<PAGE>
N/I family of mutual funds
N/I Micro Cap Fund
N/I Growth Fund
N/I Growth & Value Fund
--------------------------------------------
advised by NUMERIC INVESTORS LP
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Prospectus
May 31, 1996
As Revised August 23, 1996
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN RBB'S 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.
TABLE OF CONTENTS
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PAGE
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<S> <C>
INTRODUCTION............................................................... 2
FINANCIAL HIGHLIGHTS....................................................... 4
INVESTMENT OBJECTIVES AND POLICIES......................................... 4
INVESTMENT LIMITATIONS..................................................... 8
MANAGEMENT................................................................. 8
HOW TO PURCHASE SHARES..................................................... 10
HOW TO REDEEM SHARES....................................................... 12
NET ASSET VALUE............................................................ 14
DIVIDENDS AND DISTRIBUTIONS................................................ 14
TAXES...................................................................... 14
DESCRIPTION OF SHARES...................................................... 15
OTHER INFORMATION.......................................................... 15
</TABLE>
APPENDIX A--Performance Benchmarks
INVESTMENT ADVISER
Numeric Investors L.P.
Cambridge, Massachusetts
CUSTODIAN
Custodial Trust Company
Princeton, New Jersey
CO-ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
CO-ADMINISTRATOR
Bear Stearns Funds Management Inc.
New York, New York
DISTRIBUTOR
Counsellors Securities Inc.
New York, New York
COUNSEL
Ballard Spahr Andrews & Ingersoll
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
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N/I family of mutual funds
of
The RBB Fund, Inc.
The n/i Family of Mutual Funds consists of three classes of common stock of
The RBB Fund, Inc. ("RBB"), an open-end management investment company. The
shares of each such class (collectively, the "n/i Family of Mutual Funds
Shares" or "Shares") offered by this Prospectus represent interests in one of
three investment portfolios of RBB and are designed to offer a variety of
investment opportunities (each such investment portfolio referred to as a
"Fund," collectively, the "Funds"). The investment objectives of each
investment portfolio described in this Prospectus are as follows:
N/I MICRO CAP FUND--to provide long-term capital appreciation. The Fund
invests generally in common stock of companies with market capitalization
of $500 million or less, although the Fund may invest in companies with
higher market capitalization.
N/I GROWTH FUND--to provide long-term capital appreciation. The Fund
invests generally in common stock of companies with smaller ($1 billion or
less) market capitalization or companies with substantial equity capital
and higher than average earnings growth rates.
N/I GROWTH & VALUE FUND--to provide long-term capital appreciation. The
Fund invests generally in common stock of companies where earnings per
share are improving more rapidly than the earnings per share of the average
company, as well as companies whose securities have market valuations which
are lower than the average market valuations of securities, as measured by
such characteristics as price to earnings ratios and price to book ratios.
NUMERIC INVESTORS L.P. ("NUMERIC"), THE FUNDS' INVESTMENT ADVISER, WILL
MONITOR THE FUNDS' TOTAL ASSETS AND MAY CLOSE ANY OF THE FUNDS AT ANY TIME TO
NEW INVESTMENT DUE TO CONCERNS THAT AN INCREASE IN THE SIZE OF A FUND MAY
ADVERSELY AFFECT THE IMPLEMENTATION OF NUMERIC'S INVESTMENT STRATEGY. NUMERIC
MAY ALSO CHOOSE TO REOPEN A CLOSED FUND TO NEW INVESTMENT AT ANY TIME, AND MAY
SUBSEQUENTLY CLOSE SUCH FUND AGAIN SHOULD CONCERNS REGARDING FUND SIZE RECUR.
SHARES OF THE N/I FAMILY OF MUTUAL FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, PNC BANK, NATIONAL ASSOCIATION OR ANY OTHER BANK
AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN
N/I FAMILY OF MUTUAL FUNDS SHARES 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 May 31, 1996, has been filed with the Securities
and Exchange Commission and is incorporated by reference in this Prospectus.
It may be obtained free of charge by calling (800) NUMERIC [(800) 686-3742].
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.
PROSPECTUS May 31, 1996
As Revised August 23, 1996
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INTRODUCTION
RBB is registered under the Investment Company Act of 1940 (the "1940 Act") as
an open-end management investment company and is currently operating or
proposing to operate seventeen separate investment portfolios. Each of the
three classes of Shares offered by this Prospectus represents interests in one
of the following three investment portfolios (each a "Fund." collectively the
"Funds"): n/i Micro Cap Fund; n/i Growth Fund; and n/i Growth & Value Fund.
RBB was incorporated under the laws of the State of Maryland on February 29,
1988.
WHO SHOULD INVEST: LONG-TERM INVESTORS SEEKING CAPITAL APPRECIATION
The Funds are intended for investors who are seeking long-term capital
appreciation, and who do not need to earn current income from their investment
in the Funds. The net asset values per share of Shares representing interests
in the Funds will fluctuate as the values of the portfolio securities change
in response to changing market prices and other factors. Because of the risks
associated with common stock investments, the Funds are intended to be a long-
term investment vehicle and are not designed to provide investors with a means
of speculating on short-term stock market movements. Investors should be able
to tolerate sudden, sometimes substantial fluctuations in the value of their
investment. Investors who engage in excessive account activity generate
additional costs which are borne by all a Fund's shareholders. In order to
minimize such costs, the Funds reserve the right to reject any purchase
request (including exchange purchases from other n/i Funds) that is reasonably
deemed to be disruptive to efficient portfolio management, either because of
the timing of the investment or previous excessive trading by the investor.
Additionally, the Funds have adopted exchange privilege limitations permitting
three exchanges per year as described in the section "Exchange Privilege
Limitations." Finally, the Funds reserve the right to suspend the offering of
their shares.
Because of these risks, the Funds should not be considered a complete
investment program. Most investors should maintain diversified holdings of
securities with different risk characteristics--including common stocks, bonds
and money market instruments. Investors may wish to purchase shares on a
regular, periodic basis (Automatic Investing), rather than investing in one
lump sum, in order to reduce the risk of investing all their monies in common
stocks at a particularly unfavorable time. Investors may also wish to
complement an investment in the Fund with other types of common stock
investments.
FUND MANAGEMENT
Numeric serves as the investment adviser to the Funds. Numeric specializes in
the active management of U.S. equity portfolios using internally developed
quantitative stock selection and portfolio risk-control techniques, and
currently has over $2 billion in assets under management for individual,
limited partnership, mutual fund, pension plan and endowment accounts.
THE FUNDS
The investment objectives and policies of each of the Funds are summarized in
the table below. There is no assurance that a Fund will achieve its investment
objective.
<TABLE>
<CAPTION>
N/I INVESTMENT PERFORMANCE
FUND OBJECTIVE/POLICY BENCHMARK*
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<C> <S> <C>
Micro Cap Objective is to provide long-term capital Wilshire Small
appreciation. Invests primarily in common stock of Company Growth
companies with market capitalizations of $500 Index
million or less.
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Growth Objective is long-term capital appreciation. Russell 2500
Invests primarily in common stock of companies with Growth Index
smaller ($1 billion or less)
market capitalization or companies with substantial
equity capital and higher than average earnings
growth rates.
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Growth & Objective is long-term capital appreciation. S&P MidCap
Value Invests primarily in common stocks of companies 400 Index
where earnings per share are improving more rapidly
than the earnings per share of the average company,
as well as companies whose securities have market
valuations which are lower than the average market
valuations of securities, as measured by such
characteristics as price to earnings ratios and
price to book ratios.
</TABLE>
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* For more information on a Fund's benchmark, see Appendix A at the back of
this prospectus.
FEE TABLE
The following tables illustrate all expenses and fees (after expected fee
waivers and expense reimbursements) that a shareholder would incur in each
Fund. The expenses and fees in the tables are based on expenses expected to be
incurred for the current fiscal year ending August 31, 1996.
2
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SHAREHOLDER TRANSACTION EXPENSES
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<S> <C>
Maximum Sales Charge Imposed on Purchases (as percentage of offering
price) NONE
Sales Charge Imposed on Reinvested Dividends NONE
Redemption Fees NONE
Exchange Fees 1 NONE
</TABLE>
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1 Exchanges are limited to three (3) per year. See "How to Purchase Shares--
Exchange Privilege Limitations."
Annual Fund Operating Expenses After Expense Reimbursements and Waivers (as a
percentage of average net assets) 1
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<CAPTION>
N/I
N/I GROWTH
MICRO N/I &
CAP GROWTH VALUE
FUND FUND FUND
----- ------ ------
<S> <C> <C> <C>
Management Fees
(after waivers) 2......................................... 0% .36% 0%
12b-1 Fees (after waivers)................................. None None None
Other Expenses
(after waivers and
reimbursements)........................................... 1.00% .64% 1.00%
---- ---- ----
Total Fund Operating Expenses
(after waivers and
reimbursements)........................................... 1.00% 1.00% 1.00%
==== ==== ====
</TABLE>
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1. Before expense waivers and reimbursements, Management Fees would be 0.75%
for each of the three Funds, Other Expenses would be 1.07% for each of the
Micro Cap and Growth & Value Funds, and Total Fund Operating Expenses would
be 1.82% for each of the Micro Cap and Growth & Value Funds, and 1.39% for
the Growth Fund.
2. Management 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, nor does it
include taxes, interest or brokerage fees and expenses on the purchase and
sale of portfolio securities.
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
YEAR YEARS
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<S> <C> <C>
Micro Cap............................................................ $10 $32
Growth............................................................... $10 $32
Growth & Value....................................................... $10 $32
</TABLE>
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 in the years shown.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
INVESTMENT RETURN OR OPERATING EXPENSES AND ACTUAL INVESTMENT RETURN OR
OPERATING EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The Fee Table is designed to assist an investor in understanding the various
costs and expenses that an investor in any of the n/i Family of Mutual Funds
Classes of RBB will bear directly or indirectly. (For more complete
descriptions of the various costs and expenses, see "Management" and
"Distribution of Shares" below.) The Fee Table reflects a voluntary waiver of
management fees for each Fund through the current fiscal year. There can be no
assurance that any future waivers of management fees (if any) will not vary
from the figures reflected in the Fee Table. In addition, Numeric is currently
voluntarily assuming additional expenses of some of the Funds. There can be no
assurance that Numeric will continue to assume such expenses. Assumption of
additional expenses will have the effect of lowering a Fund's overall expense
ratio and increasing its yield or total return to investors. "Other Expenses"
for the Funds are based on estimated amounts for the current fiscal year.
OFFERING PRICES
Shares that represent interests in the Funds will be offered to the public at
the next determined net asset value after receipt of an order by PFPC Inc.
("PFPC"), the Funds' transfer agent. THE SHARES ARE OFFERED ON A NO-LOAD
BASIS: THERE IS NO SALES CHARGE IMPOSED ON PURCHASES OF SHARES, NOR ARE THE
SHARES SUBJECT TO A 12B-1 FEE.
MINIMUM INITIAL AND SUBSEQUENT INVESTMENTS
The minimum initial investment for each Fund is $3,000. Subsequent investments
must be $100 or more. The minimum initial investment for an Automatic
Investment Plan is $1,000 with minimum monthly payments of $100. The minimum
investment for Individual Retirement Accounts ("IRAs"), or pension, profit-
sharing or other employee benefit plans is $1,000 and minimum subsequent
investments are $100. See "How to Purchase Shares."
EXCHANGES
Shares of a n/i Family Fund may be exchanged up to three (3) times per year
for Shares of any other n/i Family Fund
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at their net asset value next determined after receipt by PFPC of an exchange
request. In addition, RBB reserves the right to impose an administrative
charge for each exchange or to reject any exchange request that is reasonably
deemed to be disruptive to efficient portfolio management. See "How to
Purchase Shares--Exchange Privilege" and "Exchange Privilege Limitation."
REDEMPTION PRICE
Shares may be redeemed at any time at their net asset value next determined
after receipt by PFPC of a redemption request. RBB reserves the right, upon 30
days' written notice, to redeem an account in any of the Funds if the net
asset 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 Shares."
RISK FACTORS TO CONSIDER
An investment in any of the 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. Some or
all of the Funds, to the extent set forth under "Investment Objectives and
Policies," may engage in the following investment practices: short sales,
borrowings, the lending of portfolio securities, engaging in options and
futures transactions and investments in micro-cap and small cap issuers. All
of these transactions involve certain special risks, as set forth under
"Investment Objectives and Policies." In addition, the Funds may be subject to
high portfolio turnover rates. See "Investment Objectives and Policies--
Portfolio Turnover" and "Taxes."
SHAREHOLDER INQUIRIES
For Questions Regarding Shareholder Accounts: (800) 348-5031. Any questions
regarding (i) new or existing accounts or (ii) purchases or redemptions should
be directed to PFPC by writing them at:
Bellevue Park Corporate Center
400 Bellevue Parkway
Wilmington, Delaware 19809
For overnight deliveries:
Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 108
Wilmington, Delaware 19809
or by calling PFPC toll-free at:
(800) 348-5031 (in Delaware call collect (302) 791-3486).
For any other questions, call:
1-800-NUMERIC [1-800-686-3742].
To Request a Prospectus. A prospectus is available by calling:
1-800 NUMERIC [1-800-686-3742].
To reach Numeric on the Internet. Information is available on the Internet
through the World Wide Web. Shareholders and investment professionals may
obtain information on Numeric by accessing:
http://www.numeric.com
FINANCIAL HIGHLIGHTS
No financial data is supplied for the Funds because, as of the date of this
Prospectus, the Funds had no performance history.
INVESTMENT OBJECTIVES AND POLICIES
To meet its investment objective, each Fund employs a specific investment
style, as described below. There is no assurance that a Fund will achieve its
investment objective.
The investment objective of the n/i Micro Cap Fund is to provide long-term
capital appreciation. The Fund will invest primarily in common stocks,
although it may also invest in securities which are convertible into common
stock, fixed income securities and money market securities. Under normal
circumstances, the Fund will invest at least 65% of its total assets in common
stock of companies with market capitalization of $500 million or less,
although the Fund may invest in companies with higher market capitalization.
Numeric determines its stock selection decisions primarily on the basis of its
growth stock model, which seeks to identify companies whose earnings per share
are improving more rapidly than the earnings per share of the average company.
Considered, but of significantly less importance, is the value stock model
which seeks to identify companies whose securities have market valuations
which are lower than the average market valuations of securities, as measured
by characteristics including price to earnings ratios and price to book
ratios. The Fund will measure its performance against the Wilshire Small
Company Growth Index.
The investment objective of the n/i Growth Fund is to provide long-term
capital appreciation. The Fund will invest primarily in common stocks,
although it may also
4
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invest in securities which are convertible into common stock, fixed income
securities and money market securities. Under normal circumstances, the Fund
will invest in common stock of companies with smaller ($1 billion or less)
market capitalization or companies with substantial equity capital and higher
than average earnings growth rates. Numeric determines its stock selection
decisions primarily on the basis of its growth stock model, which seeks to
identify companies whose earnings per share are improving more rapidly than
the earnings per share of the average company. Considered, but of
significantly less importance, is the value stock model which seeks to
identify companies whose securities have market valuations which are lower
than the average market valuations of securities, as measured by
characteristics including price to earnings ratios and price to book ratios.
The Fund will measure its performance against the Russell 2500 Growth Index.
The investment objective of the n/i Growth & Value Fund is to provide long-
term capital appreciation. The Fund will invest primarily in common stocks,
although it may also invest in securities which are convertible into common
stock, fixed income securities and money market securities. Numeric determines
its stock selection decisions primarily on the basis of its growth stock model
and its value stock model. The growth stock model seeks to identify companies
whose earnings per share are improving more rapidly than the earnings per
share of the average company. The value stock model seeks to identify
companies whose securities have market valuations which are lower than the
average market valuation of securities, as measured by characteristics
including price to earnings ratios and price to book ratios. The Fund
anticipates that it will invest a large portion of its total assets in common
stock of "mid cap" companies, which the Fund defines as the 151st to the
1000th largest companies (excluding ADRs) as ranked by market capitalization.
This currently represents a market capitalization range of approximately $800
million to $8 billion. The Fund will measure its performance against the S&P
MidCap 400 Index.
NUMERIC'S INVESTMENT STYLE. Numeric employs a quantitative approach to
investment management. Numeric relies on proprietary quantitative computer
models utilizing internally developed computer technology and financial
databases to assist in the stock selection process. Numeric's proprietary
models are capable of ranking a large universe of eligible investments using a
wide array of financial data such as market price, book value, earnings, cash
flow and earnings growth rates. The models also evaluate the degree to which
independent research analysts are changing their earnings forecasts for the
companies they follow. The models are broadly classified into two types:
Numeric's value stock model seeks to identify companies whose securities have
market valuations which are lower than the average market valuation of
securities, as measured by characteristics including price to earnings ratios
and price to book ratios; Numeric's growth stock model seeks to identify
companies whose earnings per share are improving more rapidly than the
earnings per share of the average company. Stocks are ranked according to
their relative attractiveness as determined by these models. These rankings
assist Numeric in constructing a portfolio it believes is invested in the most
attractive securities consistent with a Fund's investment objectives. The same
investment strategy used to manage a particular Fund also may be used for
institutional accounts managed by Numeric. These models may be changed
periodically to capture the insights of Numeric's ongoing research efforts.
In pursuing the investment objectives of each of the Funds, Numeric will use
the investment instruments and techniques discussed below:
EQUITY MARKETS. The Funds will be invested primarily in equity markets at all
times. Equity markets can be highly volatile, so that investing in the Funds
involves substantial risk. In addition, the Funds can and will typically
invest in stocks which are riskier and more volatile than the average stock.
As a result, investing in these Funds involves risk of substantial loss of
capital.
OPTIONS AND FUTURES. The Funds 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 Funds may also
invest in futures contracts and options on futures contracts (index futures
contracts or interest rate futures contracts, as applicable) for hedging
purposes, including equitizing cash.
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.
5
<PAGE>
The Funds will engage in unlisted over-the-counter options only with broker-
dealers deemed creditworthy by Numeric. Closing transactions in certain
options are usually effected directly with the same broker-dealer that
effected the original option transaction. The Funds bear the risk that the
broker-dealer will fail to meet its obligations. There is no assurance that
the Funds 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 Funds 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 and techniques; and (iv) losses due to
unanticipated market movements. Successful use of options and futures by the
Funds is subject to Numeric's ability to correctly predict movements in the
direction of the market. For example, if a 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 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 futures 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
Objectives and Policies" in the Statement of Additional Information.
SHORT SALES. Short sales are transactions in which a Fund sells a security it
does not own in anticipation of a decline in the market value of that
security. To complete such a transaction, the Fund must borrow the security to
make delivery to the buyer. The Fund then is obligated to replace the security
borrowed by purchasing it at the market price at the time of replacement. The
price at such time may be more or less than the price at which the security
was sold by the Fund. Until the security is replaced, the Fund is required to
pay to the lender amounts equal to any dividend which accrues during the
period of the loan. To borrow the security, the Fund also may be required to
pay a premium, which would increase the cost of the security sold. The
proceeds of the short sale will be retained by the broker, to the extent
necessary to meet margin requirements, until the short position is closed out.
Until a Fund replaces a borrowed security in connection with a short sale, the
Fund will: (a) maintain daily a segregated account, containing cash, cash
equivalents or U.S. Government securities, at such a level that (i) the amount
deposited in the account plus the amount deposited with the broker as
collateral will equal the current value of the security sold short and (ii)
the amount deposited in the segregated account plus the amount deposited with
the broker as collateral will not be less than the market value of the
security at the time it was sold short; or (b) otherwise cover its short
position in accordance with positions taken by the Staff of the Securities and
Exchange Commission.
A Fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which
the fund replaces the borrowed security. The Fund will realize a gain if the
security declines in price between those dates. This result is the opposite of
what one would expect from a cash purchase of a long position in a security.
The amount of any gain will be decreased, and the amount of any loss
increased, by the amount of any premium or amounts in lieu of interest the
Fund may be required to pay in connection with a short sale. The Fund may
purchase call options to provide a hedge against an increase in the price of a
security sold short by the Fund. See "Options and Futures Contracts" above.
The Funds anticipate that the frequency of short sales will vary substantially
in different periods, and they do not intend that any specified portion of
their assets, as a matter of practice, will be invested in short sales.
However, no securities will be sold short if, after effect is given to any
such short sale, the total market value of all securities sold short would
exceed 25% of the value of a Fund's net assets. The value of the securities of
any single issuer sold short by a Fund may not exceed the lesser of 2% of the
value of a Fund's net assets or 2% of the outstanding securities of any class
of any issuer. Short sales may be made only in securities which are fully
listed on a national securities exchange.
In addition to the short sales discussed above, the Funds may make short sales
"against the box," a transaction in which a Fund enters into a short sale of a
security which the Fund owns. The proceeds of the short sale will be held
6
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by a broker until the settlement date at which time the Fund delivers the
security to close the short position. The Fund receives the net proceeds from
the short sale. It currently is anticipated that the Funds will make short
sales against the box for purposes of protecting the value of the Funds' net
assets.
LENDING OF FUND SECURITIES. The Funds may lend their portfolio securities to
financial institutions. Such loans would involve risks of delay in receiving
additional collateral in the event the value of the collateral decreases below
the value of the securities loaned or of delay in recovering the securities
loaned or even loss of rights in the collateral should the borrower of the
securities fail financially. However, loans will be made only to borrowers
which Numeric deems to be of good standing and only when, in Numeric's
judgment, the income to be earned from the loans justifies the attendant
risks.
PORTFOLIO TURNOVER. The Funds may be subject to a greater degree of turnover
and thus a higher incidence of short-term capital gains taxable as ordinary
income than might be expected from portfolios which invest substantially all
of their funds on a long-term basis, and correspondingly larger brokerage
charges can be expected to be borne by such Funds. Federal income tax law may
restrict the extent to which such Funds may engage in short-term trading
activities. See "Taxes" below and in the Statement of Additional Information
for a discussion of the impact of portfolio turnover. The Funds anticipate
that their annual turnover will range from 150% to 300% or more depending on
market conditions. Such turnover rates are greater than that of many other
investment companies.
MICRO CAP AND SMALL CAP STOCKS. Securities of companies with micro and small
capitalizations tend to be riskier than securities of companies with medium or
large capitalizations. This is because micro and small cap companies typically
have smaller product lines and less access to liquidity than mid cap or large
cap companies, and are therefore more sensitive to economic downturns. In
addition, growth prospects of micro and small cap companies tend to be less
certain than mid or large cap companies, and the dividends paid on micro and
small cap stocks are frequently negligible. Moreover, micro and small cap
stocks have, on occasion, fluctuated in the opposite direction of large cap
stocks or the general stock market. Consequently, securities of micro and
small cap companies tend to be more volatile than those of mid and large cap
companies.
BORROWING MONEY. As a fundamental policy, the Funds are permitted to borrow to
the extent permitted under the 1940 Act and to mortgage, pledge or hypothecate
their respective assets in connection with such borrowings in amounts not in
excess of 125% of the dollar amounts borrowed. The 1940 Act permits an
investment company to borrow in an amount up to 33 1/3% of the value of such
company's total assets. However, the Funds currently intend to borrow money
only for temporary or emergency (not leveraging) purposes, in an amount up to
15% of the value of their respective total assets (including the amount
borrowed) valued at the lesser of cost or market, less liabilities (not
including the amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of its total assets, the Funds will not make any
additional investments.
DEBT SECURITIES. The Funds may invest in debt securities rated no less than
investment grade by either Standard & Poor's or Moody's. Bonds in the lowest
investment grate 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 Funds will not retain a
bond which was rated as investment grade at the time of purchase but whose
rating is subsequently downgraded below investment grade. The value of debt
securities held by a Fund will tend to vary inversely in relation to changes
in prevailing interest rates. Thus, if interest rates have increased from the
time a debt security was purchased, such security, if sold, might be sold at a
price less than its cost. Conversely, if interest rates have declined from the
time a debt security was purchased, the debt security, if sold, might be sold
at a price greater than its cost.
MARKET FLUCTUATION. Because the investment alternatives available to each Fund
may be limited by specific objectives of that Fund, investors should be aware
that an investment in a particular Fund may be subject to greater market
fluctuation than an investment in a portfolio of securities representing a
broader range of investment alternatives. In view of the specialized nature of
the investment activities of each Fund, an investment in any single fund
should not be considered a complete investment program. There is no assurance
that any Fund will achieve its investment objectives.
SHORT-TERM DEBT OBLIGATIONS. The Funds may purchase money market instruments
to the extent consistent with their investment objectives and policies. Such
instruments include U.S. Government obligations, repurchase agreements,
certificates of deposit, bankers acceptances and commercial paper.
REPURCHASE AGREEMENTS. The Funds may agree to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed-upon time and price ("repurchase agreements"). The financial
institutions with whom the Funds may enter into repurchase agreements will be
banks and broker/dealers which Numeric considers creditworthy pursuant to
criteria
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approved by the Board of Directors. Numeric will consider, among other things,
whether a repurchase obligation of a seller involves minimal credit risk to a
Fund in determining whether to have the Fund enter into a repurchase
agreement. The seller under a repurchase agreement will be required to
maintain the value of the securities subject to the agreement at not less than
the repurchase price plus accrued interest. Numeric will mark to market daily
the value of the securities, and will, if necessary, require the seller to
maintain additional securities, to ensure that the value is not less than the
repurchase price. Default by or bankruptcy of the seller would, however,
expose a Fund to possible loss because of adverse market action or delays in
connection with the disposition of the underlying obligations.
OTHER INVESTMENT INSTRUMENTS AND TECHNIQUES. In addition to the above
investment instruments and techniques, the Funds presently intend to invest
not more than 5% of a Fund's net assets in when-issued and forward
commitments, illiquid securities, depositary receipts, investment company
securities and convertible securities. These investment instruments and
techniques and related risks are described in greater detail in the Funds'
Statement of Additional Information under "Investment Objectives and
Policies."
The Funds' investment objectives and 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 Funds.
Such changes may result in the Funds having investment objectives which differ
from those an investor may have considered at the time of investment.
Shareholders will be provided 30 days prior written notice of any change in a
Fund's investment objectives. There is no assurance that the investment
objective of the Funds will be achieved.
INVESTMENT LIMITATIONS
No Fund may 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.")
THE FUNDS MAY NOT:
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 the Fund, except that up to 25% of the value of the Fund's total
assets may be invested without regard to such limitations.
2. Borrow money, except to the extent permitted under the 1940 Act or
mortgage, pledge or hypothecate any of their respective assets in connection
with any such borrowing except in amounts not in excess of 125% of the dollar
amounts borrowed. For purposes of this Investment Restriction, the entry into
options, forward contracts, futures contracts, including those relating to
indexes, and options on futures contracts or indexes shall not constitute
borrowing.
3. Purchase any securities which would cause, at the time of purchase, 25% or
more of the value of the total assets of a Fund to be invested in the
obligations of issuers in any industry, provided that there is no limitation
with respect to investments in U.S. Government obligations.
4. Make loans, except that a Fund may purchase or hold debt obligations in
accordance with its investment objective, policies and limitations, may enter
into repurchase agreements for securities, and may lend portfolio securities
against collateral consisting of cash or securities which are consistent with
the Fund's permitted investments, which is equal at all times to at least 100%
of the value of the securities loaned. There is no investment restriction on
the amount of securities that may be loaned, except that payments received on
such loans, including amounts received during the loan on account of interest
on the securities loaned, may not (together with all non-qualifying income)
exceed 10% of a Fund's annual gross income (without offset for realized
capital gains) unless, in the opinion of counsel to RBB, such amounts are
qualifying income under Federal income tax provisions applicable to regulated
investment companies.
In determining whether the Funds have complied with limitation 3 above, the
Funds will not take into account the value of options and futures. These
investment limitations are applied at the time investment securities are
purchased (except that, with respect to borrowings, if asset coverage falls
below 300%, a Fund will reduce its borrowing to restore asset coverage to 300%
within three business days in accordance with the requirements of the 1940
Act). In order to permit the sale of its shares in certain states, the Funds
may make commitments more restrictive than the investment policies and
limitations described in this Prospectus. If the Funds determine that any
commitment is no longer in the best interests of the Funds, they will revoke
the commitment by terminating sale of shares of the Funds in the state
involved.
MANAGEMENT
BOARD OF DIRECTORS
The business and affairs of RBB and each investment portfolio are managed
under the direction of RBB's Board of Directors.
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INVESTMENT ADVISER
Numeric serves as investment adviser to the Funds. Numeric was organized in
October, 1989 as a Delaware limited partnership and is located in Cambridge,
Massachusetts. The firm, which specializes in the active management of U.S.
equity portfolios using internally developed quantitative stock selection and
portfolio risk-control techniques, currently has over $2 billion in assets
under management for individual, limited partnership, mutual fund, pension
plan and endowment accounts. Langdon B. Wheeler, CFA is the founder of
Numeric. Mr. Wheeler received his MBA from Harvard University and an
undergraduate degree from Yale University. All Funds are managed by John C.
Bogle, Jr., CFA. Mr. Bogle joined Numeric in 1990 after serving as Vice
President and Portfolio Manager at State Street Global Advisors. Mr. Bogle
received his MBA and BS from Vanderbilt University. Messrs. Wheeler and Bogle
are active in the development and implementation of the firm's stock selection
models. The General Partner of Numeric is Langdon Wheeler & Associates, Inc.,
a Massachusetts corporation. The principal officers of Langdon Wheeler &
Associates, Inc. are Messrs. Wheeler and Bogle.
For the services provided and the expenses assumed by it, Numeric is entitled
to receive a fee from each of the Funds at an annual rate of 0.75% of a Fund's
average daily net assets, computed daily and payable monthly. Numeric may from
time to time voluntarily agree to waive all or any portion of its advisory
fees. Numeric presently intends to waive its fees for the current fiscal year
and for the following fiscal year to the extent necessary to maintain an
annualized expense ratio for each Fund of 1.00%, although there is no
guarantee that Numeric will maintain such waivers indefinitely.
CO-ADMINISTRATORS
Bear Stearns Funds Management Inc. ("BSFM"), an affiliate of Bear, Stearns &
Co. Inc. ("Bear Stearns"), serves as co-administrator to the Funds. BSFM
generally assists each of the Funds in all aspects of their administration and
operations. The services provided and the fees payable by the Funds for these
services are described in the Statement of Additional Information under
"Investment Advisory, Distribution and Servicing Arrangements."
PFPC, an indirect wholly owned subsidiary of PNC Bank, N.A. ("PNC"), also
serves as co-administrator to the Funds. PFPC assists the Funds in matters
relating to the maintenance of financial records and accounting. The services
provided and the fees payable by the Funds for these services are described in
the Statement of Additional Information under "Investment Advisory,
Distribution and Servicing Arrangements."
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
PFPC serves as the Funds' transfer agent and dividend disbursing agent. PFPC's
principal business address is 400 Bellevue Parkway, Wilmington, DE 19809. The
services provided and the fees payable by the Funds for these services are
described in the Statement of Additional Information under "Investment
Advisory, Distribution and Servicing Arrangements."
CUSTODIAN
Custodial Trust Company ("CTC"), an affiliate of Bear Stearns, serves as
custodian for the Funds. The services provided and the fees payable by the
Funds for these services are described in the Statement of Additional
Information under "Investment Advisory, Distribution and Servicing
Arrangements."
OTHER ADMINISTRATIVE SERVICES
Counsellors Funds Service, Inc., a wholly owned subsidiary of the Distributor,
provides certain administrative services to the Funds not otherwise provided
by BSFM or PFPC. The services provided and fees payable by the Funds for these
services are described in the Statement of Additional Information under
"Investment Advisory, Distribution and Servicing Arrangements."
EXPENSES
The expenses of each Fund are deducted from their total income before
dividends are paid. These expenses include, but are not limited to, fees paid
to Numeric, fees and expenses of officers and directors who are not affiliated
with Numeric or the Funds' 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
agreement with respect to a Fund. Any general expenses of RBB that are not
readily identifiable as
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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. 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.
Numeric has agreed to reimburse each Fund for the amount, if any, by which the
total operating and management expenses of such Fund 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.
Numeric may assume additional expenses of the Funds from time to time. In
certain circumstances, Numeric may assume such expenses on the condition that
it is reimbursed by the Funds 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 the total return or yield
to investors.
FUND TRANSACTIONS
Numeric may consider a number of factors in determining which brokers to use
in purchasing or selling a Fund's 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. 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.
Numeric may allocate trades among any or all of its clients, including the
Funds. Numeric combines orders and allocates to each account its proportionate
or "pro rata" share of the trade. Accounts included in the trade allocation
may include limited partnerships for which Numeric serves as general partner
and in which employees and/or partners of Numeric may own a substantial
interest. Numeric may cause the Funds to pay brokerage commissions which may
be in excess of the lowest rates available to brokers who execute transactions
for the Funds or who otherwise provide brokerage and research services
utilized by Numeric, provided that Numeric determines in good faith that the
amount of each such commission paid to a broker is reasonable in relation to
the value of the brokerage viewed in terms of either the particular
transaction to which the commission relates or Numeric's overall
responsibilities with respect to the Funds.
DISTRIBUTION OF SHARES
Counsellors Securities Inc. (the "Distributor"), a wholly owned subsidiary of
Warburg, Pincus Counsellors, Inc., with offices at 466 Lexington Avenue, New
York, New York, acts as distributor for each of the Funds pursuant to separate
distribution contracts (collectively, the "Distribution Contracts") with RBB
on behalf of each of the Funds.
HOW TO PURCHASE SHARES
GENERAL
Shares representing interests in the Funds are offered continuously for sale
by the Distributor and may be purchased without imposition of a sales charge
through PFPC, the Funds' transfer agent. Shares may be purchased initially by
completing the application included in this Prospectus and forwarding the
application and payment to PFPC. Subsequent purchases of Shares may be
effected by mailing a check or Federal Reserve Draft payable to the order of
"n/i Family of Funds" c/o PFPC, P.0. Box 8966, Wilmington, Delaware 19899. The
name of the Fund for which Shares are being purchased must also appear on the
check or Federal Reserve Draft. Federal Reserve Drafts are available at
national banks or any state bank which is a member of the Federal Reserve
System. Initial investments in any Fund must be at least $3,000 and subsequent
investments must be at least $100. The minimum initial investment for an
Automatic Investment Plan is $1,000 with minimum monthly payments of $100. RBB
reserves the right to reject any purchase order or to waive the minimum
initial or subsequent investment requirement. Investors will be given notice
of any increase in minimum investment requirements.
Provided that the investment is at least $2,500, an investor may also purchase
Shares by having his bank or his broker wire Federal Funds to PFPC. An
investor's bank or broker may impose a charge for this service. In order to
ensure prompt receipt of an investor's Federal Funds wire, for an initial
investment, it is important that an investor follows these steps:
A. Telephone the Funds' transfer agent, PFPC, toll-free (800) 348-5031 (in
Delaware call collect (302) 791- 3486), and provide PFPC with your name,
address, telephone number, Social Security or Tax Identification Number, the
Fund selected, the amount being wired, and by which bank. PFPC will then
provide an investor with a Fund account number. Investors with existing
accounts should also notify PFPC prior to wiring funds.
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B. Instruct your bank or broker to wire the specified amount, together with
your assigned account number, to PFPC's account with PNC:
PNC Bank, N.A.
ABA-0310-0005-3
CREDITING ACCOUNT NUMBER: 86-1108-2312
FROM: (name of investor)
ACCOUNT NUMBER: (Investor's account number with the Fund)
FOR PURCHASE OF: (name of the Fund)
AMOUNT: (amount to be invested)
C. Fully complete and sign the Application and mail it to the address shown
thereon. PFPC will not process redemptions until it receives a fully completed
and signed Application.
For subsequent investments, an investor should follow steps A and B above.
Shares of the Funds may be purchased on any Business Day. A "Business Day" is
any day that the New York Stock Exchange (the "NYSE") is open for business.
Currently, the NYSE is closed on weekends and New Year's Day, President's Day,
Good Friday, Memorial Day, Independence Day (observed), Labor Day,
Thanksgiving Day and Christmas Day (observed). Such Shares are offered at the
next determined net asset value per share.
The price paid for a Fund's Shares purchased initially or acquired through the
exercise of an exchange privilege is based on the net asset value next
computed after an order is received by PFPC. Such price will be the net asset
value next computed after an order is received by PFPC provided such order is
transmitted to and received by PFPC prior to its close of business on such
day. Orders received by PFPC after its close of business are priced at the net
asset value next determined on the following Business Day. In those cases
where an investor pays for Shares by check, the purchase will be effected at
the net asset value next determined after PFPC receives payment in good order.
Shareholders whose shares are held in a street name account and who desire to
transfer such shares to another street name account should contact the record
holder of their current street name account.
The Funds understand that some broker-dealers (other than the Distributor),
financial institutions, securities dealers, financial planners 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. If payment is not received by such time,
the Service Agent could be held liable for resulting fees or losses.
AUTOMATIC INVESTMENT PLAN
Additional investments in Shares of the Funds may be made automatically by
authorizing PFPC to withdraw funds from your bank account through an Automatic
Investment Plan. Investors desiring to participate in an Automatic Investment
Plan should call RBB's transfer agent, PFPC, at (800) 348-5031 (in Delaware
call collect (302) 791-3486) to obtain the appropriate forms, or complete the
appropriate section of the Application included with this Prospectus. The
minimum initial investment for an Automatic Investment Plan is $1,000 with
minimum monthly payments of $100.
EXCHANGE PRIVILEGE
The exchange privilege is available to shareholders residing in any state in
which the Shares being acquired may be legally sold. A shareholder may
exchange Shares of any Fund for Shares of any other of the Fund up to three
(3) times per year. Such exchange will be effected at the net asset value of
the exchanged Fund and the net asset value of the Fund to be acquired next
determined after PFPC's receipt of a request for an exchange. In addition, RBB
reserves the right to impose a $5.00 administrative fee for each exchange. An
exchange of Shares will be treated as a sale for Federal income tax purposes.
See "Taxes."
A shareholder wishing to make an exchange may do so by sending a written
request to PFPC. Shareholders are automatically provided with telephone
exchange privileges when opening an account, unless they indicate on the
Application that they do not wish to use this privilege. To add a telephone
exchange feature to an existing account that previously did not provide for
this option, a Telephone Exchange Authorization Form must be filed with PFPC.
This form is available from PFPC. Once this election has been made, the
shareholder may simply contact PFPC by telephone to request the exchange by
calling (800) 348-5031 (in Delaware call collect (302) 791-3486). RBB will
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine, and if RBB does not employ such procedures, it may be
liable for any losses
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due to unauthorized or fraudulent telephone instructions. Neither RBB nor PFPC
will be liable for any loss, liability, cost or expense for following RBB's
telephone transaction procedures described below or for following instructions
communicated by telephone that it reasonably believes to be genuine.
RBB's telephone transaction procedures include the following measures: (1)
requiring the appropriate telephone transaction privilege forms; (2) requiring
the caller to provide the names of the account owners, the account social
security number and name of the Fund, all of which must match RBB's records;
(3) requiring RBB's service representative to complete a telephone transaction
form, listing all of the above caller identification information;
(4) permitting exchanges only if the two account registrations are identical;
(5) requiring that redemption proceeds be sent only by check to the account
owners of record at the address of record, or by wire only to the owners of
record at the bank account of record; (6) sending a written confirmation for
each telephone transaction to the owners of record at the address of record
within five (5) business days of the call; and (7) maintaining tapes of
telephone transactions for six months, if the fund elects to record
shareholder telephone transactions.
For accounts held of record by Service Agents, additional documentation or
information regarding the scope of a caller's authority is required. Finally,
for telephone transactions in accounts held jointly, additional information
regarding other account holders is required. Telephone transactions will not
be permitted in connection with IRA or other retirement plan accounts or by an
attorney-in-fact under power of attorney.
If the exchanging shareholder does not currently own Shares of the Fund whose
Shares are being acquired, a new account will be established with the same
registration, dividend and capital gain options as the account from which
shares are exchanged, unless otherwise specified in writing by the shareholder
with all signatures guaranteed by an Eligible Guarantor Institution, as
defined by rules issued by the SEC, including banks, brokers, dealers, credit
unions, national securities exchanges and savings associations. The exchange
privilege may be modified or terminated at any time, or from time to time, by
RBB, upon 60 days' written notice to shareholders.
If an exchange is to a new n/i Family Fund, the dollar value of Shares
acquired must equal or exceed RBB's minimum for a new account; if to an
existing account, the dollar value must equal or exceed RBB's minimum for
subsequent investments. If any amount remains in the n/i Fund from which the
exchange is being made, such amount must not drop below the minimum account
value required by RBB.
EXCHANGE PRIVILEGE LIMITATIONS
The Funds' exchange privilege is not intended to afford shareholders a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt
the management of the Funds and increase transactions costs, the Funds have
established a policy of limiting excessive exchange activity.
Shareholders are entitled to three (3) substantive exchange redemptions (at
least 30 days apart) from each Fund during any twelve-month period.
Notwithstanding these limitations, the Funds reserve the right to reject any
purchase request (including exchange purchases from other n/i Funds) that is
reasonably deemed to be disruptive to efficient portfolio management.
RETIREMENT PLANS
n/i Family Fund Shares may be purchased in conjunction with individual
retirement accounts ("IRAs"), rollover IRAs, or pension, profit-sharing or
other employer benefit
plans. For further information as to applications and annual fees, contact
PFPC. To determine whether the benefits of an IRA are available and/or
appropriate, a shareholder should consult with a tax adviser.
CLOSING OF THE FUND
Numeric will monitor the Funds' total assets and may close any of the Funds at
any time to new investment due to concerns that an increase in the size of a
Fund may adversely affect the implementation of Numeric's investment strategy.
Numeric may also choose to reopen a closed fund to new investment at any time,
and may subsequently close such Fund again should concerns regarding Fund size
recur. Numeric reserves the right while a Fund is closed to accept new
investments from any of its employees or their spouses or children.
HOW TO REDEEM SHARES
REDEMPTION IN WRITING
Shareholders may redeem for cash some or all of their Fund Shares at any time.
To do so, a written request in proper form must be sent directly to The n/i
Family of Mutual Funds c/o PFPC, P.O. Box 8966, Wilmington, Delaware 19899-
8966. Shareholders may also place redemption requests through a Service Agent,
but such Service Agent might charge a fee for this service.
A request for redemption must be signed by all persons in whose names the
Shares are registered. Signatures must conform exactly to the account
registration. If the proceeds
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of the redemption would exceed $10,000, or if the proceeds are not to be paid
to the record owner at the record address, or if the shareholder is a
corporation, partnership, trust or fiduciary, signature(s) must be guaranteed
by an Eligible Guarantor Institution. A signature guarantee verifies the
authenticity of your signature. You may call PFPC at (800) 348-5031 (in
Delaware call collect (302) 791-3486) to determine whether the entity that
will guarantee the signature is an Eligible Guarantor Institution.
Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption. In some cases, however,
other documents may be necessary. Additional documentary evidence of authority
is also required by PFPC in the event redemption is requested by a
corporation, partnership, trust, fiduciary, executor or administrator.
REDEMPTION BY TELEPHONE
Investors may redeem shares without charge by telephone if they have checked
the appropriate box and supplied the necessary information on the Application,
or have filed a Telephone Authorization with PFPC. An investor may obtain a
Telephone Authorization from PFPC by calling (800) 348-5031 (in Delaware call
collect (302) 791-3486). The Fund will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, and if the fund does
not employ such procedures, it may be liable for any losses due to
unauthorized or fraudulent telephone instructions. The proceeds will be mailed
by check to an investor's registered address unless he has designated in his
Application or Telephone Authorization that such proceeds are to be sent by
wire transfer to a specified checking or savings account. If proceeds are to
be sent by wire transfer, a telephone redemption request received prior to
4:00 p.m. will result in redemption proceeds being wired to the investor's
bank account on the next day that a wire transfer can be effected. The minimum
redemption for proceeds sent by wire transfer is $2,500. There is no maximum
for proceeds sent by wire transfer. The Funds may modify this redemption
service at any time or charge a service fee upon prior notice to shareholders.
No service fee is currently contemplated. RBB and PFPC reserve the right to
refuse a telephone redemption if they deem it advisable to do so. Neither the
Funds, their Administrators nor the Distributor will be liable for any loss,
liability, cost or expense for following these procedures or for following
instructions communicated by telephone that it reasonably believes to be
genuine. These procedures are set forth under "How to Purchase Shares--
Exchange Privilege" above.
OTHER INFORMATION ON REDEMPTIONS
The Funds are not responsible for the efficiency of the Federal Wire System or
a shareholder's investment adviser, broker-dealer or bank. The shareholder is
responsible for any charges imposed by the shareholder's bank. To change the
name of the single designated bank account to receive redemptions, it is
necessary to send a written request (with a signature guaranteed by an
Eligible Guarantor Institution) to n/i Family of Mutual Funds, c/o PFPC Inc.,
P. O. Box 8966, Wilmington, Delaware 19899-8966.
INVOLUNTARY REDEMPTION
RBB reserves the right to redeem a shareholder's account in any Fund at any
time the net asset value of the account in such Fund falls below $500 as the
result of a redemption or an exchange request. Shareholders will be notified
in writing that the value of their account in a Fund is less than $500 and
will be allowed 30 days to make additional investments before the redemption
is processed.
PAYMENT OF REDEMPTION PROCEEDS
In all cases, the redemption price is the net asset value per share next
determined after the request for redemption is received in proper form by
PFPC. Payment for Shares redeemed is made by check mailed within seven days
after acceptance by PFPC of the request and any other necessary documents in
proper order. Such payment may be postponed or the right of redemption
suspended as provided by the rules of the SEC. If the Shares to be redeemed
have been recently purchased by check, PFPC may delay mailing a redemption
check, which may be a period of up to 15 days, pending a determination that
the check has cleared.
REDEMPTION IN-KIND
The Funds reserve the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption of a Fund's shares by making
payment in whole or in part in securities chosen by the Fund 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 after they have redeemed their
shares. The Funds have 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.
AUTOMATIC WITHDRAWAL
Automatic withdrawal permits investors to request withdrawal of a specified
dollar amount (minimum of $25) on either a monthly, quarterly or annual basis
if the investor has a $10,000 minimum account. An application for automatic
withdrawal can be obtained from PFPC. Automatic withdrawal may be ended at any
time by the investor, RBB or PFPC. Purchases of additional shares concurrently
with withdrawals generally are undesirable.
13
<PAGE>
NET ASSET VALUE
The net asset value for each Fund is calculated by adding the value of all its
securities to cash and other assets, deducting its actual and accrued
liabilities and dividing by the total number of Shares outstanding. The net
asset value of the Funds is calculated as of 4:00 p.m. Eastern Time on each
Business Day.
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 the Board of Directors, a Fund may use a pricing service,
bank or broker-dealer experienced in such matters to value a 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 their net investment income and
net realized capital gains, if any, to each Fund's shareholders. All
distributions are reinvested in the form of additional full and fractional
Shares of the relevant Fund unless a shareholder elects otherwise.
The Funds expect to declare and pay dividends from net investment income
annually, generally near the end of the year. 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.
Each Fund will elect to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended. So long as a
Fund qualifies for this tax treatment, such Fund 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 any Fund 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 39.6%
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.
RBB will send written notices to shareholders annually regarding the tax
status of distributions made by each Fund. 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. Each Fund intends 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.
Investment strategies which require periodic changes to portfolio holdings
with the expectation of outperforming equity indices are called "active"
strategies. These compare with "passive" or "Index" strategies which hold only
the stocks in the equity indices. Passive strategies trade infrequently--only
as the indices change. Most equity mutual funds pursue active strategies which
have higher turnover than passive strategies. The following describes the
impact of portfolio turnover on returns.
High turnover can adversely affect taxable investors, especially those in
higher marginal tax brackets, in two ways:
First, short term capital gains, which are a by-product of high turnover
investment strategies, are currently taxed at
14
<PAGE>
rates comparable to ordinary income rates. Ordinary income tax rates are
higher than long term capital gain tax rates for middle and upper income
taxpayers.
Second, the frequent realization of gains, which causes taxes to be paid
frequently, is less advantageous than infrequent realization of gains.
Infrequent realization of gains allows the payment of taxes to be deferred to
later years, allowing more of the gains to compound before taxes are paid.
Consequently, after-tax compound rates of return will generally be higher for
taxable investors using investment strategies with very low turnover, all else
being equal.
Although tax considerations should not typically drive an investment decision,
investors should consider their ability to allocate tax-deferred (such as IRAs
and 401(k) plans) versus taxable assets when considering where to invest. All
else being equal, investors will earn better returns investing tax-deferred
assets in active strategies, while using passive strategies for taxable
investments.
Shareholders who exchange Shares representing interests in one Fund 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 one Fund is not intended to constitute a balanced
investment program. Future legislative or administrative changes or court
decisions may materially affect the tax consequences of investing in one or
more Funds of RBB. Shareholders are also urged to consult their tax advisers
concerning the application of state and local income taxes to investments in
RBB which may differ from the Federal income tax consequences described above.
DESCRIPTION OF SHARES
RBB has authorized capital of thirty billion shares of Common Stock, $.001 par
value per share, of which 12.35 billion shares are currently classified into
66 different classes of Common Stock (see "Description of Shares" in the
Statement of Additional Information).
Exchanges between the n/i Family of Mutual Funds and other Families of RBB are
not permitted.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE n/i FAMILY CLASSES AND DESCRIBE ONLY THE
INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND OTHER MATTERS
RELATING TO THE n/i FAMILY CLASSES.
Each share that represents an interest in a Fund has an equal proportionate
interest in the assets belonging to such Fund with each other share that
represents an interest in such Fund, 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 of RBB 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.
Holders of shares of each of the Funds will vote in the aggregate and not by
class on all matters, except where otherwise required by law. Further,
shareholders of all investment portfolios 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 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 May 7, 1996, 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 should be addressed to PFPC, Bellevue Park
Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware 19809, toll-free
(800) 348-5031 (in Delaware call collect (302) 791-3486).
HISTORICAL PRO-FORMA PERFORMANCE INFORMATION
Presented below are the pro forma performance histories of certain managed
accounts advised by John C. Bogle, Jr, the
15
<PAGE>
portfolio manager for each of the Funds, for various periods ended March 31,
1996, assuming total expenses of 1.00%.
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
SINCE
INCEPTION
3 YEAR (10/1/91)
1 YEAR ANNUALIZED ANNUALIZED
RETURN RETURN RETURN
------ ---------- ----------
<S> <C> <C> <C>
Growth Account..................................... 36.45% 21.97% 25.94%
Russell 2500 Growth Index:......................... 31.73% 17.00% 14.79%
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
SINCE
INCEPTION
(7/1/94)
1 YEAR ANNUALIZED
RETURN RETURN
------ ----------
<S> <C> <C>
Growth & Value Account........................................ 37.87% 30.24%
S&P MidCap 400 Index.......................................... 28.50% 23.46%
</TABLE>
The performance returns shown above are size-weighted and are reduced by an
assumed fee of 1.00% per annum which is applied monthly. The composites
include all accounts managed in the respective strategy, except for periods
during which an account experienced abnormal cash flows which caused its
performance to be unrepresentative of its investment strategy. The accounts
described above have investment objectives, policies and strategies
substantially similar to those to be employed in managing the Funds. The
historical pro-forma performance information presented above for the managed
accounts includes reinvestment of dividends received on the underlying
securities. This information is deemed relevant with respect to each Fund
because these accounts were managed using substantially the same investment
objective, policies, restrictions and methodologies as those to be used by the
relevant Fund. The periods shown are the entire periods during which these
accounts were managed by Mr. Bogle in this manner. However, this performance
information is not necessarily indicative of the future performance of each
Fund. Because each Fund will be actively managed, its investments will vary
from time to time and will not be identical to the past portfolio investments
of the managed accounts. Each Fund's performance will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original costs.
FUTURE PERFORMANCE INFORMATION
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 over one, five and ten year periods or, if such periods
have not yet elapsed, shorter periods corresponding to the life of such Funds.
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, net of fees,
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 Fund'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, as well as the benchmarks
described in the Appendix to this Prospectus. Performance information may also
include evaluation of the Funds by nationally recognized ranking services and
information as reported in financial publications such as Barron's, Business
Week, Forbes, Fortune, Money Magazine, Mutual Fund Magazine, The New York
Times, The Wall Street Journal, or other national, regional or local
publications. All advertisements containing performance data will include a
legend disclosing that such performance data represents 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
yields of such Funds refer 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 earned by a Fund 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
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 any of the Funds will fluctuate and is 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 a Fund 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.
16
<PAGE>
N/I family of mutual funds
1 - 800 - NUMERIC
ACCOUNT APPLICATION
Please Note: Do not use this form to open a retirement plan account. For an IRA
application or help with this Application, please call 1-800-NUMERIC.
1. ACCOUNT REGISTRATION: (PLEASE CHECK THE APPROPRIATE BOX(ES) BELOW.)
[_] Individual [_] Joint Tenant
- --------------------------------------------------------------------------------
NAME
- --------------------------------------------------------------------------------
SOCIAL SECURITY NUMBER OF PRIMARY OWNER
- --------------------------------------------------------------------------------
NAME OF JOINT OWNER
- --------------------------------------------------------------------------------
JOINT OWNER SOCIAL SECURITY NUMBER
For joint accounts, the account registrants will be joint tenants with right of
survivorship and not tenants in common unless tenants in common or community
property registrations are requested.
GIFT TO MINOR:
[_] UNIFORM GIFTS/TRANSFERS TO MINOR'S ACT
- --------------------------------------------------------------------------------
NAME OF ADULT CUSTODIAN (ONLY ONE PERMITTED)
- --------------------------------------------------------------------------------
NAME OF MINOR (ONLY ONE PERMITTED)
- --------------------------------------------------------------------------------
MINOR'S SOCIAL SECURITY NUMBER DATE OF BIRTH
CORPORATION, PARTNERSHIP, TRUST OR OTHER ENTITY:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NAME OF CORPORATION, PARTNERSHIP, OR OTHER
- --------------------------------------------------------------------------------
NAME(S) OF TRUSTEE(S)
- --------------------------------------------------------------------------------
TAXPAYER IDENTIFICATION NUMBER
2. MAILING ADDRESS:
- --------------------------------------------------------------------------------
STREET OR P.O. BOX APARTMENT NUMBER
- --------------------------------------------------------------------------------
CITY STATE ZIP CODE
( ) ( )
- --------------------------------------------------------------------------------
DAY PHONE NUMBER EVENING PHONE NUMBER
3. INVESTMENT INFORMATION:
Minimum initial investment of $3,000 per Fund.
[_] N/I MICRO CAP$ ___________________________________________________
[_] N/I GROWTH$ ______________________________________________________
[_] N/I GROWTH & VALUE$ ______________________________________________
Make the check payable to n/i Family of Funds.
Shareholders may not purchase shares of the n/i Funds with a check issued by a
third party and endorsed over to the Funds. Checks for investment must be made
payable to the n/i Family of Funds.
DISTRIBUTION OPTIONS:
NOTE: Dividends and capital gains may be reinvested or paid by check. If no
options are selected below, both dividends and capital gains will be reinvested
in additional Fund shares.
DIVIDENDS[_] Pay by check [_] Reinvest
CAPITAL GAINS [_] Pay by check [_] Reinvest
SYSTEMATIC WITHDRAWAL PLAN:
To select this option please fill out the information below:
Fund Name _________ Amount ____________________________________________________
Startup Month _____
Frequency Options: [_] Annually [_] Monthly
[_] Quarterly
. A minimum account value of $10,000 in a single account is required to
establish a Systematic Withdrawal Plan
. Payments will be made on or near the 25th of the month
(PLEASE COMPLETE OTHER SIDE) NOT PART OF THE PROSPECTUS
<PAGE>
Please check one of the following options:
[_] Please mail checks to Address of Record (Named in Section 2)
[_] Please electronically credit my Bank of Record (Named in Section 5)
4. TELEPHONE EXCHANGE AND REDEMPTION:
To use either or both of these options, you must initial the appropriate line
below.
I authorize the Transfer Agent to accept instructions from any persons to
exchange shares in my account(s) by telephone in accordance with the procedures
and conditions set forth in the Fund's current prospectus.
- ---------- Exchange shares for shares of another n/i fund.
initial joint initial
Redeem shares, and send the proceeds to the address of record.
- ----------
initial joint initial
5. AUTOMATIC INVESTMENT PLAN:
The Automatic Investment Plan ($1,000 minimum initial investments), which is
available to shareholders of the ni Funds, makes possible regularly scheduled
purchases of Fund shares to allow dollar-cost averaging. The Fund's Transfer
Agent can arrange for an amount of money selected by you ($100 minimum) to be
deducted from your checking account and used to purchase shares of a specified
n/i Fund.
Please debit $ from my checking account (named below) on or about the 20th
of the month.
[_] Monthly[_] Every Alternate Month
[_] Quarterly[_] Other
$ into the Fund Start Month.
$100 minimum
$ into the Fund Start Month.
$100 minimum
$ into the Fund Start Month.
$100 minimum
PLEASE ATTACH AN UNSIGNED, VOIDED CHECK.
BANK OF RECORD:
- --------------------------------------------------------------------------------
BANK NAME
- --------------------------------------------------------------------------------
STREET ADDRESS OR P.O. BOX
- --------------------------------------------------------------------------------
CITY STATE ZIP CODE
- --------------------------------------------------------------------------------
BANK ABA NUMBER BANK ACCOUNT NUMBER
6. SIGNATURES:
The undersigned warrants that I (we) have full authority and, if a natural
person, I (we) am (are) of legal age to purchase shares pursuant to this
Account Information Form, and I (we) have received a current prospectus for the
n/i Fund(s) in which I (we) am (are) investing.
Under the Interest and Dividend Tax Compliance Act of 1983, the Fund is
required to have the following certification:
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service
that I am subject to 31% backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
- --------------------------------------------------------------------------------
SIGNATURE OF APPLICANT DATE
- --------------------------------------------------------------------------------
PRINT NAME TITLE (IF APPLICABLE)
- --------------------------------------------------------------------------------
SIGNATURE OF JOINT OWNER DATE
- --------------------------------------------------------------------------------
PRINT NAME TITLE (IF APPLICABLE)
(If you are signing for a corporation, you must indicate corporate office or
title. If you wish additional signatories on the account, please include a
corporate resolution. If signing as a fiduciary, you must indicate capacity.)
For information on additional options, such as IRA Applications, rollover
requests for qualified retirement plans, or for wire instructions, please call
us at 1-800-NUMERIC.
MAIL COMPLETED ACCOUNT APPLICATION AND CHECK TO:
N/I FAMILY OF FUNDS
C/O PFPC INC.
P.O. BOX 8966
WILMINGTON, DE 19899-8966
NOT PART OF THE PROSPECTUS
<PAGE>
APPENDIX A
PERFORMANCE BENCHMARKS
<TABLE>
<CAPTION>
N/I PERFORMANCE
FUND BENCHMARK DESCRIPTION
- -------------------------------------------------------------------------------
<C> <C> <S>
Micro Cap Wilshire Small Wilshire Asset Management's indices are derived from
Company Growth the largest 2500 securities by market
Index capitalization, the Top 2500, of the Wilshire 5000
stock index. The Small Company Universe consists of
stocks 751 through 2500 (the largest 750 stocks
ranked by market capitalization are excluded).
The Small Company Index is segmented into growth and
value categories. Variables employed to identify
growth stocks include high sales growth, high return
on equity, and low dividend payout.
- -------------------------------------------------------------------------------
Growth Russell 2500 The Russell 2500 is an index of stock 501 through
Growth Index 3000 in the Russell 3000 Index, as ranked by total
market capitalization. This index is segmented into
growth and value categories. The Russell 2500 Growth
Index contains stocks from the Russell 2500 with
greater-than-average growth orientation. Companies
in this index generally have higher price-to-book
and price/earnings ratios.
- -------------------------------------------------------------------------------
Growth S&P MidCap 400 A broad-based index of 400 companies with market
& Value Index capitalizations from $50 million to $10 billion. The
Standard & Poor's MidCap 400 Index is a widely
accepted, unmanaged index of overall mid-cap stock
market performance.
- -------------------------------------------------------------------------------
</TABLE>
App. A-1
<PAGE>
N/I family of mutual funds
1-800-NUMERIC
INVESTMENT ADVISER
CUSTODIAN
Numeric Investors L.P. Custodial Trust Company
One Memorial Drive 101 Carnegie Center
Cambridge, MA 02142
Princeton, NJ 05840-6231
CO-ADMINISTRATORS
TRANSFER AGENT
Bear Stearns Funds Management Inc. PFPC Inc.
245 Park Avenue, 15th floor Bellevue Corporate Center
New York, NY 10167
400 Bellevue Parkway
Wilmington, DE 19809
PFPC Inc.
Bellevue Corporate Center INDEPENDENT ACCOUNTANTS
400 Bellevue Parkway Coopers & Lybrand, L.L.P.
Wilmington, DE 19809
2400 Eleven Penn Center
Philadelphia, PA 19103
DISTRIBUTOR
Counsellors Funds Service, Inc. COUNSEL
466 Lexington Avenue Ballard Spahr Andrews & Ingersoll
New York, NY 10017-3147 1735 Market Street
Philadelphia, PA 19103-7599
