SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WARBURG, PINCUS CASH RESERVE FUND, INC.
--------------------------------------------------------------------------------
Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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WARBURG, PINCUS CASH RESERVE FUND, INC.
YOUR VOTE IS IMPORTANT
Dear Shareholder:
The Board of Directors (the "Board") of Warburg, Pincus Cash Reserve
Fund, Inc. (the "Fund") has recently reviewed and unanimously endorsed a
proposal to have Credit Suisse Asset Management, LLC, the Fund's investment
adviser ("CSAM"), take full responsibility for the day-to-day portfolio
management of the Fund. Up until now, that responsibility had been shared with
BlackRock Investment Management Corporation ("BIMC"), which had also provided
certain administration services to the Fund through its affiliate PFPC Inc.
("PFPC"). The Board believes that shifting full investment authority to CSAM is
appropriate in light of the capabilities of CSAM's money market portfolio
management group, which have been enhanced significantly since the Fund
commenced operations in 1985.
Recognizing that CSAM's money market portfolio management group has
enhanced the depth and quality of its investment personnel, THE BOARD HAS
DETERMINED THAT IT WOULD BE MORE EFFICIENT FOR THE FUND TO HAVE ONLY ONE
INVESTMENT ADVISER AND THAT THAT SOLE ADVISER BE CSAM. Consequently, the Board
has approved (i) the termination of BIMC as sub-investment adviser to the Fund;
(ii) the retention of CSAM as sole investment adviser to the Fund; and (iii) the
retention of PFPC as co-administrator to the Fund. These changes will result in
a decrease in the maximum aggregate fees payable by the Fund for investment
advice and administration from 0.50% of the Fund's average daily net assets to
0.45%. Of this amount, 0.35% would be payable to CSAM and 0.10% would be payable
to PFPC. The 0.10% increase in fees payable to CSAM for investment advice and
the 0.10% payable to PFPC for administration services is more than offset by the
elimination of the 0.25% payable to BIMC.
We are pleased to invite you to attend a special meeting of
shareholders to consider the approval of a new investment advisory agreement
with CSAM. (No shareholder vote is required in connection with the termination
of BIMC as sub-investment adviser or the retention of PFPC as co-administrator
to the Fund.)
THE FUND'S BOARD BELIEVES THAT THE NEW INVESTMENT ADVISORY AGREEMENT
WITH CSAM IS IN THE BEST INTERESTS OF SHAREHOLDERS, AND RESULTS IN A REDUCTION
OF THE AGGREGATE CONTRACTUAL ADVISORY AND ADMINISTRATION FEES CURRENTLY BEING
PAID BY THE FUND. THE COSTS ASSOCIATED WITH THIS PROXY ARE BEING PAID FOR BY
CSAM AND NOT BY THE FUND.
THE BOARD MEMBERS OF YOUR FUND BELIEVE THAT THE PROPOSAL SET FORTH
ABOVE IS IMPORTANT AND RECOMMEND THAT YOU READ THE ENCLOSED MATERIALS CAREFULLY
AND THEN VOTE FOR THE PROPOSAL.
Detailed information about the proposal may be found in the attached
Proxy Statement. You are entitled to vote at the meeting and any adjournments
thereof if you owned shares of the Fund at the close of business on November 20,
2000. If you attend the meeting, you may vote your shares in person. If you do
not expect to attend the meeting, please complete, date, sign and return the
enclosed proxy in the enclosed postage paid envelope. If you prefer, you can fax
the proxy card to D.F. King & Co., Inc., the Fund's proxy solicitor, Attn:
Dominick F. Maurillo, at (212) 269-2796. We also encourage you to vote by
telephone or through the Internet. Proxies
<PAGE>
may be voted by telephone by calling (800) 207-3155 between the hours of 9:00
a.m. and 10:00 p.m. (Eastern time) or through the Internet using the Internet
address located on your proxy card.
Voting by fax, telephone or through the Internet will reduce the time
and costs associated with the proxy solicitation. When the Fund records proxies
by telephone or through the Internet, it will use reasonable procedures designed
to (i) authenticate shareholders' identities, (ii) allow shareholders to
authorize the voting of their shares in accordance with their instructions and
(iii) confirm that their instructions have been properly recorded.
Whichever voting method you use, please read the full text of the proxy
statement before you vote.
If you have any questions regarding the proposals, please feel free to
call D.F. King & Co., Inc. at (800) 207-3155.
IT IS IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED PROMPTLY.
Respectfully,
/s/ Eugene L. Podsiadlo
Eugene L. Podsiadlo
President
<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:
Registration Valid Signatures
------------ ----------------
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
3
<PAGE>
WARBURG, PINCUS CASH RESERVE FUND, INC.
466 Lexington Avenue
New York, New York 10017-3147
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
JANUARY 26, 2001
Dear Shareholders:
Please take notice that a Special Meeting of Shareholders (the "Special
Meeting") of Warburg, Pincus Cash Reserve Fund, Inc. (the "Fund") will be held
on Friday, January 26, 2001, at 3:00 p.m., Eastern Time, at the offices of the
Fund, 466 Lexington Avenue, New York, New York 10017-3147, 16th Floor, for the
following purposes:
PROPOSAL I To approve a new Investment Advisory
---------- Agreement between the Fund and Credit
Suisse Asset Management, LLC.
PROPOSAL II To transact such other business as may
----------- properly come before the Special Meeting
or any adjournment thereof.
THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE IN FAVOR OF THE PROPOSAL.
Holders of record shares of the Fund at the close of business on
November 20, 2000 are entitled to vote at the Special Meeting and at any
adjournment(s) thereof. As a convenience to shareholders, you can now vote in
any of five ways:
o By mail, with the enclosed proxy card(s);
o By telephone, with a toll-free call to the telephone number that
appears on your proxy card or, if no toll-free telephone number
appears on your proxy card, to D.F. King & Co., Inc., the Fund's
proxy solicitor, at 1-800-207-3155;
o By faxing the enclosed proxy card to D.F. King & Co., Inc., Attn:
Dominick F. Maurillo, at 212-269-2796;
o Through the Internet, by using the Internet address located on
your proxy card and following the instructions on the site; or
o In person at the Special Meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
<PAGE>
If you have any questions regarding the proposals, please feel free to
call D.F. King & Co., Inc. at 1-800-207-3155.
By Order of the Board of Directors,
/s/ Hal Liebes
Hal Liebes
Vice President and Secretary
December 6, 2000
YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO AVOID
THE EXPENSE OF FURTHER SOLICITATION.
2
<PAGE>
WARBURG, PINCUS CASH RESERVE FUND, INC.
466 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3147
-------------
PROXY STATEMENT
-------------
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 26, 2001
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board") of Warburg, Pincus Cash
Reserve Fund, Inc. (the "Fund") for use at the Special Meeting of Shareholders
of the Fund, to be held at the offices of the Fund, 466 Lexington Avenue, New
York, New York 10017-3147, on Friday, January 26, 2001, at 3:00 p.m., Eastern
Time, and at any and all adjournments thereof (the "Special Meeting").
This Proxy Statement, Notice of Special Meeting and the proxy card are
first being mailed to shareholders on or about December 6, 2000 or as soon as
practicable thereafter. Any shareholder giving a proxy has the power to revoke
it on the Internet, by telephone, by mail (addressed to Hal Liebes, Vice
President and Secretary of Warburg Pincus Funds, c/o Credit Suisse Asset
Management, LLC, 466 Lexington Avenue, New York, New York 10017-3147), in person
at the Special Meeting by executing a superseding proxy or by submitting a
notice of revocation. All properly executed proxies received in time for the
Special Meeting will be voted as specified in the proxy, or, if no specification
is made, in favor of the proposal referred to in the Proxy Statement.
The presence at any Special Meeting, in person or by proxy, of the
holders of at least a majority of the shares entitled to be cast of the Fund
shall be necessary and sufficient to constitute a quorum. In the event that the
necessary quorum to transact business or the vote required to approve or reject
the proposal is not obtained at the Special Meeting, the persons named as
proxies may propose one or more adjournments of the Special Meeting in
accordance with applicable law to permit further solicitation of proxies with
respect to the proposal. Any such adjournment will require the affirmative vote
of the holders of a majority of the Fund's shares present in person or by proxy
at the Special Meeting. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor for that
proposal and will vote against any such adjournment those proxies to be voted
against that proposal.
For purposes of determining the presence of a quorum for transacting
business at the Special Meeting, abstentions and broker "non-votes" will be
treated as shares that are present but which have not been voted. Broker
non-votes are proxies received from brokers or nominees when the broker or
nominee has neither received instructions from the beneficial owner or other
persons entitled to vote nor has discretionary power to vote on a particular
matter. Accordingly, shareholders are urged to forward their voting instructions
promptly.
<PAGE>
Approval of the proposal will require the affirmative vote of a
"majority of the outstanding voting securities" of the Fund ("Majority Vote").
"Majority Vote" for purposes of this proxy statement, and under the Investment
Company Act of 1940, as amended (the "1940 Act"), means the lesser of (i) 67% of
the shares represented at a meeting at which more than 50% of the outstanding
shares of the Fund are represented or (ii) more than 50% of the outstanding
shares of the Fund. If the shareholders of the Fund should fail to approve the
New Advisory Agreement, the Board shall consider appropriate action with respect
to such non-approval of the New Advisory Agreement.
Abstentions and broker non-votes will have the effect of votes
"against" the proposal for purposes of tabulating votes necessary for each
proposal's approval. As noted above, properly executed proxies in which no
specification is made will be voted in favor of the proposal.
The Fund is an open-end investment company having one class of common
stock outstanding. Each full share outstanding is entitled to one vote and each
fractional share outstanding is entitled to a proportionate share of one vote.
As of November 20, 2000 (the "Record Date"), the Fund had ___________
outstanding shares.
The persons who owned more than 5% of the Fund's outstanding shares as
of the Record Date, to the knowledge of the Fund, are set forth in APPENDIX A
hereto.
THE FUND PROVIDES PERIODIC REPORTS TO ALL OF ITS SHAREHOLDERS WHICH
HIGHLIGHT RELEVANT INFORMATION, INCLUDING INVESTMENT RESULTS AND A REVIEW OF
PORTFOLIO CHANGES. YOU MAY RECEIVE AN ADDITIONAL COPY OF THE MOST RECENT ANNUAL
REPORT FOR THE FUND AND A COPY OF THE MORE RECENT SEMI-ANNUAL REPORT, WITHOUT
CHARGE, BY CALLING 800-WARBURG (800-927-2874) OR BY WRITING TO WARBURG PINCUS
FUNDS, P.O. BOX 9030, BOSTON, MASSACHUSETTS 02205-9030.
2
<PAGE>
PROPOSAL I
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT WITH CSAM
INTRODUCTION
The shareholders of the Fund will be asked at the Special Meeting to
approve a new Investment Advisory Agreement (the "New Advisory Agreement")
between the Fund and Credit Suisse Asset Management, LLC ("CSAM"), the Fund's
current investment adviser, which is located at 466 Lexington Avenue, New York,
New York 10017-3147. The New Advisory Agreement was unanimously approved by the
Board of the Fund, including all of the Directors who are not parties to the New
Advisory Agreement or "interested persons" (as defined under the 1940 Act) of
any such parties (the "Non-Interested Directors"), at a meeting held on November
16, 2000.
At that meeting, CSAM recommended to the Board that the Fund (i)
terminate BlackRock Institutional Management Corporation ("BIMC") as
sub-investment adviser and co-administrator to the Fund; (ii) retain CSAM as
sole investment adviser to the Fund and increase the advisory fee to be paid to
CSAM from 0.25% to 0.35% of the Fund's average daily net assets; and (iii)
retain PFPC Inc. ("PFPC") as co-administrator to the Fund at a contractual rate
of compensation of 0.10% of the Fund's average daily net assets. After
presentations by CSAM, THE BOARD (I) DETERMINED THAT IT WOULD BE MORE EFFICIENT
FOR THE FUND TO HAVE ONLY ONE INVESTMENT ADVISER AND (II) WAS SATISFIED THAT THE
ADVISORY SERVICES TO BE PROVIDED TO THE FUND BY CSAM AS THE SOLE INVESTMENT
ADVISER WOULD BE OF THE SAME OR BETTER QUALITY AS CURRENTLY BEING PROVIDED TO
THE FUND.
ALTHOUGH THE PROPOSAL CONTEMPLATES AN INCREASE IN THE ADVISORY FEE
PAYABLE TO CSAM FROM 0.25% TO 0.35% OF THE FUND'S AVERAGE DAILY NET ASSETS AND
THE RETENTION OF PFPC AT A CONTRACTUAL RATE OF COMPENSATION OF 0.10% OF THE
FUND'S AVERAGE DAILY NET ASSETS, THE AGGREGATE CONTRACTUAL ADVISORY AND
CO-ADMINISTRATION FEES PROPOSED TO BE PAYABLE TO CSAM AND PFPC, RESPECTIVELY,
ARE LOWER THAN THE CURRENT AGGREGATE CONTRACTUAL ADVISORY AND CO-ADMINISTRATION
FEES PAYABLE TO CSAM AND BIMC (0.45% VS. 0.50% OF THE FUND'S AVERAGE DAILY NET
ASSETS).
The New Advisory Agreement as unanimously approved by the Board is now
being submitted for approval by the shareholders of the Fund. If it is approved
by a Majority Vote of the outstanding shares of the Fund, it will continue in
effect for an initial two-year term, and will continue from year to year
thereafter, subject to approval annually by the Board or by a Majority Vote of
the outstanding shares of the Fund, and also, in either event, approval by a
majority of the Non-Interested Directors at a meeting called for the purpose of
voting on such approval. If the shareholders of the Fund should fail to approve
the New Advisory Agreement, the Board shall consider appropriate action with
respect to such non-approval of the New Advisory Agreement. (No shareholder vote
is required in connection with the termination of BIMC as sub-investment adviser
and co-administrator to the Fund or the retention of PFPC as co-administrator to
the Fund.)
3
<PAGE>
A form of the New Advisory Agreement to be used for the Fund, which has
been marked to reflect changes from the Current Advisory Agreement (as defined
below), is attached as APPENDIX B.
BOARD EVALUATION AND RECOMMENDATION
In determining whether it was appropriate to approve the New Advisory
Agreement and to recommend approval to shareholders, the Board of the Fund,
including the Non-Interested Directors, considered various matters and materials
provided by CSAM. The Board considered, primarily, the benefits to the Fund of
approving the New Advisory Agreement given (i) the increased capabilities of
CSAM's money market portfolio management group and (ii) the opportunity to
reduce the aggregate contractual advisory and co-administration fees currently
payable by the Fund. The Board also evaluated the nature and quality of the
advisory services currently provided to the Fund by CSAM and the extent of the
proposed additional advisory services to be performed (and the additional
expenses and costs to be borne) by CSAM if it was retained as the Fund's sole
investment adviser. The Board further considered the nature and quality of the
co-administration services currently being provided by PFPC to the Fund,
pursuant to an agreement between BIMC and PFPC. The Board also considered that
it is anticipated that the Fund would continue to receive the same
co-administration services after the termination of BIMC.
BACKGROUND INFORMATION REGARDING THE FUND
The Fund commenced investment operations on April 16, 1985 with the
predecessor of CSAM serving as the Fund's investment adviser and the predecessor
of BIMC serving as sub-investment adviser and administrator, in each case from
the Fund's inception date. The Fund invests in money market instruments, as
described more fully in the Fund's Prospectus.
Currently, Credit Suisse Asset Management Securities, Inc. ("CSAMSI"),
a subsidiary of CSAM located at 466 Lexington Avenue, New York, New York
10017-3147, also serves as co-administrator to the Fund and is also the
distributor of the shares of the Fund. THESE SERVICE ARRANGEMENTS WILL NOT BE
AFFECTED BY THE PROPOSED NEW ADVISORY AGREEMENT WITH CSAM OR THE NEW
CO-ADMINISTRATION AGREEMENT WITH PFPC.
DESCRIPTION OF CURRENT INVESTMENT ADVISORY AGREEMENTS
CSAM, a professional investment counseling firm, serves as the Fund's
investment adviser. CSAM is an indirect wholly-owned U.S. subsidiary of Credit
Suisse Group ("Credit Suisse"). Credit Suisse is a global financial services
company, providing a comprehensive range of banking and insurance products.
Active on every continent and in all major financial centers, Credit Suisse
comprises five business units -- Credit Suisse Asset Management (asset
management), of which CSAM is a member; Credit Suisse First Boston (investment
banking); Credit Suisse Private Banking (private banking); Credit Suisse (retail
banking); and Winterthur (insurance). Credit Suisse has approximately $680
billion of global assets under management and employs approximately 62,000
people worldwide. The principal business address of Credit Suisse is Paradeplatz
8, CH 8070, Zurich, Switzerland. Credit Suisse Asset Management
4
<PAGE>
companies manage approximately $68 billion in the U.S. and $198 billion globally
as of September 30, 2000.
BIMC currently manages approximately $50 billion in assets. BIMC and
PFPC are affiliated companies, both being subsidiaries of PNC Financial Services
Group, Inc. BIMC and PFPC are located at 400 Bellevue Parkway, Wilmington,
Delaware 19809.
Pursuant to the Investment Advisory Agreement with the Fund, dated July
6, 1999 (the "Current Advisory Agreement"), subject to the supervision and
direction of the Board, CSAM is required to (a) act in strict conformity with
the Fund's Articles of Incorporation, the 1940 Act and the Investment Advisers
Act of 1940, as amended (the "Advisers Act"), (b) manage the Fund's assets in
accordance with the Fund's investment objective and policies as stated in the
Fund's Prospectus and Statement of Additional Information ("SAI"), (c) make
general investment decisions for the Fund, including decisions concerning (i)
the specific types of securities to be held by the Fund and the proportion of
the Fund's assets that should be allocated to such investments during particular
market cycles, (ii) the specific issuers whose securities will be purchased or
sold by the Fund, (iii) the appropriate maturity of its portfolio investments
and (iv) the appropriate average weighted maturity of its portfolio in light of
current market conditions, (d) place purchase and sale orders for securities on
behalf of the Fund, and (e) monitor and evaluate the services provided by the
Fund's investment sub-adviser(s), if any, under the terms of the applicable
investment sub-advisory agreement(s). As compensation for its services to the
Fund, CSAM is currently entitled to receive 0.25% of the average daily net
assets of the Fund. After expense waivers and reimbursements, CSAM was paid
$1,051,927 and $461,411 in net investment advisory fees for the fiscal year
ended December 31, 1999 and the six-months ended June 30, 2000, respectively.
The net advisory fees paid to CSAM for the 1999 fiscal year equaled 0.21% of the
Fund's average daily net assets.
Pursuant to the Sub-Advisory and Administration Agreement with the
Fund, dated April 16, 1985 (the "Current Sub-Advisory Agreement" and together
with the Current Advisory Agreement, the "Current Agreements"), BIMC is required
to provide investment advisory assistance and portfolio management advice with
respect to the Fund's portfolio in accordance with (a) the Fund's Articles of
Incorporation and By-laws, (b) the 1940 Act and the Advisers Act, (c) all
applicable Rules and Regulations of the Securities and Exchange Commission, (d)
regulations of the Board of Governors of the Federal Reserve System pertaining
to investment advisory activities of bank holding companies to the same extent
as if such regulations were by their terms applicable to the activities of BIMC,
and (e) the Fund's investment objective and policies as stated in its Prospectus
and SAI as from time to time in effect. In connection therewith, BIMC is
responsible for the day-to-day operations of the Fund and performs the following
services: (a) provides investment research and credit analysis concerning the
Fund's investments, (b) conducts a continual program of evaluation of the Fund's
assets, (c) places orders for all purchases and sales of the Fund's portfolio
investments and (d) maintains the books and records required to support the
Fund's operations. Like CSAM, BIMC is currently entitled to receive 0.25% of the
average daily net assets of the Fund. After expense waivers and reimbursements,
BIMC was paid $923,257 and $415,810 in net advisory and co-administration fees
for the fiscal year ended December 31, 1999 and the six-months ended June 30,
2000, respectively. The net advisory and co-administration fees paid to BIMC for
the 1999 fiscal year equaled 0.16% of the Fund's average daily net assets. (BIMC
delegates
5
<PAGE>
to PFPC the performance of administration services for the Fund and pays PFPC
for such services out of its fee from the Fund.)
A comparison of the aggregate contractual advisory, sub-advisory and
co-administration fees that have been payable to those that would have been
payable by the Fund if the New Advisory Agreement with CSAM and the new
co-administration agreement with PFPC had been in effect throughout the fiscal
year ended December 31, 1999 and the six-months ended June 30, 2000 is provided
below. As reflected in the table, the aggregate contractual fees payable under
the proposed arrangements are lower than the aggregate contractual fees payable
under the Current Agreements. Please note that the amounts shown do not reflect
the current expense waivers and reimbursements by each of CSAM and BIMC.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
GROSS FEE PAYABLE TO GROSS FEE PAYABLE TO GROSS FEE PAYABLE TO TOTAL GROSS FEES PAYABLE
AGREEMENT CSAM BIMC* PFPC* BY FUND
---------------------------------------------------------------------------------------------------------------------------
12/31/99 6/30/2000 12/31/99 6/30/2000 12/31/99 6/30/2000 12/31/99 6/30/2000
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
New Advisory $1,834,449 $776,619 N/A N/A N/A N/A $1,834,449 $776,619
Agreement (New Rate
0.35%)
---------------------------------------------------------------------------------------------------------------------------
New PFPC N/A N/A N/A N/A $524,128 $221,891 $524,128 $221,891
Co-Administration
Agreement (Rate 0.10%)
---------------------------------------------------------------------------------------------------------------------------
Total (New Advisory Agreement and New PFPC Co-Administration Agreement; Aggregate Rate 0.45%) $2,358,577 $ 998,510
========== =========
---------------------------------------------------------------------------------------------------------------------------
Current Agreements $1,310,320 $553,212 $1,310,847 $553,511 N/A N/A $2,621,167 $1,106,723
(Aggregate Rate 0.50%) ========== ==========
---------------------------------------------------------------------------------------------------------------------------
* As noted above, under the Current Sub-Advisory Agreement, BIMC delegates to
PFPC the performance of administration services for the Fund and pays PFPC
for such services out of its fee from the Fund.
</TABLE>
CSAM HAS ADDITIONALLY AGREED TO EXTEND ITS CURRENT VOLUNTARY 0.55%
EXPENSE LIMITATION WITH RESPECT TO THE FUND'S TOTAL ANNUAL OPERATING EXPENSES
UNTIL THE FISCAL YEAR ENDED DECEMBER 31, 2001 TO ENSURE THAT THE APPROVAL OF THE
NEW ADVISORY AGREEMENT DOES NOT RESULT IN AN INCREASE IN THE TOTAL FEES OR
EXPENSES OTHERWISE INCURRED BY THE FUND'S SHAREHOLDERS.
In addition to expenses that CSAM may incur in performing its services
under the Current Advisory Agreement, CSAM pays the compensation, fees and
related expenses of all Directors who are affiliated persons of CSAM or any of
its subsidiaries and, if the New Advisory Agreement is approved by the
shareholders of the Fund, will continue to do so. The Fund pays all other
expenses incurred in its operations, including general administrative expenses.
The Current Advisory Agreement was last submitted to a shareholder vote
on May 21, 1999 in connection with Credit Suisse's acquisition of Warburg Pincus
Asset Management, Inc. The Current Sub-Advisory Agreement with the Fund was last
submitted to a shareholder vote on April 16, 1985 at its initial shareholder
meeting.
REGARDLESS OF WHETHER THE NEW ADVISORY AGREEMENT IS APPROVED, CSAM WILL
CONTINUE TO SERVE AS INVESTMENT ADVISER TO THE FUND UNDER THE CURRENT ADVISORY
AGREEMENT ALTHOUGH THE BOARD WILL CONSIDER APPROPRIATE ACTION IF THE NEW
ADVISORY AGREEMENT IS NOT APPROVED BY SHAREHOLDERS. IF THE NEW ADVISORY
AGREEMENT IS NOT APPROVED BY SHAREHOLDERS, BIMC WILL CONTINUE TO PROVIDE
SERVICES TO THE FUND AS SUB-INVESTMENT ADVISER AND CO-ADMINISTRATOR.
6
<PAGE>
DESCRIPTION OF PROPOSED NEW ADVISORY AGREEMENT
Subject to the supervision of the Board, the New Advisory Agreement
requires CSAM, in the exercise of its best judgment, to (a) act in strict
conformity with the Fund's Articles of Incorporation, the 1940 Act and the
Advisers Act, (b) manage the Fund's assets in accordance with the Fund's
investment objective and policies as stated in the Fund's Prospectus and SAI,
(c) make investment decisions for the Fund, (d) place purchase and sale orders
for securities on behalf of the Fund, (e) exercise rights in respect of
portfolio securities and other investments for the Fund and (f) monitor and
evaluate the services provided by the Fund's investment sub-adviser(s), if any,
under the terms of the applicable investment sub-advisory agreement(s). In
providing those services, CSAM will provide investment research and supervision
of the Fund's investments and conduct a continual program of investment,
evaluation and, if appropriate, sale and reinvestment of the Fund's assets. In
addition, CSAM will furnish the Fund with whatever statistical information the
Fund may reasonably request with respect to the securities that the Fund may
hold or contemplate purchasing. WHILE THE NEW ADVISORY AGREEMENT IS SIMILAR TO
THE CURRENT ADVISORY AGREEMENT IN CERTAIN RESPECTS, THERE ARE SOME IMPORTANT
DIFFERENCES, SUCH AS A NEW DESCRIPTION OF THE SERVICES TO BE PROVIDED TO THE
FUND BY CSAM IN LIGHT OF ITS PROPOSED ROLE AS THE SOLE INVESTMENT ADVISER AND
THE PROPOSED HIGHER ADVISORY FEE OF 0.35% OF THE AVERAGE DAILY NET ASSETS OF THE
FUND (COMPARED TO THE CURRENT RATE OF 0.25%), AS WELL AS DIFFERENT EFFECTIVE AND
TERMINATION DATES. Like the Current Advisory Agreement, the New Advisory
Agreement also provides CSAM with the authority to retain a sub-investment
adviser(s) if CSAM chooses to do so in the future. Please see APPENDIX B.
As is currently the case, the services of CSAM under the proposed New
Advisory Agreement are not exclusive. CSAM has the right to provide similar
services to other investment companies or to engage in other activities,
provided that those activities do not adversely affect CSAM's ability to perform
its services under the New Advisory Agreement. The New Advisory Agreement will
terminate automatically in the event of its assignment. In addition, it may be
terminated by CSAM upon 90 days' written notice to the Fund or with respect to
the Fund, upon the vote of a majority of the Board or a majority of the
outstanding voting securities of the Fund, upon 60 days' written notice to CSAM.
Under the New Advisory Agreement, the fee for the period from the date
of the New Advisory Agreement to the end of the quarter during which the New
Advisory Agreement commences is prorated according to the proportion that such
period bears to the full quarterly period. Upon the termination of the New
Advisory Agreement before the end of a quarter, the fee for such part of that
quarter shall be prorated according to the proportion that such period bears to
the full quarterly period.
AS DESCRIBED HEREIN, THE RETENTION OF CSAM UNDER THE NEW ADVISORY
AGREEMENT WILL NOT INCREASE THE FEES OR EXPENSES OTHERWISE INCURRED BY THE
FUND'S SHAREHOLDERS.
7
<PAGE>
ADDITIONAL INFORMATION ABOUT CSAM
The following chart sets forth information with respect to name,
address and principal occupations of the executive officer(s) and managing
member(s) of CSAM. [CSAM also has an operating committee consisting of senior
investment professionals.] (Unless otherwise noted, the person's position at
CSAM constitutes his/her principal occupation.) Each person's address is 466
Lexington Avenue, New York, New York 10017, except for Messrs. Cochran and
Jaffe, whose address is 277 Park Avenue, New York, New York 10172.
--------------------------------------------------------------------------------
NAME POSITION WITH CSAM AND
PRINCIPAL OCCUPATION
--------------------------------------------------------------------------------
James McCaughan Chief Executive Officer
--------------------------------------------------------------------------------
G. Moffett Cochran President
--------------------------------------------------------------------------------
Martin Jaffe Chief Financial Officer
--------------------------------------------------------------------------------
Laurence Smith Global Chief Investment Officer
--------------------------------------------------------------------------------
Hal Liebes Secretary and General Counsel of CSAM
--------------------------------------------------------------------------------
The following chart sets forth information with respect the Fund's
officers and directors who are affiliated with CSAM. Unless otherwise noted,
each person's address is 466 Lexington Avenue, New York, New York 10017.
--------------------------------------------------------------------------------
NAME POSITION WITH THE FUND AND WITH CSAM
--------------------------------------------------------------------------------
William W. Priest Chairman of the Board of the Fund
Chairman-Management Committee,
Chairman since 2000, Managing
Director of CSAM since 1990; Chief
Executive Officer from 1990 to 2000;
Director/Trustee of other Warburg
Pincus Funds and other CSAM-advised
investment companies.
--------------------------------------------------------------------------------
Eugene Podsiadlo President of the Fund
Managing Director of CSAM; Associated
with CSAM since Credit Suisse
acquired the Funds' predecessor
adviser in July 1999; with the
predecessor adviser since 1991; Vice
President of Citibank, N.A. from 1987
to 1991; Officer of CSAMSI and of
other Warburg Pincus Funds.
--------------------------------------------------------------------------------
Hal Liebes Vice President and Secretary of the
Fund Managing Director and General
Counsel of CSAM; Associated with
Lehman Brothers, Inc. from 1996 to
1997; Associated with CSAM from 1995
to 1996; Associated with CS First
Boston Investment Management from
1994 to 1995; Associated with
Division of Enforcement, U.S.
Securities and Exchange Commission
from 1991 to 1994; Officer of CSAMSI,
other Warburg Pincus Funds and other
CSAM-advised investment companies.
--------------------------------------------------------------------------------
Michael Pignataro Treasurer and Chief Financial Officer
of the Fund Vice President and
Director of Fund Administration of
CSAM; Associated with CSAM since
1984; Officer of other Warburg Pincus
Funds and other CSAM-advised
investment companies.
--------------------------------------------------------------------------------
Gregory N. Bressler Assistant Secretary of the Fund
Vice President and Legal Counsel of
CSAM since January 2000; Associated
with the law firm of Swidler Berlin
Shereff Friedman LLP and its
predecessor from 1996 to 2000.
--------------------------------------------------------------------------------
8
<PAGE>
--------------------------------------------------------------------------------
NAME POSITION WITH THE FUND AND WITH CSAM
--------------------------------------------------------------------------------
Stuart Cohen Assistant Secretary of the Fund
Vice President and Legal Counsel of
CSAM; Associated with CSAM since
Credit Suisse acquired the Funds'
predecessor adviser in July 1999;
with the predecessor adviser since
1997; Associated with the law firm of
Gordon Altman Butowsky Weitzen Shalov
& Wein from 1995 to 1997; Officer of
other Warburg Pincus Funds.
--------------------------------------------------------------------------------
Rocco Del Guercio Assistant Treasurer of the Fund
Assistant Vice President and
Administrative Officer of CSAM;
Associated with CSAM since June 1996;
Assistant Treasurer, Bankers Trust
Corp. -- Fund Administration from
March 1994 to June 1996; Officer of
other Warburg Pincus Funds and other
CSAM-advised investment companies.
--------------------------------------------------------------------------------
Joseph Parascondola Assistant Treasurer of the Fund
Assistant Vice President - Fund
Administration of CSAM since April
2000; Assistant Vice President,
Deutsche Asset Management from
January 1999 to April 2000; Assistant
Vice President, Weiss, Peck & Greer
LLC from November 1995 to December
1998.
--------------------------------------------------------------------------------
The following chart sets forth information with respect to other mutual
funds advised by CSAM with an investment objective similar to the investment
objective of the Fund.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
RATE OF
COMPENSATION AS %
OF AVERAGE NET
ASSETS**
FUND INVESTMENT OBJECTIVE SIZE OF FUND*
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Warburg, Pincus WorldPerks High current income consistent with $23,491,606 0.40%
Money Market Fund, Inc. preservation of capital and liquidity
----------------------------------------------------------------------------------------------------------------------
Warburg, Pincus WorldPerks High current income exempt from $12,765,203 0.40%
Tax Free Money Market Fund, Inc. federal personal income taxes
consistent with preservation of
capital and liquidity
----------------------------------------------------------------------------------------------------------------------
Warburg, Pincus New York As high a level of current interest $191,009,853 0.25%***
Tax Exempt Fund, Inc. income exempt from federal, New York
State and New York City personal income
taxes as is consistent with preservation
of capital and liquidity
----------------------------------------------------------------------------------------------------------------------
* Represents the total assets of the Fund as of June 30, 2000.
** CSAM is currently waiving fees and/or reimbursing expenses pursuant to
expense limitation agreements with respect to each of these funds. These
expense limitation agreements may be terminated at any time by CSAM.
*** For this fund, CSAM supervises the activities of BIMC, which serves as
sub-investment adviser and co-administrator and is paid an additional 0.25%
of average net assets by the Fund.
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR THIS PROPOSAL.
* * * * * * * * * * * * *
9
<PAGE>
ADDITIONAL INFORMATION
GENERAL
The costs of the Special Meeting (estimated at [$100,000], including
the cost of preparing, printing and mailing the enclosed proxy, accompanying
notice and proxy statement and all other costs incurred in connection with the
solicitation of proxies) will be paid entirely by CSAM (and not by the Fund).
The principal solicitation of proxies will be by the mailing of this proxy
statement, but proxies may also be solicited by telephone and/or in person by
representatives of the Fund and regular employees of CSAM or its affiliates.
Such representatives and employees will not receive additional compensation for
solicitation activities.
CSAM has retained the services of D.F. King & Co., Inc. (the "Agent")
to assist in the solicitation of proxies. As the Special Meeting date
approaches, shareholders may receive a telephone call from a representative of
the Agent if their vote has not yet been received. Authorization to permit the
Agent to execute proxies may be obtained by telephonic or electronic transmitted
instructions from shareholders of the Fund. Proxies that are obtained
telephonically will be recorded in accordance with the procedures set forth
below. The Board believes that these procedures are reasonably designed to
ensure that the identity of the shareholder casting the vote and the
shareholder's voting instructions are accurately determined.
In all cases where a telephonic proxy is solicited, the Agent's
representative is required to ask for each shareholder's full name, address,
last four digits of the shareholder's social security or tax identification
number, title of the person and whether such person is authorized to direct the
voting of such shares (if an entity), the number of shares owned, if known, and
to confirm that the shareholder has received the proxy statement and proxy card
in the mail. If the information solicited agrees with the information provided
to the Agent, then the Agent representative has the responsibility to explain
the process, read the proposals listed on the proxy card, and ask for the
shareholder's instructions on each proposal. The Agent's representative,
although he or she is permitted to answer questions about the process, is not
permitted to recommend to the shareholder how to vote, other than to read any
recommendation set forth in the proxy statement. The Agent will record the
shareholder's instructions on the card. Within 72 hours, the shareholder will be
sent a letter by first class mail confirming his or her vote and asking the
shareholder to call the Agent immediately if his or her votes are not correctly
reflected in the confirmation.
If the shareholder wishes to participate in the Special Meeting, but
does not wish to give his or her proxy by telephone, by fax or by the Internet,
the shareholder may still submit the proxy card originally sent with the proxy
statement or attend in person. Should shareholders require additional
information regarding the proxy or replacement proxy cards, they may contact the
Agent toll-free at 1-800-207-3155. Any proxy given by a shareholder, whether in
writing, by telephone, by fax or by the Internet, is revocable.
SHAREHOLDER PROPOSALS
Shareholders wishing to submit proposals for inclusion in a proxy
statement for a shareholder meeting subsequent to the Special Meeting, if any,
should send their written
10
<PAGE>
proposals to the Secretary of the Fund, c/o Credit Suisse Asset Management, LLC,
466 Lexington Avenue, New York, NY 10017, within a reasonable time before the
solicitation of proxies for such meeting. The timely submission of a proposal
does not guarantee its inclusion.
OTHER BUSINESS
Management knows of no business to be presented to the Special Meeting
other than the matters set forth in this proxy statement, but should any other
matter requiring the vote of shareholders arise, the proxies will vote thereon
according to their best judgment in the interests of the Fund.
By Order of the Board of Directors,
/s/ Hal Liebes
Hal Liebes
Vice President and Secretary
New York, New York
December 6, 2000
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL
REPORT AND THE MORE RECENT SEMI-ANNUAL REPORT TO A SHAREHOLDER UPON REQUEST. ANY
SUCH REQUEST SHOULD BE DIRECTED TO THE FUND BY CALLING 800-WARBURG
(800-927-2874) OR BY WRITING TO WARBURG PINCUS FUNDS, P.O. BOX 9030, BOSTON,
MASSACHUSETTS 02205-9030.
11
<PAGE>
[PROXY CARD]
WARBURG, PINCUS CASH RESERVE FUND, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
I hereby appoint Rocco Del Guercio and Gregory Bressler, each with the full
power of substitution, as proxies for the undersigned to vote the shares of
Warburg, Pincus Cash Reserve Fund, Inc. (the "Fund") as to which I am entitled
to vote, as shown on the reverse side, at a Special Meeting of the Shareholders
of the Fund (the "Meeting") to be held on Friday, January 26, 2001, at 3:00
p.m., Eastern Time, at the offices of the Fund, 466 Lexington Avenue, New York,
New York 10017, 16th Floor, and any adjournments thereof, as follows:
I hereby revoke any and all proxies with respect to such shares previously given
by me. I acknowledge receipt of the Proxy Statement dated December 6, 2000. THIS
PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL
BE VOTED "FOR" PROPOSAL 1.
This instruction may be revoked at any time prior to its exercise at the Meeting
by execution of a subsequent proxy card, by written notice to the Secretary of
the Fund or by voting in person at the Meeting.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY IN THE ENCLOSED ENVELOPE.
Signature should be exactly as the name or names appear on this proxy card. If
the individual signing the proxy card is a fiduciary (e.g., attorney, executor,
trustee, guardian, etc.), the individual's signature must be followed by his
full title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
------------------------ ------------------------
------------------------ ------------------------
------------------------ ------------------------
<PAGE>
<TABLE>
<CAPTION>
[REVERSE SIDE]
<S> <C> <C>
PLEASE MARK VOTES
AS IN THIS EXAMPLE
[X] VOTE THIS CARD TODAY! THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 1.
---
BY MAIL, BY PHONE AT
1-800-207-3155,
BY FAX AT
212-269-2796
OR ON-LINE AT
www.warburg.com
This proxy, if properly executed, For Against Abstain
will be voted in 1) To approve a new Investment [ ] [ ] [ ]
this manner directed by the Advisory Agreement between the Fund
undersigned shareholder. and Credit Suisse Asset Management,
IF NO DIRECTION IS MADE, LLC.
THIS PROXY WILL
BE VOTED "FOR"
APPROVAL OF PROPOSAL 1.
2) To transact such other business as
may properly come before the Special
Meeting or any adjournment thereof.
Please be sure to sign and date Mark box at right if comments or address change
this Proxy. Date have been noted on the reverse side. [ ]
Shareholder sign here Co-owner sign here:
------------------- -------------------
DETACH CARD
</TABLE>
APPENDIX A
WARBURG, PINCUS CASH RESERVE FUND, INC.
OWNERS OF MORE THAN
5% OF THE OUTSTANDING SHARES
OF THE FUND
[TO BE UPDATED]
NUMBER OF PERCENT OF
COMMON SHARES COMMON SHARES
OWNED OF RECORD OUTSTANDING
NAME AND ADDRESS
Fiduciary Trust Co. International* %
Customer Account Attn: Felyce Porr
Securities Services Group
Church Street Station
P. O. Box 3199
New York, NY 10008-3199
Neuberger & Berman #114000* %
Attn: Operations Control Dept.
55 Water Street, 27th Floor
New York, NY 10041-0001
The Bank of New York* %
c/o Frank Notaro
Special Processing Dept.
One Wall Street, 2nd Floor
New York, NY 10005-2501
* The Fund does not believe that these entities are the beneficial owners of
the shares held by record by them.
<PAGE>
APPENDIX B
FORM OF NEW
INVESTMENT ADVISORY AGREEMENT
Credit Suisse Asset Management, LLC
466 Lexington Avenue
New York, New York 10017-3147
Dear Sirs:
Warburg, Pincus Cash Reserve Fund, Inc. (the "Fund"), a
corporation organized and existing under the laws of the State of Maryland,
herewith confirms its agreement with Credit Suisse Asset Management, LLC (the
"Adviser") as follows:
1. Investment Description; Appointment
The Fund desires to employ the capital of the Fund by
investing and reinvesting in investments of the kind and in accordance with the
limitations specified in its Articles of Incorporation, as may be amended from
time to time, and in the Fund's Prospectus(es) and Statement(s) of Additional
Information as from time to time in effect (the "Prospectus" and "SAI,"
respectively), and in such manner and to such extent as may from time to time be
approved by the Board of Directors of the Fund. Copies of the Fund's Prospectus
and SAI have been or will be submitted to the Adviser. The Fund desires to
employ and hereby appoints the Adviser to act as investment adviser to the Fund.
The Adviser accepts the appointment and agrees to furnish the services for the
compensation set forth below.
2. Services as Investment Adviser
Subject to the supervision and direction of the Board of
Directors of the Fund, the Adviser will (a) act in strict conformity with the
Fund's Articles of Incorporation, the Investment Company Act of 1940 (the "1940
Act") and the Investment Advisers Act of 1940, as the same may from time to time
be amended, (b) manage the Fund's assets in accordance with the Fund's
investment objective and policies as stated in the Fund's Prospectus and SAI,
(c) make investment decisions for the Fund, (d) place purchase and sale
orders for securities on behalf of the Fund, (e) exercise voting rights
in respect of portfolio securities and other investments for the fund, and (f)
monitor and evaluate the services provided by the Fund's investment
sub-adviser(s), if any, under the terms of the applicable investment
sub-advisory agreement(s). In providing those services, the Adviser will provide
investment research and supervision of the Fund's investments and conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. In addition, the Adviser will furnish the
Fund with whatever
<PAGE>
statistical information the Fund may reasonably request with respect to the
securities that the Fund may hold or contemplate purchasing.
Subject to the approval of the Board of Directors of the Fund and where
required, the Fund's shareholders, the Adviser may engage an investment
sub-adviser or sub-advisers to provide advisory services in respect of the Fund
and may delegate to such investment sub-adviser(s) the responsibilities
described in subparagraphs (b), (c), (d) and (e) above. In the event that an
investment sub-adviser's engagement has been terminated, the Adviser shall be
responsible for furnishing the Fund with the services required to be performed
by such investment sub-adviser(s) under the applicable investment sub-advisory
agreements or arranging for a successor investment sub-adviser(s) to provide
such services on terms and conditions acceptable to the Fund and the Fund's
Board of Directors and subject to the requirements of the 1940 Act.
3. BROKERAGE
IN EXECUTING TRANSACTIONS FOR THE FUND, SELECTING BROKERS OR
DEALERS AND NEGOTIATING ANY BROKERAGE COMMISSION RATES, THE ADVISER WILL USE ITS
BEST EFFORTS TO SEEK THE BEST OVERALL TERMS AVAILABLE. IN ASSESSING THE BEST
OVERALL TERMS AVAILABLE FOR ANY PORTFOLIO TRANSACTION, THE ADVISER WILL CONSIDER
ALL FACTORS IT DEEMS RELEVANT INCLUDING, BUT NOT LIMITED TO, BREADTH OF THE
MARKET IN THE SECURITY, THE PRICE OF THE SECURITY, THE FINANCIAL CONDITION AND
EXECUTION CAPABILITY OF THE BROKER OR DEALER AND THE REASONABLENESS OF ANY
COMMISSION FOR THE SPECIFIC TRANSACTION AND FOR TRANSACTIONS EXECUTED THROUGH
THE BROKER OR DEALER IN THE AGGREGATE. IN SELECTING BROKERS OR DEALERS TO
EXECUTE A PARTICULAR TRANSACTION AND IN EVALUATING THE BEST OVERALL TERMS
AVAILABLE, THE ADVISER MAY CONSIDER THE BROKERAGE AND RESEARCH SERVICES (AS
THOSE TERMS ARE DEFINED IN SECTION 28(E) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS THE SAME MAY FROM TIME TO TIME BE AMENDED) PROVIDED TO THE FUND AND/OR OTHER
ACCOUNTS OVER WHICH THE ADVISER OR AN AFFILIATE EXERCISES INVESTMENT DISCRETION.
4. Information Provided to the Fund
The Adviser will keep the Fund informed of developments
materially affecting the Fund, and will, on its own initiative, furnish the Fund
from time to time with whatever information the Adviser believes is appropriate
for this purpose.
5. Standard of Care
The Adviser shall exercise its best judgment in rendering the
services listed in paragraphs 2, 3 and 4 above. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates,
provided that nothing herein shall be deemed to protect or purport to protect
the Adviser against any liability to the Fund or to shareholders of the Fund to
which the Adviser would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or by
reason of the Adviser's reckless disregard of its obligations and duties under
this Agreement.
6. Compensation
B-2
<PAGE>
In consideration of the services rendered pursuant to this
Agreement, the Fund will pay the Adviser an annual fee calculated at an annual
rate of 0.35% of the Fund's average daily net assets. The fee for the period
from the date of this Agreement to the end of the year shall be prorated
according to the proportion that such period bears to the full yearly period.
Upon any termination of this Agreement before the end of a year, the fee for
such part of that year shall be prorated according to the proportion that such
period bears to the full yearly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
the Adviser, the value of the Fund's net assets shall be computed at the times
and in the manner specified in the Fund's Prospectus or SAI.
7. Expenses
The Adviser will bear all expenses in connection with the
performance of its services under this Agreement, including the fees payable to
any investment sub-adviser engaged pursuant to paragraph 2 of this Agreement.
The Fund will bear its proportionate share of certain other expenses to be
incurred in its operation, including: investment advisory and administration
fees; taxes, interest, brokerage fees and commissions, if any; fees of Directors
of the Fund who are not officers, directors, or employees of the Adviser, any
sub-adviser or any of their affiliates; fees of any pricing service employed to
value shares of the Fund; Securities and Exchange Commission fees and state blue
sky qualification fees; charges of custodians and transfer and dividend
disbursing agents; the Fund's proportionate share of insurance premiums; outside
auditing and legal expenses; costs of maintenance of the Fund's existence; costs
attributable to investor services, including, without limitation, telephone and
personnel expenses; costs of preparing and printing prospectuses and statements
of additional information for regulatory purposes and for distribution to
existing shareholders; costs of shareholders' reports and meetings of the
shareholders of the Fund and of the officers or Board of Directors of the Fund;
and any extraordinary expenses.
The Fund will be responsible for nonrecurring expenses which
may arise, including costs of litigation to which the Fund is a party and of
indemnifying officers and Directors of the Fund with respect to such litigation
and other expenses as determined by the Directors.
8. Services to Other Companies or Accounts
The Fund understands that the Adviser now acts, will continue
to act and may act in the future as investment adviser to fiduciary and other
managed accounts and to one or more other investment companies or series of
investment companies, and the Fund has no objection to the Adviser so acting,
provided that whenever the Fund and one or more other accounts or investment
companies or portfolios advised by the Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each entity. The Fund
recognizes that in some cases this procedure may adversely affect the size of
the position obtainable for the Fund. In addition, the Fund understands that the
persons employed by the Adviser to assist in the performance of the Adviser's
duties hereunder will not devote their full time to such service and nothing
contained herein shall be deemed to limit or restrict the right of the Adviser
or any affiliate of the Adviser to engage in and devote time and attention to
other businesses or to render services of whatever
B-3
<PAGE>
kind or nature, provided that doing so does not adversely affect the ability of
the adviser to perform its services under this Agreement.
9. Term of Agreement
This Agreement shall continue for an initial two-year period
commencing on the date first written above, and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually by (a) the Board of Directors of the
Fund or (b) a vote of a "majority" (as defined in the 1940 Act) of the Fund's
outstanding voting securities, provided that in either event the continuance is
also approved by a majority of the Board of Directors who are not "interested
persons" (as defined in said Act) of any party to this Agreement, by vote cast
in person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable, without penalty, on 60 days' written notice, by the
Board of Directors of the Fund or by vote of holders of a majority of the Fund's
shares, or upon 90 days' written notice, by the Adviser. This Agreement will
also terminate automatically in the event of its assignment (as defined in said
Act).
10. Representation by the Fund
The Fund represents that a copy of its Articles of
Incorporation, dated October 31, 1984, together with all amendments thereto, is
on file in the Department of Assessments and Taxation of the State of Maryland.
11. Miscellaneous
The Fund recognizes that directors, officers and employees of
the Adviser may from time to time serve as directors, trustees, officers and
employees of corporations and business trusts (including other investment
companies) and that such other corporations and trusts may include the name
"Warburg", "Warburg Pincus", "CS", "CSAM", "Credit Suisse" or "Credit Suisse
Warburg Pincus" as part of their names, and that the Adviser or its affiliates
may enter into advisory or other agreements with such other corporations and
trusts. If the Adviser ceases to act as the investment adviser of the Fund, the
Fund agrees that, at the Adviser's request, the Fund's license to use the words
"Warburg" , "Warburg Pincus" "CS", "CSAM", "Credit Suisse" or "Credit Suisse
Warburg Pincus" will terminate and that the Fund will take all necessary action
to change the name of the Fund to names not including the words "Warburg"
"Warburg Pincus", "CS", "CSAM", "Credit Suisse" or "Credit Suisse Warburg
Pincus".
B-4
<PAGE>
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
WARBURG, PINCUS CASH RESERVE FUND, INC.
By:
----------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
Accepted:
CREDIT SUISSE ASSET MANAGEMENT, LLC
By:
------------------------------------------------------
Name:
-------------------------------------------------
Title:
------------------------------------------------
B-5
