Registration No. 33-20827
Inv. Co. Act No. 811-5518
As filed with the Securities and Exchange Commission on October 6, 1995
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
POST-EFFECTIVE AMENDMENT NO. 28 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
AMENDMENT NO. 30 [X]
__________________________________
THE RBB FUND, INC.
(Warburg Pincus Growth & Income Fund: Warburg Pincus Class and
Warburg Pincus Series 2 Class; Warburg Pincus Balanced Portfolio:
Warburg Pincus Class and Warburg Pincus Series 2 Class; Warburg
Pincus Tax Free Fund: Warburg Pincus Class; Government Securities
Portfolio: RBB Family Class; BEA International Equity Portfolio:
BEA Class; BEA Strategic Fixed Income Portfolio: BEA Class; BEA
Emerging Markets Equity Portfolio: BEA Class; BEA U.S. Core Equity
Portfolio: BEA Class; BEA U.S. Core Fixed Income Portfolio; BEA
Class; BEA Global Fixed Income Portfolio: BEA Class; BEA Municipal
Bond Fund Portfolio; BEA Class; BEA Balanced Fund Portfolio; BEA
Class; BEA Short Duration Portfolio: BEA Class; Money Market
Portfolio: RBB Family Class, Cash Preservation Class, Sansom
Street Class, Bedford Class, Janney Class, Beta Class, Gamma
Class, Delta Class, Epsilon Class, Zeta Class, Eta Class and Theta
Class; Municipal Money Market Portfolio: RBB Family Class, Cash
Preservation Class, Sansom Street Class, Bedford Class, Bradford
Class, Janney Class, Beta Class, Gamma Class, Delta Class, Epsilon
Class, Zeta Class, Eta Class and Theta Class; Government
Obligations Money Market Portfolio: Sansom Street Class, Bedford
Class, Bradford Class, Janney Class, Beta Class, Gamma Class,
Delta Class, Epsilon Class, Zeta Class, Eta Class and Theta Class;
New York Municipal Money Market Portfolio: Bedford Class, Janney
Class, Beta Class, Gamma Class, Delta Class, Epsilon Class, Zeta
Class, Eta Class and Theta Class)
__________________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Bellevue Park Corporate Center
400 Bellevue Parkway
Suite 100
Wilmington, DE 19809
(Address of Principal Executive Offices)
________________________________________
Registrant's Telephone Number: (302) 792-2555
Copies to:
GARY M. GARDNER, ESQUIRE JOHN N. AKE, ESQUIRE
PNC Bank, National Association Ballard Spahr Andrews & Ingersoll
Broad and Chestnut Streets 1735 Market Street, 51st Floor
Philadelphia, PA 19101 Philadelphia, PA 19101
(Name and Address of
Agent for Service)
Approximate Date of Proposed Public Offering: as soon as possible
after effective date of registration statement.
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
-------
on _________________ pursuant to paragraph (b)
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X 60 days after filing pursuant to paragraph (a)(i)
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on _______________ pursuant to paragraph (a)(i)
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75 days after filing pursuant to paragraph (a)(ii)
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on _______________ pursuant to paragraph (a)(ii) of rule 485
-------
If appropriate, check following box:
------- this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
______________________________
Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
Registrant has elected to register an indefinite number of shares of common
stock of each of the sixty classes registered hereby under the Securities
Act of 1933. Registrant anticipates filing its notice pursuant to Rule
24f-2 for the fiscal year ended August 31, 1995 on or before October 30,
1995. ______________________________
This document contains a total of ___________ pages.
Exhibit Index appears on page __________.
<PAGE>
THE RBB FUND, INC.
(Warburg Pincus Classes of Shares of the Warburg Pincus Growth & Income Fund,
Warburg Pincus Balanced Fund and Warburg Pincus Tax Free Fund)
Cross Reference Sheet
Form N-1A Item Location
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PART A PROSPECTUS
1. Cover Page............................ Cover Page
2. Synopsis.............................. Introduction
3. Financial Highlights Information...... Financial Highlights
4. General Description of Registrant..... Cover Page; Investment
Objectives and Policies
5. Management of the Fund................ Management
6. Capital Stock and Other Securities.... Cover Page; Dividends and
Distributions;
Shareholder Servicing;
Description of Shares
7. Purchase of Securities Being Offered.. How to Purchase Shares;
Net Asset Value
8. Redemption or Repurchase.............. How to Redeem and
Exchange Shares; Net
Asset Value
9. Legal Proceedings..................... Inapplicable
<PAGE>
PART B STATEMENT OF
ADDITIONAL INFORMATION
10. Cover Page............................ Cover Page
11. Table of Contents..................... Contents
12. General Information and History....... General
13. Investment Objectives and Policies.... Investment Objectives and
Policies
14. Management of the Fund................ Directors and Officers;
Investment Advisory,
Distribution and
Servicing Arrangements
15. Control Persons and Principal Holders
of Securities...................... Miscellaneous
16. Investment Advisory and Other
Services........................... Investment Advisory,
Distribution and
Servicing Arrangements;
See Prospectus -
"Management"
17. Brokerage Allocation and Other
Practices.......................... Fund Transactions
18. Capital Stock and Other Securities.... Description of Shares;
Additional Information
Concerning Fund Shares;
See Prospectus -
"Dividends and
Distributions"
19. Purchase, Redemption and Pricing of
Securities Being Offered........... Purchase and Redemption
Information; Valuation of
Shares; See Prospectus -
"How to Purchase Shares,"
"How to Redeem and
Exchange Shares" and
"Shareholder Servicing"
20. Tax Status............................ Taxes; See Prospectus -
"Taxes"
21. Underwriters.......................... Not Applicable
22. Calculation of Performance Data....... Performance Information
23. Financial Statements.................. Inapplicable
<PAGE>
PART C OTHER INFORMATION
Information required to be included in Part C is set forth under the
appropriate item, so numbered in Part C of this Registration Statement.
<PAGE>
[LOGO]
PROSPECTUS
DECEMBER 2, 1995
/ / WARBURG PINCUS GROWTH & INCOME FUND
/ / WARBURG PINCUS BALANCED FUND
/ / WARBURG PINCUS TAX FREE FUND
<PAGE>
WARBURG PINCUS GROWTH & INCOME FUND
WARBURG PINCUS BALANCED FUND
WARBURG PINCUS TAX FREE FUND
PROSPECTUS
December 2, 1995
The WARBURG PINCUS GROWTH & INCOME FUND (the "Growth & Income Fund"), the
WARBURG PINCUS BALANCED FUND (the "Balanced Fund") and the WARBURG PINCUS TAX
FREE FUND (the "Tax Free Fund") (collectively, the "Funds") consist of multiple
classes of common stock of The RBB Fund, Inc. ("RBB"). RBB is an open-end
management investment company registered under the Investment Company Act of
1940 (the "1940 Act") and incorporated under the laws of the State of Maryland
on February 29, 1988. RBB currently operates or proposes to operate seventeen
separate investment portfolios. The shares ("Shares") offered by this Prospectus
represent interests in the Funds.
The Growth & Income Fund's investment objective is to provide long-term growth
of capital and income and a reasonable current return. The Growth & Income Fund
seeks to achieve its objectives by investing primarily in equity securities, and
in various income producing securities including, but not limited to dividend
paying equity securities, fixed income securities and money market instruments.
The Growth & Income Fund may also purchase without limitation dollar-denominated
American Depository Receipts ("ADRs"). ADRs are issued by domestic banks and
evidence ownership of underlying foreign securities.
The Balanced Fund's investment objective is to maximize total return through a
combination of long-term growth of capital and current income consistent with
preservation of capital. It seeks to achieve this objective by diversified
investments in common stocks, preferred stocks, debt securities, preferred
stocks and debt securities which are convertible into common stocks and
government, corporate, bank and commercial obligations. In implementing this
objective, this Balanced Fund will use a multi-manager approach.
The Tax Free Fund's investment objective is to maximize current interest income
which is exempt from Federal income taxes, consistent with preser-vation of
capital. It seeks to achieve such objective by investing substantially all of
its assets in a diver-sified portfolio of obligations issued by or on behalf of
states, territories and possessions of the United States, the District of
Columbia, and their political subdivisions, agencies, instrumentalities and
authorities ("Municipal Obligations"). During periods of normal market
conditions, at least 80% of the net assets of the Tax Free Fund will be invested
in Municipal Obligations, the interest on which is exempt from the regular
Federal income tax and does not constitute an item of tax prefer-ence for
purposes of the Federal alternative mini-mum tax ("Tax-Exempt Interest").
Each Fund offers a class of common shares that is "no load" ("No Load Shares"),
available (a) directly from the Funds' distributor, Counsellors Securities Inc.,
("Counsellors Securities") and (b) through various brokerage firms, including
Charles Schwab & Company, Inc. Mutual Fund OneSourceTM Program and Fidelity
Brokerage Services, Inc. FundsNetworkTM Program. See "How to Purchase Shares."
No Load Shares of the Balanced Fund and the Tax Free Fund are subject to a 12b-1
fee of .25% per annum. No Load Shares of the Growth & Income Fund are not
subject to a 12b-1 fee.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
INVESTMENTS IN SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
This Prospectus contains information that a prospective investor needs to know
before investing. Please keep it for future reference. A Statement of Additional
Information, dated December 2, 1995, has been filed with the Securities and
Exchange Commission and is incorporated by reference in this Prospectus. It may
be obtained free of charge from RBB's distributor by calling (800) 257-5614.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<PAGE>
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES*
ANNUAL FUND OPERATING EXPENSES AFTER EXPENSE REIMBURSEMENTS AND WAIVERS
<TABLE>
<CAPTION>
GROWTH & INCOME TAX FREE
FUND BALANCED FUND FUND
--------------- ------------- --------
<S> <C> <C> <C>
Management fees**..................................... % % %
12b-1 fees**.......................................... --
Other Expenses (after waivers and reimbursements).....
--- --- ---
Total Fund Operating Expenses (after waivers and
reimbursements)..................................... % % %
--- --- ---
--- --- ---
</TABLE>
EXAMPLE
An investor would pay the following expenses on a
$1,000 investment in each of the Funds, assuming
(1) a 5% annual return, and (2) redemption at the
end of each time period:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ------ ----- -----
<S> <C> <C> <C> <C>
Growth & Income Fund.................................... $
Balanced Fund...........................................
Tax Free Fund...........................................
</TABLE>
- ------------
* No sales charge is imposed upon the purchase of shares of the Funds. Thus,
the full amount of the purchase price of Fund shares will be invested at the
time of purchase or upon any other exchange of Shares of other Warburg Pincus
Funds without imposition of any sales charge.
** Management fees and 12b-1 fees are based on average daily net assets and are
calculated daily and paid monthly.
The caption "Other Expenses" does not include extraordinary expenses as
determined by use of generally accepted accounting principles.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating Expenses
After Expense Reimbursements and Waivers" remain the same as the years shown.
Certain broker-dealers and financial institutions also may charge their clients
fees in connection with investments in a Fund's shares, which fees are not
reflected in the table. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN. Long-term Shareholders of the Balanced Fund and the Tax Free Fund 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").
How-ever, given the Funds' 12b-1 fees, it is estimated that it would require a
substantial number of years to exceed the maximum permissable year-end sales
charges.
The Fee Table is designed to assist an investor in understanding the various
costs and expenses that an investor in the Shares of the Funds will bear
directly or indirectly. (For more complete descriptions of the various costs and
expenses, see "Management" and "Distribution of Shares" below.) The expense
figures for the Growth & Income Fund and the Balanced Fund are based upon fees
and costs as of August 31, 1995. Expenses for the Tax Free Fund have been
restated from actual expenses paid by such Fund during the year ended August 31,
1995 to reflect
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<PAGE>
current expense levels. In addition, the Fee Table reflects a voluntary
assumption of some of the additional expenses of the Balanced Fund and Tax Free
Fund by the investment adviser. Assumption of additional expenses will have the
effect of lowering the Balanced Fund and Tax Free Fund's respective overall
expense ratios and increasing their respective yields to investors. There can be
no assurance that the investment adviser will continue to assume such expenses.
Absent such expense reimbursements, under current expense levels the actual
expenses paid by the Balanced Fund and Tax Free Fund for the year ended August
31, 1995 would have been as follows:
ANNUAL FUND OPERATING EXPENSES BEFORE EXPENSE REIMBURSEMENTS AND WAIVERS
BALANCED FUND TAX FREE FUND
------------- -------------
Management fees.............................. .90% .50%
12b-1 Fees................................... .25 .25
Other Expenses...............................
--
---
Total Fund Operating Expenses................ % %
--
--
---
---
The caption "Other Expenses" does not include extraordinary expenses as
determined by use of generally accepted accounting principles.
OFFERING PRICES
Shares which represent interests in the Funds will be offered to the public
at the next determined net asset value after receipt of an order by the Funds.
See "How to Purchase Shares."
MINIMUM INITIAL AND SUBSEQUENT INVESTMENTS
The minimum initial investment for the Funds is $1,000. Subsequent
investments must be $100 or more. See "How to Purchase Shares."
EXCHANGES
Shares may be exchanged for Shares of other Warburg Pincus Funds at their
net asset value next determined after receipt by the Funds of an exchange
request. No exchange fee is currently charged for exchanges. See "How to Redeem
and Exchange Shares."
REDEMPTION PRICE
Shares may be redeemed at any time at their net asset value next determined
after receipt by Warburg Pincus Funds of a redemption request. The Funds reserve
the right, upon 30 days written notice, to redeem an account in the Funds if the
total value of the investor's Shares in that account falls below $500 and is not
increased to at least such amount within such 30-day period. See "How to Redeem
and Exchange Shares--Redemption of Shares."
RISK FACTORS
An investment in the Growth & Income, Balanced or Tax Free Funds is subject
to certain risks, as set forth in detail under "Investment Objectives and
Policies." As with other mutual funds, there can be no assurance that any Fund
will achieve its objective. The Funds, to the extent set forth under "Investment
Objectives and Policies," may engage in the following investment practices: the
purchase of mortgage-related securities, the lending of portfolio securities and
engaging in options and futures transactions, engaging in secured borrowings and
investing in lower rated fixed-income securities. High yield bonds are commonly
referred to as "junk bonds." All of these transactions involve certain special
risks, as set forth under "Investment Objectives and Policies."
SHAREHOLDER INQUIRIES
Any questions or communications regarding a shareholder account should be
directed to Warburg Pincus Funds at 1-800-888-6878 and direct communications to
P.O. Box 9030 Boston, Massachusetts 02205-9030.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below sets forth certain information concerning the investment
results of the RBB classes representing interests in No Load Shares of the
Warburg Pincus Growth & Income, Balanced and Tax Free Funds, for the periods
indicated. The financial data included in this table for each of the years or
periods ended August 31, 1990 through 1995 are a part of RBB's financial
statements for the Funds which have been audited by Coopers & Lybrand L.L.P.,
RBB's independent accountants, whose current report thereon appears in the
Statement of Additional Information along with the financial statements. The
financial data for the Funds for the period ended August 31, 1989 is part of
previous financial statements audited by Coopers & Lybrand L.L.P. The financial
data included in this table should be read in conjunction with the financial
statements and related notes included in the Statement of Additional
Information.
[FINANCIAL HIGHLIGHTS TO COME]
4
<PAGE>
FINANCIAL HIGHLIGHTS TO COME]
5
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
GROWTH & INCOME FUND
The Growth & Income Fund's investment objectives are to provide long-term
growth of capital and income and a reasonable current return. The Growth &
Income Fund seeks to achieve its objectives by investing primarily in equity
securities. Equity securities include common stocks, securities which are
convertible into common stocks and readily marketable securities, such as rights
and warrants, which derive their value from common stock. The Growth & Income
Fund seeks to achieve its income objective by investing in various income
producing securities including, but not limited to, dividend paying equity
securities and fixed income securities. The portion of the Fund invested from
time to time in equity securities, fixed income securities and money market
securities will vary depending on market conditions and there may be extended
periods when the Fund is primarily invested in one of them. In addition, the
amount of income generated from the Fund will fluctuate depending, among other
things, on the composition of the Fund's holdings and the level of interest and
dividend income paid on those holdings. Investments in common stock in general
are subject to market risks that may cause their prices to fluctuate over time.
Therefore, an investment in the Growth and Income Fund may be more suitable for
long-term investors who can bear the risk of these fluctuations. The Growth &
Income Fund may also purchase without limitation dollar-denominated American
Depository Receipts ("ADRs"). ADRs are issued by domestic banks and evidence
ownership of underlying foreign securities. The policy of the Growth & Income
Fund is to invest substantially all of its assets in equity securities under
normal market conditions.
The Growth & Income Fund may invest in debt securities rated no less than
investment grade by either Standard & Poor's or Moody's. Bonds in the lowest
investment grade debt category (e.g., bonds rated BBB by Standard & Poor's
Corporation or Baa by Moody's Investors Services, Inc.) have speculative
characteristics, and changes in economic conditions or other circumstances
are more likely to lead to a weakened capacity to make principal and
interest payments than is the case with higher grade bonds. The Growth & Income
Fund may retain a bond which was rated as investment grade at the time of
purchase but whose rating is subsequently downgraded below investment grade.
The Growth & Income Fund may invest up to 10% of its total assets in
securities of foreign issuers. Investing in securities of foreign issuers
involves considerations not typically associated with investing in securities of
companies organized and operated in the U.S. Foreign securities generally are
denominated and pay dividends or interest in foreign currencies. The Growth &
Income Fund may hold from time to time various foreign currencies pending their
investment in foreign securities or their conversion into U.S. dollars. The
value of the assets of the Growth & Income Fund as measured in U.S. dollars may
therefore be affected favorably or unfavorably by changes in exchange rates.
There may be less publicly available information concerning foreign issuers than
is available with respect to U.S. issuers. Foreign securities may not be
registered with the U.S. Securities and Exchange Commission, and generally,
foreign companies are not subject to uniform accounting, auditing and financial
reporting requirements comparable to those applicable to U.S. issuers. See
"Investment Objectives and Policies--Foreign Securities" in the Statement of
Additional Information.
ILLIQUID SECURITIES. The Growth & Income Fund will not invest more than 15% of
its net assets in illiquid securities, including securities that are illiquid by
virtue of the absence of a readily available market or legal or contractual
restrictions on resale. Securities that have legal or contractual restrictions
on resale but have a readily available market are not deemed illiquid for
purposes of this limitation. The Growth & Income Fund's adviser will monitor the
liquidity of such
6
<PAGE>
restricted securities under the supervision of the investment adviser and the
Board of Directors. See "Investment Objectives and Policies--Illiquid
Securities" in the Statement of Additional Information.
OPTIONS AND FUTURES CONTRACTS. The Growth & Income Fund may write covered call
options, buy put options, buy call options and write put options, without
limitation except as noted in this paragraph. Such options may relate to
particular securities or to various indexes and may or may not be listed on a
national securities exchange and issued by the Options Clearing Corporation. The
Growth & Income Fund may also invest in futures contracts and options on futures
contracts (index futures contracts or interest rate futures contracts, as
applicable) for hedging purposes or for other purposes so long as aggregate
initial margins and premiums required for non-hedging positions do not exceed 5%
of its net assets, after taking into account any unrealized profits and losses
on any such contracts it has entered into. However, the Growth & Income Fund may
not write put options or purchase or sell futures contracts or options on
futures contracts to hedge more than its total assets unless immediately after
any such transaction the aggregate amount of premiums paid for put options and
the amount of margin deposits on its existing futures positions do not exceed 5%
of its total assets.
Options trading is a highly specialized activity which entails greater than
ordinary investment risks. A call option for a particular security gives the
purchaser of the option the right to buy, and a writer the obligation to sell,
the underlying security at the stated exercise price at any time prior to the
expiration of the option, regardless of the market price of the security. The
premium paid to the writer is in consideration for undertaking the obligations
under the option contract. A put option for a particular security gives the
purchaser the right to sell the underlying security at the stated exercise price
at any time prior to the expiration date of the option, regardless of the market
price of the security. In contrast to an option on a particular security, an
option on an index provides the holder with the right to make or receive a cash
settlement upon exercise of the option. The amount of this settlement will be
equal to the difference between the closing price of the index at the time of
exercise and the exercise price of the option expressed in dollars, times a
specified multiple.
The Growth & Income Fund will engage in unlisted over-the-counter options
only with broker/dealers deemed creditworthy by its invest-ment adviser. Closing
transactions in certain options are usually effected directly with the same
broker/dealer that effected the original option transaction. The Growth & Income
Fund bears the risk that the broker/dealer will fail to meet its obligations.
There is no assurance that the Growth & Income Fund will be able to close an
unlisted option position. Furthermore, unlisted options are not subject to the
protections afforded purchasers of listed options by the Options Clearing
Corporation, which performs the obligations of its members who fail to do so in
connection with the purchase or sale of options.
To enter into a futures contract, the Growth & Income Fund must make a
deposit of an initial margin with its custodian in a segregated account in the
name of its futures broker. Subsequent payments to or from the broker, called
variation margin, will be made on a daily basis as the price of the underlying
security or index fluctuates, making the long and short positions in the futures
contracts more or less valuable.
The risks related to the use of options and futures contracts include: (i)
the correlation between movements in the market price of a Fund's investments
(held or intended for purchase) being hedged and in the price of the futures
contract or option may be imperfect; (ii) possible lack of a liquid secondary
market for closing out options or futures positions; (iii) the need for
additional portfolio management skills
7
<PAGE>
and techniques; and (iv) losses due to unanticipated market movements.
Successful use of options and futures by the Growth & Income Fund is subject to
the investment adviser's ability to correctly predict movements in the direction
of the market. For example, if the Growth & Income Fund uses future contracts as
a hedge against the possibility of a decline in the market adversely affecting
securities held by it and securities prices increase instead, the Growth &
Income Fund will lose part or all of the benefit of the increased value of its
securities which it has hedged because it will have approximately equal
offsetting losses in its futures positions. The risk of loss in trading futures
contracts in some strategies can be substantial, due both to the low margin
deposits required, and the extremely high degree of leverage involved in future
pricing. As a result, a relatively small price movement in a futures contract
may result in immediate and substantial loss or gain to the investor. Thus, a
purchase or sale of a futures contract may result in losses or gains in excess
of the amount invested in the contract. For a further discussion see "Investment
Policies" in the Statement of Additional Information.
PORTFOLIO TURNOVER. The Growth & Income Fund will effect portfolio transactions
without regard to holding period, if, in its judgment, such transactions are
advisable in light of general market, economic or financial conditions. As a
result, the Fund may engage in a substantial number of portfolio transactions
which could cause the portfolio turnover rate to exceed 100%, although under
normal conditions the Growth & Income Fund does not anticipate that its annual
portfolio turnover rate will exceed 100%. However, it is impossible to predict
portfolio turnover rates. The portfolio turnover rate is calculated by dividing
the lesser of the Fund's annual sales or purchases of portfolio securities
(exclusive of purchases or sales of securities whose maturities at the time of
acquisition were one year or less) by the monthly average value of the
securities in the Fund during the year.
The anticipated portfolio turnover rate for the Growth & Income Fund may be
greater than that of many other investment companies. A higher than normal
portfolio turnover rate may affect the degree to which the Fund's net asset
value fluctuates. Higher portfolio turnover rates are likely to result in
comparatively greater brokerage commissions. In addition, short-term gains
realized from portfolio transactions are taxable to shareholders as ordinary
income. The amount of portfolio activity will not be a limiting factor when
making portfolio decisions. See Statement of Additional Information "Fund
Transactions" and "Taxes."
TEMPORARY DEFENSIVE MEASURES. The Growth & Income Fund reserves the right to
hold, as a temporary defensive measure, cash and eligible, U.S.
dollar-denominated money market instruments, as well as securities subject to
repurchase agreements. The Growth & Income Fund's investment adviser will
determine when market conditions warrant temporary defensive measures.
The Growth & Income Fund's investment objectives and the policies described
above may be changed by RBB's Board of Directors without the affirmative vote of
the holders of a majority of the outstanding Shares representing interests in
the Growth & Income Fund. Such changes may result in the Growth & Income Fund
having investment objectives which differ from those an investor may have
considered at the time of investment. There is no assurance that the Growth &
Income Fund's investment objective will be achieved.
BALANCED FUND
The Balanced Fund's investment objective is to maximize total return through
a combination of long-term growth of capital and current income consistent with
preservation of capital. The Balanced Fund seeks to achieve this objective
through a policy of diversified investment in common stocks, preferred stocks,
debt securities, preferred stocks and debt securities which are
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<PAGE>
convertible into common stocks, and government, corporate, bank and commercial
obligations. At all times, the Balanced Fund will have a minimum of 25% of its
assets in stocks and minimum of 25% in fixed income securities. Compliance with
such percentage requirement may limit the ability of the Balanced Fund to
maximize total return. With respect to convertible senior securities, only that
portion of the value of such securities attributable to their fixed income
characteristics will be used for purposes of determining the percentage of the
assets of the Balanced Fund that are invested in fixed-income senior securities.
The actual percentage of assets invested in equity and fixed-income securities
will vary from time to time, depending on the judgment of the investment adviser
as to general market and economic conditions, trends and yields and interest
rates and changes in fiscal and monetary policies.
MULTI-MANAGER APPROACH. The Balanced Fund will be managed by a team of senior
managers of the investment adviser, Warburg, Pincus Counsellors, Inc. ("WPC").
Six of the managers will be dedicated to managing portions of the Balanced Fund
allocated to equities; one manager will select and manage the fixed income
securities which comprise the fixed income portion of the Balanced Fund. Dale C.
Christensen and Anthony G. Orphanos, Managing Directors of WPC, will be
designated overall portfolio strategists and will be responsible for determining
the portion of the Balanced Fund to be allocated between equity and fixed income
securities, and the allocation among the various equity sectors.
Equity Investment. Each of the equity portfolio managers will manage an
allocated portion of the equity holdings of the Balanced Fund; each manager will
manage his/her portion with a different investment emphasis or approach, but
consistent with the overall objective of long-term growth of capital for the
Balanced Fund's common stock portion.
The four areas represented by the equity portfolio managers are: (1) U.S.
Value Sector, managed by Anthony G. Orphanos, will invest primarily in stocks
whose acquisition price represents low absolute or relative value, based on
historical and financial analysis, and compared to other stocks and sectors of
the Standard & Poor's 500 universe of common stocks and other indices. (2) U.S
Small Company Sector, managed by Elizabeth B. Dater and Stephen J. Lurito, will
invest primarily in common stocks and warrants of small capitalization and
emerging growth U.S. companies that represent attractive opportunities for
maximum capital appreciation. Emerging growth companies are small and
medium-sized companies that have passed their start up phase and that show
positive earnings and prospects for achieving significant profit and gain in a
relatively short period of time. (3) U.S. Mid-Cap Sector, managed by George U.
Wyper and Susan L. Black, will invest primarily in a diversified portfolio of
common stocks, warrants and securities convertible into or exchangeable for
common stock securities of domestic companies which have market capitalizations
in the $660 million to $13.8 billion range, commonly referred to as middle
capitalization or "mid-cap," and includes a potential universe of companies in
such indices as the Russell Midcap Index and Standard & Poor's Midcap 400 Index.
The portfolio manager will attempt to identify sectors of the market and
companies within market sectors that he believes will outperform the overall
market. And, (4) International Equity Sector, managed by Richard H. King and
Nicholas P.W. Horsley, will invest primarily in a broadly diversified portfolio
of equity securities of companies that, wherever organized, have their principal
business activities and interests outside the United States. The international
equity managers intend to invest principally in the securities of financially
strong companies with opportunities for growth within growing international
economies and markets through increased earnings power and improved utilization
or recognition of
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assets. Investments may be made in equity securities of companies of any size,
whether traded on or off a national securities exchange. Investments in foreign
securities involve risks not otherwise associated with investments in domestic
securities, including risks of currency fluctuations, tax or excessive
government regulation, and political instability. See "Investment Objectives and
Policies--Foreign Securities" in the Statement of Additional Information.
Fixed Income Investment. The fixed income portion, managed by Mr.
Christensen, will invest primarily in debt instruments such as corporate
obligations, U.S. Government obligations, municipal obligations and mortgage-
related debt securities.
CORPORATE OBLIGATIONS. The Balanced Fund may invest in debt obligations of
corporations, such as corporate bonds, debentures, debentures convertible into
common stocks, and notes, which, at the time of purchase for the Fund, are rated
"AAA," "AA" or "A" by Standard & Poor's Corporation ("S&P") or "Aaa," "Aa" or
"A," by Moody's Investors Service, Inc. ("Moody's"). These ratings are described
in the Appendix to this Prospectus. The Balanced Fund may also purchase debt
obligations which are unrated at the time of purchase provided they are
determined by the Fund's investment adviser to be of comparable quality to rated
obligations pursuant to guidelines approved by RBB's Board of Directors. Such
obligations may include dollar-denominated debt obligations of foreign issuers.
In selecting debt securities for the Balanced Fund, the investment adviser
will review and monitor the creditworthiness of each issuer and issue, in
addition to relying on ratings assigned by S&P or Moody's as indicators of
quality. Interest rate trends and specific developments which may affect
individual issuers will also be analyzed.
U.S. GOVERNMENT OBLIGATIONS. The Balanced Fund may purchase obligations issued
or guaranteed by the U.S. Government or its agencies or instrumentalities.
Obligations which may be so purchased include obligations of agencies and
instrumentalities of the U.S. Government which are supported by the full faith
and credit of the U.S. or by U.S. Treasury guarantees, such as securities of the
Government National Mortgage Association and the Federal Housing Authority, or
obligations supported by the right of the issuer to borrow from the U.S.
Treasury, such as securities of the Federal Home Loan Mortgage Corporation, or
obligations supported only by the credit of the agency or instrumentality
issuing the obligation, such as securities of the Federal National Mortgage
Association and the Federal Loan Banks.
"WHEN-ISSUED" SECURITIES. The Balanced Fund may purchase securities on a
"when-issued" basis. When-issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and yield. The
Balanced Fund will generally not pay for such securities or start earning
interest on them until they are received. Securities purchased on a when-issued
basis are recorded as an asset when the commitment is entered into and are
subject to changes in value prior to delivery based upon changes in the general
level of interest rates. The Balanced Fund expects that commitments to purchase
when-issued securities will not exceed 25% of the value of its total assets
absent unusual market conditions. The Balanced Fund does not intend to purchase
when-issued securities for speculative purposes but only in furtherance of its
investment objective.
MUNICIPAL OBLIGATIONS. When conditions warrant, the Balanced Fund may also
invest without limitation in Municipal Obligations, whether or not the income
thereon is exempt from regular Federal income tax, provided that the Municipal
Obligations are determined by the Fund's investment adviser to present minimal
credit risks and at the time of purchase are rated "A" or higher by S&P or by
Moody's in the case of bonds, "SP-1" by S&P or "MIG-2" or higher by Moody's
in the case of notes, or "VMIG-2" or higher by
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Moody's in the case of variable rate demand notes, or if unrated, are determined
by the investment adviser to be of comparable quality pursuant to guidelines
adopted by RBB's Board of Directors. For a more complete discussion of
Municipal Obligations, see "Tax Free Portfolio--Municipal Obligations" below
and "Investment Objectives and Policies--Municipal Obligations" in the
Statement of Additional Information.
MORTGAGE-RELATED DEBT SECURITIES. The Balanced Fund may purchase without
limitation mortgage-related debt securities. Such securities represent interests
in pools of mortgage loans to residential home buyers made by lenders such as
savings and loan institutions, mortgage bankers, commercial banks and others.
Pools of mortgage loans are assembled for sale to investors (such as the
Balanced Fund) by various governmental, government-related and private
organizations. Mortgage-related securities may include asset-backed securities
which are backed by mortgages, installment sales contracts, credit card
receivables or other assets and collateralized mortgage obligations ("CMOs")
issued or guaranteed by U.S. Government agencies and instrumentalities or issued
by private companies. Purchasable mortgage-related securities also include
adjustable rate securities. The estimated life of an asset-backed security
varies with the prepayment experience with respect to the underlying debt
instruments. For this and other reasons, an asset-backed security's stated
maturity may be shortened, and the security's total return may be difficult to
predict precisely. Such difficulties are not expected, however, to have a
significant effect on the Balanced Fund since the remaining maturity of any
asset-backed security acquired will be 397 days or less.
Interests in pools of mortgage loans differ from other forms of debt
securities, which normally provide for periodic payment of interest in fixed
amounts with principal payments at maturity or specified call dates. Instead,
these securities will provide a monthly payment to the Balanced Fund which
consists of both interest and principal payments. In effect, these payments are
"pass-throughs" of the monthly payments made by the individual borrowers on
their residential mortgage loans, net of any fees paid to the issuer or
guarantor of such securities. Additional payments to the Fund may be derived
from repayments of principal resulting from the sale of the underlying
residential property, refinancing or foreclosure, net of fees or costs which may
be incurred. Some mortgage-related securities are described as "modified
pass-throughs." These securities entitle the holder to receive all interest and
principal payments owed on the mortgage pool, net of certain fees, regardless of
whether or not the mortgagor actually makes the payment.
The average life of mortgage-related securities varies with the maturities
of the underlying mortgage instruments. In addition, prepayments of the
mortgages included in the underlying mortgage pool will usually result in the
return of the greatest part of principal invested well before the maturity of
the mortgages in the pool. The volume of such prepayments of principal in a
given pool will influence the actual yield of mortgage-related securities, and
principal returned to the Balanced Fund as a holder of such securities may be
reinvested in instruments whose yield may be higher or lower than that which
might have been obtained had such prepayments not occurred. When interest rates
are decreasing, such prepayments usually increase, thereby reducing the average
life of a pool. As a result, the reinvestment of such principal prepayments will
be at a lower rate than that on the original mortgage-related security, and thus
the Balanced Fund's yield will be lower. In addition, when interest rates are
decreasing, the value of mortgage-related securities may not increase as much as
the value of other debt securities. In quoting yields for mortgage-related
securities,
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<PAGE>
the standard practice is to assume that the securities will have a 12-year life.
As previously noted,however, the life of individual pools may differ widely and
the actual yield earned on mortgage-related securities may differ significantly
from the estimated yield based on the 12-year life assumption.
The principal governmental guarantor of mortgage-related securities is the
Government National Mortgage Association ("GNMA"). GNMA is a wholly owned U.S.
Government corporation within the U.S. Department of Housing and Urban
Development. Pass-through securities issued by GNMA are guaranteed by the full
faith and credit of the U.S. Government as to the timely payment of principal
and interest. The Federal National Mortgage Association ("FNMA") is a
government-sponsored corporation owned entirely by private stockholders.
Pass-through securities issued by FNMA are guaranteed as to timely payment of
principal and interest by FNMA but are not backed by the full faith and credit
of the U.S. Government. The Federal Home Loan Mortgage Corporation ("FHLMC") is
a government-sponsored corporation owned entirely by private stockholders. FHLMC
issues Participation Certificates ("PCs") which represent interests in mortgages
from FHLMC's national portfolio. FHLMC guarantees the timely payment of interest
and ultimate collection of principal but PCs are not backed by the full faith
and credit of the U.S. Government.
Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create
pass-through pools of conventional residential mortgage loans. Such issuers may
in addition be the originators of the underlying mortgage loans as well as the
guarantors of the mortgage-related securities. Pools created by such
non-governmental issuers generally offer a higher rate of interest than
government and government-related pools because there are no direct or indirect
government guarantees of payments in the former pools. However, timely payment
of interest and principal of these pools is supported by various forms of
insurance or guarantees, including individual loan and pool insurance. The
insurance and guarantees are issued by government entities, private insurers and
the mortgage poolers. Such insurance and guarantees and the creditworthiness of
the issuers thereof will be considered in determining whether a mortgage-related
security meets the Balanced Fund's investment quality standards. Private
insurers provide less assurance than government or government-related insurers
that they will be able to meet their obligations. The Balanced Fund may buy
mortgage-related securities without insurance or guarantees if, through an
examination of the financial condition and business history of the pooler,
including among other things the pooler's loan experience, profitability,
capital adequacy, liquidity, foreign exposure, and management, the Balanced
Fund's investment adviser determines that the pooler is creditworthy. Although
the market for such securities is becoming increasingly liquid, securities
issued by certain private organizations may not be readily marketable.
Corporations that are government owned, government-related or are private
mortgage poolers may create mortgage loan pools offering pass-through
investments in addition to those described above. The mortgages underlying these
securities may be mortgage instruments whose principal or interest payments may
vary or whose terms to maturity may differ from customary long-term fixed rate
mortgages. As new types of mortgage-related securities are developed and offered
to investors, the Balanced Fund's adviser will consider making investments in
such new types of securities consistent with the Balanced Fund's investment
objectives and policies and with due regard to those quality and credit
standards, which, in the investment adviser's view, are applicable to such
investments.
WARRANTS. The Balanced Fund may purchase warrants provided that they are
attached to
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<PAGE>
securities that may otherwise be purchased by the Fund.
ILLIQUID SECURITIES. The Balanced Fund will not invest more than 15% of its net
assets in illiquid securities. See "Investment Objectives and Policies--Growth &
Income Fund--Illiquid Securities" above, and "Investment Objectives and
Policies--Illiquid Securities" in the Statement of Additional Information.
PORTFOLIO TURNOVER. The Balanced Fund will effect portfolio transactions without
regard to holding period, if, in its judgment, such transactions are advisable
in light of general market, economic or financial conditions. As a result, the
Fund may engage in a substantial number of portfolio transactions. The Balanced
Fund anticipates that, under normal conditions, its annual portfolio turnover
rate should not exceed 100% for the equity portion and 100% for the fixed income
portion. However, it is impossible to predict portfolio turnover rates. For a
discussion of the effects of higher portfolio turnover rates, see "Investment
Objectives and Policies--Growth & Income Fund--Portfolio Turnover."
TEMPORARY DEFENSIVE MEASURES. The Balanced Fund also reserves the right, as a
temporary defensive measure, to purchase eligible, U.S. dollar-denominated money
market instruments and securities subject to repurchase agreements. The Fund's
investment adviser will determine when market conditions warrant temporary
defensive measures.
The investment objective and policies of the Balanced Fund described above
may be changed by RBB's Board of Directors without the approval of a majority of
the outstanding Shares representing interest in the Fund. Such changes may
result in the Fund having investment objectives which differ from those an
investor may have considered at the time of investment. There is no assurance
that the investment objective of the Balanced Fund will be achieved.
TAX FREE FUND
The Tax Free Fund's investment objective is to maximize current interest
income which is exempt from Federal income taxes, consistent with preservation
of capital. The Tax Free Fund intends to meet its investment objective by
investing substantially all of its assets in a diversified portfolio of
Municipal Obligations, the interest on which, in the opinion of bond counsel
or counsel to the issuer, as the case may be, is exempt from the regular
Federal income tax. During periods of normal market conditions, at least
80% of the net assets of the Tax Free Fund will be invested in Municipal
Obligations, the interest on which is Tax-Exempt Interest.
MUNICIPAL OBLIGATIONS. The Fund invests in Municipal Obligations which are
determined by the Fund's investment adviser to present minimal credit risks
pursuant to guidelines established by RBB's Board of Directors and which at the
time of purchase are considered to be "high grade"-- e.g., rated "A" or higher
by S&P or "A" or higher by Moody's in the case of bonds; rated "SP-1" by S&P or
"MIG-1" by Moody's in the case of notes; rated "VMIG-1" by Moody's in the case
of variable rate demand notes; or rated "A-1" by S&P or "Prime-1" by Moody's in
the case of tax-exempt commercial paper. In addition, the Fund may invest in
"high quality" notes and tax-exempt commercial paper rated "MIG-2," "VMIG-2,"
or "Prime-2" by Moody's or "A-2" by S&P if deemed advisable by the Fund's
investment adviser. The Fund may also purchase securities that are unrated
at the time of purchase provided that the securities are determined to be of
comparable quality by the Fund's investment adviser pursuant to guidelines
approved by RBB's Board of Directors. The applicable Municipal Obligations
ratings are described in the Appendix to this Prospectus.
The two principal classifications of Municipal Obligations are "general
obligation" securities and "revenue" securities. General obligation securities
are secured by the issuer's pledge of its full faith, credit and taxing power
for the pay-
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ment of principal and interest. Revenue securities are payable only from the
revenues derived from a particular facility or class of facilities or, in
some cases, from the proceeds of a special excise tax or other specific
excise tax or other specific revenue source such as the user of the
facility being financed. Revenue securities include private activity bonds
which are not payable from the unrestricted revenues of the issuer.
Consequently, the credit quality of private activity bonds is usually
directly related to the credit standing of the corporate user of the
facility involved.
Municipal Obligations may also include "moral obligation" bonds, which are
normally issued by special purpose public authorities. If the issuer of moral
obligation bonds is unable to meet its debt service obligations from current
revenues, it may draw on a reserve fund, the restoration of which is a moral
commitment but not a legal obligation of the state or municipality which created
the issuer.
Municipal Obligations may include variable rate demand notes. Such notes are
frequently not rated by credit rating agencies, but unrated notes purchased by
the Fund will have been determined by the Fund's investment adviser to be of
comparable quality at the time of the purchase to rated instruments
purchasable by the Fund pursuant to guidelines adopted by RBB's Board of
Directors. Where necessary to ensure that a note is of "high quality," the
Fund will require that the issuer's obligation to pay the principal of the
note be backed by an unconditional bank letter or line of credit, guarantee
or commitment to lend. While there may be no active secondary market with
respect to a particular variable rate demand note purchased by the Fund,
the Fund may, upon the notice specified in the note, demand payment of the
principal of the note at any time or during specified periods not exceeding
one year, depending upon the instrument involved. The absence of such an
active secondary market, however, could make it difficult for the Fund to
dispose of a variable rate demand note if the issuer defaulted on its
payment obligation or during the periods that the Fund is not entitled
to exercise its demand rights. The Fund could, for this or other reasons,
suffer a loss to the extent of the default. The Fund invests in variable
rate demand notes only when the Fund's investment adviser deems the
investment to involve minimal credit risk. The Fund's investment adviser
also monitors the continuing creditworthiness of issuers of such notes to
determine whether the Fund should continue to hold such notes.
The Tax Reform Act of 1986 substantially revised provisions of prior law
affecting the issuance and use of proceeds of certain Municipal Obligations.
A new definition of private activity bonds applies to many types of bonds,
including those which were industrial development bonds under prior law.
Interest on private activity bonds issued after August 15, 1986 is tax-exempt
only if the bonds fall within certain defined categories of qualified private
activity bonds and meet the requirements specified in those respective
categories. In addition, interest on certain private activity bonds issued
after August 7, 1986 that is received by taxpayers subject to alternative
minimum tax is taxable. The Act has generally not changed the tax treatment
of bonds issued to finance governmental operations. As used in this
Prospectus, the term "private activity bonds" also includes industrial
development revenue bonds issued prior to the effective date of the
provisions of the Tax Reform Act of 1986. To the extent the Fund invests
in certain private activity bonds issued after August 7, 1986 ("Alternative
Minimum Tax Securities"), a portion of the interest earned by the Fund may
constitute an item of tax preference for purposes of the Federal alternative
minimum tax ("AMT Interest"). Investors should also be aware of the
possibility of state and local alternative minimum or minimum income tax
liability on interest from Alternative Minimum Tax Securities.
Although the Tax Free Fund may invest more than 25% of its net assets in (i)
Municipal
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<PAGE>
Obligations whose issuers are in the same state, (ii) Municipal Obligations the
interest on which is paid solely from revenues of similar projects and (iii)
private activity bonds bearing Tax Exempt Interest, it does not currently intend
to do so on a regular basis. To the extent the Tax Free Fund's assets are
concentrated in Municipal Obligations that are payable from the revenues of
similar projects or are issued by issuers located in the same state, the Fund
will be subject to the peculiar risks presented by the laws and economic
conditions relating to such states or projects to a greater extent than it
would be if its assets were not so concentrated.
TEMPORARY DEFENSIVE MEASURES. The Fund may hold uninvested cash reserves pending
investment during temporary defensive periods or if, in the opinion of the
Fund's investment adviser, suitable Municipal Obligations are unavailable. There
is no percentage limitation on the amount of assets which may be held uninvested
during temporary defensive periods. Uninvested cash reserves will not earn
income.
"WHEN-ISSUED" SECURITIES. The Fund may purchase securities on a "when-issued"
basis. See "Balanced Fund--'When-Issued' Securities" above. The Fund expects
that commitments to purchase when-issued securities will not exceed 25% of the
value of its total assets absent unusual market conditions. The Fund does not
intend to purchase when-issued securities for speculative purposes but only
in furtherance of its investment objective.
STAND-BY COMMITMENTS. The Fund may acquire "stand-by commitments" with respect
to Municipal Obligations held in its portfolio. Under a stand-by commitment,
a dealer would agree to purchase at the Fund's option specified Municipal
Obligations at a specified price. The acquisition of a stand-by commitment
may increase the cost, and thereby reduce the yield, of the Municipal
Obligation to which such commitment relates. The Fund will acquire
stand-by commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes.
ILLIQUID SECURITIES. The Tax Free Fund will not invest more than 15% of its net
assets in illiquid securities, including securities that are illiquid by virtue
of the absence of a readily available market or legal or contractual
restrictions on resale. Securities that have legal or contractual restrictions
on resale but have a readily available market are not deemed illiquid for
purposes of this limitation. The Fund's investment adviser will monitor the
liquidity of such restricted securities under the supervision of RBB's Board
of Directors. See "Investment Objectives and Policies-- Illiquid Securities"
in the Statement of Additional Information.
TAX-EXEMPT DERIVATIVE SECURITIES. The Tax Free Fund may invest in tax-exempt
derivative securi-ties such as tender option bonds, custodial receipts,
participations, beneficial interests in trusts and partnership interests. A
typical taxexempt derivative security involves the purchase of an interest
in a pool of Municipal Obligations which interest includes a tender option,
demand or other feature, allowing the Fund to tender the underlying Municipal
Obligation to a third party at periodic intervals and to receive the principal
amount thereof. In some cases, Municipal Obligations are represented by
custodial receipts evidencing rights to future principal or interest payments,
or both, on underlying municipal securities held by a custodian and such
receipts include the option to tender the underlying securities to the
sponsor (usually a bank, brokerdealer or other financial institution).
Although the Internal Revenue Service has not ruled on whether the interest
received on derivative securities in the form of participation interests or
custodial receipts is Tax-Exempt Interest, opinions relating to the validity
of, and the tax-exempt status of payments received by, the Fund from such
derivative securities are rendered by counsel to the respective sponsors of
such derivatives and relied upon by the Fund in purchasing such securities.
Neither the Fund nor its invest-
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<PAGE>
ment adviser will review the proceedings relating to the creation of any
tax-exempt derivative securities or the basis for such legal opinions.
The Tax Free Fund's investment objective and the policies described above
may be changed by RBB's Board of Directors without the affirmative vote of
the holders of a majority of outstanding Shares of RBB representing interests
in the Fund. Such changes may result in the Fund having investment objectives
which differ from those an investor may have considered at the time of
investment. There is no assurance that the investment objective of the
Tax Free Fund will be achieved.
INVESTMENT LIMITATIONS
The Funds may not change the following investment limitations (with certain
exceptions, as noted below) without the affirmative vote of the holders of a
majority of a Fund's outstanding Shares. (A complete list of the investment
limitations that cannot be changed without such a vote of the shareholders is
contained in the Statement of Additional Information under "Investment
Objectives and Policies.")
1. Purchase the securities of any one issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies or instrumentalities, if
immediately after and as a result of such purchase more than 5% of the value of
a Fund's total assets would be invested in the securities of such issuer, or
more than 10% of the outstanding voting securities of such issuer would be owned
by a Fund, except that up to 25% of the value of a Fund's total assets may be
invested without regard to such limitations.
2. Purchase any securities which would cause, at the time of purchase, more
than 25% of the value of the total assets of a Fund to be invested in the
obligations of issuers in the same industry, provided that there is no
limitation with respect to investments in U.S. Government obligations.
In addition, the Growth & Income Fund may not borrow money, except from
banks or by entering into reverse repurchase agreements for temporary purposes
and then in amounts not in excess of 10% of the value of the Fund's total assets
at the time of such borrowing, and only if after such borrowing there is asset
coverage of at least 300% for all borrowings of the Fund; or mortgage, pledge or
hypothecate any of its assets except in connection with any such borrowing or
reverse repurchase agreement and in amounts not in excess of the lesser of the
dollar amounts borrowed or 10% of the value of the Fund's total assets at the
time of such borrowing; or purchase portfolio securities while borrowings and
reverse repurchase agreements in excess of 5% of the Fund's net assets are
outstanding. (This borrowing provision is not for investment leverage, but
solely to facilitate management of the Growth & Income Fund's securities by
enabling the Growth & Income Fund to meet redemption requests where the
liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient.)
Similarly, the Balanced Fund and the Tax Free Fund may not borrow money,
except from banks or by entering into reverse repurchase agreements for
temporary purposes and then in amounts not in excess of 30% of the value of such
Fund's total assets at the time of such borrowing, and only if after such
borrowing there is asset coverage of at least 300% for all borrowings of such
Fund; or mortgage, pledge or hypothecate any of their respective assets except
in connection with any such borrowing or reverse repurchase agreement and in
amounts not in excess of 125% of the dollar amounts borrowed; or purchase
portfolio securities while borrowings and reverse repurchase agreements in
excess of 5% of such Fund's net assets are outstanding. (This borrowing
provision is not for investment leverage, but solely to facilitate management of
the Balanced Fund and Tax Free Fund's securities by enabling these Funds to meet
redemption
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<PAGE>
requests where the liquidation of portfolio securities is deemed to be
disadvantageous or inconvenient.)
In addition, the Tax Free Fund may not change its policy of investing,
during normal market conditions, at least 80% of its net assets in obligations
the interest on which is Tax-Exempt Interest or AMT Interest.
MANAGEMENT
BOARD OF DIRECTORS. The business and affairs of RBB and the Funds are managed
under the direction of RBB's Board of Directors.
INVESTMENT ADVISER. Warburg, Pincus Counsellors, Inc. ("WPC"), a wholly owned
subsidiary of Warburg, Pincus Counsellors G.P., serves as the investment adviser
to the Funds. WPC, organized in 1970, is a professional investment counseling
firm which provides investment services to investment companies, employee
benefit plans, endowment funds, foundations and other institutions and
individuals. WPC currently manages over $9.0 billion in assets, of which
approximately $4.0 billion are investment companies. WPC's principal offices are
located at 466 Lexington Avenue, New York, New York 10017-3147. As adviser to
the Funds, WPC is responsible for overall management of the Funds, and is
responsible for all purchases and sales of portfolio securities for the Funds.
WPC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the Funds. Qualified recipients are
securities dealers who have sold Fund Shares or others, including banks and
other financial institutions, under special arrangements. In some instances,
these incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or expected sale of
significant amounts of Fund shares.
GROWTH & INCOME FUND. Anthony G. Orphanos, a Managing Director of WPC who has
been with WPC for the last sixteen years, is Chief Investment Officer and is
responsible for the day-to-day management of the Growth & Income Fund's
investments. Mr. Orphanos has been the portfolio manager of the Growth & Income
Fund since WPC began serving as sub-advisor to the Fund in November 1991.
Linda Diaz, CFA, Assistant Vice President, is a research analyst and
assistant portfolio manager for the Warburg Pincus Growth & Income Fund. Ms.
Diaz has been with WPC since 1995 and has 10 years of investment experience.
Prior to joining WPC, Ms. Diaz was an Assistant Vice President and portfolio
manager in the Asset Management Division for Kidder Peabody & Co. She received
her B.S. degree from The Wharton School, University of Pennsylvania.
For the services provided and expenses assumed by it, WPC is entitled to
receive a fee from RBB computed daily and payable monthly at an annual rate of
.75% of the Growth & Income Fund's average daily net assets. This fee is higher
than that paid by most investment companies.
BALANCED FUND. Dale C. Christensen, a Managing Director of WPC, has been with
WPC since 1989, prior to which he was a Vice President in the International
Private Banking division and the domestic pension fund management division at
Citicorp, a Fixed Income Portfolio Manager at CIC Asset Management and a Vice
President of Investments at First City Trust. Mr. Christensen and Mr. Orphanos
are the overall portfolio strategists for the Balanced Fund and are responsible
for determining the portion of the Fund to be allocated among the various fixed
income and equity sectors. Mr. Christensen also manages the fixed income portion
of the Balanced Fund. Mr. Orphanos is responsible for the U.S. Value Sector.
Elizabeth B. Dater and Stephen J. Lurito are responsible for the U.S. Small
Company Sector. Ms. Dater is a Managing Director of WPC and has been with WPC
since 1978. Mr. Lurito is a Managing Director at
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WPC and has been with WPC since 1987. George U. Wyper and Susan L. Black manage
the U.S. Mid-Cap Sector. Mr. Wyper is a Managing Director and joined WPC in
August 1994, before which time he was chief investment officer of White River
Corporation and president of Hanover Advisors, Inc. (1993-August 1994), chief
investment officer of Fund American Enterprises, Inc. (1991-1993) and the fixed
income portfolio manager of Firemen's Fund Insurance Company (1987-1990). Ms.
Black is a Managing Director of WPC and has worked at WPC since 1985. The
International Equity Sector is managed by Richard H. King and Nicholas P.W.
Horsley. Mr. King has been a Managing Director of WPC since 1989. Mr. Horsley is
an associate portfolio manager with WPC and has been with WPC since 1993, prior
to which he was a director, portfolio manager and analyst at Barclays deZoete
Wedd in New York City.
For the services provided and expenses assumed by it, WPC is entitled to
receive a fee from RBB computed daily and payable monthly at an annual rate of
.90% of the Balanced Fund's average daily net assets. This fee is higher than
that paid by most investment companies.
TAX FREE FUND. Mr. Christensen and Sharon B. Parente manage the Tax Free Fund.
Ms. Parente, a Senior Vice President of WPC, has been with WPC since 1992 and
has sixteen years of investment experience. Prior to joining WPC, Ms. Parente
was a vice president at Citibank in the Private Banking Group from 1985 to 1992.
She was a fixed income portfolio manager at Calvert Group from 1981 to 1985 and
a municipal trader's assistant at Prescott, Ball & Turben from 1979 to 1981. Ms.
Parente received her B.S. degree from the University of Virginia.
For the services provided and the expenses assumed by it, WPC is entitled to
receive a fee from RBB computed daily and payable monthly at an annual rate of
.50% of the Tax Free Fund's average daily net assets.
THE DISTRIBUTOR. Counsellors Securities Inc. (the "Counsellors Securities"), a
wholly owned subsidiary of WPC, serves as the Funds' distributor. Counseller's
principal offices are located at 466 Lexington Avenue, New York, New York 10017-
3147. No compensation is payable by the Growth & Income Fund to Counsellors
Securities for distribution services. Counsellors Securities receives a fee at
an annual rate equal to .25% of the Balanced Fund's and Tax Free Fund's
respective average daily net assets for distribution services, pursuant to
distribution plans (the "12b-1 Plans") adopted by each of the Funds pursuant to
Rule 12b-1 under the 1940 Act. Amounts paid to Counsellors Securities under the
Balanced Fund's and Tax Free Fund's respective 12b-1 Plans may be used by
Counsellors Securities to cover expenses that are related to (i) the sale of the
No Load Shares of each Fund, (ii) ongoing servicing and/or maintenance of the
accounts of shareholders of each Fund, and (iii) sub-transfer agency services,
subaccounting services or administrative services related to the sale of the No
Load Shares of each Fund, all as set forth in each Fund's 12b-1 Plan. Payments
under the 12b-1 Plans are not tied exclusively to the distribution expenses
actually incurred by Counsellors Securities and payments may exceed distribution
expenses actually incurred. RBB's Board of Directors will evaluate the
appropriateness of the 12b-1 Plans on a continuing basis and in doing so will
consider all relevant factors, including expenses borne by Counsellors
Securities and amounts received under the 12b-1 Plans.
CO-ADMINISTRATORS. The Funds employ Counsellors Funds Service, Inc.
("Counsellors Service"), a wholly-owned subsidiary of Counsellors, as a
co-administrator. As co-administrator, Counsellors Service provides shareholder
liaison services to the Funds including responding to shareholder inquiries and
providing information on shareholder accounts. As compensation, the Growth &
Income Fund pays to Counsellors Service a fee calculated at an annual rate of
.05% of the
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Fund's average daily net assets for the first $125 million of average daily net
assets and .10% of average daily net assets for assets above $125 million; the
Balanced and Tax Free Funds each pay to Counsellors Service a fee calculated at
an annual rate of .10% of average daily net assets.
The Funds also employ PFPC Inc. ("PFPC"), an indirect, wholly-owned
subsidiary of PNC Bank Corp., as a co-administrator. As a co-administrator, PFPC
calculates the Funds' net asset values, provides all accounting services for the
Funds and assists in related aspects of the Funds' operations. As compensation,
the Growth & Income Fund pays to PFPC a fee calculated at an annual rate of .20%
of the Fund's first $125 million of average daily net assets, and .15% of
average daily net assets over $125 million; the Balanced and Tax Free Funds each
pay to PFPC a fee calculated at an annual rate of .15% of average daily net
assets with a minimum annual fee of $75,000.
CUSTODIAN. PNC Bank serves as RBB's custodian. State Street Bank and Trust
Company ("State Street") serves as co-custodian for the Funds' foreign
securities.
TRANSFER AGENT AND SUB-TRANSFER AGENT. PFPC serves as RBB's transfer agent and
dividend disbursing agent. PFPC has its principal offices at 400 Bellevue
Parkway, Wilmington, Delaware 19809. State Street acts as shareholder servicing
agent, sub-transfer agent and dividend disbursing agent for the Funds. State
Street's principal business address is 225 Franklin Street, Boston,
Massachusetts 02110. It has delegated to Boston Financial Data Services, Inc.
("BFDS"), a 50% owned subsidiary, responsibility for most shareholder servicing
functions. BFDS's principal business address is 2 Heritage Drive, North
Quincy, Massachussets 02176.
EXPENSES. The expenses of the Funds are deducted from their total income before
dividends are paid. These expenses include, but are not limited to, fees paid to
the investment adviser, fees and expenses of officers and directors who are not
affiliated with the Fund's investment adviser or Distributor, taxes, interest,
legal fees, custodian fees, auditing fees, brokerage fees and commissions,
certain of the fees and expenses of registering and qualifying the Funds and
their shares for distribution under Federal and state securities laws, expenses
of preparing prospectuses and statements of additional information and of
printing and distributing prospectuses and statements of additional information
annually to existing shareholders that are not attributable to a particular
class of shares of RBB, the expense of reports to shareholders, shareholders'
meetings and proxy solicitations that are not attributable to a particular class
of shares of RBB, fidelity bond and directors and officers liability insurance
premiums, the expense of using independent pricing services and other expenses
which are not expressly assumed by the adviser under its investment advisory
agreements with respect to the Funds. Any general expenses of RBB that are not
readily identifiable as belonging to a particular investment portfolio of RBB
will be allocated among all investment portfolios of RBB based upon the relative
net assets of the investment portfolios at the time such expenses are cited.
Distribution expenses, transfer agency expenses, expenses of preparation,
printing and distributing prospectuses, statements of additional information,
proxy statements and reports to shareholders, and registration fees, identified
as belonging to a particular class, are allocated to such class.
The investment adviser has agreed to reimburse the Funds for the amount, if
any, by which the total operating and management expenses of the Funds for any
fiscal year exceed the most restrictive state blue sky expense limitation in
effect from time to time, to the extent required by such limitation.
The investment adviser may assume additional expenses of the Funds from time
to time. In certain circumstances, it may assume such expenses on the condition
that it is reimbursed by
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RBB for such amounts prior to the end of a fiscal year. In such event, the
reimbursement of such amounts will have the effect of increasing a Fund's
expense ratio and of decreasing yield to investors.
For the Funds' fiscal year ended August 31, 1995, the Growth & Income Fund's
total expenses were % of average net assets, the Balanced Fund's total
expenses were % of average net assets before expense waivers and
reimbursements, and the Tax Free Fund's expenses were % of average net assets
before expense waivers and reimbursements. WPC is currently waiving expenses and
providing reimbursements to limit the Balanced Fund's total expenses to 1.60%
per annum of average net assets, and has agreed to limit the Tax Free Fund's
total expenses to .50% per annum of average net assets. However, there can be no
assurance that WPC will continue to assume such expenses.
FUND TRANSACTIONS. The Funds' investment adviser may consider a number of
factors in determining which brokers to use in purchasing or selling the Funds'
securities. These factors, which are more fully discussed in the Statement of
Additional Information, include, but are not limited to, research services, the
reasonableness of commissions and quality of services and execution.
Transactions for the Funds may be effected through broker-dealers who sell Fund
Shares, subject to the requirements of best execution. A higher rate of turnover
of a Fund's securities may involve correspondingly higher transaction costs,
which will be borne directly by the Fund. A Fund may enter into brokerage
transactions with and pay brokerage commissions to brokers that are affiliated
persons (as such term is defined in the 1940 Act) provided that the terms of the
brokerage transactions comply with the provisions of the 1940 Act.
HOW TO PURCHASE SHARES
Shares of a Fund may be purchased either by mail, or with special advance
instructions, by wire.
BY MAIL. If the investor desires to purchase shares by mail, a check or money
order made payable to RBB or Warburg Pincus Funds (in U.S. currency) should be
sent along with the completed account application to Warburg Pincus Funds
through its distributor, Counsellors Securities Inc., at the address set forth
under "Management--The Distributor" above. Checks payable to the investor and
endorsed to the order of Warburg Pincus Funds will not be accepted as payment
and will be returned to sender. If payment is received by check in proper form
on or before 4:00 p.m. (Eastern time) on a day that a Fund calculates its net
asset value (a "Business Day") the purchase will be made at the Fund's net asset
value calculated at the end of that day. If payment is received after 4:00 p.m.,
the purchase will be effected at the Fund's net asset value determined for the
next business day after payment has been received. Checks or money orders that
are not in proper form or that are not accompanied or preceded by a complete
application will be returned to sender. Shares purchased by check are entitled
to receive dividends and distributions beginning on the day after payment has
been received. Checks should be made payable to Warburg Pincus Funds for an
investment in more than one mutual fund managed by WPC, and should be
accompanied by a breakdown of amounts to be invested in each such Fund. If a
check used for purchase does not clear, the Funds will cancel the purchase and
the investor may be liable for losses or fees incurred. For a description of the
manner of calculating a Fund's net asset value, see "Net Asset Value" below.
BY WIRE. Investors may also purchase shares in a Fund by wiring funds from their
banks. Telephone orders will not be accepted until a completed account
application in proper form has
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been received and an account number has been established. After telephoning
(800) 888-6878 for instructions, an investor should then wire federal funds to
Counsellors Securities Inc. using the following wire address:
State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02101
ABA# 0110 000 28
Attn: Mutual Funds/Custody Dept.
[Warburg Pincus Growth & Income,
Warburg Pincus Balanced Fund or
Warburg Pincus Tax Free Fund, as applicable]
DDA# 9904-649-2
[Shareowner name]
[Shareowner account number]
If a telephone order is received by the close of regular trading on the New
York Stock Exchange (the "NYSE") (currently 4:00 p.m., Eastern time), and
payment by wire is received on the same day in proper form (in accordance with
instructions stated above), the shares will be priced according to the net asset
value of the Fund on that day and are entitled to dividends and distributions
beginning on that day. If payment by wire is received in proper form by the
close of the NYSE without a prior telephone order, the purchase will be priced
according to the net asset value of the Fund on that day and are entitled to
dividends and distributions beginning on that day. However, if a wire received
in proper form is not preceded by a telephone order and is received after the
close of regular trading on the NYSE, the payment will be held uninvested until
the order is effected at the close of business on the next business day. Payment
for orders that are not accepted will be returned to the prospective investor
after prompt inquiry. If a telephone order is placed and payment by wire is not
received on the same day, the Fund will cancel the purchase and the investor may
be liable for losses or fees incurred.
Shares of the Funds are sold without a sales charge. The minimum initial
investment in a Fund is $1,000 and the minimum subsequent investments must be
$100, except that subsequent minimum investments can be as low as $50 under the
Automatic Monthly Investment Plan described in the next section. For a
tax-deferred retirement plan, such as an IRA, the minimum initial and subsequent
investment is $500, except that subsequent minimum investments can be as low as
$50 under the Automatic Monthly Investment Plan. The Funds reserve the right to
vary further the initial and subsequent minimum investment requirements at any
time.
After an investor has made his initial investment, additional shares may be
purchased at any time by mail or by wire in the manner outlined above. Wire
payments for initial and subsequent investments should clearly indicate the
investor's account number. In the interest of economy and convenience, physical
certificates representing shares in a Fund are not normally issued.
The Funds understand that some broker-dealers (other than Counsellors
Securities), financial institutions, securities dealers and other industry
professionals ("Service Agents") may impose certain conditions on their clients
that invest in the Funds, which are in addition to or different from those
described in this Prospectus, and, to the extent permitted by applicable
regulatory authority, may charge their clients direct fees. Certain features of
the Funds, such as the minimum initial or subsequent investments, may be
modified in these programs, and administrative charges may be imposed for the
services rendered. Therefore, a client or customer should contact the
organization acting on his behalf concerning the fees (if any) charged in
connection with a purchase or redemption of a Fund's shares and should read this
Prospectus in light of the terms governing his accounts with Service Agents.
Service Agents will be responsible for promptly transmitting client or customer
purchase and redemption orders to the Funds in accordance with their agreements
with clients or customers. Certain Service Agents may
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<PAGE>
receive compensation from Counsellors or Counsellors Service. See "Shareholder
Servicing." Certain Service Agents that have entered into agreements with
Counsellors Securities may enter confirmed purchase orders on behalf of
customers, with payment to follow no later than the Funds' pricing on the
following business day. If payment is not received by such time, the Service
Agent could be held liable for resulting fees or losses.
Each Fund is available through the brokerage firms Waterhouse Securities,
Inc. and Jack White & Company, Inc. Each Fund is also available through the
Charles Schwab & Company, Inc. Mutual Fund OneSource ProgramTM ("Schwab") and
the Fidelity Brokerage Services, Inc. FundsNetworkTM Program ("Fidelity"). For
distribution and sub-accounting services with respect to shares of a Fund held
by each of these firms, Counsellors pays Jack White & Company up to .25%,
Waterhouse Securities up to .30% and pays Schwab and Fidelity up to .35% of the
annual average value of such accounts. Purchases made through these programs do
not require customers to pay a transaction fee.
AUTOMATIC MONTHLY INVESTING. Automatic monthly investing allows shareholders to
authorize the Funds to debit their bank account monthly ($50 minimum) for the
purchase of Fund shares on or about either the tenth or twentieth business day
of each month. To establish the automatic monthly investing option, obtain a
separate application or complete the "Automatic Investment Program" section of
the account application and include a voided, unsigned check from the bank
account to be debited. Only an account maintained at an automated clearing house
member may be used. Shareholders using this service must satisfy the initial
investment minimum for a Fund prior to or concurrent with the start of any
Automatic Investment Program. Please refer to an account application for further
information or contact Warburg Pincus Funds at (800) 888-6878 to modify or
terminate the program. Investors should allow a period of up to 30 days in order
to implement an automated investment program. The failure to provide complete
information could result in further delays.
RETIREMENT PLANS. For information about investing in the Funds through a
tax-deferred retirement plan, such as an Individual Retirement Account ("IRA")
or a Simplified Employee Pension IRA ("SEP-IRA"), an investor should telephone
Warburg Pincus Funds at (800) 888-6878 or write to Warburg Pincus Funds at the
address set forth above. Investors should consult their own tax advisers about
the establishment of retirement plans.
HOW TO REDEEM AND EXCHANGE SHARES
REDEMPTION OF SHARES. An investor of a Fund may redeem (sell) his shares on any
day that the Fund's net asset value is calculated (see "Net Asset Value" below).
Shares of a Fund may either be redeemed by mail or by telephone. Investors
should realize that in using the telephone redemption and exchange option, you
may be giving up a measure of security that you may have if you were to redeem
or exchange your shares in writing. If an investor desires to redeem his shares
by mail, a written request for redemption should be sent to Warburg Pincus Funds
at the address indicated below under "Separate Transfer Agent Agreement." An
investor should be sure that the redemption request identifies the Fund, the
number of shares to be redeemed and the investor's account number. In order to
change the bank account or address designated to receive the redemption
proceeds, the investor must send a written request (with signature guarantee of
all investors listed on the account when such a change is made in conjunction
with a redemption request) to Warburg Pincus Funds. Each mail redemption request
must be signed by the registered owner(s) or his legal representative(s) exactly
as the shares are registered. If an investor has applied for the telephone
redemption feature on his account application, he may redeem his
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<PAGE>
shares by calling Warburg Pincus Funds at (800) 888-6878 between 9:00 a.m. and
4:00 p.m., Eastern time on any business day. An investor making a telephone
withdrawal should state (i) the name of the Fund, (ii) the account number of the
Fund, (iii) the name of the investor(s) appearing on the Fund's records, (iv)
the amount to be withdrawn and (v) the name of the person requesting the
redemption.
After receipt of the redemption request by mail or by telephone, the
redemption proceeds will, at the option of the investor, be paid by check and
mailed to the investor of record or be wired to the investor's bank as indicated
in the account application previously filled out by the investor. No Warburg
Pincus Fund currently imposes a service charge for effecting wire transfers but
each such Fund reserves the right to do so in the future. During periods of
significant economic or market change, telephone redemptions may be difficult to
implement. If an investor is unable to contact Warburg Pincus Funds by
telephone, an investor may deliver the redemption request to Warburg Pincus
Funds by mail at the address shown below under "Separate Transfer Agent
Agreement." Although the Funds will redeem shares purchased by check before the
check clears, payments of the redemption proceeds will be delayed until such
check has cleared, which may take up to 15 days from the purchase date.
Investors should consider purchasing shares using a certified bank check or
money order if they anticipate an immediate need for a redemption.
If a redemption order is received prior to the close of regular trading on
the NYSE, the redemption order will be effected at the net asset value per share
as determined on that day. If a redemption order is received after the close of
regular trading on the NYSE, the redemption order will be effected at the net
asset value as next determined. Redemption proceeds will normally be mailed or
wired to an investor on the next business day following the date a redemption
order is effected. If, however, in the judgment of WPC, immediate payment would
adversely affect a Fund, the Funds reserve the right to pay the redemption
proceeds within seven days after the redemption order is effected. Furthermore,
a Fund may suspend the right of redemption or postpone the date of payment upon
redemption (as well as suspend or postpone the recordation of an exchange of
shares) for such periods as are permitted under the 1940 Act.
The proceeds paid upon redemption may be more or less than the amount
invested depending upon a share's net asset value at the time of redemption. If
an investor redeems all the shares in his account, all dividends and
distributions declared up to and including the date of redemption are paid along
with the proceeds of the redemption.
If, due to redemptions, the value of an investor's account drops to less
than $500, the Funds reserve the right to redeem the shares in that account at
net asset value. Prior to any redemption, a Fund will notify an investor in
writing that this account has a value of less than $500. The investor will then
have 60 days to make an additional investment before a redemption will be
processed by a Fund.
SEPARATE TRANSFER AGENT ARRANGEMENT. Shareholders who purchased shares of the
Funds through Counsellors Securities or Warburg Pincus Funds should send a
written request for additional share purchases or redemptions in proper form
directly to: Warburg Pincus Funds, P.O. Box 9030, Boston, MA 02205-9030.
Investors who indicated instructions for telephone redemption by wire or check
on their original Warburg Pincus Funds application form may telephone Warburg
Pincus Funds at 1-800-888-6878.
Shareholders who made their purchases of shares of the RBB/Warburg Pincus
Growth & Income Fund through any other broker-dealer
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<PAGE>
may direct their redemption requests in writing to Warburg Pincus Funds, c/o
PFPC, P.O. Box 8950, Wilmington, Delaware 19899. Shareholders who purchased
their shares of these Funds through any other broker-dealer may also place
redemption requests through such broker-dealer, but such broker-dealer might
charge a fee for this service.
TELEPHONE TRANSACTIONS. In order to request redemptions by telephone, investors
must have completed and returned to Warburg Pincus Funds an account application
containing a telephone election. Unless contrary instructions are elected, an
investor will be entitled to make exchanges by telephone. Neither a Fund nor its
agents will be liable for following instructions communicated by telephone that
it reasonably believes to be genuine. Reasonable procedures will be employed on
behalf of the Funds to confirm that instructions communicated by telephone are
genuine. Such procedures include providing written confirmation of telephone
transactions, tape recording telephone instructions and requiring specific
personal information prior to acting upon telephone instructions. If these or
other reasonable procedures are not followed, the Funds may be liable for any
losses due to unauthorized or fraudulent instructions.
AUTOMATIC CASH WITHDRAWAL PLAN. Each Fund offers investors an automatic cash
withdrawal plan under which investors may elect to receive periodic cash
payments of at least $1,000 monthly or quarterly. To establish this service,
complete the "Automatic Withdrawal Plan" section of the account application and
attach a voided check from the bank account to be credited. For further
information regarding the automatic cash withdrawal plan or to modify or
terminate the Plan, investors should contact Warburg Pincus Funds at (800)
888-6878.
EXCHANGE OF SHARES. An investor may exchange shares of a Fund for shares of the
same class of another Fund or for shares of the same class of other mutual funds
advised by WPC at their respective net asset value. However, shareholders may
not effect exchanges between No Load Shares and Series 2 Shares. Exchanges may
be effected by mail or by telephone in the manner described under "Redemption of
Shares" above. If an exchange request is received by Warburg Pincus Funds prior
to 4:00 p.m. (Eastern time), the exchange will be made at the Fund's net asset
value determined at the end of that business day. 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, the Funds
reserve 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,
exchanges may be made among the Funds with the following other funds:
. 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 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,
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<PAGE>
secondarily, capital appreciation by investing in a diversified portfolio
of fixed-income securities;
. WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND--a bond fund seeking
maximum income after the effect of federal income taxes as a primary
objective and capital appreciation as a secondary objective through
investments in taxable and tax-exempt debt instruments;
. 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 EMERGING GROWTH FUND--an equity fund seeking maximum
capital appreciation by investing in emerging growth companies;
. WARBURG PINCUS INTERNATIONAL EQUITY FUND--an international equity fund
seeking long-term capital appreciation.
. 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.
The exchange privilege is available to shareholders residing in any state in
which the Funds' 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. Investors wishing to exchange shares of
the Funds for shares in another Warburg Pincus Fund should review the prospectus
of the other fund prior to making an exchange. For further information regarding
the exchange privilege or to obtain a current prospectus for another Warburg
Pincus Fund, an investor should contact Warburg Pincus Funds at (800) 257-5614.
NET ASSET VALUE
The net asset value per class of a Fund is calculated by adding the relevant
classes' pro rata share of the value of the Fund's securities, cash and other
assets, deducting the relevant classes' pro rata share of the actual and accrued
liabilities and the liabilities specifically allocated to the relevant class,
and dividing by the total number of Shares of the relevant class outstanding.
The net asset value per class of the Fund is calculated as of 4:00 p.m. Eastern
time on each Business Day. A Business Day is any day on which the NYSE is open
for business.
Valuation of securities held by the Funds is as follows: securities traded
on a national securities exchange or on the NASDAQ National Market System are
valued at the last reported sale price that day; securities traded on a national
securities exchange or on the NASDAQ National Market System for which there were
no sales on that day and securities traded on other over-the-counter markets for
which market quotations are readily available are valued at the mean of the bid
and asked prices; and securities for which market quotations are not readily
available are valued at fair market value as determined in good faith by or
under the direction of RBB's Board of Directors. The amortized cost method of
valuation may also be used with respect to debt obligations with sixty days or
less remaining to maturity.
With the approval of RBB's Board of Directors, a Fund may use a pricing
service, bank or broker-dealer experienced in such matters to
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<PAGE>
value the Fund's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
DIVIDENDS AND DISTRIBUTIONS
The Funds will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Funds to the Funds' shareholders. All
distributions are reinvested in the form of additional full and fractional
Shares unless a shareholder elects otherwise.
The Growth & Income and Balanced Funds will declare and pay dividends, if
any, from net investment income quarterly, near the end of each quarter. The Tax
Free Fund will declare dividends daily and pay monthly. Net realized capital
gains (including net short-term capital gains), if any, will be distributed at
least annually.
TAXES
The following discussion is only a brief summary of some of the important
tax considerations generally affecting the Funds and their shareholders and is
not intended as a substitute for careful tax planning. Accordingly, investors in
the Funds should consult their tax advisers with specific reference to their own
tax situation.
The Funds will elect to be taxed as regulated investment companies under
Subchapter M of the Internal Revenue Code of 1986, as amended. So long as the
Funds qualify for this tax treatment, the Funds will be relieved of Federal
income tax on amounts distributed to shareholders, but shareholders, unless
otherwise exempt, will pay income or capital gains taxes on amounts so
distributed (except distributions that constitute "exempt interest dividends" or
that are treated as a return of capital) regardless of whether such
distributions are paid in cash or reinvested in additional Shares.
Distributions out of the "net capital gain" (the excess of net long-term
capital gain over net short-term capital loss), if any, of the Funds will be
taxed to shareholders as long-term capital gain regardless of the length of time
a shareholder has held his Shares, whether such gain was reflected in the price
paid for the Shares, or whether such gain was attributable to bonds bearing
tax-exempt interest. All other distributions, to the extent they are taxable,
are taxed to shareholders as ordinary income. The maximum marginal rate on
ordinary income for individuals, trusts and estates is generally 31% while the
maximum rate imposed on net capital gain of such taxpayers is 28%. Corporate
taxpayers are taxed at the same rates on both ordinary income and capital gains.
The Growth & Income and Balanced Funds anticipate that dividends paid by
these Funds will be eligible for the 70% dividends received deduction allowed to
certain corporations to the extent of the gross amount of qualified dividends
received, respectively, by the Funds for the year. However, corporate
shareholders will have to take into account the entire amount of any dividend
received in determining their adjusted current earnings adjustment for
alternative minimum tax purposes. The dividends received deduction is not
available for capital gain dividends.
The Tax Free Fund intends to pay substantially all of its dividends as
"exempt interest dividends." Investors in this Fund should note, however,
that taxpayers are required to report the receipt of tax-exempt interest
and "exempt interest dividends" in their Federal income tax returns and
that in two circumstances such amounts, while exempt from regular Federal
income tax, are subject to alternative minimum tax at a rate of 24% in
the case of individuals, trusts and estates, and 20% in the case of corporate
taxpayers. First, tax-exempt interest and "exempt interest dividends" derived
from certain private activity bonds issued after August 7,
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<PAGE>
1986, will generally constitute an item of tax preference for corporate and
noncorporate tax-payers in determining alternative minimum tax liability.
Depending upon market conditions, the Tax Free Fund may invest up to 20% of
its net assets in such private activity bonds. Secondly, tax-exempt interest
and "exempt interest dividends" derived from all Municipal Obligations must
be taken into account by corporate taxpayers in determining their adjusted
current earnings adjustment for alternative minimum tax purposes. Shareholders
who are recipients of Social Security Act or Railroad Retirement Act benefits
should further note that tax-exempt interest and "exempt interest dividends"
will be taken into account in determining the taxability of their benefit
payments.
The Tax Free Fund will determine annually the percentages of its net
investment income which is fully tax-exempt, which constitute an item of tax
preference for alternative minimum tax purposes, and which is fully taxable, and
will apply such percentages uniformly to all distributions declared from net
investment income during that year. These percentages may differ significantly
from the actual percentages for any particular day.
The Funds will send written notices to shareholders annually regarding the
tax status of distributions made by the Funds. Dividends declared in October,
November or December of any year payable to shareholders of record on a
specified date in such a month will be deemed to have been received by the
shareholders on December 31, provided such dividends are paid during January of
the following year. The Funds intend to make sufficient actual or deemed
distributions prior to the end of each calendar year to avoid liability for
Federal excise tax.
Investors should be careful to consider the tax implications of buying
Shares just prior to a distribution. The price of shares purchased at that time
will reflect the amount of the forthcoming distribution. Those investors
purchasing just prior to a distribution will nevertheless be taxed on the entire
amount of the distribution received.
Shareholders who exchange Shares representing interests in the Funds for
Shares representing interests in another Fund will generally recognize capital
gain or loss for Federal income tax purposes.
Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different U.S. Federal income tax treatment.
An investment in any of the Funds is not intended to constitute a balanced
investment program. Shares of the Tax Free Fund would not be suitable for
tax-exempt institutions and may not be suitable for retirement plans qualified
under Section 401 of the Internal Revenue Code, H.R. 10 plans and individual
retirement accounts since such plans and accounts are generally tax-exempt and,
therefore, not only would not gain any additional benefit from the Tax Free
Fund's dividends being tax-exempt but also such dividends would be taxable when
distributed to the beneficiary.
Future legislative or administrative changes or court decisions may
materially affect the tax consequences of investing in the Funds. Shareholders
are also urged to consult their tax advisers concerning the application of state
and local income taxes to investments in the Funds which may differ from the
Federal income tax consequences described above.
SHAREHOLDER SERVICING
No Load Shares may be sold to or through institutions that will not be paid
a distribution fee by the Funds pursuant to Rule 12b-1 under the 1940 Act for
services to their clients or customers who are beneficial owners of No Load
Shares. These institutions may be paid a fee by WPC, Counsellors Securities,
or their affiliates for transfer agency, administrative or other ser-
27
<PAGE>
vices provided to their customers that invest in a Fund's No Load Shares. These
services include maintaining account records, processing orders to purchase,
redeem and exchange No Load Shares and responding to certain customer inquiries.
Organizations that provide record-keeping or other services to certain employee
benefit plans and qualified and other retirement plans that include a Fund as an
investment alter-native may also be paid a fee for these services by WPC,
Counsellors Securities or their affiliates. Such compensation does not represent
an additional expense to the Funds or their shareholders, since it will be paid
from the assets of WPC, Counsellors Securities or their affiliates.
The Growth & Income and Balanced Funds are authorized to offer a separate
class of shares of the Fund (the "Series 2 Shares") exclusively to financial
institutions and retirement plans ("Institutions"), whose customers (or
participants in the case of retirement plans) ("Customers") are beneficial
owners of Series 2 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 Series 2 Shares
with Counsellors Securities pursuant to a separate Distribution Plan adopted
pursuant to Rule 12b-1 of the 1940 Act. Pursu-ant to the terms of an Agreement,
the Institution will provide certain distribution, shareholder ser-vicing,
administrative and/or accounting services for its clients and customers.
DESCRIPTION OF SHARES
RBB has authorized capital of thirty billion shares of Common Stock, $.001
par value per share, of which 12.2 billion shares are currently classified into
62 different classes of Common Stock. See "Description of Shares" in the
Statement of Additional Information.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE WARBURG PINCUS CLASSES AND DESCRIBE ONLY THE
INVESTMENT OBJECTIVES AND POLICIES, OPERATIONS, CONTRACTS AND OTHER MATTERS
RELATING TO SUCH CLASSES.
Each Fund offers a separate class of shares, the Series 2 Shares, pursuant
to a separate pro-spectus. Series 2 Shares may not be purchased by individuals
directly but institutions and retire-ment plans may purchase Series 2 Shares for
individuals. Series 2 Shares of each class represent equal pro rata interests in
the respective Fund and accrue dividends and calculate net asset value and
performance quotations in the same manner. Because of the higher fees borne by
the Series 2 Shares, the total return on such shares can be expected, at any
time, to be lower than the total return on No Load Shares. Investors may obtain
information concerning the Series 2 Shares by calling Counsellors Securities at
(800) 888-6878.
Each share that represents an interest in an investment portfolio of RBB
(including each Fund Share) has an equal proportionate interest in the assets
belonging to such portfolio with each other share that represents an interest in
such portfolio, even where a share has a different class designation than
another share representing an interest in that Fund. Shares of RBB do not have
preemptive or conversion rights. When issued for payment as described in this
Prospectus, Shares will be fully paid and non-assessable.
RBB currently does not intend to hold annual meetings of shareholders except
as required by the 1940 Act or other applicable law. The law under certain
circumstances provides shareholders with the right to call for a meeting of
shareholders to consider the removal of one or more directors. To the extent
required by law, RBB will assist in shareholder communication in such matters.
28
<PAGE>
Shareholders of all investment portfolios of RBB (including the Funds) will
vote in the aggregate and not by portfolio except as otherwise required by law
or when the Board of Directors determines that the matter to be voted upon
affects only the interests of the shareholders of a particular investment
portfolio. (See the Statement of Additional Information under "Additional
Information Concerning Fund Shares" for examples when the 1940 Act requires
voting by investment portfolio or by class.) Shareholders of RBB are entitled to
one vote for each full share held (irrespective of class or portfolio) and
fractional votes for fractional shares held. Voting rights are not cumulative
and, accordingly, the holders of more than 50% of the aggregate shares of Common
Stock of RBB may elect all of the directors.
As of September 30, 1995, to RBB's knowledge, no person held of record or
beneficially 25% or more of the outstanding shares of all classes of RBB.
OTHER INFORMATION
REPORTS AND INQUIRIES. Shareholders will receive unaudited semi-annual reports
describing the Funds' investment operations and annual financial statements
audited by independent accountants. Shareholder inquiries can be made by
contacting Warburg Pincus Funds at (800) 888-6878, or by writing to Warburg
Pincus Funds, P.O. Box 9030, Boston, Massachusetts 02205-9030.
SHARE CERTIFICATES. RBB will issue share certificates for the Fund Shares only
upon the written request of a shareholder sent to PFPC. Share certificates are
not available for Shares purchased through Counsellors Securities.
PERFORMANCE INFORMATION. The Funds quote the performance of the No Load Shares
separately from the Series 2 Shares. The net asset value of the No Load Shares
are listed in the Wall Street Journal each business day under the heading
"Warburg Pincus Funds." From time to time, the Funds may advertise their
performance, including comparisons to other mutual funds with similar investment
objectives and to stock or other relevant indices. All such advertisements will
show the average annual total return, net of a Fund's maximum sales charge, over
one, five and ten year periods or, if such periods have not yet elapsed, shorter
periods corresponding to the life of the Fund. Such total return quotations will
be computed by finding the compounded average annual total return for each time
period that would equate the assumed initial investment of $1,000 to the ending
redeemable value, according to a required standardized calculation. The standard
calculation is required by the SEC to provide consistency and comparability in
investment company advertising. The Funds may also from time to time include in
such advertising an aggregate total return figure or a total return figure that
is not calculated according to the standardized formula in order to compare more
accurately a Fund's performance with other measures of investment return. For
example, a portfolio's total return may be compared with data published by
Lipper Analytical Services, Inc., CDA Investment Technologies, Inc. or
Weisenberger Investment Company Service, or with the performance of the Standard
& Poor's 500 Stock Index or the Dow Jones Industrial Average. All advertisements
containing performance data will include a legend disclosing that such
performance data represent past performance and that the investment return and
principal value of an investment will fluctuate so that an investor's Shares,
when redeemed, may be worth more or less than their original cost.
From time to time, the Funds may also advertise their "30-day yield." The
yield refers to the income generated by an investment in a Fund over the 30-day
period identified in the advertisement, and is computed by dividing the net
investment income per share during the period by the maximum public offering
price per share of the last day of the period. This income is "annualized" by
assuming that the amount of income is
29
<PAGE>
generated each month over a one-year period and is compounded semi-annually. The
annualized income is then shown as a percentage of the net asset value.
The yield on Shares of the Funds will fluctuate and are not necessarily
representative of future results. Shareholders should remember that yield is
generally a function of portfolio quality and maturity, type of instrument,
operating expenses and market conditions. Any fees charged by broker/dealers
directly to their customers in connection with investments in the Funds are not
reflected in the yields on a Fund's Shares, and such fees, if charged, will
reduce the actual return received by shareholders on their investments.
In reports or other communications to investors or in advertising, a Fund
may also describe the general biography or work experience of the portfolio
managers of the Fund and may include quotations attributable to the portfolio
managers describing approaches taken in managing a Fund's investments, research
methodology underlying stock selection or a Fund's investment objective. A Fund
may also discuss the continuum of risk and return relating to different
investments and the potential impact of foreign stocks on a portfolio otherwise
composed of domestic securities. In addition, a Fund may from time to time
compare its expense ratio to that of investment companies with similar
objectives and policies, based on data generated by Lipper Analytical Services,
Inc. or similar investment services that monitor mutual funds.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUNDS' STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RBB OR ITS DISTRIBUTOR.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY RBB OR BY THE DISTRIBUTOR IN
ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
-------------------
30
<PAGE>
APPENDIX A
RATINGS OF DEBT SECURITIES
STANDARD & POOR'S CORPORATION
<TABLE>
<S> <C>
AAA Debt rated "AAA" has the highest rating assigned by Standard & Poor's. Capacity to
pay interest and repay principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay principal and
differs from the highest rated issues only in a small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal although
it is somewhat more susceptible to the adverse effects of changes in circumstances
and economic conditions than debt in higher rated categories.
BBB Debt rated "BBB" is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories.
BB Debt rated "BB", "B", "CCC", or "CC" is regarded, on balance, as predominantly
B speculative with respect to capacity to pay interest and repay principal in
CCC accordance with the terms of the obligation. "BB" indicates the lowest degree of
CC speculation and "CC" the highest degree of speculation. While such debt will likely
have some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
C This rating is reserved for income bonds on which no interest is being paid.
D Debt rated "D" is in default, and payment of interest and/or repayment of principal
is in arrears.
(+) OR (-) The ratings from "AAA" or "CCC" may be modified by the addition of a plus or minus
sign to show relative standing or within the major rating categories.
* Continuance of the rating is contingent upon S&P's receipt of an executed copy of
the escrow agreement or closing documentation confirming investments and cash
flows.
NR Indicates no rating has been requested, that there is insufficient information on
which to base a rating, or that S&P does not rate a particular type of obligation
as a matter of policy.
DEBT OBLIGATIONS OF ISSUERS OUTSIDE THE UNITED STATES AND ITS TERRITORIES are rated
on the same basis as domestic corporate and municipal issues. The ratings measure
the creditworthiness of the obligor but do not take into account currency exchange
and related uncertainties.
P PROVISIONAL RATINGS: The letter "p" indicates that the rating is provisional. A
provisional rating assumes the successful completion of the project being financed
by the debt being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful and timely completion of the
project. This rating, however, while addressing credit quality subsequent to
completion of the project, makes no comment on the likelihood of, or the risk of
default upon failure of, such completion. The investor should exercise judgment
with respect to such likelihood and risk.
</TABLE>
A-1
<PAGE>
NOTES
Note rating symbols are as follows:
<TABLE>
<S> <C>
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus (+)
designation.
SP-2 Satisfactory capacity to pay principal and interest.
SP-3 Speculative capacity to pay principal and interest.
</TABLE>
COMMERCIAL PAPER
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days.
Ratings are graded into four categories, ranging from "A" for the highest
quality obligations to "D" for the lowest. The four categories are as follows:
<TABLE>
<S> <C>
A Issues assigned this highest rating are regarded as having the greatest capacity
for timely payment. Issues in this category are delineated with the numbers 1, 2,
and 3 to indicate the relative degree of safety.
A-1 This designation indicates that the degree of safety regarding timely payment is
either overwhelming or very strong. Those issues determined to possess overwhelming
safety characteristics are denoted with a plus (+) sign designation.
A-2 Capacity for timely payment on issues with this designation is strong. However, the
relative degree of safety is not as high as for issues designated "A-1".
A-3 Issues carrying this designation have a satisfactory capacity for timely payment.
They are, however, somewhat more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
B Issues rated "B" are regarded as having only an adequate capacity for timely
payment. However, such capacity may be damaged by changing conditions or short-term
adversities.
C This rating is assigned to short-term debt obligations with a doubtful capacity for
payment.
D This rating indicates that the issue is either in default or is expected to be in
default upon maturity.
</TABLE>
VARIABLE RATE DEMAND BONDS
Standard & Poor's assigns "dual" ratings to all long-term debt issues that
have as part of their provisions a long-term rating and a variable rate demand
rating. The first rating addresses the likelihood of repayment of principal and
interest due and the second rating addresses only the demand feature. The
long-term debt rating symbols are used for bonds to denote the long-term
maturity and the commercial paper rating symbols are used to denote the put
option (for example, "AAA/A-1 +"). If the nominal maturity is short (three years
or less), a note rating is assigned.
A-2
<PAGE>
MOODY'S INVESTORS SERVICE, INC. RATINGS
CORPORATE BONDS
Aaa
Bonds which are rated Aaa are judged to be the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long term risks appear somewhat larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa
Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly scecured. Interest payment and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
A-3
<PAGE>
B
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca
Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's bond ratings, where specified, are also applied to senior bank
obligations with an original maturity in excess of one year. Among the bank
obligations covered are bank deposits, bankers acceptance and obligations to
deliver foreign exchange. Obligations relying upon support mechanisms such as
letters-of-credit are excluded unless explicitly rated.
NOTE: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
SHORT-TERM NOTES AND VARIABLE RATE DEMAND OBLIGATIONS
The following summarizes the ratings used by Moody's for short-term notes
and variable rate demand obligations:
MIG-1/VMIG-1. Obligations bearing these designations are of the best
quality, enjoying strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the market for
refinancing.
MIG-2/VMIG-2. Obligations bearing these designations are of high quality
with margins of protection ample although not as large as in the preceding
group.
MIG-3/VMIG-3. Obligations bearing these designations are of favorable
quality. All security elements are accounted for but there is a lacking the
undeniable strength of the preceding grades. Liquidity and cash flow
protection may be narrow and market access for refinancing is hereby to be
less well established.
A-4
<PAGE>
COMMERCIAL PAPER RATINGS
The rating PRIME-1 is the highest commercial paper rating assigned by
Moody's. Issuers rated PRIME-1 (or related supporting institutions) are
considered to have a superior capacity for repayment of senior short-term debt
obligations. Issuers rated PRIME-2 (or related supporting institutions) are
considered to have strong capacity for repayment of senior short-term debt
obligations. This will normally be evidenced by many of the characteristics of
issuers rated PRIME-1 but to a lesser degree. Earnings trends and coverage
ratios, while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained. Issuers PRIME-3 (or
supporting institutions) have an acceptable capacity rated for repayment of
senior short-term debt obligations. The effect of industry characteristics and
market composition may be more pronounced. Variability in earnings and
profitability may result in changes in the level of debt protection measurements
and may require relatively high financial leverage. Adequate alternate liquidity
is maintained. Issuers rated NOT PRIME do not fall within any of the Prime
rating categories.
A-5
<PAGE>
[LOGO]
TABLE OF CONTENTS
/ / WARBURG PINCUS
GROWTH & INCOME
FUND
FINANCIAL HIGHLIGHTS............... 4
/ / WARBURG PINCUS
INVESTMENT OBJECTIVES AND BALANCED FUND
POLICIES........................... 6
INVESTMENT LIMITATIONS............. 16
MANAGEMENT......................... 17
/ / WARBURG PINCUS
HOW TO PURCHASE SHARES............. 20 TAX FREE FUND
HOW TO REDEEM AND EXCHANGE SHARES.. 22
NET ASSET VALUE.................... 25
DIVIDENDS AND DISTRIBUTIONS........ 26
TAXES.............................. 26
SHAREHOLDER SERVICING.............. 28
DESCRIPTION OF SHARES.............. 29
OTHER INFORMATION.................. 29
PROSPECTUS
WPGBF-1-1294
DECEMBER 2, 1995
<PAGE>
WARBURG PINCUS GROWTH AND INCOME FUND
WARBURG PINCUS BALANCED FUND
WARBURG PINCUS TAX FREE FUND
(Investment Portfolios of The RBB Fund, Inc.)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information provides supplementary
information pertaining to shares of the classes (the "Shares") representing
interests in the Warburg Pincus Growth & Income Fund (the "Growth & Income
Fund"), the Warburg Pincus Balanced Fund (the "Balanced Fund") and the Warburg
Pincus Tax Free Fund (the "Tax Free Fund") (collectively, the "Funds") of The
RBB Fund, Inc. ("RBB"). This Statement of Additional Information is not a
prospectus, and should be read only in conjunction with the Warburg Pincus
Family Prospectus dated December 2, 1995 (the "Prospectus"). A copy of the
Prospectus may be obtained from the Funds' distributor by calling toll-free
(800) 888-9723. This Statement of Additional Information is dated December 2,
1995.
CONTENTS
Prospectus
Page Page
---- ----------
General........................................ 2 1
Investment Objectives and Policies ............ 2 6
Directors and Officers ........................ 18 N/A
Investment Advisory, Distribution
and Servicing Arrangements .................. 21 17
Fund Transactions ............................. 25 20
Purchase and Redemption Information ........... 27 20
Valuation of Shares ........................... 28 25
Performance Information....................... 28 29
Taxes ......................................... 32 26
Description of Shares......................... 38 28
Additional Information Concerning Fund Shares.. 40 28
Miscellaneous ................................. 41 N/A
Financial Statements .......................... F-1 N/A
No person has been authorized to give any information or to make any
representations not contained in this Statement of Additional Information in
connection with the offering made by the Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by RBB or its distributor. The Statement of Additional Information does not
constitute an offering by RBB or by the distributor in any jurisdiction in which
such offering may not lawfully be made.
<PAGE>
GENERAL
The RBB Fund, Inc. ("RBB") is an open-end management investment
company currently operating or proposing to operate seventeen separate
investment portfolios. RBB is an open-end investment company registered under
the Investment Company Act of 1940 (the "1940 Act") and was organized as a
Maryland corporation on February 29, 1988. This Statement of Additional
Information pertains to multiple classes of shares representing interests in the
Warburg Pincus Growth & Income Fund (the "Growth & Income Fund"), the Warburg
Pincus Balanced Fund (the "Balanced Fund") and the Warburg Pincus Tax Free Fund
(the"Tax Free Fund) (collectively, the "Funds") of RBB. The Shares of the
Classes are offered by the Prospectus dated December 2, 1995.
Capitalized terms used herein and not otherwise defined have the same
meanings as are given to them in the Prospectus.
INVESTMENT OBJECTIVES AND POLICIES
The following supplements the information contained in the Prospectus
concerning the investment objectives and policies of the Funds. A description
of ratings of certain instruments the Funds may purchase is set forth in the
Appendix to the Prospectus.
Common Investment Policies of the Funds
Reverse Repurchase Agreements. Reverse repurchase agreements involve
the sale of securities held by a Fund pursuant to the Fund's agreement to
repurchase the securities at an agreed upon price, date and rate of interest.
Such agreements are considered to be borrowings under the Investment Company Act
of 1940, as amended (the "1940 Act"), and may be entered into only for temporary
or emergency purposes. While reverse repurchase transactions are outstanding, a
Fund will maintain in a segregated account with its custodian or a qualified
sub-custodian, cash, U.S. Government securities or other liquid, high-grade debt
securities of an amount at least equal to the market value of the securities,
plus accrued interest, subject to the agreement and will monitor the account to
ensure that such value is maintained. Reverse repurchase agreements involve the
risk that the market value of the securities sold by a Fund may decline below
the price of the securities the Fund is obligated to Repurchase.
Mortgage-Related Debt Securities. Mortgage-related debt securities
represent ownership interests in individual pools of residential mortgage
loans. These securities are designed to provide monthly payments of interest
and principal to the investor. Each mortgagor's monthly payment to his
lending institution on his residential mortgage is "passed-through" to
investors. Mortgage pools consist of whole mortgage loans or participations
in loans. The terms and characteristics of the mortgage instruments are
generally uniform within a pool but may vary among pools. Lending
institutions which originate mortgages for the pools are subject to certain
standards, including credit and underwriting criteria for individual
mortgages included in the pools.
2
<PAGE>
Since the inception of the mortgage-related pass-through security in
1970, the market for these securities has expanded considerably. The size of
the primary issuance market, and active participation in the secondary market by
securities dealers and many types of investors, historically have made interests
in government and government-related pass-through pools highly liquid, although
no guarantee regarding future market conditions can be made. The average life
of pass-through pools varies with the maturities of the underlying mortgage
instruments. In addition, a pool's term may be shortened by unscheduled or
early payments of principal and interest on the underlying mortgages. The
occurrence of mortgage prepayments is affected by factors including the level of
interest rates, general economic conditions, the location and age of the
mortgages and various social and demographic conditions. Because prepayment
rates of individual pools vary widely, it is not possible to predict accurately
the average life of a particular pool. For pools of fixed rate 30 year
mortgages, common industry practice is to assume that prepayments will result in
a 12 year average life. Pools of mortgages with other maturities or different
characteristics will have varying assumptions concerning average life. The
assumed average life of pools of mortgages having terms of less than 30 years is
less than 12 years, but typically not less than 5 years. Yields on pass-through
securities are typically quoted by investment dealers and vendors based on the
maturity of the underlying instruments and the associated average life
assumption. In periods of falling interest rates, the rate of prepayment tends
to increase, thereby shortening the actual average life of a pool of underlying
mortgage-related securities. Conversely, in periods of rising rates the rate of
prepayment tends to decrease, thereby lengthening the actual average life of the
pool. Historically, actual average life has been consistent with the 12-year
assumption referred to above. Actual prepayment experience may cause the yield
of mortgage-related securities to differ from the assumed average life yield.
In addition, as noted in the Prospectus, reinvestment of prepayments may occur
at higher or lower interest rates than the original investment, thus affecting
the yield of a Fund.
The coupon rate of interest on mortgage-related securities is lower
than the interest rates paid on the mortgages included in the underlying pool,
but only by the amount of the fees paid to the mortgage pooler, issuer, and/or
guarantor of payment of the securities for the guarantee of the services of
passing through monthly payments to investors. Actual yield may vary from the
coupon rate, however, if mortgage-related securities are purchased at a premium
or discount, traded in the secondary market at a premium or discount, or to the
extent that mortgages in the underlying pool are prepaid as noted above. In
addition, interest on mortgage-related securities is earned monthly, rather than
semi-annually as is the case for traditional bonds, and monthly compounding may
tend to raise the effective yield earned on such securities.
U.S. Government Obligations. Examples of types of U.S. Government
obligations include U.S. Treasury Bills, Treasury Notes and Treasury Bonds and
the obligations of Federal Home Loan Banks, Federal Farm Credit Banks, Federal
Land Banks, the Federal Housing Administration, Farmers Home Administration,
Export-Import Bank of the United States, Small Business Administration,
3
<PAGE>
Federal National Mortgage Association, Government National Mortgage Association,
General Services Administration, Student Loan Marketing Association, Central
Bank for Cooperatives, Federal Home Loan Mortgage Corporation, Federal
Intermediate Credit Banks, Maritime Administration, International Bank for
Reconstruction and Development (the "World Bank"), the Asian-American
Development Bank and the Inter-American Development Bank.
Futures Contracts. When a Fund purchases a futures contract, it
agrees to purchase a specified underlying instrument at a specified future date.
When a Fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and sale
will take place is fixed when a Fund enters into the contract. The underlying
instrument may be a specified type of security, such as U.S. Treasury bonds or
notes.
The majority of futures contracts are closed out by entering into an
offsetting purchase or sale transaction in the same contract on the exchange
where they are traded, rather than being held for the life of the contract.
Futures contracts are closed out at their current prices, which may result in a
gain or loss.
If a Fund holds a futures contract until the delivery date, it will be
required to complete the purchase and sale contemplated by the contract. In the
case of futures contracts on securities, the purchaser generally must deliver
the agreed-upon purchase price in cash, and the seller must deliver securities
that meet the specified characteristics of the contract.
A Fund may purchase futures contracts as an alternative to purchasing
actual securities. For example, if a Fund intended to purchase bonds but had
not yet done so, it could purchase a futures contract in order to lock in
current bond prices while deciding on particular investments. This strategy is
sometimes known as an anticipatory hedge. Alternatively, a Fund could purchase
a futures contract if it had cash and short-term securities on hand that it
wished to invest in longer-term securities, but at the same time that Fund
wished to maintain a highly liquid position in order to be prepared to meet
redemption requests or other obligations. In these strategies a Fund would use
futures contracts to attempt to achieve an overall return -- whether positive or
negative -- similar to the return from longer-term securities, while taking
advantage of potentially greater liquidity that futures contracts may offer.
Although the Funds would hold cash and liquid debt securities in a segregated
account with a value sufficient to cover their open futures obligations, the
segregated assets would be available to the Funds immediately upon closing out
the futures position, while settlement of securities transactions can take
several days. However, because a Fund's cash that would otherwise have been
invested in higher-yielding bonds would be held uninvested or invested in
short-term securities so long as the futures position remains open, the Fund's
return would involve a smaller amount of interest income and potentially a
greater amount of capital gain or loss.
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The Funds may sell futures contracts to hedge their other investments
against changes in value, or as an alternative to sales of securities. For
example, if the investment adviser anticipated a decline in bond prices, but did
not wish to sell bonds owned by a Fund, it could sell a futures contract in
order to lock in a current sale price. If prices subsequently fell, the future
contract's value would be expected to rise and offset all or a portion of the
loss in the bonds that the Fund had hedged. Of course, if prices subsequently
rose, the futures contract's value could be expected to fall and offset all or a
portion of the benefit of the Fund. In this type of strategy, a Fund's return
will tend to involve a larger component of interest income, because the Fund
will remain invested in longer-term securities rather than selling them and
investing the proceeds in short-term securities which generally provide lower
yields.
Futures margin payments. The purchaser or seller of a futures
contract is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker (known as
a futures commission merchant, or FCM), when the contract is entered into.
Initial margin deposits are equal to a percentage of the contract's value, as
set by the exchange where the contract is traded, and may be maintained in cash
or high quality liquid securities. If the value of either party's position
declines, that party will be required to make additional "variation margin"
payments to settle the change in value on a daily basis. The party that has a
gain may be entitled to receive all or a portion of this amount. Initial and
variation margin payments are similar to good faith deposits or performance
bonds, unlike margin extended by a securities broker, and initial and variation
margin payments do not constitute purchasing securities on margin for purposes
of a Fund's investment limitations. In the event of the bankruptcy of an FCM
that holds margin on behalf of a Fund, that Fund may be entitled to a return of
margin owed to it only in proportion to the amount received by the FCM's other
customers. The investment adviser will attempt to minimize this risk by careful
monitoring of the creditworthiness of the FCMs with which a Fund does business.
Correlation of price changes. The prices of futures contracts depend
primarily on the value of their underlying instruments. Because there are a
limited number of types of futures contracts, it is likely that the standardized
futures contracts available to a Fund will not match that Fund's current or
anticipated investments. Futures prices can also diverge from the prices of
their underlying instruments, even if the underlying instruments match a Fund's
investments well. Futures prices are affected by such factors as current and
anticipated short-term interest rates, changes in volatility of the underlying
instrument, and the time remaining until expiration of the contract, which may
not affect security prices the same way. Imperfect correlation between a Fund's
investments and its futures positions may also result from differing levels of
demand in the futures markets and the securities markets, from structural
differences in how futures and securities are traded, or from imposition of
daily price fluctuation limits for futures contracts. The Funds may purchase or
sell futures contracts with a greater or lesser value than the securities they
wish to hedge or intend to purchase in
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order to attempt to compensate for differences in historical volatility between
the futures contract and the securities, although this may not be successful in
all cases. If price changes in a Fund's futures positions are poorly correlated
with its other investments, its futures positions may fail to produce
anticipated gains or result in losses that are not offset by the gains in the
Fund's other investments.
Liquidity of futures contracts. Because futures contracts are
generally settled within a day from the date they are closed out, compared with
a settlement period of seven days for some types of securities, the futures
markets can provide liquidity superior to the securities markets in many cases.
Nevertheless, there is no assurance a liquid secondary market will exist for any
particular futures contract at any particular time. In addition, futures
exchanges may establish daily price fluctuation limits for futures contracts,
and may halt trading if a contract's price moves upward or downward more than
the limit in a given day. On volatile trading days when the price fluctuation
limit is reached, it may be impossible for a Fund to enter into new positions or
close out existing positions. If the secondary market for a futures contract is
not liquid because of price fluctuation limits or otherwise, it would prevent
prompt liquidation of unfavorable futures positions, and potentially could
require a Fund to continue to hold a futures position until the delivery date
regardless of changes in its value. As a result, a Fund's access to other
assets held to cover its futures positions could also be impaired.
Purchasing Put Options. By purchasing a put option, a Fund obtains
the right (but not the obligation) to sell the option's underlying instrument at
a fixed strike price. The option may give a Fund the right to sell only on the
option's expiration date, or may be exercisable at any time up to and including
that date. In return for this right, a Fund pays the current market price for
the option (known as the option premium). The option's underlying instrument
may be a security, or a futures contract.
A Fund may terminate its position in a put option it has purchased by
allowing it to expire or by exercising the option. If the option is allowed to
expire, the Fund will lose the entire premium it paid. If the Fund exercises
the option, it completes the sale of the underlying instrument at the strike
price. If a Fund exercises a put option on a futures contract, it assumes a
seller's position in the underlying futures contract. Purchasing an option on a
futures contract does not require a Fund to make futures margin payments unless
it exercises the option. A Fund may also terminate a put option position by
closing it out in the secondary market at its current price, if a liquid
secondary market exists.
Put options may be used by a Fund to hedge securities it owns, in a
manner similar to selling futures contracts, by locking in a minimum price at
which the Fund can sell. If security prices fall, the value of the put option
would be expected to rise and offset all or a portion of the Fund's resulting
losses. The put thus acts as a hedge against a fall in the price of such
securities. However, all other things being equal (including securities prices)
option premiums tend to decrease over time as the expiration date
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nears. Therefore, because of the cost of the option in the form of the premium
(and transaction costs), a Fund would expect to suffer a loss in the put option
if prices do not decline sufficiently to offset the deterioration in the value
of the option premium. This potential loss represents the cost of the hedge
against a fall in prices. At the same time, because the maximum a Fund has at
risk is the cost of the option, purchasing put options does not eliminate the
potential for a Fund to profit from an increase in the value of the securities
hedged to the same extent as selling a futures contract.
Purchasing Call Options. The features of call options are essentially
the same as those of put options, except that the purchaser of a call option
obtains the right to purchase, rather than sell, the underlying instrument at
the option's strike price (call options on futures contracts are settled by
purchasing the underlying futures contract). By purchasing a call option, a
Fund would attempt to participate in potential price increases of the underlying
instrument, with results similar to those obtainable from purchasing a futures
contract, but with risk limited to the cost of the option if security prices
fell. At the same time, a Fund can expect to suffer a loss if security prices
do not rise sufficiently to offset the cost of the option.
The Funds will purchase call options only in connection with "closing
purchase transactions." A Fund may terminate its position in a call option by
entering into a closing purchase transaction. A closing purchase transaction is
the purchase of a call option on the same security with the same exercise price
and call period as the option previously written by a Fund. If a Fund is unable
to enter into a closing purchase transaction, the Fund may be required to hold a
security that it might otherwise have sold to protect against depreciation.
Writing Put Options. When a Fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, a Fund assumes the obligation to pay the strike price
for the option's underlying instrument if the other party to the option chooses
to exercise it. When writing an option on a futures contract a Fund will be
required to make margin payments to an FCM as described above for futures
contracts. A Fund may seek to terminate its position in a put option it writes
before exercise by closing out the option in the secondary market at its current
price. If the secondary market is not liquid for an option a Fund has written,
however, the Fund must continue to be prepared to pay the strike price while the
option is outstanding, regardless of price changes, and must continue to set
aside assets to cover its position.
A Fund may write put options as an alternative to purchasing actual
securities. If security prices rise, the Fund would expect to profit from a
written put option, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it is likely
that the Fund will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the Fund would expect to
suffer a loss. This loss should be less than the loss the Fund would have
experienced from purchasing the underlying instrument directly, however, because
the premium received for writing the option should mitigate
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the effects of the decline. As with other futures and options strategies used
as alternatives for purchasing securities, a Fund's return from writing put
options generally will involve a smaller amount of interest income than
purchasing longer-term securities directly, because a Fund's cash will be
invested in shorter-term securities which usually offer lower yields.
Writing Call Options. Writing a call option obligates a Fund to sell
or deliver the option's underlying instrument, in return for the strike price,
upon exercise of the option. The characteristics of writing call options are
similar to those of writing put options, as described above, except that writing
covered call options generally is a profitable strategy if prices remain the
same or fall. Through receipt of the option premium, a Fund would seek to
mitigate the effects of a price decline. At the same time, because a Fund would
have to be prepared to deliver the underlying instrument in return for the
strike price, even if its current value is greater, the Fund would give up some
ability to participate in security price increases when writing call options.
Combined Option Positions. A Fund may purchase and write options in
combination with each other to adjust the risk and return characteristics of the
overall position. For example, a Fund may purchase a put option and write a
call option on the same underlying instrument, in order to construct a combined
position whose risk and return characteristics are similar to selling a futures
contract. Another possible combined position would involve writing a call
option at one strike price and buying a call option at a lower price, in order
to reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open and
close out.
Risks of Options Transactions. Options are subject to risks similar
to those described above with respect to futures contracts, including the risk
of imperfect correlation between the option and a Fund's other investments and
the risk that there might not be a liquid secondary market for the option. In
the case of options on futures contracts, there is also a risk of imperfect
correlation between the option and the underlying futures contract. Options are
also subject to the risks of an illiquid secondary market, particularly in
strategies involving writing options, which a Fund cannot terminate by exercise.
In general, options whose strike prices are close to their underlying
instruments' current value will have the highest trading volume, while options
whose strike prices are further away may be less liquid. The liquidity of
options may also be affected if options exchanges impose trading halts,
particularly when markets are volatile.
Asset Coverage for Futures and Options Positions. A Fund will not use
leverage in its options and futures strategies. A Fund will hold securities or
other options or futures positions whose values are expected to offset its
obligations under the hedge strategies. A Fund will not enter into an option or
futures position that exposes the Fund to an obligation to another party unless
it owns either (i) an offsetting position in securities or other options or
futures contracts or (ii) cash, receivables and short-term
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debt securities with a value sufficient to cover its potential obligations. A
Fund will comply with guidelines established by the SEC with respect to coverage
of options and futures strategies by mutual funds, and if the guidelines so
require will set aside cash and high grade liquid debt securities in a
segregated account with its custodian bank in the amount prescribed. Securities
held in a segregated account cannot be sold while the futures or option strategy
is outstanding, unless they are replaced with similar securities. As a result,
there is a possibility that segregation of a large percentage of a Fund's assets
could impede portfolio management or the Fund's ability to meet redemption
requests or other current obligations.
Limitations on Futures and Options Transactions. RBB, on behalf of
the Funds, has filed a notice of eligibility for exclusion from the definition
of the term "commodity pool operator" with the Commodity Futures Trading
Commission ("CFTC") and the National Futures Association, which regulate trading
in the futures markets. Pursuant to Section 4.5 of the regulations under the
Commodity Exchange Act, the notice of eligibility includes the following
representations:
(a) The Funds will use commodity futures contracts and related
commodity options solely for bona fide hedging purposes within the meaning of
CFTC regulations; provided that the Funds may hold long positions in commodity
futures contracts and related commodity options that do not fall within the
definition of bona fide hedging transactions if the positions are used as part
of a portfolio management strategy and are incidental to the Funds' activities
in the underlying cash market, and the underlying commodity value of the
positions at all times will not exceed the sum of (i) cash or United States
dollar-denominated high quality short-term money market instruments set aside in
an identifiable manner, plus margin deposits, (ii) cash proceeds from existing
investments due in 30 days, and (iii) accrued profits on the positions held by a
futures commission merchant; and
(b) The Funds will not enter into any commodity futures contract or
option on a commodity futures contract if, as a result, the sum of initial
margin deposits on commodity futures contracts and related commodity options and
premiums paid for options on commodity futures contracts the Funds have
purchased, after taking into account unrealized profits and losses on such
contracts, would exceed 5% of a Fund's total assets.
In addition, the Funds will not enter into any futures contract into
any option if, as a result, the sum of (i) the current value of assets hedged in
the case of strategies involving the sale of securities, and (ii) the current
value of securities or other instruments underlying the respective Fund's other
futures or options positions, would exceed 50% of such Fund's net assets.
The Funds' limitations on investments in futures contracts and their
policies regarding futures contracts and the limitations on investments in
options and its policies regarding options discussed above in this Statement of
Additional Information, are not fundamental policies and may be changed as
regulatory agencies permit. The Funds will not modify the above
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limitations to increase its permissible futures and options activities without
supplying additional information in a current Prospectus or Statement of
Additional Information that has been distributed or made available to the Funds'
shareholders.
Various exchanges and regulatory authorities have recently undertaken
reviews of options and futures trading in light of market volatility. Among the
possible actions that have been presented are proposals to adopt new or more
stringent daily price fluctuation limits for futures or options transactions,
and proposals to increase the margin requirements for various types of
strategies. It is impossible to predict what actions, if any, will result from
these reviews at this time.
Short Sales "Against the Box." In a short sale, a Fund sells a
borrowed security and has a corresponding obligation to the lender to return the
identical security. A Fund may engage in short sales if at the time of the
short sale it owns or has the right to obtain, at no additional cost, an equal
amount of the security being sold short. This investment technique is known as
a short sale "against the box." In a short sale, a seller does not immediately
deliver the securities sold and is said to have a short position in those
securities until delivery occurs. If a Fund engages in a short sale, the
collateral for the short position will be maintained by the Fund's custodian or
a qualified sub-custodian. While the short sale is open, the Fund will maintain
in a segregated account an amount of securities equal in kind and amount to the
securities sold short or securities convertible into or exchangeable for such
equivalent securities. These securities constitute a Fund's long position. The
Funds will not engage in short sales against the box for speculative purposes.
A Fund may, however, make a short sale as a hedge, when it believes that the
price of a security may decline, causing a decline in the value of a security
owned by the Fund (or a security convertible or exchangeable for such security),
or when the Fund wants to sell the security at an attractive current price, but
also wishes to defer recognition of gain or loss for federal income tax purposes
and for purposes of satisfying certain tests applicable to regulated investment
companies under the Internal Revenue Code. In such case, any future losses in a
Fund's long position should be reduced by a gain in the short position.
Conversely, any gain in the long position should be reduced by a loss in the
short position. The extent to which such gains or losses are reduced will
depend upon the amount of the security sold short relative to the amount a Fund
owns. There will be certain additional transaction costs associated with short
sales against the box, but the Funds will endeavor to offset these costs with
the income from the investment of the cash proceeds of short sales.
Section 4(2) Paper. "Section 4(2) paper" is commercial paper which is
issued in reliance on the "private placement" exemption from registration which
is afforded by Section 4(2) of the Securities Act of 1933. Section 4(2) paper
is restricted as to disposition under the Federal securities laws and is
generally sold to institutional investors such as the Funds which agree that
they are purchasing the paper for investment and not with a view to public
distribution. Any resale by the purchaser must be in an exempt transaction.
Section 4(2) paper normally is resold to other
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institutional investors through or with the assistance of investment dealers who
make a market in the Section 4(2) paper, thereby providing liquidity. See
"Illiquid Securities" below.
Repurchase Agreements. The repurchase price under the repurchase
agreements described in the Prospectus generally equals the price paid by the
Fund involved plus interest negotiated on the basis of current short-term rates
(which may be more or less than the rate on the securities underlying the
repurchase agreement). Securities subject to repurchase agreements will be held
by RBB's custodian in the Federal Reserve/Treasury book-entry system or by
another authorized securities depository. Repurchase agreements are considered
to be loans by the Fund involved under the 1940 Act.
Rights Offerings and Purchase Warrants. Rights offerings and purchase
warrants are privileges issued by a corporation which enable the owner to
subscribe to and purchase a specified number of shares of the corporation at a
specified price during a specified period of time. Subscription rights normally
have a short lifespan to expiration. The purchase of rights or warrants
involves the risk that a Fund could lose the purchase value of a right or
warrant if the right to subscribe to additional shares is not executed prior to
the rights and warrants expiration. Also, the purchase of rights and/or
warrants involves the risk that the effective price paid for the right and/or
warrant added to the subscription price of the related security may exceed the
value of the subscribed security's market price such as when there is no
movement in the level of the underlying security.
Illiquid Securities. A Fund may not invest more than 15% of its net
assets in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days (except for the Tax Free Fund, which may not
engage in repurchase agreements) and securities that are illiquid by virtue of
the absence of a readily available market or legal or contractual restrictions
on resale. Securities that have legal or contractual restrictions on resale but
have a readily available market are not considered illiquid for purposes of this
limitation. The Funds' investment adviser will monitor the liquidity of such
restricted securities under the supervision of the Board of Directors.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the notice period.
Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
securities which are otherwise not readily marketable and (except for the Tax
Free Fund, which may not engage in repurchase agreements) repurchase agreements
having a maturity of longer than seven days. Securities which have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. The Board has adopted a policy that the Funds will not
purchase private placements (i.e. restricted securities other than Rule 144A
Securities). Mutual funds do not typically hold a significant amount of these
restricted or other illiquid securities because of the
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potential for delays on resale and uncertainty in valuation. Limitations on
resale may have an adverse effect on the marketability of portfolio securities
and a mutual fund might be unable to dispose of restricted or other illiquid
securities promptly or at reasonable prices and might thereby experience
difficulty satisfying redemptions within seven days. A mutual fund might also
have to register such restricted securities in order to dispose of them
resulting in additional expense and delay. Adverse market conditions could
impede such a public offering of securities.
In recent years, however, a large institutional market has developed
for certain securities that are not registered under the Securities Act
including repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not be indicative of the liquidity of such
investments.
The SEC adopted Rule 144A which allows for a broader institutional
trading market for securities otherwise subject to restriction on resale to the
general public. Rule 144A establishes a "safe harbor" from the registration
requirements of the Securities Act for resales of certain securities to
qualified institutional buyers. The investment adviser anticipates that the
market for certain restricted securities such as institutional commercial paper
will expand further as a result of this relatively new regulation and the
development of automated systems for the trading, clearance and settlement of
unregistered securities of domestic and foreign issuers, such as the PORTAL
System sponsored by the NASD.
The Adviser will monitor the liquidity of restricted securities in the
Funds under the supervision of the Board of Directors. In reaching liquidity
decisions, the Adviser may consider, inter alia, the following factors: (1) the
unregistered nature of the security; (2) the frequency of trades and quotes for
the security; (3) the number of dealers wishing to purchase or sell the security
and the number of other potential purchasers; (4) dealer undertakings to make a
market in the security and (5) the nature of the security and the nature of the
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers and the mechanics of the transfer).
Additional Investment Policies -- Growth & Income and Balanced Funds
Foreign Securities. Although the Funds generally intend to invest in
securities of companies and governments of developed, stable nations, the value
of a Fund's investments may be adversely affected by changes in political or
social conditions, diplomatic relations, confiscatory taxation, expropriation,
limitation on the removal of funds or assets, imposition of (or change in)
exchange control regulations in those foreign nations and difficulty in
enforcing judgments. In addition, changes in government administrations,
economies or monetary policies in the U.S. or abroad could result
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in appreciation or depreciation of those portfolio securities. Furthermore, the
economies of individual foreign nations may differ from the U.S. economy,
whether favorably or unfavorably, in areas such as growth of gross national
product, rate of inflation, capital reinvestment, resource self-sufficiency and
balance of payments position. Any foreign investments made by a Fund must be
made in compliance with U.S. and foreign currency restrictions and tax laws
restricting the amounts and types of foreign investments.
In addition, while the volume of transactions effected on foreign
stock exchanges has increased in recent years, it remains appreciably below that
of the New York Stock Exchange. Accordingly, a Fund's foreign investments may
be less liquid and their prices may be more volatile than comparable investments
in securities of U.S. companies. In buying and selling securities on foreign
exchanges, the Funds will normally pay fixed commissions that are generally
higher than the negotiated commissions charged in the U.S. Moreover, the Funds'
expenses may be higher due to the additional cost of custody of foreign
securities. In addition, there is generally less government supervision and
regulation of securities exchanges, brokers and issuers in foreign countries
than in the U.S.
Dollar-Denominated Debt Obligations of Foreign Issuers. U.S.
dollar-denominated debt securities issued by foreign corporations held by a Fund
may not be registered with the Securities and Exchange Commission ("SEC"), and
the issuers thereof may not be subject to its reporting requirements.
Accordingly, there may be less publicly available information concerning foreign
issuers of debt securities held by a Fund than is available concerning U.S.
issuers. Foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards or to other regulatory requirements
comparable to those applicable to U.S. companies. Securities of many foreign
companies may be less liquid and their prices more volatile than those of
securities of comparable U.S. companies. In addition, with respect to certain
foreign countries, there is the possibility of expropriation, confiscatory
taxation, limitations on the use or removal of funds or the assets of a Fund,
and political or social instability or diplomatic developments which could
affect investments in those countries. Moreover, individual foreign economies
may differ favorably or unfavorably from the U.S. economy in such respects as
growth of gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position.
Additional Investment Considerations - Balanced Portfolio
Normally, RBB will issue shares representing an interest in the
Balanced Fund only for cash or cash equivalents. Transactions involving the
issuance of shares representing an interest in the Balanced Fund for securities
or assets other than cash will be limited to bona fide reorganizations,
statutory mergers and to other acquisitions of portfolio securities (except for
municipal debt securities issued by state political subdivisions or their
agencies or instrumentalities) which (a) meet the
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Balanced Fund's investment objectives and policies; (b) are acquired for
investment and not for resale; (c) are liquid securities which are not
restricted as to transfer either by law or liquidity of market; and (d) have a
readily ascertainable value as evidenced by a listing on the American Stock
Exchange, the NYSE or NASDAQ.
Additional Investment Policies -- Tax Free Fund
Firm Commitments. Firm commitments for securities include "when
issued" and delayed delivery securities purchased for delivery beyond the normal
settlement date at a stated price and yield. While firm commitments are
outstanding, the Tax Free Fund will maintain in a segregated account with RBB's
custodian or a qualified sub-custodian, cash, U.S. Government securities or
other liquid, high grade debt securities of an amount at least equal to the
purchase price of the securities to be purchased. Normally, the custodian will
set aside portfolio securities to satisfy a purchase commitment and, in such a
case, the Fund may be required subsequently to place additional assets in the
separate account in order to ensure that the value of the account remains equal
to the amount of the Fund's commitment. It may be expected that the Fund's net
assets will fluctuate to a greater degree when it sets aside portfolio
securities to cover such purchase commitments than when it sets aside cash. The
Fund's liquidity and ability to manage its portfolio might be affected when it
sets aside cash or portfolio securities to cover such purchase commitments. The
Fund expects that commitments to purchase "when issued" securities will not
exceed 25% of the value of its respective total assets absent unusual market
conditions. When the Fund engages in when-issued transactions, it relies on the
seller to consummate the trade. Failure of the seller to do so may result in
the Fund incurring a loss or missing an opportunity to obtain a price considered
to be advantageous.
Stand-by Commitments. Under a stand-by commitment with respect to
obligations issued by or on behalf of states, territories and possessions of the
United States, the District of Columbia and their political subdivisions,
agencies, instrumentalities and authorities (collectively, "Municipal
Obligations") held by the Fund, a dealer would agree to purchase at the Fund's
option a specified Municipal Obligation at its amortized cost value to the Fund
plus accrued interest, if any. Stand-by commitments may be exercisable by the
Fund at any time before the maturity of the underlying Municipal Obligations and
may be sold, transferred or assigned only with the instruments involved.
It is expected that stand-by commitments will generally be available
without the payment of any direct or indirect consideration. However, if
necessary or advisable, the Fund may pay for a stand-by commitment either
separately in cash or by paying a higher price for portfolio securities which
are acquired subject to the commitment (thus reducing the yield to maturity
otherwise available for the same securities). The total amount paid in either
manner for outstanding stand-by commitments held by the Fund will not exceed 1/2
of 1% of the value of the Fund's total assets calculated immediately after each
stand-by commitment is acquired.
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It is intended that stand-by commitments will be entered into only
with dealers, banks and broker-dealers which, in the investment adviser's
opinion, present minimal credit risks. The Fund's reliance upon the credit of
these dealers, banks and broker-dealers will be secured by the value of the
underlying Municipal Obligations that are subject to the commitment.
The Fund will acquire stand-by commitments solely to facilitate
portfolio liquidity and it is not intended that the Fund will exercise its
rights thereunder for trading purposes. The acquisition of a stand-by
commitment will not affect the valuation or assumed maturity of the underlying
Municipal Obligation which will continue to be valued in accordance with the
amortized cost method. The actual stand-by commitment will be valued at zero in
determining net asset value. Accordingly, where the Fund pays directly or
indirectly for a stand-by commitment, its cost will be reflected as an
unrealized loss for the period during which the commitment is held by the Fund
and will be reflected in realized gain or loss when the commitment is exercised
or expires.
Obligations of Domestic Banks, Foreign Banks and Foreign Branches of
U.S. Banks. With respect to bank obligations, the assets of a bank or savings
institution will be deemed to include the assets of its domestic and foreign
branches. Investments in bank obligations will include obligations of domestic
branches of foreign banks and foreign branches of domestic banks. Such
investments may involve risks that are different from investments in securities
of domestic branches of U.S. banks. These risks may include future unfavorable
political and economic developments, possible withholding taxes on interest
income, seizure or nationalization of foreign deposits, currency controls,
interest limitations, or other governmental restrictions which might affect the
payment of principal or interest on the securities held in the Fund.
Additionally, these institutions may be subject to less stringent reserve
requirements and to different accounting, auditing, reporting and recordkeeping
requirements than those applicable to domestic branches of U.S. banks. The Fund
will invest in obligations of domestic branches of foreign banks and foreign
branches of domestic banks only when its investment adviser believes that the
risks associated with such investment are minimal.
INVESTMENT LIMITATIONS
The Funds have adopted the following fundamental investment
limitations which may not be changed without the affirmative vote of the holders
of a majority of the Funds' outstanding shares (as defined in Section 2(a)(42)
of the Investment Company Act). The Funds may not:
1. a. Growth of Income Fund. Borrow money, except from banks
or by entering into reverse repurchase agreements for temporary purposes
and then in amounts not in excess of 10% of the value of the Growth &
Income Fund's total assets at the time of such borrowing, and only if after
such borrowing there is asset coverage of at least 300 percent for all
borrowings of the Fund; or mortgage, pledge or hypothecate any of the
Growth and Income Fund's assets except as may be
15
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necessary in connection with such borrowing or reverse repurchase
agreements and in amounts not in excess of the lesser of the dollar amounts
borrowed or 10% of the value of the Growth & Income Fund's total assets at
the time of such borrowing; or purchase portfolio securities while
borrowings and reverse repurchase agreements in excess of 5% of the Fund's
net assets are outstanding. (This borrowing provision is not for
investment leverage, but solely to facilitate management of the Growth and
Income Fund's securities by enabling the Fund to meet redemption requests
where the liquidation of portfolio securities is deemed to be
disadvantageous or inconvenient);
b. Balanced Fund. Borrow money, except from banks or by
entering into reverse repurchase agreements for temporary purposes and then
in amounts not in excess of 30% of the value of the Fund's total assets at
the time of such borrowing, and only if after such borrowing there is asset
coverage of at least 300% for all borrowings of the Fund; or mortgage,
pledge or hypothecate any of its assets except in connection with any such
borrowing or reverse repurchase agreement and in amounts not in excess of
125% of the dollar amounts borrowed; or purchase portfolio securities while
borrowings and reverse repurchase agreements in excess of 5% of the
Balanced Fund's net assets are outstanding. (This borrowing provision is
not for investment leverage, but solely to facilitate management of the
Balanced Fund's securities by enabling the Balanced Fund to meet redemption
requests where the liquidation of portfolio securities is deemed to be
disadvantageous or inconvenient.)
c. Tax Free Fund. Borrow money, except from banks or by
entering into reverse repurchase agreements for temporary purposes and then
in amounts not in excess of 30% of the value of the Tax Free Fund's total
assets at the time of such borrowing, and only if after such borrowing
there is asset coverage of at least 300% for all borrowings of the Fund; or
mortgage, pledge or hypothecate any of its assets except in connection with
any such borrowing or reverse repurchase agreement and in amounts not in
excess of 125% of the dollar amounts borrowed; or purchase portfolio
securities while borrowings and reverse repurchase agreements in excess of
5% of the Tax Free Fund's total assets are outstanding. (This borrowing
provision is not for investment leverage, but solely to facilitate
management of the Tax Free Fund's securities by enabling the Fund to meet
redemption requests where the liquidation of portfolio securities is deemed
to be disadvantageous or inconvenient.)
2. Purchase securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result of such purchase
more than 5% of a Fund's total assets would be invested in the securities
of such issuer, or more than 10% of the outstanding voting securities of
such issuer would be owned by a Fund, except that up to 25% of the value of
a Fund's assets may be invested without regard to this 5% limitation;
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3. Purchase securities on margin, except for short-term credit
necessary for clearance of portfolio transactions, except that the Fund may
establish margin accounts in connection with its use of options, futures
contracts and options on futures contracts;
4. Underwrite securities of other issuers, except to the extent
that, in connection with the disposition of portfolio securities, a Fund
may be deemed an underwriter under Federal securities laws and except to
the extent that the purchase of Municipal Obligations directly from the
issuer thereof in accordance with a Fund's investment objective, policies
and limitations may be deemed to be an underwriting.
5. Make short sales of securities or maintain a short position
or write or sell puts, calls, straddles, spreads or combinations thereof,
except that a Fund may purchase and sell puts and call options on
securities, stock indices and currencies and may purchase and sell options
on futures contracts;
6. Purchase or sell real estate, provided that a Fund may
invest in securities secured by real estate or interests therein or issued
by companies which invest in real estate or interests therein;
7. Purchase or sell commodities or commodity contracts, except
that a Fund may purchase and sell futures contracts and related options;
8. Invest in oil, gas or mineral-related programs or leases;
9. Make loans, except that a Fund may purchase or hold debt
obligations in accordance with its investment objective, policies and
limitations and except that a Fund (other than the Tax Free Fund) may enter
into repurchase agreements;
10. Purchase any securities issued by any other investment
company except in connection with the merger, consolidation or acquisition
of all the securities or assets of such an issuer; or
11. Make investments for the purpose of exercising control or
management.
In addition to the foregoing enumerated investment limitations, the
Growth & Income and Balanced Funds may not (a) invest more than 5% of their
respective total assets (taken at the time of purchase) in securities of issuers
(including their predecessors) with less than three years of continuous
operations, (b) invest more than 5% of their respective total assets (taken at
the time of purchase) in equity securities that are not readily marketable, and
(c) purchase any securities which would cause, at the time of purchase, more
than 25% of the value of their respective total assets to be invested in the
obligations of issuers in any industry (exclusive of the U.S. Government and its
agencies and instrumentalities).
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In addition to the foregoing enumerated policy limitations, the Tax-
Free Fund may not:
(a) Change its policy of investing during normal market
conditions at least 80% of its net assets in obligations the interest on
which is exempt from the regular Federal income tax and does not constitute
an item of tax preference for purposes of the Federal alternative minimum
tax ("Tax-Exempt Interest") and may not invest in private activity bonds
where the payment of principal and interest are the responsibility of a
company (including its predecessors) with less than three years of
continuous operations.
(b) Purchase any securities which would cause, at the time
of purchase, more than 25% of the value of the total assets of the Tax Free
Fund to be invested in the obligations of issuers in the same industry.
DIRECTORS AND OFFICERS
The directors and executive officers of RBB, their business addresses
and principal occupations during the past five years are:
Principal Occupation
Name and Address Position with RBB During Past Five Years
- ---------------- ----------------------------------------
Arnold M. Reichman* Director Since 1984, Managing
466 Lexington Avenue Director and Assistant
New York, NY 10017 Secretary, E. M. Warburg,
Pincus & Co., Inc.; Since
1984 Managing Director,
Warburg Pincus Counsellors,
Inc.; Since 1985, Vice
President and Secretary,
Counsellors Securities Inc;
Officer of various
investment companies
advised by Warburg, Pincus
Counsellors, Inc.
Robert Sablowsky** Director Since 1985, Executive
14 Wall Street Vice President of
New York, NY 10005 Gruntal & Co., Inc.,
Director, Gruntal & Co.,
Inc. and Gruntal Financial
Corp.
Francis J. McKay Director Since 1963, Executive
7701 Burholme Avenue Vice President, Fox Chase
Philadelphia, PA 1911 Cancer Center (Biomedical
research and medical care.)
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Principal Occupation
Name and Address Position with RBB During Past Five Years
---------------- ----------------------------------------
Marvin E. Sternberg Director Since 1974, Chairman,
937 Mt. Pleasant Road Director and President,
Bryn Mawr, PA 19010 Moyco Industries, Inc.
(manufacturer of dental
supplies and precision coated
abrasives); Since 1968,
Director and President, Mart
MMM, Inc. (formerly
Montgomeryville Merchandise
Mart Inc.) and Mart PMM, Inc.
(formerly Pennsauken
Merchandise Mart, Inc.)
(Shopping Centers); and Since
1975, Director and Executive
Vice President, Cellucap Mfg.
Co., Inc. (manufacturer of
disposable headwear).
Julian A. Brodsky Director Director, and Vice Chairman
1234 Market Street Comcast Corporation;
16th Floor Director, Comcast
Philadelphia, PA 19107-3723 Cablevision of
Philadelphia (cable television
and communications) and Nextel
(wireless communications).
Donald van Roden Director Self-employed businessman.
1200 Old Mill Lane From February 1980 to March
Wyomissing, PA 19610 1987 Vice Chairman, SmithKline
Beckman Corporation
(pharmaceuticals); Director,
AAA Mid-Atlantic (auto
service); Director, Keystone
Insurance Co.
Edward J. Roach President and Certified Public Accountant;
Bellevue Park Treasurer Vice Chairman of the Board,
Corporate Center Fox Chase Cancer Center; Vice
400 Bellevue Parkway President and Trustee,
Wilmington, DE 19809 Pennsylvania School for the
Deaf; Trustee, Immaculata
College; Vice President and
Treasurer of various investment
companies advised by PNC
Institutional Management
Corporation.
19
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Principal Occupation
Name and Address Position with RBB During Past Five Years
---------------- ----------------------------------------
Morgan R. Jones Secretary Chairman of the law firm of
1100 PNB Bank Building Drinker Biddle & Reath,
Broad and Chestnut Streets Philadelphia, Pennsylvania;
Philadelphia, PA 19107 Director, Rocking Horse Child
Care Centers of America, Inc.
- ---------------
* Mr. Reichman is an "interested person" of RBB as that term is defined
in the 1940 Act by virtue of his position with Counsellors Securities
Inc., RBB's distributor.
** Mr. Sablowsky is an "interested person" of RBB as that term is defined
in the 1940 Act by virtue of his position with Gruntal & Co., Inc., a
broker-dealer which sells RBB's shares.
Messrs. McKay, Sternberg and Brodsky are members of the Audit
Committee of the Board of Directors. The Audit Committee, among other things,
reviews results of the annual audit and recommends to RBB the firm to be
selected as independent auditors.
Messrs. Reichman, McKay and van Roden are members of the
Executive Committee of the Board of Directors. The Executive Committee may
generally carry on and manage the business of RBB when the Board of Directors is
not in session.
Messrs. McKay, Sternberg, Brodsky and van Roden are members of
the Nominating Committee of the Board of Directors. The Nominating Committee
recommends to the Board annually all persons to be nominated as directors of
RBB.
RBB pays directors who are not "affiliated persons" (as that term
is defined in the 1940 Act) of the Fund $9,500 annually and $700 per meeting of
the Board or any committee thereof that is not held in conjunction with a Board
meeting. Directors who are not affiliated persons of RBB are reimbursed for any
expenses incurred in attending meetings of the Board of Directors or any
committee thereof. The Chairman (currently Donald van Roden) receives an
additional $5,000 for his services. For the year ended August 31, 1995,
Directors and officers of RBB received compensation and reimbursement of
expenses in the aggregate amount of $__________. On October 24, 1990, RBB
adopted, as a participating employer, RBB Office Retirement Profit-Sharing Plan
and Trust Agreement, a retirement plan for employees (currently Edward J. Roach)
pursuant to which RBB will contribute on a monthly basis amounts equal to 10% of
the monthly compensation of each eligible employee. By virtue of the services
performed by WPC, the Funds' adviser, and Counsellors Securities, the Funds'
distributor, RBB itself requires only one part-time employee. No officer,
director or employee of WPC currently receives any compensation from RBB.
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<PAGE>
INVESTMENT ADVISORY, DISTRIBUTION AND SERVICING ARRANGEMENTS
Advisory Agreements
WPC renders advisory services to the Funds pursuant to Investment
Advisory Agreements. The Advisory Agreement relating to the Growth & Income
Fund is dated September 30, 1993. The Advisory Agreement relating to the
Balanced Fund is dated September 30, 1994. The Advisory Agreement relating to
the Tax Free Fund is dated March 31, 1995. Such advisory agreements are
hereinafter collectively referred to as the "Advisory Contracts." Prior to
October 1, 1993, PIMC and WPC rendered advisory and sub-advisory services,
respectively, to the Growth & Income Fund pursuant to Advisory and Sub-Advisory
Agreements dated August 16, 1988. Prior to October 1, 1994, PIMC and WPC
rendered advisory and sub-advisory services, respectively, to the Balanced Fund
pursuant to Advisory and Sub-Advisory Agreements dated August 16, 1988. Prior
to April 10, 1995, PIMC and PNC Bank rendered advisory and sub-advisory
services, respectively, to the Tax Free Fund pursuant to Advisory and Sub-
Advisory Agreements dated August 16, 1988.
For the year ended August 31, 1995, WPC waived advisory fees with
respect to the Growth & Income Fund in the amount of $_________ under the
Advisory Contract. During the same period, WPC received advisory fees (after
waivers) with respect to the Growth & Income Fund in the amount of
$________________. For the year ended August 31, 1995, WPC waived advisory
fees with respect to the Balanced Fund in the amount of $__________ under the
Advisory Contract. During the same period, WPC received advisory fees (after
waivers) with respect to the Balanced Fund in the amount of $______________.
For the year ended August 31, 1995, WPC waived advisory fees with respect to the
Tax Free Fund of $____________ under the Advisory Contract. During the same
period, WPC received advisory fees (after waivers) with respect to the Tax Free
Fund in the amount of $_____________.
As required by various state regulations, WPC will reimburse RBB
or the Funds affected (as applicable) if and to the extent that the aggregate
operating expenses of RBB or the Funds affected exceed applicable state limits
for the fiscal year, to the extent required by such state regulations.
Currently, the most restrictive of such applicable limits is believed to be
2 1/2% of the first $30 million of average annual net assets, 2% of the next $70
million of average annual net assets and 1 1/2% of the remaining average annual
net assets. Certain expenses, such as brokerage commissions, taxes, interest
and extraordinary items, are excluded from this limitation. Whether such
expense limitations apply to RBB as a whole or to the Funds on an individual
basis depends upon the particular regulations of such states.
The Funds bear all of their own expenses not specifically assumed
by Warburg. General expenses of RBB not readily identifiable as belonging to a
portfolio of RBB are allocated among all investment portfolios by or under the
direction of RBB's Board of Directors in such manner as the Board determines to
be fair and equitable. Expenses borne by a Fund include, but are not limited
to, the following (or a Fund's share of the following): (a) the cost (including
brokerage commissions) of securities purchased or sold by
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<PAGE>
a Fund and any losses incurred in connection therewith; (b) fees payable to and
expenses incurred on behalf of a Fund by WPC; (c) expenses of organizing RBB
that are not attributable to a class of RBB; (d) certain of the filing fees and
expenses relating to the registration and qualification of RBB and a Fund's
shares under Federal and/or state securities laws and maintaining such
registrations and qualifications; (e) fees and salaries payable to RBB's
directors and officers; (f) taxes (including any income or franchise taxes) and
governmental fees; (g) costs of any liability and other insurance or fidelity
bonds; (h) any costs, expenses or losses arising out of a liability of or claim
for damages or other relief asserted against RBB or a Fund for violation of any
law; (i) legal, accounting and auditing expenses, including legal fees of
special counsel for the independent directors; (j) charges of custodians and
other agents; (k) expenses of setting in type and printing prospectuses,
statements of additional information and supplements thereto for existing
shareholders, reports, statements, and confirmations to shareholders and proxy
material that are not attributable to a class; (l) costs of mailing
prospectuses, statements of additional information and supplements thereto to
existing shareholders, as well as reports to shareholders and proxy material
that are not attributable to a class; (m) any extraordinary expenses; (n) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (o) costs of mailing and tabulating proxies
and costs of shareholders' and directors' meetings; (p) costs of PFPC's use of
independent pricing services to value a portfolio's securities; and (q) the cost
of investment company literature and other publications provided by RBB to its
directors and officers. Distribution expenses, transfer agency expenses,
expenses of preparation, printing and mailing prospectuses, statements of
additional information, proxy statements and reports to shareholders, and
organizational expenses and registration fees, identified as belonging to a
particular class of RBB, are allocated to such class.
Under the Advisory Contracts, WPC will not be liable for any
error of judgment or mistake of law or for any loss suffered by RBB or the Funds
in connection with the performance of an Advisory Contract, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
WPC in the performance of its duties or from reckless disregard of its duties
and obligations thereunder.
The Advisory Contracts were approved on July 26, 1995 by vote of
RBB's Board of Directors, including a majority of those directors who are not
parties to the Advisory Contracts or interested persons (as defined in the 1940
Act) of such parties. The Advisory Contracts are terminable by vote of RBB's
Board of Directors or by the holders of a majority of the outstanding voting
securities of the Funds, at any time without penalty, on 60 days' written notice
to WPC. The Growth & Income Fund Advisory Contract became effective on October
1, 1993 and was approved by shareholders at a special meeting held September 30,
1993. The Balanced Fund Advisory Contract became effective on October 1, 1994
and was approved by shareholders at a special meeting held September 30, 1994.
The Tax Free Fund Advisory Contract became effective on April 10, 1995 and was
approved by Shareholders at a meeting
22
<PAGE>
commenced on March 31, 1995 and concluded on April 25, 1995. The Advisory
Contracts terminate automatically in the event of assignment thereof.
Custodian Agreements
PNC Bank is custodian of the Funds' assets pursuant to a
custodian agreement dated August 16, 1988, as amended (the "Custodian
Agreement"). Under the Custodian Agreement, PNC Bank (a) maintains a separate
account or accounts in the name of the Funds, (b) holds and transfers portfolio
securities on account of the Funds, (c) accepts receipts and makes disbursements
of money on behalf of the Funds, (d) collects and receives all income and other
payments and distributions on account of the Funds' portfolio securities and (e)
makes periodic reports to the RBB's Board of Directors concerning the Funds'
operations. PNC Bank is authorized to select one or more banks or trust
companies to serve as sub-custodian on behalf of the Funds, provided that PNC
Bank remains responsible for the performance of all its duties under the
Custodian Agreement and holds RBB harmless from the acts and omissions of any
sub-custodian. For its services to the Funds under the Custodian Agreement, PNC
Bank receives a fee which is calculated based upon the Funds' average daily
gross assets as follows: $.25 per $1,000 on the first $50 million of average
daily gross assets; $.20 per $1,000 on the next $50 million of average daily
gross assets; and $.15 per $1,000 on average daily gross assets over $100
million, with a minimum monthly fee of $1,000 per Fund, exclusive of transaction
charges and out-of-pocket expenses, which are also charged to the Funds.
State Street Bank and Trust Company ("State Street") is co-
custodian of the Funds' foreign securities pursuant to a sub-custodian agreement
dated October 26, 1994 (the "Foreign Custodian Agreement"). Under the Foreign
Custodian Agreement, State Street performs custodial functions with respect to
the Funds' non-U.S. portfolio holdings, including appointment of non-U.S.
custodians and agents.
Transfer Agency and Sub-Transfer Agency Agreements
PFPC, Inc. ("PFPC"), an affiliate of PNC Bank, serves as the
transfer and dividend disbursing agent for the No Load and Series 2 Classes of
the Warburg Growth & Income and Balanced Funds and the No Load Class of the Tax
Free Fund pursuant to a Transfer Agency Agreement dated August 16, 1988 (the
"Transfer Agency Agreement"), under which PFPC (a) issues and redeems shares of
the Classes, (b) addresses and mails all communications by the Funds to record
owners of shares of the Classes, including reports to shareholders, dividend and
distribution notices and proxy materials for its meetings of shareholders,
(c) maintains shareholder accounts and, if requested, sub-accounts and (d) makes
periodic reports to RBB's Board of Directors concerning the operations of the
Classes. PFPC may, on 30 days' notice to RBB, assign its duties as transfer and
dividend disbursing agent to any other affiliate of PNC Bank Corp.
State Street Bank acts as shareholder servicing agent, sub-
transfer agent and dividend disbursing agent for the Funds. For its services
23
<PAGE>
to the Fund under the Sub-Transfer Agency Agreement, State Street receives a fee
at the annual rate of $8.00 per account for the Funds, plus $5.00 per new
account establishment, exclusive of out-of-pocket expenses, and also receives
reimbursement of its out-of-pocket expenses.
Co-Administration Agreements
Counsellors Funds Service, Inc. ("Counsellors Service") serves as
co-administrator to the Funds pursuant to Co-Administration Agreements dated
August 4, 1994 for the Growth & Income and Balanced Funds and dated March 31,
1995 for the Tax Free Fund (the "Counsellors Service Co-Administration
Agreements"). Counsellors Service has agreed to provide shareholder liaison
services to the Funds including responding to shareholder inquiries and
providing information on shareholder accounts. The Counsellors Service Co-
Administration Agreements provide that Counsellors Service shall not be liable
for any error of judgment or mistake of law or any loss suffered by RBB or the
Funds in connection with the performance of the agreement, except a loss
resulting from willful misfeasance, bad faith or negligence, or reckless
disregard of its duties and obligations thereunder. In consideration for
providing services pursuant to the Counsellors Service Co-Administration
Agreements, Counsellors Services receives a fee with respect to the Growth &
Income Fund calculated at an annual rate of .05% of the Growth & Income Fund's
average daily net assets for the first $125 million of average daily net assets,
and .10% of average daily net assets for assets above $125 million. With
respect to the Balanced and Tax Free Funds, Counsellors Service receives a fee
calculated at an annual rate of .10% of each Fund's respective average daily net
assets.
PFPC also serves as co-administrator to Funds pursuant to Co-
Administration Agreements dated August 4, 1994 for the Growth & Income and
Balanced Funds and dated March 31, 1995 for the Tax Free Fund (the "PFPC Co-
Administration Agreements"). PFPC has agreed to calculate the Funds' net asset
values, provide all accounting services for the Funds, and assist in related
aspects of the Funds' operations. The PFPC Co-Administration Agreements provide
that PFPC shall not be liable for any error of judgment or mistake of law or any
loss suffered by RBB or the Funds in connection with the performance of the
agreement, except a loss resulting from willful misfeasance, bad faith or
negligence, or reckless disregard of its duties and obligations thereunder. In
consideration for providing services pursuant to the PFPC Co-Administration
Agreements, PFPC receives a fee with respect to the Growth & Income Fund
calculated at an annual rate of .20% of the Growth & Income Fund's average daily
net assets, with a minimum annual fee of $75,000, for the first $125 million of
average daily net assets, and .15% of average daily net assets for assets above
$125 million. With respect to the Balanced and Tax Free Funds, PFPC receives a
fee calculated at an annual rate of .15% of each Fund's respective average daily
net assets, with a minimum annual fee for each Fund of $75,000.
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<PAGE>
Distribution and Shareholder Servicing
The Balanced and Tax Free Funds have each entered into
Distribution Agreements with Counsellors Securities pursuant to their
Distribution Plans (the "12b-1 Plans") under Rule 12b-1 of the 1940 Act.
In consideration for Services (as defined below), the Distribution Agreement
provides that the Balanced and Tax Free Funds will each pay Counsellors
Securities a fee calculated at an annual rate of .25% of the respective average
daily net assets of the No Load Shares of the Balanced and Tax Free Funds.
Services performed by Counsellors Securities include (a) the sale of the No Load
Shares, as set forth in the 12b-1 Plans ("Selling Services"), (b) ongoing
servicing and/or maintenance of the accounts of shareholders of the Balanced and
Tax Free Funds, as set forth in the 12b-1 Plans ("Shareholder Services"), and
(c) sub-transfer agency services, subaccounting services or administrative
services, as set forth in the 12b-1 Plans ("Administrative Services" and
collectively with Selling Services and Administrative Services, "Services")
including, without limitation, (i) payments reflecting an allocation of overhead
and other office expenses of Counsellors Securities related to providing
Services; (ii) payments made to, and reimbursement of expenses of, persons who
provide support services in connection with the distribution of the No Load
Shares including, but not limited to, office space and equipment, telephone
facilities, answering routine inquiries regarding the Balanced and Tax Free
Funds, and providing any other Shareholder Services; (iii) payments made to
compensate selected dealers or other authorized persons for providing any
Services; (iv) costs relating to the formulation and implementation of marketing
and promotional activities, including, but not limited to, direct mail
promotions and television, radio, newspaper, magazine and other mass media
advertising, and related travel and entertainment expenses; (v) costs of
printing and distributing prospectuses, statements of additional information and
reports of the Balanced and Tax Free Funds to prospective shareholders of the
Funds; and (vi) costs involved in obtaining whatever information, analyses and
reports with respect to marketing and promotional activities that Counsellors
Securities may, from time to time, deem advisable.
FUND TRANSACTIONS
Subject to policies established by the Board of Directors, WPC is
responsible for the execution of portfolio transactions and the allocation of
brokerage transactions for the Funds. In executing portfolio transactions, WPC
seeks to obtain the best net results for the Funds, taking into account such
factors as the price (including the applicable brokerage commission or dealer
spread), size of the order, difficulty of execution and operational facilities
of the firm involved. While WPC generally seeks reasonably competitive
commission rates, payment of the lowest commission or spread is not necessarily
consistent with obtaining the best results in particular transactions.
25
<PAGE>
No Fund has any obligation to deal with any broker or group of
brokers in the execution of portfolio transactions. WPC may, consistent with
the interests of the Funds and subject to the approval of the Board of
Directors, select brokers on the basis of the research, statistical and pricing
services they provide to the Funds and other clients of WPC. Information and
research received from such brokers will be in addition to, and not in lieu of,
the services required to be performed by WPC under its respective contracts. A
commission paid to such brokers may be higher than that which another qualified
broker would have charged for effecting the same transaction, provided that WPC,
as applicable, determines in good faith that such commission is reasonable in
terms either of the transaction or the overall responsibility of WPC, as
applicable, to a Fund and its other clients and that the total commissions paid
by a Fund will be reasonable in relation to the benefits to a Fund over the
long-term.
Corporate debt and U.S. Government securities are generally
traded on the over-the-counter market on a "net" basis without a stated
commission, through dealers acting for their own account and not as brokers.
The Funds will primarily engage in transactions with these dealers or deal
directly with the issuer unless a better price or execution could be obtained by
using a broker. Prices paid to a dealer in debt securities will generally
include a "spread," which is the difference between the prices at which the
dealer is willing to purchase and sell the specific security at the time, and
includes the dealer's normal profit.
WPC may seek to obtain an undertaking from issuers of commercial
paper or dealers selling commercial paper to consider the repurchase of such
securities from the Funds prior to their maturity at their original cost plus
interest (sometimes adjusted to reflect the actual maturity of the securities),
if it believes that the Funds' anticipated need for liquidity makes such action
desirable. Any such repurchase prior to maturity reduces the possibility that
the Funds would incur a capital loss in liquidating commercial paper (for which
there is no established market), especially if interest rates have risen since
acquisition of the particular commercial paper.
Investment decisions for the Funds and for other investment
accounts managed by WPC are made independently of each other in the light of
differing conditions. However, the same investment decision may occasionally be
made for two or more of such accounts. In such cases, simultaneous transactions
are inevitable. Purchases or sales are then averaged as to price and allocated
as to amount according to a formula deemed equitable to each such account.
While in some cases this practice could have a detrimental effect upon the price
or value of the security as far as a Fund is concerned, in other cases it is
believed to be beneficial to the Funds. The Funds will not purchase securities
during the existence of any underwriting or selling group relating to such
security of which WPC or any affiliated person (as defined in the 1940 Act)
thereof is a member except pursuant to procedures adopted by RBB's Board of
Directors pursuant to Rule 10f-3 under the 1940 Act. Among other things, these
procedures, which will be reviewed by RBB's directors as deemed necessary from
time to time, require that the commission
26
<PAGE>
paid in connection with such a purchase be reasonable and fair, that the
purchase be at not more than the public offering price prior to the end of the
first business day after the date of the public offer, and that WPC not
participate in or benefit from the sale to a Fund.
In no instance will portfolio securities be purchased from or
sold to Counsellors Securities, PNC Bank or WPC or any affiliated person of the
foregoing entities except as permitted by SEC exemptive order or by applicable
law.
During the year ended August 31, 1995, the Growth & Income Fund
paid $_______________ of brokerage commissions, the Balanced Fund paid $______
of brokerage commissions, and the Tax Free Fund paid $_________ of brokerage
commissions.
A high rate of portfolio turnover involves correspondingly
greater brokerage commission expenses and other transaction costs, which must be
borne directly by a Fund. Federal income tax laws may restrict the extent to
which a Fund may engage in short term trading of securities. See "Taxes." For
the year ended August 31, 1995, the Growth & Income Fund had a portfolio
turnover rate of ____%. For the year or period ended August 31, 1995, the
Balanced Fund had a portfolio turnover rate of ___%. For the year ended August
31, 1995, the Tax Free Fund had a portfolio turnover rate of ____%. The Funds
anticipate that their annual portfolio turnover rates will vary from year to
year. The portfolio turnover rate is calculated by dividing the lesser of a
Fund's annual sales or purchases of portfolio securities (exclusive of purchases
or sales of securities whose maturities at the time of acquisition were one year
or less) by the monthly average value of the securities in the portfolio during
the year.
PURCHASE AND REDEMPTION INFORMATION
The Funds reserve the right, if conditions exist which make cash
payments undesirable, to honor any request for redemption or repurchase of a
Fund's shares by making payment in whole or in part in securities chosen by RBB
and valued in the same way as they would be valued for purposes of computing a
Fund's net asset value. If payment is made in securities, a shareholder may
incur transaction costs in converting these securities into cash. RBB has
elected, however, to be governed by Rule 18f-1 under the 1940 Act so that a Fund
is obligated to redeem its shares solely in cash up to the lesser of $250,000 or
1% of its net asset value during any 90-day period for any one shareholder of a
Fund.
Under the 1940 Act, a Fund may suspend the right to redemption or
postpone the date of payment upon redemption for any period during which the New
York Stock Exchange (the "NYSE") is closed (other than customary weekend and
holiday closings), or during which trading on the NYSE is restricted, or during
which (as determined by the SEC by rule or regulation) an emergency exists as a
result of which disposal or valuation of portfolio securities is not reasonably
practicable, or for such other periods as the SEC may permit.
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(A Fund may also suspend or postpone the recordation of the transfer of its
shares upon the occurrence of any of the foregoing conditions.)
VALUATION OF SHARES
The net asset value per share of each Fund is calculated as of
4:00 p.m. Eastern Time on each Business Day. "Business Day" means each weekday
when the NYSE is open. Currently, the NYSE is closed on New Year's Day, Martin
Luther King Day, Presidents' Day, Good Friday, Memorial Day, Independence Day
(observed), Labor Day, Thanksgiving Day and Christmas Day (observed).
Securities which are listed on stock exchanges are valued at the last sale price
on the day the securities are valued or, lacking any sales on such day, at the
mean of the bid and asked prices available prior to the evaluation. In cases
where securities are traded on more than one exchange, the securities are
generally valued on the exchange designated by the Board of Directors as the
primary market. Securities traded in the over-the-counter market and listed on
the National Association of Securities Dealers Automatic Quotation System
("NASDAQ") are valued at the last trade price listed on the NASDAQ at 4:00 p.m.;
securities listed on NASDAQ for which there were no sales on that day and other
over-the-counter securities are valued at the mean of the bid and asked prices
available prior to valuation. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the direction of RBB's Board of Directors. The amortized cost method of
valuation may also be used with respect to debt obligations with sixty days or
less remaining to maturity.
In determining the approximate market value of portfolio
investments, the Funds may employ outside organizations, which may use a matrix
or formula method that takes into consideration market indices, matrices, yield
curves and other specific adjustments. This may result in the securities being
valued at a price different from the price that would have been determined had
the matrix or formula method not been used. All cash, receivables and current
payables are carried on the Funds' books at their face value. Other assets, if
any, are valued at fair value as determined in good faith by or under the
direction of RBB's Board of Directors.
PERFORMANCE INFORMATION
Total Return. For purposes of quoting and comparing the
performance of the Funds to that of other mutual funds and to stock or other
relevant indices in advertisements or in reports to shareholders, performance
may be stated in terms of total return. Under the rules of the Securities and
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Exchange Commission, funds advertising performance must include total return
quotes calculated according to the following formula:
n
P(1 + T) = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years (1, 5 or 10)
ERV = ending redeemable value at the end of the 1, 5 or 10
year periods (or fractional portion thereof) of a hypothetical $1,000 payment
made at the beginning of the 1, 5 or 10 year periods.
Under the foregoing formula, the time periods used in advertising
will be based on rolling calendar quarters, updated to the last day of the most
recent quarter prior to submission of the advertisement for publication, and
will cover one, five and ten year periods or a shorter period dating from the
effectiveness of the Funds' registration statement. In calculating the ending
redeemable value, the maximum sales load is deducted from the initial $1,000
payment and all dividends and distributions by the Funds are assumed to have
been reinvested at net asset value, as described in the Prospectus, on the
reinvestment dates during the period. Total return, or "T" in the formula
above, is computed by finding the average annual compounded rates of return over
the 1, 5 and 10 year periods (or fractional portion thereof) that would equate
the initial amount invested to the ending redeemable value. Any sales loads
that might in the future be made applicable at the time to reinvestments would
be included as would any recurring account charges that might be imposed by the
Funds.
Calculated according to the SEC rules, for the year ended
August 31, 1995, both the average annual total return and the aggregate total
return was ____% for the Growth & Income Fund, ___% for the Balanced Fund, and
___% for the Tax Free Fund. Calculated according to the SEC rules, for the
period beginning on the commencement of the Funds' operations and ending
August 31, 1995, the average annual total return (commencing October 6, 1988)
was ____% for the Growth & Income Fund, ____% for the Balanced Fund and ____%
for the Tax Free Funds. For the same periods, the aggregate total return
(commencing October 6, 1988) was ______% for the Growth & Income Fund, ______
for the Balanced Fund and ___% for the Tax Free Fund.
Performance. From time to time, the Funds may advertise their
average annual total return over various periods of time. These total return
figures show the average percentage change in value of an investment in a Fund
from the beginning of the measuring period to the end of the measuring period.
The figures reflect changes in the price of a Fund's shares assuming that any
income dividends and/or capital gain distributions made by a Fund during the
period were reinvested in shares of the Fund. Total return will be shown for
recent one-, five- and ten-year periods, and may be shown for other periods
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<PAGE>
as well (such as from commencement of a Fund's operations or on a year-by-year,
quarterly or current year-to-date basis).
When considering average total return figures for periods longer
than one year, it is important to note that a Fund's annual total return for one
year in the period might have been grater or less than the average for the
entire period. When considering total return figures for periods shorter than
one year, investors should bear in mind that the Funds seek long-term
appreciation and that such return may not be representative of a Fund's return
over a longer market cycle. The Funds may also advertise aggregate total return
figures for various periods, representing the cumulative change in value of an
investment in a Fund for the specific period (again reflecting changes in a
Fund's share prices and assuming reinvestment of dividends and distributions).
Aggregate and average total returns may be shown by means of schedules, charts
or graphs, may indicate various components of total return (i.e., change in
value of initial investment, income dividends and capital gain distributions)
and would be quoted separately for each class of a Fund's shares.
Investors should note that total return figures are based on
historical earnings and are not intended to indicate future performance.
In reports or other communications to investors or in advertising
material, the Funds may describe general economic and market conditions
affecting the Funds and may compare their performance with (1) that of other
mutual funds as listed in the rankings prepared by Lipper Analytical Services,
Inc. or similar investment services that monitor the performance of mutual funds
or as set forth in the publications listed below; (2) with the S&P 500, which is
an unmanaged indexes of common stocks prepared by Standard & Poor's Corporation
or (3) other appropriate indices of investment securities or with data developed
by Counsellors derived from such indices. The Funds may also include
evaluations published by nationally recognized ranking services and by financial
publications that are nationally recognized, such as The Wall Street Journal,
Investor's Daily, Money, Inc., Institutional Investor, Barron's, Fortune, Forbes
Business Week, Morningstar, Inc. and Financial Times.
In reports or other communications to investors or in
advertising, the Funds may also describe the general biography or work
experience of the portfolio managers of the Funds and may include quotations
attributable to the portfolio managers describing approaches taken in managing
the Funds' investments, research methodology, underlying stock selection or the
Funds' investment objective. The Funds may also discuss the continuum of risk
and return relating to different investments, and the potential impact of
foreign stock on a portfolio otherwise composed of domestic securities. In
addition, the Funds may from time to time compare their expense ratios to those
of investment companies with similar objective and policies, as advertised by
Lipper Analytical Services, Inc. or similar investment services that monitor
mutual funds.
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<PAGE>
Yield. The Funds may also advertise their yield. Under the
rules of the SEC, a Fund advertising yield must calculate yield using the
following formula:
6
YIELD = 2 [(a-b+1) - 1]
---
cd
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursement).
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of
the period.
Under the foregoing formula, yield is computed by compounding
semi-annually, the net investment income per share earned during a 30 day period
divided by the maximum offering price per share on the last day of the period.
For the purpose of determining the interest earned (variable "a" in the formula)
on debt obligations that were purchased by a Fund at a discount or premium, the
formula generally calls for amortization of the discount or premium; the
amortization schedule will be adjusted monthly to reflect changes in the market
values of the debt obligations.
The yield for the 30 day period ended August 31, 1995 was ____%
for the Growth & Income Fund, ______% for the Balanced Fund, and ___% for the
Tax Free Fund.
Yield may fluctuate daily and does not provide a basis for
determining future yields. Because the yields will fluctuate, they cannot be
compared with yields on savings account or other investment alternatives that
provide an agreed to or guaranteed fixed yield for a stated period of time.
However, yield information may be useful to an investor considering temporary
investments in money market instruments. In comparing the yield of one fund to
another, consideration should be given to each fund's investment policies,
including the types of investments made, lengths of maturities of the portfolio
securities, the method used by each fund to compute the yield (methods may
differ) and whether there are any special account charges which may reduce the
effective yield.
The yields on certain obligations are dependent on a variety of
factors, including general market conditions, conditions in the particular
market for the obligation, the financial condition of the issuer, the size of
the offering, the maturity of the obligation and the rates on the issue. The
ratings of Moody's Investors Service, Inc. and Standard & Poor's Corporation
represent their respective opinions as to the quality of the obligations they
undertake to rate. Ratings, however, are general and are not absolute standards
of quality. Consequently, obligations with the same rating, maturity and
interest rate may have different market prices. In addition,
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<PAGE>
subsequent to its purchase by a Fund, an issue may cease to be rated or may have
its rating reduced below the minimum required for purchase. In such an event,
the Fund's investment adviser or sub-adviser will consider whether the Fund
should continue to hold the obligation.
From time to time, in advertisements or in reports to
shareholders with respect to the Funds, the yields of the Funds may be quoted
and compared to those of other mutual funds with similar investment objectives
and to stock or other relevant indices. For example, the yield of a Fund may be
compared to the Donoghue's Money RRB Report(R) of Holliston, MA, 10746, a widely
recognized independent publication that monitors the performance of money market
funds, or to the data prepared by Lipper Analytical Services, Inc., a
widely-recognized independent service that monitors the performance of mutual
funds.
TAXES
The following is only a summary of certain additional tax
considerations generally affecting the Funds and their shareholders that are not
described in the Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Funds or their shareholders, and the
discussion here and in the Funds' Prospectus is not intended as a substitute for
careful tax planning. Investors are urged to consult their tax advisers with
specific reference to their own tax situation.
The Funds have elected to be taxed as regulated investment
companies under Part I of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). As regulated investment companies, the Funds are exempt
from Federal income tax on their net investment income and realized capital
gains which they distribute to shareholders, provided that they distribute an
amount equal to the sum of (a) at least 90% of their investment company taxable
income (net taxable investment income and the excess of net short-term capital
gain over net long-term capital loss), if any, for the year and (b) at least 90%
of their net tax-exempt interest income, if any, for the year (the "Distribution
Requirement") and satisfy certain other requirements of the Code that are
described below. Distributions of investment company taxable income and net
tax-exempt interest income made during the taxable year or, under specified
circumstances, within twelve months after the close of the taxable year will
satisfy the Distribution Requirement. The Distribution Requirement for any year
may be waived if a regulated investment company establishes to the satisfaction
of the Internal Revenue Service that it is unable to satisfy the Distribution
Requirement by reason of distributions previously made for the purpose of
avoiding liability for Federal excise tax (discussed below).
In addition to satisfaction of the Distribution Requirement each
Fund must derive at least 90% of its gross income from dividends, interest,
certain payments with respect to securities loans and gains from the sale or
other disposition of stock or securities or foreign currencies, or from other
income derived with respect to its business of investing in such stock,
securities, or currencies (the "Income Requirement") and derive less than 30%
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<PAGE>
of its gross income from the sale or other disposition of any of the following
investments, if such investments were held for less than three months: (a) stock
or securities (as defined in Section 2(a)(36) of the 1940 Act); (b) options,
futures, or forward contracts (other than options, futures or forward contracts
on foreign currencies); and (c) foreign currencies (or options, futures or
forward contracts on foreign currencies) but only if such currencies (or
options, futures or forward contracts) are not directly related to the regulated
investment company's principal business of investing in stock or securities (or
options and futures with respect to stocks or securities) (the "Short-Short Gain
Test"). Interest (including accrued original issue discount and, in the case of
debt securities bearing taxable interest income, "accrued market discount")
received by a Fund at maturity or on disposition of a security held for less
than three months will not be treated as gross income derived from the sale or
other disposition of such security for purposes of the Short-Short Gain Test.
However, any other income which is attributable to realized market appreciation
will be treated as gross income from the sale or other disposition of securities
for this purpose.
Future Treasury regulations may provide that currency gains that
are not "directly related" to a Fund's principal business of investing in stock
or securities (or in options or futures with respect to stock or securities)
will not satisfy the Income Requirements. Income derived by a regulated
investment company from a partnership or trust will satisfy the Income
Requirement only to the extent such income is attributable to items of income of
the partnership or trust that would satisfy the Income Requirement if they were
realized by a regulated investment company in the same manner as realized by the
partnership or trust.
In addition to the foregoing requirements, at the close of each
quarter of its taxable year, at least 50% of the value of a Fund's assets must
consist of cash and cash items, U.S. Government securities, securities of other
regulated investment companies, and securities of other issuers (as to which a
Fund has not invested more than 5% of the value of its total assets in
securities of such issuer and as to which a Fund does not hold more than 10% of
the outstanding voting securities of such issuer), and no more than 25% of the
value of a Fund's total assets may be invested in the securities of any one
issuer (other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which such Fund controls and
which the engaged in the same or similar trades or businesses (the "Asset
Diversification Requirement").
The Internal Revenue Service has taken the position, in informal
rulings issued to other taxpayers, that the issuer of a repurchase agreement is
the bank or dealer from which securities are purchased. A Fund will not enter
into repurchase agreements with any one bank or dealer if entering into such
agreements would, under the informal position expressed by the Internal Revenue
Service, cause it to fail to satisfy the Asset Diversification Requirement.
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<PAGE>
Distributions of investment company taxable income will be
taxable (subject to the possible allowance of the dividend received deduction
described below) to shareholders as ordinary income, regardless of whether such
distributions are paid in cash or are reinvested in shares. Shareholders
receiving any distribution from RBB in the form of additional shares will be
treated as receiving a taxable distribution in an amount equal to the fair
market value of the shares received, determined as of the reinvestment date.
The Funds intend to distribute to shareholders their excess of
net long-term capital gain over net short-term capital loss ("net capital
gain"), if any, for each taxable year. Such gain is distributed as a capital
gain dividend and is taxable to shareholders as long-term capital gain,
regardless of the length of time the shareholder has held his shares, whether
such gain was recognized by a Fund prior to the date on which a shareholder
acquired shares of the Fund and whether the distribution was paid in cash or
reinvested in shares. The aggregate amount of distributions designated by any
Fund as capital gain dividends may not exceed the net capital gain of a Fund for
any taxable year, determined by excluding any net capital loss or net long-term
capital loss attributable to transactions occurring after October 31 of such
year and by treating any such loss as if it arose on the first day of the
following taxable year. Such distributions will be designated as capital gain
dividends in a written notice mailed by RBB to shareholders not later than 60
days after the close of each Fund's respective taxable year. While the Tax Free
Fund does not expect to realize long-term capital gains, the Fund intends to
distribute any net long-term capital gains that it may realize (such as gains
from the sale of debt securities and realized market discount on tax-exempt
Municipal Obligations).
In the case of corporate shareholders, distributions (other than
capital gain dividends) of a Fund for any taxable year generally qualifies for
the 70% dividends received deduction to the extent of the gross amount of
"qualifying dividends" received by a Fund for the year. Generally, a dividend
will be treated as a "qualifying dividend" if it has been received from a
domestic corporation. However, a dividend received by a taxpayer will not be
treated as a "qualifying dividend" if (1) it has been received with respect to
any share of stock that the taxpayer has held for 45 days (90 days in the case
of certain preferred stock) or less (excluding any day more than 45 days (or 90
days in the case of certain preferred stock) after the date on which the stock
becomes ex-dividend), or (2) to the extent that the taxpayer is under an
obligation (pursuant to a short sale or otherwise) to make related payments with
respect to positions in substantially similar or related property. RBB will
designate the portion, if any, of the distribution made by a Fund that qualifies
for the dividends received deduction in a written notice mailed by RBB to
shareholders not later than 60 days after the close of the Fund's taxable year.
Investors should note that changes made to the Code by the Tax
Reform Act of 1986 and subsequent legislation have not entirely eliminated
distinctions in the tax treatment of capital gain and ordinary income
distributions. The nominal maximum marginal rate on ordinary income for
individuals, trusts and estates is currently 31%, but for individual taxpayers
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<PAGE>
whose adjusted gross income exceeds certain threshold amounts (that differ
depending on the taxpayer's filing status) in taxable years beginning before
1996, provisions phasing out personal exemptions and limiting itemized
deductions may cause the actual maximum marginal rate to exceed 31%. The
maximum rate on the net capital gain of individuals, trusts and estates,
however, is in all cases 28%. Capital gains and ordinary income of corporate
taxpayers are taxed at a nominal maximum rate of 34% (an effective marginal rate
of 39% applies in the case of corporations having taxable income between
$100,000 and $335,000). Investors should be aware that any loss realized upon
the sale, exchange or redemption of shares held for six months or less will be
treated as a long-term capital loss to the extent any capital gain dividends
have been paid with respect to such shares.
Distributions of net investment income received by the Funds from
investments in debt securities will (except in the case of exempt interest
dividends distributed by the Tax-Free Fund) be taxable to shareholders as
ordinary income and will not be treated as "qualifying dividends" for purposes
of the dividends received deduction. Although the Tax-Free Fund does not expect
to receive net investment income other than Tax-Exempt Interest and AMT
Interest, up to 20% of the net assets of the Fund may be invested in Municipal
Obligations that do not bear Tax-Exempt Interest or AMT Interest, and any
taxable income recognized by the Fund will be distributed and taxed to their
shareholders in accordance with the foregoing rules.
The Tax-Free Fund is designed to provide investors with current
tax-exempt interest income. Exempt interest dividends distributed to
shareholders by the Fund is not included in the shareholder's gross income for
regular Federal income tax purposes. In order for the Tax-Free Fund to pay
exempt interest dividends during any taxable year, at the close of each fiscal
quarter at least 50% of the value of the Fund must consist of exempt interest
obligations.
In addition, the Tax-Free Fund may not be appropriate
investments for entities which are "substantial users" of facilities financed by
private activity bonds or "related persons" thereof. "Substantial user" is
defined under U.S. Treasury Regulations to include a nonexempt person who
regularly uses a part of such facilities in his trade or business and (a) whose
gross revenues derived with respect to the facilities financed by the issuance
of bonds are more than 5% of the total revenue derived by all users of such
facilities, (b) who occupies more than 5% of the entire usable area of such
facilities, or (c) for whom such facilities or a part thereof were specifically
constructed, reconstructed or acquired. "Related persons" include certain
related natural persons, affiliated corporations, a partnership and its partners
and an S corporation and its shareholders.
The Tax-Free Fund may acquire standby commitments with respect to
Municipal Obligations held in its portfolio and will treat any interest received
on Municipal Obligations subject to such standby commitments as tax-exempt
income. In Rev. Rul. 82-144, 1982-2 C.B. 34, the Internal Revenue Service held
that a mutual fund acquired ownership of municipal obligations for federal
income tax purposes, even though the fund simultaneously purchased
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<PAGE>
"put" agreements with respect to the same municipal obligations from the seller
of the obligations. The Fund will not engage in transactions involving the use
of standby commitments that differ materially from the transaction described in
Rev. Rul. 82-144 without first obtaining a private letter ruling from the
Internal Revenue Service or the opinion of counsel.
Interest on indebtedness incurred by a shareholder to purchase or
carry shares of the Tax-Free Fund is not deductible for income tax purposes if
(as expected) the Tax-Free Fund distributes exempt interest dividends during the
shareholder's taxable year. Receipt of exempt interest dividends may result in
collateral Federal income tax consequences to certain other taxpayers, including
persons subject to alternative minimum tax (see Prospectus and discussion
below), financial institutions, property and casualty insurance companies,
individual recipients of Social Security or Railroad Retirement benefits, and
foreign corporations engaged in a trade or business in the United States.
Prospective investors should consult their own tax advisers as to such
consequences.
Corporate taxpayers may be liable for alternative minimum tax,
which is imposed at the rate of 20% of "alternative minimum taxable income"
(less, in the case of corporate shareholders with "alternative minimum taxable
income" of less than $310,000, the applicable "exemption amount"), in lieu of
the regular corporate income tax. "Alternative minimum taxable income" is equal
to "taxable income" (as determined for corporate income regular tax purposes)
with certain adjustments. Although corporate taxpayers in determining
"alternative minimum taxable income" are allowed to exclude exempt interest
dividends (other than exempt interest dividends derived from certain private
activity bonds ("AMT Preference Dividends"), as explained in the Prospectus) and
to utilize the 70% dividends received deduction at the first level of
computation, the Code requires (as a second computational step) that
"alternative minimum taxable income" be increased by 75% of the excess of
"adjusted current earnings" over other "alternative minimum taxable income."
Corporate shareholders will have to take into account (1) all
exempt interest dividends and (2) the full amount of all dividends from the Tax-
Free Fund that are treated as "qualifying dividends" for purposes of the
dividends received deduction in determining their "adjusted current earnings."
As much as 75% of any exempt interest dividend and 82.5% of any "qualifying
dividend" received by a corporate shareholder could, as a consequence, be
subject to alternative minimum tax. Exempt interest dividends received by such
a corporate shareholder may accordingly be subject to alternative minimum tax at
an effective rate of 15%.
Corporate investors should also note that the Superfund
Amendments and Reauthorization Act of 1986 imposes an environmental tax on
corporate taxpayers of 0.12% of the excess of "alternative minimum taxable
income" (with certain modifications) over $2,000,000 for taxable years beginning
after 1986 and before 1996, regardless of whether such taxpayers are liable for
alternative minimum tax.
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If for any taxable year any Fund does not qualify as a regulated
investment company, all of its taxable income will be subject to tax at regular
corporate rates without any deduction for distributions to shareholders, and all
distributions will be taxable as ordinary dividends (including amounts derived
from interest on Municipal Obligations in the case of the Tax-Free Fund) to the
extent of such Fund's current and accumulated earning and profits. Such
distributions will be eligible for the dividends received deduction in the case
of corporate shareholders. Investors should be aware that any loss realized on
a sale of shares of a Fund will be disallowed to the extent an investor
repurchases shares of the same Fund within a period of 61 days (beginning 30
days before and ending 30 days after the day of disposition of the shares).
Dividends paid by a Fund in the form of shares within the 61-day period would be
treated as a purchase for this purpose.
A shareholder will recognize gain or loss upon an exchange of
shares of a Fund for shares of another Fund or of another Warburg Pincus Fund
upon exercise of an exchange privilege. Shareholders may not include the
initial sales charge in the tax basis of the Shares exchanged for shares of
another Fund or of another Warburg Pincus Fund for the purpose of determining
gain or loss on the exchange, where the Shares exchanged have been held 90 days
or less. The sales charge will increase the basis of the shares acquired
through exercise of the exchange privilege (unless the shares acquired are also
exchanged for shares of another Fund or of another Warburg Pincus Fund within 90
days after the first exchange).
The Code imposes a non-deductible 4% excise tax on regulated
investment companies that do not distribute with respect to each calendar year
an amount equal to 98% of their ordinary income for the calendar year plus 98%
of their capital gain net income for the 1-year period ending on October 31 of
such calendar year. The balance of such income must be distributed during the
next calendar year. For the foregoing purposes, a company is treated as having
distributed any amount on which it is subject to income tax for any taxable year
ending in such calendar year. Because the Funds intend to distribute all of
their taxable income currently, no Fund anticipates incurring any liability for
this excise tax. However, investors should note that the Funds may in certain
circumstances be required to liquidate investments in order to make sufficient
distributions to avoid excise tax liability.
RBB will be required in certain cases to withhold and remit to
the United States Treasury 31% of dividends (other than exempt interest
dividends of the Tax Free Fund) paid to any shareholder (1) who has provided
either an incorrect tax identification number or no number at all, (2) who is
subject to backup withholding by the Internal Revenue Service for failure to
report the receipt of interest or dividend income properly, or (3) who has
failed to certify to RBB that he is not subject to backup withholding or that he
is an "exempt recipient."
The foregoing general discussion of Federal income tax
consequences is based on the Code and the regulations issued thereunder as in
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<PAGE>
effect on the date of this Statement of Additional Information. Future
legislative or administrative changes or court decisions may significantly
change the conclusions expressed herein, and any such changes or decisions may
have a retroactive effect with respect to the transactions contemplated herein.
Although the Funds expect to qualify as a "regulated investment
company" and to be relieved of all or substantially all Federal income taxes,
depending upon the extent of their activities in states and localities in which
their offices are maintained, in which their agents or independent contractors
are located or in which they are otherwise deemed to be conducting business, the
Funds may be subject to the tax laws of such states or localities.
DESCRIPTION OF SHARES
The Fund has authorized capital of thirty billion shares of
Common Stock, $.001 par value per share, of which 12.2 billion shares are
currently classified as follows: 100 million shares are classified as Class A
Common Stock (Growth & Income), 100 million shares are classified as Class B
Common Stock, 100 million shares are classified as Class C Common Stock
(Balanced), 100 million shares are classified as Class D Common Stock
(Tax-Free), 500 million shares are classified as Class E Common Stock (Money),
500 million shares are classified as Class F Common Stock (Municipal Money), 500
million shares are classified as Class G Common Stock (Money), 500 million
shares are classified as Class H Common Stock (Municipal Money), 1 billion
shares are classified as Class I Common Stock (Money), 500 million shares are
classified as Class J Common Stock (Municipal Money), 500 million shares are
classified as Class K Common Stock (U.S. Government Money), 1,500 million shares
are classified as Class L Common Stock (Money), 500 million shares are
classified as Class M Common Stock (Municipal Money), 500 million shares are
classified as Class N Common Stock (U.S. Government Money), 500 million shares
are classified as Class O Common Stock (N.Y. Money), 100 million shares are
classified as Class P Common Stock (Government), 100 million shares are
classified as Class Q Common Stock, 500 million shares are classified as Class R
Common Stock (Municipal Money), 500 million shares are classified as Class S
Common Stock (U.S. Government Money), 500 million shares are classified as Class
T Common Stock (International), 500 million shares are classified as Class U
Common Stock (Strategic), 500 million shares are classified as Class V Common
Stock (Emerging), 100 million shares are classified as Class W Common Stock
(Laffer/Canto Equity), 50 million shares are classified as Class X Common Stock
(U.S. Core Equity), 50 million shares are classified as Class Y Common Stock
(U.S. Core Fixed Income), 50 million shares are classified as Class Z Common
Stock (Global Fixed Income), 50 million shares are classified as Class AA Common
Stock (Municipal Bond), 50 million shares are classified as Class BB Common
Stock (BEA Balanced), 50 million shares are classified as Class CC Common Stock
(Short Duration), 100 million shares are classified as Class DD Common Stock
(Growth & Income Series 2), 100 million shares are classified as Class EE Common
Stock (Balanced Series 2), 700 million shares are classified as Class Alpha 1
Common Stock (Money), 200 million shares are classified as Class Alpha 2 Common
Stock (Municipal Money), 500 million shares
38
<PAGE>
are classified as Class Alpha 3 Common Stock (U.S. Government Money), 100
million shares are classified as Class Alpha 4 Common Stock (N.Y. Money), 1
million shares are classified as Class Beta 1 Common Stock (Money), 1 million
shares are classified as Class Beta 2 Common Stock (Municipal Money), 1 million
shares are classified as Class Beta 3 Common Stock (U.S. Government Money), 1
million shares are classified as Class Beta 4 Common Stock (N.Y. Money), 1
million shares are classified as Gamma 1 Common Stock (Money), 1 million shares
are classified as Gamma 2 Common Stock (Municipal Money), 1 million shares are
classified as Gamma 3 Common Stock (U.S. Government Money), 1 million shares are
classified as Gamma 4 Common Stock (N.Y. Money), 1 million shares are classified
as Delta 1 Common Stock (Money), 1 million shares are classified as Delta 2
Common Stock (Municipal Money), 1 million shares are classified as Delta 3
Common Stock (U.S. Government Money), 1 million shares are classified as Delta 4
Common Stock (N.Y. Money), 1 million shares are classified as Epsilon 1 Common
Stock (Money), 1 million shares are classified as Epsilon 2 Common Stock
(Municipal Money), 1 million shares are classified as Epsilon 3 Common Stock
(U.S. Government Money), 1 million shares are classified as Epsilon 4 Common
Stock (N.Y. Money), 1 million shares are classified as Zeta 1 Common Stock
(Money), 1 million shares are classified as Zeta 2 Common Stock (Municipal
Money), 1 million shares are classified as Zeta 3 Common Stock (U.S. Government
Money), 1 million shares are classified as Zeta 4 Common Stock (N.Y. Money), 1
million shares are classified as Eta 1 Common Stock (Money), 1 million shares
are classified as Eta 2 Common Stock (Municipal Money), 1 million shares are
classified as Eta 3 Common Stock (U.S. Government Money), 1 million shares are
classified as Eta 4 Common Stock (N.Y. Money), 1 million shares are classified
as Theta 1 Common Stock (Money), 1 million shares are classified as Theta 2
Common Stock (Municipal Money), 1 million shares are classified as Theta 3
Common Stock (U.S. Government Money), and 1 million shares are classified as
Theta 4 Common Stock (N.Y. Money). Shares of the Class A, C and D Common Stock
constitute the No Load Classes of the Growth & Income, Balanced and Tax Free
Funds, respectively. Under RBB's charter, the Board of Directors has the power
to classify or reclassify any unissued shares of Common Stock from time to time.
The classes of Common Stock have been grouped into fifteen
separate "families": the RBB Family, the Warburg Pincus Family, the Cash
Preservation Family, the Sansom Street Family, the Bedford Family, the Bradford
Family, the BEA Family, the Janney Montgomery Scott Money Family, the Beta
Family, the Gamma Family, the Delta Family, the Epsilon Family, the Zeta Family,
the Eta Family and the Theta Family. The RBB Family represents interests in one
non-money market portfolio as well as the Money Market and Municipal Money
Market Portfolios; the Warburg Pincus Family represents interests in the Growth
& Income, Balanced, and Tax Free Funds; the Cash Preservation Family represents
interests in the Money Market and Municipal Money Market Portfolios; the Sansom
Street Family represents interests in the Money Market, Municipal Money Market
and Government Obligations Money Market Portfolios; Bedford Family represents
interests in the Money Market, Municipal Money Market, Government Obligations
Money Market and New York Municipal Money Market Portfolios; the Bradford Family
represents interests in the Municipal Money Market and Government Obligations
Money Market Portfolios; the BEA Family represents interests in nine non-money
market portfolios; the Janney
39
<PAGE>
Montgomery Scott Family and the Beta, Gamma, Delta, Epsilon, Zeta, Eta and Theta
Families represent interests in the Money Market, Municipal Money Market,
Government Obligations Money Market and New York Municipal Money Market
Portfolios.
ADDITIONAL INFORMATION CONCERNING FUND SHARES
RBB does not currently intend to hold annual meetings of
shareholders except as required by the 1940 Act or other applicable law. RBB's
amended By-Laws provide that shareholders collectively owning at least ten
percent of the outstanding shares of all classes of Common Stock of RBB 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, RBB will assist in shareholder
communication in such matters.
As stated in the Prospectus, holders of shares of each class of
RBB will vote in the aggregate and not by class on all matters, except where
otherwise required by law. Further, shareholders of RBB will vote in the
aggregate and not by portfolio except as otherwise required by law or when the
Board of Directors determines that the matter to be voted upon affects only the
interests of the shareholders of a particular portfolio. Rule 18f-2 under the
1940 Act provides that any matter required to be submitted by the provisions of
such Act or applicable state law, or otherwise, to the holders of the
outstanding securities of an investment company such as RBB shall not be deemed
to have been effectively acted upon unless approved by the holders of a majority
of the outstanding shares of each portfolio affected by the matter. Rule 18f-2
further provides that a portfolio shall be deemed to be affected by a matter
unless it is clear that the interests of each portfolio in the matter are
identical or that the matter does not affect any interest of the portfolio.
Under the Rule, the approval of an investment advisory agreement or any change
in a fundamental investment policy would be effectively acted upon with respect
to a portfolio only if approved by the holders of a majority of the outstanding
voting securities of such portfolio. However, the Rule also provides that the
ratification of the selection of independent public accountants, the approval of
principal underwriting contracts and the election of directors are not subject
to the separate voting requirements and may be effectively acted upon by
shareholders of an investment company voting without regard to portfolio.
Notwithstanding any provision of Maryland law requiring a greater
vote of shares of RBB's common stock (or of any class voting as a class) in
connection with any corporate action, unless otherwise provided by law, (for
example by Rule 18f-2 discussed above) or by RBB's Articles of Incorporation,
RBB may take or authorize such action upon the favorable vote of the holders of
more than 50% of all of the outstanding shares of Common Stock voting without
regard to class (or portfolio).
40
<PAGE>
MISCELLANEOUS
Counsel. The law firm of Ballard Spahr Andrews & Ingersoll, 1735
Market Street, 51st Floor, Philadelphia, Pennsylvania 19103 serves as
counsel to RBB, PIMC, PNC Bank and PFPC. The law firm of Drinker Biddle &
Reath, 1100 Philadelphia National Bank Building, Broad and Chestnut
Streets, Philadelphia, Pennsylvania 19107, serves as counsel to RBB's
independent directors.
Independent Accountants. Coopers & Lybrand L.L.P., 2400 Eleven
Penn Center, Philadelphia, Pennsylvania 19103, serves as RBB's independent
accountants. RBB's financial statements which appear in this Statement of
Additional Information have been audited by Coopers & Lybrand L.L.P., as
set forth in their report, which also appears in this Statement of
Additional Information, and have been included herein in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing. [note: Financial Statements and report of Coopers & Lybrand
L.L.P. to be provided by Post-Effective Amendment]
Control Persons. As of September 29, 1995, to RBB's knowledge,
the following named persons at the addresses shown below owned of record
approximately 5% or more of the total outstanding shares of the class of
RBB indicated below. See "Description of Shares" above. RBB does not know
whether such persons also beneficially own such shares.
PORTFOLIO NAME AND ADDRESS PERCENT OWNED
--------- ---------------- --------------
RBB Money Market Luanne M. Garvey and Robert 7.855
Portfolio J. Garvey
2729 Woodland Avenue
Trooper, PA 19403
PNC Bank, NA Custodian FBO 13.532
Harold T. Erfer
414 Charles Lane
Wynnewood, PA 19096
PNC Bank, NA Custodian FBO 17.583
Karen M. McElhinny and
Contributin Account
4943 King Arthur Drive
Erie, PA 16506
E.L. Haines Jr. and Betty J. 8.154
Haines
2341 Pinebluff Drive
Dallas, TX 75228
John Robert Estrada and 14.104
Shirley Ann Estrada
1700 Raton Drive
Arlington, TX 76018
Eric Levine and Linda & 30.740
Howard Levine
67 Lanes Pond Road
Howell, NJ 07731
41
<PAGE>
PORTFOLIO NAME AND ADDRESS PERCENT OWNED
--------- ---------------- --------------
RBB Municipal Money William B. Pettus Trust 10.862
Market Portfolio Augustine W. Pettus Trust
827 Winding Path Lane
St. Louis, MO 63021-6635
Seymour Fein 89.137
P.O. Box 486
Tremont Post Office
Bronx, NY 10457-0486
Cash Preservation Saver's Marketing Inc. 21.340
Money Market c/o Planco
Portfolio 15 Industrial Blvd.
Paoli, PA 19301
Jewish Family and Children's 43.178
Agency of Philadelphia
Capital Campaign
Attn: S. Ramm
1610 Spruce Street
Philadelphia, PA 19103
Lynda R. Succ Trustee for in 8.262
Trust under The Lynda R.
Campbell Caring Trust
935 Rutger Street
St. Louis, MO 63104
Cash Preservation Kenneth Farwell and Valerie 7.020
Municipal Money Farwell Jt. Ten
Market Portfolio 3854 Sullivan
St. Louis, MO 63107
Larnie Johnson and Mary 11.364
Alice Johnson
4927 Lee Avenue
St. Louis, MO 63115-1726
Marcella L. Haugh Caring 8.421
Trust
40 Plaza Square - Apt. 202
St. Louis, MO 63103
Deborah C. Brown of Trustee 29.929
for Barbara J.C. Custis
Trustee
The Crowe Trust
9921 West 128th Terrace
Overland Park, KS 66213
Sansom Street Money Wasner & Co. 19.201
Market Portfolio FAO Paine Webber and Managed
Assets Sundry Holdings
Attn: Joe Domizio
200 Stevens Drive
Lester, PA 19113
Saxon and Co. 72.138
FBO Paine Webber
P.O. Box 7780 1888
Philadelphia, PA 19182
42
<PAGE>
PORTFOLIO NAME AND ADDRESS PERCENT OWNED
--------- ---------------- --------------
Robertson Stephens & Co. 8.659
FBO Exclusive Benefit
Investors
555 California St./#2600
San Francisco, CA 94104
BEA Strategic Fixed Chase Manhattan Bankers 17.782
Income Portfolio Trustee for Kendale Company
Master Pension Plan
Attn: Mark Tesoriero
3 Metrotech Center
6th Floor
Brooklyn, NY 11245
Temple Inland Master 5.848
Retirement Trust
303 South Temple Drive
Diboll, TX 75941
State of Oregon 55.136
Treasury Department
159 State Capital Building
Salem, OR 97310
BEA Emerging Markets Wachovia Bank North Carolina 8.265
Equity Portfolio Trust for Carolina Power &
Light Co. Supplemental
Retirement Trust
301 N. Main Street
Winston Salem, NC 27101
Northern Trust Company 18.992
Trustee for Texas
Instruments Employee Plan
P.O. Box 92956
Chicago, IL 60675-2956
Hall Family Foundation 19.126
P.O. Box 419580
Kansas City, MO 64208
Northern Trust 11.377
Trustee for Pillsbury
P.O. Box 92956
Chicago, IL 60675
Amherst H. Wilder Foundation 5.661
919 Lafond Avenue
St. Paul, MN 55104
BEA US Core Equity Bank of New York 62.094
Portfolio Trust APU Buckeye Pipeline
One Wall Street
New York, NY 10286
Werner & Pfleiderer Pension 11.438
Plan Employees
663 E. Crescent Avenue
Ramsey, NJ 07446
43
<PAGE>
PORTFOLIO NAME AND ADDRESS PERCENT OWNED
--------- ---------------- --------------
BEA Associates 10.601
FAO Profit Sharing Trust
153 E. 53rd Street
New York, NY 10022
BEA Associates 6.290
FAO Pension Trust
153 E. 53rd Street
New York, NY 10022
BEA US Core Fixed New England UFCW & 31.738
Income Portfolio Employers' Pension Fund
Board of Trustees
161 Forbes Road, Suite 201
Braintree, MA 02184
Bankers Trust 24.687
Trust Pechniney Corp.
Pension Master Trust
34 Exchange Place
4th Floor
Jersey City, NJ 07302
Kollmorgen Corporation 5.804
Pension Trust
1601 Thapelo Road
Waltham, MA 02154
Patterson & Co. 21.333
P.O. Box 7829
Philadelphia, PA 19102
BEA Global Fixed Sunkist Master Trust 64.337
Income Portfolio 14130 Riverside Drive
Sherman Oaks, CA 91423
Key Trust Co. of Ohio 35.661
FBO Eastern Enterp.
Collective Inv. Trust
P.O. Box 901536
Cleveland, OH 44202-1559
BEA Municipal Bond William A. Marquard 29.495
Fund Portfolio 2199 Maysville Rd.
Carlisle, KY 40311
Arnold Leon 10.306
c/o Fiduciary Trust Company
P.O. Box 3199
Church Street Station
New York, NY 10008
Edgar E. Sharp 7.339
P.O. Box 8338
Longboat Key, FL 34228
44
<PAGE>
PORTFOLIO NAME AND ADDRESS PERCENT OWNED
--------- ---------------- --------------
John C. Cahill 13.528
c/o David Holmgren
30 White Birch Lane
Cots Cob, CT 06870
Irwin Bard 7.255
1750 North East 183rd St.
North Miami Beach, FL 33160
Janney Montgomery Janney Montgomery Scott 100
Scott Money Market 1801 Market Street
Portfolio Philadelphia, PA 19103-1675
Janney Montgomery Janney Montgomery Scott 100
Scott Municipal 1801 Market Street
Money Market Philadelphia, PA 19103-1675
Portfolio
Janney Montgomery Janney Montgomery Scott 100
Scott Government 1801 Market Street
Obligations Money Philadelphia, PA 19103-1675
Market Portfolio
Janney Montgomery Janney Montgomery Scott 100
Scott New York 1801 Market Street
Municipal Money Philadelphia, PA 19103-1675
Market Portfolio
As of such date, no person owned of record or, to RBB's knowledge,
beneficially, more than 25% of the outstanding shares of all classes of
RBB.
As of the above date, directors and officers as a group owned less
than one percent of the shares of RBB.
Litigation. There is currently no material litigation affecting
RBB.
[Financial Statements to be provided by Post-Effective Amendment]
45
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
(1) Included in Part A of the Registration Statement:
None
Included in Part B of the Registration Statement:
None
(b) Exhibits: See Note #
----------
(1) (a) Articles of Incorporation of Registrant 1
(b) Articles Supplementary of Registrant. 1
(c) Articles of Amendment to Articles of
Incorporation of Registrant. 2
(d) Articles Supplementary of Registrant. 2
(e) Articles Supplementary of Registrant. 5
(f) Articles Supplementary of Registrant. 6
(g) Articles Supplementary of Registrant. 9
(h) Articles Supplementary of Registrant. 10
(i) Articles Supplementary of Registrant. 14
(j) Articles Supplementary of Registrant. 14
(k) Articles Supplementary of Registrant. 19
(l) Articles Supplementary of Registrant. 19
(m) Articles Supplementary of Registrant. 19
(n) Articles Supplementary of Registrant. 19
(o) Articles Supplementary of Registrant 20
<PAGE>
See Note #
----------
(2) Amended By-Laws adopted August 16, 1988. 3
(a) Amendment to By-Laws adopted July 25, 1989. 4
(b) By-Laws amended through October 24, 1989. 5
(3) None.
(4) Specimen Certificates
a) SafeGuard Equity Growth and Income Shares 3
b) SafeGuard Fixed Income Shares 3
c) SafeGuard Balanced Shares 3
d) SafeGuard Tax-Free Shares 3
e) SafeGuard Money Market Shares 3
f) SafeGuard Tax-Free Money Market Shares 3
g) Cash Preservation Money Market Shares 3
h) Cash Preservation Tax-Free Money
Market Shares 3
i) Sansom Street Money Market Shares 3
j) Sansom Street Tax-Free Money Market Shares 3
k) Sansom Street Government Obligations Money 3
Market Shares
l) Bedford Money Market Shares
m) Bedford Tax-Free Money Market Shares 3
n) Bedford Government Obligations Money Market 3
Shares
o) Bedford New York Municipal Money
Market Shares 5
p) SafeGuard Government Securities Shares 5
q) Income Opportunities High Yield Bond Shares 6
r) Bradford Tax-Free Money Market Shares 8
s) Bradford Government Obligations Money Market 8
Shares
t) Alpha 1 Money Market Shares 8
u) Alpha 2 Tax-Free Money Market Shares 8
v) Alpha 3 Government Obligations Money Market 8
Shares
w) Alpha 4 New York Municipal Money Market 8
Shares
x) Beta 1 Money Market Shares 8
y) Beta 2 Tax-Free Money Market Shares 8
z) Beta 3 Government Obligations Money Market 8
Shares
aa) Beta 4 New York Municipal Money Market Shares 8
bb) Gamma 1 Money Market Shares 8
cc) Gamma 2 Tax-Free Money Market Shares 8
dd) Gamma 3 Government Obligations Money Market 8
Shares
ee) Gamma 4 New York Municipal Money Market 8
Shares
ff) Delta 1 Money Market Shares 8
gg) Delta 2 Tax-Free Money Market Shares 8
2
<PAGE>
See Note #
----------
hh) Delta 3 Government Obligations Money Market 8
Shares
ii) Delta 4 New York Municipal Money
Market Shares 8
jj) Epsilon 1 Money Market Shares 8
kk) Epsilon 2 Tax-Free Money Market Shares 8
ll) Epsilon 3 Government Obligations Money
Market Shares 8
mm) Epsilon 4 New York Municipal Money
Market Shares 8
nn) Zeta 1 Money Market Shares 8
oo) Zeta 2 Tax-Free Money Market Shares 8
pp) Zeta 3 Government Obligations Money
Market Shares 8
qq) Zeta 4 New York Municipal Money Market Shares
rr) Eta 1 Money Market Shares 8
ss) Eta 2 Tax-Free Money Market Shares 8
tt) Eta 3 Government Obligations Money Market
Shares 8
uu) Eta 4 New York Municipal Money Market Shares 8
vv) Theta 1 Money Market Shares 8
ww) Theta 2 Tax-Free Money Market Shares 8
xx) Theta 3 Government Obligations Money Market
Shares 8
yy) Theta 4 New York Municipal Money Market
Shares 8
zz) BEA International Equity Shares 9
a1) BEA Strategic Fixed Income Shares 9
a2) BEA Emerging Markets Equity Shares 9
a3) Laffer/Canto Equity Shares 12
a4) BEA U.S. Core Equity Shares 13
a5) BEA U.S. Core Fixed Income Shares 13
a6) BEA Global Fixed Income Shares 13
a7) BEA Municipal Bond Shares 13
a8) BEA Balanced Shares 16
a9) BEA Short Duration Shares 16
a10) Warburg Growth & Income Shares 18
a11) Warburg Balanced Shares 18
(5) (a) Investment Advisory Agreement (Money) 3
between Registrant and Provident
Institutional Management Corporation,
dated as of August 16, 1988.
(b) Sub-Advisory Agreement (Money) between 3
Provident Institutional Management
Corporation and Provident National Bank,
dated as of August 16, 1988.
(c) Investment Advisory Agreement 3
3
<PAGE>
See Note #
----------
(Tax -Free Money) between Registrant and
Provident Institutional Management
Corporation, dated as of August 16, 1988.
(d) Sub-Advisory Agreement (Tax-Free Money) 3
between Provident Institutional Management
Corporation and Provident National Bank,
dated as of August 16, 1988.
(e) Investment Advisory Agreement 3
(Government Money) between Registrant and
Provident Institutional Management
Corporation, dated as of August 16, 1988.
(f) Sub-Advisory Agreement (Government Money) 3
between Provident Institutional Management
Corporation and Provident National Bank,
dated as of August 16, 1988.
(k) Investment Advisory Agreement (Balanced) 3
between Registrant and Provident
Institutional Management Corporation,
dated as of August 16, 1988.
(l) Sub-Advisory Agreement (Balanced) between 4
Provident Institutional Management
Corporation and Provident National Bank,
dated as of August 16, 1988.
(m) Investment Advisory Agreement (Tax-Free) 3
between Registrant and Provident
Institutional Management Corporation,
dated as of August 16, 1988.
(n) Sub-Advisory Agreement (Tax-Free) between 3
Provident Institutional Management
Corporation and Provident National Bank,
dated as of August 16, 1988.
(s) Investment Advisory Agreement 8
(Government Securities) between Registrant
and Provident Institutional Management
Corporation dated as of April 8, 1991.
(t) Investment Advisory Agreement 8
(High Yield Bond) between Registrant
and Provident Institutional Management
Corporation dated as of April 8, 1991.
(u) Sub-Advisory Agreement (High Yield Bond) 8
between Registrant and Warburg,
4
<PAGE>
See Note #
----------
Pincus Counsellors, Inc.
dated as of April 8, 1991.
(v) Investment Advisory Agreement 9
(New York Municipal Money Market) between
Registrant and Provident Institutional
Management Corporation dated
November 5, 1991.
(w) Investment Advisory Agreement (Equity) 10
between Registrant and Provident
Institutional Management Corporation
dated November 5, 1991.
(x) Sub-Advisory Agreement (Equity) between 10
Registrant, Provident Institutional
Management Corporation and Warburg,
Pincus Counsellors, Inc. dated
November 5, 1991.
(y) Investment Advisory Agreement 10
(Tax-Free Money Market) between
Registrant and Provident Institutional
Management Corporation dated
April 21, 1992.
(z) Investment Advisory Agreement 11
(BEA International Equity Portfolio)
between Registrant and BEA Associates.
(aa) Investment Advisory Agreement 11
(BEA Strategic Fixed Income Portfolio)
between Registrant and BEA Associates.
(bb) Investment Advisory Agreement 11
(BEA Emerging Markets Equity Portfolio)
between Registrant and BEA Associates.
(cc) Investment Advisory Agreement 14
(Laffer/Canto Equity Portfolio)
between Registrant and Laffer Advisors
Incorporated, dated as of July 21, 1993.
(dd) Sub-Advisory Agreement 12
(Laffer/Canto Sector Equity Portfolio)
between PNC Institutional Management
Corporation and Laffer Advisors
Incorporated, dated as of July 21, 1993.
(ee) Investment Advisory Agreement 15
(BEA U.S. Core Equity Portfolio) between
5
<PAGE>
See Note #
----------
Registrant and BEA Associates, dated as
of October 27, 1993.
(ff) Investment Advisory Agreement 15
(BEA U.S. Core Fixed Income Portfolio)
between Registrant and BEA Associates,
dated as of October 27, 1993.
(gg) Investment Advisory Agreement 15
(BEA Global Fixed Income Portfolio)
between Registrant and BEA Associates,
dated as of October 27, 1993.
(hh) Investment Advisory Agreement 15
(BEA Municipal Bond Fund Portfolio)
between Registrant and BEA Associates,
dated as of October 27, 1993.
(ii) Investment Advisory Agreement 14
(Warburg Pincus Growth and Income Fund)
between Registrant and Warburg,
Pincus Counsellors, Inc.
(jj) Investment Advisory Agreement 16
(Warburg Pincus Balanced Fund) between
Registrant and Warburg, Pincus Counsellors,
Inc.
(kk) Form of Investment Advisory Agreement 16
(BEA Balanced) between Registrant and
BEA Associates.
(ll) Form of Investment Advisory Agreement 16
(BEA Short Duration Portfolio) between
Registrant and BEA Associates.
(mm) Investment Advisory Agreement (Warburg
Pincus Tax Free Fund) between Registrant
and Warburg, Pincus Counsellors, Inc.
(6) (r) Distribution Agreement and Supplements 8
(Classes A through Q) between the
Registrant and Counsellors Securities Inc.
dated as of April 10, 1991.
(s) Distribution Agreement Supplement 9
(Classes L, M, N and O) between the
Registrant and Counsellors Securities
Inc. dated as of November 5, 1991.
(t) Distribution Agreement Supplements 9
6
<PAGE>
See Note #
----------
(Classes R, S, and Alpha 1 through Theta 4)
between the Registrant and Counsellors
Securities Inc. dated as of November
5, 1991.
(u) Distribution Agreement Supplement 10
(Classes T, U and V) between the Registrant
and Counsellors Securities Inc.
dated as of September 18, 1992.
(v) Distribution Agreement Supplement 14
(Class W) between the Registrant and
Counsellors Securities Inc. dated as of
July 21, 1993.
(w) Distribution Agreement Supplement 14
(Classes X, Y, Z and AA) between the
Registrant and Counselors Securities Inc.
(x) Distribution Agreement Supplement 18
(Classes BB and CC) between Registrant
and Counsellor's Securities Inc. dated
as of October 26, 1994.
(y) Distribution Agreement Supplement 18
(Classes DD and EE) between Registrant and
Counsellor's Securities Inc. dated as of
October 26, 1994.
(z) Form of Distribution Agreement Supplement 19
(Classes L, M, N and O) between the
Registrant and Counsellor's Securities
Inc.
(aa) Form of Distribution Agreement Supplement 19
(Classes R, S) between the Registrant and
Counsellor's Securities Inc.
(bb) Distribution Agreement Supplements 19
(Classes Alpha 1 through Theta 4) between
the Registrant and Counsellor's Securities
Inc.
(cc) Distribution Agreement Supplement Janney 20
Classes (Alpha 1, Alpha 2, Alpha 3 and
Alpha 4 between the Registrant and
Counsellor's Securities, Inc.
(7) Fund Office Retirement Profit-Sharing and 7
Trust Agreement, dated as of October 24, 1990.
7
<PAGE>
See Note #
----------
(8) (a) Custodian Agreement between Registrant and 3
Provident National Bank dated as of
August 16, 1988.
(b) Sub-Custodian Agreement among 10
The Chase Manhattan Bank, N.A., the
Registrant and Provident National Bank,
dated as of July 13, 1992, relating to
custody of Registrant's foreign securities.
(e) Amendment No. 1 to Custodian Agreement 9
dated August 16, 1988.
(f) Agreement between Brown Brothers Harriman 10
& Co. and Registrant on behalf of
BEA International Equity Portfolio,
dated September 18, 1992.
(g) Agreement between Brown Brothers Harriman & 10
Co. and Registrant on behalf of BEA
Strategic Fixed Income Portfolio, dated
September 18, 1992.
(h) Agreement between Brown Brothers Harriman 10
& Co. and Registrant on behalf of
BEA Emerging Markets Equity Portfolio,
dated September 18, 1992.
(i) Agreement between Brown Brothers Harriman 15
& Co. and Registrant on behalf of BEA
Emerging Markets Equity, BEA International
Equity, BEA Strategic Fixed Income and BEA
Global Fixed Income Portfolios,
dated as of November 29, 1993.
(j) Agreement between Brown Brothers Harriman 15
& Co. and Registrant on behalf of
BEA U.S. Core Equity and BEA U.S. Core
Fixed Income Portfolio dated as of
November 29, 1993.
(k) Custodian Contract between 18
Registrant and State Street Bank and
Trust Company.
(9) (a) Transfer Agency Agreement (Sansom Street) 3
between Registrant and Provident
Financial Processing Corporation,
dated as of August 16, 1988.
(b) Transfer Agency Agreement (Cash Preservation) 3
8
<PAGE>
See Note #
----------
between Registrant and Provident Financial
Processing Corporation, dated as of
August 16, 1988.
(c) Shareholder Servicing Agreement 3
(Sansom Street Money).
(d) Shareholder Servicing Agreement 3
(Sansom Street Tax-Free Money).
(e) Shareholder Servicing Agreement 3
(Sansom Street Government Money).
(f) Shareholder Services Plan 3
(Sansom Street Money).
(g) Shareholder Services Plan 3
(Sansom Street Tax-Free Money).
(h) Shareholder Services Plan 3
(Sansom Street Government Money).
(i) Transfer Agency Agreement (SafeGuard) 3
between Registrant and Provident Financial
Processing Corporation, dated as of
August 16, 1988.
(j) Transfer Agency Agreement (Bedford) 3
between Registrant and Provident
Financial Processing Corporation,
dated as of August 16, 1988.
(k) Transfer Agency Agreement 7
(Income Opportunities) between Registrant
and Provident Financial Processing
Corporation dated June 25, 1990.
(l) Administration and Accounting Services 8
Agreement between Registrant and
Provident Financial Processing
Corporation, relating to Government
Securities Portfolio, dated as of
April 10, 1991.
(m) Administration and Accounting Services 9
Agreement between Registrant and
Provident Financial Processing
Corporation, relating to
New York Municipal Money Market
Portfolio dated as of November 5, 1991.
9
<PAGE>
See Note #
----------
(n) Administration and Accounting Services 9
Agreement between Registrant and Provident
Financial Processing Corporation, relating
to Equity Portfolio dated as of
November 5, 1991.
(o) Administration and Accounting Services 9
Agreement between Registrant and Provident
Financial Processing Corporation, relating
to High Yield Bond Portfolio,
dated as of April 10, 1991.
(p) Administration and Accounting Services 10
Agreement between Registrant and Provident
Financial Processing Corporation
(International) dated September 18, 1992.
(q) Administration and Accounting Services 10
Agreement between Registrant and Provident
Financial Processing Corporation (Strategic)
dated September 18, 1992;
(r) Administration and Accounting Services 10
Agreement between Registrant and Provident
Financial Processing Corporation (Emerging)
dated September 18, 1992.
(s) Transfer Agency Agreement and Supplements 9
(Bradford, Alpha, Beta, Gamma, Delta,
Epsilon, Zeta, Eta and Theta) between
Registrant and Provident Financial
Processing Corporation dated as of
November 5, 1991.
(t) Transfer Agency Agreement Supplement 10
(BEA) between Registrant and Provident
Financial Processing Corporation
dated as of September 18, 1992.
(u) Administrative Services Agreement between 10
Registrant and Counsellor's Fund
Services, Inc. (BEA Portfolios)
dated September 18, 1992.
(v) Administration and Accounting Services 10
Agreement between Registrant and Provident
Financial Processing Corporation, relating
to Tax-Free Money Market Portfolio, dated
as of April 21, 1992.
(w) Transfer Agency Agreement Supplement 12
10
<PAGE>
See Note #
----------
(Laffer) between Registrant and PFPC Inc.
dated as of July 21, 1993.
(x) Administration and Accounting Services 12
Agreement between Registrant and PFPC Inc.,
relating to Laffer/Canto Equity Fund,
dated July 21, 1993.
(y) Transfer Agency Agreement Supplement 15
(BEA U.S. Core Equity, BEA U.S.
Core Fixed Income, BEA Global Fixed Income
and BEA Municipal Bond Fund) between
Registrant and PFPC Inc. dated as of
October 27, 1993.
(z) Administration and Accounting Services 15
Agreement between Registrant and PFPC Inc.
relating to (Core Equity) dated as of
October 27, 1993.
(aa) Administration and Accounting Services 15
Agreement between Registrant and PFPC Inc.
(Core Fixed Income) dated
October 27, 1993.
(bb) Administration and Accounting Services 15
Agreement between Registrant and
PFPC Inc. (International Fixed Income)
dated October 27, 1993
(cc) Administration and Accounting Services 15
Agreement between Registrant and PFPC Inc.
(Municipal Bond) dated October 27, 1993.
(dd) Transfer Agency Agreement Supplement 18
(BEA Balanced and Short Duration) between
Registrant and PFPC Inc. dated
October 26, 1994.
(ee) Administration and Accounting Services 18
Agreement between Registrant and PFPC Inc.
(BEA Balanced) dated October 26, 1994.
(ff) Administration and Accounting Services 18
Agreement between Registrant and PFPC Inc.
(BEA Short Duration) dated
October 26, 1994.
(gg) Co-Administration Agreement between 18
Registrant and PFPC Inc. (Warburg Pincus
Growth & Income Fund) dated
11
<PAGE>
See Note #
----------
August 4, 1994.
(hh) Co-Administration Agreement between 18
Registrant and PFPC Inc. (Warburg Pincus
Balanced Fund) dated August 4, 1994.
(ii) Co-Administration Agreement between 18
Registrant and Counsellors Funds Services,
Inc. (Warburg Pincus Growth & Income Fund)
dated August 4, 1994.
(jj) Co-Administration Agreement between 18
Registrant and Counsellors Funds Services,
Inc. (Warburg Pincus Balanced Fund) dated
August 4, 1994.
(kk) Administrative Services Agreement Supplement 18
between Registrant and Counsellor's Fund
Services, Inc. (BEA Classes) dated
October 26, 1994.
(ll) Co-Administration Agreement between
Registrant and PFPC Inc. (Warburg Pincus
Tax Free Fund) dated March 31, 1995.
(mm) Co-Administration Agreement between
Registrant and Counsellors Funds
Services, Inc. (Warburg Pincus Tax Free
Fund) dated March 31, 1995.
(nn) Transfer Agency and Service Agreement
between Registrant and State Street
Bank and Trust Company and PFPC, Inc.
dated February 1, 1995.
(oo) Supplement to Transfer Agency and Service
Agreement between Registrant, State Street
Bank and Trust Company, Inc. and PFPC
dated April 10, 1995.
(10)(a) Opinion of Counsel.
Incorporated by reference herein to
Registrant's 24f-2 Notice for the fiscal
year ending August 31, 1994 filed
on October 7, 1994.
(b) Consent of Counsel.
(11) Consent of Independent Accountants.
None.
12
<PAGE>
See Note #
----------
(12) None.
(13)(a) Subscription Agreement (relating to 2
Classes A through N).
(b) Subscription Agreement between Registrant 7
and Planco Financial Services, Inc.,
relating to Classes O and P.
(c) Subscription Agreement between Registrant and 7
Planco Financial Services, Inc., relating to
Class Q.
(d) Subscription Agreement between Registrant 9
and Counsellors Securities Inc. relating to
Classes R, S, and Alpha 1 through Theta 4.
(e) Subscription Agreement between Registrant 10
and Counsellors Securities Inc. relating to
Classes T, U and V.
(f) Subscription Agreement between Registrant 18
and Counsellor's Securities Inc. relating to
Classes BB and CC.
(g) Purchase Agreement between Registrant and
Counsellors Securities Inc. relating to
Class DD (Warburg Pincus Growth & Income
Fund Series 2).
(h) Purchase Agreement between Registrant ^ and
Counsellors Securities Inc. relating to
Class EE (Warburg Pincus Balanced Fund
Series 2).
(14) None.
(15)(a) Plan of Distribution (Sansom Street Money). 3
(b) Plan of Distribution (Sansom Street Tax-Free 3
Money).
(c) Plan of Distribution (Sansom Street 3
Government Money).
(d) Plan of Distribution (Cash Preservation 3
Money).
(e) Plan of Distribution (Cash Preservation 3
Tax-Free Money).
13
<PAGE>
See Note #
----------
(f) Plan of Distribution (SafeGuard Equity). 3
(g) Plan of Distribution 3
(SafeGuard Fixed Income).
(h) Plan of Distribution (SafeGuard Balanced). 3
(i) Plan of Distribution (SafeGuard Tax-Free). 3
(j) Plan of Distribution (SafeGuard Money). 3
(k) Plan of Distribution (SafeGuard Tax-Free
Money). 3
(l) Plan of Distribution (Bedford Money). 3
(m) Plan of Distribution (Bedford Tax-Free 3
Money).
(n) Plan of Distribution (Bedford Government 3
Money).
(o) Plan of Distribution (Bedford New York 7
Municipal Money).
(p) Plan of Distribution (SafeGuard Government 7
Securities).
(q) Plan of Distribution (Income Opportunities 7
High Yield).
(r) Amendment No. 1 to Plans of Distribution 8
(Classes A through Q).
(s) Plan of Distribution (Bradford Tax-Free 9
Money).
(t) Plan of Distribution (Bradford Government 9
Money).
(u) Plan of Distribution (Alpha Money). 9
(v) Plan of Distribution (Alpha Tax-Free 9
Money).
(w) Plan of Distribution (Alpha Government 9
Money).
(x) Plan of Distribution (Alpha New York 9
Money).
14
<PAGE>
See Note #
----------
(y) Plan of Distribution (Beta Money). 9
(z) Plan of Distribution (Beta Tax-Free 9
Money).
(aa) Plan of Distribution (Beta Government 9
Money).
(bb) Plan of Distribution (Beta New York 9
Money).
(cc) Plan of Distribution (Gamma Money). 9
(dd) Plan of Distribution (Gamma Tax-Free 9
Money).
(ee) Plan of Distribution (Gamma Government 9
Money).
(ff) Plan of Distribution (Gamma New York 9
Money).
(gg) Plan of Distribution (Delta Money). 9
(hh) Plan of Distribution (Delta Tax-Free 9
Money).
(ii) Plan of Distribution (Delta Government 9
Money).
(jj) Plan of Distribution (Delta New York 9
Money).
(kk) Plan of Distribution (Epsilon Money). 9
(ll) Plan of Distribution (Epsilon Tax-Free 9
Money).
(mm) Plan of Distribution (Epsilon Government 9
Money).
(nn) Plan of Distribution (Epsilon New York 9
Money).
(oo) Plan of Distribution (Zeta Money). 9
(pp) Plan of Distribution (Zeta Tax-Free 9
Money).
(qq) Plan of Distribution (Zeta Government 9
Money).
15
<PAGE>
See Note #
----------
(rr) Plan of Distribution (Zeta New York 9
Money).
(ss) Plan of Distribution (Eta Money). 9
(tt) Plan of Distribution (Eta Tax-Free Money). 9
(uu) Plan of Distribution (Eta Government 9
Money).
(vv) Plan of Distribution (Eta New York 9
Money).
(ww) Plan of Distribution (Theta Money). 9
(xx) Plan of Distribution (Theta Tax-Free 9
Money).
(yy) Plan of Distribution (Theta Government 9
Money).
(zz) Plan of Distribution (Theta New York 9
Money).
(aaa) Plan of Distribution (Laffer Equity). 12
(bbb) Plan Distribution (Warburg Pincus Growth 18
& Income Series 2).
(ccc) Plan of Distribution (Warburg Pincus 18
Balanced Series 2).
(16) Schedule of Computation of Performance 3
Quotations.
(17) None.
(18) Rule 18f-3 Plan.
16
<PAGE>
_________________
Note #
- ------
1 Incorporated herein by reference to the same exhibit number of
Registrant's Registration Statement (No. 33-20827) filed on March 24,
1988.
2 Incorporated herein by reference to the same exhibit number of
Pre-Effective Amendment No. 2 to Registrant's Registration Statement (No.
33-20827) filed on July 12, 1988.
3 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 1 to Registrant's Registration Statement (No.
33-20827) filed on March 23, 1989.
4 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 2 to Registrant's Registration Statement (No.
33-20827) filed on October 25, 1989.
5 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 3 to the Registrant's Registration Statement
(No. 33-20827) filed on April 27, 1990.
6 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 4 to the Registrant's Registration Statement
(No. 33-20827) filed on May 1, 1990.
7 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 5 to the Registrant's Registration Statement
(No. 33-20827) filed on December 14, 1990.
8 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 6 to the Registrant's Registration Statement
(No. 33-20827) filed on October 24, 1991.
9 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 7 to the Registrant's Registration Statement
(No. 33-20827) filed on July 15, 1992.
10 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 8 to the Registrant's Registration Statement
(No. 33-20827) filed on October 22, 1992.
11 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 9 to the Registrant's Registration Statement
(No. 33-20827) filed on December 16, 1992.
12 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 11 to the Registrant's Registrant Statement
(No. 33-20827) filed on June 21, 1993.
17
<PAGE>
13 Incorporated herein by reference to the same exhibit number Post-Effective
Amendment No. 12 to the Registrant's Registration Statement (No. 33-20827)
filed on July 27, 1993.
14 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 13 to the Registrant's Registration Statement
(No. 33-20827) filed on October 29, 1993.
15 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 14 to the Registrant's Registration Statement
No. 33-20827 filed on December 21, 1993.
16 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 19 to the Registrant's Registration Statement
(No. 33-20827) filed on October 14, 1994.
17 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 20 to the Registrant's Registration Statement
No. 33-20827 filed on October 21, 1994.
18 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 21 to the Registrant's Registration Statement
No. 33-20827 filed on October 28, 1994.
19 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 22 to the Registrant's Registration Statement
No. 33-20827 filed on December 19, 1994.
20 Incorporated hereby by reference to the same exhibit number of
Post-Effective Amendment No. 27 to the Registrant's Registration Statement
No. 33-20827 filed on March 31, 1995.
Item 25. Persons Controlled by or under Common Control with Registrant
-------------------------------------------------------------
None.
Item 26. Number of Holders of Securities
-------------------------------
The following information is given as of September 30, 1995.
Title of Class of Common Stock Number of Record Holders
------------------------------ ------------------------
a) Warburg Pincus Growth & Income
b) Warburg Pincus Balanced
c) Warburg Pincus Tax-Free
d) RBB Money Market 12
e) RBB Municipal Money Market 2
f) Cash Preservation Money Market 37
g) Cash Preservation Municipal Money Market 74
h) Sansom Street Money Market 3
i) Sansom Street Municipal Money Market 0
18
<PAGE>
j) Sansom Street Government Obligations 0
Money Market
k) Bedford Money Market 87,305
l) Bedford Municipal Money Market 4,488
m) Bedford Government Obligations Money 3,675
Market
n) Bedford New York Municipal Money Market 2,819
o) RBB Government Securities 661
p) Bradford Municipal Money Market 3,318
q) Bradford Government Obligations Money 1,811
Market
r) BEA International Equity 177
s) BEA Strategic Fixed Income 42
t) BEA Emerging Markets Equity 45
u) BEA U.S. Core Equity 30
v) BEA U.S. Core Fixed Income 28
w) BEA U.S. Global Fixed Income 1
x) BEA Municipal Bond fund 33
y) BEA Short Duration 0
z) BEA Balanced 0
(aa) Janney Montgomery Scott 1
Money Market
(bb) Janney Montgomery Scott 1
Municipal Money Market
(cc) Janney Montgomery Scott 1
Government Obligations
Money Market
(dd) Janney Montgomery Scott 1
New York Municipal
Money Market
Item 27. Indemnification
---------------
Sections 1, 2, 3 and 4 of Article VIII of Registrant's Articles of
Incorporation, as amended, incorporated herein by reference as Exhibits 1(a)
and 1(c), provide as follows:
Section 1. To the fullest extent that limitations on the
liability of directors and officers are permitted by the Maryland
General Corporation Law, no director or officer of the Corporation
shall have any liability to the Corporation or its shareholders for
damages. This limitation on liability applies to events occurring at
the time a person serves as a director or officer of the Corporation
whether or not such person is a director or officer at the time of
any proceeding in which liability is asserted.
Section 2. The Corporation shall indemnify and advance expenses
to its currently acting and its former directors to the fullest
extent that indemnification of directors is permitted by the Maryland
General Corporation Law. The Corporation shall indemnify and advance
expenses to its officers to the same extent as its directors and to
such further extent as is consistent with law. The Board of
Directors may by By-law, resolution or agreement make further
provision for indemnification of directors, officers, employees and
agents to the fullest extent permitted by the Maryland General
Corporation Law.
Section 3. No provision of this Article shall be effective to
protect or purport to protect any director or officer of the
19
<PAGE>
Corporation against any liability to the Corporation or its security
holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Section 4. References to the Maryland General Corporation Law
in this Article are to the law as from time to time amended. No
further amendment to the Articles of Incorporation of the Corporation
shall decrease, but may expand, any right of any person under this
Article based on any event, omission or proceeding prior to such
amendment.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------
Information as to any other business, profession, vocation or
employment of a substantial nature in which any directors and officers of PIMC,
BEA, and Warburg are, or at any time during the past two (2) years have been,
engaged for their own accounts or in the capacity of director, officer,
employee, partner or trustee is incorporated herein by reference to Schedules A
and D of PIMC's Form ADV (File No. 801-13304) filed on March 28, 1993,
Schedules B and D of BEA's Form ADV (File No. 801-37170) filed on March 30,
1993, and Schedules A and D of Warburg's Form ADV (File No. 801-07321) filed
on August 28, 1992, respectively.
There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
director or officer of PNC Bank, National Association (successor by merger to
Provident National Bank) ("PNC Bank"), is, or at any time during the past two
years has been, engaged for his own account or in the capacity of director,
officer, employee, partner or trustee.
20
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
Directors and Officers
To the knowledge of Registrant, none of the directors or officers of
PNC except those set forth below, is or has been, at any time during the past
two years, engaged in any other business, profession, vocation or employment of
a substantial nature, except that certain directors and officers of PNC Bank
also hold various positions with, and engage in business for, PNC Bank Corp.
(formerly PNC Financial Corp), which owns all the outstanding stock of PNC
Bank, or other subsidiaries of PNC Bank Corp. Set forth below are the names
and principal businesses of the directors and certain of the senior executive
officers of PNC Bank who are engaged in any other business, profession,
vocation or employment of substantial nature.
21
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
Position with
PNC Bank,
National Other Business Type of
Association Name Connections Business
- -------------- ---- -------------- --------
Director B.R. Brown President and C.E.O. of Coal
Consol, Inc.
Pittsburgh, PA (22)
Director Constance E. Clayton Superintendent of Schools Educator
The School District of
Philadelphia
Philadelphia, PA (23)
Director F. Eugene Dixon, Jr. Private Trustee Trustee
Lafayette Hill, PA (24)
Director A. James Freeman Vice Chairman and C.E.O. Manufacturing
Lord Corporation
Erie, PA (25)
Director Banking
Marine Bank
Erie, PA (26)
Director Dr. Stuart Heydt President and C.E.O. Medical
Geisinger Foundation
Danville, PA (27)
Director Edward P. Junker, III Chairman and C.E.O. Banking
Marine Bank
Erie, PA (26)
Director Thomas A. McConomy President, C.E.O. and Manufacturing
Chairman, Calgon Carbon
Corporation
Pittsburgh, PA (28)
Director Robert C. Milsom Retired
Pittsburgh, PA*
Director Thomas H. O'Brien Chairman and C.E.O. Bank Holding
PNC Bank Corp. (14)
Director Dr. J. Dennis O'Connor Chancellor Education
University of Pittsburgh
Pittsburgh, PA (29)
22
<PAGE>
Position with
PNC Bank,
National Other Business Type of
Association Name Connections Business
- -------------- ---- -------------- --------
Director Rocco A. Ortenzio Chairman and C.E.O. Medical
Continental Medical Systems,
Inc.
Mechanicsburg, PA (30)
Director Robert C. Robb, Jr. Partner Financial and
Lewis, Eckert, Robb & Management
Company Consultants
Plymouth Meeting, PA (31)
Director Daniel M. Rooney President, Pittsburgh Football
Steelers Football Club
of the National Football
League
Pittsburgh, PA (32)
Director Seth E. Schofield Chairman, President and Airline
C.E.O.
USAir Group, Inc. and
USAir, Inc.
Arlington, VA (33)
Director Robert M. Valentini President and C.E.O. Bell of Communica-
Pennsylvania and Chairman tions
Network Policy Council of Bell
Atlantic Corporation
Philadelphia, PA (34)
President and James E. Rohr President Bank
Chief Executive PNC Bank Corp. Holding
Officer (14) Company
President and Bruce E. Robbins None.
Chief Executive
Officer of PNC
Bank, National
Association,
Pittsburgh
Senior Executive Edward V. Randall, Jr. None.
Vice President
Executive J. Richard Carnall Director Banking
Vice President PNC National Bank (2)
Chairman and Director Financial-
PFPC Inc. (3) Related
Services
23
<PAGE>
Position with
PNC Bank,
National Other Business Type of
Association Name Connections Business
- -------------- ---- -------------- --------
Director
PNC Trust Company Fiduciary
of New York (11) Activities
Director Equipment
Hayden Bolts, Inc.* Leasing
Director, Real Estate
Parkway Real Estate
Company*
Director Investment
Provident Capital Advisory
Management, Inc. (5)
Director Investment
Advanced Investment Advisory
Management, Inc. (15)
Executive Richard C. Caldwell Director Banking
Vice President PNC National Bank (2)
Director Investment
Provident Capital Advisory
Management, Inc. (5)
Director Fiduciary
PNC Trust Company Activities
of New York (11)
Executive Vice President Bank Holding
PNC Bank Corp. (14) Company
Director Investment
Advanced Investment Advisory
Management, Inc. (15)
Director Banking
PNC Bank, New Jersey,
New Jersey, National
Association (16)
Director Financial-
PFPC Inc. (3) Related
Services
Executive Vice Herbert G. None.
President Summerfield, Jr.
24
<PAGE>
Position with
PNC Bank,
National Other Business Type of
Association Name Connections Business
- -------------- ---- -------------- --------
Executive Vice Joe R. Irwin None.
President
President and Richard L. Smoot Senior Vice President Banking
Chief Executive Operations
Officer of PNC PNC Bank Corp. (20)
Bank, National
Association, Director Fiduciary
Philadelphia PNC Trust Company of Activities
New York (11)
Director Investment
PNC Institutional Advisory
Management Corporation (28)
Director Financial
PFPC Inc. (3) Related
Services
Executive Vice W. Herbert Crowder, III None.
President
Executive Vice Walter L. West None.
President
Senior Vice George Lula None.
President
Secretary William F. Strome Director International
PNC Bank International Banking
(35) Services
Managing General Counsel Bank Holding
and Senior Vice President Company
PNC Bank Corp.
Senior Vice James P. Conley None.
President/
Credit Policy
____________________
* For more information, contact William F. Strome, PNC Bank, National
Association, Broad and Chestnut Streets, Philadelphia, PA 19101.
(1) PNC Bank, National Association, 120 S. 17th Street, Philadelphia, PA
19103.
(2) PNC National Bank, 103 Bellevue Parkway, Wilmington, DE 19809.
(3) PFPC Inc., 400 Bellevue Parkway, Wilmington, DE 19809.
25
<PAGE>
(4) PNC Service Corp, 103 Bellevue Parkway, Wilmington, DE 19809.
(5) Provident Capital Management, Inc., 30 S. 17th Street, Site 1500,
Philadelphia, PA 19103.
(6) PNC National Investment Corporation, Broad and Chestnut Streets,
Philadelphia, PA 19101.
(7) Provident Realty Management, Inc., Broad and Chestnut Streets,
Philadelphia, PA 19101.
(8) Provident Realty, Inc., Broad and Chestnut Streets, Philadelphia, PA
19101.
(9) PNC Bancorp, Inc. 3411 Silverside Park, Wilmington, DE 19810
(10) PNC New Jersey Credit Corp, 1415 Route 70 East, Suite 604, Cherry
Hill, NJ 08034.
(11) PNC Trust Company of New York, 40 Broad Street, New York, NY 10084.
(12) Provcor Properties, Inc., Broad and Chestnut Streets, Philadelphia, PA
19101.
(13) PNC Credit Corp, 103 Bellevue Parkway, Wilmington, DE 19809.
(14) PNC Bank Corp., 5th Avenue and Wood Streets, Pittsburgh, PA 15265.
(15) Advanced Investment Management, Inc., 27th Floor, One Oliver Plaza,
Pittsburgh, PA 15265.
(16) PNC Bank of New Jersey, National Association, Woodland Falls Corporate
Park, 210 Lake Drive East, Cherry Hill, NJ 08002.
(17) PNC Institutional Management Corporation, 400 Bellevue Parkway,
Wilmington, DE 19809.
(18) Provident National Leasing Corporation, Broad and Chestnut Streets,
Philadelphia, PA 19101
(19) Provident National Bank Corp. New Jersey, 1 Centennial Square,
Haddonfield, NJ 08033
(20) The Clayton Bank and Trust Company, Clayton, DE 19938
(21) Keystone Life Insurance Company, 1207 Chestnut Street, Philadelphia,
PA 19107-4101
(22) Consol, Inc., Consol Plaza, Pittsburgh, PA 15241
(23) School District of Philadelphia, 21 Street and The Parkway,
Philadelphia, PA 19103-1099
(24) F. Eugene Dixon, Jr., Private Trustee, 665 Thomas Road, Lafayette
Hill, PA 19444-0178
(25) Lord Corporation, 2000 W. Grandview Boulevard, Erie, PA 16514
(26) Marine Bank, Ninth and State Streets, Erie, PA 16553
(27) Geisinger Foundation, 100 N. Academy Avenue, Danville, PA 17822
(28) Calgon Carbon Corporation, P.O. Box 717, Pittsburgh, PA 15230-0717
(29) University of Pittsburgh, 107 Cathedral of Learning, Pittsburgh, PA
15260
(30) Continental Medical Systems, Inc., P.O. Box 715, Mechanicsburg, PA
17055
(31) Lewis, Eckert, Robb & Company, 425 One Plymouth Meeting, Plymouth
Meeting, PA 19462
(32) Football Club of the National Football League, 300 Stadium Circle,
Pittsburgh, PA 15212
(33) USAir Group, Inc. and USAir, Inc., 2345 Crystal Drive, Arlington, VA
22227
(34) Bell of Pennsylvania, One Parkway, Philadelphia, PA 19102
(35) PNC Bank International, 5th and Wood Streets, Pittsburgh, PA 15222
26
<PAGE>
Item 29. Principal Underwriter
---------------------
(a) Counsellors Securities Inc. (the "Distributor") acts as
distributor for the following investment companies:
Warburg, Pincus Cash Reserve Fund
Warburg, Pincus New York Tax Exempt Fund
Warburg, Pincus New York Municipal Bond Fund
Warburg, Pincus Intermediate Maturity Government Fund
Warburg, Pincus Fixed Income Fund
Warburg, Pincus Global Fixed Income Fund
Warburg, Pincus Capital Appreciation Fund
Warburg, Pincus Emerging Growth Fund
Warburg, Pincus International Equity Fund
Warburg, Pincus Japan OTC Fund
Counsellors Tandem Securities Fund
Warburg Pincus Growth & Income Fund
Warburg Pincus Balanced Fund
Warburg Pincus Tax Free Fund
The Distributor acts as a principal underwriter, depositor or investment
adviser for the following investment companies: None other than Registrant and
companies listed above.
(b) Information for each director or officer of the Distributor
is set forth below:
Name and Principal Positions and Offices Positions and Offices
Business Address with the Distributor with Registrant
- ------------------ --------------------- ------------------
John L. Vogelstein Director
466 Lexington Avenue
New York, New York 10017
Lionel I. Pincus Director
466 Lexington Avenue
New York, New York 10017
Reuben S. Leibowitz Director,
466 Lexington Avenue President and Chief
New York, New York 10017 Financial Officer
John L. Furth Director
466 Lexington Avenue
New York, New York 10017
Arnold M. Reichman Vice President, Director
466 Lexington Avenue Secretary and
New York, New York 10017 Chief Operating Officer
Roger Reinlieb Vice President
27
<PAGE>
466 Lexington Avenue
New York, New York 10017
Karen Amato Assistant Secretary
466 Lexington Avenue
New York, New York 10017
Stephen Distler Treasurer
466 Lexington Avenue
New York, New York 10017
(c) Information as to commissions and other compensation
received by the principal underwriter is set forth below.
Net
Name of Underwriting Compensation
Principal Discounts and on Redemption Brokerage Other
Underwriter Commissions and Repurchase Commissions Compensation
- ----------- ------------- -------------- ----------- ------------
Counsellors $ 0 $ 0 $ 0 $ 0
Securities
Inc.
Item 30. Location of Accounts and Records
--------------------------------
(1) PNC Bank, National Association (successor by merger to
Provident National Bank), Broad and Chestnut Street,
Philadelphia, PA 19101 (records relating to its functions as
sub-adviser and custodian).
(2) Counsellors Securities Inc., 466 Lexington Avenue, New York,
New York 10017 (records relating to its functions as
distributor).
(3) PNC Institutional Management Corporation (formerly Provident
Institutional Management Corporation), Bellevue Corporate
Center, 103 Bellevue Parkway, Wilmington, Delaware 19809
(records relating to its functions as investment adviser,
sub-adviser and administrator).
(4) PFPC Inc. (formerly Provident Financial Processing
Corporation), Bellevue Corporate Center, 400 Bellevue
Parkway, Wilmington, Delaware 19809 (records relating to its
functions as transfer agent and dividend disbursing agent).
(5) Ballard Spahr Andrews & Ingersoll, 1735 Market Street - 51st
Floor, Philadelphia, Pennsylvania 19103 (Registrant's
Articles of Incorporation, By-Laws and Minute Books).
28
<PAGE>
(6) BEA Associates, One Citicorp Center, 153 East 53rd Street,
New York, New York 10022 (records relating to its function
as investment adviser).
(7) Laffer Advisors Incorporated, 4275 Executive Square #330, La
Jolla, California 92037 (records relating to its function as
investment adviser).
(8) Warburg, Pincus Counsellors, Inc., 466 Lexington Avenue, New
York, New York 10017-3147.
Item 31. Management Services
-------------------
None.
Item 32. Undertakings
------------
(a) Registrant hereby undertakes to hold a meeting of
shareholders for the purpose of considering the removal
of directors in the event the requisite number of
shareholders so request.
29
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Wilmington, and State of Delaware, on October 2, 1995.
THE RBB FUND, INC.
By: /s/ Edward J. Roach
------------------------
Edward J. Roach
President and
Treasurer
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment to Registrant's Registration Statement has
been signed below by the following persons in the capacities and on the
date indicated.
Signature Title Date
--------- ----- ----
/s/ Edward J. Roach President (Principal October 2, 1995
- ---------------------- Executive Officer) and
Edward J. Roach Treasurer (Principal
Financial and Accounting
Officer)
/s/ Donald van Roden Director October 2, 1995
- -----------------------
Donald van Roden
/s/ Francis J. McKay Director October 2, 1995
- -----------------------
Francis J. McKay
/s/ Marvin E. Sternberg Director October 2, 1995
- -----------------------
Marvin E. Sternberg
/s/ Julian A. Brodsky Director October 2, 1995
- -----------------------
Julian A. Brodsky
/s/ Arnold M. Reichman Director October 2, 1995
- -----------------------
Arnold M. Reichman
/s/ Robert Sablowsky Director October 2, 1995
- -----------------------
Robert Sablowsky
<PAGE>
THE RBB FUND, INC.
RBB CLASSES
WARBURG PINCUS CLASSES
WARBURG PINCUS SERIES 2 CLASSES
CASH PRESERVATION CLASSES
SANSOM STREET CLASSES
BEDFORD CLASSES
BRADFORD CLASSES
BEA CLASSES
JANNEY (ALPHA) CLASSES
BETA CLASSES
GAMMA CLASSES
DELTA CLASSES
EPSILON CLASSES
ZETA CLASSES
ETA CLASSES
THETA CLASSES
EXHIBIT INDEX
-------------
Exhibit Page See Note #
- ------- ---- ----------
(1)(a) Articles of Incorporation of 1
Registrant.
(b) Articles Supplementary of 1
Registrant.
(c) Articles of Amendment to Articles 2
of Incorporation of Registrant.
(d) Articles Supplementary of 2
Registrant.
(e) Articles Supplementary of 5
Registrant.
(f) Articles Supplementary of 6
Registrant.
(g) Articles Supplementary of 9
Registrant.
(h) Articles Supplementary of 10
Registrant.
(i) Articles Supplementary of 14
Registrant.
(j) Articles Supplementary of 14
Registrant.
(k) Articles Supplementary of 19
Registrant.
(l) Articles Supplementary of 19
Registrant.
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(m) Articles Supplementary of 19
Registrant.
(n) Articles Supplementary of 19
Registrant.
(o) Articles Supplementary of 20
Registrant
(2) Amended By-Laws adopted August 16, 3
1988.
(a) Amendment to By-Laws adopted July 25, 4
1989.
(b) By-Laws amended through October 24, 5
1989.
(3) None.
(4) Specimen Certificates
(a) SafeGuard Equity Growth and 3
Income Shares
(b) SafeGuard Fixed Income Shares 3
(c) SafeGuard Balanced Shares 3
(d) SafeGuard Tax-Free Shares 3
(e) SafeGuard Money Market Shares 3
(f) SafeGuard Tax-Free Money Market 3
Shares
(g) Cash Preservation Money Market 3
Shares
(h) Cash Preservation Tax-Free Money 3
Market Shares
(i) Sansom Street Money Market Shares 3
(j) Sansom Street Tax-Free Money 3
Market Shares
(k) Sansom Street Government 3
Obligations Money
(l) Bedford Money Market Shares 3
(m) Bedford Tax-Free Money Market 3
Shares
(n) Bedford Government Obligations 3
Money Market Shares
(o) Bedford New York Municipal Money 5
Market Shares
33
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(p) SafeGuard Government Securities 5
Shares
(q) Income Opportunities High Yield 6
Bond Shares
(r) Bradford Tax-Free Money Market 8
Shares
(s) Bradford Government Obligations 8
Money Market Shares
(t) Alpha 1 Money Market Shares 8
(u) Alpha 2 Tax-Free Money Market 8
Shares
(v) Alpha 3 Government Obligations 8
Money Market Shares
(w) Alpha 4 New York Municipal Money 8
Market Shares
(x) Beta 1 Money Market Shares 8
(y) Beta 2 Tax-Free Money Market 8
Shares
(z) Beta 3 Government Obligations 8
Money Market Shares
(aa) Beta 4 New York Municipal Money 8
Market Shares
(bb) Gamma 1 Money Market Shares 8
(cc) Gamma 2 Tax-Free Money Market 8
Shares
(dd) Gamma 3 Government Obligations 8
Money Market Shares
(ee) Gamma 4 New York Municipal Money 8
Market Shares
(ff) Delta 1 Money Market Shares 8
(gg) Delta 2 Tax-Free Money Market 8
Shares
(hh) Delta 3 Government Obligations 8
Money Market Shares
(ii) Delta 4 New York Municipal Money 8
Market Shares
(jj) Epsilon 1 Money Market Shares 8
34
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(kk) Epsilon 2 Tax-Free Money Market 8
Shares
(ll) Epsilon 3 Government Obligations 8
Money Market Shares
(mm) Epsilon 4 New York Municipal 8
Money Market Shares
(nn) Zeta 1 Money Market Shares 8
(oo) Zeta 2 Tax-Free Money Market 8
Shares
(pp) Zeta 3 Government Obligations 8
Money Market Shares
(qq) Zeta 4 New York Municipal Money 8
Market Shares
(rr) Eta 1 Money Market Shares 8
(ss) Eta 2 Tax-Free Money Market 8
Shares
(tt) Eta 3 Government Obligations 8
Money Market Shares
(uu) Eta 4 New York Municipal Money 8
Market Shares
(vv) Theta 1 Money Market Shares 8
(ww) Theta 2 Tax-Free Money Market 8
Shares
(xx) Theta 3 Government Obligations 8
Money Market Shares
(yy) Theta 4 New York Municipal Money 8
Market Shares
(zz) BEA International Equity Shares 9
(a1) BEA Strategic Fixed Income Shares 9
(a2) BEA Emerging Markets Equity 9
Shares
(a3) Laffer/Canto Equity Shares 12
(a4) BEA U.S. Core Equity Shares 13
(a5) BEA U.S. Core Fixed Income Shares 13
(a6) BEA Global Fixed Income Shares 13
35
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(a7) BEA Municipal Bond Fund Shares 13
(a8) BEA Balanced Shares 16
(a9) BEA Short Duration Shares 16
(a10) Warburg Growth & Income Shares 18
(a11) Warburg Balanced Shares 18
(5) (a) Investment Advisory Agreement 3
(Money) between Registrant and
Provident Institutional
Management Corporation, dated as
of August 16, 1988.
(b) Sub-Advisory Agreement (Money) 3
between Provident Institutional
Management Corporation and
Provident National Bank, dated as
of August 16, 1988.
(c) Investment Advisory Agreement 3
(Tax-Free Money) between
Registrant and Provident
Institutional Management
Corporation, dated as of
August 16, 1988.
(d) Sub-Advisory Agreement (Tax-Free 3
Money) between Provident
Institutional Management
Corporation and Provident
National Bank, dated as of
August 16, 1988.
(e) Investment Advisory Agreement 3
(Government Money) between
Registrant and Provident
Institutional Management
Corporation, dated as of
August 16, 1988.
(f) Sub-Advisory Agreement 3
(Government Money) between
Provident Institutional
Management Corporation and
Provident National Bank, dated as
of August 16, 1988.
(k) Investment Advisory Agreement 3
(Balanced) between Registrant and
Provident Institutional
Management Corporation, dated as
of August 16, 1988.
36
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(l) Sub-Advisory Agreement (Balanced) 3
between Provident Institutional
Management Corporation and
Provident National Bank, dated as
of August 16, 1988.
(m) Investment Advisory Agreement 3
(Tax-Free) between Registrant and
Provident Institutional
Management Corporation, dated as
of August 16, 1988.
(n) Sub-Advisory Agreement (Tax-Free) 3
between Provident Institutional
Management Corporation and
Provident National Bank, dated as
of August 16, 1988.
(s) Investment Advisory Agreement 8
(Government Securities) between
Registrant and Provident
Institutional Management
Corporation dated as of April 8,
1991.
(t) Investment Advisory Agreement 8
(High Yield Bond) between
Registrant and Provident
Institutional Management
Corporation dated as of April 8,
1991.
(u) Sub-Advisory Agreement (High 8
Yield Bond) between Registrant
and Warburg, Pincus Counsellors,
Inc. dated as of April 8, 1991.
(v) Investment Advisory Agreement 9
(New York Municipal Money Market)
between Registrant and Provident
Institutional Management
Corporation dated November 5,
1991.
(w) Investment Advisory Agreement 10
(Equity) between Registrant and
Provident Institutional
Management Corporation dated
November 5, 1991.
(x) Sub-Advisory Agreement (Equity) 10
between Registrant, Provident
Institutional Management
Corporation and Warburg, Pincus
Counsellors, Inc. dated November
5, 1991.
37
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(y) Investment Advisory Agreement 10
(Tax-Free Money Market) between
Registrant and Provident
Institutional Management
Corporation dated April 21, 1992.
(z) Investment Advisory Agreement 11
(BEA International Equity
Portfolio) between Registrant and
BEA Associates.
(aa) Investment Advisory Agreement 11
(BEA Strategic Fixed Income
Portfolio) between Registrant and
BEA Associates.
(bb) Investment Advisory Agreement 11
(BEA Emerging Markets Equity
Portfolio) between Registrant and
BEA Associates.
(cc) Investment Advisory Agreement 14
(Laffer/Canto Equity Portfolio)
between Registrant and Laffer
Advisors, Incorporated, dated as
of July 21, 1993.
(dd) Sub-Advisory Agreement 12
(Laffer/Canto Portfolio) between
PNC Institutional Management
Corporation and Laffer Advisors,
Incorporated, dated as of July
21, 1993.
(ee) Investment Advisory Agreement 15
(BEA U.S. Core Equity Portfolio)
between Registrant and BEA
Associates, dated as of
October 27, 1993.
(ff) Investment Advisory Agreement 15
(BEA U.S. Core Fixed Income
Portfolio) between Registrant and
BEA Associates, dated as of
October 27, 1993.
(gg) Investment Advisory Agreement 15
(BEA Global Fixed Income
Portfolio) between Registrant and
BEA Associates, dated as of
October 27 1993.
(hh) Investment Advisory Agreement 15
(BEA Municipal Bond Fund
Portfolio) between Registrant and
BEA Associates, dated as of
October 27, 1993.
38
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(ii) Investment Advisory Agreement 14
(Warburg Pincus Growth & Income
Fund) between Registrant and
Warburg, Pincus Counsellors, Inc.
(jj) Form of Investment Advisory 16
Agreement (Warburg Pincus
Balanced Fund) between Registrant
and Warburg, Pincus Counsellors,
Inc.
(kk) Form of Investment Advisory 16
Agreement (BEA Balanced) between
Registrant and BEA Associates.
(ll) Form of Investment Advisory 16
Agreement (BEA Short Duration)
between Registrant and BEA
Associates.
(mm) Investment Advisory Agreement
(Warburg Pincus Tax Free Fund)
between Registrant and Warburg,
Pincus Counsellors, Inc.
(6) (r) Distribution Agreement and 8
Supplements (Classes A through Q)
between the Registrant and
Counsellors Securities Inc. dated
as of April 10, 1991.
(s) Distribution Agreement Supplement 9
(Classes L, M, N and O) between
the Registrant and Counsellors
Securities Inc. dated as of
November 5, 1991.
(t) Distribution Agreement 9
Supplements (Classes R, S, and
Alpha 1 through Theta 4) between
the Registrant and Counsellors
Securities Inc. dated as of
November 5, 1991.
(u) Distribution Agreement Supplement 10
(Classes T, U and V) between the
Registrant and Counsellors
Securities Inc. dated as of
September 18, 1992.
(v) Distribution Agreement Supplement 14
(Class W) between the Registrant
and Counsellors Securities Inc.
dated as of July 21, 1993.
39
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(w) Distribution Agreement Supplement 14
(Classes X, Y, Z and AA) between
the Registrant and Counsellors
Securities Inc.
(x) Distribution Agreement Supplement 18
(Classes BB and CC) between
Registrant and Counsellors
Securities Inc. dated as of
October 26, 1994.
(y) Distribution Agreement Supplement 18
(Classes DD and EE) between
Registrant and Counsellors
Securities Inc. dated as of
October 26, 1994.
(z) Form of Distribution Agreement 19
Supplement (Classes L, M, N, and
O) between the Registrant and
Counselor's Securities Inc.
(aa) Form of Distribution Agreement 19
Supplement (Classes R and S)
between the Registrant and
Counselor's Securities Inc.
(bb) Distribution Agreement 19
Supplements (Classes Alpha 1
through Theta 4) between
Registrant and Counsellor's
Securities Inc.)
(cc) Distribution Agreement 20
Supplement, Janney Classes (Alpha
1, Alpha 2, Alpha 3 and Alpha 4)
between Registrant and
Counsellor's Securities Inc.
(7) Fund Office Retirement 7
Profit-Sharing and Trust
Agreement, dated as of October
24, 1990.
(8) (a) Custodian Agreement between 3
Registrant and Provident National
Bank dated as of August 16, 1988.
(b) Sub-Custodian Agreement among The 10
Chase Manhattan Bank, N.A., the
Registrant and Provident National
Bank, dated as of July 13, 1992,
relating to custody of
Registrant's foreign securities.
(e) Amendment No. 1 to Custodian 9
Agreement dated August 16, 1988.
40
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(f) Agreement between Brown Brothers 10
Harriman & Co. and Registrant on
behalf of BEA International
Equity Portfolio, dated September
18, 1992.
(g) Agreement between Brown Brothers 10
Harriman & Co. and Registrant on
behalf of BEA Strategic Fixed
Income Portfolio, dated September
18, 1992.
(h) Agreement between Brown Brothers 10
Harriman & Co. and Registrant on
behalf of BEA Emerging Markets
Equity Portfolio, dated September
18, 1992.
(i) Agreement between Brown Brothers 15
Harriman & Co. and Registrant on
behalf of BEA International
Equity, BEA Emerging Markets, BEA
Strategic Fixed Income and BEA
Global Fixed Income Portfolio,
dated as of November 29, 1993.
(j) Agreement between Brown Brothers 15
Harriman & Co. and Registrant on
behalf of BEA U.S. Core Equity
and BEA U.S. Core Fixed Income
Portfolios, dated as of
November 29, 1993.
(k) Custodian Contract between 18
Registrant and State Street Bank
and Trust Company.
(9) (a) Transfer Agency Agreement (Sansom 3
Street) between Registrant and
Provident Financial Processing
Corporation, dated as of
August 16, 1988.
(b) Transfer Agency Agreement (Cash 3
Preservation) between Registrant
and Provident Financial
Processing Corporation, dated as
of August 16, 1988.
(c) Shareholder Servicing Agreement 3
(Sansom Street Money).
(d) Shareholder Servicing Agreement 3
(Sansom Street Tax-Free Money).
41
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(e) Shareholder Servicing Agreement 3
(Sansom Street Government Money).
(f) Shareholder Services Plan (Sansom 3
Street Money).
(g) Shareholder Services Plan (Sansom 3
Street Tax-Free Money).
(h) Shareholder Services Plan (Sansom 3
Street Government Money).
(i) Transfer Agency Agreement 3
(SafeGuard) between Registrant
and Provident Financial
Processing Corporation, dated as
of August 16, 1988.
(j) Transfer Agency Agreement 3
(Bedford) between Registrant and
Provident Financial Processing
Corporation, dated as of
August 16, 1988.
(k) Transfer Agency Agreement (Income 7
Opportunities) between Registrant
and Provident Financial
Processing Corporation dated
June 25, 1990.
(l) Administration and Accounting 8
Services Agreement between
Registrant and Provident
Financial Processing Corporation,
relating to Government Securities
Portfolio, dated as of April 10,
1991.
(m) Administration and Accounting 9
Services Agreement between
Registrant and Provident
Financial Processing Corporation,
relating to New York Municipal
Money Market Portfolio dated as
of November 5, 1991.
(n) Administration and Accounting 9
Services Agreement between
Registrant and Provident
Financial Processing Corporation,
relating to Equity Portfolio
dated as of November 5, 1991.
42
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(o) Administration and Accounting 9
Services Agreement between
Registrant and Provident
Financial Processing Corporation,
relating to High Yield Bond
Portfolio, dated as of April 10,
1991.
(p) Administration and Accounting 10
Services Agreement between
Registrant and Provident
Financial Processing Corporation
(International) dated as of
September 18, 1992.
(q) Administration and Accounting 10
Services Agreement between
Registrant and Provident
Financial Processing Corporation
(Strategic) dated September 18,
1992.
(r) Administration and Accounting 10
Services Agreement between
Registrant and Provident
Financial Processing Corporation
(Emerging) dated September 18,
1992.
(s) Transfer Agency Agreement and 9
Supplements (Bradford, Alpha,
Beta, Gamma, Delta, Epsilon,
Zeta, Eta and Theta) between
Registrant and Provident
Financial Processing Corporation
dated as of November 5, 1991.
(t) Transfer Agency Agreement 10
Supplement (BEA) between
Registrant and Provident
Financial Processing Corporation.
(u) Administration Services Agreement 10
between Registrant and
Counsellor's Fund Services, Inc.
(BEA Portfolios) dated September
18, 1992.
(v) Administration and Accounting 10
Services Agreement between
Registrant and Provident
Financial Processing Corporation,
relating to Tax-Free Money Market
Portfolio, dated as of April 21,
1992.
43
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(w) Transfer Agency Agreement 12
Supplement (Laffer) between
Registrant and PFPC Inc. dated as
of July 21, 1993.
(x) Administration and Accounting 12
Services Agreement between
Registrant and PFPC Inc.,
relating to Laffer/Canto Equity
Fund, dated July 21, 1993.
(y) Transfer Agency Agreement 15
Supplemental (BEA U.S. Core
Equity, BEA U.S. Core Fixed
Income, BEA Global Fixed Income
and BEA Municipal Bond Fund)
between Registrant and PFPC Inc.
dated as of October 27, 1993.
(z) Administration and Accounting 15
Services Agreement between
Registrant and PFPC Inc., (Core
Equity) dated October 27, 1993.
(aa) Administration and Accounting 15
Services Agreement between
Registrant and PFPC Inc. (Core
Fixed Income) dated October 27,
1993.
(bb) Administration and Accounting 15
Services Agreement between
Registrant and PFPC Inc.
(International Fixed Income)
dated October 27, 1993.
(cc) Administration and Accounting 15
Services Agreement between
Registrant and PFPC Inc. dated
October 27, 1993.
(dd) Transfer Agency Agreement 18
Supplement (BEA Balanced and
Short Duration) between
Registrant and PFPC Inc. dated
October 26, 1994.
(ee) Administration and Accounting 18
Services Agreement between
Registrant and PFPC Inc. (BEA
Balanced) dated October 26, 1994.
(ff) Administration and Accounting 18
Services Agreement between
Registrant and PFPC Inc. (BEA
Short Duration) dated October 26,
1994.
44
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(gg) Co-Administration Agreement 18
between Registrant and PFPC Inc.
(Warburg Pincus Growth & Income
Fund) dated August 4, 1994.
(hh) Co-Administration Agreement 18
between Registrant and PFPC Inc.
(Warburg Pincus Balanced Fund)
dated August 4, 1994.
(ii) Co-Administration Agreement 18
between Registrant and
Counsellors Fund Service, Inc.
(Warburg Pincus Growth Income
Fund) dated August 4, 1994.
(jj) Co-Administration Agreement 18
between Registrant and
Counsellors Fund Service, Inc.
(Warburg Pincus Balanced Fund)
dated August 4, 1994.
(kk) Administrative Services Agreement 18
Supplement between Registrant and
Counsellor's Fund Services, Inc.
(BEA Classes) dated October 26,
1994.
(ll) Co-Administration Agreement
between Registrant and PFPC Inc.
(Warburg Pincus Tax Free Fund)
dated March 31, 1995.
(mm) Co-Administration Agreement
between Registrant and
Counsellors Funds Services, Inc.
(Warburg Pincus Tax Free Fund).
(nn) Transfer Agency and Service
Agreement between Registrant,
State Street Bank and Trust
Company and PFPC Inc. dated
February 1, 1995.
(oo) Supplement to Transfer Agency and
Service Agreement between
Registrant, State Street Bank and
Trust Company, Inc. and PFPC
dated April 10, 1995.
(10) (a) Opinion of Counsel.
Incorporated by reference herein
to Registrant's 24f-2 Notice for
the fiscal year ending August 31,
1994 filed on October 7, 1994.
(b) Consent of Counsel.
(11) Consent of Independent
Accountants.
None.
-----
45
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(12) None.
(13) (a) Subscription Agreement (relating 2
to Classes A through N).
(b) Subscription Agreement between 7
Registrant and Planco Financial
Services, Inc., relating to
Classes O and P.
(c) Subscription Agreement between 7
Registrant and Planco Financial
Services, Inc., relating to Class
Q.
(d) Subscription Agreement between 9
Registrant and Counsellors
Securities Inc. relating to
Classes R, S, and Alpha 1 through
Theta 4.
(e) Subscription Agreement between 10
Registrant and Counsellors
Securities Inc. relating to
Classes T, U and V.
(f) Subscription Agreement between 18
Registrant and Counsellors
Securities Inc. relating to
Classes BB and CC.
(g) Purchase Agreement between
Registrant and Counsellors
Securities Inc. relating to
Classes DD (Warburg Pincus
Growth & Income Fund Series 2).
(h) Purchase Agreement between
Registrant and Counsellors
Securities Inc. relating to Class
EE (Warburg Pincus Balanced Fund
Series 2).
(14) None.
(15) (a) Plan of Distribution (Sansom 3
Street Money).
(b) Plan of Distribution (Sansom 3
Street Tax-Free Money).
(c) Plan of Distribution (Sansom 3
Street Government Money).
(d) Plan of Distribution (Cash 3
Preservation Money).
46
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(e) Plan of Distribution (Cash 3
Preservation Tax-Free Money).
(f) Plan of Distribution (SafeGuard 3
Equity).
(g) Plan of Distribution (SafeGuard 3
Fixed Income).
(h) Plan of Distribution (SafeGuard 3
Balanced).
(i) Plan of Distribution (SafeGuard 3
Tax-Free).
(j) Plan of Distribution (SafeGuard 3
Money).
(k) Plan of Distribution (SafeGuard 3
Tax-Free Money).
(l) Plan of Distribution (Bedford 3
Money).
(m) Plan of Distribution (Bedford 3
Tax-Free Money).
(n) Plan of Distribution (Bedford 3
Government Money).
(o) Plan of Distribution (Bedford New 7
York Municipal Money).
(p) Plan of Distribution (SafeGuard 7
Government Securities).
(q) Plan of Distribution (Income 7
Opportunities High Yield).
(r) Amendment No. 1 to Plans of 8
Distribution (Classes A through
Q).
(s) Plan of Distribution (Bradford 9
Tax-Free Money).
(t) Plan of Distribution (Bradford 9
Government Money).
(u) Plan of Distribution (Alpha 9
Money).
(v) Plan of Distribution (Alpha 9
Tax-Free Money).
47
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(w) Plan of Distribution (Alpha 9
Government Money).
(x) Plan of Distribution (Alpha New 9
York Money).
(y) Plan of Distribution (Beta 9
Money).
(z) Plan of Distribution (Beta 9
Tax-Free Money).
(aa) Plan of Distribution (Beta 9
Government Money).
(bb) Plan of Distribution (Beta New 9
York Money).
(cc) Plan of Distribution (Gamma 9
Money).
(dd) Plan of Distribution (Gamma 9
Tax-Free Money).
(ee) Plan of Distribution (Gamma 9
Government Money).
(ff) Plan of Distribution (Gamma New 9
York Money).
(gg) Plan of Distribution (Delta 9
Money).
(hh) Plan of Distribution (Delta 9
Tax-Free Money).
(ii) Plan of Distribution (Delta 9
Government Money).
(jj) Plan of Distribution (Delta New 9
York Money).
(kk) Plan of Distribution (Epsilon 9
Money).
(ll) Plan of Distribution (Epsilon 9
Tax-Free Money).
(mm) Plan of Distribution (Epsilon 9
Government Money).
(nn) Plan of Distribution (Epsilon New 9
York Money).
(oo) Plan of Distribution (Zeta 9
Money).
48
<PAGE>
Exhibit Page See Note #
- ------- ---- ----------
(pp) Plan of Distribution (Zeta 9
Tax-Free Money).
(qq) Plan of Distribution (Zeta 9
Government Money).
(rr) Plan of Distribution (Zeta New 9
York Money).
(ss) Plan of Distribution (Eta Money). 9
(tt) Plan of Distribution (Eta 9
Tax-Free Money).
(uu) Plan of Distribution (Eta 9
Government Money).
(vv) Plan of Distribution (Eta New 9
York Money).
(ww) Plan of Distribution (Theta 9
Money).
(xx) Plan of Distribution (Theta 9
Tax-Free Money).
(yy) Plan of Distribution (Theta 9
Government Money).
(zz) Plan of Distribution (Theta New 9
York Money).
(aaa) Plan of Distribution (Laffer 12
Equity).
(bbb) Plan Distribution (Warburg Pincus 18
Growth & Income Series 2).
(ccc) Plan of Distribution (Warburg 18
Pincus Balanced Series 2).
(16) Schedule of Computation of 3
Performance Quotations.
(17) None.
(18) Rule 18f-3 Plan.
_________________
49
<PAGE>
Note #
- ------
1 Incorporated herein by reference to the same exhibit number of
Registrant's Registration Statement (No. 33-20827) filed on March
24, 1988.
2 Incorporated herein by reference to the same exhibit number of
Pre-Effective Amendment No. 2 to Registrant's Registration
Statement (No. 33-20827) filed on July 12, 1988.
3 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 1 to Registrant's Registration
Statement (No. 33-20827) filed on March 23, 1989.
4 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 2 to Registrant's Registration
Statement (No. 33-20827) filed on October 25, 1989.
5 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 3 to the Registrant's Registration
Statement (No. 33-20827) filed on April 27, 1990.
6 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 4 to the Registrant's Registration
Statement (No. 33-20827) filed on May 1, 1990.
7 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 5 to the Registrant's Registration
Statement (No. 33-20827) filed on December 14, 1990.
8 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 6 to the Registrant's Registration
Statement (No. 33-20827) filed on October 24, 1991.
9 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 7 to the Registrant's Registration
Statement (No. 33-20827) filed on July 15, 1992.
10 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 8 to the Registrant's Registration
Statement (No. 33-20827) filed on October 22, 1992.
11 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 9 to the Registrant's Registration
Statement (No. 33-20827) filed on December 16, 1992.
50
<PAGE>
12 Incorporated herein by reference to the same exhibit number of
Post Effective Amendment No. 11 to the Registration Statement (No.
33-20827) filed on June 21, 1993.
13 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 12 to Registration Statement (No.
33-20827) filed on July 27, 1993.
14 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 13 to Registration Statement (No.
33-20827 filed on October 29, 1993.
15 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 14 to Registration Statement (No.
33-20827) filed on December 21, 1993.
16 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 19 to Registration Statement (No.
33-20827) filed on October 14, 1994.
17 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 20 to Registration Statement (No.
33-20827) filed on October 21, 1994.
18 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 21 to Registration Statement (No.
33-20827) filed on October 28, 1994.
19 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 22 to Registration Statement (No.
33-20827) filed on December 19, 1994.
20 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 20 to Registration Statement (No.
33-20827) filed on March 31, 1995.
51
EXHIBIT 5(mm)
INVESTMENT ADVISORY AGREEMENT
-----------------------------
(Warburg Pincus Tax Free Fund)
AGREEMENT made as of March 31, 1995 between THE RBB
FUND, INC., a Maryland corporation (herein called the "Company"),
and Warburg, Pincus Counsellors, Inc. (herein called the
"Investment Advisor").
WHEREAS, the Company is registered as an open-end,
management investment company under the Investment Company Act of
1940 (the "1940 Act"), of which the Warburg Pincus Tax Free Fund
(the "Fund") is a separate investment portfolio; and
WHEREAS, the Company desires to retain the Investment
Advisor to render certain investment advisory services to the
Company with respect to the Fund, and the Investment Advisor is
willing to so render such services,
NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained, and intending to be legally
bound hereby, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints the
-----------
Investment Advisor to act as investment advisor for the Fund for
the period and on the terms set forth in this Agreement. The
Investment Advisor accepts such appointment and agrees to render
the services herein set forth, for the compensation herein
provided.
2. Delivery of Documents. The Company has furnished
---------------------
the Investment Advisor with copies properly certified or
authenticated of each of the following:
(a) Resolutions of the Board of Directors of the
Company authorizing the appointment of the Investment Advisor and
the execution and delivery of this Agreement;
(b) The Prospectus and Statement of Additional
Information relating to the class of Shares representing
interests in the Fund of the Company in effect under the 1933 Act
(such prospectus and statement of additional information, as
presently in effect and as it shall from time to time be amended
and supplemented, is herein called the "Prospectus").
The Company will furnish the Investment Advisor from
time to time with copies, properly certified or authenticated, of
all amendments of or supplements to the foregoing, if any.
<PAGE>
3. Management of the Fund. Subject to the
----------------------
supervision of the Board of Directors of the Company, the
Investment Advisor will provide for the overall management of the
Fund including (i) the provision of a continuous investment
program for the Fund, including investment research and
management with respect to all securities, investments, cash and
cash equivalents in the Fund, (ii) the determination from time to
time of what securities and other investments will be purchased,
retained, or sold by the Company for the Fund, and (iii) the
placement from time to time of orders for all purchases and sales
made for the Fund. The Investment Advisor will provide the
services rendered by it hereunder in accordance with the Fund's
investment objectives, restrictions and policies as stated in the
applicable Prospectus contained in the Registration Statement.
The Investment Advisor further agrees that it will render to the
Company's Board of Directors such periodic and special reports
regarding the performance of its duties under this Agreement as
the Board may request. The Investment Advisor agrees to provide
to the Company (or its agents and service providers) prompt and
accurate data with respect to the Fund's transactions and, where
not otherwise available, the daily valuation of securities in the
Fund.
4. Brokerage. The Investment Advisor may place
---------
orders either directly with the issuer or with any broker or
dealer. In placing orders with brokers and dealers, the
Investment Advisor will attempt to obtain the best price and the
most favorable execution of its orders. In placing orders, the
Investment Advisor will consider the experience and skill of the
firm's securities traders as well as the firm's financial
responsibility and administrative efficiency. Consistent with
this obligation, the Investment Advisor may, subject to the
review of the Board of Directors, select brokers on the basis of
the research, statistical and pricing services they provide to
the Fund and other clients of the Investment Advisor.
Information and research received from such brokers will be in
addition to, and not in lieu of, the services required to be
performed by the Investment Advisor hereunder. A commission paid
to such brokers may be higher than that which another qualified
broker would have charged for effecting the same transaction,
provided that the Investment Advisor determines in good faith
that such commission is reasonable in terms of either the
transaction or the overall responsibility of the Investment
Advisor to the Fund and its other clients and that the total
commissions paid by the Fund will be reasonable in relation to
the benefits to the Fund over the long-term. In no instance will
the Fund's securities be purchased from or sold to the Company's
principal underwriter, the Investment Advisor, or any affiliated
person thereof, except to the extent permitted by SEC exemptive
order or by applicable law.
2
<PAGE>
5. Conformity with Law; Confidentiality. The
------------------------------------
Investment Advisor further agrees that it will comply with all
applicable rules and regulations of all federal regulatory
agencies having jurisdiction over the Investment Advisor in the
performance of its duties hereunder. The Investment Advisor will
treat confidentially and as proprietary information of the
Company all records and other information relating to the Company
and prior, present or potential shareholders (except clients of
the Investment Advisor and its affiliates), and will not use such
records and information for any purpose other than performance of
its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Company, which
approval shall not be unreasonably withheld and may not be
withheld where the Investment Advisor may be exposed to civil or
criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted
authorities, or when so requested by the Company.
6. Services Not Exclusive. The investment management
----------------------
and services rendered by the Investment Advisor hereunder are not
to be deemed exclusive, and the Investment Advisor shall be free
to render similar services to others so long as its services
under this Agreement are not impaired thereby.
7. Books and Records. In compliance with the
-----------------
requirements of Rule 31a-3 under the 1940 Act, the Investment
Advisor hereby agrees that all records which it maintains for the
Fund are the property of the Company and further agrees to
surrender promptly to the Company any of such records upon the
Company's request. The Investment Advisor further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940
Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
8. Expenses. During the term of this Agreement, the
--------
Investment Advisor will pay all expenses incurred by it in
connection with its activities under this Agreement other than
the cost of securities purchased for the Fund (including
brokerage commissions, if any), the cost of independent pricing
services used in valuing the Fund's securities and fees and
expenses of registering and qualifying shares for distribution
under state securities laws.
If the expenses borne by the Fund in any fiscal year
exceed the most restrictive applicable expense limitations
imposed by the securities regulations of any state in which the
Shares of the Fund are registered or qualified for sale to the
public, the Investment Advisor shall reimburse the Fund for any
excess up to the amount of the fees payable by the Fund to it
during such fiscal year pursuant to Paragraph 9 hereof; provided,
--------
3
<PAGE>
however, that notwithstanding the foregoing, the Investment
- -------
Advisor shall reimburse the Fund for such excess expenses
regardless of the amount of such fees payable to it during such
fiscal year to the extent that the securities regulations of any
state in which the Shares are registered or qualified for sale so
require.
9. Compensation.
------------
(a) For the services provided and the expenses
assumed pursuant to this Agreement with respect to the Fund, the
Company will pay the Investment Advisor from the assets of the
Fund and the Investment Advisor will accept as full compensation
therefor a fee, computed daily and payable monthly, at the annual
rate of .50% of the Fund's average daily net assets.
(b) The fee attributable to the Fund shall be
satisfied only against assets of the Fund and not against the
assets of any other investment portfolio of the Company.
10. Limitation of Liability of the Investment Advisor.
-------------------------------------------------
The Investment Advisor shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the
Company in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Advisor in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement ("Disabling
Conduct"). The Fund will indemnify the Investment Advisor
against and hold it harmless from any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel
fees and expenses) resulting from any claim, demand, action or
suit not resulting from Disabling Conduct by the Investment
Advisor. Indemnification shall be made only following: (i) a
final decision on the merits by a court or other body before whom
the proceeding was brought that the Investment Advisor was not
liable by reason of Disabling Conduct; or (ii) in the absence of
such a decision, a reasonable determination, based upon a review
of the facts, that the Investment Advisor was not liable by
reason of Disabling Conduct by (a) the vote of a majority of a
quorum of directors of the Fund who are neither "interested
persons" of the Fund nor parties to the proceeding
("Disinterested Non-Party Directors") or (b) an independent legal
counsel in a written opinion. The Investment Advisor shall be
entitled to advances from the Fund for payment of the reasonable
expenses incurred by it in connection with the matter as to which
it is seeking indemnification in the manner and to the fullest
extent permissible under the Maryland General Corporation Law.
4
<PAGE>
The Investment Advisor shall provide to the Fund a written
affirmation of its good faith belief that the standard of conduct
necessary for indemnification by the Fund has been met and a
written undertaking to repay any such advance if it should
ultimately be determined that the standard of conduct has not
been met. In addition, at least one of the following additional
conditions shall be met: (a) the Investment Advisor shall provide
a security in form and amount acceptable to the Fund for its
undertaking; (b) the Fund is insured against losses arising by
reason of the advance; or (c) a majority of a quorum of
Disinterested Non-Party Directors, or independent legal counsel,
in a written opinion, shall have determined, based upon a review
of facts readily available to the Fund at the time the advance is
proposed to be made, that there is reason to believe that the
Investment Advisor will ultimately be found to be entitled to
indemnification. Any amounts payable by the Fund under this
Section shall be satisfied only against the assets of the Fund
and not against the assets of any other investment portfolio of
the Company.
11. Duration and Termination. This Agreement shall
------------------------
become effective with respect to the Fund on the day after
approval of this Agreement by vote of a majority of the
outstanding voting securities of the Fund and, unless sooner
terminated as provided herein, shall continue with respect to the
Fund until August 16, 1995. Thereafter, if not terminated, this
Agreement shall continue with respect to the Fund for successive
annual periods ending on August 16, provided such continuance is
--------
specifically approved at least annually (a) by the vote of a
majority of those members of the Board of Directors of the
Company who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the Board of
Directors of the Company or by vote of a majority of the
outstanding voting securities of the Fund; provided, however,
-------- -------
that this Agreement may be terminated with respect to the Fund by
the Company at any time, without the payment of any penalty, by
the Board of Directors of the Company or by vote of a majority of
the outstanding voting securities of the Fund, on 60 days' prior
written notice to the Investment Advisor, or by the Investment
Advisor at any time, without payment of any penalty, on 90 days'
prior written notice to the Company. This Agreement will
immediately terminate in the event of its assignment. (As used
in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the
same meaning as such terms have in the 1940 Act).
12. Amendment of this Agreement. No provision of this
---------------------------
Agreement may be changed, discharged or terminated orally, except
by an instrument in writing signed by the party against which
5
<PAGE>
enforcement of the change, discharge or termination is sought,
and no amendment of this Agreement affecting the Fund shall be
effective until approved by vote of the holders of a majority of
the outstanding voting securities of the Fund.
13. Miscellaneous. The captions in this Agreement are
-------------
included for convenience of reference only and in no way define
or delimit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors
and shall be governed by and construed and enforced in accordance
with the laws of the state of New York without giving effect to
the conflicts of laws principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as
of the day and year first above written.
THE RBB FUND, INC.
By: /s/Edward J. Roach
-------------------
President
WARBURG, PINCUS COUNSELLORS, INC.
By:/s/ Eugene P. Grace
-------------------
6
EXHIBIT 9(ll)
CO-ADMINISTRATION AGREEMENT
TERMS AND CONDITIONS
This Agreement is made as of March 31, 1995 by and
between the RBB Fund, Inc. (the "Company"), a Maryland
corporation, and PFPC Inc. ("PFPC"), a Delaware corporation,
which is an indirect, wholly-owned subsidiary of PNC Bank,
National Association with respect to the Warburg Pincus Tax Free
Fund (the "Fund"), a portfolio of the Company.
The Company is registered as an open-end investment
company under the Investment Company Act of 1940 (the "1940
Act"), as amended. The Company wishes to retain PFPC to provide
certain administration and accounting services for the Fund, and
PFPC wishes to furnish such services. Such services are in
addition to those provided to the Company by Counsellors Funds
Service, Inc. pursuant to the Co-Administration Agreement dated
March 31, 1995.
In consideration of the promises and mutual covenants
herein contained, the parties agree as follows:
1. Definitions.
-----------
a. "Authorized Person." The term "Authorized Person"
--------------------
shall mean any officer of the Company and any other
person, who is duly authorized by the Company's
Governing Board, to give Oral and Written Instructions
on behalf of the Company. Such persons are listed' in
the Certificate attached hereto as the Authorized
Persons Appendix to each Services Attachment to this
Agreement. If PFPC provides more than one service
hereunder, the Company's designation of Authorized
Persons may vary by service.
b. "CFTC." The term "CFTC" shall mean the Commodities
-------
Futures Trading Commission.
c. "Governing Board." The Term "Governing Board" shall
------------------
mean the Company's Board of Directors, or, where duly
authorized, a competent committee thereof.
d. "Oral Instructions." The term "Oral Instructions"
--------------------
shall mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed
by PFPC to be an Authorized Person.
<PAGE>
e. "PNC." The term "PNC" shall mean PNC Bank, National
------
Association or a subsidiary or affiliate of PNC Bank,
National Association.
f. "Property." The term "Property" shall mean:
-----------
i. any and all securities and other investment items
which the Fund may from time to time deposit, or
cause to be deposited, with PNC or which PNC may
from time to time hold for the Fund;
ii. all income in respect of any of such securities or
other investment items;
iii. all proceeds of the sale of any of such securities
or investment items;and
iv. all proceeds of the sale of securities issued by
the Fund, which are received by PNC from time to
time, from or on behalf of the Fund.
g. "SEC." The term "SEC" shall mean the Securities and
------
Exchange Commission.
h. "Securities and Commodities Laws." The terms the "1933
----------------------------------
Act" shall mean the Securities Act of 1933, as amended
the "1934 Act" shall mean the Securities Exchange Act
of 1934, as amended the "1940 Act" shall mean the
Investment Company Act 1940, as amended, and the "CEA"
shall mean the Commodities Exchange Act, as amended.
i. "Services." The term "Services" shall mean the service
-----------
provided to the Fund by PFPC.
j. "Shares." The terms "Shares" shall mean the shares of
---------
stock of any class of the Fund.
k. "Written Instructions." The term "Written
-----------------------
Instructions" shall mean written instructions signed by
one Authorized Person and received by PFPC. The
instructions may be delivered by hand, mail, tested
telegram, cable, telex or facsimile sending device.
2. Appointment.
------------
The Company hereby appoints PFPC to provide
administration and accounting services for the Fund, in
accordance with the terms set forth in this Agreement. PFPC
accepts such appointment and agrees to furnish such services.
2
<PAGE>
3. Delivery of Documents.
----------------------
The Company has provided or, where applicable, will
provide PFPC with the following:
a. certified or authenticated copies of the resolutions of
the Company's Governing Board, approving the
appointment of PFPC or its affiliates to provide
services;
b. a copy of the Fund's most recent effective registration
statement;
c. a copy of the Fund's advisory agreement;
d. a copy of the Fund's distribution agreement;
e. a copy of the Fund's co-administration agreement with
Counsellors Funds Service, Inc.;
f. copies of any shareholder servicing agreements made in
respect of the Fund; and
g. certified or authenticated copies of any and all
amendments or supplements to the foregoing.
4. Compliance with Government Rules and Regulations.
-------------------------------------------------
PFPC undertakes to comply with all applicable
requirements of the 1933 Act, the 1934 Act, the 1940 Act, and the
CEA, and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to all duties to be
performed by PFPC hereunder. Except as specifically set forth
herein, PFPC assumes no responsibility for such compliance by the
Fund.
5. Instructions.
-------------
Unless otherwise provided in this Agreement, PFPC shall
act only upon Oral and Written Instructions.
PFPC shall be entitled to rely upon any Oral and
Written Instructions it receives from an Authorized Person (or
from a person reasonably believed by PFPC to be an Authorized
Person) pursuant to this Agreement. PFPC may assume that any
Oral or Written Instruction received hereunder is not in any way
inconsistent with the provisions of organizational documents or
this Agreement or of any vote, resolution or proceeding of the
Company's Governing Board or of the Fund's shareholders.
3
<PAGE>
The Company agrees to forward to PFPC Written
Instructions confirming Oral Instructions so that PFPC receives
the Written Instructions by the close of business on the same day
that such Oral Instructions are received. The fact that such
confirming Written Instructions are not received by PFPC shall in
no way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions. The Company
further agrees that PFPC shall incur no liability to the Fund in
acting upon Oral or Written Instructions provided such
instructions reasonably appear to have been received from an
Authorized Person.
6. Right to Receive Advice.
------------------------
a. Advice of the Company. If PFPC is in doubt as to any
----------------------
action it should or should not take, PFPC may request
directions or advice, including Oral or Written
Instructions, from the Company.
b. Advice of Counsel. If PFPC shall be in doubt as to any
------------------
questions of law pertaining to any action it should or
should not take, PFPC may request advice at its own
cost from such counsel of its own choosing (who may be
counsel for the Company, the Fund's advisor or PFPC, at
the option of PFPC).
c. Conflicting Advice. In the event of a conflict between
-------------------
directions, advice or Oral or Written Instructions PNC
receives from the Company, and the advice it receives
from counsel, PFPC shall be entitled to rely upon and
follow the advice of counsel.
d. Protection of PFPC. PFPC shall be protected in any
-------------------
action it takes or does not take in reliance upon
directions, advice or Oral or Written Instructions it
receives from the Company or from counsel and which
PFPC believes, in good faith, to be consistent with
those directions, advice and Oral or Written
Instructions.
e. Limitation. Nothing in this paragraph shall be
-----------
construed so as to impose an obligation upon PFPC (i)
to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such
directions, advice or Oral or Written Instructions
unless, under the terms of other provisions of this
Agreement, the same is a condition of PFPC's properly
taking or not taking such action.
4
<PAGE>
7. Records.
--------
The books and records pertaining to the Fund, which are
in the possession of PFPC, shall be the property of the Company.
Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities laws,
rules and regulations. The Company, or the Company's Authorized
Persons, shall have access to such books and records at all times
during PFPC's normal business hours. Upon the reasonable request
of the Company, copies of any such books and records shall be
provided by PFPC to the Company or to an Authorized Person of the
Company, at the Company's expense.
PFPC shall keep the following records:
a. all books and records with respect to the Fund's books
of account;
b. records of the Fund's securities transactions;
c. all other books and records as PFPC is required to
maintain pursuant to Rule 31a-1 of the 1940 Act and as
specifically set forth in Appendix A hereto.
8. Confidentiality.
----------------
PFPC agrees to keep confidential all records of the
Fund and information relative to the Fund and its shareholders
(past, present and potential), unless the release of such records
or information is otherwise consented to, in writing, by the
Company. The Company agrees that such consent shall not be
unreasonably withheld. The Company further agrees that, should
PFPC be required to provide such information or records to duly
constituted authorities (who may institute civil or criminal
contempt proceedings for failure to comply), PFPC shall not be
required to seek the Company's consent prior to disclosing such
information.
9. Liaison with Accountants.
-------------------------
PFPC shall act as liaison with the Company's
independent public accountants and shall provide account
analyses, fiscal year summaries, and other audit-related
schedules. PFPC shall take all reasonable action in the
performance of its obligations under this Agreement to assure
that the necessary information is made available to such
accountants for the expression of their opinion, as such may be
required by the Company from time to time.
5
<PAGE>
10. Disaster Recovery.
------------------
PFPC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable
provision of emergency use of electronic data processing
equipment to the extent appropriate equipment is available. In
the event of equipment failures, PFPC shall, at no additional
expense to the Fund, take reasonable steps to minimize service
interruptions but shall have no liability with respect thereto.
11. Compensation.
-------------
As compensation for services rendered by PFPC during
the term of this Agreement, the Fund will pay to PFPC a fee or
fees as may be agreed to in writing by the Company and PFPC.
12. Indemnification.
----------------
The Company agrees to indemnify and hold harmless PFPC
and its nominees from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation,
liabilities arising under the 1933 Act, the 1934 Act, the 1940
Act, the CEA, and any state and foreign securities and blue sky
laws, and amendments thereto, and expenses, including (without
limitation) attorneys' fees and disbursements, arising directly
or indirectly from any action which PFPC takes or does not take
(i) at the request or on the direction of or in reliance on the
advice of the Company or (ii) upon Oral or Written Instructions.
Neither PFPC, nor any of its nominees, shall be indemnified
against any liability to the Company or to its shareholders (or
any expenses incident to such liability) arising out of PFPC's
own willful misfeasance, bad faith, negligence or reckless
disregard of its duties and obligations under this Agreement.
13. Responsibility of PFPC.
-----------------------
PFPC shall be under no duty to take any action on
behalf of the Fund except as specifically set forth herein or as
may be specifically agreed to by PFPC, in writing. PFPC shall be
obligated to exercise care and diligence in the performance of
its duties hereunder, to act in good faith and to use its best
efforts, within reasonable limits, in performing services
provided for under this Agreement. PFPC shall be responsible for
its own negligent failure to perform its duties under this
Agreement. Notwithstanding the foregoing, PFPC shall not be
responsible for losses beyond its control, provided that PFPC has
acted in accordance with the standard of care set forth above;
and provided further that PFPC shall only be responsible for that
portion of losses or damages suffered by the Fund that are
attributable to the negligence of PFPC.
6
<PAGE>
Without limiting the generality of the foregoing or of
any other provision of this Agreement, PFPC, in connection with
its duties under this Agreement, shall not be liable for (a) the
validity or invalidity or authority or lack thereof of any Oral
or Written Instruction, notice or other instrument which conforms
to the applicable requirements of this Agreement, and which PFPC
reasonably believes to be genuine; or (b) delays or errors or
loss of data occurring by reason of circumstances beyond PFPC's
control, including acts of civil or military authority, national
emergencies, labor difficulties, fire, flood or catastrophe, acts
of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply.
Notwithstanding anything in this Agreement to the
contrary, PFPC shall have no liability to the Fund for any
consequential, special or indirect losses or damages which the
Fund may incur or suffer by or as a consequence of PFPC's
performance of the services provided hereunder, whether or not
the likelihood of such losses or damages was known by PFPC.
14. Description of Accounting Services.
-----------------------------------
PFPC will perform the following accounting functions,
if required:
a. Journalize the Fund's investment, capital share and
income and expense activities;
b. Verify investment buy/sell trade tickets when received
from the Fund's investment advisor and transmit trades
to the Fund's custodian for proper settlement;
c. Maintain individual ledgers for investment securities;
d. Maintain historical tax lots for each security;
e. Reconcile cash and investment balances of the Fund with
the custodian, and provide the Fund's investment
advisor with the beginning cash balance available for
investment purposes;
f. Update the cash availability throughout the day as
required by the Fund's advisor;
g. Post to and prepare the Fund's Statement of Assets and
Liabilities and the Statement of Operations;
h. Calculate various contractual expenses (e.g., advisory
----
and custody fees);
7
<PAGE>
i. Monitor the expense accruals and notify Fund management
of any proposed adjustments;
j. Control all disbursements from the Fund and authorize
such disbursements upon Written Instructions;
k. Calculate capital gains and losses;
l. Determine the Fund's net income;
m. Obtain security market quotes from independent pricing
services approved by the Advisor, or if such quotes are
unavailable, then obtain such prices from the Advisor,
and in either case calculate the market value of the
Fund's investments;
n. Transmit or mail a copy of the daily portfolio
valuation to the Advisor;
o. Compute the net asset value of the Fund;
p. As appropriate, compute the Fund's yields, total
return, expense ratios, portfolio turnover rate, and,
if required, portfolio average dollar-weighted
maturity; and
q. Prepare a monthly financial statement, which will
include the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses.
15. Description of Administration Services.
---------------------------------------
PFPC will perform the following administrative
functions, if required:
a. Prepare quarterly broker security transactions
summaries;
b. Prepare monthly security transaction listings;
c. Prepare for execution and file the Fund's Federal and
state tax returns;
d. Assist in the preparation of the Fund's Semi-Annual
Reports with the SEC on Form N-SAR;
8
<PAGE>
e. Assist in the preparation of the Fund's annual and
semi-annual shareholder reports;
f. Assist with the preparation of registration statements
and other filings relating to the registration of
Shares; and
g. Monitor the Fund's status as a regulated investment
company under Sub-Chapter M of the Internal Revenue
Code of 1986, as amended.
16. Duration and Termination.
-------------------------
This Agreement shall continue until terminated by the
Company or by PFPC on sixty (60) days prior written notice to the
other party.
17. Notices.
--------
All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram,
cable, telex or facsimile sending device. If notice is sent by
confirming telegram, cable, telex or facsimile sending device, it
shall be deemed to have been given immediately. If notice is
sent by first-class mail, it shall be deemed to have been given
three days after it has been mailed. If notice is sent by
messenger, it shall be deemed to have been given on the day it is
delivered. Notices shall be addressed (a) if to PFPC at PFPC's
address, 103 Bellevue Parkway, Wilmington, Delaware 19809; (b) if
to the Company, at the address of the Company, 103 Bellevue
Parkway, Wilmington, Delaware 19809; or (c) if to neither of the
foregoing, at such other address as shall have been notified to
the sender of any such Notice or other communication.
18. Amendments.
-----------
This Agreement, or any term thereof, may be changed or
waived only by written amendment, signed by the party against
whom enforcement of such change or waiver is sought.
19. Delegation.
-----------
PFPC may assign its rights and delegate its duties
hereunder to any wholly-owned direct or indirect subsidiary of
PNC Bank or PNC Bank Corp., provided that (i) PFPC gives the
Company thirty (30) days prior written notice; (ii) the delegate
agrees with PFPC to comply with all relevant provisions of the
1940 Act; and (iii) PFPC and such delegate promptly provide such
information as the Company may request, and respond to such
questions as the Company may ask, relative to the delegation,
including (without limitation) the capabilities of the delegate.
9
<PAGE>
20. Counterparts.
-------------
This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
21. Further Actions.
----------------
Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
22. Limitation of Liability.
------------------------
The Company and PFPC agree that the obligations of the
Company under this Agreement will not be binding upon any of the
Directors, shareholders, nominees, officers, employees or agents,
whether past, present or future, of the Company, individually,
but are binding only upon the assets and property of the Fund, as
Provided in the Company's Charter. The execution and delivery of
this Agreement have been authorized by the Directors of the
Company, and signed by an authorized officer of the Company,
acting as such, and neither the authorization by the Directors
nor the execution and delivery by the officer will be deemed to
have been made by any of them individually or to impose any
liability on any of them personally, but will bind only the
property of the Fund as provided in the Charter.
23. Miscellaneous.
--------------
This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties may embody in one or more
separate documents their agreement, if any, with respect to
delegated and/or Oral Instructions.
The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction
or effect.
This Agreement shall be deemed to be a contract made in
Delaware and governed by Delaware law. If any provision of this
agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding and
shall inure to the benefit of the parties hereto and their
respective successors.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below on
the day and year first above written.
PFPC INC.
By:/s/ Charles D. Curtis
---------------------
THE RBB FUND, INC.
By: /s/ Edward J. Roach
-------------------
11
<PAGE>
APPENDIX A
[list Books and Records to be Maintained by PFPC]
-----------------------------------------------
<PAGE>
The RBB Fund, Inc.
103 Bellevue Parkway
Wilmington, Delaware 19089
Re: Co-Administration Service Fees
------------------------------
Gentlemen:
This letter constitutes our agreement with respect to
compensation to be paid to PFPC Inc. ("PFPC") under the terms of
the Co-Administration Agreement dated March 31, 1995 between you
(the "Company") and PFPC. Pursuant to Paragraph 11 of that
Agreement, and in consideration of the services to be provided to
you, you will pay PFPC an annual co-administration fee, to be
calculated daily and paid monthly. You will also reimburse PFPC
for its out-of-pocket expenses incurred on behalf of the Fund,
including, but not limited: postage and handling, telephone,
telex, Federal Express and outside pricing service charges.
The annual co-administration fee shall be .15% of the
Fund's average daily net assets, with a minimum annual fee of
$75,000.
In each month the Fund shall pay to PFPC the greater of
the asset based fee as calculated above or the minimum fee. The
fee for the period from the day of the year this agreement is
entered into until the end of that year shall be pro-rated
according to the proportion which such period bears to the full
annual period.
If the foregoing accurately sets forth our agreement,
and you intend to be legally bound thereby, please execute a copy
of this letter and return it to us.
Very truly yours,
PFPC INC.
By: /s/ Stephen M. Wynn
--------------------
Accepted: THE RBB FUND, INC.
By:/s/ Edward J. Roach
-------------------
EXHIBIT 9 (mm)
CO-ADMINISTRATION AGREEMENT
March 31, 1995
Counsellors Funds Service, Inc.
466 Lexington Avenue
New York, New York 10017-3147
Dear Sirs:
The RBB Fund, Inc. (the "Company"), a corporation
organized under the laws of the State of Maryland, confirms its
agreement with Counsellors Funds Service, Inc. ("Counsellors
Service") with respect to the Warburg Pincus Tax Free Fund (the
"Fund"), a portfolio of the Company, as follows:
1. Investment Description; Appointment
-----------------------------------
The Company desires to employ its capital by investing
and reinvesting in investments of the kind and in accordance with
the limitations specified in the Company's Articles of
Incorporation, as amended from time to time (the "Charter"), in
the Company's By-laws, as amended from time to time (the
"By-laws"), in the Fund's prospectus (the "Prospectus") and
statement of additional information (the "Statement of Additional
Information") as in effect from time to time, and in such manner
and to the extent as may from time to time be approved by the
Board of Directors of the Company. Copies of the Fund's
Prospectus and Statement of Additional Information and the
Company's Charter and By-laws have been submitted to Counsellors
Service. The Fund employs Warburg, Pincus Counsellors, Inc. (the
"Adviser") as its investment adviser. The Company desires to
employ and hereby appoints Counsellors Service as its
co-administrator for the Fund. Such co-administration services
shall be in addition to those provided to the Company by PFPC,
Inc. pursuant to the Co-Administration Agreement dated August 4,
1994.
Counsellors Service accepts this appointment and
agrees to furnish the services for the compensation set forth
below.
2. Services as Co-Administrator
----------------------------
Subject to the supervision and direction of the Board
of Directors of the Company, Counsellors Service will:
<PAGE>
(a) assist in supervising all aspects of the Fund's
operations, except those performed by other parties pursuant to
written agreements with the Company;
(b) provide various shareholder liaison services
including, but not limited to, responding to inquiries of
shareholders regarding the Fund, providing information on
shareholder investments, assisting shareholders of the Fund in
changing dividend options, account designations and addresses,
and other similar services;
(c) provide certain administrative services including,
but not limited to, providing periodic statements showing the
account balance of a Fund shareholder and integrating the
statements with those of other transactions and balances in the
shareholder's other accounts serviced by the Fund's custodian or
transfer agent;
(d) supply the Fund with office facilities (which may
be Counsellors Service's own offices), data processing services,
clerical, internal executive and administrative services, and
stationery and office supplies;
(e) furnish corporate secretarial services, including
assisting in the preparation of materials for Board of Directors
meetings and distributing those materials and assisting in the
preparation of minutes of meetings of the Company's Board of
Directors and any Committees thereof and of the Fund's
shareholders;
(f) coordinate the preparation of reports to the
Fund's shareholders of record and the Securities and Exchange
Commission (the "SEC") including, but not limited to, proxy
statements; annual, semi-annual and quarterly reports to
shareholders; annual and semi-annual reports on Form N-SAR; and
post-effective amendments to the Fund's Registration Statement on
Form N-1A (the "Registration Statements");
(g) develop computer systems for the generation of
consolidated periodic reports to investors;
(h) assist in other regulatory filings as necessary;
(i) assist the Fund's investment adviser, at the
investment adviser's request, in monitoring and developing
compliance procedures for the Fund which will include, among
other matters, procedures to assist the investment adviser in
monitoring compliance with the Fund's investment objective,
policies, restrictions, tax matters and applicable laws and
regulations; and
(j) acting as liaison between the Fund and the Fund's
independent public accountants, counsel, custodian or custodians,
2
<PAGE>
transfer agent and co-administrator and taking all reasonable
action in the performance of its obligations under this Agreement
to assure that all necessary information is made available to
each of them.
In performing all services under this Agreement,
Counsellors Service shall act in conformity with applicable law,
the Company's Charter and By-Laws, and all amendments thereto,
and the investment objective, investment policies and other
practices and policies set forth in the Fund's Registration
Statement, as such Registration Statement and practices and
policies may be amended from time to time.
3. Compensation
------------
In consideration of services rendered pursuant to this
Agreement, the Fund will pay Counsellors Service on the first
business day of each month a fee for the previous month at an
annual rate of .10% of the Fund's average daily net assets. The
fee for the period from the date Counsellors Service commences
its operations on behalf of the Fund to the end of the month
during which Counsellors Service commences such operations shall
be prorated according to the proportion that such period bears to
the full monthly period. Upon any termination of this Agreement
before the end of any month, the fee for such part of a month
shall be prorated according to the proportion which such period
bears to the full monthly period and shall be payable upon the
date of termination of this Agreement. For the purpose of
determining fees payable to Counsellors Service, fees shall be
calculated monthly and the value of the Fund's net assets shall
be computed at the times and in the manner specified in the
Prospectus and Statement of Additional Information as from time
to time in effect.
4. Expenses
--------
Counsellors Service will bear all expenses in
connection with the performance of its services under this
Agreement; provided, however, that the Fund will reimburse
-------- -------
Counsellors Service for the out-of-pocket expenses incurred by it
on behalf of the Fund. Such reimbursable expenses shall include,
but not be limited to, postage, telephone, telex and Federal
Express charges. Counsellors Service will bill the Fund as soon
as practicable after the end of each calendar month for the
expenses it is entitled to have reimbursed.
The Fund will bear certain other expenses to be
incurred in its operation, including: taxes, interest, brokerage
fees and commissions, if any; fees of Directors of the Company
who are not officers, directors, or employees of the Adviser or
Counsellors Service; Securities and Exchange Commission fees and
state Blue Sky qualification fees; charges of custodians and
transfer and dividend disbursing agents; certain insurance
3
<PAGE>
premiums; outside auditing and legal expenses; costs of
maintenance of corporate existence; except as otherwise provided
herein, 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, and meetings of the officers of Board of Directors of
the Company; costs of any pricing services; and any extraordinary
expenses.
5. Standard of Care
----------------
Counsellors Service shall exercise its best judgment in
rendering the services listed in paragraph 2 above. Counsellors
Service 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
in this Agreement shall be deemed to protect or purport to
protect Counsellors Service against liability to the Fund or to
its shareholders to which Counsellors Service would otherwise be
subject by reason of willful misfeasance, bad faith or negligence
on its part in the performance of its duties or by reason of
Counsellors Service's reckless disregard of its obligations and
duties under this Agreement.
6. Term of Agreement
-----------------
This Agreement shall become effective on the day
following approval by the Board of Directors of the Company
including a majority of the Board of Directors who are not
"interested persons" (as defined in the Investment Company Act of
1940, as amended) of any party to this Agreement, and shall
continue until September 16, 1995 and shall continue
automatically (unless terminated as provided herein) for
successive annual periods ending on September 16 of each year,
provided that such continuance is specifically approved at least
annually by the Board of Directors of the Company, including a
majority of the Board of Directors who are not "interested
persons" 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 Company or by
vote of holders of a majority of the Fund's shares, or upon 60
days' written notice, by Counsellors Service.
7. Service to Other Companies or Accounts
--------------------------------------
The Company understands that Counsellors Service now
acts, will continue to act and may act in the future as
administrator, co-administrator or administrative services agent
to one or more other investment companies, and the Company has no
objection to Counsellors Service's so acting. The Company
4
<PAGE>
understands that the persons employed by Counsellors Service to
assist in the performance of Counsellors Service's duties
hereunder will not devote their full time to such service and
nothing contained in this Agreement shall be deemed to limit or
restrict the right of Counsellors Service or any affiliate of
Counsellors Service to engage in and devote time and attention to
other businesses or to render services of whatever kind or
nature.
8. Limitation of Liability
-----------------------
The Company and Counsellors Service agree that the
obligations of the Company under this Agreement will not be
binding upon any of the directors, shareholders, nominees,
officers, employees or agents, whether past, present or future,
of the Company, individually, but are binding only upon the
assets and property of the Fund, as provided in the Company's
Charter. The execution and delivery of this Agreement has been
authorized by the Board of Directors of the Company, and signed
by an authorized officer of the Company, acting as such, and
neither the authorization by the Board of Directors nor the
execution and delivery by the officer will be deemed to have been
made by any of them individually or to impose any liability on
any of them personally, but will bind only the property of the
Fund as provided in the Charter.
If the foregoing is in accordance with your
understanding, kindly indicate your acceptance hereof by signing
and returning to us the enclosed copy hereof.
Very truly yours,
RBB FUND, INC.
By:/s/ Edward J. Roach
-------------------
Name:Edward J. Roach
Title:President
Accepted:
COUNSELLORS FUNDS SERVICE, INC.
By:/s/ Eugene P. Grace
-------------------
Name:Eugene P. Grace
Title:Vice President
5
Exhibit (9nn)
TRANSFER AGENCY AND SERVICE AGREEMENT
between
THE RBB FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
and
PFPC, INC.
<PAGE>
TABLE OF CONTENTS
-----------------
Article 1 Terms of Appointment: Duties of the Bank . . . . . . . 2
Article 2 Fees and Expenses . . . . . . . . . . . . . . . . . . 7
Article 3 Representations and Warranties of the Bank . . . . . . 8
Article 4 Representations and Warranties of the Fund . . . . . . 9
Article 5 Representations and Warranties of PFPC . . . . . . . . 10
Article 6 Data Access and Proprietary Information . . . . . . . 10
Article 7 Indemnification . . . . . . . . . . . . . . . . . . . 13
Article 8 Standard of Care . . . . . . . . . . . . . . . . . . . 16
Article 9 Covenants of the Fund and the Bank . . . . . . . . . . 16
Article 10 Termination of Agreement . . . . . . . . . . . . . . . 18
Article 11 Additional Funds . . . . . . . . . . . . . . . . . . . 18
Article 12 Assignment . . . . . . . . . . . . . . . . . . . . . . 19
Article 13 Amendment . . . . . . . . . . . . . . . . . . . . . . 19
Article 14 Massachusetts Law to Apply . . . . . . . . . . . . . . 20
Article 15 Force Majeure . . . . . . . . . . . . . . . . . . . . 20
Article 16 Consequential DamaGes . . . . . . . . . . . . . . . . 20
Article 17 Merger of Agreement . . . . . . . . . . . . . . . . . 20
Article 18 Counterparts . . . . . . . . . . . . . . . . . . . . . 21
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1st day of February, 1995, by
and between The RBB Fund, Inc., a Maryland corporation, having
its principal office and place of business at 400 Bellevue
Parkway, Suite 100, Wilmington, DE 19809 (the "Fund"), PFPC Inc.,
a Delaware corporation that is an indirect wholly-owned
subsidiary of PNC Bank Corp. ("PFPC") and STATE STREET BANK AND
TRUST COMPANY, a Massachusetts trust company having its principal
office and place of business at 225 Franklin Street, Boston,
Massachusetts 02110 (the "Bank").
WHEREAS, the Fund is authorized to issue shares in
separate series, with each such series representing interests in
a separate portfolio of securities and other assets; and
WHEREAS, the Fund currently offers shares in at least
two such series, namely the Warburg Pincus Growth and Income Fund
and the Warburg Pincus Balanced Fund (each series, together with
all other series subsequently established by the Fund and made
subject to this Agreement in accordance with Article 10, being
herein referred to, as a "Portfolio", and collectively as the
"Portfolios");
WHEREAS, PFPC serves as transfer agent, registrar and
dividend disbursing agent for the Fund with respect to the
Portfolios pursuant to one or more Transfer Agency Agreements
between the Fund and PFPC (the "Transfer Agency Agreements");
WHEREAS, PFPC is desirous of having the Bank perform
the duties of transfer agent, registrar and dividend disbursing
<PAGE>
agent for the Fund with respect to the Portfolios, and the Fund
has agreed to and is in concurrence with such appointment;
WHEREAS, the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual
covenants herein contained, the parties hereto agree as follows:
Article 1 Terms of Appointment: Duties of the Bank
----------------------------------------
1.01 Subject to the terms and conditions set forth in
this Agreement, PFPC hereby employs and appoints the Bank to
provide any and all transfer agent registrar and dividend
disbursing agent duties relating to the Portfolios directly to
the Portfolios, and the Bank agrees to provide such transfer
agent registrar and dividend disbursing agent duties with respect
to the shares of capital stock of the Fund representing interests
in each of the respective Portfolios ("Shares"), for the benefit
of the shareholders of each of the respective Portfolios of the
Fund ("Shareholders"). The Fund understands that PFPC is hereby
delegating the entirety of its duties as transfer agent,
registrar and dividend disbursing agent with respect to the
Portfolios to the Bank, and the Fund agrees to such delegation.
Pursuant to such delegation, the Fund understands and agrees that
the manner of performance and content of the services to be
provided to the Portfolios by the Bank hereunder are in lieu of
and shall replace the manner of performance and content of the
services to be provided to the Portfolios by PFPC under the
Transfer Agency Agreements. Upon such delegation, PFPC shall be
relieved of any further transfer agency or other duties or
2
<PAGE>
obligations with respect to the Portfolios under the Transfer
Agency Agreements and from any liability for any acts or failures
to act occurring thereafter.
1.02 The Bank agrees that it will perform the following
services:
(a) In accordance with procedures established
from time to time by agreement between the Fund on behalf of each
of the Portfolios, as applicable and the Bank, the Bank shall:
(i) Receive for acceptance, orders for the
purchase of Shares, and promptly deliver
payment and appropriate documentation
thereof to the Custodian of the Fund
authorized pursuant to the Articles of
Incorporation of the Fund (the
"Custodian");
(ii) Pursuant to purchase orders, issue the
appropriate number of Shares and hold
such Shares in the appropriate
Shareholder account;
(iii) Receive for acceptance redemption
requests and redemption directions and
deliver the appropriate documentation
thereof to the Custodian;
(iv) In respect to the transactions in items
(i), (ii) and (iii) above, the Bank
shall execute transactions directly with
3
<PAGE>
broker-dealers authorized by the Fund
who shall thereby be deemed to be acting
on behalf of the Fund;
(v) At the appropriate time as and when it
receives monies paid to it by the
Custodian with respect to any
redemption, pay over or cause to be paid
over in the appropriate manner such
monies as instructed by the redeeming
Shareholders;
(vi) Effect transfers of Shares by the
registered owners thereof upon receipt
of appropriate instructions;
(vii) Prepare and transmit payments for
dividends and distributions declared by
the Fund on behalf of the applicable
Portfolio;
(viii) Issue replacement certificates for those
certificates alleged to have been lost,
stolen or destroyed upon receipt by the
Bank of indemnification satisfactory to
the Bank and protecting the Bank and the
Fund, and the Bank at its option, may
issue replacement certificates in place
of mutilated stock certificates upon
4
<PAGE>
presentation thereof and without such
indemnify;
(ix) Maintain records of account for and
advise the Fund and its Shareholders as
to the foregoing; and
(x) Record the issuance of Shares of the
Portfolios and maintain pursuant to SEC
Rule l7Ad-10(e) a record of the total
number of Shares of the Portfolios which
are authorized, based upon data provided
to it by the Fund, and issued and
outstanding. The Bank shall also
provide the Fund on a regular basis with
the total number of Shares which are
authorized and issued and outstanding
and shall have no obligation, when
recording the issuance of Shares, to
monitor the issuance of such Shares or
to take cognizance of any laws relating
to the issue or sale of such Shares,
which functions shall be the sole
responsibility of the Fund.
(b) In addition to and neither in lieu nor in
contravention of the services set forth in the above paragraph
(a), the Bank shall: (i) perform the customary services of a
transfer agent, registrar and dividend disbursing agent,
5
<PAGE>
including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies,
mailing Shareholder reports and prospectuses to current
Shareholders, withholding taxes on U.S. resident and non-resident
alien accounts, preparing and filing U.S. Treasury Department
Forms 1099 and other appropriate forms required with respect to
dividends and distributions by federal authorities for all
Shareholders, preparing and mailing confirmation forms and
statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements
for Shareholders, and providing Shareholder account information
and (ii) provide a system which will enable the Fund to monitor
the total number of Shares sold in each State.
(c) In addition, the Fund shall (i) identify to
the Bank in writing those transactions and assets to be treated
as exempt from blue sky reporting for each State and (ii) verify
the establishment of transactions for each state on the system
prior to activation and thereafter monitor the daily activity for
each state. The responsibility of the Bank for the Fund's blue
sky state registration status is solely limited to the initial
establishment of transactions subject to blue sky compliance by
the Fund and the reporting of such transactions to the Fund as
provided above.
6
<PAGE>
(d) The Bank shall provide additional services on
behalf of the Fund (i.e., escheatment services) which may be
agreed upon in writing between the Fund, the Bank and PFPC.
Article 2 Fees and Expenses
-----------------
2.01 For the performance by the Bank pursuant to this
Agreement, the Fund agrees on behalf of each of the Portfolios to
pay the Bank an annual maintenance fee for each Shareholder
account as set out in the initial fee schedule attached hereto.
Such fees and out-of-pocket expenses and advances identified
under Section 2.02 below may be changed from time to time subject
to mutual written agreement between the Fund and the Bank.
2.02 In addition to the fee paid under Section 2.01
above, the Fund agrees on behalf of each of the Portfolios to
reimburse the Bank for out-of-pocket expenses, including but not
limited to confirmation production, postage, forms, telephone,
microfilm, microfiche, tabulating proxies, records storage or
advances incurred by the Bank for the items set out in the fee
schedule attached hereto. In addition, any other expenses
incurred by the Bank at the request or with the consent of the
Fund, will be reimbursed by the Fund on behalf of the applicable
Portfolio.
2.03 The Fund agrees on behalf of each of the
Portfolios to pay all fees and reimbursable expenses within five
days following the receipt of the respective billing notice.
Postage for mailing of dividends, proxies, Fund reports and other
mailings to all Shareholder accounts shall be advanced to the
7
<PAGE>
Bank by the Fund at least seven (7) days prior to the mailing
date of such materials.
2.04 The Fund and PFPC agree that, the payment of fees
by the Fund hereunder shall be in lieu of the payment of fees
(but not the payment of expenses) by the Fund for transfer agent,
registrar and dividend disbursing agent services provided by PFPC
with respect to the Portfolios pursuant to the Transfer Agency
Agreements.
Article 3 Representations and Warranties of the Bank
------------------------------------------
The Bank represents and warrants to the Fund and PFPC
that:
3.01 It is a trust company duly organized and existing
and in good standing under the laws of the Commonwealth of
Massachusetts.
3.02 It is duly qualified to carry on its business in
the Commonwealth of Massachusetts.
3.03 It is empowered under applicable laws and by its
Charter and By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been
taken to authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the
necessary facilities, equipment and personnel to perform its
duties and obligations under this Agreement.
3.06 It is currently registered with the appropriate
federal agency for the registration of transfer agents, and will
remain so registered for the duration of this Agreement. The Bank
8
<PAGE>
agrees that it will promptly notify the Fund and PFPC in the
event of any material change in its status as a federally
registered transfer agent, and that the Fund or PFPC may
immediately terminate this Agreement upon written notice to the
Bank should the Bank fail to be federally registered as a
transfer agent.
Article 4 Representations and Warranties of the Fund
------------------------------------------
The Fund represents and warrants to the Bank that:
4.01 It is a corporation duly organized and existing
and in good standing under the laws of Maryland.
4.02 It is empowered under applicable laws and by its
Articles of Incorporation and By-Laws to enter into and perform
this Agreement.
4.03 All corporate proceedings required by By-Laws
Articles of Incorporation and ByLaws have been taken to authorize
it to enter into and perform this Agreement.
4.04 It is an open-end management investment company
registered under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act
of 1933, as amended on behalf of each of the Portfolios is
currently effective and will remain effective, and appropriate
state securities law filings have been made and will continue to
be made, with respect to all Shares of the Portfolios being
offered for sale.
9
<PAGE>
Article 5 Representations and Warranties of PFPC
--------------------------------------
The PFPC represent and warrants to the Fund and the
Bank that:
5.01 It is a corporation duly organized and existing
and in good standing under the of the state of Delaware.
5.02 It is duly qualified to carry on its transfer
agency business in the state of Delaware.
5.03 It is empowered under applicable laws and by its
Charter and By-Laws to enter into and perform this Agreement.
5.04 All requisite corporate proceedings have been
taken to authorize it to enter into and perform this Agreement.
5.05 It is currently registered with the appropriate
federal agency for the registration of transfer agents and will
remain so for the duration of the Agreement. PFPC agrees that it
will promptly notify the Fund and the Bank in the event of any
material change in its status as a federally registered transfer
agent. The Fund or the Bank may immediately terminate the
Agreement upon written notice to PFPC should PFPC fail to be
federally registered as a transfer agent.
Article 6 Data Access and Proprietary Information
---------------------------------------
6.01 The Fund acknowledges that the data bases,
computer programs, screen formats, report formats, interactive
design techniques, and documentation manuals furnished to the
Fund by the Bank as part of the Fund's ability to access certain
Fund-related data ("Customer Data") maintained by the Bank on
data bases under the control and ownership of the Bank or other
10
<PAGE>
third party ("Data Access Services") constitute copyrighted,
trade secret, or other proprietary information (collectively,
"Proprietary Information") of substantial value to the Bank or
other third party. In no event shall Proprietary Information be
deemed Customer Data. The Fund agrees to treat all Proprietary
Information as proprietary to the Bank and further agrees that it
shall not divulge any Proprietary Information to any person or
organization except as may be provided hereunder. Without
limiting the foregoing, the Fund agrees for itself and its
employees and agents:
(a) to access Customer Data solely from locations
as may be designated in writing by the Bank
and solely in accordance with the Bank's
applicable user documentation;
(b) to refrain from copying or duplicating in any
way the Proprietary Information;
(c) to refrain from obtaining unauthorized access
to any portion of the Proprietary
Information, and if such access is
inadvertently obtained, to inform in a timely
manner of such fact and dispose of such
information in accordance with the Bank's
instructions;
(d) to refrain from causing or allowing third-
party data acquired hereunder from being
retransmitted to any other computer facility
11
<PAGE>
or other location, except with the prior
written consent of the Bank;
(e) that the Fund shall have access only to those
authorized transactions agreed upon by the
Fund and the Bank;
(f) to honor all reasonable written requests made
by the Bank to protect at the Bank's expense
the rights of the Bank in Proprietary
Information at common law, under federal
copyright law and under other federal or
state law.
The Fund and the Bank shall each take reasonable
efforts to advise its employees of their obligations pursuant to
this Article 6. The obligations of this Article shall survive
any earlier termination of this Agreement.
6.02 If the Fund notifies the Bank that any of the Data
Access Services do not operate in material compliance with the
most recently issued user documentation for such services, the
Bank shall endeavor in a timely manner to correct such failure.
Organizations from which the Bank may obtain certain data
included in the Data Access Services are solely responsible for
the contents of such data and the Fund agrees to make no claim
against the Bank arising out of the contents of such third-party
data, including, but not limited to, the accuracy thereof. DATA
ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE
SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS
12
<PAGE>
IS, AS AVAILABLE BASIS. THE BANK EXPRESSLY DISCLAIMS ALL
WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
6.03 If the transactions available to the Fund include
the ability to originate electronic instructions to the Bank in
order to (i) effect the transfer or movement of cash or Shares or
(ii) transmit Shareholder information or other information, then
in such event the Bank shall be entitled to rely on the validity
and authenticity of such instruction without undertaking any
further inquiry as long as such instruction is undertaken in
conformity with reasonable security procedures established by the
Bank from time to time.
Article 7 Indemnification
---------------
7.01 The Bank shall not be responsible for, and the
Fund shall on behalf of the applicable Portfolio indemnify and
hold the Bank harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and
liability not caused by the Bank's negligence, bad faith or
willful misconduct or that of its employees and arising out of or
attributable to:
(a) All actions of the Bank or its agent or
subcontractors required by the Fund to be taken pursuant to this
Agreement, provided that such actions are taken in good faith and
without negligence or willful misconduct.
13
<PAGE>
(b) The Fund's lack of good faith negligence or
willful misconduct which arise out of the breach of any
representation or warranty of the Fund hereunder.
(c) The good faith reasonable reliance on or use
by the Bank or its agents or subcontractors of information,
records or documents which (i) are received by the Bank or its
agents or subcontractors, and (ii) have been prepared or
maintained by the Fund or any other person or firm on behalf of
the Fund including but not limited to any previous transfer agent
or registrar.
(d) The reliance on, or the carrying out by the
Bank or its agents or subcontractors of any instructions or
requests of the Fund on behalf of the applicable Portfolio.
(e) The offer or sale of Shares in violation of
any requirement under the federal securities laws or regulations
or the securities laws or regulations of any state that such
Shares be registered in such state or in violation of any stop
order or other determination or ruling by any federal agency or
any state with respect to the offer or sale of such Shares in
such state.
7.02 At any time the Bank may apply to any officer of
the Fund for instructions, and may consult with legal counsel
with respect to any matter arising in connection with the
services to be performed by the Bank under this Agreement, and
the Bank and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund on behalf of the applicable
14
<PAGE>
Portfolio for any action taken or omitted by it in good faith
reasonable reliance upon such instructions or upon the opinion of
such counsel. The Bank, its agents and subcontractors shall be
protected and indemnified in acting upon any paper or document
furnished by or on behalf of the Fund, reasonably believed to be
genuine and to have been signed by the proper person or persons,
or upon any instruction, information, data, records or documents
provided the Bank or its agents or subcontractors by machine
readable input, telex, CRT data entry or other similar means
authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written
notice thereof from the Fund. The Bank, its agents and
subcontractors shall also be protected and indemnified in
recognizing stock certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officers of
the Fund, and the proper countersignature of any former transfer
agent or former registrar, or of a co-transfer agent or co-
registrar.
7.03 The Bank shall indemnify and hold PFPC harmless
from and against any and all losses, damages, costs, charges,
reasonable counsel fees, payments, expenses and liability arising
out of or attributable to the Bank's negligence, bad faith or
willful misconduct under this Agreement.
7.04 In order that the indemnification provisions
contained in this Article 7 shall apply, upon the assertion of a
claim for which a party to this Agreement may be required to
15
<PAGE>
indemnify another Party to this Agreement, the indemnified party
shall promptly notify the indemnifying party of such assertion,
and shall keep the indemnifying party advised with respect to all
developments concerning such claim. The indemnifying party shall
have the option to participate with the indemnified party in the
defense of such claim or to defend against said claim in its own
name or in the name of the indemnified party. The indemnified
party shall in no case confess any claim or make any compromise
in any case in which the indemnifying party may be required to
indemnify the indemnified party except with the indemnifying
party's prior written consent.
Article 8 Standard of Care
----------------
8.01 The Bank shall at all times act in good faith and
agrees to use its best efforts within reasonable limits to insure
the accuracy of all services performed under this Agreement, but
assumes no responsibility and shall not be liable for loss or
damage due to errors unless said errors are caused by its
negligence, bad faith, or willful misconduct or that of its
employees.
Article 9 Covenants of the Fund and the Bank
----------------------------------
9.01 The Fund shall on behalf of each of the Portfolios
promptly furnish to the Bank the following:
(a) A certified copy of the resolution of the
Directors of the Fund authorizing the appointment of the Bank and
the execution and delivery of this Agreement.
16
<PAGE>
(b) A copy of the Articles of Incorporation and
By-Laws of the Fund and all amendments thereto.
9.02 The Bank hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Fund for
safekeeping of stock certificates, check forms and facsimile
signature imprinting devices, if any; and for the preparation or
use, and for keeping account of' such certificates, forms and
devices.
9.03 The Bank shall keep records relating to the
services to be performed hereunder, in the form and manner as it
may reasonably deem advisable. To the extent required by Section
31 of the Investment Company Act of 1940, as amended, and the
Rules thereunder, the Bank agrees that all such records prepared
or maintained by the Bank relating to the services to be
performed by the Bank hereunder are the property of the Fund and
will be preserved, maintained and made available in accordance
with such Section and Rules, and will be surrendered promptly to
the Fund on and in accordance with its request.
9.04 The Bank and the Fund agree that all books,
records, information and data pertaining to the business of the
other party which are exchanged or received pursuant to the
negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other
person, except as may be required by law.
9.05 In case of any requests or demands for the
inspection of the Shareholder records of the Fund, the Bank will
17
<PAGE>
endeavor to notify the Fund and to secure instructions from an
authorized officer of the Fund as to such inspection. The Bank
reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may
be held liable for the failure to exhibit the Shareholder records
to such person.
Article 10 Termination of Agreement
------------------------
10.01 This Agreement may be terminated by the Fund,
the Bank or PFPC upon one hundred twenty (120) days written
notice to the other parties. This Agreement will also terminate
automatically with respect to a particular Portfolio upon the
termination of the Transfer Agency Agreement with respect to that
Portfolio.
10.02 Should the Fund exercise its right to
terminate, all out-of-pocket expenses associated with the
movement of records and material will be borne by the Fund on
behalf of the applicable Portfolio(s). Additionally, the Bank
reserves the right to charge for any other reasonable expenses
associated with such termination and/or a charge equivalent to
the average of three (3) months' fees.
Article 11 Additional Funds
----------------
11.01 In the event that the Fund establishes one or
more series of Shares in addition to the Warburg Pincus Growth
and Income Fund and the Warburg Pincus Balanced Fund with respect
to which it and PFPC desire to have the Bank render services as
transfer agent under the terms hereof, the Fund and PFPC shall so
18
<PAGE>
notify the Bank in writing, and if the Bank agrees in writing to
provide such services, such series of Shares shall become a
Portfolio hereunder.
Article 12 Assignment
----------
12.01 Except as provided in Section 12.03 below,
neither this Agreement nor any rights or obligations hereunder
may be assigned by any party without the written consent of the
other parties.
12.02 This Agreement shall inure to the benefit of
and be binding upon the parties and their respective permitted
successors and assigns.
12.03 The Bank may, without further consent on the
part of the Fund or PFPC subcontract for the performance hereof
with (i) Boston Financial Data Services, Inc., a Massachusetts
corporation ("BFDS") which is duly registered as a transfer agent
pursuant to Section 17A(c)(2) of the Securities Exchange Act of
1934, as amended ("Section 17A(c)(2)"), (ii) a BFDS subsidiary
duly registered as a transfer agent pursuant to Section I
7A(c)(2) or (iii) a BFDS affiliate that is duly registered as a
transfer agent pursuant to Section 1 7A(c)(2); provided, however,
that the Bank shall be as fully responsible to the Fund and PFPC
for the acts and omissions of any subcontractor as it is for its
own acts and omissions or other responsibilities hereunder.
19
<PAGE>
Article 13 Amendment
---------
13.01 This Agreement may be amended or modified by
a written agreement executed by the parties and authorized or
approved by a resolution of the Directors of the Fund.
Article 14 Massachusetts Law to Apply
--------------------------
14.01 This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the
laws of The Commonwealth of Massachusetts.
Article 15 Force Majeure
-------------
15.01 In the event either the Fund or the Bank is
unable to perform its obligations under the terms of this
Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such party shall not
be liable for damages to any party to this Agreement for any
damages resulting from such failure to perform or otherwise from
such causes.
Article 16 Consequential DamaGes
---------------------
16.01 Neither the Fund nor the Bank shall be liable
to any party to this Agreement for consequential damages under
any provision of this Agreement or for any consequential damages
arising out of any act or failure to act hereunder.
Article 17 Merger of Agreement
-------------------
17.01 This Agreement constitutes the entire
agreement among the parties hereto and supersedes any prior
20
<PAGE>
agreement among the parties hereto with respect to the subject
matter hereof whether oral or written.
Article 18 Counterparts
------------
18.01 This Agreement may be executed by the parties
hereto on any number of counterparts, and all of said
counterparts taken together shall be deemed to constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their names and on their behalf by
and through their duly authorized officers, as of the day and
year first above written.
THE RBB FUND, INC.
BY: /s/ Edward J. Roach
---------------------------
President
ATTEST:
/s/ Linda G. Hagan
- ------------------------------
STATE STREET BANK TRUST
COMPANY
BY: /s/State Street (illegible)
-----------------------------
Executive Vice President
ATTEST:
/s/ S. Cesso
- ------------------------------
PFPC INC.
BY: /s/ Robert J. Perlsweig
----------------------------
Executive Vice President
ATTEST:
/s/ Joseph Gramled
- ------------------------------
21
Exhibit 9 (00)
SUPPLEMENT TO TRANSFER AGENCY
AND SERVICE AGREEMENT AMONG
THE RBB FUND, INC.,
STATE STREET BANK AND TRUST COMPANY AND
PFPC INC.
April 10, 1995
State Street Bank and Trust Company
Two Heritage Drive
North Quincy, Mass. 02171
Re: Addition of Warburg Pincus Tax-Free Fund
----------------------------------------
Ladies and Gentlemen:
Pursuant to Article 11 of the Transfer Agency and Service
Agreement (the "Agreement") among The RBB Fund, Inc. ("RBB"),
State Street Bank and Trust Company ("State Street") and PFPC
Inc. ("PFPC"), RBB and PFPC hereby notify State Street that they
desire State Street to provide the transfer agency and other
services provided for in the Agreement to the Warburg Pincus Tax-
Free Fund of RBB. Such services shall be provided pursuant to
and in accordance with the terms set forth in the Agreement, the
Warburg Pincus Tax-Free Fund shall be a "Portfolio" as
contemplated by the Agreement and the provisions, understandings
and agreements set forth in the Agreement shall apply fully to
the Warburg Pincus Tax-Free Fund.
If the foregoing is acceptable to you, kindly indicate your
acceptance and agreement by signing and dating this Supplement as
indicated.
Very truly yours,
The RBB FUND, INC.
By: /s/ Edward J. Roach Title: President
--------------------------- -------------------------
PFPC INC.
By: /s/ Robert J. Perlsweig Title: Executive Vice President
--------------------------- -------------------------
Accepted and Agreed to:
STATE STREET BANK AND TRUST COMPANY
By: /s/ illegible Title: Executive Vice President
--------------------------- -------------------------
Date: April 10, 1995
Exhibit (10)(b)
CONSENT
-------
We hereby consent to the use of our name under the
caption "Miscellaneous-Counsel" in the Statement of Additional
Information of Post-Effective Amendment No. 28 to the
Registration Statement on Form N-1A of The RBB Fund, Inc.
(Registration No. 33-20827) filed under the Securities Act of
1933 and Amendment No. 30 under the Investment Company Act of
1940.
/s/ Ballard Spahr Andrews & Ingersoll
-------------------------------------
Ballard Spahr Andrews & Ingersoll
October 2, 1995
EXHIBIT 13(g)
PURCHASE AGREEMENT
------------------
The RBB Fund, Inc. (the "Fund"), a Maryland
corporation, and Counsellors Securities Inc. ("Counsellors"), a
New York corporation, intending to be legally bound, hereby agree
with each other as follows:
1. The Fund hereby offers Counsellors and Counsellors
hereby purchases $1000 worth of shares of Class DD Common Stock
(Warburg Pincus Growth & Income Fund Series 2) of the Fund (par
value $.001 per share) (such shares hereinafter sometimes
collectively known as "Shares") at a price per Share equivalent
to the net asset value per share of the Warburg Pincus Growth &
Income Fund No-Load shares of the Fund as determined on May 15,
1995.
The Fund hereby acknowledges receipt from Counsellors of funds in
the amount of $1000.00 in full payment for the Shares.
2. Counsellors represents and warrants to the Fund
that the Shares are being acquired for investment purposes and
not with a view to the distribution thereof.
3. This agreement may be executed in counterparts,
and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the 15th day of May, 1994.
THE RBB FUND, INC.
By:/s/Edward J. Roach
------------------
President
COUNSELLORS SECURITIES INC.
By:/s/Eugene P. Grace
------------------
Vice President
EXHIBIT 13(h)
PURCHASE AGREEMENT
------------------
The RBB Fund, Inc. (the "Fund"), a Maryland
corporation, and Counsellors Securities Inc. ("Counsellors"), a
New York corporation, intending to be legally bound, hereby agree
with each other as follows:
1. The Fund hereby offers Counsellors and Counsellors
hereby purchases $1000 worth of shares of Class EE Common Stock
(Warburg Pincus Balanced Fund Series 2) of the Fund (par value
$.001 per share) (such shares hereinafter sometimes collectively
known as "Shares") at a price per Share equivalent to the net
asset value per share of the Warburg Pincus Balanced Fund No-Load
shares of the Fund as determined on , 1995.
The Fund hereby acknowledges receipt from Counsellors of funds in
the amount of $1000.00 in full payment for the Shares.
2. Counsellors represents and warrants to the Fund
that the Shares are being acquired for investment purposes and
not with a view to the distribution thereof.
3. This agreement may be executed in counterparts,
and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day of , 1995.
THE RBB FUND, INC.
By:/s/Edward J. Roach
------------------
President
COUNSELLORS SECURITIES INC.
By:/s/Eugene P. Grace
------------------
Vice President
RULE 18f-3 PLAN
Rule 18f-3 Plan
1. A Portfolio of the Fund ("Portfolio") may issue
more than one class of voting stock ("Class"), provided
that:
(a) Each such Class:
(1) (i) Shall have a different arrangement
for shareholder services or the distribution of
securities or both, and shall pay all of the expenses
of that arrangement; and
(ii) May pay a different share of other
expenses, not including advisory or custodial fees or
other expenses related to the management of the
Portfolio's assets, if those expenses are actually
incurred in a different amount by that Class, or if the
Class receives services of a different kind or to a
different degree than other Classes;
(2) Shall have exclusive voting rights on
any matter submitted to shareholders that relates
solely to its arrangement;
(3) Shall have separate voting rights on any
matter submitted to shareholders in which the interests
of one Class differ from the interests of any other
Class; and
(4) Shall have in all other respects the
same rights and obligations as each other class.
(b) Expenses may be waived or reimbursed by the
Portfolio's adviser, underwriter, or any other provider
of services to the Portfolio.
(c) (1) Any payments made under paragraph
(a)(1)(i) of this Plan shall conform to Appendix A to
this Plan, as such Appendix A shall be amended from
time to time by the Board.
(2) Before any vote on the Plan or the
Appendix, the Directors shall be provided, and any
agreement relating to a Class arrangement shall require
the parties thereto to furnish, such information as may
be reasonably necessary to evaluate the Plan.
<PAGE>
(3) The provisions of the Plan in Appendix A
are severable for each Class, and whenever any action
is to be taken with respect to the Plan in Appendix A,
that action will be taken separately for each Class.
(d) A Portfolio may offer a Class with an
exchange privilege providing that securities of the
Class may be exchanged for certain securities of
another Portfolio. Such exchange privileges are
summarized in Appendix B, as may be modified by the
Board from time to time, and are set forth in greater
detail in the prospectuses of each of the Classes.
2
<PAGE>
Appendix A
<TABLE>
RBB FUND
Current Distribution Fee Levels
June 30, 1995
_________________________________________________________________________________________________________
<CAPTION>
A. Money Market Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Sansom Street (Class I) fee 0.05% 4/10/91
Shareholder Service Fee 0.10% 8/16/88
2. Bedford (Class L) fee 0.60% 11/17/94
3. Cash Preservation (Class G) fee 0.40% 4/10/91
4. RBB Family (Class E) fee 0.40% 4/10/91
5. Janney (Class Alpha 1) fee 0.60% 2/1/95
<CAPTION>
B. Municipal Money Market Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Sansom Street (Class J) fee 0.05% 4/10/91
Shareholder Service Fee 0.10% 8/16/88
2. Bedford (Class M) fee 0.60% 11/17/94
3. Bradford (Class R) fee 0.60% 11/17/94
4. Cash Preservation (Class H) fee 0.40% 4/10/91
5. RBB Family (Class F) fee 0.40% 4/10/91
A-1
<PAGE>
6. Janney (Class Alpha 2) fee 0.60% 2/1/95
<CAPTION>
C. Government Obligation Money Market Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Sansom Street (Class K) fee 0.05% 4/10/91
Shareholder Service Fee 0.10% 8/16/88
2. Bedford (Class N) fee 0.60% 11/17/94
3. Bradford (Class S) fee 0.60% 11/17/94
4. Janney (Class Alpha 3) fee 0.60% 2/1/95
<CAPTION>
D. Government Securities Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. RBB Family (Class P) fee 0.40% 4/10/91
<CAPTION>
E. Warburg Pincus Tax Free Fund
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Warburg (Class D) fee 0.25% 2/1/95
<CAPTION>
F. Warburg Pincus Growth & Income Fund
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Warburg (Class A) none none
2. Warburg (Class DD) fee 0.50% 11/17/94
A-2
<PAGE>
<CAPTION>
G. Warburg Pincus Balanced Fund
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Warburg (Class C) fee 0.25% 8/3/94
2. Warburg (Class EE) fee 0.50% 11/17/94
<CAPTION>
H. New York Municipal Money Market Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Bedford (Class O) fee 0.60% 11/17/94
2. Janney (Class Alpha 4) fee 0.60% 2/1/95
<CAPTION>
I. Laffer/Canto Equity Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Laffer (Class W) fee 0.40% 7/21/93
<CAPTION>
J. BEA International Equity Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA (Class T) None None
<CAPTION>
K. BEA Emerging Markets Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA (Class V) None None
<CAPTION>
L. BEA Strategic Fixed Income Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA (Class U) None None
A-3
<PAGE>
<CAPTION>
M. BEA U.S. Core Equity Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA (Class X) None None
<CAPTION>
N. BEA U.S. Core Fixed Income Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA (Class Y) None None
<CAPTION>
O. BEA Global Fixed Income Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA (Class Z) None None
<CAPTION>
P. BEA Municipal Bond Fund
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA (Class AA) None None
<CAPTION>
Q. BEA Short Duration Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA (Class BB) None None
<CAPTION>
R. BEA Balanced Portfolio
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA (Class CC) None None
</TABLE>
A-4
<PAGE>
<TABLE>
EXCHANGE PRIVILEGES OF THE PORTFOLIOS
OF THE RBB FUND, INC.
<CAPTION>
========================================================================================================
FAMILY Each Portfolio (Class) . . . May Be Exchanged For Any Of
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
BEA International Equity (T) International Equity (T)
Strategic Fixed Income (U) Strategic Fixed Income (U)
Emerging Markets Equity (V) Emerging Markets Equity (V)
U.S. Core Equity (X) U.S. Core Equity (X)
U.S. Core Fixed Income (Y) U.S, Core Fixed Income (Y)
Global Fixed Income (Z) Global Fixed Income (Z)
Municipal Bond Fund (AA) Municipal Bond Fund (AA)
Balanced Fund (BB) Balanced Fund (BB)
Short Duration Fund (CC) Short Duration Fund (CC)
- --------------------------------------------------------------------------------------------------------
Cash Preservation Money Market (G) Money Market (G)
Municipal Money Market (H) Municipal Money Market (H)
- --------------------------------------------------------------------------------------------------------
RBB Money Market (E) Money Market (E)
Municipal Money Market (F) Municipal Money Market (F)
Government Securities (P) Government Securities (P)
- --------------------------------------------------------------------------------------------------------
Bedford (Bear Stearns) Money Market (L) Common shares of other non-
RBB funds advised or sponsored
by Bear, Stearns & Co. Inc.
- --------------------------------------------------------------------------------------------------------
Bedford (Valley Forge) Money Market (L) Common shares of other non-
RBB funds advised or sponsored
by Valley Forge Capital
Holdings, Inc.
- --------------------------------------------------------------------------------------------------------
Warburg Pincus Growth & Income (A) Growth & Income (A)
(Common Shares) Balanced (C) Balanced (C)
Tax Free (D) Tax Free (D)
Common Shares of other Common Shares of other
non-RBB funds advised by non-RBB funds advised by
Warburg, Pincus Counsellors, Warburg, Pincus Counsellors,
Inc. Inc.
- --------------------------------------------------------------------------------------------------------
Warburg Pincus Growth & Income (DD) Growth & Income (DD)
(Series 2 Shares) Balanced (EE) Balanced (EE)
Series 2 Shares of other non-RBB Series 2 Shares of other non-RBB
funds advised by Warburg, Pincus funds advised by Warburg,
Counsellor, Inc. Pincus Counsellor, Inc.
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