Fund's portfolio.
At or prior to the Closing Date, the RBB Fund on behalf
of each Existing Warburg Fund will declare a dividend or dividends which,
together with all previous such dividends, will have the effect of
distributing to the Existing Warburg Fund's shareholders all of the Fund's
investment company taxable income for all taxable years ending on or prior
to the Closing Date (computed without regard to any deduction for dividends
paid). In addition, each Existing Warburg Fund's dividend will include its
net capital gains realized in all taxable years ending on or prior to the
Closing Date (after reductions for any capital loss carryforward).
As soon after the Closing Date as conveniently practicable,
each Existing Warburg Fund will liquidate and distribute pro rata to
shareholders of record as of the close of business on the Closing Date the
shares of the same class of the corresponding New Warburg Fund received by the
Existing Warburg Fund. Such liquidation and distribution will be accomplished by
the establishment of accounts in the names of the Existing Warburg Fund's
shareholders on the share records of the corresponding New Warburg Fund's
transfer agent. Each account will represent the respective pro rata number of
shares of the class of shares of the corresponding New Warburg Fund due to each
of the Existing Warburg Fund's
<PAGE>18
shareholders. After such distribution and the winding up of its affairs, each
Existing Warburg Fund will be terminated as a series of the RBB Fund.
The consummation of each Reorganization is subject to the
conditions set forth in the Plan. Notwithstanding approval by the shareholders
of an Existing Warburg Fund, the Plan may be terminated with respect to a
Reorganization at any time at or prior to the Closing Date: (i) by mutual
agreement of the RBB Fund, on behalf of an Existing Warburg Fund, and the
corresponding New Warburg Fund; (ii) by the RBB Fund, on behalf of an Existing
Warburg Fund, in the event the corresponding New Warburg Fund shall, or a New
Warburg Fund, in the event the RBB Fund or the corresponding Existing Warburg
Fund shall, materially breach any representation, warranty or agreement
contained in the Plan to be performed at or prior to the Closing Date; or (iii)
if a condition to the Plan expressed to be precedent to the obligations of the
terminating party has not been met and it reasonably appears that it will not or
cannot be met.
Pursuant to the Plan, each New Warburg Fund has agreed to
indemnify and advance expenses to each director or officer of The RBB Fund
against money damages incurred in connection with any claim arising out of such
person's services as a director or officer with respect to matters specifically
relating to the corresponding Existing Warburg Fund. Each Existing Warburg Fund
has obtained a rider for its current directors and officers liability policy
extending the period for making claims under the policy until three years
following the Closing Date. The premium for the three-year period has been
prepaid by the Existing Warburg Fund.
Warburg has agreed to indemnify each person who served as a
director or officer of The RBB Fund on the date of execution of the Plan
against any and all direct and indirect liabilities, losses, claims,
damages and expenses (including, without limitation, reasonable attorneys'
fees) (each, a "Loss") that arise from or relate to the operations
commencing on the first business day after the Closing Date of the New
Warburg Funds, to the extent that a Loss has not been recovered against the
relevant New Warburg Fund.
Approval of the Plan with respect to each Existing
Warburg Fund will require the affirmative vote of a majority of each
Existing Warburg Fund's outstanding shares in the aggregate without regard to
class, in person or by proxy, if a quorum is present. The approval of
shareholders of any other RBB Fund or of shareholders of the New Warburg
Funds is not required. Implementing the Reorganization by any one Existing
Warburg Fund would not be conditioned on receipt of shareholder approval by
any other Existing Warburg Fund. Shareholders of the Existing Warburg Funds
are entitled to one vote for each share. If the Reorganization is not
approved by shareholders of an Existing Warburg Fund, the Board of Directors
of the RBB Fund on behalf of the applicable Existing Warburg Fund will
consider other possible courses of action available to it, including
resubmitting the Reorganization proposal to shareholders.
DESCRIPTION OF THE NEW WARBURG FUNDS' SHARES. Shares of
each New Warburg Fund will be issued to the corresponding Existing Warburg
Fund in
<PAGE>19
accordance with the procedures detailed in the Plan and as described in the New
Warburg Fund's Prospectuses. The New Warburg Funds do not issue share
certificates to shareholders. See "Information on Shareholders' Rights" and the
Prospectuses of the New Warburg Funds for additional information with respect to
the shares of the New Warburg Funds.
FEDERAL INCOME TAX CONSEQUENCES. The exchange of assets of
each Existing Warburg Fund for shares of the corresponding New Warburg Fund is
intended to qualify for federal income tax purposes as a tax-free reorganization
under Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"). As a condition to the closing of the Reorganization, each New Warburg
Fund and the RBB Fund on behalf of the corresponding Existing Warburg Fund will
receive an opinion from Willkie Farr & Gallagher, counsel to the New Warburg
Funds, to the effect that, on the basis of the existing provisions of the Code,
U.S. Treasury regulations issued thereunder, current administrative rules,
pronouncements and court decisions, for federal income tax purposes, upon
consummation of the Reorganization:
(1) the transfer of all or substantially all of each Existing Warburg
Fund's assets in exchange for the corresponding New Warburg Fund's
shares and the assumption by the New Warburg Fund of liabilities of the
Existing Warburg Fund will constitute a "reorganization" within the
meaning of Section 368(a) of the Code, and the New Warburg Fund and the
corresponding Existing Warburg Fund are each a "party to a
reorganization" within the meaning of Section 368(b) of the Code;
(2) no gain or loss will be recognized by each New Warburg Fund upon
the receipt of the assets of the corresponding Existing Warburg Fund
solely in exchange for the New Warburg Fund's shares and the assumption
by the New Warburg Fund of liabilities of the corresponding Existing
Warburg Fund;
(3) no gain or loss will be recognized by each Existing Warburg Fund
upon the transfer of the Existing Warburg Fund's assets to the
corresponding New Warburg Fund in exchange for the New Warburg Fund's
shares and the assumption by the New Warburg Fund of liabilities of the
Existing Warburg Fund or upon the distribution (whether actual or
constructive) of the New Warburg Fund's shares to the Existing Warburg
Fund's shareholders;
(4) no gain or loss will be recognized by shareholders of each
Existing Warburg Fund upon the exchange of their shares for shares of
the corresponding New Warburg Fund and the assumption by the New
Warburg Fund of liabilities of the Existing Warburg Fund;
(5) the aggregate tax basis of the shares of each New Warburg Fund
received by each shareholder of the corresponding Existing Warburg Fund
pursuant to the Reorganization will be the same as the aggregate tax
basis of shares of the Existing Warburg Fund held by such shareholder
immediately prior to the Reorganization, and the holding period of
shares of the New Warburg Fund to be received by each
<PAGE>20
shareholder of the Existing Warburg Fund will include the period
during which shares of the Existing Warburg Fund exchanged
therefor were held by such shareholder (provided shares of the
Existing Warburg Fund were held as capital assets on the date of the
Reorganization); and
(6) the tax basis of each Existing Warburg Fund's assets acquired by
the corresponding New Warburg Fund will be the same as the tax basis of
such assets to the Existing Warburg Fund immediately prior to the
Reorganization, and the holding period of the assets of the Existing
Warburg Fund in the hands of the New Warburg Fund will include the
period during which those assets were held by the Existing Warburg
Fund.
Shareholders of each Existing Warburg Fund should consult
their tax advisors regarding the effect, if any, of the proposed Reorganization
in light of their individual circumstances. Since the foregoing discussion only
relates to the federal income tax consequences of the Reorganization,
shareholders of each Existing Warburg Fund should also consult their tax
advisors as to state and local tax consequences, if any, of the Reorganization.
CAPITALIZATION. The following table shows the capitalization
of each Fund as of the close of business on February 29, 1996 and the combined
pro forma capitalization as if each Reorganization had occurred as of the close
of business on that date.
<TABLE>
<CAPTION>
New Warburg Fund
Existing Warburg Fund (Unaudited) Pro Forma
(Unaudited) Combined
--------------------- ---------------- ---------
<S> <C> <C> <C>
Growth & Income Fund - Common Shares
Net assets................................... $1,050,086,210.11 0 $1,050,086,210.11
Net asset value per share.................... $16.24 0 $16.24
Shares outstanding........................... 64,647,776.8490 0 64,647,776.8490
Growth & Income Fund - Advisor Shares
Net assets................................... $80,037,316.87 0 $80,037,316.87
Net asset value per share.................... $16.23 0 $16.23
Shares outstanding........................... 4,932,004.8370 0 4,932,004.8370
Balanced Fund - Common Shares
Net assets................................... $19,578,313.86 0 $19,578.313.86
Net asset value per share.................... $11.85 0 $11.85
Shares outstanding........................... 1,652,037.6760 0 1,652,037.6760
</TABLE>
<PAGE>21
<TABLE>
<CAPTION>
New Warburg Fund
Existing Warburg Fund (Unaudited) Pro Forma
(Unaudited) Combined
--------------------- ---------------- ---------
<S> <C> <C> <C>
Balanced Fund - Advisor Shares
Net assets................................... $1,316.65 0 $1,316.65
Net asset value per share.................... $11.85 0 $11.85
Shares outstanding........................... 111.0930 0 111.0930
Tax Free Fund - Common Shares
Net assets................................... $4,416,268.07 0 $4,416,268.07
Net asset value per share.................... $10.62 0 $10.62
Shares outstanding........................... 415,857.4290 0 415,857.4290
</TABLE>
The New Warburg Funds will not commence operations until
consummation of the Reorganizations and, accordingly, as of March 1, 1996 there
were no outstanding shares of the New Warburg Funds.
As of the Record Date, the officers and Directors of the RBB
Fund beneficially owned as a group less than 1% of the outstanding shares of
each Existing Warburg Fund. To the best knowledge of the RBB Fund, as of the
Record Date, no shareholder or "group" (as that term is used in Section 13(d) of
the Securities Exchange Act of 1934 (the "Exchange Act")), except as set forth
in the table below, owned beneficially or of record more than 5% of the
outstanding shares of a class of an Existing Warburg Fund.
<TABLE>
<CAPTION>
EXISTING PERCENT OWNED AS OF RECORD
WARBURG FUND NAME AND ADDRESS DATE
------------ ---------------- --------------------------
<S> <C> <C>
Warburg Pincus Growth & Income Fund Charles Schwab & Co., Inc. 34.37%
Reinvest Account
Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Nat'l Financial Svs. Corp. 11.41%
P.O. Box 3908
Church Street Station
New York, NY 10008
</TABLE>
<PAGE>22
<TABLE>
<CAPTION>
EXISTING PERCENT OWNED AS OF RECORD
WARBURG FUND NAME AND ADDRESS DATE
------------ ---------------- --------------------------
<S> <C> <C>
Warburg Pincus Growth & Income Fund - Connecticut General Life Ins. Co. 98.68%
Advisor Shares CIGNA Corp.
P.O. Box 2975
Hartford, CT 06104
Warburg Pincus Balanced Fund Charles Schwab & Co., Inc. 41.81%
Reinvest Account
Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Nat'l Financial Svs Corp. 24.58%
P.O. Box 3908
Church Street Station
New York, NY 10008
Warburg Pincus Balanced Fund Advisor Warburg, Pincus Counsellors, Inc. 85.34%
Shares Attn: Stephen Distler
466 Lexington Avenue
New York, NY 10017
Warburg Pincus Tax Free Fund Gruntal & Co. 10.93%
14 Wall Street
New York, NY 10005
Gruntal & Co. 9.71%
14 Wall Street
New York, NY 10005
</TABLE>
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion is based upon and qualified in its
entirety by the disclosures in the Prospectuses and Statements of Additional
Information of the New Warburg Funds and the Existing Warburg Funds.
INVESTMENT OBJECTIVES. As stated above each Existing
Warburg Fund and its corresponding New Warburg Fund have the same investment
objective. There can be no assurance that any Fund will achieve its
investment objective. The investment objectives of
<PAGE>23
the New Warburg Funds, like those of the Existing Warburg Funds, may be changed
by the Board of Directors without the affirmative vote of the holders of a
majority of the outstanding shares of the relevant Fund (as defined in the 1940
Act).
PRIMARY INVESTMENTS. The New Warburg Funds were organized for
the purpose of acquiring the assets of the corresponding Existing Warburg Funds
and have the same portfolio managers. In addition, the investment policies and
investment restrictions of the New Warburg Funds were developed so that they
would be identical to those of the corresponding Existing Warburg Funds, except
as follows:
(1) the borrowing limit of the New Growth & Income Fund is
30% of total assets, while that of the Existing Growth & Income Fund is 10%; and
(2) the New Growth & Income Fund may pledge up to 125% of any
amount it borrows while the Existing Growth & Income Fund may pledge up to the
lesser of the amount borrowed or 10% of its assets at the time of borrowing.
All of the investment restrictions of the Existing Warburg
Funds are fundamental and cannot be changed without the approval of the holders
of a majority of a Fund's outstanding shares. While the New Warburg Funds have
the same investment restrictions (except as previously stated), the following
restrictions have been reclassified as non-fundamental and can be changed by a
New Warburg Fund's Board of Directors without shareholder approval: (i) the
prohibition of a Fund investing in oil, gas or mineral-related programs or
leases; (ii) the prohibition of a Fund investing in securities issued by any
other investment company; and (iii) the prohibition of a Fund making investments
for purposes of exercising control or management. Warburg has no current
intention of recommending any change to any non-fundamental investment policy of
the New Warburg Funds for the first year of their operations.
MANAGEMENT OF THE FUND
Warburg will provide investment advisory services to each New
Warburg Fund under an advisory agreement substantially identical to the advisory
agreement currently in effect between Warburg and the RBB Fund relating to each
Existing Warburg Fund. The same persons who today are responsible for the
day-to-day management of each Existing Warburg Fund will continue in that role
after the Reorganizations. In addition, PFPC Inc. and Counsellors Funds Services
Inc. would continue to provide accounting and co-administrative services, as
applicable, and CSI would continue to provide distribution services, each under
new agreements substantially identical to those now in effect for each Existing
Warburg Fund. In particular, the advisory fees, co-administration fees and
distribution fees payable under the related agreements would not be changed as a
result of the Reorganization.
State Street Bank and Trust Company will continue its role as
shareholder servicing agent, transfer agent and dividend disbursing agent after
the Reorganizations. PNC Bank will continue to serve as custodian and State
Street Bank as co-custodian for foreign
<PAGE>24
securities. The fees payable for transfer agency and custodial services will be
no higher after the Reorganizations than before. Coopers & Lybrand L.L.P., the
auditors for the Existing Warburg Funds, will also serve in that capacity for
the New Warburg Funds.
INTEREST OF WARBURG IN THE REORGANIZATIONS
Warburg may be deemed to have an interest in the Plan and the
Reorganizations because it provides investment advisory services to the Existing
Warburg Funds. Warburg receives compensation from the Existing Warburg Funds for
services it provides pursuant to advisory agreements. The terms and provisions
of these arrangements are described in the New Warburg Fund Prospectuses under
"Management of the Fund -- Investment Adviser." Future growth of assets of the
New Warburg Funds, if any, can be expected to increase the total amount of fees
payable to Warburg and its affiliates and to reduce the amount of fees and
expenses required to be waived to maintain total fees and expenses of the New
Warburg Funds at agreed upon levels. Warburg may also be deemed to have an
interest in the Plan and the Reorganizations because, as of the Record Date, it
or one or more of its affiliates possessed or shared voting power or investment
power as a fiduciary on behalf of its customers in the Existing Growth & Income
Fund[, and owned all of each outstanding shares of each New Warburg Fund].
Warburg and its affiliates have advised the Existing Warburg Funds that it
intends to vote the shares over which it has voting power at the Meeting (i) in
the manner instructed by the customers for which such shares are held or (ii) in
the event that such instructions are not received, in the same proportion as
votes cast by other shareholders. See "Voting Information."
INFORMATION ON SHAREHOLDERS' RIGHTS
GENERAL. The RBB Fund and the New Warburg Funds are open-end
diversified management investment companies registered under the 1940 Act, which
continuously offer to sell shares at their current net asset values. Each
Existing Warburg Fund is a series of the RBB Fund, which is a Maryland
corporation that was incorporated on February 29, 1988 and is governed by its
Articles of Incorporation, By-Laws and Board of Directors. Each New Warburg Fund
is a Maryland corporation organized on January 24, 1996 and is governed by its
Articles of Incorporation, By-Laws and Board of Directors. Each Fund is also
governed by applicable state and federal law. The RBB Fund has an authorized
capital of thirty billion shares of common stock with a par value of $.001 per
share. Each New Warburg Fund has an authorized capital of three billion shares
of common stock with a par value of $.001 per share. The Board of Directors of
the RBB Fund has authorized the issuance of seventeen series of shares, each
representing shares in one of seventeen separate portfolios, and may authorize
the issuance of additional series of shares in the future. The assets of each
portfolio are segregated and separately managed and a shareholder's interest is
in the assets of the portfolio in which he or she holds shares. In each New
Warburg Fund and each Existing Warburg Fund, shares represent interests in the
assets of the relevant Fund and have identical voting, dividend, liquidation and
other rights on the same terms and conditions except that expenses related to
the distribution of each class of shares of a Fund are borne
<PAGE>25
solely by such class and each class of shares has exclusive voting rights with
respect to provisions of such Fund's Rule 12b-1 distribution plan pertaining to
a particular class.
MULTI-CLASS STRUCTURE. The New and Existing Tax Free Funds
have issued only one class of shares. The New and Existing Growth & Income Funds
and the Balanced Funds each have issued two classes of shares: Common Shares and
Advisor Shares. Individual investors may purchase Advisor Shares only through
institutional shareholders of record, broker-dealers, financial institutions,
depository institutions and other financial intermediaries ("Institutions").
The New and Existing Growth & Income and Balanced Funds are
authorized to offer Advisor Shares exclusively to Institutions whose clients or
customers (or participants in the case of retirement plans) ("Customers") are
beneficial owners of Advisor Shares. Either those Institutions or companies
providing certain services to them (together, "Service Organizations") will
enter into service agreements ("Agreements") related to the sale of the Advisor
Shares with CSI pursuant to a Distribution Plan. Pursuant to the terms of an
Agreement, the Service Organization agrees to perform certain distribution,
shareholder servicing, administrative and/or accounting services for its
Customers. Distribution services would be marketing or other services in
connection with the promotion and sale of Advisor Shares. Shareholder services
that may be provided include responding to Customer inquiries, providing
information on Customer investments and providing other shareholder liaison
services. See "Shareholder Servicing" in the Prospectuses of the Existing New
Warburg Funds for Advisor Shares.
DIRECTORS. The By-Laws of the RBB Fund and of each New Warburg
Fund provide that the term of office of each Director shall be from the time of
his or her election and qualification until his or her successor shall have been
elected and shall have qualified. Any Director of the RBB Fund or any New
Warburg Fund may be removed by the vote of at least a majority of the shares of
capital stock then entitled to be cast for the election of Directors. Vacancies
on the Boards of the RBB Fund or any New Warburg Fund may be filled by the
Directors remaining in office. A meeting of shareholders will be required for
the purpose of electing additional Directors whenever fewer than a majority of
the Directors then in office were elected by shareholders.
VOTING RIGHTS. Neither the RBB Fund nor any New Warburg Fund
holds a meeting of shareholders annually, and there normally is no meeting of
shareholders for the purpose of electing Directors unless and until such time as
less than a majority of the Directors holding office have been elected by
shareholders.
LIQUIDATION OR TERMINATION. In the event of the liquidation or
termination of any of the investment funds of the RBB Fund or of any New Warburg
Fund, the shareholders of the fund are entitled to receive, when and as declared
by the Directors, the excess of the assets over the liabilities belonging to the
fund. In either case, the assets so distributed to shareholders will be
distributed among the shareholders in proportion to the number of shares of each
class held by them and recorded on the books of the fund.
<PAGE>26
LIABILITY OF DIRECTORS. The Articles of Incorporation of the
RBB Fund and of each New Warburg Fund provide that the Directors and officers
shall not be liable for monetary damages for breach of fiduciary duty as a
Director or officer, except to the extent such exemption is not permitted by
law. The Articles of Incorporation further provide that the RBB Fund and each
New Warburg Fund shall indemnify each Director and officer and provide advances
for the payment of expenses relating to the matter for which indemnification is
sought, each to the fullest extent permitted by Maryland General Corporation Law
and other applicable law. Pursuant to the Plan, each New Warburg Fund extends
this same protection to current directors and officers of the RBB Fund for
liability relating to the corresponding Existing Warburg Fund.
RIGHTS OF INSPECTION. Maryland law permits any shareholder of
the RBB Fund and of each New Warburg Fund or any agent of such shareholder to
inspect and copy, during usual business hours, the By-Laws, minutes of
shareholder proceedings, annual statements of the affairs and voting trust
agreements of the RBB Fund and the New Warburg Fund on file at its principal
offices.
SHAREHOLDER LIABILITY. Under Maryland law, shareholders of the
RBB Fund and of each New Warburg Fund do not have personal liability for
corporate acts and obligations. Shares of a New Warburg Fund issued to the
shareholders of the corresponding Existing Warburg Fund in the Reorganization
will be fully paid and nonassessable when issued, transferable without
restrictions and will have no preemptive rights.
The foregoing is only a summary of certain characteristics of
the operations of the New Warburg Funds and the RBB Fund on behalf of the
Existing Warburg Funds. The foregoing is not a complete description of the
documents cited. Shareholders should refer to the provisions of the corporate
documents and state laws governing each Fund for a more thorough description.
ADDITIONAL INFORMATION
Both the RBB Fund and the New Warburg Funds are subject to the
informational requirements of the Exchange Act and the 1940 Act and in
accordance therewith file reports and other information including proxy
material, reports and charter documents, with the SEC. These materials can be
inspected and copies obtained at the Public Reference Facilities maintained by
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the New York
Regional Office of the SEC at 7 World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can also be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services, SEC,
Washington, D.C. 20549 at prescribed rates.
<PAGE>27
VOTING INFORMATION
This Combined Prospectus/Proxy Statement is furnished in
connection with a solicitation of proxies by the Board of Directors of the RBB
Fund to be used at the Special Meeting of Shareholders of the Existing Warburg
Funds to be held at 3:00 p.m. on May 1, 1996, at the offices of The RBB Fund,
Inc., 400 Bellevue Parkway, Wilmington, Delaware, 19809 and at any adjournment
or adjournments thereof. This Combined Prospectus/Proxy Statement, along with a
Notice of the Meeting and proxy card(s), is first being mailed to shareholders
of the Existing Warburg Funds on or about March 8, 1996. Only shareholders of
record as of the close of business on the Record Date will be entitled to notice
of, and to vote at, the Meeting or any adjournment thereof. As of the Record
Date, the Existing Warburg Funds had the following shares outstanding and
entitled to vote: Existing Growth & Income Fund 63,992,111.6950 (Common Shares),
4,939,664.0300 (Advisor Shares); Existing Balanced Fund 1,655,020.2620 (Common
Shares), 111.0930 (Advisor Shares); and Existing Tax Free Fund 416,881.9450
(Common Shares). The holders of one-third of the shares of an Existing Warburg
Fund outstanding at the close of business on the Record Date present in person
or represented by proxy will constitute a quorum for the Meeting of that Fund.
For purposes of determining a quorum for transacting business at the Meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
be treated as shares that are present but which have not been voted. For this
reason, abstentions and broker non-votes will have the effect of a "no" vote for
purposes of obtaining the requisite approval of the Plan. If the enclosed proxy
is properly executed and returned in time to be voted at the Meeting, the
proxies named therein will vote the shares represented by the proxy in
accordance with the instructions marked thereon. Unmarked proxies will be voted
FOR approval of the relevant Plan and FOR approval of any other matters deemed
appropriate. A proxy may be revoked at any time on or before the Meeting by
written notice to the Secretary of The RBB Fund, Inc., Bellevue Park Corporate
Center, 400 Bellevue Parkway, Suite 100, Wilmington, Delaware 19809.
Approval of the Plan with respect to each Existing Warburg
Fund will require the affirmative vote of a majority of each Existing Warburg
Fund's outstanding shares, voting in the aggregate without regard to class, in
person or by proxy, if a quorum is present. The approval of shareholders of any
other investment series of the RBB Fund is not required. Implementing the
Reorganization by any one Existing Warburg Fund would not be conditioned on
receipt of shareholder approval by any other Existing Warburg Fund. Shareholders
of the Existing Warburg Funds are entitled to one vote for each share.
Proxy solicitations will be made primarily by mail, but
proxy solicitations also may be made by telephone, telegraph or personal
interviews conducted by officers and employees of Warburg and/or by PFPC or
their respective affiliates. In addition, D.F. King & Co. Inc. ("D.F. King"),
or an agent of D.F. King may call shareholders to ask if they would be willing
to authorize D.F. King or its agent to execute a proxy on their behalf
<PAGE>28
authorizing the voting of their shares in accordance with the instructions given
over the telephone by the shareholders. The latter telephone solicitation
procedure is designed to authenticate the shareholder's identity by, among other
things, asking the shareholder to provide his or her social security number (in
the case of an individual) or taxpayer identification number (in the case of an
entity). The shareholder's instructions will be implemented in a proxy executed
by D.F. King or its agent and a confirmation will be sent to the shareholder to
ensure that the vote has been authorized in accordance with the shareholder's
instructions. Although a shareholder's vote may be solicited and cast in this
manner, each shareholder will receive a copy of this Combined Prospectus/Proxy
Statement and may vote by mail or by fax using the enclosed proxy card. The
Existing Warburg Funds believe that this telephone voting system will comply
with Maryland law and will obtain an opinion of counsel to that effect prior to
implementing such procedures. The aggregate cost of solicitation of the
shareholders of the Existing Warburg Fund is expected to be approximately
$54,000 to $78,000. All expenses of the Reorganization, including the costs of
the proxy solicitation and the preparation of enclosures to the Combined
Prospectus/Proxy Statement, reimbursement of expenses of forwarding solicitation
material to beneficial owners of shares of the Existing Warburg Funds and
expenses incurred in connection with the preparation of this Combined
Prospectus/Proxy Statement will be borne by Warburg or its affiliates (excluding
extraordinary expenses not normally associated with transactions of this type).
It is anticipated that banks, brokerage houses and other institutions, nominees
and fiduciaries will be requested to forward proxy materials to beneficial
owners and to obtain authorization for the execution of proxies. Warburg or its
affiliates, may, upon request, reimburse banks, brokerage houses and other
institutions, nominees and fiduciaries for their expenses in forwarding proxy
materials to beneficial owners.
In the event that a quorum necessary for a shareholders'
meeting is not present or sufficient votes to approve the Reorganization of an
Existing Warburg Fund are not received by May 1, 1996, the persons named as
proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies. In determining whether to adjourn the Meeting, the
following factors may be considered: the percentage of votes actually cast, the
percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to shareholders with respect to
the reasons for the solicitation. Any such adjournment will require an
affirmative vote by the holders of a majority of the shares of the relevant
Existing Warburg Fund present in person or by proxy and entitled to vote at the
Meeting. The persons named as proxies will vote upon a decision to adjourn the
Meeting with respect to an Existing Warburg Fund after consideration of the best
interests of all shareholders of that Fund.
As of the Record Date, Warburg (or its affiliates) possessed
or shared voting power or investment power as a fiduciary on behalf of its
customers, with respect to the following number of shares (constituting the
percentage of outstanding shares indicated in parentheses) of each of the
respective Existing Warburg Funds: Existing Warburg Growth & Income Fund,
6,519,945.608 (10.19%); Existing Warburg Balanced Fund, 19,351.726 (1.17%); and
Existing Warburg Tax Free Fund, 34,729.816 (8.33%).
<PAGE>29
OTHER BUSINESS
The RBB Fund Board of Directors knows of no other business to
be brought before the Meeting. However, if any other matters come before the
Meeting, proxies that do not contain specific restrictions to the contrary will
be voted on such matters in accordance with the judgment of the persons named in
the enclosed Proxy Card.
The approval of shareholders of the New Warburg Funds is not
required in order to affect the Reorganizations and, accordingly, the votes of
the shareholders of the New Warburg Funds are not being solicited by this
Combined Prospectus/Proxy Statement.
FINANCIAL STATEMENTS AND EXPERTS
The audited statement of assets and liabilities of each
Existing Warburg Fund, including the schedule of portfolio investments, as of
August 31, 1995, the related statements of operations for the year then ended,
the statement of changes in net assets for each of the two years in the period
then ended and the financial highlights for each of the years in the five-year
period then ended, have been incorporated by reference into this Combined
Prospectus/Proxy Statement in reliance upon the reports of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of such firm as experts
in accounting and auditing. There is no financial information available at this
time for the New Warburg Funds, which have not yet commenced operations.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the
New Warburg Funds will be passed upon by Willkie Farr & Gallagher, One Citicorp
Center, 153 East 53rd Street, New York, New York 10022, counsel to the New
Warburg Funds. In rendering such opinion, Willkie Farr & Gallagher may rely on
an opinion of Venable, Baetjer and Howard, LLP as to certain matters under
Maryland law.
<PAGE>
EXHIBIT A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
<PAGE>1-
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 6th day of March, 1996, between and among Warburg, Pincus ___________
Fund, Inc., a Maryland corporation (the "New Warburg Fund"), and The RBB
Fund, Inc., a Maryland corporation (the "RBB Fund"), on behalf of the Warburg
Pincus______________ Fund, a series of shares of the RBB Fund (the
"Existing Warburg Fund").
This Agreement is intended to be and is adopted as a
plan of reorganization and liquidation within the meaning of
Section 368 (a) of the United States Internal Revenue Code of 1986, as
amended (the "Code"). The reorganization of the Existing Warburg Fund
(collectively, the "Reorganization") will consist of the transfer of
substantially all of the assets of the Existing Warburg Fund in exchange
solely for shares of the applicable class of common stock (collectively,
the "Shares"), of the New Warburg Fund corresponding thereto, as
indicated in the table set forth in Schedule A hereto, and the assumption
by the New Warburg Fund of liabilities of the Existing Warburg Fund and the
distribution, after the Closing Date hereinafter referred to, of New
Warburg Fund Shares to the shareholders of the Existing Warburg Fund in
liquidation of the Existing Warburg Fund as provided herein, all upon the terms
and conditions hereinafter set forth in this Agreement.
WHEREAS, the Board of Directors of the RBB Fund on behalf of the
Existing Warburg Fund has determined that the exchange of all of the assets and
the liabilities of the Existing Warburg Fund for New Warburg Fund Shares and the
assumption of such liabilities by the New Warburg Fund is in the best interests
of the RBB Fund and the Existing Warburg Fund and that the interests of the
existing shareholders of the RBB Fund and the Existing Warburg Fund would not be
diluted as a result of this transaction; and
WHEREAS, the Board of Directors of the New Warburg Fund has determined
that the exchange of all of the assets of the Existing Warburg Fund for New
Warburg Fund Shares is in the best interests of the New Warburg Fund's
shareholders and that the interests of the existing shareholders of the New
Warburg Fund would not be diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
<PAGE>2
1. TRANSFER OF ASSETS OF THE EXISTING WARBURG FUND IN EXCHANGE FOR NEW
WARBURG FUND SHARES AND ASSUMPTION OF THE EXISTING WARBURG FUND'S
LIABILITIES AND LIQUIDATION OF THE EXISTING WARBURG FUND
1.1. Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the RBB Fund
agrees to transfer the Existing Warburg Fund's assets as set forth in paragraph
1.2 to the New Warburg Fund identified in Schedule A, and the New Warburg Fund
agrees in exchange therefor: (i) to deliver to the RBB Fund the number of New
Warburg Fund Shares, including fractional New Warburg Fund Shares, determined by
dividing the value of the Existing Warburg Fund's net assets attributable to
each class of shares, computed in the manner and as of the time and date set
forth in paragraph 2.1, by the net asset value of one New Warburg Fund Share of
the same class, computed in the manner and as of the time and date set forth in
paragraph 2.2; and (ii) to assume the liabilities of the Existing Warburg Fund,
as set forth in paragraph 1.3. Such transactions shall take place at the closing
provided for in paragraph 3.1 (the "Closing").
1.2. (a) The assets of the Existing Warburg Fund to be acquired by the
New Warburg Fund shall consist of all property including, without limitation,
all cash, securities and dividend or interest receivables which are owned by the
Existing Warburg Fund and any deferred or prepaid expenses shown as an asset on
the books of the Existing Warburg Fund on the closing date provided in paragraph
3.1 (the "Closing Date").
(b) The RBB Fund, on behalf of the Existing Warburg Fund, has
provided the New Warburg Fund with a list of all of the Existing Warburg Fund's
assets as of the date of execution of this Agreement. The RBB Fund, on behalf of
the Existing Warburg Fund, reserves the right to sell any of these securities
but will not, without the prior approval of the New Warburg Fund, acquire any
additional securities other than securities of the type in which the New Warburg
Fund is permitted to invest. The RBB Fund, on behalf of the Existing Warburg
Fund, will, within a reasonable time prior to the Closing Date, furnish the New
Warburg Fund with a list of the securities, if any, on the Existing Warburg
Fund's list referred to in the first sentence of this paragraph which do not
conform to the New Warburg Fund's investment objectives, policies and
restrictions. In the event that the Existing Warburg Fund holds any investments
which the New Warburg Fund may not hold, the Existing Warburg Fund will dispose
of such securities prior to the Closing Date. In addition, if it is determined
that the portfolios of the Existing Warburg Fund and the New Warburg Fund, when
aggregated, would contain investments exceeding certain percentage limitations
imposed upon the New Warburg Fund with respect to such investments, the Existing
Warburg Fund, if requested by the New Warburg Fund, will dispose of and/or
reinvest a sufficient amount of such investments as may
<PAGE>3
be necessary to avoid violating such limitations as of the Closing Date.
1.3. The RBB Fund, on behalf of the Existing Warburg Fund,
will endeavor to discharge all the Existing Warburg Funds' known
liabilities and obligations prior to the Closing Date, other than those
liabilities and obligations which would otherwise be discharged at a later
date in the ordinary course of business. The New Warburg Fund shall assume all
liabilities, expenses, costs, charges and reserves, including those
liabilities reflected on an unaudited statement of assets and liabilities
of the Existing Warburg Fund prepared by PFPC Inc., as of the Valuation
Date (as defined in paragraph 2.1), in accordance with generally accepted
accounting principles consistently applied from the prior audited period.
The New Warburg Fund shall also assume any liabilities, expenses, costs or
charges incurred by or on behalf of the Existing Warburg Fund specifically
arising from or relating to the operations and/or transactions of the
Existing Warburg Fund prior to and including the Closing Date but which are
not reflected on the above-mentioned statement of assets and liabilities,
including any liabilities, expenses, costs or charges arising under paragraph
5.10 hereof.
1.4. As provided in paragraph 3.4, as soon after the Closing Date as
is conveniently practicable (the "Liquidation Date"), the Existing Warburg
Fund will liquidate and distribute pro rata to the Existing Warburg
Fund's shareholders of record determined as of the close of business on
the Closing Date (the "Existing Warburg Fund Shareholders") the New Warburg
Fund Shares it receives pursuant to paragraph 1.1. Such liquidation and
distribution will be accomplished by the transfer of the New Warburg Fund
Shares then credited to the account of the Existing Warburg Fund on the
books of the New Warburg Fund to open accounts on the share records of the
New Warburg Fund in the name of the Existing Warburg Fund's shareholders
representing the respective pro rata number of the New Warburg Fund Shares of
the particular class due such shareholders. All issued and outstanding
shares of the Existing Warburg Fund will simultaneously be canceled
on the books of the RBB Fund, although share certificates representing
interests in the Existing Warburg Fund will represent a number of New Warburg
Fund Shares after the Closing Date as determined in accordance with Section
2.3. The New Warburg Fund shall not issue certificates representing the New
Warburg Fund Shares in connection with such exchange.
1.5. Ownership of New Warburg Fund Shares will be shown on the books
of the New Warburg Fund's transfer agent. Shares of the New Warburg Fund
will be issued in the manner described in the New Warburg Fund's current
prospectus and statement of additional information.
1.6. Any transfer taxes payable upon issuance of the New Warburg
Fund Shares in a name other than the registered holder of
<PAGE>4
the Existing Warburg Fund Shares on the books of the Existing Warburg
Fund as of that time shall, as a condition of such issuance and transfer, be
paid by the person to whom such New Warburg Fund shares are to be issued and
transferred.
1.7. Any reporting responsibility of the Existing Warburg Fund is and
shall remain the responsibility of the RBB Fund up to and including the
applicable Closing Date and such later dates on which the Existing Warburg Fund
is terminated.
2. VALUATION
2.1. The value of the Existing Warburg Fund's assets to be acquired
hereunder shall be the value of such assets computed as of the close of regular
trading on the New York Stock Exchange, Inc. (the "NYSE") on the applicable
Closing Date (such time and date being hereinafter called the "Valuation Date"),
using the valuation procedures set forth in the Existing Warburg Fund's then
current prospectus or statement of additional information.
2.2. The net asset value of each class of Shares of the New Warburg
Fund shall be the net asset value per share computed as of the Valuation Date,
using the valuation procedures set forth in the New Warburg Fund's then current
prospectus or statement of additional information.
2.3. The number of Shares of each class of the New Warburg Fund to be
issued (including fractional shares, if any) in exchange for the Existing
Warburg Fund's net assets shall be determined by dividing the value of the net
assets of the Existing Warburg Fund attributable to the respective classes of
Shares determined using the same valuation procedures referred to in paragraph
2.1 by the net asset value per Share of such class of the New Warburg Fund
determined in accordance with paragraph 2.2.
2.4. All computations of value shall be made by PFPC Inc. in
accordance with its regular practice as pricing agent for the Existing Warburg
Fund and New Warburg Fund, respectively.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date for the Reorganization shall be May 3, 1996, or
such other date as the parties to such Reorganization may agree to in writing.
All acts taking place at the Closing shall be deemed to take place
simultaneously as of the close of business on the Closing Date unless otherwise
provided. The Closing shall be held as of 4:00 p.m., at the offices of PFPC
Inc., 400 Bellevue Parkway, Wilmington, Delaware 19809, or at such other time
and/or place as the parties may agree.
3.2. The custodian for the New Warburg Fund (the "Custodian"),
shall deliver at the Closing a certificate of an
<PAGE>5
authorized officer stating that: (a) the Existing Warburg Fund's
portfolio securities, cash and any other assets shall have been delivered in
proper form to the New Warburg Fund prior to or on the Closing Date and (b) all
necessary taxes, including all applicable federal and state stock transfer
stamps, if any, shall have been paid, or provision for payment shall have been
made, in conjunction with the delivery of portfolio securities.
3.3. In the event that on the Valuation Date (a) the NYSE or another
primary trading market for portfolio securities of the New Warburg Fund or the
Existing Warburg Fund shall be closed to trading or trading thereon shall be
restricted or (b) trading or the reporting of trading on the NYSE or elsewhere
shall be disrupted so that accurate appraisal of the value of the net assets of
the New Warburg Fund or the Existing Warburg Fund is impracticable, the
applicable Closing Date shall be postponed until the first business day after
the day when trading shall have been fully resumed and reporting shall have been
restored.
3.4. The RBB Fund, on behalf of the Existing Warburg Fund, shall
deliver at the Closing a list of the names and addresses of the Existing Warburg
Fund's shareholders and the number and class of outstanding Shares owned by each
such shareholder immediately prior to the Closing or provide evidence that such
information has been provided to the New Warburg Fund's transfer agent. The New
Warburg Fund shall issue and deliver a confirmation evidencing the New Warburg
Fund Shares to be credited to the Existing Warburg Fund's account on the Closing
Date to the Secretary of the RBB Fund or provide evidence satisfactory to the
RBB Fund that such New Warburg Fund Shares have been credited to the Existing
Warburg Fund's account on the books of the New Warburg Fund. At the Closing,
each party shall deliver to the relevant other parties such bills of sale,
checks, assignments, share certificates, if any, receipts or other documents as
such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1. The RBB Fund, on behalf of the Existing Warburg Fund,
represents and warrants to the New Warburg Fund as follows:
(a) The RBB Fund is a Maryland corporation duly organized,
validly existing and in good standing under the laws of the State of Maryland
and the Existing Warburg Fund is a validly existing series of shares of the RBB
Fund representing interests in the Existing Warburg Fund under the laws of the
State of Maryland;
(b) The RBB Fund is a registered investment company classified
as a management company of the open-end type and its registration with the
Securities and Exchange Commission (the "Commission") as an investment company
under the Investment
<PAGE>6
Company Act of 1940, as amended (the "1940 Act"), is in full force and effect;
(c) The RBB Fund is not, and the execution, delivery and
performance of this Agreement will not result, in a violation of its Charter or
By-Laws or any material agreement, indenture, instrument, contract, lease or
other undertaking to which the RBB Fund or any Existing Warburg Fund is a party
or by which either of them or their property is bound;
(d) The Existing Warburg Fund has no contracts or other
commitments (other than this Agreement) which will be terminated with liability
to the Existing Warburg Fund prior to the Closing Date;
(e) Except as previously disclosed in writing to and accepted
by the New Warburg Fund, no litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against the Existing Warburg Fund or any of its
properties or assets which, if adversely determined, would materially and
adversely affect its financial condition or the conduct of its business. The RBB
Fund knows of no facts which might form the basis for the institution of such
proceedings and is not party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects its business or the business of the Existing Warburg Fund or
its ability to consummate the transactions herein contemplated;
(f) The statements of assets and liabilities of the Existing
Warburg Fund for the six fiscal years ended August 31, 1995 and the period
beginning with commencement of the Existing Warburg Fund and ending August 31,
1989 have been audited by Coopers & Lybrand L.L.P., certified public
accountants, and are in accordance with generally accepted accounting principles
consistently applied, and such statements (copies of which have been furnished
to the New Warburg Fund) fairly reflect the financial condition of the Existing
Warburg Fund as of such dates, and there are no known contingent liabilities of
the Existing Warburg Fund as of such dates not disclosed therein;
(g) Since August 31, 1995, there has not been any material
adverse change in the Existing Warburg Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary course of
business, or any incurrence by the Existing Warburg Fund of indebtedness
maturing more than one year from the date that such indebtedness was incurred,
except as otherwise disclosed to and accepted by the New Warburg Fund. For the
purposes of this subparagraph (g), a decline in net asset value per share or the
total assets of the Existing Warburg Fund in the ordinary course of business
shall not constitute a material adverse change;
<PAGE>7
(h) At the Closing Date, all federal and other tax returns and
reports of each Existing Warburg Fund required by law to have been filed by such
dates shall have been filed, and all federal and other taxes shall have been
paid so far as due, or provision shall have been made for the payment thereof
and, to the best of the RBB Fund's knowledge, no such return is currently under
audit and no assessment has been asserted with respect to such returns;
(i) For the most recent fiscal year of its operation, the
Existing Warburg Fund has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company; all of the
Existing Warburg Fund's issued and outstanding shares have been offered and sold
in compliance in all material respects with applicable federal and state
securities laws;
(j) All issued and outstanding shares of each class of the
Existing Warburg Fund are, and at the applicable Closing Date will be, duly and
validly issued and outstanding, fully paid and non-assessable. All of the issued
and outstanding shares of the Existing Warburg Fund will, at the time of
Closing, be held by the persons and the amounts set forth in the records of the
transfer agent as provided in paragraph 3.4. The Existing Warburg Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of the Existing Warburg Fund's shares, nor is there outstanding any
security convertible into any of the Existing Warburg Fund's shares;
(k) At the applicable Closing Date, the RBB Fund will have
good and marketable title to the Existing Warburg Fund's assets to be
transferred to the New Warburg Fund pursuant to paragraph 1.2 and full right,
power and authority to sell, assign, transfer and deliver such assets hereunder
and, upon delivery and payment for such assets, the New Warburg Fund will
acquire good and marketable title thereto, subject to no restrictions on the
full transfer thereof, including such restrictions as might arise under the
Securities Act of 1933, as amended (the "1933 Act"), other than as disclosed to
the New Warburg Fund.
(l) The execution, delivery and performance of this Agreement
has been duly authorized by all necessary actions on the part of the RBB Fund's
Board of Directors, and subject to the approval of the Existing Warburg Fund's
shareholders, this Agreement will constitute a valid and binding obligation of
the RBB Fund, enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other laws relating to or affecting creditors' rights and to general equity
principles;
(m) The information to be furnished by the RBB Fund for
use in no-action letters, applications for exemptive orders,
<PAGE>8
registration statements, proxy materials and other documents which may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all
material respects with federal securities and other laws and
regulations thereunder applicable thereto;
(n) The proxy statement of the Existing Warburg Fund (the
"Proxy Statement") to be included in the Registration Statement referred to in
paragraph 5.7 (other than information therein that relates to the New Warburg
Fund) will, on the effective date of the Registration Statement and on the
Closing Date, not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not materially misleading.
4.2. The New Warburg Fund represents and warrants to the Existing
Warburg Fund as follows:
(a) The New Warburg Fund is a Maryland corporation, duly
organized, validly existing and in good standing under the laws of the State of
Maryland;
(b) The New Warburg Fund is a registered investment company
classified as a management company of the open-end type and its registration
with the Commission as an investment company under the 1940 Act is in full force
and effect;
(c) The current prospectus and statement of additional
information filed as part of the New Warburg Fund registration statement on Form
N-1A (the "New Warburg Fund Registration Statement") conform in all material
respects to the applicable requirements of the 1933 Act and the 1940 Act and the
rules and regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading;
(d) At the Closing Date, the New Warburg Fund will have
good and marketable title to its assets;
(e) The New Warburg Fund is not, and the execution, delivery
and performance of this Agreement will not result, in a violation of its Charter
or By-Laws or any material agreement, indenture, instrument, contract, lease or
other undertaking to which the New Warburg Fund is a party or by which it is
bound;
(f) Except as previously disclosed in writing to and
accepted by the RBB Fund, no litigation or administrative proceeding or
investigation of or before any court or
<PAGE>9
governmental body is presently pending or to its knowledge threatened
against the New Warburg Fund or any of its properties or assets which,
if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. The New Warburg Fund
knows of no facts which might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body which
materially and adversely affects its business or its ability to consummate
the transactions contemplated herein;
(g) Since the inception of the New Warburg Fund there has not
been any material adverse change with respect to the New Warburg
Fund's financial condition, assets, liabilities or business other than
changes occurring in the ordinary course of business, or any incurrence
by the New Warburg Fund of indebtedness maturing more than one year from the
date that such indebtedness was incurred. For the purposes of this
subparagraph (h), a decline in net asset value per share or the total assets
of the New Warburg Fund in the ordinary course of business shall not
constitute a material adverse change;
(h) At the Closing Date, all federal and other tax returns
and reports of the New Warburg Fund required by law then to be filed shall
have been filed, and all federal and other taxes shown as due on said returns
and reports shall have been paid or provision shall have been made for the
payment thereof;
(i) The New Warburg Fund intends to meet the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company in the future;
(j) At the date hereof, all issued and outstanding New Warburg
Fund Shares are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable, with no personal liability attaching
to the ownership thereof. The New Warburg Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any New Warburg
Fund Shares, nor is there outstanding any security convertible into any New
Warburg Fund Shares;
(k) The execution, delivery and performance of this Agreement
shall have been duly authorized prior to the Closing Date by all necessary
actions, if any, on the part of the New Warburg Fund's Board of Directors and
the New Warburg Fund's shareholders, and this Agreement will constitute a valid
and binding obligation of the New Warburg Fund enforceable in accordance with
its terms, subject to the effect of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other laws relating to or affecting
creditors' rights and to general equity principles;
(l) The New Warburg Fund Shares to be issued and
delivered to the Existing Warburg Fund, for the account of the
<PAGE>10
Existing Warburg Fund's shareholders, pursuant to the terms of this Agreement,
will at the Closing Date have been duly authorized and, when so issued and
delivered, will be duly and validly issued New Warburg Fund Shares, and will
be fully paid and non-assessable with no personal liability attaching to the
ownership thereof;
(m) The information to be furnished by the New Warburg
Fund for use in no-action letters, applications for exemptive orders,
registration statements, proxy materials and other documents which may be
necessary in connection with the transactions contemplated hereby shall
be accurate and complete in all material respects and shall comply in all
material respects with federal securities and other laws and regulations
applicable thereto;
(n) The Proxy Statement to be included in the Registration
Statement referred to in paragraph 5.7 (only insofar as it relates to the New
Warburg Fund) will, on the effective date of the Registration Statement and on
the Closing Date, not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not materially misleading; and
(o) The New Warburg Fund agrees to use all reasonable efforts
to obtain the approvals and authorizations required by the 1933 Act, the 1940
Act and such of the state Blue Sky or securities laws as it may deem appropriate
in order to continue its operations after the Closing Date.
5. COVENANTS OF THE RBB FUND, THE NEW WARBURG FUND AND THE EXISTING
WARBURG FUND
5.1. The New Warburg Fund and the Existing Warburg Fund each will
operate its business in the ordinary course between the date hereof and the
Closing Date. It is understood that such ordinary course of business will
include the declaration and payment of customary dividends and distributions.
5.2. The RBB Fund, on behalf of the Existing Warburg Fund, will call a
meeting of its shareholders to consider and act upon this Agreement and to take
all other actions in co-ordination with the Existing Warburg Fund necessary to
obtain approval of the transactions contemplated herein.
5.3. The RBB Fund, on behalf of the Existing Warburg Fund, covenants
that the New Warburg Fund Shares to be issued hereunder are not being acquired
for the purpose of making any distribution thereof other than in accordance with
the terms of this Agreement.
<PAGE>11
5.4. The RBB Fund, on behalf of the Existing Warburg Fund, will assist
the New Warburg Fund in obtaining such information as the New Warburg Fund
reasonably requests concerning the beneficial ownership of the Existing Warburg
Fund's Shares.
5.5. Subject to the provisions of this Agreement, the New Warburg Fund
and the RBB Fund each will take, or cause to be taken, all action, and do or
cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.6. As promptly as practicable, but in any case within sixty days
after the Closing Date, the RBB Fund shall furnish the New Warburg Fund, in such
form as is reasonably satisfactory to the New Warburg Fund, a statement of the
earnings and profits of the Existing Warburg Fund for federal income tax
purposes which will be carried over to the New Warburg Fund as a result of
Section 381 of the Code, and which will be certified by the Existing Warburg
Fund's President and its Treasurer.
5.7. The RBB Fund, on behalf of the Existing Warburg Fund, will provide
the New Warburg Fund with information reasonably necessary for the preparation
of a prospectus (the "Prospectus") which will include the Proxy Statement
referred to in paragraph 4.1(n), all to be included in a registration statement
on Form N-14 of the New Warburg Fund (the "Registration Statement"), in
compliance with the 1933 Act, the Securities Exchange Act of 1934 (the "1934
Act") and the 1940 Act in connection with the meeting of the RBB Fund's
shareholders to consider approval of this Agreement and the transactions
contemplated herein.
5.8. The RBB Fund, on behalf of the Existing Warburg Fund, will provide
the New Warburg Fund with information reasonably necessary for the preparation
of the New Warburg Registration Statement.
5.9. As promptly as practicable, but in any case within thirty days of
the Closing Date, the RBB Fund shall furnish the New Warburg Fund with a
statement containing information required for purposes of complying with Rule
24f-2 under the 1940 Act. A notice pursuant to Rule 24f-2 will be filed by the
New Warburg Fund offsetting redemptions by the Existing Warburg Fund during the
fiscal year ending on or after the applicable Closing Date against sales of New
Warburg Fund Shares and the RBB Fund agrees that it will not net redemptions
during such period by the Existing Warburg Fund against sales of shares of any
other series of the RBB Fund.
5.10. The New Warburg Fund agrees to indemnify and advance expenses to
each person who at the time of the execution of this Agreement serves as a
Director or Officer ("Indemnified Person") of the RBB Fund, against money
damages actually and reasonably incurred by such Indemnified Person in
connection with any claim
<PAGE>12
that is asserted against such Indemnified Person arising out of such
person's service as a director or officer of the RBB Fund with respect to
matters specifically relating to the Existing Warburg Fund, provided that such
indemnification and advancement of expenses shall be permitted to the fullest
extent that is available under the Maryland General Corporation law and other
applicable law. This paragraph 5.10 shall not protect any such Indemnified
Person against any liability to the Existing Warburg Fund, the New Warburg Fund
or their shareholders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or from reckless disregard of
the duties involved in the conduct of his office. An Indemnified Person seeking
indemnification shall be entitled to advances from the New Warburg Fund for
payment of the reasonable expenses incurred by him in connection with the matter
as to which he is seeking indemnification in the manner and to the fullest
extent permissible under the Maryland General Corporation law and other
applicable law. Such Indemnified Person shall provide to the New Warburg Fund a
written affirmation of his good faith belief that the standard of conduct
necessary for indemnification by the New Warburg Fund has been met and a written
undertaking to repay any advance if it should ultimately be determined that the
standard of conduct has not been met. In addition, at least one of the following
additional conditions shall be met: (a) the Indemnified Person shall provide
security in form and amount acceptable to the New Warburg Fund for its
undertaking; (b) the New Warburg Fund is insured against losses arising by
reason of the advance; or (c) either a majority of a quorum of disinterested
non-party directors of the New Warburg Fund (collectively, the "Disinterested
Directors"), or independent legal counsel experienced in mutual fund matters,
selected by the Indemnified Person, in a written opinion, shall have determined,
based on a review of facts readily available to the New Warburg Fund at the time
the advance is proposed to be made, that there is reason to believe that the
Director will ultimately be found to be entitled to indemnification.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE EXISTING WARBURG FUND
The obligations of the RBB Fund to consummate the transactions provided
for herein with respect to the Existing Warburg Fund shall be subject, at its
election, to the performance by the New Warburg Fund of all of the obligations
to be performed by it hereunder on or before the Closing Date and, in addition
thereto, the following further conditions:
6.1. All representations and warranties of the New Warburg Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the actions
contemplated by this Agreement, as of
<PAGE>13
the Closing Date with the same force and effect as if made on and as of the
Closing Date;
6.2. The New Warburg Fund shall have delivered to the RBB Fund a
certificate executed in its name by its President or Vice President and its
Treasurer or Assistant Treasurer, in a form reasonably satisfactory to the RBB
Fund and dated as of the Closing Date, to the effect that the representations
and warranties of the New Warburg Fund made in this Agreement are true and
correct at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement and as to such other matters as the
Existing Warburg Fund shall reasonably request;
6.3 The RBB Fund shall have received written agreements from PFPC
Inc. and Counsellors Securities Inc. (or their affiliates) to maintain, for a
one year period from the Closing Date, the expense ratios of the RBB Fund at
the same levels in effect on the Closing Date. These expense ratios will be
in effect except for increases in expense ratios due to redemptions of shares
outside of the ordinary course of business; and 6.4 The RBB Fund shall
have received on the Closing Date a favorable opinion from Willkie Farr &
Gallagher, counsel to the New Warburg Fund, dated as of the Closing Date, in a
form reasonably satisfactory to the RBB Fund, covering the following points:
That (a) the New Warburg Fund is a validly existing corporation and in good
standing under the laws of the State of Maryland, has the corporate power to own
all of its properties and assets and to carry on its business as a registered
investment company; (b) the Agreement has been duly authorized, executed and
delivered by the New Warburg Fund and, assuming that the Prospectus,
Registration Statement and Proxy Statement comply with the 1933 Act, the 1934
Act and the 1940 Act and the rules and regulations thereunder and, assuming due
authorization, execution and delivery of the Agreement by the other parties
thereto, is a valid and binding obligation of the New Warburg Fund enforceable
against the New Warburg Fund in accordance with its terms, subject to the effect
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and to general
equity principles; (c) the New Warburg Fund Shares to be issued to the Existing
Warburg Fund's shareholders as provided by this Agreement are duly authorized
and upon such delivery will be validly issued and outstanding and are fully paid
and non-assessable with no personal liability attaching to ownership thereof,
and no shareholder of the New Warburg Fund has any preemptive rights to
subscription or purchase in respect thereof; (d) the execution and delivery of
this Agreement did not, and the consummation of the transactions contemplated
hereby will not, result in a violation of the New Warburg Fund's Charter or
By-Laws or in a material violation of any provision of any agreement
<PAGE>14
(known to such counsel) to which the New Warburg Fund is a party or by which it
or its property is bound or, to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any penalty, under any
agreement, judgment, or decree to which the New Warburg Fund is a party or by
which it or its property is bound; (e) to the knowledge of such counsel, no
consent, approval, authorization or order of any court or governmental authority
of the United States or state of Maryland is required for the consummation by
the New Warburg Fund of the actions contemplated herein, except such as have
been obtained under the 1933 Act, the 1934 Act and the 1940 Act, and such as may
be required under state securities laws; (f) only insofar as they relate to the
New Warburg Fund, the descriptions in the Proxy Statement of statutes, legal and
governmental proceedings, investigations, orders, decrees or judgments of any
court or governmental body in the United States and contracts and other
documents, if any, are accurate and fairly present the information required to
be shown; (g) such counsel does not know of any legal, administrative or
governmental proceedings, investigation, order, decree or judgment of any court
or governmental body, only insofar as they relate to the New Warburg Fund or its
assets or properties, pending, threatened or otherwise existing on or before the
effective date of the Registration Statement or the Closing Date, which are
required to be described in the Registration Statement or to be filed as
exhibits to the Registration Statement which are not described and filed as
required; (h) the New Warburg Fund is registered as an investment company under
the 1940 Act and its registration with the Commission as an investment company
under the 1940 Act is in full force and effect; (i) the Proxy Statement and the
New Warburg Fund Registration Statement (except as to financial and statistical
data contained therein, as to which no opinion need be given) comply as to form
in all material respects with the requirements of the 1933 Act, the 1934 Act and
the 1940 Act and the rules and regulations thereunder; and (j) the New Warburg
Registration Statement is effective under the 1933 Act and the 1940 Act and no
stop-order suspending its effectiveness or order pursuant to section 8(e) of the
1940 Act has been issued.
In addition, such counsel also shall state that they have participated
in conferences with officers and other representatives of the New Warburg Fund
at which the contents of the Proxy Statement, the New Warburg Fund Registration
Statement and related matters were discussed and, although they are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Proxy Statement and the New Warburg
Fund Registration Statement (except to the extent indicated in paragraph (f) of
their above opinion), on the basis of the foregoing (relying as to materiality
to a large extent upon the opinions of officers and other representatives of the
New Warburg Fund), they do not believe that the Proxy Statement and the New
Warburg Fund Registration Statement as of their respective dates, as of the date
of the Existing Warburg Fund shareholders' meeting, and as
<PAGE>15
of the Closing Date, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein regarding the
New Warburg Fund or necessary to make the statements therein regarding the New
Warburg Fund, in the light of the circumstances under which they were made, not
misleading.
Such opinion may state that such counsel does not express any opinion
or belief as to the financial statements or other financial data or as to the
information relating to the Existing Warburg Fund, contained in the Proxy
Statement, Registration Statement or New Warburg Fund Registration Statement,
and that such opinion is solely for the benefit of the RBB Fund, its Directors
and its officers. Such counsel may rely as to matters governed by the laws of
the state of Maryland on an opinion of Maryland counsel and/or certificates of
officers or directors of each New Warburg Fund. Such opinion also shall include
such other matters incident to the transaction contemplated hereby, as the
Existing Warburg Fund may reasonably request.
In this paragraph 6.4, references to the Proxy Statement include and
relate only to the text of such Proxy Statement and not, except as specifically
stated above, to any exhibits or attachments thereto or to any documents
incorporated by reference therein.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE NEW WARBURG FUND.
The obligations of the New Warburg Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance by the
Existing Warburg Fund of all the obligations to be performed by it hereunder on
or before the Closing Date and, in addition thereto, the following conditions:
7.1. All representations and warranties of the RBB Fund contained in
this Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date;
7.2. The RBB Fund shall have delivered to the New Warburg Fund a
statement of the Existing Warburg Fund's assets and liabilities, together with a
list of the Existing Warburg Fund's portfolio securities showing the tax costs
of such securities by lot and the holding periods of such securities, as of the
Closing Date, certified by the Treasurer or Assistant Treasurer of the RBB Fund;
7.3. The RBB Fund shall have delivered to the New Warburg Fund on the
Closing Date a certificate executed in its name, and on behalf of the Existing
Warburg Fund, by its President or Vice President and its Treasurer or Assistant
Treasurer, in form and substance satisfactory to the New Warburg Fund and dated
as of the Closing Date, to the effect that the representations and
<PAGE>16
warranties of the Existing Warburg Fund made in this Agreement are true
and correct at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and as to such other matters as the
New Warburg Fund shall reasonably request; and
7.4. The New Warburg Fund shall have received on the Closing Date a
favorable opinion of Ballard Spahr Andrews & Ingersoll, counsel to the RBB Fund,
in a form satisfactory to the Secretary of the New Warburg Fund, covering the
following points:
That (a) the RBB Fund is a validly existing corporation and in good standing
under the laws of the State of Maryland and has the statutory power to own all
of its properties and assets and to carry on its business as a registered
investment company; (b) the Agreement has been duly authorized, executed and
delivered by the RBB Fund on behalf of the Existing Warburg Fund and, assuming
that the Prospectus, the Registration Statement and the Proxy Statement comply
with the 1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder and, assuming due authorization, execution and delivery of the
Agreement by the other parties hereto, is a valid and binding obligation of the
RBB Fund enforceable against the RBB Fund in accordance with its terms, subject
to the effect of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and to general equity principles; (c) the execution and delivery of the
Agreement did not, and the consummation of the transactions contemplated hereby
will not, result in a violation of the RBB Fund's Charter or By-Laws or a
material violation of any provision of any agreement (known to such counsel) to
which the RBB Fund or the Existing Warburg Fund is a party or by which either of
them or their properties are bound or, to the knowledge of such counsel, result
in the acceleration of any obligation or the imposition of any penalty, under
any agreement, judgment or decree to which the RBB Fund or the Existing Warburg
Fund is a party or by which either of them or their properties are bound, (d) to
the knowledge of such counsel, no consent, approval, authorization or order of
any court or governmental authority of the United States or state of Maryland is
required for the consummation by the RBB Fund and the Existing Warburg Fund of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act, and such as may be required under
state securities laws; (e) only insofar as they relate to the RBB Fund and the
Existing Warburg Fund, the descriptions in the Proxy Statement under the
captions "Summary--Shareholder Voting Rights", "Management of the Fund",
"Information on Shareholders' Rights", and "Voting Information" are accurate and
fairly present the information required to be shown; (f) such counsel does not
know of any legal, administrative or governmental proceedings, investigation,
order, decree or judgment of any court or governmental body, only insofar as
they relate to the RBB Fund or the Existing Warburg
<PAGE>17
Fund or their respective assets or properties, pending, threatened or otherwise
existing on or before the effective date of the Registration Statement or the
Closing Date, which are required to be described in the Registration Statement
or to be filed as exhibits to the Registration Statement which are not described
and filed as required or which materially and adversely affect the Existing
Warburg Fund's business]; and (g) the RBB Fund is registered as an investment
company under the 1940 Act and its registration with the Commission as an
investment company under the 1940 Act is in full force and effect.
Such counsel also shall state that they have participated in
conferences with officers and other representatives of the RBB Fund and the
Existing Warburg Fund at which the contents of the Proxy Statement and related
matters were discussed and, although they are not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Proxy Statement (except to the extent indicated in paragraph
(e) of their above opinion), on the basis of the foregoing (relying as to
materiality to a large extent upon the opinions of officers and other
representatives of the Existing Warburg Fund), they do not believe that the
Proxy Statement as of its date, as of the date of the Existing Warburg Fund's
shareholder meeting, and as of the Closing Date, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein regarding the RBB Fund or the Existing Warburg Fund or necessary in the
light of the circumstances under which they were made, to make the statements
therein regarding the RBB Fund and the Existing Warburg Fund not misleading.
Such opinion may state that such counsel does not express any opinion
or belief as to the financial statements or other financial data, or as to the
information relating to the New Warburg Fund, contained in the Proxy Statement
or Registration Statement, and that such opinion is solely for the benefit of
the New Warburg Fund and its directors and officers. Such opinion also shall
include such other matters incident to the transaction contemplated hereby as
the New Warburg Fund may reasonably request.
In this paragraph 7.4, references to the Proxy Statement include and
relate only to the text of such Proxy Statement and not to any exhibits or
attachments thereto or to any documents incorporated by reference therein.
7.5. The New Warburg Fund shall have received from Coopers & Lybrand
L.L.P. a letter addressed to the New Warburg Fund dated as of the effective date
of the Registration Statement in form and substance satisfactory to the New
Warburg Fund, to the effect that:
<PAGE>18
(a) they are independent public accountants with respect to
the RBB Fund within the meaning of the 1933 Act and the applicable regulations
thereunder;
(b) in their opinion, the financial statements and per Share
income and capital changes of the Existing Warburg Fund included or incorporated
by reference in the Registration Statement and reported on by them comply as to
form in all material aspects with the applicable accounting requirements of the
1933 Act and the rules and regulations thereunder;
(c) on the basis of limited procedures agreed upon by the New
Warburg Fund and the RBB Fund and described in such letter (but not an audit in
accordance with generally accepted auditing standards) with respect to the
unaudited pro forma financial statements of the Existing Warburg Fund included
in the Registration Statement and the Proxy Statement, and inquiries of
appropriate officials of the RBB Fund or the director(s) thereof responsible for
financial and accounting matters, nothing came to their attention which caused
them to believe that (i) such unaudited pro forma financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the rules and regulations thereunder, or (ii)
such unaudited pro forma financial statements are not fairly presented in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements; and
(d) on the basis of limited procedures agreed upon by the New
Warburg Fund and the RBB Fund and described in such letter (but not an
examination in accordance with generally accepted auditing standards), the
information relating to the Existing Warburg Fund appearing in the Registration
Statement and the Proxy Statement that is expressed in dollars or percentages of
dollars (with the exception of performance comparisons) has been obtained from
the accounting records of such Existing Warburg Fund or from schedules prepared
by officers of the RBB Fund having responsibility for financial and reporting
matters and such information is in agreement with such records, schedules or
computations made therefrom.
7.6. The RBB Fund shall have delivered to the New Warburg Fund,
pursuant to paragraph 4.1(f), copies of financial statements of the Existing
Warburg Fund as of and for its most recently completed fiscal year.
7.7. The New Warburg Fund shall have received from Coopers & Lybrand
LLP a letter addressed to the New Warburg Fund and dated as of the applicable
Closing Date stating that as of a date no more than three (3) business days
prior to the applicable Closing Date, Coopers & Lybrand LLP performed limited
procedures in connection with the RBB Fund's most recent unaudited financial
statements and that (a) nothing came to their attention in performing such
limited procedures or otherwise that led them to
<PAGE>19
believe that there had been any changes in the assets, liabilities, net
assets, net investment income, net increase (decrease) in net assets from
operations or net increase (decrease) in net assets as compared with amounts as
of the Existing Warburg Fund's most recent audited fiscal year end or the
corresponding period in the Existing Warburg Fund's most recent audited fiscal
year, other than changes occurring in the ordinary course of business, and (b)
based on such limited procedures, there is no change in their report on the most
recent audited financial statements of such Existing Warburg Fund.
7.8. The Board of Directors of the RBB Fund, including a majority of
the directors who are not "interested persons" of the RBB Fund (as defined by
the 1940 Act), shall have determined that this Agreement and the transactions
contemplated hereby are in the best interests of the RBB Fund and the Existing
Warburg Fund and that the interests of the shareholders in the RBB Fund and the
Existing Warburg Fund would not be diluted as a result of such transactions, and
the RBB Fund shall have delivered to the New Warburg Fund at the applicable
Closing, a certificate, executed by an officer, to the effect that the condition
described in this subparagraph has been satisfied.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE NEW WARBURG FUND
AND THE EXISTING WARBURG FUND.
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the New Warburg Fund, the RBB Fund on behalf of the
Existing Warburg Fund shall, and if any of such conditions do not exist on or
before the Closing Date with respect to the Existing Warburg Fund, the New
Warburg Fund shall, at their respective option, not be required to consummate
the transactions contemplated by this Agreement:
8.1. The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding Shares of
the Existing Warburg Fund in accordance with the provisions of the RBB Fund's
Charter and applicable law and certified copies of the votes evidencing such
approval shall have been delivered to the New Warburg Fund.
8.2. On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
8.3. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state blue sky and securities authorities, including
"no-action" positions of and exemptive orders from such federal and state
authorities)
<PAGE>20
deemed necessary by the New Warburg Fund or the RBB Fund to permit
consummation, in all material respects, of the transactions contemplated
hereby shall have been obtained, except where failure to obtain any such
consent, order or permit would not involve a risk of a material adverse effect
on the assets or properties of the New Warburg Fund or the Existing Warburg
Fund, provided that either party hereto may for itself waive any of such
conditions.
8.4. The Registration Statement and the New Warburg Fund Registration
Statement shall each have become effective under the 1933 Act and no stop orders
suspending the effectiveness thereof shall have been issued and, to the best
knowledge of the parties hereto, no investigation or proceeding for that purpose
shall have been instituted or be pending, threatened or contemplated under the
1933 Act.
8.5. The parties shall have received a favorable opinion of Willkie
Farr & Gallagher, addressed to, and in form and substance satisfactory to, the
RBB Fund, on behalf of the Existing Warburg Fund, and the New Warburg Fund,
substantially to the effect that for federal income tax purposes:
(a) The transfer of all or substantially all of the Existing
Warburg Fund's assets in exchange for the New Warburg Fund Shares and the
assumption by the New Warburg Fund of liabilities of the Existing Warburg Fund
will constitute a "reorganization" within the meaning of Section 368(a) of the
Code and the New Warburg Fund and the Existing Warburg Fund are each a "party to
a reorganization" within the meaning of Section 368(b) of the Code; (b) no gain
or loss will be recognized by the New Warburg Fund upon the receipt of the
assets of the Existing Warburg Fund solely in exchange for the New Warburg Fund
Shares and the assumption by the New Warburg Fund of liabilities of the Existing
Warburg Fund; (c) no gain or loss will be recognized by the Existing Warburg
Fund upon the transfer of the Existing Warburg Fund's assets to the New Warburg
Fund in exchange for the New Warburg Fund Shares and the assumption by the New
Warburg Fund of liabilities of the Existing Warburg Fund or upon the
distribution (whether actual or constructive) of the New Warburg Fund Shares to
the Existing Warburg Fund's shareholders in exchange for their shares of the
Existing Warburg Fund; (d) no gain or loss will be recognized by shareholders of
the Existing Warburg Fund upon the exchange of their Existing Warburg Fund
shares for the New Warburg Fund Shares and the assumption by the New Warburg
Fund of liabilities of the Existing Warburg Fund; (e) the aggregate tax basis
for the New Warburg Fund Shares received by each of the Existing Warburg Fund's
shareholders pursuant to the Reorganization will be the same as the aggregate
tax basis of the Existing Warburg Fund Shares held by such shareholder
immediately prior to the Reorganization, and the holding period of the New
Warburg Fund Shares to be received by each Existing Warburg Fund shareholder
will include the period during which the
<PAGE>21
Existing Warburg Fund Shares exchanged therefor were held by such
shareholder (provided that the Existing Warburg Fund Shares were held as
capital assets on the date of the Reorganization); and (f) the tax basis of
the Existing Warburg Fund's assets acquired by the New Warburg Fund will be
the same as the tax basis of such assets to the Existing Warburg Fund
immediately prior to the Reorganization, and the holding period of the
assets of the Existing Warburg Fund in the hands of the New Warburg Fund will
include the period during which those assets were held by the Existing Warburg
Fund.
Notwithstanding anything herein to the contrary, neither the New
Warburg Fund nor the RBB Fund may waive the conditions set forth in this
paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES; OTHER AGREEMENTS
9.1. The New Warburg Fund represents and warrants to the Existing
Warburg Fund, and the RBB Fund on behalf of the Existing Warburg Fund represents
and warrants to the New Warburg Fund, that there are no brokers or finders or
other entities to receive any payments in connection with the transactions
provided for herein.
9.2. Warburg, Pincus Counsellors, Inc. ("Warburg") or its affiliates
agrees to bear the expenses incurred in connection with the transactions
contemplated by this Agreement, whether or not consummated (excluding
extraordinary expenses such as litigation expenses, damages and other expenses
not normally associated with transactions of the type contemplated by this
Agreement). These expenses consist of: (i) expenses associated with preparing
this Agreement, the Registration Statement and expenses of the shareholder
meetings; (ii) preparing and filing the New Warburg Registration Statement
covering the Fund Shares to be issued in the Reorganization; (iii) registration
or qualification fees and expenses of preparing and filing such forms, if any,
necessary under applicable state securities laws to qualify the New Warburg Fund
Shares to be issued in connection with the Reorganization; (iv) postage;
printing; accounting fees; and legal fees incurred in connection with the
transactions contemplated by this Agreement; (v) solicitation costs incurred in
connection with the shareholders meeting referred to in clause (i) above and
paragraph 5.2 hereof and (vi) any other Reorganization expenses.
9.3. (a) Warburg agrees to indemnify and hold harmless each person who
at the time of execution of this Agreement is a director or officer of the RBB
Fund (a "Warburg Indemnified Party") from and against any and all direct and
indirect liabilities, losses, claims, damages and expenses (including, without
limitation, reasonable attorneys' fees) ("Losses") incurred by a Warburg
Indemnified Party and that arise from or relate to the operations commencing on
the first business day
<PAGE>22
after the Closing Date of the New Warburg Fund. This indemnification
provision shall only cover Losses that have not been recovered by the Warburg
Indemnified Party against the New Warburg Fund after a reasonable period of time
following a written request to do so by the Warburg Indemnified Party.
(b) Warburg's agreement to indemnify the Warburg Indemnified Parties
pursuant to this paragraph 9.3 is expressly conditioned upon Warburg's being
promptly notified of any action or claim brought against any such party after
the Warburg Indemnified Party receives notice of the action. The failure of a
Warburg Indemnified Party to notify Warburg shall not relieve Warburg from any
liability that Warburg may have otherwise than on account of this
indemnification agreement.
(c) In case any action or claim shall be brought against any Warburg
Indemnified Party and it shall timely notify Warburg of the commencement
thereof, Warburg shall be entitled to participate in, and, to the extent that it
shall wish to do so, to assume the defense thereof with counsel satisfactory to
it. If Warburg opts to assume the defense of such action, Warburg will not be
liable to the Warburg Indemnified Party for any legal or other expenses
subsequently incurred by the Warburg Indemnified Party in connection with the
defense thereof other than (1) reasonable costs of investigation or the
furnishing of documents or witnesses and (2) all reasonable fees and expenses of
separate counsel to such Warburg Indemnified Party if the Warburg Indemnified
Party shall have concluded reasonably that representation of Warburg and the
Warburg Indemnified Party by the same counsel would be inappropriate due to
actual or potential differing interests between them in the conduct of the
defense of such action.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1. The New Warburg Fund and the RBB Fund, itself and on behalf of
the Existing Warburg Fund, agree that neither party has made any representation,
warranty or covenant not set forth herein and that this Agreement constitutes
the entire agreement among the parties.
10.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1. This Agreement may be terminated at any time at or prior to the
Closing Date by: (1) mutual agreement of the RBB Fund, on behalf of the Existing
Warburg Fund, and the New Warburg Fund; (2) the RBB Fund, on behalf of the
Existing Warburg Fund, in the event the New Warburg Fund shall, or the New
Warburg Fund in the event the RBB Fund or the Existing Warburg Fund shall,
<PAGE>23
materially breach any representation, warranty or agreement contained
herein to be performed at or prior to the Closing Date; or (3) the RBB Fund, on
behalf of the Existing Warburg Fund, or the New Warburg Fund, or the New Warburg
Fund in the event a condition herein expressed to be precedent to the
obligations of the terminating party or parties has not been met and it
reasonably appears that it will not or cannot be met.
11.2. In the event of any such termination, there shall be no liability
for damages on the part of either the New Warburg Fund or the RBB Fund, or their
respective directors or officers, to the other party or parties.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in writing in
such manner as may be mutually agreed upon by the authorized officers of the New
Warburg Fund and the RBB Fund; provided, however, that following the meeting of
the Existing Warburg Fund's shareholders called by the RBB Fund pursuant to
paragraph 5.2 of this Agreement no such amendment may have the effect of
changing the provisions for determining the number of the New Warburg Fund
Shares to be issued to the Existing Warburg Fund's Shareholders under this
Agreement to the detriment of such shareholders without their further approval.
13. NOTICES
13.1. Any notice, report, statement or demand required or permitted by
any provisions of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy or certified mail addressed to the RBB Fund and/or
the Existing Warburg Fund at:
Bellevue Park Corporate Center
400 Bellevue Parkway
Suite 100
Wilmington, DE 19809
Attention: Edward Roach
with a copy to:
John N. Ake, Esq.
Ballard Spahr Andrews & Ingersoll
1735 Market Street, 51st Floor
Philadelphia, PA 19101
or to the New Warburg Fund at:
466 Lexington Avenue
New York, NY 10017
Attention: Arnold M. Reichman
<PAGE>24
with a copy to:
Rose F. DiMartino, Esq.
Willkie Farr & Gallagher
153 East 53rd Street
New York, NY 10022
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
14.1. The article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
14.3. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
14.4. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its Chairman of the Board, President or Vice
President and attested to by its Secretary or Assistant Secretary.
WARBURG, PINCUS______________________FUND, INC.
By: ___________________________
Name:
Title:
Attest: _______________________
THE RBB FUND, INC., for itself and
on behalf of the Warburg, Pincus
__________________Fund
By: ___________________________
<PAGE>25
Name:
Title:
Attest: _______________________
<PAGE>26
SOLELY WITH RESPECT TO PARAGRAPHS 9.2 and 9.3:
WARBURG, PINCUS COUNSELLORS, INC.
By: ___________________________
Name:
Title:
Attest: _______________________
<PAGE>27
Schedule A
Existing Warburg Fund New Warburg Fund
--------------------- ----------------
Warburg Pincus Growth & Warburg, Pincus Growth &
Income Fund, a series of the RBB Fund Income Fund, Inc.
Warburg Pincus Class
Common Shares
Warburg Pincus Series 2
Class Series 2 Shares
<PAGE>
PROSPECTUSES OF WARBURG, PINCUS TAX FREE FUND, INC.
DATED MARCH 4, 1996 ARE INCORPORATED BY
REFERENCE TO THE N-1A REGISTRATION STATEMENT
(Registration Number 333-00531)
<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 DOES NOT CONSTITUTE A
PROSPECTUS.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 6, 1996
STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 7, 1996
Acquisition Of The Assets Of
WARBURG PINCUS TAX FREE FUND
a separate investment portfolio of
THE RBB FUND, INC.
Bellevue Park Corporate Center
400 Bellevue Parkway
Suite 100
Wilmington, Delaware 19809
(302) 792-2555
By And In Exchange For Shares Of
WARBURG, PINCUS TAX FREE FUND, INC.
466 Lexington Avenue
New York, New York 10017-3147
1-800-WARBURG
This Statement of Additional Information,
relating specifically to the proposed transfer of all or substantially all of
the assets of Warburg Pincus Tax Free Fund (the "Existing Warburg Fund") of
The RBB Fund, Inc. to Warburg, Pincus Tax Free Fund, Inc. (the "New
Warburg Fund") in exchange for shares of the New Warburg Fund and the
assumption by the New Warburg Fund of liabilities of the Existing Warburg
Fund, consists of this cover page and the following described documents, each
of which accompanies this Statement of Additional Information and is
incorporated herein by reference.
1. Statement of Additional Information of the New Warburg Fund
dated March 4, 1996.
2. Annual Reports of the Existing Warburg Fund for the fiscal
year ended August 31, 1995.
This Statement of Additional Information is not a
prospectus. A Combined Prospectus/Proxy Statement, dated March 7, 1996,
relating to the above-referenced matter may be obtained without charge by
calling or writing the New Warburg Fund at the telephone number or address
set forth above. This Statement of Additional Information should be read
in conjunction with the Combined Prospectus/Proxy Statement.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
OF THE NEW WARBURG FUND
DATED MARCH 4, 1996
IS INCORPORATED BY REFERENCE
TO THE N-1A REGISTRATION STATEMENT
<PAGE>
WARBURG PINCUS TAX FREE FUND, INC.
PART C
OTHER INFORMATION
Item 15. Indemnification
The response to this item is incorporated by
reference to "Plan of Reorganization" under the
caption "Information About the Reorganizations" and
to "Liability of Directors" under the caption
"Information on Shareholders' Rights" in Part A of
this Registration Statement.
Item 16. Exhibits
(1) Registrant's Articles of Incorporation. (1)
(2) By-Laws of the Registrant. (1)
(3) Not applicable.
(4) Form of Plan of Reorganization (included as Exhibit A
to Registrant's Combined Prospectus/Proxy Statement
contained in Part A of this Registration Statement).
(5) Not applicable.
(6) Form of Investment Advisory Agreement for Warburg, Pincus
Counsellors, Inc. (2)
(7) Not applicable.
(8) Not applicable.
(9) (a) Form of Custodian Agreement with PNC, National Association. (3)
(9) (b) Form of Custodian Agreement with State Street Bank & Trust Company.
(4)
(10) (a) Form of Distribution Plan pursuant to Rule 12b-1 under the 1940
Act. (5)
(10) (b) Form of Distribution Agreement. (6)
<PAGE>
(10) (c) Form of Services Agreement. (3)
(10) (d) Form of 18f-3 Plan. (5)
(11) (a) Opinion and Consent of Willkie Farr & Gallagher, counsel to
Registrant, with respect to validity of shares.
(11) (b) Opinion of Venable, Baetjer and Howard, L.L.P., Maryland counsel
to Registrant, with respect to validity of shares.
(12) Opinion and Consent of Willkie Farr & Gallagher with
respect to tax matters.
(13) (a) Form of Transfer Agency Agreement. (3)
(13) (b) Form of Co-Administration Agreement with Counsellors Funds
Service, Inc. (3)
(13) (c) Form of Co-Administration Agreement with PFPC Inc. (3)
(14) Consent of Coopers & Lybrand L.L.P.
(15) Not applicable.
(16) Not applicable.
(17)(a) Form of Proxy Card.
(17)(b) Registrant's Declaration pursuant to Rule 24f-2. (1)
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this Registration Statement by
any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act [17 CFR
230.145c], the reoffering prospectus will contain the information
called for by the applicable registration form for reofferings
by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an
amendment to the Registration Statement and will not be used until
the amendment is
<PAGE>
effective, and that, in determining any liability under the
Securities Act of 1933, each post-effective amendment shall be
deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of them.
- ----------------
(1) Incorporated by reference to Registrant's Registration Statement on
Form N-1A, filed on January 30, 1996 (Securities Act File No. 333-00531 (the
"N-1A Registration Statement")).
(2) Incorporated by reference to Pre-Effective Amendment No. 1 to the
N-1A Registration Statement, filed on March 1, 1996 (Securities Act File No.
333-00531).
(3) Incorporated by reference; material provisions of this exhibit
substantially similar to those of the corresponding exhibit in Pre-Effective
Amendment No. 2 to the Registration Statement on Form N-1A of Warburg, Pincus
Post-Venture Capital Fund, Inc., filed on September 22, 1995 (Securities Act
File No. 33-61225).
(4) Incorporated by reference; material provisions of this exhibit
substantially similar to those of the corresponding exhibit in Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A of Warburg, Pincus
Trust filed on June 14, 1995 (Securities Act File No. 33-58125).
(5) Incorporated by reference; material provisions of this exhibit
substantially similar to the corresponding exhibit in Pre-Effective Amendment
No. 1 to the Registration Statement on Form N-1A of Warburg, Pincus Japan
Growth Fund, Inc., filed on December 18, 1995 (Securities Act File No.
33-63655).
(6) Incorporated by reference; material provisions of this exhibit
substantially similar to those of the corresponding exhibit in Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A of Warburg, Pincus
Balanced Fund, Inc., filed on March 1, 1996 (Securities Act File
No. 333-00533).
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement has been signed on
behalf of the registrant, in the City of New York and State of New York, on
the 5th day of March, 1996.
Warburg, Pincus Tax Free Fund, Inc.
By: /s/ Arnold M. Reichman
Name: Arnold M. Reichman
Title: President and Director
As required by the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ John L. Furth Chairman of the Board March 5, 1996
John L. Furth of Directors
/s/ Arnold M. Reichman President and March 5, 1996
Arnold M. Reichman Director
/s/ Stephen Distler Vice President and March 5, 1996
Stephen Distler Chief Financial Officer
/s/ Howard Conroy Vice President, March 5, 1996
Howard Conroy Treasurer and Chief
Accounting Officer
/s/Richard N. Cooper Director March 5, 1996
Richard N. Cooper
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/Donald J. Donahue Director March 5, 1996
Donald J. Donahue
/s/ Jack W. Fritz Director March 5, 1996
Jack W. Fritz
/s/ Thomas A. Melfe Director March 5, 1996
Thomas A. Melfe
/s/ Alexander B. Trowbridge Director March 5 ,1996
Alexander B. Trowbridge
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
(1) Registrant's Articles of Incorporation. (1)
(2) By-Laws of the Registrant. (1)
(3) Not applicable.
(4) Form of Plan of Reorganization (included as Exhibit A
to Registrant's Combined Prospectus/Proxy Statement
contained in Part A of this Registration Statement).
(5) Not applicable.
(6) Form of Investment Advisory Agreement for Warburg, Pincus
Counsellors, Inc. (2)
(7) Not applicable.
(8) Not applicable.
(9) (a) Form of Custodian Agreement with PNC, National Association. (3)
(9) (b) Form of Custodian Agreement with State Street Bank & Trust Company.
(4)
(10) (a) Form of Distribution Plan pursuant to Rule 12b-1 under the 1940
Act. (5)
(10) (b) Form of Distribution Agreement. (6)
<PAGE>
(10) (c) Form of Services Agreement. (3)
(10) (d) Form of 18f-3 Plan. (5)
(11) (a) Opinion and Consent of Willkie Farr & Gallagher, counsel to
Registrant, with respect to validity of shares.
(11) (b) Opinion of Venable, Baetjer and Howard, L.L.P., Maryland counsel
to Registrant, with respect to validity of shares.
(12) Opinion and Consent of Willkie Farr & Gallagher with
respect to tax matters.
(13) (a) Form of Transfer Agency Agreement. (3)
(13) (b) Form of Co-Administration Agreement with Counsellors Funds
Service, Inc. (3)
(13) (c) Form of Co-Administration Agreement with PFPC Inc. (3)
(14) Consent of Coopers & Lybrand L.L.P.
(15) Not applicable.
(16) Not applicable.
(17)(a) Form of Proxy Card.
(17)(b) Registrant's Declaration pursuant to Rule 24f-2. (1)
<PAGE>
- ---------------------------
(1) Incorporated by reference to Registrant's Registration Statement on
Form N-1A, filed on January 30, 1996 (Securities Act File No. 333-00531 (the
"N-1A Registration Statement")).
(2) Incorporated by reference to Pre-Effective Amendment No. 1 to the
N-1A Registration Statement, filed on March 1, 1996 (Securities Act File No.
333-00531).
(3) Incorporated by reference; material provisions of this exhibit
substantially similar to those of the corresponding exhibit in Pre-Effective
Amendment No. 2 to the Registration Statement on Form N-1A of Warburg, Pincus
Post-Venture Capital Fund, Inc., filed on September 22, 1995 (Securities Act
File No. 33-61225).
(4) Incorporated by reference; material provisions of this exhibit
substantially similar to those of the corresponding exhibit in Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A of Warburg, Pincus
Trust filed on June 14, 1995 (Securities Act File No. 33-58125).
(5) Incorporated by reference; material provisions of this exhibit
substantially similar to the corresponding exhibit in Pre-Effective Amendment
No. 1 to the Registration Statement on Form N-1A of Warburg, Pincus Japan
Growth Fund, Inc., filed on December 18, 1995 (Securities Act File No.
33-63655).
(6) Incorporated by reference; material provisions of this exhibit
substantially similar to those of the corresponding exhibit in Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A of Warburg, Pincus
Balanced Fund, Inc., filed on March 1, 1995 (Securities Act
File No. 333-00533).
<PAGE>
THE ANNUAL REPORTS, PROSPECTUSES AND STATEMENTS
OF ADDITIONAL INFORMATION OF THE EXISTING
WARBURG FUND ARE INCORPORATED BY REFERENCE
TO THE MOST RECENT FILINGS THEREOF BY THE RBB FUND, INC.
<PAGE>1
[Letterhead of Willkie Farr & Gallagher]
March 5, 1996
Warburg, Pincus Tax Free Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3174
Ladies and Gentlemen:
We have acted as counsel to Warburg, Pincus Tax Free Fund, Inc., a Maryland
corporation (the "Acquiring Fund"), in connection with the proposed acquisition
by the Acquiring Fund of all or substantially all of the assets and liabilities
of Warburg Pincus Tax Free Fund (the "Acquired Fund"), a series of The RBB Fund,
Inc., a Maryland corporation (the "RBB Fund"), in exchange for Common shares of
the Acquiring Fund (the "Common Shares"), pursuant to an Agreement and Plan of
Reorganization to be executed by the Acquiring Fund, and by the RBB Fund, on
behalf of the Acquired Fund (the "Plan").
We have examined the Acquiring Fund's Registration Statement on Form N-14
substantially in the form in which it is to become effective (the "Registration
Statement"), the Acquiring Fund's Articles of Incorporation and Bylaws, and the
Plan.
We have also examined and relied upon other documents and certificates with
respect to factual matters as we have deemed necessary to render the opinion
expressed herein. We have assumed, without independent verification, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with originals of all documents submitted to us
as copies. We have further assumed that the Plan constitutes the legal, valid
and binding obligation of the RBB Fund, enforceable against the RBB Fund in
accordance with its terms. As to matters of Maryland law, we have relied solely
on the opinion of Venable, Baetjer and Howard, LLP with respect to the matters
addressed therein, which is satisfactory to us in form and scope and a copy of
which is annexed hereto.
<PAGE>2
Warburg, Pincus Tax Free Fund, Inc.
March 5, 1996
Page 2
Anything in this opinion to the contrary notwithstanding, we render or imply no
opinion with respect to compliance with any applicable securities or anti-fraud
statutes, rules, regulations or other similar laws of any state (including
Maryland) or the United States of America. In rendering the opinions herein, we
assume that there will be no material changes in the facts and conditions on
which we base such opinions between the date hereof and the time of issuance of
the Acquiring Fund Shares pursuant to the Agreement.
Based upon the foregoing, we are of the opinion that:
1. The Acquiring Fund is a corporation validly existing and
in good standing under the laws of the State of Maryland.
2. The Common Shares of the Acquiring Fund to be issued as
contemplated in the Plan have been, to the extent of the number of the shares
authorized in the Articles of Incorporation of the Acquiring Fund and then
unissued, duly authorized, and, subject to the receipt by the Acquiring Fund of
consideration equal to the net asset value thereof (but in no event less than
the par value thereof), when issued in accordance with the Plan, will be validly
issued, fully paid and nonassessable Common Shares of the Acquiring Fund under
the laws of the State of Maryland.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, to the references to us in the Prospectus/Proxy
Statement included as part of the Registration Statement and to the filing of
this opinion as an exhibit to any application made by or on behalf of the
Acquiring Fund or any distributor or dealer in connection with the registration
or qualification of the Acquiring Fund or the Common Shares under the securities
laws of any state or other jurisdiction.
This opinion is furnished by us as counsel to the Acquiring Fund, is solely for
the benefit of the Acquiring Fund and its governing board in connection with the
above described acquisition of assets and may not be relied upon for any other
purpose or by any other person.
Very truly yours,
/s/ Willkie Farr & Gallagher
<PAGE>1
[LETTERHEAD OF VENABLE, BAETJER AND HOWARD, LLP]
March 5, 1996
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022-4669
RE: WARBURG, PINCUS TAX FREE FUND, INC.
Ladies and Gentlemen:
We have acted as special Maryland counsel to Warburg, Pincus Tax Free
Fund, Inc., a Maryland corporation (the "Acquiring Fund"), in connection with
the proposed acquisition by the Acquiring Fund of all or substantially all the
assets and liabilities of Warburg Pincus Tax Free Fund (the "Acquired Fund"), a
portfolio of The RBB Fund, Inc. (the "RBB Fund"), a Maryland corporation, in
exchange for Common shares of the Acquiring Fund (the "Common Shares"), pursuant
to an Agreement and Plan of Reorganization to be executed by the Acquiring Fund
and by the RBB Fund on behalf of the Acquired Fund (the "Plan").
We have examined the Acquiring Fund's Registration Statement on Form
N-14 substantially in the form in which it is to become effective (the "N-14
Registration Statement"), the Acquiring Fund's Articles of Incorporation and
Bylaws, and the Plan substantially in the form in which it is to be attached to
the Prospectus/Proxy Statement included in the N-14 Registration Statement. We
have further examined and relied upon a certificate of the Maryland State
Department of Assessments and Taxation to the effect that the Acquiring Fund is
duly incorporated and existing under the laws of the State of Maryland and is in
good standing and duly authorized to transact business in the State of Maryland.
We have also examined and relied upon other documents and certificates
with respect to factual matters and we have deemed necessary to render the
opinion expressed herein. We have assumed, without independent verification, the
genuineness of all signatures, the authenticity of all documents submitted to us
as
<PAGE>2
Willkie Farr & Gallagher
March 5, 1996
Page 2
originals, and the conformity with originals of all documents submitted to us as
copies. We have further assumed that the Plan constitutes the legal, valid and
binding obligation of the RBB Fund, enforceable against the RBB Fund in
accordance with its terms, and, further, that the number of Common Shares to be
issued by the Acquiring Fund and then distributed to the shareholders of the
Acquired Fund pursuant to the Plan will not exceed the respective number of then
unissued Common Shares of the Acquiring Fund authorized in the Acquiring Fund's
Articles of Incorporation.
Based upon the foregoing, we are of the opinion that:
1. The Acquiring Fund is a corporation validly existing and in
good standing under the laws of the State of Maryland.
2. The Common Shares of the Acquiring Fund to be issued as contemplated
in the Plan have been, to the extent of the number of shares of the respective
class authorized in the Articles of Incorporation of the Acquiring Fund and then
unissued, duly authorized, and, subject to the receipt by the Acquiring Fund of
consideration equal to the net asset value thereof (but in no event less than
the par value thereof), when issued in accordance with the Plan will be validly
issued, fully paid and nonassessable Common Shares of the Acquiring Fund under
the laws of the State of Maryland.
This letter expresses our opinion with respect to the Maryland General
Corporation Law governing matters such as the authorization and issuance of
stock. It does not extend to the securities of "blue sky" laws of Maryland, to
federal securities laws or to other laws.
<PAGE>3
Willkie Farr & Gallagher
March 5, 1996
Page 3
You may rely on our foregoing opinion in rendering your opinion to the
Acquiring Fund that is to be filed as an exhibit to the N-14 Registration
Statement. We consent to the filing of this opinion as an exhibit to the N-14
Registration Statement and the reference to us under the caption "Legal Matters"
in the Prospectus/Proxy Statement included in the N-14 Registration Statement.
We do not thereby admit that we are "experts" as that term is used in the
Securities Act of 1933 and the regulations thereunder.
Very truly yours,
/s/ Venable, Baetjer and Howard, LLP
BA3DOCS1/0032584.01(ss.3)
<PAGE>
[LETTERHEAD OF WILLKIE FARR & GALLAGHER]
March 5, 1996
The RBB Fund, Inc.
Bellevue Park Corporate Center
400 Bellevue Parkway
Suite 100
Wilmington, Delaware 19809
Warburg, Pincus Growth & Income Fund, Inc.
Warburg, Pincus Balanced Fund, Inc.
Warburg, Pincus Tax Free Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3147
Ladies and Gentlemen:
You have asked us for our opinion concerning certain federal income tax
consequences to (a) Warburg Pincus Growth & Income Fund, Warburg Pincus Balanced
Fund, and Warburg Pincus Tax Free Fund (each, an "Existing Warburg Fund" and,
collectively, the "Existing Warburg Funds"), each a separate series of The RBB
Fund, Inc. (the "RBB Fund"), (b) Warburg, Pincus Growth & Income Fund, Inc.,
Warburg, Pincus Balanced Fund, Inc. and Warburg, Pincus Tax Free Fund, Inc.
(each, a "New Warburg Fund" and, collectively, the "New Warburg Funds") and (c)
holders of shares of common stock in each of the Existing Warburg Funds when the
holders of shares in each of the Existing Warburg Funds receive shares of common
stock of each corresponding New Warburg Fund in liquidation of their interests
in the Existing Warburg Funds pursuant to an acquisition by each of the New
Warburg Funds of all or substantially all of the assets of the corresponding
Existing Warburg Fund in exchange for the shares of the New Warburg Fund and the
assumption by the New Warburg Fund of scheduled liabilities of the Existing
Warburg Fund and the subsequent liquidation of the Existing Warburg Fund and
distribution in liquidation of the shares of the New Warburg Fund to the
shareholders of the Existing Warburg Fund (the "Reorganization"), all pursuant
to an agreement and plan of reorganization.
<PAGE>
March 5, 1996
Page 2
We have reviewed such documents and materials as we have considered necessary
for the purpose of rendering this opinion. In rendering this opinion, we assume
that such documents as yet unexecuted will, when executed, conform in all
material respects to the proposed forms of such documents that we have examined.
In addition, we assume the genuineness of all signatures, the capacity of each
party executing a document so to execute that document, the authenticity of all
documents submitted to us as originals and the conformity to original documents
of all documents submitted to us as certified or photostatic copies.
We have made inquiry as to the underlying facts which we considered to be
relevant to the conclusions set forth in this letter. The opinions expressed in
this letter are based upon certain factual statements relating to the Existing
Warburg Funds and the New Warburg Funds set forth in the Registration Statements
on Form N-14 (the "Registration Statements") filed by each of the New Warburg
Funds with the Securities and Exchange Commission and representations to be made
in letters from the RBB Fund, on behalf of each Existing Warburg Fund, and each
of the New Warburg Funds addressed to us for our use in rendering a final
opinion. Based on information received and expected to be received from the
Existing Warburg Funds and the New Warburg Funds, we have no reason to believe
that we will not be able to render this opinion as a final opinion at the
Closing. We have no reason to believe that these representations and facts will
not be valid, but we have not attempted and will not attempt to verify
independently any of these representations and facts, and this opinion is based
upon the assumption that each of them is accurate. Capitalized terms used herein
and not otherwise defined shall have the meaning given them in the Registration
Statements.
The conclusions expressed herein are based upon the Internal Revenue Code of
1986 (the "Code"), Treasury regulations issued thereunder, published rulings and
procedures of the Internal Revenue Service and judicial decisions, all as in
effect on the date of this letter.
Based upon the foregoing, it is our opinion that:
<PAGE>
March 5, 1996
Page 3
(1) the transfer of all or substantially all of each Existing Warburg
Fund's assets in exchange for the corresponding New Warburg Fund's shares and
the assumption by the New Warburg Fund of certain scheduled liabilities of the
Existing Warburg Fund will constitute a "reorganization" within the meaning of
Section 368(a)(1)(F) of the Code, and the Existing Warburg Fund and the
corresponding New Warburg Fund are each a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
(2) no gain or loss will be recognized by any New Warburg Fund upon
the receipt of the assets of the corresponding Existing Warburg Fund in exchange
for the New Warburg Fund's shares and the assumption by the New Warburg Fund of
certain scheduled liabilities of the corresponding Existing Warburg Fund;
(3) no gain or loss will be recognized by any Existing Warburg Fund
upon the transfer of its assets to the corresponding New Warburg Fund in
exchange for the New Warburg Fund's shares and the assumption by the New Warburg
Fund of certain scheduled liabilities of the Existing Warburg Fund or upon the
distribution (whether actual or constructive) of the New Warburg Fund's shares
to the Existing Warburg Fund's shareholders;
(4) no gain or loss will be recognized by an Existing Warburg Fund's
shareholders upon the exchange of their shares for the corresponding New Warburg
Fund's shares and the assumption by the New Warburg Fund of liabilities of the
Existing Warburg Fund;
(5) the aggregate tax basis of the shares of the New Warburg Fund
received by each shareholder of an Existing Warburg Fund pursuant to the
Reorganization will be the same as the aggregate tax basis of the shares of the
Existing Warburg Fund surrendered therefor, and the holding period of the shares
of the New Warburg Fund to be received by each shareholder of the Existing
Warburg Fund will include the period during which the shares of the Existing
Warburg Fund exchanged therefor were held by such shareholder (provided the
shares of the Existing Warburg Fund were held as capital assets on the date of
the Reorganization); and
(6) the tax basis to the New Warburg Fund of the
corresponding Existing Warburg Fund's assets acquired by
<PAGE>
March 5, 1996
Page 4
the New Warburg Fund will be the same as the tax basis of such assets to the
Existing Warburg Fund immediately prior to the Reorganization, and the holding
period of the assets of the Existing Warburg Fund in the hands of the New
Warburg Fund will include the period during which those assets were held by the
Existing Warburg Fund.
We hereby consent to the filing of this opinion as an exhibit to each
Registration Statement and to the use of our name and any reference to our firm
in each Registration Statement or in the Prospectus/Proxy Statement constituting
a part thereof.
Very truly yours,
/s/ Willkie Farr & Gallagher
WILLKIE FARR & GALLAGHER
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the following with respect to the Registration Statement on
Form N-14 (File No. 333-00625) under the Securities Act of 1933 of the Warburg,
Pincus Tax Free Fund, Inc., with respect to the transfer of substantially all
the assets and liabilities of the Warburg, Pincus Tax Free Fund, a portfolio
of The RBB Fund, Inc.
1. The incorporation by reference of our report dated October 16,
1995 into this Combined Prospectus/Proxy Statement of the
Warburg, Pincus Tax Free Fund.
2. The reference to our Firm under the heading "Financial
Statements and Experts" in the aforementioned Combined
Prospectus/Proxy Statement of the Warburg, Pincus Tax
Free Fund.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
March 5, 1996
<PAGE>
FORM OF PROXY CARD
<PAGE>
VOTE THIS VOTING INSTRUCTION CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
..........................................................................
..........................................................................
WARBURG PINCUS TAX FREE FUND
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of Warburg Pincus Tax Free Fund
(the "Fund"), a series of The RBB Fund, Inc., hereby appoints Edward J.
Roach and Linda Hagan attorneys and proxies for the undersigned with
full powers of substitution and revocation, to represent the undersigned and
to vote on behalf of the undersigned all shares of the Fund that the
undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at the offices of the RBB Fund, Inc., Bellevue Park
Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware 19809 on
May 1, 1996 at 3:00 p.m., and any adjournment or adjournments thereof. The
undersigned hereby acknowledges receipt of the Notice of Special Meeting and
Combined Prospectus/Proxy Statement dated March 7, 1996 and hereby
instructs said attorneys and proxies to vote said shares as indicated
herein. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Meeting. A majority of
the proxies present and acting at the Meeting in person or by substitute
(or, if only one shall be so present, then that one) shall have and may
exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE
Note: Please sign exactly as your name appears on this Proxy.
If joint owners, EITHER may sign this Proxy. When signing as
attorney, executor, administrator, trustee, guardian or
corporate officer, please give your full title.
Date:
_________________________ ____________________________
Signature(s) (Title(s), if applicable)
<PAGE>
VOTE THIS VOTING INSTRUCTION CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
..........................................................................
..........................................................................
Please indicate your vote by an "X" in the appropriate box below. This proxy, if
properly executed, will be voted in the manner directed by the undersigned
shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" APPROVAL OF
THE PROPOSALS. The Board of Directors unanimously recommends a vote "FOR"
approval of the proposals.
1. To approve or disapprove the FOR|_| AGAINST|_| ABSTAIN|_|
Agreement and Plan of Reorganization
To approve or disapprove the respective Agreement and Plan of
Reorganization dated as of March 6, 1996 (the "Plan") providing (i)
that the Warburg Pincus Tax Free Fund (the "Existing Warburg
Fund") be reorganized from a series of The RBB Fund, Inc. into Warburg,
Pincus Tax Free Fund, Inc. (the "New Warburg Fund"), (ii) the
Existing Warburg Fund would transfer to the corresponding New
Warburg Fund all or substantially all of its assets in exchange for
shares of the New Warburg Fund and the assumption of the Existing
Warburg Fund's liabilities, and (iii) the distribution of such
shares of the New Warburg Fund to shareholders of the Existing
Warburg Fund in liquidation of the Existing Warburg Fund.
2. To transact such other business as may properly come before the Meeting
or any adjournment or adjournments thereof.
FOR|_| AGAINST|_| ABSTAIN|_|
...............................................................................
