<PAGE>
As filed with the Securities and Exchange Commission on May 9, 1997
Securities Act File No. 33-20827
Investment Company Act File No. 811-5518
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. __ / /
Post-Effective Amendment No. 45 /X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 47 /X/
-------------------------
THE RBB FUND, INC.
(Government Securities Portfolio: RBB Family Class; BEA International
Equity Portfolio: BEA Class, BEA Investor Class and BEA Advisor Class; BEA High
Yield Portfolio: BEA Class, BEA Investor Class and BEA Advisor Class; BEA
Emerging Markets Equity Portfolio: BEA Class, BEA Investor Class and BEA
Advisor Class; BEA U.S. Core Equity Portfolio: BEA Class; BEA U.S. Core Fixed
Income Portfolio: BEA Class; BEA Strategic Global Fixed Income Portfolio: BEA
Class; BEA Municipal Bond Fund Portfolio: BEA Class; BEA Balanced Fund
Portfolio: BEA Class; BEA Short Duration Portfolio: BEA Class; BEA Global
Telecommunications Portfolio: BEA Investor Class and BEA Advisor Class; NI
Micro Cap Fund: NI Class; NI Growth Fund: NI Class; NI Growth & Value Fund:
NI Class; Boston Partners Large Cap Value Fund: Boston Partners Advisor Class,
Boston Partners Institutional Class and Boston Partners Investor Class; Boston
Partners Mid Cap Value Fund: Boston Partners Institutional Class and Boston
Partners Investor Class; Money Market Portfolio: RBB Family Class, Cash
Preservation Class, Sansom Street Class, Bedford Class, Janney Class, Beta
Class, Gamma Class, Delta Class, Epsilon Class, Zeta Class, Eta Class and Theta
Class; Municipal Money Market Portfolio: RBB Family Class, Cash Preservation
Class, Sansom Street Class, Bedford Class, Bradford Class, Janney Class, Beta
Class, Gamma Class, Delta Class, Epsilon Class, Zeta Class, Eta Class and Theta
Class; Government Obligations Money Market Portfolio: Sansom Street Class,
Bedford Class, Bradford Class, Janney Class, Beta Class, Gamma Class, Delta
Class, Epsilon Class, Zeta Class, Eta Class and Theta Class; New York Municipal
Money Market Portfolio: Bedford Class, Janney Class, Beta Class, Gamma Class,
Delta Class, Epsilon Class, Zeta Class, Eta Class and Theta Class)
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
(Address of Principal Executive Offices)
--------------------------------------------------
Registrant's Telephone Number: (302) 792-2555
Copies to:
GARY M. GARDNER, ESQUIRE MICHAEL P. MALLOY, ESQUIRE
PNC Bank, National Association Drinker Biddle & Reath LLP
1600 Market Street, 28th Floor 1100 PNB Building
Philadelphia, PA 19103 1345 Chestnut Street
(Name and Address of Agent for Service) Philadelphia, PA 19107-3496
It is proposed that this filing will become effective (check
appropriate box)
/X/ immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
<PAGE>
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant
has elected to register an indefinite number of shares of common stock of each
of the seventy-nine classes registered hereby under the Securities Act of 1933.
Registrant filed its notice pursuant to Rule 24f-2 for the fiscal year ended
August 31, 1996 on October 28, 1996.
The purpose of this Post-Effective Amendment is to fulfill Registrant's
undertaking to file unaudited financial statements within four to six months of
the effective date of its registration statement with respect to the Advisor
Class of the BEA International Equity Fund, BEA Emerging Markets Equity Fund,
BEA High Yield Fund and BEA Global Telecommunications Fund (the "Funds"), each a
portfolio of The RBB Fund, Inc. Financial Statements have been provided for the
Advisor Class of the Funds. No Investor Class shares of the Fund have been
issued as of the date of this Post-Effective Amendment. Financial Statements
for the Institutional Class of the BEA International Equity, BEA Emerging
Markets Equity and BEA High Yield Funds are included in the Prospectuses for
such funds and have not been separately provided in this filing.
<PAGE>
THE RBB FUND, INC.
(BEA ADVISOR CLASSES OF THE BEA INTERNATIONAL EQUITY,
BEA EMERGING MARKETS EQUITY, BEA HIGH YIELD AND
BEA GLOBAL TELECOMMUNICATIONS FUNDS)
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
Form N-1A Item Location
- -------------- --------
Part A Prospectus
1. Cover Page. . . . . . . . . . . . . . Cover Page
2. Synopsis. . . . . . . . . . . . . . . Annual Fund
Operating Expenses
3. Condensed Financial Information . . . Financial Highlights
4. General Description of Registrant . . Cover Page; The Company; Investment
Objectives and Policies; Investment
Limitations; Risk Factors
5. Management of the Fund. . . . . . . . Management
5A. Management's Discussion
of Fund Performance . . . . . . . . Not Applicable
6. Capital Stock and Other Securities. . Cover Page; Dividends and
Distributions; Taxes; Shareholder
Servicing; Multi-Class Structure;
Description of Shares
7. Purchase of Securities Being
Offered . . . . . . . . . . . . . . How to Purchase Shares; Net Asset
Value
8. Redemption or Repurchase. . . . . . . How to Redeem Shares; Net Asset
Value
9. Pending Legal Proceedings . . . . . . Not Applicable
<PAGE>
THE RBB FUND, INC.
(BEA ADVISOR CLASSES OF THE BEA INTERNATIONAL EQUITY,
BEA EMERGING MARKETS EQUITY, BEA HIGH YIELD AND
BEA GLOBAL TELECOMMUNICATIONS FUNDS)
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
Form N-1A Item Location
- -------------- --------
PART B STATEMENT OF ADDITIONAL INFORMATION
10. Cover Page. . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . Contents
12. General Information and History . . . General; Directors and Officers;
Additional Information Concerning
Fund Shares; Miscellaneous; see
Prospectus - "The Fund"
13. Investment Objectives and Policies. . Common Investment Policies;
Supplemental Investment Objectives
and Policies; Investment
Limitations; Risk Factors
14. Management of the Fund. . . . . . . . Directors and Officers; Investment
Advisory and Servicing Arrangements
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . Miscellaneous
16. Investment Advisory and Other
Services. . . . . . . . . . . . . . Investment Advisory and Servicing
Arrangements; See Prospectus -
"Management"
17. Brokerage Allocation and Other
Practices . . . . . . . . . . . . . Portfolio Transactions
18. Capital Stock and Other Securities. . Additional Information Concerning
Fund Shares; See Prospectus -
"Dividends and Distributions"
"Multi-Class Structure" and
"Description of Shares"
19. Purchase, Redemption and Pricing of
Securities Being Offered. . . . . . Purchase and Redemption
Information; Valuation of Shares;
See Prospectus - "How to Purchase
Shares" and "How to Redeem Shares"
20. Tax Status. . . . . . . . . . . . . . Taxes; See Prospectus - "Taxes"
21. Underwriters. . . . . . . . . . . . . Not Applicable
22. Calculation of Performance Data . . . Performance and Yield Information
23. Financial Statements. . . . . . . . . Miscellaneous
<PAGE>
BEA ADVISOR FUNDS
BEA INTERNATIONAL EQUITY FUND
BEA EMERGING MARKETS EQUITY FUND
BEA GLOBAL TELECOMMUNICATIONS FUND
BEA HIGH YIELD FUND
(INVESTMENT PORTFOLIOS OF THE RBB FUND, INC.)
SUPPLEMENT DATED MAY 9, 1997
TO THE PROSPECTUS DATED OCTOBER 15, 1996
FINANCIAL HIGHLIGHTS
The following Financial Highlights are added to the Prospectus after
page P-2:
FINANCIAL HIGHLIGHTS
The "Financial Highlights" presented below set forth certain
investment results for the BEA Advisor Classes representing interests in the
BEA International Equity, BEA Emerging Markets Equity, BEA Global
Telecommunications and BEA High Yield Funds (the "BEA Advisor Funds") for the
six-month period ended February 28, 1997. Shares of the Advisor Class of the
BEA International Equity, BEA Emerging Markets Equity and BEA High Yield
Funds were first issued on November 1, 1996. Shares of the Advisor Class of
the BEA Global Telecommunications Fund were first issued on December 4, 1996.
The financial data included in this table has been derived from unaudited
financial statements and notes thereto for the six-month period ended
February 28, 1997, which are included in the Semi-Annual Report to
Shareholders for the BEA International Equity, BEA Emerging Markets Equity,
BEA Global Telecommunications and BEA High Yield Funds. The Semi-Annual
Report to Shareholders has been filed with the Securities and Exchange
Commission and the financial statements therein have been incorporated by
reference into the Statement of Additional Information for the BEA Advisor
Funds. The financial data should be read in conjunction with such financial
statements and notes thereto. Further information about the performance of
the BEA Advisor Funds is available in the Semi-Annual Report to Shareholders.
Both the Statement of Additional Information and the Semi-Annual Report to
Shareholders may be obtained from the Fund free of charge by calling the
telephone number on page 1 of the prospectus.
<PAGE>
<TABLE>
<CAPTION>
BEA International BEA Emerging Markets BEA Global
Equity Fund Equity Fund Telecommunications Fund BEA High Yield Fund
----------------------- ----------------------- ----------------------- -----------------------
For the Period For the Period For the Period For the Period
November 1, 1996* to November 1, 1996* to December 4, 1996* to November 1, 1996*
February 28, 1997 February 28, 1997 February 28, 1997 to February 28, 1997
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------------------- ----------------------- ----------------------- -----------------------
Advisor Advisor Advisor Advisor
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period. . . . . . . $ 19.67 $ 18.08 $ 15.00 $ 16.21
------------ ------------ ------------ ------------
Income from investment
operations
Net investment income (loss) . 0.08 (0.03) (0.01) 0.28
Net gain (loss) on securities
(both realized and
unrealized). . . . . . . . . 1.24 2.61 1.19 0.56
------------ ------------ ------------ ------------
Total from investment
operations . . . . . . . . . 1.32 2.58 1.18 0.84
------------ ------------ ------------ ------------
Less Distributions
Dividends from net
investment income. . . . . (0.26) (0.06) --- (0.36)
Distributions from
capital gains. . . . . . . --- --- --- ---
------------ ------------ ------------ ------------
Total distributions. . . . . . (0.26) (0.06) --- (0.36)
------------ ------------ ------------ ------------
Net asset value, end of period . . $ 20.73 $ 20.60 $ 16.18 $ 16.69
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total return . . . . . . . . . . . 6.73%(c)(d) 14.31%(c)(d) 7.87%(c) 12.42%(c)
Ratio/Supplemental Data
Net assets, end of period. . . . $5,265 $5,480 $491,493 $83,831
Ratio of expenses to
average net assets . . . . . . 1.41%(a)(b) 1.74%(a)(b) 1.65%(a)(b) 0.95%(a)(b)
Ratio of net investment
income (loss) to average
net assets . . . . . . . . . . (0.67)%(b) (1.03)%(b) (0.34)%(b) 9.25%(b)
Fund turnover rate . . . . . . . 50%(c) 45%(c) 13%(c) 38%(c)
Average commission rate(e) . . . --- --- $ .0037 N/A
</TABLE>
-2-
<PAGE>
(a) Without the voluntary waiver of advisory fees and administration fees, the
ratios of expenses to average net assets for the Advisor classes of the BEA
International Equity, BEA Emerging Markets Equity and BEA High Yield Funds
would have been 1.49%, 1.86% and 1.36%, respectively, annualized for the
period from November 1, 1996 to February 28, 1997. Without the voluntary
waiver of advisory fees and administration fees, the ratio of expenses to
average net assets for the Advisor class of the BEA Global
Telecommunications Fund would have been 2.83%, annualized for the period
from December 4, 1996 to February 28,
1997.
(b) Annualized.
(c) Not annualized.
(d) Redemption fees not reflected in total return.
(e) Computed by dividing the total amount of brokerage commissions paid by the
total shares of investment securities purchased and sold during the period
for which commissions were charged, as required by the SEC.
* Commencement of operations.
-3-
<PAGE>
[LOGO] B E A
ADVISOR FUNDS
- ------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
EMERGING MARKETS EQUITY FUND
GLOBAL TELECOMMUNICATIONS FUND
HIGH YIELD FUND
PROSPECTUS -- OCTOBER 15, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Annual Fund Operating Expenses..................................................................................... P-2
Financial Highlights............................................................................................... P-3
The Company........................................................................................................ P-3
Investment Objectives and Policies................................................................................. P-3
Investment Limitations............................................................................................. P-7
Risk Factors....................................................................................................... P-7
Management......................................................................................................... P-9
Expenses........................................................................................................... P-12
How to Purchase Shares............................................................................................. P-12
How to Redeem Shares............................................................................................... P-14
Net Asset Value.................................................................................................... P-16
Dividends and Distributions........................................................................................ P-16
Taxes.............................................................................................................. P-16
Multi-Class Structure.............................................................................................. P-18
Description of Shares.............................................................................................. P-18
Other Information.................................................................................................. P-19
</TABLE>
<PAGE>
BEA ADVISOR FUNDS
THE BEA ADVISOR FUNDS CONSIST OF FOUR CLASSES OF COMMON STOCK OF THE RBB FUND,
INC. (THE "COMPANY"), AN OPEN-END MANAGEMENT INVESTMENT COMPANY. SHARES
(COLLECTIVELY, THE "ADVISOR SHARES" OR "SHARES") OF SUCH CLASSES (THE "ADVISOR
CLASSES" OR "CLASSES") ARE OFFERED BY THIS PROSPECTUS AND REPRESENT INTERESTS IN
ONE OF THE FOUR OF THE INVESTMENT PORTFOLIOS OF THE COMPANY DESCRIBED IN THIS
PROSPECTUS (COLLECTIVELY, THE "FUNDS"). THE INVESTMENT OBJECTIVE OF EACH FUND
DESCRIBED IN THIS PROSPECTUS IS AS FOLLOWS:
BEA INTERNATIONAL EQUITY FUND -- seeks to provide long-term
appreciation of capital. The Fund will invest primarily in equity securities
of non-U.S. issuers.
BEA EMERGING MARKETS EQUITY FUND -- seeks to provide long-term
appreciation of capital. The Fund will invest primarily in equity securities
in emerging country markets.
BEA GLOBAL TELECOMMUNICATIONS FUND -- seeks to provide long-term
appreciation of capital. The Fund will invest primarily in equity securities
of telecommunications companies, both foreign and domestic.
BEA HIGH YIELD FUND -- seeks to provide a high total return. The Fund
will invest primarily in high yield fixed income securities (also known as
"junk bonds") issued by corporations, governments and agencies, both
domestic and foreign. The Fund will invest without regard to maturity or
credit quality limitations.
There can be, of course, no assurance that a Fund's investment objective
will be achieved. Investments in the Funds involve certain risks. See "Risk
Factors."
THE BEA HIGH YIELD FUND MAY INVEST ITS ASSETS WITHOUT LIMITATION IN
SECURITIES WHICH MAY INCLUDE BELOW INVESTMENT-GRADE QUALITY SECURITIES COMMONLY
KNOWN AS "JUNK BONDS". INVESTMENTS OF THIS TYPE ARE SUBJECT TO GREATER RISKS,
INCLUDING THE RISK OF LOSS OF PRINCIPAL AND INTEREST, THAN THOSE INVOLVED WITH
INVESTMENT GRADE SECURITIES. PURCHASERS SHOULD CAREFULLY ASSESS THE RISKS
ASSOCIATED WITH AN INVESTMENT IN THIS FUND. SEE "RISK FACTORS."
BEA Associates ("BEA" or the "Adviser"), a U.S. investment advisory firm,
will act as the investment adviser to each Fund. BEA maintains a global
investment strategy and, as of September 30, 1996, served as adviser for
approximately $31.3 billion in assets.
The minimum initial investment in a Fund is $2,500 and the minimum
subsequent investment is $250. The minimum initial investment for Individual
Retirement Accounts, Uniform Gifts to Minors and Automatic Investment Plans are
$1,000 and minimum subsequent investments in these Plans are $100.
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 October 15, 1996, has been filed with the
Securities and Exchange Commission (the "SEC") and is incorporated by reference
in this Prospectus. The Statement of Additional Information is available for
reference, along with related materials, on the SEC website
(http://www.sec.gov). It may also be obtained free of charge by calling (800)
401-2230.
Shares of the Funds are not deposits or obligations of, or guaranteed or
endorsed by, any bank and shares are not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other agency.
Investments in Shares of the Funds involve investment risks, including the
possible loss of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE 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 OCTOBER 15, 1996
<PAGE>
ANNUAL FUND OPERATING EXPENSES (AFTER WAIVERS)
<TABLE>
<CAPTION>
BEA
BEA EMERGING BEA
INTERNATIONAL MARKETS GLOBAL BEA
EQUITY EQUITY TELECOMMUNICATIONS HIGH YIELD
FUND FUND FUND FUND
------------- -------- --------------------- -------------
<S> <C> <C> <C> <C>
Management Fees (after waivers)(1)................ .80% 1.00% 1.00% .45%(2)
12b-1 Fees........................................ .25% .25% .25% .25%
Other Expenses (after waivers)(3)................. .39% .49% .40% .25%
--- --- --- ---
Total Fund Operating Expenses (after
waivers)(3)...................................... 1.44% 1.74% 1.65% .95%
--- --- --- ---
--- --- --- ---
</TABLE>
- ------------------------------
(1) Management fees are based on average daily net assets of each Fund and are
calculated daily and paid monthly.
(2) Before expense waivers, management fees would be .70%.
(3) Based upon estimated amounts for the current fiscal year after expense
waivers. Before expense waivers, Other Expenses would be .42%, .62% and .41%
for the BEA International Equity, the BEA Emerging Markets Equity, and the
BEA High Yield Funds, respectively, and Total Fund Operating Expenses would
be 1.47%, 1.87% and 1.36%.
- --------------------------------------------------------------------------------
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in each of
the Funds, assuming (1) a 5% annual return, and (2) redemption at the end of
each time period.
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
------ ------ ------- -------
<S> <C> <C> <C> <C>
BEA International Equity Fund......................................... $ 15 $46 $ 79 $ 172
BEA Emerging Markets Equity Fund...................................... $ 18 $55 $ 94 $ 205
BEA Global Telecommunications Fund.................................... $ 17 $52 N/A N/A
BEA High Yield Fund................................................... $ 10 $30 $ 52 $ 115
</TABLE>
The Example in this fee table assumes that all dividends and distributions are
reinvested and that the amounts listed under "Annual Fund Operating Expenses"
remain the same in the years shown. THE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN.
This fee table is designed to assist an investor in understanding the various
costs and expenses that an investor in each of the Funds will bear directly or
indirectly. For more complete descriptions of various costs and expenses see
"Management" below. The "Other Expense" figures are restated from fees and costs
of the Institutional Classes of the Funds as of August 31, 1996, except for the
BEA Global Telecommunications Fund, for which Other Expenses are estimated for
the current fiscal year. Actual expenses of the Advisor Shares may be greater or
less than such costs and fees of the Institutional Shares. However, there can be
no assurance that any future waivers of Management and Administration Fees (if
any) will not vary from the figures reflected in this fee table. To the extent
any service providers assume additional expenses of any Fund, such assumptions
of additional expenses will have the effect of lowering a Fund's overall expense
ratio and increasing its return to investors.
P-2
<PAGE>
BEA ADVISOR FUNDS
- ----------------------------------------------
FINANCIAL HIGHLIGHTS
Financial Highlights are not applicable to a new class of shares such as the
Advisor Shares offered by this Prospectus.
- ----------------------------------------------
THE COMPANY
The Company is an open-end management investment company that currently operates
or proposes to operate nineteen separate investment portfolios. Each of the BEA
Advisor Funds represent interests in a separate portfolio. Each Fund is
non-diversified. The Company was incorporated in Maryland on February 29, 1988.
The Funds are designed primarily for individual investors and are available
through financial intermediaries, including broker-dealers, investment advisers,
financial planners, banks and insurance companies. Investment professionals such
as those listed above may purchase Shares for discretionary or non-discretionary
accounts maintained by individuals.
- ----------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Fund may not be changed without the affirmative
vote of a majority of the Fund's outstanding shares (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")). As with other
mutual funds, there can be no assurance that any Fund will achieve its
investment objective. Because of their different investment emphases, each Fund
should be considered as a vehicle for diversification and not as a balanced
investment program. The Statement of Additional Information contains a more
detailed description of the various investments and investment techniques used
by the Funds.
BEA INTERNATIONAL EQUITY FUND
The BEA International Equity Fund's investment objective is to seek long-term
appreciation of capital by investing primarily in equity securities of non-U.S.
issuers. The Fund defines equity securities of non-U.S. issuers as securities of
issuers whose principal activities are outside the United States. The Fund
expects that its investments will be concentrated in Argentina, Australia,
Austria, Brazil, Canada, Chile, Colombia, Denmark, England, Finland, France,
Germany, Greece, Hong Kong, Hungary, Italy, Japan, Malaysia, Mexico, The
Netherlands, New Zealand, Norway, Portugal, Singapore, South Africa, Spain,
Sweden, Switzerland, Thailand and Venezuela. The Fund may invest in securities
of issuers in Emerging Markets, as defined below under "Investment Objectives
and Policies -- BEA Emerging Markets Equity Fund," but does not expect to invest
more than 40% of its total assets in securities of issuers in Emerging Markets.
The Fund will invest in securities of issuers from at least three countries
outside the United States.
Under normal market conditions, the Fund will invest a minimum of 80% of its
total assets in equity securities of non-U.S. issuers. Such equity securities
include common stock and preferred stock (including convertible preferred
stock); bonds, notes and debentures convertible into
P-3
<PAGE>
common or preferred stock; stock purchase warrants and rights; equity interests
in trusts and partnerships; and depositary receipts of companies.
The Fund may invest up to 20% of its total assets in debt securities issued by
U.S. or foreign governments or corporations, although it does not currently
intend to invest more than 5% of its net assets in debt securities. The Fund has
no limitation on the maturity or the credit quality of the debt securities in
which it invests, which may include lower-quality, high yielding securities,
commonly known as "junk bonds." See "Risk Factors -- Lower-Rated Securities."
BEA EMERGING MARKETS EQUITY FUND
The BEA Emerging Markets Equity Fund's investment objective is to seek long-term
appreciation of capital by investing primarily in equity securities of issuers
in Emerging Markets. As used in this Prospectus, an Emerging Market is any
country which is generally considered to be an emerging or developing country by
the World Bank and the International Finance Corporation, as well as countries
that are classified by the United Nations as emerging or developing, at the time
of the Fund's investment. The countries that will not be considered Emerging
Markets include: Australia, Austria, Belgium, Canada, Denmark, Finland, France,
Germany, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand,
Norway, Spain, Switzerland, the United Kingdom and the United States. Under
normal market conditions, the Fund will invest a minimum of 80% of its total
assets in equity securities of issuers in Emerging Markets. The Fund will not
necessarily seek to diversify investments on a geographical basis or on the
basis of the level of economic development of any particular country. The Fund
will at all times, except during defensive periods, maintain investments in at
least three Emerging Markets.
The Fund normally will not emphasize dividend or interest income in choosing
securities, unless BEA believes the income will contribute to the securities'
appreciation potential.
An equity security of an issuer in an Emerging Market is defined as common stock
and preferred stock (including convertible preferred stock); bonds, notes and
debentures convertible into common or preferred stock; stock purchase warrants
and rights; equity interests in trusts and partnerships; and depositary receipts
of companies: (i) the principal securities trading market for which is in an
Emerging Market; (ii) whose principal trading market is in any country, provided
that, alone or on a consolidated basis, they derive 50% or more of their annual
revenue from either goods produced, sales made or services performed in Emerging
Markets; or (iii) that are organized under the laws of, and with a principal
office in, an Emerging Market. Determinations as to eligibility will be made by
BEA based on publicly available information and inquiries made to the companies.
To the extent that the Fund's assets are not invested as described above, the
remainder of the assets may be invested in government or corporate debt
securities of Emerging Market or developed countries, although the Fund does not
presently intend to invest more than 5% of its net assets in debt securities.
Debt securities may include lower-rated debt securities (commonly known as "junk
bonds"). See "Risk Factors -- Lower-Rated Securities."
BEA GLOBAL TELECOMMUNICATIONS FUND
The BEA Global Telecommunications Fund's investment objective is long term
capital appreciation by investing primarily in equity securities of
telecommunications companies, both foreign and domestic. It is the policy of the
Fund under normal market conditions to invest not less than
P-4
<PAGE>
65% of its total assets in equity securities (including common and preferred
stocks, convertible securities and warrants to acquire such equity securities)
of telecommunications companies. The Fund will invest in convertible securities
based on their underlying equity characteristics without regard to the credit
rating of such securities. Such convertible securities may include lower-quality
high yielding securities commonly known as "junk bonds." See "-- Risk Factors --
Lower Rated Securities". As a Fund investing in global markets, at least 65% of
the Fund's investments will be made in at least three different countries. The
Fund considers telecommunications companies to be those which are engaged
primarily in designing, developing, operating, financing, manufacturing or
providing the following activities, products and services: communications
equipment and services (including equipment and services for both data and voice
transmission); electronic components and equipment; broadcast (including
television and radio, satellite, microwave and cable television); computer
equipment, mobile communications and cellular radio and paging; electronic mail;
local and wide area networking and linkage of word and data processing systems;
publishing and information systems; video and telex; and emerging technologies
combining telephone, television and/or computer systems (collective
"telecommunication activity"). A "telecommunications" company is an entity in
which (i) at least 50% of either its revenue or earnings was derived from
telecommunications activity, or (ii) at least 50% of its assets was devoted to
telecommunications activity based on the company's most recent fiscal year. The
remainder of the assets of the BEA Global Telecommunications Fund may be
invested in equity or non-equity securities issued by companies that are not
primarily engaged in telecommunications activities.
Because the Fund will concentrate its investments in the telecommunications
industry, its investments may be subject to greater risk and market fluctuation
than a fund that has securities representing a broader range of investment
alternatives.
Telecommunications industries may be subject to greater governmental regulation
than many other industries and changes in governmental policies and the need for
regulatory approvals may have a material effect on the products and services of
this industry. Telephone operating companies in the United States, for example,
are subject to both federal and state regulation affecting permitted rates of
return and the kinds of services that may be offered. Certain types of companies
represented in the Fund are engaged in competition for market share. In recent
years, these have been companies providing goods and services such as private
and local area networks and telephone set equipment.
BEA HIGH YIELD FUND
BEA High Yield Fund seeks to provide high total return by investing primarily in
high yield fixed income securities (commonly known as "junk bonds") issued by
corporations, governments and agencies, both U.S. and foreign. Under normal
market conditions, the Fund will invest a minimum of 65% of its total assets in
such high yield fixed income securities, with the remainder invested in fixed
income securities which may have equity characteristics, such as convertible
bonds. The Fund is not limited in the extent to which it can invest in junk
bonds (i.e., securities rated below investment grade by recognized rating
agencies or in comparable unrated securities). See "Risk Factors -- Lower-Rated
Securities." The portion of the Fund's assets invested in various countries will
vary from time to time depending on BEA's assessment of market opportunities.
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The value of the securities held by the Fund, and thus the net asset value of
the shares of the Fund, generally will vary inversely in relation to changes in
prevailing interest rates. Also, the value of such securities may be affected by
changes in real or perceived creditworthiness of the issuers. The Fund is not
restricted to any maximum or minimum time to maturity in purchasing portfolio
securities, and the average maturity of the Fund's assets will vary based upon
BEA's assessment of economic and market conditions.
COMMON INVESTMENT POLICIES
This section describes certain investment policies that are common to each Fund.
These policies are described in more detail in the Statement of Additional
Information.
TEMPORARY INVESTMENTS. For temporary purposes during periods in which BEA
believes changes in economic, financial or political conditions make it
advisable, each Fund may reduce its holdings in equity and other securities and
invest up to 100% of its assets in cash or certain short-term (less than twelve
months to maturity) and medium-term (not greater than five years to maturity)
interest-bearing instruments or deposits of United States and foreign issuers.
Such investments may include, but are not limited to, commercial paper,
certificates of deposit, variable or floating rate notes, bankers' acceptances,
time deposits, government securities and money market deposit accounts. See
Statement of Additional Information, "Common Investment Policies -- Temporary
Investments." To the extent permitted by their investment objectives and
policies, the Funds may hold cash or cash equivalents pending investment.
BORROWING. A Fund may borrow up to 33 1/3 percent of its total assets
without obtaining shareholder approval. The Adviser intends to borrow, or to
engage in reverse repurchase agreements or dollar roll transactions, only for
temporary or emergency purposes. See Statement of Additional Information,
"Common Investment Policies -- Reverse Repurchase Agreements" and "--
Borrowing."
RULE 144A SECURITIES. Rule 144A securities are securities which are
restricted as to resale to the general public, but which may be resold to
qualified institutional buyers. Each Fund may invest in Rule 144A securities
that BEA has determined are liquid pursuant to guidelines established by the
Company's Board of Directors.
INVESTMENT COMPANIES. Each Fund may invest in securities issued by other
investment companies within the limit prescribed by the 1940 Act. As a
shareholder of another investment company, each Fund would bear, along with
other shareholders, its pro rata portion of the other investment company's
expenses, including advisory fees. These expenses would be in addition to the
advisory and other expenses that a Fund bears directly in connection with its
own operations.
PORTFOLIO TURNOVER. BEA will effect portfolio transactions in each Fund
without regard to holding period, if, in its judgment, such transactions are
advisable in light of general market, economic or financial conditions. The BEA
International Equity, the BEA Emerging Markets Equity, the BEA Global
Telecommunications and the BEA High Yield Funds anticipate that their annual
portfolio turnover rate should not exceed 100% under normal conditions. However,
it is impossible to predict portfolio turnover rates. The amount of portfolio
activity will not be a limiting factor when making portfolio decisions. See the
Statement of Additional Information, "Portfolio Transactions" and "Taxes."
CURRENCY HEDGING. BEA may seek to hedge against a decline in value of a
Fund's
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non-dollar denominated portfolio securities resulting from currency devaluations
or fluctuations. Unless the BEA Funds engage in currency hedging transactions,
they will be subject to the risk of changes in relation to the U.S. dollar of
the value of the foreign currencies in which their assets are denominated. These
Funds may also seek to protect, during the period prior to its remittance, the
value of the amount of interest, dividends and net realized capital gains
received or to be received in a local currency that it intends to remit out of a
foreign country by investing in high-quality short-term U.S. dollar-denominated
debt securities of such country and/or participating in the forward currency
market for the purchase of U.S. dollars in the country. There can be no
guarantee that suitable U.S. dollar-denominated investments will be available at
the time BEA wishes to use them to hedge amounts to be remitted.
The Statement of Additional Information contains additional investment policies
and strategies of the Funds.
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INVESTMENT LIMITATIONS
Each Fund is subject to the following fundamental investment limitation, which
may not be changed with respect to a Fund except upon the affirmative vote of
the holders of a majority of that Fund's outstanding shares. A complete list of
the Funds' fundamental investment limitations is set forth in the Statement of
Additional Information under "Investment Limitations." Each Fund may not:
Borrow money or issue senior securities, except that each Fund may
borrow from institutions and enter into reverse repurchase agreements and
dollar rolls for temporary purposes in amounts up to one-third of the value
of its total assets at the time of such borrowing; or mortgage, pledge or
hypothecate any assets, except in connection with any such borrowing and
then in amounts not in excess of one-third of the value of the Fund's total
assets at the time of such borrowing. Each Fund will not purchase securities
while its aggregate borrowings (including reverse repurchase agreements,
dollar rolls and borrowings from banks) are in excess of 5% of its total
assets are outstanding. Securities held in escrow or separate accounts in
connection with the Fund's investment practices are not considered to be
borrowings or deemed to be pledged for purposes of this limitation.
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RISK FACTORS
FOREIGN SECURITIES. Investing in the securities of non-U.S. issuers
involves opportunities and risks that are different from investing in the
securities of U.S. issuers. The risks associated with investing in securities of
non-U.S. issuers are generally heightened for investments in securities of
issuers in Emerging Markets.
Because foreign securities generally are denominated and pay dividends or
interest in foreign currencies, and the Funds may hold from time to time various
foreign currencies pending their investment in foreign securities or their
conversion into U.S. dollars, the value of the Funds' assets as measured in U.S.
dollars may be affected favorably or unfavorably by changes in exchange rates.
In addition, investors should realize that the value of the Funds' investments
may be adversely affected by changes in political or social conditions,
diplomatic relations, confiscatory taxation, expropriation, limitation on the
removal of funds or assets, or imposition of (or change in) exchange control
regulations in those foreign nations. In addition, changes in
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government administrations or economic or monetary policies in the U.S. or
abroad could result in appreciation or depreciation of portfolio securities and
could favorably or adversely affect the Funds' operations. Furthermore, the
economies of individual foreign nations may differ from that of the United
States, whether favorably or unfavorably, in areas such as growth of gross
national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position. Any foreign investments made
by the Funds must be made in compliance with U.S. and foreign currency
restrictions and tax laws restricting the amounts and types of foreign
investments.
In general, less information is publicly available with respect to foreign
issuers than is available with respect to U.S. companies. Most foreign companies
are also not subject to the uniform accounting and financial reporting
requirements applicable to issuers in the United States. The Funds' foreign
investments may be less liquid and their prices may be more volatile than
comparable investments in securities in U.S. companies. Expenses relating to
foreign investments are higher than those relating to domestic securities. In
addition, there is generally less government supervision and regulation of
securities exchanges, brokers and issuers in foreign countries than in the
United States.
LOWER-RATED SECURITIES. The widespread expansion of government, consumer
and corporate debt within the economy has made the corporate sector, especially
cyclically sensitive industries, more vulnerable to economic downturns or
increased interest rates. Because lower-rated debt securities involve issuers
with weaker credit fundamentals (such as debt-to-equity ratios, interest charge
coverage, earnings history and the like), an economic downturn, or increases in
interest rates, could severely disrupt the market for lower-rated debt
securities and adversely affect the value of outstanding debt securities and the
ability of the issuers to repay principal and interest.
Lower-rated debt securities (commonly known as "junk bonds") possess speculative
characteristics and are subject to greater market fluctuations and risk of lost
income and principal than higher-rated debt securities for a variety of reasons.
The markets for and prices of lower-rated debt securities have been found to be
less sensitive to interest rate changes than higher-rated investments, but more
sensitive to adverse economic changes or individual corporate developments.
Also, during an economic downturn or substantial period of rising interest
rates, highly leveraged issuers may experience financial stress which would
adversely affect their ability to service their principal and interest payment
obligations, to meet projected business goals and to obtain additional
financing. If the issuer of a debt security owned by a Fund defaulted, the Fund
could incur additional expenses in seeking recovery with no guaranty of
recovery. In addition, periods of economic uncertainty and changes can be
expected to result in increased volatility of market prices of lower-rated debt
securities and a Fund's net asset value. Lower-rated debt securities also
present risks based on payment expectations. For example, lower-rated debt
securities may contain redemption or call provisions. If an issuer exercises
these provisions in a declining interest rate market, a Fund would have to
replace the security with a lower yielding security, resulting in a decreased
return for investors. Conversely, a lower-rated debt security's value will
decrease in a rising interest rate market, as will the value of a Fund's assets.
If a Fund experiences unexpected net redemptions, this may force it to
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sell its lower-rated debt securities, without regard to their investment merits,
thereby decreasing the asset base upon which a Fund's expenses can be spread and
possibly reducing a Fund's rate of return.
In addition, to the extent that there is no established retail secondary market,
there may be thin trading of lower-rated debt securities, and this may have an
impact on both BEA's ability to value accurately lower-rated debt securities and
the Fund's assets, as judgment plays a greater role when reliable objective data
are unavailable, and to dispose of the debt securities. Adverse publicity and
investor perceptions, whether or not based on fundamental analysis, may decrease
the value and liquidity of lower-rated debt securities, especially in a thinly
traded market.
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MANAGEMENT
BOARD OF DIRECTORS
The business and affairs of the Company and each investment portfolio are
managed under the direction of the Company's Board of Directors.
INVESTMENT ADVISER
BEA serves as the Investment Adviser for each of the Funds pursuant to
investment advisory agreements (the "Advisory Agreements"). BEA is a general
partnership organized under the laws of the State of New York in December 1990
and, together with its predecessor firms, has been engaged in the investment
advisory business for over 60 years. BEA is a wholly-owned subsidiary of Credit
Suisse, the second largest Swiss bank which in turn is a subsidiary of CS
Holding, a Swiss Corporation. Active employees of BEA have a long-term equity
incentive plan. BEA is a Registered Investment Adviser under the Investment
Advisers Act of 1940, as amended. BEA's principal offices are located at One
Citicorp Center, 153 East 53rd Street, New York, New York 10022.
BEA is a diversified Investment Adviser, managing global equity, fixed income
and derivative securities accounts for corporate pension and profit-sharing
plans, state pension funds, union funds, endowments and other charitable
institutions. As of September 30, 1996, BEA managed approximately $31.3 billion
in assets. BEA currently acts as Investment Adviser for twenty investment
companies registered under the Investment Company Act, and as sub-adviser to
certain portfolios of twelve other registered investment companies. BEA also
acts as Investment Adviser for forty-two offshore funds.
BEA will select investments for each of the Funds and will place purchase and
sale orders on behalf of each of the Funds. The Funds may use affiliates of
Credit Suisse in connection with the purchase or sale of securities in
accordance with the rules or exemptive orders adopted by the Securities and
Exchange Commission (the "SEC") when BEA believes that the charge for the
transaction does not exceed usual and customary levels. BEA is also responsible
for providing to the Funds' and the Company's service providers prompt and
accurate data with respect to the Funds' transactions.
The day-to-day portfolio management of the BEA International Equity and the BEA
Emerging Markets Equity Funds is the responsibility of the BEA International
Equity Management Team. The Team consists of the following investment
professionals: William P. Sterling (Managing Director), Richard Watt (Managing
Director), Stephen M. Swift (Managing Director), and Steven D. Bleiberg (Senior
Vice President). Mr. Sterling joined BEA in 1995, prior to which time he was the
head of International Economics at Merrill Lynch &
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Company. Mr. Watt joined BEA in 1995, prior to which time he was the head of
emerging markets investments and research at Gartmore Investment Limited in
London. Prior to 1992, he was a director of Kleinwort Benson International
Investment in London and was a portfolio manager with Lorithan Regional Council,
a public pension plan sponsor in Scotland. Mr. Swift joined BEA in 1995, prior
to which time he spent three years at Credit Suisse Asset Management in London,
where he was the head of Global Equities and portfolio manager for the CS Tiger
Fund. For the previous 15 years he was with Wardley Investment Services, a Hong
Kong-based subsidiary of the Hong Kong and Shanghai Bank. Mr. Bleiberg has been
engaged as an investment professional with BEA for more than five years.
The day to day portfolio management of the BEA Global Telecommunications Fund is
the responsibility of the BEA Global Telecommunications Management Team. The
Team consists of the following investment professionals: Richard Watt (Managing
Director), William P. Sterling (Managing Director), Todd M. Rice (Senior Vice
President) and Stephen Waite (Vice President). Mr. Rice has been engaged as an
investment professional with BEA for more than five years. Mr. Waite joined BEA
in 1995, prior to which he was Vice President and Senior European Economist for
Merrill Lynch & Company in London.
The day-to-day portfolio management of the BEA High Yield Fund is the
responsibility of the BEA High Yield Management Team. The Team consists of the
following investment professionals: Richard Lindquist (Managing Director), Misia
Dudley (Senior Vice President), Marianne Rossi (Senior Vice President), and John
Tobin (Vice President). Mr. Lindquist, Ms. Dudley, Ms. Rossi and Mr. Tobin
joined BEA in 1995 as a result of BEA's acquisition of CS First Boston
Investment Management. Prior to joining CS First Boston, Mr. Lindquist and Ms.
Rossi were with Prudential Insurance Company of America. Prior to joining CS
First Boston, Ms. Dudley was with Stockbridge Partners, and prior to that had
spent five years with E.F. Hutton. Prior to joining CS First Boston, Mr. Tobin
managed portfolios for Integrated Resources and prior to that was Vice President
and industry analyst with Bankers Trust Company.
For the advisory services provided and expenses assumed by it, BEA is entitled
to receive a fee from the BEA International Equity Fund, the BEA Emerging
Markets Equity Fund, the BEA Global Telecommunications Fund and the BEA High
Yield Fund at an annual rate of .80%, 1.00%, 1.00% and .70%, respectively, of
average daily net assets, computed daily and payable monthly.
BEA may, at its discretion from time to time agree to waive voluntarily all or
any portion of its advisory fee for any Fund. BEA 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. BEA may assume additional expenses of a Fund from time to time.
In certain circumstances, BEA may assume such expenses on the condition that it
is reimbursed by the Fund 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 return to investors.
The Advisory Agreements provide that BEA shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Company in connection
with the matters to
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which the Advisory Agreement relates and shall be indemnified for any losses and
claims in connection with any claim relating thereto, except liability resulting
from willful misfeasance, bad faith or gross negligence on BEA's part in the
performance of its duties or from reckless disregard of its obligations and
duties under the Advisory Agreement.
CO-ADMINISTRATORS
PFPC Inc. ("PFPC"), an indirect, wholly-owned subsidiary of PNC Bank Corp.,
serves as co-administrator for the Funds. As co-administrator, PFPC will provide
various services to each Fund, including determining each of the Fund's net
asset value, providing all accounting services for the Funds and generally
assisting in all aspects of each Fund's operations. As compensation for
administrative services, the Company will pay PFPC a fee calculated at the
annual rate of .125% of each Fund's average daily net assets. PFPC has its
principal offices at 400 Bellevue Parkway, Wilmington, Delaware 19809.
The Company employs BEA as co-administrator. As co-administrator, BEA generally
assists each of the Funds in all aspects of their administration and shareholder
servicing. As compensation, the Company pays to BEA a fee calculated at an
annual rate of .05% of each Fund's average daily net assets for assets up to
$125 million, and .10% thereafter.
DISTRIBUTOR
Counsellors Securities Inc. ("Counsellors Securities") serves as the Company's
distributor. Counsellors Securities is located at 466 Lexington Avenue, New
York, New York 10017-3147. Counsellors Securities receives a fee at an annual
rate equal to .25% of the Fund's average daily net assets for distribution
services, pursuant to a distribution agreement between Counsellor's Securities
and the Company in accordance with a distribution plan (the "12b-1 Plan")
adopted by the Company pursuant to Rule 12b-1 under the 1940 Act. Amounts paid
to Counsellors Securities under the Company's 12b-1 Plan may be used by
Counsellors Securities to cover expenses that are related to (i) the
distribution of Advisor Shares of the Funds, (ii) ongoing servicing and/or
maintenance of the accounts of shareholders of the Fund, and (iii) sub-transfer
agency services, subaccounting services or administrative services related to
the sale of the Advisor Shares of the Funds, all as set forth in the Company's
12b-1 Plan. Payments under the 12b-1 Plan are not tied exclusively to the
expenses actually incurred. Counsellors Securities may delegate some or all of
these functions to a Service Organization. See "How to Purchase Shares --
Purchases Through Intermediaries." The Company's Board of Directors will
evaluate the appropriateness of the 12b-1 Plan on a continuing basis and in
doing so will consider all relevant factors, including expenses borne by
Counsellors Securities and amounts received under the 12b-1 Plan.
Counsellors Securities or its affiliates may, at their own expense, provide
promotional incentives to parties who support the sale of shares of a Fund,
consisting of securities dealers who have sold Fund shares or others, including
banks and other financial institutions, under special arrangements. In some
instances, these incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or expected sale of
significant amounts of Fund Shares.
TRANSFER AGENT
State Street Bank and Trust Company ("State Street") acts as transfer agent for
the Funds. It has delegated to Boston Financial Data Services, Inc. ("BFDS"), a
50% owned subsidiary, responsibility for most transfer agent servicing
functions. State Street's principal address is 225
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Franklin Street, Boston, MA 02110 and BFDS's principal address is 2 Heritage
Drive, Quincy, MA 02171, telephone number (800) 401-2230.
CUSTODIAN
Brown Brothers Harriman & Co. serves as custodian for the Funds. The 1940 Act
and the rules and regulations adopted thereunder permit a Fund to maintain its
securities and cash in the custody of certain eligible banks and securities
depositories. In compliance with such rules and regulations, a Fund's portfolio
of securities and cash, when invested in securities of foreign issuers, may be
held by eligible foreign subcustodians appointed by the custodian.
- ----------------------------------------------
EXPENSES
The expenses of each Fund are deducted from its total income before dividends
are paid. These expenses include, but are not limited to, fees paid to the
investment adviser, distributor, co-administrators, fees and expenses of
officers and directors who are not affiliated with the Fund's investment adviser
or distributor, taxes, interest, legal fees, custodian fees, auditing fees,
brokerage fees and commissions and certain other fees and expenses. Any general
expenses of the Company that are not readily identifiable as belonging to a
particular investment portfolio of the Company will be allocated among all
investment portfolios of the Company based upon the relative net assets of the
investment portfolios at the time such expenses are incurred. Transfer agency
expenses; expenses of preparation, printing and distributing prospectuses,
statements of additional information, proxy statements and reports to
shareholders; and registration fees and other costs identified as belonging to a
particular class, are allocated to such class.
- ----------------------------------------------
HOW TO PURCHASE SHARES
Shares representing interests in the Funds are offered continuously for sale by
the Distributor and may be purchased without imposition of a sales charge.
Shares of a Fund may be purchased either by mail or, with special advance
instructions, by wire.
BY MAIL
If an investor desires to purchase shares by mail, a check or money order made
payable to the "BEA Advisor Funds" (in U.S. currency) should be sent along with
the completed account application to the "BEA Advisor Funds" at the address set
forth below. Checks payable to the investor and endorsed to the order of the
"BEA Advisor Funds" will not be accepted as payment and will be returned to
sender. If payment is received by check in proper form on or before 4:00 p.m.
(Eastern time) on a day that a Fund calculates its net asset value (a "Business
Day") the purchase will be made at the Fund's net asset value calculated at the
end of that day. If payment is received after 4:00 p.m., the purchase will be
effected at the Fund's net asset value determined for the next Business Day
after payment has been received. Checks or money orders that are not in proper
form or that are not accompanied or preceded by a complete application will be
returned to sender. Shares purchased by check are entitled to receive dividends
and distributions beginning on the day after payment has been received. Checks
should be made payable to the "BEA Advisor Funds" accompanied by a breakdown of
amounts to be invested in each Fund. If a check used for purchase does not
clear, the Funds will cancel the purchase and the investor may be liable for
losses or fees incurred. For a description of the manner of calculating a Fund's
net asset value, see "Net Asset Value" below.
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SEND TO:
BEA ADVISOR FUNDS
P.O. Box 8500
Boston, MA 02266-8500
OVERNIGHT TO:
BFDS
ATTN: BEA ADVISOR FUNDS
2 Heritage Drive
North Quincy, MA 02171
BY WIRE
An investor may also purchase shares in a Fund by wiring funds from their banks.
Telephone orders will not be accepted until a complete account application in
proper form has been received and an account number has been established. After
telephoning (800) 401-2230 for instructions, an investor should then wire
federal funds to the BEA Advisors Funds c/o BFDS using the following wire
address:
State Street Bank & Trust Company
ABA# 0110 000 28
ATTN: Mutual Fund/Custody Dept.
[BEA Advisor Fund Name]
DDA# 9905-227-6
For Further Credit: [ACCOUNT NUMBER AND REGISTRATION]
If a telephone order is received by the close of regular trading on the New York
Stock exchange (the "NYSE") (currently 4:00 p.m., Eastern time), AND payment by
wire is received on the same day in proper form (in accordance with instructions
stated above), the shares will be priced according to the net asset value of the
Fund on that day and are entitled to dividends and distributions beginning on
that day. If payment by wire is received in proper form by the close of the NYSE
without a prior telephone order, the purchase will be priced according to the
net asset value of the Fund on that day and are entitled to dividends and
distributions beginning on that day. However, if a wire received in proper form
is not preceded by a telephone order AND is received after the close of regular
trading on the NYSE, the payment will be held uninvested until the order is
effected at the close of business on the next business day. Payment for orders
that are not accepted will be returned to the prospective investor after prompt
inquiry. If a telephone order is placed and payment by wire is not received on
the same day, the Fund will cancel the purchase and the investor may be liable
for losses or fees incurred.
Shares of a Fund are sold without a sales charge. The minimum investment in a
Fund is $2,500 and the minimum subsequent investments must be $250, except that
subsequent minimum investments can be as low as $100 under the Automatic
Investment Plan, Uniform Gifts to Minors Act and through Individual Retirement
Accounts described below. The Funds reserve the right to change the initial and
subsequent minimum investment requirements at any time.
After an investor has made his initial investment, additional shares may be
purchased at any time by mail or by wire in the manner outlined above. Wire
payments for initial and subsequent investments should clearly indicate the
investor's account number and the name in which shares are being purchased. Each
Fund reserves the right to suspend the offering of Shares for a period of time
or to reject any specific purchase order. In the interest of economy and
convenience, physical certificates representing shares in a Fund are not
normally issued.
PURCHASE THROUGH INTERMEDIARIES
The Funds understand that some broker-dealers (other than Counsellors
Securities), financial institutions, securities dealers and other industry
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professionals ("Service Agents") 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, redemption fees and
certain trading restrictions may be modified or waived by Service Agents, and
administrative charges or other direct fees may be imposed. Therefore, a client
or customer should contact the Service Agent 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. Service Agents that
have entered into agreements with a Fund or its agent may enter confirmed
purchase orders on behalf of clients and customers with payment to follow no
later than the Fund's pricing on the following Business Day. If payment is not
received by such date the Service Agents could be held liable for resulting fees
or losses.
For administration, subaccounting, transfer agency and/or other services,
Service Agents may be paid fees up to .35% of the annual average value of
accounts maintained by such Service Agents with a Fund.
AUTOMATIC INVESTMENT PLAN
Additional investments in Shares of the Funds may be made automatically by
authorizing the BEA Advisor Funds to withdraw funds from your bank account
through an Automatic Investment Plan. Investors desiring to participate in an
Automatic Investment Plan should call the BEA Advisor Funds, at (800) 401-2230
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.
RETIREMENT PLANS AND UNIFORM GIFTS TO MINORS ACT
Shares may be purchased in conjunction with Individual Retirement Accounts
("IRA's"), rollover IRA's, pension, profit-sharing or other employer benefit
plans, and under the Uniform Gifts to Minors Act. The minimum initial investment
in conjunction with such accounts is $1,000, and the minimum subsequent
investment is $100. For further information as to applications and annual fees,
please contact the BEA Advisor Funds. To determine whether the benefits of an
IRA are available and/or appropriate, a shareholder should consult with a tax
adviser.
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HOW TO REDEEM SHARES
An investor of a Fund may redeem (sell) his shares on any day that the Fund's
net asset value is calculated (see "Net Asset Value" below).
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 BEA
Advisor Funds c/o BFDS, P.O. Box 8500, Boston, MA 02266-8500. 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.
Generally, a properly signed written request is all that is required for a
redemption. In some cases, however, other
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documents may be necessary. Additional documentary evidence of authority is also
required by the BEA Advisor Funds in the event redemption is required by a
corporation, partnership, trust, fiduciary, executor or administrator.
REDEMPTION BY TELEPHONE
In order to request redemptions by telephone, investors must have completed and
returned to the BEA Advisor Funds an account application containing a telephone
election. Unless contrary instructions are elected, an investor will be entitled
to make redemptions by telephone by calling the BEA Advisor Funds at (800)
401-2230. To add a telephone redemption feature to an existing account that
previously did not provide for this option, a Telephone Redemption Authorization
form may be obtained from the BEA Advisor Funds. Neither a Fund nor its agents
will be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. Reasonable procedures will be employed on
behalf of the Funds to confirm that instructions communicated by telephone are
genuine. Such procedures include providing written confirmation of telephone
transactions, tape recording telephone instructions and requiring specific
personal information prior to acting upon telephone instructions. If these or
other reasonable procedures are not followed, the Funds may be liable for any
losses due to unauthorized or fraudulent instructions.
INVOLUNTARY REDEMPTION
The Company reserves the right to redeem an account in any Fund of a shareholder
at any time the net asset value of the account in such Fund falls below $500 as
the result of a redemption 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.
REDEMPTION IN-KIND
The Company reserves the right, at its discretion, to honor any request for
redemption of a Fund's Shares by making payment in whole or in part in
securities chosen by the Company 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 Company has
elected, however, to be governed by Rule 18f-1 under the Investment Company Act
so that a Portfolio 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. Redeeming shareholders will be required to bear
certain administrative or custodial costs in effecting a redemption in-kind.
EXCHANGE PRIVILEGE
An Individual or Intermediary may exchange Advisor Shares of a Fund for Advisor
Shares of any other BEA Advisor Fund at their respective net asset values.
Exchanges may be effected in the manner described under "Redemption of Shares"
above. If an exchange request is received by BEA Advisor Funds prior to 4:00
p.m. (Eastern time), the exchange will be made at each Fund's net asset value
determined on the same business day. The exchange privilege may be modified or
terminated at any time upon 60 days' notice to shareholders.
The exchange privilege is available to shareholders residing in any state in
which the Advisor Shares being acquired may legally be sold. When a shareholder
effects an exchange of shares, the exchange is treated for federal
P-15
<PAGE>
income tax purposes as a redemption. Therefore, the shareholder may realize a
taxable gain or loss in connection with the exchange. For further information
regarding the exchange privilege, the shareholder should contact the BEA Advisor
Funds at (800) 401-2230.
In order to request exchanges by telephone, investors must have completed and
returned to the BEA Advisor Funds an account application containing a telephone
election. Unless contrary instructions are elected, an investor will be entitled
to make exchanges by telephone by calling the BEA Advisor Funds at (800)
401-2230. To add a telephone exchange feature to an existing account that
previously did not provide for this option, a Telephone Exchange Authorization
Form may be obtained from the BEA Advisor Funds. The Funds will employ
reasonable procedures to confirm that instructions communicated by telephone are
genuine as described above under "Redemption by Telephone."
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 and authorized dealer of record
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. If any amount remains in the account from which the
exchange is being made, such amount must not drop below the minimum account
value required by the Fund.
- ----------------------------------------------
NET ASSET VALUE
The net asset value for each Fund is determined daily as of the close of regular
trading on the NYSE on each Business Day. The net asset value of a 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
its Shares outstanding.
- ----------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
The Company will distribute substantially all of the net realized capital gains,
if any, of each of the Funds to each Fund's shareholders annually. The Company
will distribute all net investment income, if any, for the BEA International
Equity, the BEA Emerging Markets Equity and the BEA Global Telecommunications
Funds annually. The Company will distribute net investment income for the BEA
High Yield Fund, if any, at least quarterly. All distributions will be
reinvested in the form of additional full and fractional Shares of the relevant
Fund unless a contrary election is made on the application to have distributions
paid in cash. If in the future a shareholder desires to have distributions paid
out rather than reinvested, the shareholder should notify the BEA Advisor Funds
in writing.
- ----------------------------------------------
TAXES
GENERAL
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 (the "Code"). So
long as a Fund qualifies for this tax treatment, such Fund will be relieved of
Federal income tax on amounts distributed to
P-16
<PAGE>
shareholders, but shareholders, unless otherwise exempt, will pay income or
capital gains taxes on amounts so distributed (except distributions that are
treated as a return of capital or that are designated as exempt interest
dividends) 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 a Fund will be taxed to
shareholders as long-term capital gain regardless of the length of time a
shareholder has held his Shares or whether such gain was reflected in the price
paid for the Shares. All other distributions, to the extent they are taxable,
are taxed to shareholders as ordinary income. The current nominal maximum
marginal rate on ordinary income for individuals, trusts and estates is
generally 39.6%. However, 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.
Transactions in foreign currencies, forward contracts, options and futures
contracts (including options and futures contracts on foreign currencies) will
be subject to special provisions of the Code that, among other things, may
affect the character (i.e., ordinary or capital) of gains or losses realized by
a Fund, accelerate the recognition of income by a Fund and defer a Fund's
losses. Exchange control regulations may restrict repatriations of investment
income and capital or of the proceeds of sales of securities by investors such
as the Funds. In addition, certain investments (such as zero coupon securities
and shares of so-called "passive foreign investment companies" or "PFICS") may
cause a Fund to recognize income without the receipt of cash. Each of these
circumstances, whether separately or in combination, may limit a Fund's ability
to pay sufficient dividends and to make sufficient distributions to satisfy the
Subchapter M and excise tax distributions requirements.
The Company 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.
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. Under certain provisions of the Code, some
shareholders may be subject to a 31% "backup" withholding tax on reportable
dividends, capital gains distributions and redemption payments. 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 one Fund is not intended to constitute a balanced investment
program.
P-17
<PAGE>
FOREIGN INCOME TAXES
Investment income received by the Funds from sources within foreign countries
may be subject to foreign income taxes withheld at the source. The United States
has entered into tax treaties with many foreign countries which entitle the
Funds to a reduced rate of, or exemption from, taxes on such income. It is
impossible to determine the effective rate of foreign tax in advance since the
amount of each Fund's assets to be invested in various countries is not known.
If more than 50% of the value of a Fund's total assets at the close of each
taxable year consists of the stock or securities of foreign corporations, such
Fund will be eligible to elect to "pass through" to the Company's shareholders
the amount of foreign income taxes paid by each Fund (the "Foreign Tax
Election"). Pursuant to the Foreign Tax Election, shareholders will be required
(i) to include in gross income, even though not actually received, their
respective pro-rata shares of the foreign income taxes paid by the Fund that are
attributable to any distributions they receive; and (ii) either to deduct their
pro-rata share of foreign taxes in computing their taxable income, or to use it
(subject to various Code limitations) as a foreign tax credit against U.S.
Federal income tax (but not both). In determining the source and character of
distributions received from a Fund for the purpose of the foreign tax credit
limitation rules of the Code, shareholders will be required to treat allocable
portions of a Fund's distributions as foreign source income. No deduction for
foreign taxes may be claimed by a shareholder who does not itemize deductions.
- ----------------------------------------------
MULTI-CLASS STRUCTURE
The Company offers other classes of shares, the Institutional and Investor
Shares, of the Funds which are offered directly to institutional investors and
financial intermediaries pursuant to separate prospectuses. Shares of a Fund
represent equal pro rata interests in the Fund and accrue dividends and
calculate net asset value and performance quotations in the same manner. The
Company quotes performance of the Institutional and Investor Shares separately
from Advisor Shares. Because of different fees paid by the Advisor Shares, the
total return on such shares can be expected, at any time, to be different than
the total return on Institutional and Investor Shares. Information concerning
these other classes may be obtained by calling the BEA Advisor Funds at (800)
401-2230.
- ----------------------------------------------
DESCRIPTION OF SHARES
The Company has authorized capital of thirty billion shares of Common Stock,
$.001 par value per share, of which 13.47 billion shares are currently
classified into 77 different classes of Common Stock (as described in the
Statement of Additional Information).
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED HEREIN
RELATE PRIMARILY TO THE BEA ADVISOR CLASSES REPRESENTING AN INTEREST IN THE BEA
INTERNATIONAL EQUITY, THE BEA EMERGING MARKETS EQUITY, THE BEA GLOBAL
TELECOMMUNICATIONS AND THE BEA HIGH YIELD FUNDS AND DESCRIBE ONLY THE INVESTMENT
OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND OTHER MATTERS RELATING TO SUCH
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. Shares
P-18
<PAGE>
of the Company do not have preemptive or conversion rights. When issued for
payment as described in this Prospectus, Shares will be fully paid and
non-assessable. This Prospectus combines offering information with respect to
four Funds; there is a possibility that one Fund might become liable for any
misstatement, inaccuracy, or incomplete disclosure in the Prospectus concerning
another Fund.
The Company 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, the Company 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. Furthermore,
shareholders of all investment portfolios of the Company 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 the
Company Shares" for examples of when the 1940 Act requires voting by investment
portfolio or by class.) Shareholders of the Company 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 the
Company may elect all of the directors.
As of October 1, 1996, to the Company's knowledge, no person held of record or
beneficially 25% or more of the outstanding shares of all classes of the
Company.
- ----------------------------------------------
OTHER INFORMATION
REPORTS AND INQUIRIES
Shareholders of a Fund will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries can be made by contacting the BEA
Advisor Funds at (800) 401-2230 or by writing to the BEA Advisor Funds P.O. Box
8500, Boston, MA 02266-2500.
PERFORMANCE INFORMATION
From time to time, each of the Funds may advertise its 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 a Fund. Such total
return quotations will be computed by finding the compounded average annual
total return for each time period that would equate the assumed initial
investment of $1,000 to the ending redeemable value, net of any redemption and
other 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
P-19
<PAGE>
Fund's total return or expense ratio may be compared with data published by
Lipper Analytical Services, Inc., CDA Investment Technologies, Inc., Mutual Fund
Forecaster, Morningstar, Inc. or Weisenberger Investment Company Service, or
with the performance of the Standard & Poor's 500 Stock Index, Standard & Poor's
MidCap 400 Index, Moody's Bond Survey Bond Index, Wilshire 5000 Index, Lehman
Brothers Bond Indexes, Morgan Stanley Composite Index EAFE, Morgan Stanley
Composite Index-Free Emerging Markets, JP Morgan Global Government Bond Index
(Unhedged), First Boston High Yield Index. Consumer Price Index, Bond Buyer's
20-Bond Index, Dow Jones Industrial Average, national publications such as
Money, Forbes, Barron's, the Wall Street Journal or the New York Times or
publications of a local or regional nature, and other industry publications.
From time to time, the BEA High Yield Fund may also advertise its "30-day
yield." The yield refers to the income generated by an investment in the Fund
over the 30-day period identified in the advertisement, and is computed by
dividing the net investment income per share during the period by the maximum
public offering price per share of the last day of the period. This income is
"annualized" by assuming that the amount of income is generated each month over
a one-year period and is compounded semi-annually. The annualized income is then
shown as a percentage of the net asset value.
The yield on Shares of the Fund 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 Intermediaries
directly to their customers in connection with investments in the Fund are not
reflected in the yields on the Fund's Shares, and such fees, if charged, will
reduce the actual return received by shareholders on their investments.
HISTORICAL PERFORMANCE INFORMATION
INSTITUTIONAL CLASS. The table below presents the prior total return
history on an annualized basis for the Institutional Class of the BEA
International Equity, the BEA Emerging Markets Equity and the BEA High Yield
Funds for period ended September 30, 1996. The investment objectives, policies
and strategies of the Funds underlying the Institutional and Advisor Classes are
identical. The Institutional Class, which has a minimum investment of $3
million, has lower fees and expenses than the Advisor Class, so that the
performance of the Institutional Class will differ from that of the Advisor
Class. In addition, the past performance of the Institutional Class of each Fund
is not indicative of the future performance of the Fund. Listed below the
performance history for each Fund is a comparative index comprised of securities
similar to those in which the Funds invest.
P-20
<PAGE>
FOR THE PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ONE THREE SINCE
FUND/INDEX (ANNUALIZED) YEAR YEARS INCEPTION*
- ------------------------------------------------------------------------------------------ --------- --------- -----------
<S> <C> <C> <C>
BEA International Equity.................................................................. 8.4% 5.0% 9.4%
Morgan Stanley Capital International-Europe, Australia & Far East Index**................. 8.9% 8.4% 12.7%
BEA Emerging Markets Equity............................................................... 5.4% 1.4% 7.9%
Morgan Stanley Capital International-Emerging Markets Free Index**........................ 5.2% 7.4% 13.6%
BEA High Yield............................................................................ 15.3% 9.3% 11.8%
CS First Boston High Yield Index***....................................................... 10.7% 9.3% 10.3%
</TABLE>
- ------------------------
* The BEA International Equity Fund commenced operations on October 1, 1992;
the BEA Emerging Markets Equity Fund commenced operations on February 1,
1993; the BEA High Yield Fund commenced operations on March 31, 1993.
** These indices are composites of equity securities considered to be
representative of equity performance in the specified countries. These
indices are not actively managed, and cannot be invested in directly.
Historical performance of these market indices does not guarantee future
performance of the Fund.
*** The index is a composite of fixed income securities considered to be
representative of fixed income performance in the high yield fixed income
market. The index is not actively managed, and cannot be invested in
directly. Historical performance of the market index does not guarantee
future performance of the Fund.
BEA COMPOSITES. The table below presents the Composite performance history
of BEA International Equity and Emerging Markets Equity on an annualized basis
for the period ended September 30, 1996. Each BEA Composite presented is
comprised of mutual funds, institutional accounts and other privately managed
accounts. The investment objectives, policies and strategies of the funds and
accounts included in the Composites are substantially similar to those of the
corresponding Fund, although certain accounts have significantly longer
operating histories than the corresponding Funds. The Composites include funds
and accounts managed in the respective investment objectives, policies and
strategies, and show the entire period for which the funds and accounts were
managed by BEA in this manner. The Composite performance information includes
the reinvestment of dividends received in the underlying securities and is net
of management fees and expenses. The mutual funds and privately managed accounts
in the Composite require a minimum investment of $3 million and $20 million,
respectively, and are only available to BEA's institutional advisory clients.
These accounts have lower fees and expenses than the Advisor Funds. In addition,
the past performance of the funds and accounts which comprise the Composites is
not indicative of the future performance of each Fund. Certain private accounts
are not subject to the same investment limitations, diversification requirements
and other restrictions which are imposed upon mutual funds under the Investment
Company Act of 1940 and the Internal Revenue Code, which, if applicable, may
have adversely affected the performance results of the Composites. Listed below
the performance history for each account included in the Composite is a
comparative index comprised of securities similar to those in which the funds
and accounts contained in the Composites and the corresponding Funds invest.
P-21
<PAGE>
FOR THE PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ONE THREE FIVE SEVEN TEN SINCE
BEA COMPOSITE/INDEX (ANNUALIZED) YEAR YEARS YEARS YEARS YEARS INCEPTION*
- -------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BEA International Equity Composite.......... 8.5% 5.6% 9.3% 5.8% 16.8% 18.6%
Morgan Stanley Capital International Europe,
Australia & Far East Index***.............. 8.9% 8.4% 8.5% 4.2% 9.0% 14.1%
BEA Emerging Markets Equity Composite....... 4.8% 1.4% 10.4% 15.1% 30.5% 31.2%
Morgan Stanley Capital International
Emerging Markets Free Index***............. 5.2% 7.4% 14.8% 14.2% N/A** N/A**
</TABLE>
- ------------------------
* The BEA International Equity Composite dates from January 1, 1981; the BEA
Emerging Markets Equity Composite dates from July 1, 1985; the BEA High
Yield Composite dates from July 1, 1989.
** Not available.
*** These indices are composites of equity securities considered to be
representative of equity performance in the specified countries. These
indices are not actively managed, and cannot be invested in directly.
Historical performance of these market indices does not guarantee future
performance of the Fund.
P-22
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUNDS' STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ITS
DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE COMPANY OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
<PAGE>
BEA ADVISOR FUNDS
QUICK REFERENCE GUIDE
- -------------------
BEA ADVISOR FUNDS
- -------------------
International Equity Fund
Emerging Markets Equity Fund
Global Telecommunications Fund
High Yield Fund
- -----------------
WORLD WIDE WEB
- -----------------
Please visit our website at: www.beafunds.com.
- ------------------------------
FUND AND ACCOUNT INFORMATION
- ------------------------------
Shareholders and all interested investors may direct
their inquiries and requests for information to the
Funds' information line at 1-800-401-2230.
- --------------------------------
AUTOMATIC REINVESTMENT PROGRAM
- --------------------------------
Dividend and capital gain distributions are
automatically reinvested in shares of the same
Fund at the current net asset value.
- ---------------------
EXCHANGE PRIVILEGES
- ---------------------
Shareholders may sell fund shares and buy shares
of other BEA Advisor Funds by telephone or in
writing. Please refer to the Prospectus section
entitled "Exchange Privilege."
- ------------------------
STATEMENTS AND REPORTS
- ------------------------
As a shareholder you will receive the following:
- - Confirmation Statements - after every transaction
that affects your account balance or account
registration
- - Account Statements - quarterly
- - Financial Reports - semi-annually
- --------------------
INVESTMENT ADVISER
- --------------------
BEA Associates
One Citicorp Center
153 East 53rd Street
New York, NY 10022
- -------------
DISTRIBUTOR
- -------------
Counsellors Securities Inc.
466 Lexington Avenue
New York, NY 10017
- ---------------
ADMINISTRATOR
- ---------------
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
- -----------
CUSTODIAN
- -----------
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02190
- ----------------
TRANSFER AGENT
- ----------------
State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02101
- -------------------------
INDEPENDENT ACCOUNTANTS
- -------------------------
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
- ---------------
LEGAL COUNSEL
- ---------------
Ballard Spahr Andrews & Ingersoll
1735 Market Street, 51st Floor
Philadelphia, PA 19103
<PAGE>
BEA
ADVISOR FUNDS
INTERNATIONAL EQUITY FUND
EMERGING MARKETS EQUITY FUND
GLOBAL TELECOMMUNICATIONS FUND
HIGH YIELD FUND
(INVESTMENT PORTFOLIOS OF THE RBB FUND, INC.)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information provides supplementary
information pertaining to shares (the "Advisor Shares" or the "Shares")
representing interests in four investment portfolios (the "Funds") of The RBB
Fund, Inc. (the "Company"): the BEA International Equity, the BEA Emerging
Markets Equity, the BEA Global Telecommunications and the BEA High Yield Funds
(collectively, the "Funds"). This Statement of Additional Information is not a
prospectus, and should be read only in conjunction with the BEA Advisor
Prospectus for the Funds, dated October 15, 1996, as supplemented (the
"Prospectus"). A copy of the Prospectus may be obtained from the Fund's
transfer agent by calling toll-free (800) 401-2230. This Statement of
Additional Information is dated October 15, 1996, as revised May 9, 1997.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS STATEMENT OF ADDITIONAL INFORMATION IN
CONNECTION WITH THE OFFERING MADE BY THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ITS DISTRIBUTOR. THE STATEMENT OF ADDITIONAL INFORMATION DOES
NOT CONSTITUTE AN OFFERING BY THE COMPANY OR BY THE DISTRIBUTOR IN ANY
JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
<PAGE>
CONTENTS
Prospectus
Page Page
---- ----------
General. . . . . . . . . . . . . . . . . . . . . . . . . . 3 3
Common Investment Policies -- All Funds. . . . . . . . . . 3 6
Supplemental Investment Objectives and
Policies --
BEA International Equity, BEA
Emerging Markets Equity and BEA Global
Telecommunications Funds . . . . . . . . . . . . . . . 29 6
Supplemental Investment Objectives and
Policies --
BEA Global Telecommunications
Fund . . . . . . . . . . . . . . . . . . . . . . . . . 30 6
Investment Limitations . . . . . . . . . . . . . . . . . . 30 7
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . 33 7
Directors and Officers . . . . . . . . . . . . . . . . . . 38 N/A
Investment Advisory and Servicing
Arrangements . . . . . . . . . . . . . . . . . . . . . . 41 9
Portfolio Transactions . . . . . . . . . . . . . . . . . . 45 N/A
Purchase and Redemption Information. . . . . . . . . . . . 48 12
Valuation of Shares. . . . . . . . . . . . . . . . . . . . 50 16
Performance and Yield Information. . . . . . . . . . . . . 51 19
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 54 16
Additional Information Concerning Fund
Shares . . . . . . . . . . . . . . . . . . . . . . . . . 64 19
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . 67 N/A
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . A-1 A-1
Financial Statements . . . . . . . . . . . . . . . . . . . F-1 N/A
-2-
<PAGE>
GENERAL
The RBB Fund, Inc. (the "Company) is an open-end management investment
company currently operating or proposing to operate twenty separate investment
portfolios. The Company was organized as a Maryland corporation on February 29,
1988.
Unless otherwise indicated, the following investment policies may be
changed by the Board of Directors without an affirmative vote of shareholders.
Capitalized terms used herein and not otherwise defined have the same meanings
as are given to such terms in the Prospectus.
COMMON INVESTMENT POLICIES -- ALL FUNDS
The following supplements the information contained in the Prospectus
concerning the investment objectives and policies of, and techniques used by,
the Funds.
NON-DIVERSIFIED STATUS. Each Fund is classified as non-diversified
within the meaning of the Investment Company Act, which means that each Fund is
not limited by such Act in the proportion of its assets that it may invest in
securities of a single issuer. Each Fund's investments will be limited,
however, in order to qualify as a "regulated investment company" for purposes of
the Internal Revenue Code of 1986, as amended. See "Taxes." To qualify, each
Fund will comply with certain requirements, including limiting its investments
so that at the close of each quarter of the taxable year (i) not more than 25%
of the market value of each Fund's total assets will be invested in the
securities of a single issuer, and (ii) with respect to 50% of the market value
of its total assets, not more than 5% of the market value of each Fund's total
assets will be invested in the securities of a single issuer and each Fund will
not own more than 10% of the outstanding voting securities of a single issuer.
To the extent that each Fund assumes large positions in the securities of a
small number of issuers, each Fund's return may fluctuate to a greater extent
than that of a diversified company as a result of changes in the financial
condition or in the market's assessment of the issuers.
TEMPORARY INVESTMENTS. The short-term and medium-term debt securities
in which a Fund may invest for temporary defensive purposes consist of: (a)
obligations of the United States or foreign governments, their respective
agencies or instrumentalities; (b) bank deposits and bank obligations (including
certificates of deposit, time deposits and bankers' acceptances) of U.S. or
foreign banks denominated in any currency; (c) floating rate securities and
other instruments denominated in any currency issued by international
development
-3-
<PAGE>
agencies; (d) finance company and corporate commercial paper and other short-
term corporate debt obligations of U.S. and foreign corporations; and (e)
repurchase agreements with banks and broker-dealers with respect to such
securities.
REPURCHASE AGREEMENTS. Each Fund may agree to purchase securities
from a bank or recognized securities dealer and simultaneously commit to resell
the securities to the bank or dealer at an agreed-upon date and price reflecting
a market rate of interest unrelated to the coupon rate or maturity of the
purchased securities ("repurchase agreements"). Such Fund would maintain
custody of the underlying securities prior to their repurchase; thus, the
obligation of the bank or dealer to pay the repurchase price on the date agreed
to would be, in effect, secured by such securities. If the value of such
securities were less than the repurchase price, plus interest, the other party
to the agreement would be required to provide additional collateral so that at
all times the collateral is at least equal to the repurchase price plus accrued
interest. Default by or bankruptcy of a seller would expose a Fund to possible
loss because of adverse market action, expenses and/or delays in connection with
the disposition of the underlying obligations. The Adviser will consider the
creditworthiness of a seller in determining whether to have a Fund enter into a
repurchase agreement. There are no percentage limits on a Fund's ability to
enter into repurchase agreements. Repurchase agreements are considered to be
loans by the Fund under the Investment Company Act of 1940, as amended (the
"Investment Company Act" or the "1940 Act").
REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS. Each Fund may enter
into reverse repurchase agreements with respect to portfolio securities for
temporary purposes (such as to obtain cash to meet redemption requests when the
liquidation of portfolio securities is deemed disadvantageous or inconvenient by
the Adviser). Reverse repurchase agreements involve the sale of securities held
by a Fund pursuant to such Fund's agreement to repurchase them at a mutually
agreed upon date, price and rate of interest. At the time a Fund enters into a
reverse repurchase agreement, it will establish and maintain a segregated
account with an approved custodian containing cash or liquid high-grade debt
securities having a value not less than the repurchase price (including accrued
interest). The assets contained in the segregated account will be marked-to-
market daily and additional assets will be placed in such account on any day in
which the assets fall below the repurchase price (plus accrued interest). A
Fund's liquidity and ability to manage its assets might be affected when it sets
aside cash or portfolio securities to cover such commitments. Reverse
repurchase agreements involve the risk that the market value of the securities
retained in lieu of sale may decline below the price of the securities a Fund
has sold but is obligated to repurchase. In the event the buyer of securities
under a reverse repurchase agreement files for bankruptcy or
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becomes insolvent, such buyer or its trustee or receiver may receive an
extension of time to determine whether to enforce a Fund's obligation to
repurchase the securities, and a Fund's use of the proceeds of the reverse
repurchase agreement may effectively be restricted pending such decision.
Reverse repurchase agreements are considered to be borrowings under the 1940
Act. Each Fund also may enter into "dollar rolls," in which it sells fixed
income securities for delivery in the current month and simultaneously contracts
to repurchase substantially similar (same type, coupon and maturity) securities
on a specified future date. During the roll period, a Fund would forgo
principal and interest paid on such securities. A Fund would be compensated by
the difference between the current sales price and the forward price for the
future purchase, as well as by the interest earned on the cash proceeds of the
initial sale. The Funds do not presently intend to invest more than 5% of net
assets in reverse repurchase agreements or dollar rolls.
WHEN-ISSUED SECURITIES, DELAYED DELIVERY TRANSACTIONS AND FORWARD
COMMITMENTS. Each Fund may purchase securities on a when-issued basis, and it
may purchase or sell securities for delayed delivery or on a forward commitment
basis. These transactions occur when securities are purchased or sold by a Fund
with payment and delivery taking place in the future to secure what is
considered an advantageous yield and price to a Fund at the time of entering
into the transaction. Although the Funds have not established a limit on the
percentage of their assets that may be committed in connection with such
transactions, they will maintain segregated accounts with their custodian
consisting of U.S. Government securities or other liquid assets, in an aggregate
amount equal to the amount of its commitment in connection with such purchase
transactions. The assets contained in the segregated account will be marked-to-
market daily and additional assets will be placed in such account on any day in
which assets fall below the amount of its commitment. Each Fund's liquidity and
ability to manage its assets might be affected when it sets aside cash or
portfolio securities to cover such commitments. When a Fund engages in when-
issued transactions, it relies on the seller to consummate the trade. Failure
of the seller to do so may result in the Fund incurring a loss or missing an
opportunity to obtain a price considered to be advantageous. When-issued and
forward commitment transactions involve the risk that the price or yield
obtained in a transaction may be less favorable than the price or yield
available in the market when the securities delivery takes place. The Fund
currently anticipates that when-issued securities will not exceed 5% of its net
assets. Each Fund does not intend to engage in when-issued purchases and
forward commitments for speculative purposes but only in furtherance of its
investment objectives.
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STANDBY COMMITMENT AGREEMENTS. Each Fund may from time to time enter
into standby commitment agreements. Such agreements commit such Fund, for a
stated period of time, to purchase a stated amount of a fixed income security
which may be issued and sold to the Fund at the option of the issuer. The price
and coupon of the security is fixed at the time of the commitment. At the time
of entering into the agreement, a Fund is paid a commitment fee, regardless of
whether or not the security is ultimately issued. A Fund will enter into such
agreements only for the purpose of investing in the security underlying the
commitment at a yield and price that is considered advantageous to a Fund. Each
Fund will not enter into a standby commitment with a remaining term in excess of
45 days and it will limit its investment in such commitments so that the
aggregate purchase price of the securities subject to such commitments, together
with the value of portfolio securities subject to legal restrictions on resale,
will not exceed 10% of its assets taken at the time of acquisition of such
commitment or security. Such Fund will at all times maintain a segregated
account with its custodian consisting of U.S. Government securities or other
liquid assets, as permitted by law, in an aggregate amount equal to the purchase
price of the securities underlying the commitment. The assets contained in the
segregated account will be marked-to-market daily and additional assets will be
placed in such account on any day in which assets fall below the amount of the
purchase price. A Fund's liquidity and ability to manage its assets might be
affected when it sets aside cash or portfolio securities to cover such
commitments.
There can be no assurance that the securities subject to a standby
commitment will be issued and the value of the security, if issued, on the
delivery date may be more or less than its purchase price. Because the issuance
of the security underlying the commitment is at the option of the issuer, a Fund
may bear the risk of a decline in the value of such security and may not benefit
from an appreciation in the value of the security during the commitment period.
The purchase of a security subject to a standby commitment agreement
and the related commitment fee will be recorded on the date on which the
security can reasonably be expected to be issued, and the value of the security
will be adjusted by the amount of the commitment fee. In the event the security
is not issued, the commitment fee will be recorded as income on the expiration
date of the standby commitment. The Funds do not presently intend to invest
more than 5% of net assets in standby commitment agreements.
ILLIQUID SECURITIES. Each Fund does not presently intend to invest
more than 5% of its net assets in illiquid securities (including repurchase
agreements which have a maturity of longer than seven days), including
securities that are
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illiquid by virtue of the absence of a readily available market or legal or
contractual restrictions on resale. The term "illiquid securities" for this
purpose means securities that cannot be disposed of within seven days in the
ordinary course of business at approximately the amount at which the Fund has
valued the securities. Such securities may include, among other things, loan
participations and assignments, options purchased in the over-the-counter
markets, repurchase agreements maturing in more than seven days, structured
notes and restricted securities other than Rule 144A securities that BEA has
determined are liquid pursuant to guidelines established by the Company's Board
of Directors. Because of the absence of any liquid trading market currently for
these investments, a Fund may take longer to liquidate these positions than
would be the case for publicly traded securities. Although these securities may
be resold in privately negotiated transactions, the prices realized on such
sales could be less than those originally paid by a Fund. Securities that have
legal or contractual restrictions on resale but have a readily available market
are not considered illiquid for purposes of this limitation. BEA will monitor
the liquidity of restricted securities in each Fund's portfolio and report
periodically on such decisions to the Board of Directors of the Company. Where
there are no readily available market quotations, the security shall be valued
at fair value as determined in good faith by the Board of Directors of the
Company. With respect to each Fund, repurchase agreements subject to demand are
deemed to have a maturity equal to the notice period.
Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
securities which are otherwise not readily marketable and repurchase agreements
having a maturity of longer than seven days. Securities which have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. The Board has adopted a policy that the Funds will not
purchase private placements (I.E., restricted securities other than Rule 144A
securities), except private placement securities for which there is a readily
available market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Limitations on resale may have
an adverse effect on the marketability of portfolio securities and a mutual fund
might be unable to dispose of restricted or other illiquid securities promptly
or at reasonable prices and might thereby experience difficulty satisfying
redemptions within seven days. A mutual fund might also have to register such
restricted securities in order to dispose of them resulting in additional
expense and delay. Adverse market conditions could impede such a public
offering of securities.
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If otherwise consistent with its investment objective and policies,
each Fund may purchase securities that are not registered under the Securities
Act but can be sold to "qualified institutional buyers" in accordance with Rule
144A under the Securities Act. These securities will not be considered illiquid
so long as the Adviser determines, under guidelines approved by the Board of
Directors, that an adequate trading market exists. A Fund's investment in Rule
144A securities could increase the level of illiquidity during any period that
qualified institutional buyers become uninterested in purchasing these
securities.
The Adviser will monitor the liquidity of restricted securities in a
Fund under the supervision of the Board of Directors. In reaching liquidity
decisions, the Adviser may consider, INTER ALIA, the following factors: (1) the
unregistered nature of the security; (2) the frequency of trades and quotes for
the security; (3) the number of dealers wishing to purchase or sell the security
and the number of other potential purchasers; (4) dealer undertakings to make a
market in the security and (5) the nature of the security and the nature of the
marketplace trades (E.G., the time needed to dispose of the security, the method
of soliciting offers and the mechanics of the transfer).
SECURITIES OF UNSEASONED ISSUERS. Each Fund will not invest in
securities of unseasoned issuers, including equity securities of unseasoned
issuers which are not readily marketable, if the aggregate investment in such
securities would exceed 5% of such Fund's net assets. The term unseasoned
refers to issuers which, together with their predecessors, have been in
operation for less than three years.
LENDING OF PORTFOLIO SECURITIES. To increase income on its
investments, a Fund may lend its portfolio securities with an aggregate value of
up to 30% of its total assets to broker/dealers and other institutional
investors. Although each Fund does not currently intend to do so, it may lend
its portfolio securities on a short or long term basis to broker-dealers or
institutional investors that the Adviser deems qualified, but only when the
borrower maintains with a Fund's custodian, collateral either in cash or money
market instruments, in an amount at least equal to the market value of the
securities loaned, plus accrued interest and dividends, determined on a daily
basis and adjusted accordingly. Collateral for such loans may include cash,
securities of the U.S. Government or its agencies or instrumentalities or an
irrevocable letter of credit issued by a bank which is deemed creditworthy by
the Adviser. In determining whether to lend securities to a particular broker-
dealer or institutional investor, the Adviser will consider, and during the
period of the loan will monitor, all relevant facts and circumstances, including
the creditworthiness of the
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borrower. Such loans would involve risks of delay in receiving additional
collateral in the event the value of the collateral decreased below the value of
the securities loaned or of delay in recovering the securities loaned or even
the loss of rights in the collateral should the borrower of the securities fail
financially. Default by or bankruptcy of a borrower would expose the Funds to
possible loss because of adverse market action, expenses and/or delays in
connection with the disposition of the underlying securities.
BORROWING. Each Fund may borrow up to 33 1/3 percent of its total
assets. The Adviser intends to borrow only for temporary or emergency purposes,
including to meet portfolio redemption requests so as to permit the orderly
disposition of portfolio securities, or to facilitate settlement transactions on
portfolio securities. Additional investments will not be made when borrowings
exceed 5% of a Fund's total assets. Although the principal of such borrowings
will be fixed, a Fund's assets may change in value during the time the borrowing
is outstanding. Each Fund expects that some of its borrowings may be made on a
secured basis. In such situations, either the custodian will segregate the
pledged assets for the benefit of the lender or arrangements will be made with a
suitable subcustodian, which may include the lender.
U.S. GOVERNMENT SECURITIES. The U.S. government securities in which a
Fund may invest include direct obligations of the U.S. Treasury (such as
Treasury bills, notes and bonds) and obligations issued by U.S. government
agencies and instrumentalities, including securities that are supported by the
full faith and credit of the United States and securities that are supported
primarily or solely by the creditworthiness of the issuer (such as securities of
the Federal Home Loan Banks, the Student Loan Marketing Association and the
Tennessee Valley Authority). The Funds do not presently intend to invest more
than 5% of net assets in U.S. government securities.
FOREIGN DEBT SECURITIES. The returns on foreign debt securities
reflect interest rates and other market conditions prevailing in those countries
and the effect of gains and losses in the denominated currencies against the
U.S. dollar, which have had a substantial impact on investment in foreign fixed
income securities. The relative performance of various countries' fixed income
markets historically has reflected wide variations relating to the unique
characteristics of each country's economy. Year-to-year fluctuations in certain
markets have been significant, and negative returns have been experienced in
various markets from time to time.
The foreign government securities in which the Funds may invest
generally consist of obligations issued or backed by national, state or
provincial governments or similar political
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subdivisions or central banks in foreign countries. Foreign government
securities also include debt obligations of supranational entities, which
include international organizations designated or backed by governmental
entities to promote economic reconstruction or development, international
banking institutions and related government agencies. Examples include the
International Bank for Reconstruction and Development (the "World Bank"), the
European Coal and Steel Community, the Asian Development Bank and the
InterAmerican Development Bank.
Foreign government securities also include debt securities of "quasi-
governmental agencies" and debt securities denominated in multinational currency
units of an issuer (including supranational issuers). Debt securities of quasi-
governmental agencies are issued by entities owned by either a national, state
or equivalent government or are obligations of a political unit that is not
backed by the national government's full faith and credit and general taxing
powers. An example of a multinational currency unit is the European Currency
Unit ("ECU"). An ECU represents specified amounts of the currencies of certain
member states of the European Economic Community. The specific amounts of
currencies comprising the ECU may be adjusted by the Council of Ministers of the
European Community to reflect changes in relative values of the underlying
currencies.
BRADY BONDS. Each Fund may invest in so-called "Brady Bonds," which
have recently been issued by Costa Rica, Mexico, Uruguay and Venezuela and which
may be issued by other Latin American countries. Brady Bonds are issued as part
of a debt restructuring in which the bonds are issued in exchange for cash and
certain of the country's outstanding commercial bank loans. Brady Bonds may be
collateralized or uncollateralized, are issued in various currencies (primarily
the U.S. dollar) and are actively traded in the over-the-counter ("OTC")
secondary market for debt of Latin American issuers. The Funds do not presently
intend to invest more than 5% of net assets in Brady Bonds.
LOAN PARTICIPATIONS AND ASSIGNMENTS. Each Fund may invest in fixed
and floating rate loans ("Loans") arranged through private negotiations between
a foreign government and one or more financial institutions ("Lenders"). The
majority of the Funds' investments in Loans in Latin America are expected to be
in the form of participations in Loans ("Participations") and assignments of
portions of Loans from third parties ("Assignments"). Participations typically
will result in each Fund having a contractual relationship only with the Lender,
not with the borrower. Each Fund will have the right to receive payments of
principal, interest and any fees to which it is entitled only from the Lender
selling the Participation and only upon receipt by the Lender of the payments
from the borrower. In connection with purchasing Participations, the Funds
generally will have no right to enforce compliance by the borrower with the
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terms of the loan agreement relating to the Loan ("Loan Agreement"), nor any
rights of set-off against the borrower, and the Fund may not directly benefit
from any collateral supporting the Loan in which it has purchased the
Participation. As a result, the Funds will assume the credit risk of both the
borrower and the Lender that is selling the Participation. In the event of
insolvency of the Lender selling a Participation, the Funds may be treated as a
general creditor of the Lender and may not benefit from any set-off between the
Lender and the borrower. The Funds will acquire Participations only if the
Lender interpositioned between the Funds and the borrower is determined by BEA
to be creditworthy. Each Fund currently anticipates that it will not invest
more than 5% of its net assets in Loan Participations and Assignments.
CONVERTIBLE SECURITIES. The Funds do not presently intend to invest
more than 5% of their net assets in convertible securities. A convertible
security is a bond, debenture, note, preferred stock or other security that may
be converted into or exchanged for a prescribed amount of common stock of the
same or a different issuer within a particular period of time at a specified
price or formula. A convertible security entitles the holder to receive
interest paid or accrued on debt or the dividend paid on preferred stock until
the convertible security matures or is redeemed, converted or exchanged. Before
conversion, convertible securities have characteristics similar to
nonconvertible debt securities in that they ordinarily provide a stable stream
of income with generally higher yields than those of common stocks of the same
or similar issuers. Convertible securities rank senior to common stock in a
corporation's capital structure but are usually subordinated to comparable
nonconvertible securities. While no securities investment is completely without
risk, investments in convertible securities generally entail less risk than the
corporation's common stock, although the extent to which such risk is reduced
depends in large measure upon the degree to which the convertible security sells
above its value as a fixed income security. Convertible securities have unique
investment characteristics in that they generally (1) have higher yields than
common stocks, but lower yields than comparable non-convertible securities, (2)
are less subject to fluctuation in value than the underlying stock since they
have fixed income characteristics and (3) provide the potential for capital
appreciation if the market price of the underlying common stock increases. Most
convertible securities currently are issued by U.S. companies, although a
substantial Eurodollar convertible securities market has developed, and the
markets for convertible securities denominated in local currencies are
increasing.
The value of a convertible security is a function of its "investment
value" (determined by its yield in comparison with the yields of other
securities of comparable maturity and
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quality that do not have a conversion privilege) and its "conversion value" (the
security's worth, at market value, if converted into the underlying common
stock). The investment value of a convertible security is influenced by changes
in interest rates, with investment value declining as interest rates increase
and increasing as interest rates decline. The credit standing of the issuer and
other factors also may have an effect on the convertible security's investment
value. The conversion value of a convertible security is determined by the
market price of the underlying common stock. If the conversion value is low
relative to the investment value, the price of the convertible security is
governed principally by its investment value. Generally, the conversion value
decreases as the convertible security approaches maturity. To the extent the
market price of the underlying common stock approaches or exceeds the conversion
price, the price of the convertible security will be increasingly influenced by
its conversion value. A convertible security generally will sell at a premium
over its conversion value by the extent to which investors place value on the
right to acquire the underlying common stock while holding a fixed income
security.
The Funds have no current intention of converting any convertible
securities they may own into equity or holding them as equity upon conversion,
although they may do so for temporary purposes. A convertible security might be
subject to redemption at the option of the issuer at a price established in the
convertible security's governing instrument. If a convertible security held by
the Fund is called for redemption, the Fund will be required to permit the
issuer to redeem the security, convert it into the underlying common stock or
sell it to a third party.
MORTGAGE-BACKED SECURITIES. The Funds do not presently intend to
invest more than 5% of their net assets in mortgage-backed securities, such as
those issued by the Government National Mortgage Association ("GNMA"), the
Federal National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage
Corporation ("FHLMC") or certain foreign issuers, as well as by private issuers
such as commercial investment banks, savings and loan institutions, mortgage
bankers and private mortgage insurance companies. Mortgage-backed securities
represent direct or indirect participations in, or are secured by and payable
from, mortgage loans secured by real property. The mortgages backing these
securities include, among other mortgage instruments, conventional 30-year fixed
rate mortgages, 15-year fixed rate mortgages, graduated payment mortgages and
adjustable rate mortgages. The government or the issuing agency typically
guarantees the payment of interest and principal of these securities. However,
the guarantees do not extend to the securities' yield or value, which are likely
to vary inversely with fluctuations in interest rates, nor do the guarantees
extend to the yield or value of the Fund's shares. These securities
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generally are "pass-through" instruments, through which the holders receive a
share of all interest and principal payments from the mortgages underlying the
securities, net of certain fees.
Yields on pass-through securities are typically quoted by investment
dealers and vendors based on the maturity of the underlying instruments and the
associated average life assumption. The average life of pass-through pools
varies with the maturities of the underlying mortgage loans. A pool's term may
be shortened by unscheduled or early payments of principal on the underlying
mortgages. The occurrence of mortgage prepayments is affected by various
factors, including the level of interest rates, general economic conditions, the
location, scheduled maturity and age of the mortgage and other social and
demographic conditions. Because prepayment rates of individual pools vary
widely, it is not possible to predict accurately the average life of a
particular pool. For pools of fixed rate 30-year mortgages, a common industry
practice in the U.S. has been to assume that prepayments will result in a 12-
year average life. At present, pools, particularly those with loans with other
maturities or different characteristics, are priced on an assumption of average
life determined for each pool.
Although certain mortgage-related securities are guaranteed by a third
party or are otherwise similarly secured, the market value of the security,
which may fluctuate, is not so secured. If the Funds purchase a mortgage-
related security at a premium, that portion may be lost if there is a decline in
the market value of the security whether resulting from increases in interest
rates or prepayment of the underlying mortgage collateral. As with other
interest-bearing securities, the prices of such securities are inversely
affected by changes in interest rates. However, though the value of a mortgage-
related security may decline when interest rates rise, the converse is not
necessarily true because in periods of declining interest rates mortgages
underlying securities are prone to prepayment. In periods of falling interest
rates, the rate of prepayment tends to increase, thereby shortening the actual
average life of a pool of mortgage-related securities. Conversely, in periods
of rising rates the rate of prepayment tends to decrease, thereby lengthening
the actual average life of the pool. However, these effects may not be present,
or may differ in degree, if the mortgage loans in the pools have adjustable
interest rates or other special payment terms, such as a prepayment charge.
Actual prepayment experience may cause the yield of mortgage-backed securities
to differ from the assumed average life yield. Reinvestment of prepayments may
occur at higher or lower interest rates than the original investment, thus
affecting a Fund's yield. For this and other reasons, a mortgage-related
security's stated maturity may be shortened by an unscheduled prepayment on
underlying mortgages and, therefore, it is not possible to
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predict accurately the security's return to the Funds. Mortgage-related
securities provide regular payments consisting of interest and principal. No
assurance can be given as to the return the Funds will receive when these
amounts are reinvested.
The rate of interest on mortgage-backed securities is lower than the
interest rates paid on the mortgages included in the underlying pool due to the
annual fees paid to the servicer of the mortgage pool for passing through
monthly payments to certificate holders and to any guarantor, such as GNMA, and
due to any yield retained by the issuer. Actual yield to the holder may vary
from the coupon rate, even if adjustable, if the mortgage-backed securities are
purchased or traded in the secondary market at a premium or discount. In
addition, there is normally some delay between the time the issuer receives
mortgage payments from the servicer and the time the issuer makes the payments
on the mortgage-backed securities, and this delay reduces the effective yield to
the holder of such securities.
COLLATERALIZED MORTGAGE OBLIGATIONS. The Funds may also purchase
collateralized mortgage obligations ("CMOs") issued by a U.S. Government
instrumentality which are backed by a portfolio of mortgages or mortgage-backed
securities. The issuer's obligations to make interest and principal payments is
secured by the underlying portfolio of mortgages or mortgage-backed securities.
These securities may be considered mortgage derivatives. The Funds may only
invest in CMOs issued by FHLMC, FNMA or other agencies of the U.S. Government or
instrumentalities established or sponsored by the U.S. Government.
CMOs provide an investor with a specified interest in the cash flow of
a pool of underlying mortgages or other mortgage-related securities. Issuers of
CMOs frequently elect to be taxed as pass-through entities known as real estate
mortgage investment conduits ("REMICs"). CMOs are issued in multiple classes,
each with a specified fixed or floating interest rate and a final distribution
date. Coupons can be fixed or variable. If variable, they can move with or in
the reverse direction of interest rates. The coupon changes could be a multiple
of the actual rate change and there may be limitations on what the coupon can
be. Cash flows of pools can also be divided into a principal only class and an
interest only class. In this case the principal only class ("PO") will only
receive principal cash flows from the pool. All interest cash flows go to the
interest only class. The relative payment rights of the various CMO classes may
be structured in many ways either sequentially, or by other rules of priority.
Generally, payments of principal are applied to the CMO classes in the order of
their respective stated maturities, so that no principal payments will be made
on a CMO class until all other classes having an earlier stated maturity date
are paid in full. Sometimes, however, CMO classes
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are "parallel pay," I.E. payments of principal are made to two or more classes
concurrently. CMOs may exhibit more or less price volatility and interest rate
risk than other types of mortgaged-related obligations.
The CMO structure returns principal to investors sequentially, rather
than according to the pro rata method of a pass-through. In the traditional CMO
structure, all classes (called tranches) receive interest at a stated rate, but
only one class at a time receives principal. All principal payments received on
the underlying mortgages or securities are first paid to the "fastest pay"
tranche. After this tranche is retired, the next tranche in the sequence
becomes the exclusive recipient of principal payments. This sequential process
continues until the last tranche is retired. In the event of sufficient early
repayments on the underlying mortgages, the "fastest-pay" tranche generally will
be retired prior to its maturity. Thus the early retirement of a particular
tranche of a CMO held by a Fund would have the same effect as the prepayment of
mortgages underlying a mortgage-backed pass-through security as described above.
The Funds do not presently intend to invest more than 5% of net assets in
collateralized mortgage obligations.
ASSET-BACKED SECURITIES. Each Fund may invest in asset-backed
securities, which represent participations in, or are secured by and payable
from, assets such as motor vehicle installment sales, installment loan
contracts, leases of various types of real and personal property and receivables
from revolving credit (credit card) agreements. The Funds may also invest in
other types of asset-backed securities that may be available in the future.
Such assets are securitized through the use of trusts and special purpose
corporations. Payments or distributions of principal and interest may be
guaranteed up to certain amounts and for a certain time period by a letter of
credit or a pool insurance policy issued by a financial institution unaffiliated
with the trust or corporation. The estimated life of an asset-backed security
varies with the prepayment experience with respect to the underlying debt
instruments. The rate of such prepayments, and hence the life of the asset-
backed security, will be primarily a function of current market rates, although
other economic and demographic factors will be involved. In certain
circumstances, asset-backed securities may be considered illiquid securities
subject to the percentage limitations described above. Asset-backed securities
are considered an industry for industry concentration purposes, and the Funds
will therefore not purchase any asset-backed securities which would cause 5% or
more of a Fund's net assets at the time of purchase to be invested in asset-
backed securities.
Asset-backed securities present certain risks that are not presented
by other securities in which the Fund may invest. Automobile receivables
generally are secured by automobiles.
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Most issuers of automobile receivables permit the loan servicers to retain
possession of the underlying obligations. If the servicer were to sell these
obligations to another party, there is a risk that the purchaser would acquire
an interest superior to that of the holders of the asset-backed securities. In
addition, because of the large number of vehicles involved in a typical issuance
and technical requirements under state laws, the trustee for the holders of the
automobile receivables may not have a proper security interest in the underlying
automobiles. Therefore, there is the possibility that recoveries on repossessed
collateral may not, in some cases, be available to support payments on these
securities. Credit card receivables are generally unsecured, and the debtors
are entitled to the protection of a number of state and federal consumer credit
laws, many of which give such debtors the right to set off certain amounts owed
on the credit cards, thereby reducing the balance due.
ZERO COUPON SECURITIES. Each Fund may invest in "zero coupon" U.S.
Treasury, foreign government and U.S. and foreign corporate debt securities,
which are bills, notes and bonds that have been stripped of their unmatured
interest coupons and receipts or certificates representing interests in such
stripped debt obligations and coupons. Each Fund currently anticipates that
zero coupon securities will not exceed 5% of its net assets. A zero coupon
security pays no interest to its holder prior to maturity. Accordingly, such
securities usually trade at a deep discount from their face or par value and
will be subject to greater fluctuations of market value in response to changing
interest rates than debt obligations of comparable maturities that make current
distributions of interest. A Fund anticipates that it will not normally hold
zero coupon securities to maturity. Federal tax law requires that a holder of a
zero coupon security accrue a portion of the discount at which the security was
purchased as income each year, even though the holder receives no interest
payment on the security during the year.
STRUCTURED NOTES. The Funds may invest in structured notes. The
distinguishing feature of a structured note is that the amount of interest
and/or principal payable on the notes is based on the performance of a benchmark
asset or market other than fixed-income securities or interest rates. Examples
of a benchmark include stock prices, currency exchange rates and physical
commodity prices. Investing in a structured note allows a Fund to gain exposure
to the benchmark market while fixing the maximum loss that the Fund may
experience in the event that the market does not perform as expected. The
performance tie can be a straight relationship or leveraged, although BEA
generally will not use leverage in its structured note strategies. Normally,
these bonds are issued by U.S. government agencies and investment banks arrange
the structuring. Depending on the terms of the
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note, the Fund may forego all or part of the interest and principal that would
be payable on a comparable conventional note; the Fund's loss cannot exceed this
foregone interest and/or principal. An investment in a structured note involves
risks similar to those associated with a direct investment in the benchmark
asset. Structured notes will be treated as illiquid securities for investment
limitation purposes. The Funds do not presently intend to invest more than 5%
of their assets in structured notes.
NON-INVESTMENT GRADE FIXED INCOME SECURITIES. When and if available,
fixed income securities may be purchased by a Fund at a discount from face
value. From time to time, a Fund may purchase securities in default with
respect to the paying of principal and/or interest at the time acquired if, in
the opinion of BEA, such securities have the potential for future capital
appreciation.
Debt securities purchased by the Funds may bear fixed, fixed and
contingent or variable rates of interest and may involve equity features such as
conversion or exchange rights or warrants for the acquisition of stock of the
same or a different issuer; participations based on revenues, sales or profits,
or the purchase of common stock in a unit transaction (where corporate debt
securities and common stock are offered as a unit). Conversion of certain debt
securities may reduce net income per share and net asset value per share. The
occurrence of any income dilution of previously outstanding shares of common
stock when debt securities are converted will depend upon whether a Fund can,
from the investments made with the proceeds of the debt securities, earn an
amount per share issuable upon conversion at least equal to the amount earned
with respect to shares of common stock outstanding prior to conversion. If debt
securities are converted at a time when the net asset value per share of common
stock is greater than the conversion price, the conversion will result in a
decrease or dilution in then current net asset value per share of common stock.
The value of the lower rated fixed income securities that the Funds
purchase may fluctuate more than the value of higher rated debt securities.
These lower rated fixed income securities generally tend to reflect short-term
corporate and market developments to a greater extent than higher rated
securities which react primarily to fluctuations in the general level of
interest rates. Changes in the value of securities subsequent to their
acquisition will not affect cash income or yields to maturity to a Fund but will
be reflected in the net asset value of a Fund's shares. The Funds attempt to
reduce risk through credit analysis and attention to current developments and
trends in both the economy and financial markets. There can be no assurance
that such attempts will be successful.
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Lower-rated debt securities may include zero coupon securities or pay-
in-kind securities. A zero coupon security bears no interest but is issued at a
discount from its value at maturity. When held to maturity, its entire return
equals the difference between its issue price and its maturity value. Pay-in-
kind securities typically do not provide for cash interest payments but instead
provide for the issuance of additional debt securities of the issuer in the face
amount of the interest payment amount due in lieu of a cash payment. The market
prices of both of these securities are affected to a greater extent by interest
rate changes and thereby tend to be more volatile than securities which pay
interest periodically and in cash.
There are also special considerations associated with investing in
lower-rated debt securities structured as zero coupon or pay-in-kind securities.
For example, a Fund must include the interest ("original issue discount") on
these securities in determining the amount of its required distributions to
shareholders for federal income tax and federal excise tax purposes, even though
it receives no cash interest until the security's maturity or payment date.
Therefore, in order to satisfy these distribution requirements, a Fund may have
to sell some of its assets without regard to their investment merit to obtain
cash to distribute to shareholders. These actions may occur under
disadvantageous circumstances and are likely to reduce a Fund's assets and may
thereby increase its expense ratio and decrease its rate of return. For
additional information concerning these tax considerations, see "Taxes" below.
From time to time, a Fund may also purchase securities not paying interest at
the time acquired if, in the opinion of the Fund's Adviser, such securities have
the potential for future income or capital appreciation.
FORWARD CURRENCY CONTRACTS. Each Fund may use forward currency
contracts to protect against uncertainty in the level of future exchange rates.
The Fund may enter into forward currency contracts with respect to specific
transactions. For example, when a portfolio anticipates the receipt in a
foreign currency of interest payments on a security that it holds, a portfolio
may desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar
equivalent of such payment, as the case may be, by entering into a forward
contract for the purchase or sale, for a fixed amount of U.S. dollars, of the
amount of foreign currency involved in the underlying transaction. A Fund will
thereby be able to protect itself against a possible loss resulting from an
adverse change in the relationship between the currency exchange rates during
the period between the date on which the security is purchased or sold, or on
which the payment is declared, and the date on which such payments are made or
received.
The precise matching of the forward contract amounts and the value of
the securities involved will not generally be
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possible because the future value of such securities in foreign currencies will
change as a consequence of market movements in the value of those securities
between the date the forward contract is entered into and the date it matures.
Accordingly, it may be necessary for a Fund to purchase additional foreign
currency on the spot (I.E., cash) market (and bear the expense of such purchase)
if the market value of the security is less than the amount of foreign currency
the Fund is obligated to deliver and if a decision is made to sell the security
and make delivery of the foreign currency. Conversely, it may be necessary to
sell on the spot market some of the foreign currency received upon the sale of a
Fund security if its market value exceeds the amount of foreign currency a Fund
is obligated to deliver. The projection of short-term currency market movements
is extremely difficult, and the successful execution of a short-term hedging
strategy is highly uncertain. Forward contracts involve the risk that
anticipated currency movements will not be accurately predicted, causing a Fund
to sustain losses on these contracts and transaction costs. A Fund may enter
into a forward contract and maintain a net exposure on such contract only if (1)
the consummation of the contract would not obligate a Fund to deliver an amount
of foreign currency in excess of the value of a Fund's portfolio securities or
other assets denominated in that currency or (2) a Fund maintains U.S.
Government securities or other liquid assets, in a segregated account in an
amount not less than the value of a Fund's total assets committed to the
consummation of the contract which value must be marked to market daily. Under
normal circumstances, consideration of the prospect for currency parities will
be incorporated into the longer term investment decisions made with regard to
overall diversification strategies. However, the Adviser believes that it is
important to have the flexibility to enter into such forward contracts when it
determines that the best interests of a Fund will be served.
At or before the maturity date of a forward contract requiring a
portfolio to sell a currency, the Funds may either sell a portfolio security and
use the sale proceeds to make delivery of the currency or retain the security
and offset its contractual obligation to deliver the currency by purchasing a
second contract pursuant to which the Fund will obtain, on the same maturity
date, the same amount of the currency that it is obligated to deliver.
Similarly, the Funds may close out a forward contract requiring them to purchase
a specified currency by entering into a second contract entitling them to sell
the same amount of the same currency on the maturity date of the first contract.
A Fund would realize a gain or loss as a result of entering into such an
offsetting forward currency contract under either circumstance to the extent the
exchange rate or rates between the currencies involved moved between the
execution dates of the first contract and the offsetting contract.
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The cost to a Fund of engaging in forward currency contracts will vary
with factors such as the currencies involved, the length of the contract period
and the market conditions then prevailing. Because forward currency contracts
are usually entered into on a principal basis, no fees or commissions are
involved. The use of forward currency contracts will not eliminate fluctuations
in the prices of the underlying securities a Fund owns or intends to acquire,
but it will fix a rate of exchange in advance. In addition, although forward
currency contracts limit the risk of loss due to a decline in the value of the
hedged currencies, at the same time they limit any potential gain that might
result should the value of the currencies increase. Moreover, investors should
be aware that dollar-denominated securities may not be available in some or all
foreign countries, that the forward currency market for the purchase of U.S.
dollars in many foreign countries is not highly developed and that in certain
countries no forward market for foreign currencies currently exists or that such
market may be closed to investment by a Fund.
Although a Fund will value its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. The Funds may convert foreign currency from time to
time, and investors should be aware of the costs of currency conversion.
Although foreign exchange dealers do not charge a fee for conversion, they do
realize a profit based on the difference between the prices at which they are
buying and selling various currencies. Thus, a dealer may offer to sell a
foreign currency to a Fund at one rate, while offering a lesser rate of exchange
should a Fund desire to resell that currency to the dealer. The Funds do not
presently intend to invest more than 5% of net assets in forward currency
contracts.
OPTIONS AND FUTURES CONTRACTS. 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 currency hedging) or for other purposes so long as
aggregate initial margins and premiums required for non-hedging positions do not
exceed 5% of its net assets, after taking into account any unrealized profits
and losses on any such contracts it has entered into.
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
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right to buy, and a writer the obligation to sell, the underlying security at
the stated exercise price at any time prior to the expiration of the option,
regardless of the market price of the security. The premium paid to the writer
is in consideration for undertaking the obligations under the option contract.
A put option for a particular security gives the purchaser the right to sell the
underlying security at the stated exercise price at any time prior to the
expiration date of the option, regardless of the market price of the security.
In contrast to an option on a particular security, an option on an index
provides the holder with the right to make or receive a cash settlement upon
exercise of the option. The amount of this settlement will be equal to the
difference between the closing price of the index at the time of exercise and
the exercise price of the option expressed in dollars, times a specified
multiple.
The Funds will engage in unlisted over-the-counter options only with
broker/dealers deemed creditworthy by the Adviser. 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
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 portfolios
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 the Adviser'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, such Fund will
lose part or all of the benefit of the increased value of its securities which
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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. These instruments and techniques are discussed in greater
detail below.
FUTURES CONTRACTS. When a Fund purchases a futures contract, it
agrees to purchase a specified underlying instrument at a specified future date.
When a Fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and sale
will take place is fixed when a Fund enters into the contract. The underlying
instrument may be a specified type of security, such as U.S. Treasury bonds or
notes.
The majority of futures contracts are closed out by entering into an
offsetting purchase or sale transaction in the same contract on the exchange
where they are traded, rather than being held for the life of the contract.
Futures contracts are closed out at their current prices, which may result in a
gain or loss.
If a Fund holds a futures contract until the delivery date, it will be
required to complete the purchase and sale contemplated by the contract. In the
case of futures contracts on securities, the purchaser generally must deliver
the agreed-upon purchase price in cash, and the seller must deliver securities
that meet the specified characteristics of the contract.
A Fund may purchase futures contracts as an alternative to purchasing
actual securities. For example, if a Fund intended to purchase bonds but had
not yet done so, it could purchase a futures contract in order to lock in
current bond prices while deciding on particular investments. This strategy is
sometimes known as an anticipatory hedge. Alternatively, a Fund could purchase
a futures contract if it had cash and short-term securities on hand that it
wished to invest in longer-term securities, but at the same time that Fund
wished to maintain a highly liquid position in order to be prepared to meet
redemption requests or other obligations. In these strategies, a Fund would use
futures contracts to attempt to achieve an overall return -- whether positive or
negative -- similar to the return from longer-term securities, while taking
advantage of potentially greater liquidity that futures contracts may offer.
Although a Fund would hold cash and liquid debt securities in a segregated
account with a value sufficient to cover its open
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futures obligations, the segregated assets would be available to a Fund
immediately upon closing out the futures position, while settlement of
securities transactions can take several days. However, because the Fund's cash
that would otherwise have been invested in higher-yielding bonds would be held
uninvested or invested in short-term securities so long as the futures position
remains open, the Fund's return would involve a smaller amount of interest
income and potentially a greater amount of capital gain or loss.
A Fund may sell futures contracts to hedge its other investments
against changes in value, or as an alternative to sales of securities. For
example, if the investment adviser anticipated a decline in bond prices, but did
not wish to sell bonds owned by a Fund, it could sell a futures contract in
order to lock in a current sale price. If prices subsequently fell, the future
contract's value would be expected to rise and offset all or a portion of the
loss in the bonds that Fund had hedged. Of course, if prices subsequently rose,
the futures contract's value could be expected to fall and offset all or a
portion of the benefit of the Fund. In this type of strategy, the Fund's return
will tend to involve a larger component of interest income, because the Fund
will remain invested in longer-term securities rather than selling them and
investing the proceeds in short-term securities which generally provide lower
yields.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures
contract is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker (known as
a futures commission merchant, or FCM), when the contract is entered into.
Initial margin deposits are equal to a percentage of the contract's value, as
set by the exchange where the contract is traded, and may be maintained in cash
or high quality liquid securities. If the value of either party's position
declines, that party will be required to make additional "variation margin"
payments to settle the change in value on a daily basis. The party that has a
gain may be entitled to receive all or a portion of this amount. Initial and
variation margin payments are similar to good faith deposits or performance
bonds, unlike margin extended by a securities broker, and initial and variation
margin payments do not constitute purchasing securities on margin for purposes
of the Fund's investment limitations. In the event of the bankruptcy of an FCM
that holds margin on behalf of a Fund, that Fund may be entitled to return of
margin owed to it only in proportion to the amount received by the FCM's other
customers. The investment adviser will attempt to minimize this risk by careful
monitoring of the creditworthiness of the FCMs with which a Fund does business.
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CORRELATION OF PRICE CHANGES. The prices of futures contracts depend
primarily on the value of their underlying instruments. Because there are a
limited number of types of futures contracts, it is likely that the standardized
futures contracts available to a Fund will not match that Fund's current or
anticipated investments. Futures prices can also diverge from the prices of
their underlying instruments, even if the underlying instruments match the
Fund's investments well. Futures prices are affected by such factors as current
and anticipated short-term interest rates, changes in volatility of the
underlying instrument, and the time remaining until expiration of the contract,
which may not affect security prices the same way. Imperfect correlation
between a Fund's investments and its futures positions may also result from
differing levels of demand in the futures markets and the securities markets,
from structural differences in how futures and securities are traded, or from
imposition of daily price fluctuation limits for futures contracts. A Fund may
purchase or sell futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in historical volatility between the futures contract
and the securities, although this may not be successful in all cases. If price
changes in a Fund's futures positions are poorly correlated with its other
investments, its futures positions may fail to produce anticipated gains or
result in losses that are not offset by the gains in that Fund's other
investments.
LIQUIDITY OF FUTURES CONTRACTS. Because futures contracts are
generally settled within a day from the date they are closed out, compared with
a settlement period of seven days for some types of securities, the futures
markets can provide liquidity superior to the securities markets in many cases.
Nevertheless, there is no assurance a liquid secondary market will exist for any
particular futures contract at any particular time. In addition, futures
exchanges may establish daily price fluctuation limits for futures contracts,
and may halt trading if a contract's price moves upward or downward more than
the limit in a given day. On volatile trading days when the price fluctuation
limit is reached, it may be impossible for a Fund to enter into new positions or
close out existing positions. If the secondary market for a futures contract is
not liquid because of price fluctuation limits or otherwise, it would prevent
prompt liquidation of unfavorable futures positions, and potentially could
require a Fund to continue to hold a futures position until the delivery date
regardless of changes in its value. As a result, a Fund's access to other
assets held to cover its futures positions could also be impaired.
PURCHASING PUT OPTIONS. By purchasing a put option, a Fund obtains
the right (but not the obligation) to sell the option's underlying instrument at
a fixed strike price. The option may give a Fund the right to sell only on the
option's
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expiration date, or may be exercisable at any time up to and including that
date. In return for this right, a Fund pays the current market price for the
option (known as the option premium). The option's underlying instrument may be
a security or a futures contract.
A Fund may terminate its position in a put option it has purchased by
allowing it to expire or by exercising the option. If the option is allowed to
expire, the Fund will lose the entire premium it paid. If the Fund exercises
the option, it completes the sale of the underlying instrument at the strike
price. If the Fund exercises a put option on a futures contract, it assumes a
seller's position in the underlying futures contract. Purchasing an option on a
futures contract does not require the Fund to make futures margin payments
unless it exercises the option. A Fund may also terminate a put option position
by closing it out in the secondary market at its current price, if a liquid
secondary market exists.
Put options may be used by a Fund to hedge securities it owns, in a
manner similar to selling futures contracts, by locking in a minimum price at
which the Fund can sell. If security prices fall, the value of the put option
would be expected to rise and offset all or a portion of the Fund's resulting
losses. The put thus acts as a hedge against a fall in the price of such
securities. However, all other things being equal (including securities prices)
option premiums tend to decrease over time as the expiration date nears.
Therefore, because of the cost of the option in the form of the premium (and
transaction costs), a Fund would expect to suffer a loss in the put option if
prices do not decline sufficiently to offset the deterioration in the value of
the option premium. This potential loss represents the cost of the hedge
against a fall in prices. At the same time, because the maximum a Fund has at
risk is the cost of the option, purchasing put options does not eliminate the
potential for the Fund to profit from an increase in the value of the securities
hedged to the same extent as selling a futures contract.
PURCHASING CALL OPTIONS. The features of call options are essentially
the same as those of put options, except that the purchaser of a call option
obtains the right to purchase, rather than sell, the underlying instrument at
the option's strike price (call options on futures contracts are settled by
purchasing the underlying futures contract). By purchasing a call option, a
Fund would attempt to participate in potential price increases of the underlying
instrument, with results similar to those obtainable from purchasing a futures
contract, but with risk limited to the cost of the option if security prices
fell. At the same time, a Fund can expect to suffer a loss if security prices
do not rise sufficiently to offset the cost of the option.
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The Funds may purchase call options in connection with "closing
purchase transactions." A Fund may terminate its position in a call option by
entering into a closing purchase transaction. A closing purchase transaction is
the purchase of a call option on the same security with the same exercise price
and call period as the option previously written by the Fund. If a Fund is
unable to enter into a closing purchase transaction, a Fund may be required to
hold a security that it might otherwise have sold to protect against
depreciation.
WRITING PUT OPTIONS. When a Fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, a Fund assumes the obligation to pay the strike price
for the option's underlying instrument if the other party to the option chooses
to exercise it. When writing an option on a futures contract the Fund will be
required to make margin payments to an FCM as described above for futures
contracts. A Fund may seek to terminate its position in a put option it writes
before exercise by closing out the option in the secondary market at its current
price. If the secondary market is not liquid for an option the Fund has
written, however, the Fund must continue to be prepared to pay the strike price
while the option is outstanding, regardless of price changes, and must continue
to set aside assets to cover its position.
A Fund may write put options as an alternative to purchasing actual
securities. If security prices rise, the Fund would expect to profit from a
written put option, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it is likely
that the Fund will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the Fund would expect to
suffer a loss. This loss should be less than the loss the Fund would have
experienced from purchasing the underlying instrument directly, however, because
the premium received for writing the option should mitigate the effects of the
decline. As with other futures and options strategies used as alternatives for
purchasing securities, the Fund's return from writing put options generally will
involve a smaller amount of interest income than purchasing longer-term
securities directly, because the Fund's cash will be invested in shorter-term
securities which usually offer lower yields.
WRITING CALL OPTIONS. Writing a call option obligates a Fund to sell
or deliver the option's underlying instrument, in return for the strike price,
upon exercise of the option. The characteristics of writing call options are
similar to those of writing put options, as described above, except that writing
covered call options generally is a profitable strategy if prices remain the
same or fall. Through receipt of the option premium, the Fund would seek to
mitigate the effects of a price decline.
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At the same time, because a Fund would have to be prepared to deliver the
underlying instrument in return for the strike price, even if its current value
is greater, the Fund would give up some ability to participate in security price
increases when writing call options.
COMBINED OPTION POSITIONS. A Fund may purchase and write options in
combination with each other to adjust the risk and return characteristics of the
overall position. For example, a Fund may purchase a put option and write a
call option on the same underlying instrument, in order to construct a combined
position whose risk and return characteristics are similar to selling a futures
contract. Another possible combined position would involve writing a call
option at one strike price and buying a call option at a lower price, in order
to reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open and
close out.
RISKS OF OPTIONS TRANSACTIONS. Options are subject to risks similar
to those described above with respect to futures contracts, including the risk
of imperfect correlation between the option and a Fund's other investments and
the risk that there might not be a liquid secondary market for the option. In
the case of options on futures contracts, there is also a risk of imperfect
correlation between the option and the underlying futures contract. Options are
also subject to the risks of an illiquid secondary market, particularly in
strategies involving writing options, which a Fund cannot terminate by exercise.
In general, options whose strike prices are close to their underlying
instruments' current value will have the highest trading volume, while options
whose strike prices are further away may be less liquid. The liquidity of
options may also be affected if options exchanges impose trading halts,
particularly when markets are volatile.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. A Fund will not use
leverage in its options and futures strategies. Such investments will be made
for hedging purposes only. A Fund will hold securities or other options or
futures positions whose values are expected to offset its obligations under the
hedge strategies. A Fund will not enter into an option or futures position that
exposes the Fund to an obligation to another party unless it owns either (i) an
offsetting position in securities or other options or futures contracts or (ii)
cash, receivables and short-term debt securities with a value sufficient to
cover its potential obligations. A Fund will comply with guidelines established
by the SEC with respect to coverage of options and futures strategies by mutual
funds, and if the guidelines so require will set aside U.S. Government
securities or other liquid assets in a segregated account with its custodian
bank in
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the amount prescribed. Securities held in a segregated account cannot be sold
while the futures or option strategy is outstanding, unless they are replaced
with similar securities. As a result, there is a possibility that segregation
of a large percentage of the Fund's assets could impede portfolio management or
the Fund's ability to meet redemption requests or other current obligations.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. RBB on behalf of the
Funds has filed a notice of eligibility for exclusion from the definition of the
term "commodity pool operator" with the Commodity Futures Trading Commission
("CFTC") and the National Futures Association, which regulate trading in the
futures markets. Pursuant to Section 4.5 of the regulations under the Commodity
Exchange Act, the notice of eligibility includes the representation that the
Funds will not enter into any commodity futures contract or option on a
commodity futures contract if, as a result, the sum of initial margin deposits
on commodity futures contracts and related commodity options and premiums paid
for options on commodity futures contracts the Fund has purchased, after taking
into account unrealized profits and losses on such contracts, would exceed 5% of
a Fund's total assets.
The Funds' policies and limitations on investments in futures
contracts and options discussed above are not fundamental policies and may be
changed by the Company's Board of Directors.
Various exchanges and regulatory authorities have recently undertaken
reviews of options and futures trading in light of market volatility. Among the
possible actions that have been presented are proposals to adopt new or more
stringent daily price fluctuation limits for futures or options transactions,
and proposals to increase the margin requirements for various types of
strategies. It is impossible to predict what actions, if any, will result from
these reviews at this time.
SHORT SALES "AGAINST THE BOX." In a short sale, a Fund sells a
borrowed security and has a corresponding obligation to the lender to return the
identical security. Each Fund may engage in short sales if at the time of the
short sale it owns or has the right to obtain, at no additional cost, an equal
amount of the security being sold short. This investment technique is known as
a short sale "against the box." In a short sale, a seller does not immediately
deliver the securities sold and is said to have a short position in those
securities until delivery occurs. If a Fund engages in a short sale, the
collateral for the short position will be maintained by the Fund's custodian or
a qualified sub-custodian. While the short sale is open, the Fund will maintain
in a segregated account an amount of securities equal in kind and amount to the
securities sold short
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or securities convertible into or exchangeable for such equivalent securities.
These securities constitute the Fund's long position. A Fund may, however, make
a short sale as a hedge, when it believes that the price of a security may
decline, causing a decline in the value of a security owned by the Fund (or a
security convertible or exchangeable for such security), or when the Fund wants
to sell the security at an attractive current price, but also wishes to defer
recognition of gain or loss for federal income tax purposes and for purposes of
satisfying certain tests applicable to regulated investment companies under the
Internal Revenue Code. In such case, any future losses in the Fund's long
position should be reduced by a gain in the short position. Conversely, any
gain in the long position should be reduced by a loss in the short position.
The extent to which such gains or losses are reduced will depend upon the amount
of the security sold short relative to the amount the Fund owns. There will be
certain additional transaction costs associated with short sales against the
box, but the Fund will endeavor to offset these costs with the income from the
investment of the cash proceeds of short sales. The Funds do not presently
intend to invest more than 5% of net assets in short sales against the box.
SECTION 4(2) PAPER. "Section 4(2) paper" is commercial paper which is
issued in reliance on the "private placement" exemption from registration which
is afforded by Section 4(2) of the Securities Act. Section 4(2) paper is
restricted as to disposition under the federal securities laws and is generally
sold to institutional investors which agree that they are purchasing the paper
for investment and not with a view to public distribution. Any resale by the
purchaser must be in an exempt transaction. Section 4(2) paper normally is
resold to other institutional investors through or with the assistance of
investment dealers who make a market in the Section 4(2) paper, thereby
providing liquidity. See "Illiquid Securities" above.
SUPPLEMENTAL INVESTMENT OBJECTIVES AND POLICIES --
BEA INTERNATIONAL EQUITY, BEA EMERGING MARKETS EQUITY AND
BEA GLOBAL TELECOMMUNICATIONS FUNDS
RIGHTS OFFERINGS AND PURCHASE WARRANTS. Rights offerings and purchase
warrants are privileges issued by a corporation which enable the owner to
subscribe to and purchase a specified number of shares of the corporation at a
specified price during a specified period of time. Subscription rights normally
have a short lifespan to expiration. The purchase of rights or warrants
involves the risk that a Fund could lose the purchase value of a right or
warrant if the right to subscribe to additional shares is not executed prior to
the rights and warrants expiration. Also, the purchase of rights and/or
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warrants involves the risk that the effective price paid for the right and/or
warrant added to the subscription price of the related security may exceed the
value of the subscribed security's market price such as when there is no
movement in the level of the underlying security.
SUPPLEMENTAL INVESTMENT OBJECTIVES AND POLICIES --
BEA GLOBAL TELECOMMUNICATIONS FUND
Telecommunications companies in both developed and emerging countries
are undergoing significant change due to varying and evolving levels of
governmental regulation or deregulation and other factors. As a result,
competitive pressures are intense and the securities of such companies may be
subject to rapid price volatility. Telecommunications regulation typically
limits rates charged, returns earned, providers of services, types of services,
ownership, areas served and terms for dealing with competitors and customers.
Telecommunications regulation generally has tended to be less stringent for
newer services than for traditional telephone service, although there can be no
assurances that such newer services will not be heavily regulated in the future.
Regulation may also limit the use of new technologies and hamper efficient
depreciation of existing assets. If regulation limits the use of new
technologies by established carriers or forces cross-subsidies, large private
networks may emerge. Service providers may also be subject to regulations
regarding ownership and control, providers of services, subscription rates and
technical standards.
Companies offering telephone services are experiencing increasing
competition from cellular telephones, and the cellular telephone industry,
because it has a limited operating history, faces uncertainty concerning the
future of the industry and demand for cellular telephones. All
telecommunications companies in both developed and emerging countries are
subject to the additional risk that technological innovations will make their
products and services obsolete. While telephone companies in developed
countries and certain emerging countries may pay an above average dividend, the
Fund's investment decisions are based upon capital appreciation potential rather
than income considerations.
INVESTMENT LIMITATIONS
The Company has adopted the following fundamental investment
limitations, which may not be changed without the affirmative vote of the
holders of a majority of the Fund's outstanding Shares (as defined in Section
2(a)(42) of the 1940 Act). Each Fund may not:
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1. Borrow money, except from banks, and only if after such borrowing
there is asset coverage of at least 300% for all borrowings of the Fund; or
mortgage, pledge or hypothecate any of its assets except in connection with any
such borrowing and in amounts not in excess of the lesser of the dollar amounts
borrowed or 33 1/3% of the value of the Fund's total assets at the time of such
borrowing;
2. Issue any senior securities, except as permitted under the 1940
Act;
3. Act as an underwriter of securities within the meaning of the
Securities Act, except insofar as it might be deemed to be an underwriter upon
disposition of certain portfolio securities acquired within the limitation on
purchases of restricted securities;
4. Purchase or sell real estate (including real estate limited
partnership interests), provided that a Fund may invest in securities secured by
real estate or interests therein or issued by companies that invest in real
estate or interests therein;
5. Purchase or sell commodities or commodity contracts, except that
a Fund may deal in forward foreign exchange between currencies of the different
countries in which it may invest and purchase and sell stock index and currency
options, stock index futures, financial futures and currency futures contracts
and related options on such futures;
6. Make loans, except through loans of portfolio instruments and
repurchase agreements, provided that for purposes of this restriction the
acquisition of bonds, debentures or other debt instruments or interests therein
and investment in government obligations, Loan Participations and Assignments,
short-term commercial paper, certificates of deposit and bankers' acceptances
shall not be deemed to be the making of a loan; and
7. Except for the BEA Global Telecommunications Fund, purchase any
securities, which would cause 25% or more of the value of the Fund's total
assets at the time of purchase to be invested in the securities of one or more
issuers conducting their principal business activities in the same industry,
provided that (a) there is no limitation with respect to (i) instruments issued
or guaranteed by the United States, any state, territory or possession of the
United States, the District of Columbia or any of their authorities, agencies,
instrumentalities or political subdivisions, and (ii) repurchase agreements
secured by the instruments described in clause (i); (b) wholly-owned finance
companies will be considered to be in the industries of their parents if their
activities are primarily related to
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<PAGE>
financing the activities of the parents; and (c) utilities will be divided
according to their services, for example, gas, gas transmission, electric and
gas, electric and telephone will each be considered a separate industry. The
BEA Global Telecommunica-tions Fund will concentrate in the telecommunications
industry.
For purposes of Investment Limitation No. 1, collateral arrangements
with respect to, if applicable, the writing of options and futures contracts,
options on futures contracts, forward currency contracts and collateral
arrangements with respect to initial and variation margin are not deemed to be a
pledge of assets and neither such arrangements nor the purchase or sale of
futures or related options are deemed to be the issuance of a senior security
for purposes of Investment Limitation No. 2.
In addition to the fundamental investment limitations specified above,
a Fund may not:
1. Make investments for the purpose of exercising control or
management. Investments by a Fund in wholly-owned investment entities created
under the laws of certain countries will not be deemed the making of investments
for the purpose of exercising control or management;
2. Purchase securities on margin, except for short-term credits
necessary for clearance of portfolio transactions, and except that a Fund may
make margin deposits in connection with its use of options, futures contracts,
options on futures contracts and forward contracts;
3. Purchase or sell interests in mineral leases, oil, gas or other
mineral exploration or development programs, except that a Fund may invest in
securities issued by companies that engage in oil, gas or other mineral
exploration or development activities; and
4. Purchase or retain the securities of any issuer, if those
individual officers and directors of the Company, the Adviser or any subsidiary
thereof each owning beneficially more than one-half of the securities of such
issuer own in the aggregate more than 5% of the securities of such issuer.
The policies set forth above are not fundamental and thus may be
changed by the Company's Board of Directors without a vote of the shareholders.
Except as required by the 1940 Act with respect to the borrowing of
money, if a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in market
values of portfolio
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<PAGE>
securities or amount of total or net assets will not be considered a violation
of any of the foregoing restrictions.
In order to permit the sale of shares of a Fund in certain states, a
Fund may make commitments more restrictive than the investment policies and
limitations above. If a Fund determines that any such commitment is no longer
in its best interests, it will revoke the commitment by terminating sales of its
shares in the state involved. In addition, a Fund may be subject to investment
restrictions imposed by countries in which it invests directly or indirectly.
Securities held by a Fund generally may not be purchased from, sold or
loaned to the Adviser or its affiliates or any of their directors, officers or
employees, acting as principal, unless pursuant to a rule or exemptive order
under the 1940 Act.
RISK FACTORS
FOREIGN SECURITIES. Investments in foreign securities are subject to
certain risks, as discussed below.
POLITICAL, ECONOMIC AND MARKET FACTORS. Investments in foreign
securities involve risks relating to political and economic developments abroad,
as well as those that result from the differences between the regulations to
which U.S. and foreign issuers are subject. These risks may include
expropriation, confiscatory taxation, withholding taxes on dividends and
interest, limitations on the use or transfer of a Fund's assets and political or
social instability or diplomatic developments. Moreover, individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payments positions.
Securities of many foreign issuers may be less liquid, and their prices may be
more volatile, than those of securities of comparable U.S. issuers. Brokerage
commissions, custodial services and other costs relating to investment in
foreign securities markets are generally more expensive than in the United
States. Such markets have different clearance and settlement procedures and in
certain markets there have been times when settlements have been unable to keep
pace with the volume of securities transactions, making it difficult to conduct
such transactions. There is generally less government supervision and
regulation of exchanges, brokers and issuers in foreign securities markets than
there is in the United States.
In addition, substantial limitations may exist in certain countries
with respect to the Funds' ability to repatriate investment income, capital or
the proceeds of sales of
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<PAGE>
securities by foreign investors. The Funds could be adversely affected by
delays in, or a refusal to grant, any required government approval for
repatriation of capital, as well as by the application to the Funds of any
restrictions on investments.
REPORTING STANDARDS. Most of the foreign securities held by the Funds
will not be registered with the SEC, nor will the issuers thereof be subject to
SEC or other U.S. reporting requirements. Accordingly, there will be less
publicly available information concerning foreign issuers of securities held by
the Fund than will be available concerning U.S. companies. Foreign companies,
and in particular, companies in emerging markets, are not generally subject to
uniform accounting, auditing and financial reporting standards or to other
regulatory requirements comparable to those applicable to U.S. companies.
EXCHANGE RATE FLUCTUATIONS. Because foreign securities ordinarily
will be denominated in currencies other than the U.S. dollar, changes in foreign
currency exchange rates will affect a Fund's net asset value, the value of
interest and dividends earned, gains and losses realized on the sale of
securities and net investment income and capital gain, if any, to be distributed
to shareholders by a Fund. If the value of a foreign currency rises against the
U.S. dollar, the value of a Fund's assets denominated in that currency will
increase; conversely, if the value of a foreign currency declines against the
U.S. dollar, the value of a Fund's assets denominated in that currency will
decrease. The exchange rates between the U.S. dollar and other currencies are
determined by supply and demand in the currency exchange markets, international
balances of payments, government intervention, speculation and other economic
and political conditions.
INVESTMENT CONTROLS. In certain countries that currently prohibit
direct foreign investment in the securities of their companies, indirect foreign
investment in the securities of companies listed and traded on the stock
exchanges in these countries is permitted through investment funds which have
been specifically authorized. The BEA Portfolios may invest in these investment
funds and registered investment companies subject to the provisions of the 1940
Act. If these Funds invest in such investment companies, they will each bear
their proportionate share of the costs incurred by such companies, including
investment advisory fees.
CLEARANCE AND SETTLEMENT PROCEDURES. Delays in clearance and
settlement could result in temporary periods when assets of a Fund are
uninvested and no return is earned thereon. The inability of a Fund to make
intended security purchases due to settlement problems could cause a Fund to
miss attractive investment opportunities. Inability to dispose of a portfolio
security due to settlement problems could result either in losses
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<PAGE>
to a Fund due to subsequent declines in the value of such portfolio security or,
if a Fund has entered into a contract to sell the security, could result in
possible liability to the purchaser.
OPERATING EXPENSES. The costs attributable to foreign investing that
a Fund must bear frequently are higher than those attributable to domestic
investing. For example, the cost of maintaining custody of foreign securities
exceeds custodian costs for domestic securities. Investment income on certain
foreign securities in which a Fund may invest may be subject to foreign
withholding or other taxes that could reduce the return on those securities.
Tax treaties between the United States and foreign countries, however, may
reduce or eliminate the amount of foreign tax to which a Fund would be subject.
LOWER-RATED OR NON-RATED CRITERIA FOR DEBT SECURITIES. The BEA High
Yield Fund has established no rating criteria for the debt securities in which
it may invest. Issuers of low rated or non-rated securities ("high yield"
securities, commonly known as "junk bonds") may be highly leveraged and may not
have available to them more traditional methods of financing. Therefore, the
risks associated with acquiring the securities of such issuers generally is
greater than is the case with higher rated securities. For example, during an
economic downturn or a sustained period of rising interest rates, issuers of
high yield securities may be more likely to experience financial stress,
especially if such issuers are highly leveraged. During such periods, such
issuers may not have sufficient revenues to meet their interest payment
obligations. The issuer's ability to service its debt obligations also may be
adversely affected by specific issuer developments, or the issuer's inability to
meet specific projected business forecasts, or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower-rated securities because such securities may be
unsecured and may be subordinated to other creditors of the issuer.
Lower-rated securities frequently have call or redemption features
that would permit an issuer to repurchase the security from the Fund. If a call
were exercised by the issuer during a period of declining interest rates, the
Fund likely would have to replace such called security with a lower yielding
security, thus decreasing the net investment income to the Fund and dividends to
shareholders.
The Fund may have difficulty disposing of certain lower-rated
securities because there may be a thin trading market for such securities. The
secondary trading market for high yield securities is generally not as liquid as
the secondary market for higher rated securities. Reduced secondary market
liquidity may have an adverse impact on market price and the Fund's ability to
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<PAGE>
dispose of particular issues when necessary to meet the Fund's liquidity needs
or in response to a specific economic event such as a deterioration in the
creditworthiness of the issuer.
Adverse publicity and investor perceptions, which may not be based on
fundamental analysis, also may decrease the value and liquidity of lower-rated
securities, particularly in a thinly traded market. Factors adversely affecting
the market value of lower-rated securities are likely to adversely affect the
Fund's net asset value. In addition, the Fund may incur additional expenses to
the extent it is required to seek recovery upon a default on a portfolio holding
or participate in the restructuring of the obligation.
Finally, there are risks involved in applying credit ratings as a
method for evaluating lower-rated debt securities. For example, credit ratings
evaluate the safety of principal and interest payments, not the market risks
involved in lower-rated debt securities. Since credit rating agencies may fail
to change the credit ratings in a timely manner to reflect subsequent events,
BEA will monitor the issuers of lower-rated debt securities in the Fund to
determine if the issuers will have sufficient cash flow and profits to meet
required principal and interest payments, and to assure the debt securities,
liquidity so the Fund can meet redemption requests. BEA will not necessarily
dispose of a portfolio security when its ratings have been changed.
SOVEREIGN DEBT. Investments in sovereign debt involve special risks.
The issuer of the debt or the governmental authorities that control the
repayment of the debt may be unable or unwilling to repay principal or interest
when due in accordance with the terms of such debt, and the Fund may have
limited legal recourse in the event of a default.
Sovereign debt differs from debt obligations issued by private
entities in that, generally, remedies for defaults must be pursued in the courts
of the defaulting party. Legal recourse is therefore somewhat limited.
Political conditions, especially a sovereign entity's willingness to meet the
terms of its debt obligations, are of considerable significance. Also, there
can be no assurance that the holders of commercial bank loans to the same
sovereign entity may not contest payments to the holders of sovereign debt in
the event of default under commercial bank loan agreements.
A sovereign debtor's willingness or ability to repay principal and pay
interest in a timely manner may be affected by, among other factors, its cash
flow situation, the extent of its foreign reserves, the availability of
sufficient foreign exchange
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<PAGE>
on the date a payment is due, the relative size of the debt service burden to
the economy as a whole, the sovereign debtor's policy toward principal
international lenders and the political constraints to which a sovereign debtor
may be subject. Increased protectionism on the part of a country's trading
partners, or political changes in those countries, could also adversely affect
its exports. Such events could diminish a country's trade account surplus, if
any, or the credit standing of a particular local government or agency.
The occurrence of political, social or diplomatic changes in one or
more of the countries issuing sovereign debt could adversely affect a Fund's
investments. Political changes or a deterioration of a country's domestic
economy or balance of trade may affect the willingness of countries to service
their sovereign debt. While the Adviser intends to manage the Funds in a manner
that will minimize the exposure to such risks, there can be no assurance that
adverse political changes will not cause a Fund to suffer a loss of interest or
principal on any of its holdings.
Investors should also be aware that certain sovereign debt instruments
in which a Fund may invest involve great risk. Sovereign debt issued by issuers
in many emerging markets generally is deemed to be the equivalent in terms of
quality to securities rated below investment grade by Moody's and S&P. Such
securities are regarded as predominantly speculative with respect to the
issuer's capacity to pay interest and repay principal in accordance with the
terms of the obligations and involve major risk exposure to adverse conditions.
Some of such sovereign debt, which may not be paying interest currently or may
be in payment default, may be comparable to securities rated "D" by S&P or "C"
by Moody's. A Fund may have difficulty disposing of certain sovereign debt
obligations because there may be a limited trading market for such securities.
Because there is no liquid secondary market for many of these securities, a Fund
anticipates that such securities could be sold only to a limited number of
dealers or institutional investors. The lack of a liquid secondary market may
have an adverse impact on the market price of such securities and a Fund's
ability to dispose of particular issues when necessary to meet a Fund's
liquidity needs or in response to a specific economic event, such as a
deterioration in the creditworthiness of the issuer. The lack of a liquid
secondary market for certain securities also may make it more difficult for a
Fund to obtain accurate market quotations for purposes of valuing a Fund's
portfolio and calculating its net asset value. When and if available, fixed
income securities may be purchased by a Fund at a discount from face value.
However, a Fund does not intend to hold such securities to maturity for the
purpose of achieving potential capital gains, unless current yields on these
securities remain attractive. From time to time a Fund may purchase securities
not paying
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interest at the time acquired if, in the opinion of the Adviser, such securities
have the potential for future income or capital appreciation.
DIRECTORS AND OFFICERS
The directors and executive officers of the Company, their business
addresses and principal occupations during the past five years are:
Position Principal Occupation
Name, Address and Age with the Company During Past Five Years
--------------------- ---------------- ----------------------
Arnold M. Reichman - 49* Director Since 1986, Managing
466 Lexington Avenue Director and Assistant
New York, NY 10017 Secretary, Warburg,
Pincus Counsellors, Inc.;
Director and Executive
Officer of Counsellors
Securities, Inc;
Director/Trustee of
various investment
companies advised by
Warburg, Pincus
Counsellors, Inc.
Robert Sablowsky - 58** Director Senior Vice President,
110 Wall Street Fahnestock & Co., Inc.
New York, NY 10005 (a broker/dealer);
prior to October 1996,
Executive Vice President
of Gruntal & Co., Inc.
(a broker/dealer).
Francis J. McKay - 60 Director Since 1963, Executive
7701 Burholme Avenue Vice President, Fox Chase
Philadelphia, PA 19111 Cancer Center.
(Biomedical research and
medical care.)
Marvin E. Sternberg -62 Director Since 1974, Chairman,
937 Mt. Pleasant Road Director and President,
Bryn Mawr, PA 19010 Moyco Industries, Inc.
(manufacturer of dental
supplies and precision
coated abrasives); since
1968, Director and
President, Mart MMM, Inc.
(formerly Montgomeryville
Merchandise Mart Inc.)
and Mart PMM, Inc.
(formerly Pennsauken
Merchandise Mart, Inc.)
(shopping centers); and
since 1975, Director and
Executive Vice President,
Cellucap Mfg. Co., Inc.
(manufacturer of
disposable headwear).
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<PAGE>
Position Principal Occupation
Name, Address and Age with the Company During Past Five Years
--------------------- ---------------- ----------------------
Julian A. Brodsky - 63 Director Director and Vice
Comcast Corporation Chairman since 1969,
1234 Market Street Comcast Corporation
16th Floor (cable television and
Philadelphia, PA 19107-3723 communications);
Director, Comcast
Cablevision of
Philadelphia (cable
television
communications) and
Nextel (wireless
communications).
Donald van Roden - 72 Chairman and Self-employed
1200 Old Mill Lane Director businessman. From
Wyomissing, PA 19610 February 1980 to March
1987, Vice Chairman,
Smith Kline Beckman
Corporation
(pharmaceuticals);
Director, AAA Mid-
Atlantic (auto service);
Director, Keystone
Insurance Co.
Edward J. Roach - 72 President and Certified Public
Bellevue Park Treasurer Accountant; Vice Chairman
Corporate Center of the of the Board, Fox
400 Bellevue Parkway Chase Cancer Center;
Wilmington, DE 19809 Trustee Emeritus,
Pennsylvania School for
the Deaf; Trustee
Emeritus, Immaculata
College; President or
Vice President and
Treasurer of various
investment companies
advised by PNC
Institutional Management
Corporation; Director,
The Bradford Funds, Inc.
Morgan R. Jones - 57 Secretary Chairman of the law firm
PNB Bank Building of Drinker Biddle &
1345 Chestnut Street Reath LLP, Philadelphia,
Philadelphia, PA 19107-3496 Pennsylvania; Director,
Rocking Horse Child Care
Centers of America, Inc.
- -------------------------
* Mr. Reichman is an "interested person" of the Company as that term is
defined in the 1940 Act by virtue of his position with Counsellors
Securities Inc., the Company's distributor.
** Mr. Sablowsky is an "interested person" of the Company as that term is
defined in the 1940 Act by virtue of his position with Fahnestock & Co.,
Inc., a registered broker-dealer.
Messrs. McKay, Sternberg and Brodsky are members of the Audit
Committee of the Board of Directors. The Audit Committee, among other things,
reviews results of the annual audit and
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<PAGE>
recommends to the Company the firm to be selected as independent auditors.
Messrs. Reichman, McKay and van Roden are members of the Executive
Committee of the Board of Directors. The Executive Committee may generally
carry on and manage the business of the Company when the Board of Directors is
not in session.
Messrs. McKay, Sternberg, Brodsky and van Roden are members of the
Nominating Committee of the Board of Directors. The Nominating Committee
recommends to the Board all persons to be nominated as directors of the Company.
The Company pays directors who are not "affiliated persons" (as that
term is defined in the 1940 Act) of any Investment Adviser or Sub-Adviser of the
Company or the Distributor and Mr. Sablowsky, who is an "interested person" of
the Company, $12,000 annually and $1,000 per meeting of the Board or any
committee thereof that is not held in conjunction with a Board meeting. Such
Directors are reimbursed for any expenses incurred in attending meetings of the
Board of Directors or any committee thereof. The Chairman (currently Donald von
Roden) receives an additional $5,000 for his services. For the year ended
August 31, 1996, each of the following members of the Board of Directors
received compensation from the Company in the following amounts:
<TABLE>
<CAPTION>
DIRECTORS' COMPENSATION
Total
Pension or Compensation
Retirement from
Aggregate Benefits Estimated Registrant and
Compensation Accrued as Annual Fund Complex
Name of from Part of Fund Benefits Upon Paid(1) to
Person/Position Registrant Expenses Retirement Directors
--------------- ------------ ------------ ------------- --------------
<S> <C> <C> <C> <C>
Julian A. Brodsky, $12,525 N/A N/A $12,525
Director
Francis J. McKay, 15,975 N/A N/A 15,975
Director
Marvin E. Sternberg, 16,725 N/A N/A 16,725
Director
Donald Van Roden, 21,025 N/A N/A 21,025
Director
Arnold M. Reichman, 0 N/A N/A 0
Director
Robert Sablowsky, 0 N/A N/A 0
Director
</TABLE>
1. A Fund Complex Means two or more investment companies that hold themselves
out to investors as related companies for purposes of investment and
investor services, or have a common investment adviser or have an
investment adviser that is an affiliated person of the investment
adviser of any other investment companies.
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<PAGE>
On October 24, 1990 the Company adopted, as a participating employer,
the Company Office Retirement Profit-Sharing Plan and Trust Agreement, a
retirement plan for employees (currently Edward J. Roach) pursuant to which the
Company will contribute on a monthly basis amounts equal to 10% of the monthly
compensation of each eligible employee. By virtue of the services performed by
the Company's advisers, custodians, administrators and distributor, the Company
itself requires only one part-time employee. No officer, director or employee
of BEA or the Distributor currently receives any compensation from the Company.
INVESTMENT ADVISORY AND SERVICING ARRANGEMENTS
ADVISORY AGREEMENTS. BEA Associates (sometimes referred to as the
"Adviser") renders advisory and administrative services to each of the Funds
pursuant to Investment Advisory Agreements. The Advisory Agreements relating to
the Funds are dated September 16, 1992 for the BEA International Equity, the BEA
Emerging Markets Equity and the BEA High Yield Funds and dated July 10, 1996 for
the BEA Global Telecommunications Fund. Such advisory agreements are
hereinafter collectively referred to as the "Advisory Contracts."
BEA Associates is a diversified investment adviser, managing global
equity, fixed income and derivative securities accounts for corporate pension
and profit-sharing plans, state pension funds, union funds, endowments and other
charitable institutions. As of September 30, 1996, BEA Associates managed
approximately $31.3 billion in assets. BEA is a wholly-owned subsidiary of
Credit Suisse, the second largest Swiss bank, which in turn is a subsidiary of
CS Holding, a Swiss corporation. Active employees of BEA have a long term
equity incentive plan. BEA Associates is a registered investment advisor under
the Investment Advisors Act of 1940, as amended.
As an investment adviser, BEA emphasizes a global investment strategy.
BEA currently acts as investment adviser for thirteen other investment companies
registered under the 1940 Act. They are: Alpha Government Securities
Portfolio, BEA Strategic Income Fund, Inc., BEA Income Fund, Inc., BEA Short
Duration Fund, The Brazilian Equity Fund, Inc., The Chile Fund, Inc., The
Emerging Markets Infrastructure Fund, Inc., The Emerging Markets
Telecommunications Fund, Inc., The First Israel Fund, Inc., The Indonesia Fund,
Inc., The Latin America Equity Fund, Inc., The Latin America Investment Fund,
Inc., and The Portugal Fund, Inc. In addition, BEA acts as sub-adviser to
certain portfolios of six other registered investment companies: Frank Russell
Investment Company (Fixed Income III Fund and Multi-strategy Bond Fund),
Oppenheimer (LifeSpan Balanced Portfolio, LifeSpan Income Portfolio and LifeSpan
Growth
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<PAGE>
Portfolio), Panorama (LifeSpan Balanced Account, LifeSpan Capital Appreciation
Account and LifeSpan Diversified Income Account), SEI Institutional Managed
Trust (High Yield Bond Portfolio), WNL Series Trust (BEA Growth and Income
Fund), Touchstone International Equity Fund and Touchstone Variable Annuity
International Equity Portfolio. BEA Associates also acts as investment adviser
for forty-two offshore funds, twenty-two of which are equity funds and twenty of
which are debt funds.
BEA Associates has sole investment discretion for the Funds and will
make all decisions affecting assets in the Funds under the supervision of the
Company's Board of Directors and in accordance with each Fund's stated policies.
BEA Associates will select investments for the Funds and will place purchase and
sale orders on behalf of the Funds. For its services to the BEA International
Equity, the BEA Emerging Markets Equity, the BEA Global Telecommunications and
the BEA High Yield Funds, BEA Associates will be paid (before any voluntary
waivers or reimbursements) a monthly fee computed at an annual rate of .80%,
1.00%, 1.00% and .70% of average daily net assets, respectively.
For the year ended August 31, 1996, BEA Associates waived advisory
fees with respect to the BEA International Equity, the BEA Emerging Markets
Equity, the BEA Global Telecommunications and the BEA High Yield Funds in the
amounts of $0, $0, $0 and $100,763, respectively. During the same period, BEA
received advisory fees (after waivers) in the amount of $5,993,072, $1,289,739,
$0 and $542,590, respectively.
Each Fund bears all of its own expenses not specifically assumed by
the Adviser. General expenses of the Company not readily identifiable as
belonging to a Fund of the Company are allocated among all investment Funds by
or under the direction of the Company's Board of Directors in such manner as the
Board determines to be fair and equitable. In addition to the expenses listed
in the Prospectus, expenses borne by a Fund include, but are not limited to, the
following (or a Fund's share of the following): (a) the cost (including
brokerage commissions) of securities purchased or sold by a Fund and any losses
incurred in connection therewith; (b) expenses of organizing the Company that
are not attributable to a class of the Company; (c) certain of the filing fees
and expenses relating to the registration and qualification of the Company and a
Fund's shares under federal and/or state securities laws and maintaining such
registrations and qualifications; (d) taxes (including any income or franchise
taxes) and governmental fees; (e) costs of any liability and other insurance or
fidelity bonds; (f) any costs, expenses or losses arising out of a liability of
or claim for damages or other relief asserted against the Company or a Fund for
violation of any law; (g)
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costs of mailing prospectuses, statements of additional information and
supplements thereto to existing shareholders, as well as reports to shareholders
and proxy material that are not attributable to a class; (h) any extraordinary
expenses; (i) fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; (j) costs of
mailing and tabulating proxies and costs of shareholders' and directors'
meetings; (k) costs of independent pricing services to value a Fund's
securities; and (l) the cost of investment company literature and other
publications provided by the Company to its directors and officers.
Under the Advisory Contracts, BEA Associates will not be liable for
any error of judgment or mistake of law or for any loss suffered by the Company
or a Fund in connection with the performance of the Advisory Contracts, and
shall be indemnified for any losses and expenses in connection with any claim
relating thereto, except a loss resulting from willful misfeasance, bad faith or
gross negligence on the part of BEA Associates in the performance of its duties
or reckless disregard by it of its obligations and duties under the Advisory
Contracts.
The Advisory Contracts were approved on July 10, 1996, by vote of the
Company's Board of Directors, including a majority of those directors who are
not parties to the Advisory Contracts or interested persons (as defined in the
1940 Act) of such parties. The Advisory Contracts were approved by each Fund's
initial shareholder. Each Advisory Contract is terminable by vote of the
Company's Board of Directors or by the holders of a majority of the outstanding
voting securities of the relevant Fund, at any time without penalty, on 60 days'
written notice to BEA Associates. Each of the Advisory Contracts may also be
terminated by BEA Associates on 60 days' written notice to the Company. Each of
the Advisory Contracts terminates automatically in the event of assignment
thereof.
CUSTODIAN AND TRANSFER AGENCY AGREEMENTS. Brown Brothers Harriman &
Co. ("BBH") acts as the custodian for the Funds and also acts as the custodian
for the Funds' foreign securities pursuant to a Custodian Agreement (the
"Custodian Agreement"). Under the Custodian Agreement, BBH (a) maintains a
separate account or accounts in the name of each Fund, (b) holds and transfers
portfolio securities on account of each Fund, (c) accepts receipts and makes
disbursements of money on behalf of each Fund, (d) collects and receives all
income and other payments and distributions on account of each Fund's portfolio
securities, and (e) makes periodic reports to the Company's Board of Directors
concerning each Fund's operations. BBH is authorized to select one or more
banks or trust companies to serve as sub-custodian on behalf of the Company,
provided that BBH remains responsible for the performance of all its duties
under the Custodian Agreement and holds the Company harmless from
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the negligent acts and omissions of any sub-custodian. For its services to the
Company under the Custodian Agreement, BBH receives a fee which is calculated
based upon each Fund's average daily gross assets, exclusive of transaction
charges and out-of-pocket expenses, which are also charged to the Company.
State Street Bank and Trust Company ("State Street") serves as
transfer agent for the Funds. It has delegated to Boston Financial Data
Services, Inc. ("BFDS"), a 50% owned subsidiary, responsibility for most
transfer agent servicing functions. State Street as the transfer and dividend
disbursing agent for the Advisor Classes pursuant to a Transfer Agency Agreement
(the "Transfer Agency Agreement"), under which it (a) issues and redeems shares
of each of the Advisor Classes, (b) addresses and mails all communications by
each Fund to record owners of shares of each such Class, including reports to
shareholders, dividend and distribution notices and proxy materials for its
meetings of shareholders, (c) maintains shareholder accounts and, if requested,
sub-accounts and (d) makes periodic reports to the Company's Board of Directors
concerning the operations of each Advisor Class. For its services to the
Company under the Transfer Agency Agreement, State Street receives a fee on a
per transaction basis.
ADMINISTRATION AGREEMENTS. PFPC Inc., an indirect, wholly-owned
subsidiary of PNC Bank Corp., serves as administrator to the Funds pursuant to
an Administration and Accounting Services Agreement dated July 10, 1996 (the
"PFPC Administration Agreement"). PFPC has agreed to calculate the Funds' net
asset values, provide all accounting services for the Funds, and assist in
related aspects of the Funds' operations. The PFPC Administration Agreement
provides that PFPC shall not be liable for any error of judgment or mistake of
law or any loss suffered by the Company or the Funds in connection with the
performance of the agreement, except a loss resulting from willful misfeasance,
bad faith or negligence, or reckless disregard of its duties and obligations
thereunder. In consideration for providing services pursuant to the PFPC
Administration Agreement, PFPC receives a fee calculated at an annual rate of
.125% of each Fund's average daily net assets, with a minimum annual fee of
$75,000.
BEA serves as co-administrator to the Funds pursuant to Co-
Administration Agreements dated July 10, 1996 (the "BEA Co-Administration
Agreements"). BEA has agreed to provide shareholder liaison services to the
Funds including responding to shareholder inquiries and providing information on
shareholder accounts. The BEA Co-Administration Agreements provide that BEA
shall not be liable for any error of judgment or mistake of law or any loss
suffered by the Company or the Funds in connection with the performance of the
agreement, except a loss resulting from willful misfeasance, bad faith or
negligence, or reckless
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disregard of its duties and obligations thereunder. In consideration for
providing services pursuant to the BEA Co-Administration Agreements, BEA
receives a fee calculated at an annual rate of .05% of each of the Funds'
average daily net assets for assets up to $125 million and .10% thereafter.
DISTRIBUTION AND SHAREHOLDER SERVICING
The Funds have each entered into Distribution Agreements with
Counsellors Securities, Inc. ("Counsellors Securities") pursuant to their
Distribution Plans (the "12b-1 Plans") under Rule 12b-1 of the 1940 Act. In
consideration for Services (as defined below), the Distribution Agreements
provide that the Funds will each pay Counsellors Securities a fee calculated at
an annual rate of .25% of the respective average daily net assets of the Advisor
Shares of the Funds. Services performed by Counsellors Securities include (a)
the sale of the Advisor Shares, as set forth in the 12b-1 Plans ("Selling
Services"), (b) ongoing servicing and/or maintenance of the accounts of
shareholders of the Funds, as set forth in the 12b-1 Plans ("Shareholder
Services"), and (c) sub-transfer agency services, subaccounting services or
administrative services, as set forth in the 12b-1 Plans ("Administrative
Services" and collectively with Selling Services and Administrative Services,
"Services") including, without limitation, (i) payments reflecting an allocation
of overhead and other office expenses of Counsellors Securities related to
providing Services; (ii) payments made to, and reimbursement of expenses of,
persons who provide support services in connection with the distribution of the
Advisor Shares including, but not limited to, office space and equipment,
telephone facilities, answering routine inquiries regarding the Funds, and
providing any other shareholder Services; (iii) payments made to compensate
selected dealers or other authorized persons for providing any Services; (iv)
costs relating to the formulation and implementation of marketing and
promotional activities, including, but not limited to, direct mail promotions
and television, radio, newspaper, magazine and other mass media advertising, and
related travel and entertainment expenses; (v) costs of printing and
distributing prospectuses, statements of additional information and reports of
the Funds to prospective shareholders of the Funds; and (vi) costs involved in
obtaining whatever information, analyses and reports with respect to marketing
and promotional activities that Counsellors Securities may, from time to time,
deem advisable.
PORTFOLIO TRANSACTIONS
Subject to policies established by the Board of Directors, BEA
Associates is responsible for the execution of portfolio transactions and the
allocation of brokerage transactions for the Funds. In executing portfolio
transactions,
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BEA Associates seeks to obtain the best net results for a Fund, taking into
account such factors as the price (including the applicable brokerage commission
or dealer spread), size of the order, difficulty of execution and operational
facilities of the firm involved. While BEA Associates generally seeks
reasonably competitive commission rates, payment of the lowest commission or
spread is not necessarily consistent with obtaining the best results in
particular transactions.
Portfolio transactions for the Funds may be effected on domestic or
foreign securities exchanges. In transactions for securities not actively
traded on a domestic or foreign securities exchange, a Fund will deal directly
with the dealers who make a market in the securities involved, except in those
circumstances where better prices and execution are available elsewhere. Such
dealers usually are acting as principal for their own account. On occasion,
securities may be purchased directly from the issuer. Such portfolio securities
are generally traded on a net basis and do not normally involve brokerage
commissions. Securities firms may receive brokerage commissions on certain
portfolio transactions, including options, futures and options on futures
transactions and the purchase and sale of underlying securities upon exercise of
options. The Funds have no obligation to deal with any broker in the execution
of transactions in portfolio securities. The Funds may use affiliates of Credit
Suisse in connection with the purchase or sale of securities in accordance with
rules or exemptive orders adopted by the Securities and Exchange Commission (the
"SEC") when BEA believes that the charge for the transaction does not exceed
usual and customary levels.
Commission rates for brokerage transactions on foreign stock exchanges
are generally fixed. The reasonableness of any negotiated commission paid by
the Funds will be evaluated on the basis of the difficulty involved in
execution, the time taken to conclude the transaction, the extent of the
broker's commitment, if any, of its own capital and the amount involved in the
transaction. It should be noted that commission rates in U.S. Markets are
negotiated.
In the case of over-the-counter issues, there is generally no stated
commission, but the price usually includes an undisclosed commission or markup,
and the Fund will normally deal with the principal market makers unless it can
obtain better terms elsewhere.
No Fund has any obligation to deal with any broker or group of brokers
in the execution of portfolio transactions. BEA Associates may, consistent with
the interests of a Fund and subject to the approval of the Board of Directors,
select brokers on the basis of the research, statistical and pricing services
they provide to a Fund and other clients of BEA Associates.
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Information and research received from such brokers will be in addition to, and
not in lieu of, the services required to be performed by BEA Associates under
his respective contracts. A commission paid to such brokers may be higher than
that which another qualified broker would have charged for effecting the same
transaction, provided that BEA Associates, as applicable, determines in good
faith that such commission is reasonable in terms either of the transaction or
the overall responsibility of BEA Associates to a Fund and its other clients and
that the total commissions paid by a Fund will be reasonable in relation to the
benefits to a Fund over the long-term.
Corporate debt and U.S. Government securities are generally traded on
the over-the-counter market on a "net" basis without a stated commission,
through dealers acting for their own account and not as brokers. The Funds will
primarily engage in transactions with these dealers or deal directly with the
issuer unless a better price or execution could be obtained by using a broker.
Prices paid to a dealer in debt securities will generally include a "spread,"
which is the difference between the prices at which the dealer is willing to
purchase and sell the specific security at the time, and includes the dealer's
normal profit.
BEA Associates may seek to obtain an undertaking from issuers of
commercial paper or dealers selling commercial paper to consider the repurchase
of such securities from a Fund prior to their maturity at their original cost
plus interest (sometimes adjusted to reflect the actual maturity of the
securities), if it believes that a Fund's anticipated need for liquidity makes
such action desirable. Any such repurchase prior to maturity reduces the
possibility that a Fund would incur a capital loss in liquidating commercial
paper (for which there is no established market), especially if interest rates
have risen since acquisition of the particular commercial paper.
Investment decisions for each Fund and for other investment accounts
managed by BEA Associates are made independently of each other in the light of
differing conditions. However, the same investment decision may be made for two
or more of such accounts. In such cases, simultaneous transactions are
inevitable. Purchases or sales are then averaged as to price and allocated as
to amount according to a formula deemed equitable to each such account. While
in some cases this practice could have a detrimental effect upon the price or
value of the security as far as a Fund is concerned, in other cases it is
believed to be beneficial to a Fund. A Fund will not purchase securities during
the existence of any underwriting or selling group relating to such security of
which BEA Associates or any affiliated person (as defined in the 1940 Act)
thereof is a member except pursuant to procedures adopted by the Company's Board
of Directors pursuant to Rule 10f-3 under the 1940 Act. Among other things,
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these procedures, which will be reviewed by the Company's directors as deemed
necessary and appropriate, require that the commission paid in connection with
such a purchase be reasonable and fair, that the purchase be at not more than
the public offering price prior to the end of the first business day after the
date of the public offer, and that BEA Associates not participate in or benefit
from the sale to a Fund.
In no instance will portfolio securities be purchased from or sold to
the Distributor or BEA Associates or any affiliated person of the foregoing
entities except as permitted by SEC exemptive order or by applicable law.
During the year ended August 31, 1996, the BEA International Equity
Portfolio (Institutional Shares) paid $3,192,274.36 in brokerage commissions,
the BEA Emerging Markets Equity Portfolio (Institutional Shares) paid
$704,909.93 in brokerage commissions and no brokerage commissions were paid
during such period for the other Funds.
The BEA International Equity, the BEA Emerging Markets Equity, the BEA
Global Telecommunications and the BEA High Yield Funds expect that their annual
Fund turnover rate should not exceed 100% under normal market conditions. A
high rate of portfolio turnover involves correspondingly greater brokerage
commission expenses and other transaction costs, which must be borne directly by
a Fund. Federal income tax laws may restrict the extent to which a Fund may
engage in short term trading of securities. See "Taxes." Each of the Funds
anticipates that its annual portfolio turnover rate will vary from year to year.
The portfolio turnover rate is calculated by dividing the lesser of a Fund's
annual sales or purchases of portfolio securities (exclusive of purchases or
sales of securities whose maturities at the time of acquisition were one year or
less) by the monthly average value of the securities in the Fund during the
year.
The Funds have the benefit of an exemptive order issued by the SEC
under the 1940 Act authorizing the Funds and other investment companies advised
by BEA to acquire jointly securities issued in private placements, subject to
the terms and conditions of the order.
PURCHASE AND REDEMPTION INFORMATION
Advisor Shares of the Funds are offered and sold on a continuous basis
by the Distributor, acting as agent for the Company. An illustration of the
computation of the public offering price per share of the Advisor Shares of the
Funds, based on the value of total net assets and total number of Advisor Shares
outstanding as of February 28, 1997 would be as follows:
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<TABLE>
<CAPTION>
NET ASSET VALUE
Global
International Emerging Markets High Yield Telecommunications
Equity Fund Equity Fund Fund Fund
------------- ---------------- ---------- ------------------
<S> <C> <C> <C> <C>
Net Assets . . . . . . . $ 5,265 $ 5,480 $ 83,831 $ 491,493
Number of Shares
Outstanding. . . . . . 254 266 5,022 30,375
Net Asset Value
Per Share. . . . . . . $ 20.73 $ 20.60 $ 16.69 $ 16.18
Sales Charge . . . . . . N/A N/A N/A N/A
Offering Price
to Public. . . . . . . $ 20.73 $ 20.60 $ 16.69 $ 16.18
</TABLE>
The Company reserves 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 Company 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. Investors
will also be required to bear certain transaction costs associated with
redemptions-in-kind. The Company has elected, however, to be governed by Rule
18f-1 under the Investment Company Act so that a Fund is obligated to redeem its
shares solely in cash up to the lesser of $250,000 or 1% of its net asset value
during any 90-day period for any one shareholder of a Fund.
Under the 1940 Act, a Fund may suspend the right to redemption or
postpone the date of payment upon redemption for any period during which the New
York Stock Exchange, Inc. (the "NYSE") is closed (other than customary weekend
and holiday closings), or during which trading on said Exchange is restricted,
or during which (as determined by the SEC by rule or regulation) an emergency
exists as a result of which disposal or valuation of Fund securities is not
reasonably practicable, or for such other periods as the SEC may permit. (A
Fund may also suspend or postpone the recordation of the transfer of its shares
upon the occurrence of any of the foregoing conditions.)
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VALUATION OF SHARES
The net asset value per share of each Fund is calculated separately as
of the close of regular trading of the NYSE on each Business Day. "Business
Day" means each weekday when the NYSE is open. Currently, the NYSE is closed on
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day and on the preceding Friday or
subsequent Monday when one of these holidays falls on a Saturday or Sunday,
respectively. Securities which are listed on stock exchanges, whether U.S. or
foreign are valued at the last sale price on the day the securities are valued
or, lacking any sales on such day, at the mean of the bid and asked prices
available prior to the valuation. Fund securities primarily traded in foreign
markets may be traded in such markets on days which are not Business Days.
Because net asset value per share of each Fund is determined only on Business
Days, the net asset value of shares of a Fund may be significantly affected on
days when an investor does not have access to the Fund. If on any Business Day
a foreign securities exchange or foreign market is closed, the securities traded
on such exchange or in such market will be valued at the market sale price
reported on the previous business day of such foreign exchange or market. In
cases where securities are traded on more than one exchange, the securities are
generally valued on the exchange designated by the Board of Directors or its
delegates as the primary market. Securities traded in the over-the-counter
market and listed on the National Association of Securities Dealers Automatic
Quotation System ("NASDAQ") are valued at the last trade price listed on the
NASDAQ at 4:00 p.m.; securities listed on NASDAQ for which there were no sales
on that day and other over-the-counter securities are valued at the mean of the
bid and asked prices available prior to valuation. Securities for which market
quotations are not readily available are valued at fair value as determined in
good faith by or under the direction of the Company'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. Any assets which are
denominated in a foreign currency are converted into U.S. dollars at the
prevailing market rates for purposes of calculating net asset value.
Foreign currency exchange rates are generally determined prior to the
close of the NYSE. Occasionally, events affecting the value of foreign
securities and such exchange rates occur between the time at which they are
determined and the close of the NYSE, which events will not be reflected in a
computation of the Fund's net asset value. If events materially affecting the
value of such securities or assets or currency exchange rates occurred during
such time period, the securities or assets would be valued at their fair value
as determined in good faith by or
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under the direction of the Board of Directors. The foreign currency exchange
transactions of a Fund conducted on a spot basis will be valued at the spot rate
for purchasing or selling currency prevailing on the foreign exchange market.
Under normal market conditions, this rate differs from the prevailing exchange
rate by an amount generally less than one-tenth of one percent due to the costs
of converting from one currency to another.
In determining the approximate market value of portfolio investments,
the Company may employ outside organizations, which may use a matrix or formula
method that takes into consideration market indices, matrices, yield curves and
other specific adjustments. This may result in the securities being valued at a
price different from the price that would have been determined had the matrix or
formula method not been used. All cash, receivables and current payables are
carried on the Company's books at their face value. Other assets, if any, are
valued at fair value as determined in good faith by the Company's Board of
Directors.
PERFORMANCE AND YIELD INFORMATION
TOTAL RETURN. For purposes of quoting and comparing the performance
of the Funds to that of other mutual funds and to stock or other relevant
indices in advertisements or in reports to shareholders, performance may be
stated in terms of total return. Under the rules of the Securities and Exchange
Commission, funds advertising performance must include total return quotes
calculated according to the following formula:
P(1 + T) n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years (1, 5 or 10)
ERV = ending redeemable value at the end of the 1, 5 or 10 year
periods (or fractional portion thereof) of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods.
Under the foregoing formula, the time periods used in advertising will
be based on rolling calendar quarters, updated to the last day of the most
recent quarter prior to submission of the advertisement for publication, and
will cover one, five and ten year periods or a shorter period dating from the
effectiveness of the Company's registration statement. In calculating the
ending redeemable value, the maximum sales load is deducted from the initial
$1,000 payment and all dividends and
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distributions by the Company are assumed to have been reinvested at net asset
value, as described in the Prospectus, on the reinvestment dates during the
period. Total return, or "T" in the formula above, is computed by finding the
average annual compounded rates of return over the 1, 5 and 10 year periods (or
fractional portion thereof) that would equate the initial amount invested to the
ending redeemable value. Any sales loads that might in the future be made
applicable at the time to reinvestments would be included as would any recurring
account charges that might be imposed by the Company.
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 formula set forth above in order to compare more accurately a
Fund's performance with other measures of investment return. For example, in
comparing a Fund's total return 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 appropriate, a Fund may calculate
its aggregate and/or average annual total return for the specified periods of
time by assuming the investment of $10,000 in Fund shares and assuming the
reinvestment of each dividend or other distribution at net asset value on the
reinvestment date. The Fund does not, for these purposes, deduct from the
initial value invested any amount representing sales charges. The Fund will,
however, disclose the maximum sales charge and will also disclose that the
performance data do not reflect sales charges and that inclusion of sales
charges would reduce the performance quoted. Such alternative total return
information will be given no greater prominence in such advertising than the
information prescribed under SEC rules, and all advertisements containing
performance data will include a legend disclosing that such performance data
represent past performance and that the investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
For the period beginning on November 1, 1996 (inception) and ended
February 28, 1997, the total return (not annualized) for the Advisor Shares of
the BEA International Equity, BEA Emerging Markets Equity and BEA High Yield
Funds was 6.73%, 14.31% and 12.42%, respectively. For the period beginning on
December 4, 1996 (inception) and ended February 28, 1997, the total return (not
annualized) for the Advisor Shares of the BEA Global Telecommunications Fund was
7.87%.
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YIELD. The BEA High Yield Fund may also advertise its yield. Under
the rules of the SEC, a Fund advertising yield must calculate yield using the
following formula:
6
YIELD = 2[(a-b + 1) - 1)
----
cd
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of
reimbursement).
c = the average daily number of shares
outstanding during the period that were
entitled to receive dividends.
d = the maximum offering price per share on the
last day of the period.
Under the foregoing formula, yield is computed by compounding semi-
annually, the net investment income per share earned during a 30-day period
divided by the maximum offering price per share on the last day of the period.
For the purpose of determining the interest earned (variable "a" in the formula)
on debt obligations that were purchased by a Fund at a discount or premium, the
formula generally calls for amortization of the discount or premium; the
amortization schedule will be adjusted monthly to reflect changes in the market
values of the debt obligations.
Yield may fluctuate daily and does not provide a basis for determining
future yields. Because the yields will fluctuate, they cannot be compared with
yields on savings account or other investment alternatives that provide an
agreed to or guaranteed fixed yield for a stated period of time. However, yield
information may be useful to an investor considering temporary investments in
money market instruments. In comparing the yield of one money market fund to
another, consideration should be given to each fund's investment policies,
including the types of investments made, lengths of maturities of the portfolio
securities, the method used by each fund to compute the yield (methods may
differ) and whether there are any special account charges which may reduce the
effective yield.
The yields on certain obligations are dependent on a variety of
factors, including general money market conditions, conditions in the particular
market for the obligation, the financial condition of the issuer, the size of
the offering, the maturity of the obligation and the ratings of the issue. The
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ratings of Moody's Investors Service and Standard & Poor's Corporation represent
their respective opinions as to the quality of the obligations they undertake to
rate. Ratings, however, are general and are not absolute standards of quality.
Consequently, obligations with the same rating, maturity and interest rate may
have different market prices. In addition, subsequent to its purchase by a
Fund, an issue may cease to be rated or may have its rating reduced below the
minimum required for purchase. In such an event, the Fund's investment adviser
will consider whether the Fund should continue to hold the obligation.
For the period ended February 28, 1997, the 30-day yield for Advisor
Shares of the BEA High Yield Fund was 7.56%.
TAXES
GENERAL TAX CONSEQUENCES TO COMPANY AND ITS SHAREHOLDERS. The
following is only a summary of certain additional tax considerations generally
affecting the Funds and their shareholders that are not described in the
Company's Prospectus. No attempt is made to present a detailed explanation of
the tax treatment of the Funds or their shareholders, and the discussion in this
Statement of Additional Information and in the Prospectus is not intended as a
substitute for careful tax planning. Investors are urged to consult their tax
advisers with specific reference to their own tax situation.
Each Fund has elected to be taxed as a regulated investment company
under Part I of Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). As a regulated investment company, each Fund is exempt from
federal income tax on its net investment income and realized capital gains which
it distributes to shareholders, provided that it (a) distributes an amount equal
to the sum of (i) at least 90% of its investment company taxable income (net
taxable investment income and the excess of net short-term capital gain over net
long-term capital loss, if any, for the year) and (ii) at least 90% of its net
tax-exempt interest income, if any, for the year (the "Distribution
Requirement"), and (b) satisfies certain other requirements of the Code that are
described below. Distributions of investment company taxable income and net
tax-exempt interest income made during the taxable year or, under specified
circumstances, within twelve months after the close of the taxable year will
satisfy the Distribution Requirement.
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In addition to satisfaction of the Distribution Requirement, each Fund
must derive at least 90% of its gross income from dividends, interest, certain
payments with respect to securities loans and gains from the sale or other
disposition of stock or securities or foreign currencies, or from other income
derived with respect to its business of investing in such stock, securities, or
currencies (the "Income Requirement") and derive less than 30% of its gross
income from the sale or other disposition of any of the following investments,
if such investments were held for less than three months: (a) stock or
securities (as defined in Section 2(a)(36) of the 1940 Act); (b) options,
futures, or forward contracts (other than options, futures or forward contracts
on foreign currencies); and (c) foreign currencies (or options, futures or
forward contracts on foreign currencies) but only if such currencies (or
options, futures or forward contracts) are not directly related to the regulated
investment company's principal business of investing in stock or securities (or
in options and futures with respect to stocks or securities) (the "Short-Short
Gain Test"). Interest (including accrued original issue discount, "accrued
market discount") received by a Fund at maturity or on disposition of a security
held for less than three months will not be treated as gross income derived from
the sale or other disposition of such security for purposes of the Short-Short
Gain Test. However, any other income which is attributable to realized market
appreciation will be treated as gross income from the sale or other disposition
of securities for this purpose.
Future Treasury regulations may provide that currency gains that are
not "directly related" to a Fund's principal business of investing in stock or
securities (or in options or futures with respect to stock or securities) will
not satisfy the Income Requirement. Income derived by a regulated investment
company from a partnership or trust (including a foreign entity that is
classified as a partnership or trust for U.S. federal income tax purposes) will
satisfy the Income Requirement only to the extent such income is attributable to
items of income of the partnership or trust that would satisfy the Income
Requirement if they were realized by a regulated investment company in the same
manner as realized by the partnership or trust.
In addition to the foregoing requirements, at the close of each
quarter of its taxable year, at least 50% of the value of each Fund's assets
must consist of cash and cash items, U.S. Government securities, securities of
other regulated investment companies, and securities of other issuers (as to
which the Fund has not invested more than 5% of the value of its total assets in
securities of such issuer and as to which the Fund does not hold more than 10%
of the outstanding voting securities of such issuer), and no more than 25% of
the value of each Fund's total assets may be invested in the securities of any
one issuer (other than U.S. Government securities and securities of other
regulated
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investment companies), or in two or more issuers which such Fund controls and
which are engaged in the same or similar trades or businesses (the "Asset
Diversification Requirement").
The Internal Revenue Service has taken the position, in informal
rulings issued to other taxpayers, that the issuer of a repurchase agreement is
the bank or dealer from which securities are purchased. A Fund will not enter
into repurchase agreements with any one bank or dealer if entering into such
agreements would, under the informal position expressed by the Internal Revenue
Service, cause it to fail to satisfy the Asset Diversification Requirement.
Distributions of investment company taxable income will be taxable
(subject to the possible allowance of the dividend received deduction described
below) to shareholders as ordinary income, regardless of whether such
distributions are paid in cash or are reinvested in shares. Shareholders
receiving any distribution from the Company in the form of additional shares
will be treated as receiving a taxable distribution in an amount equal to the
fair market value of the shares received, determined as of the reinvestment
date.
Each Fund intends to distribute to shareholders its excess of net
long-term capital gain over net short-term capital loss ("net capital gain"), if
any, for each taxable year. Such gain is distributed as a capital gain dividend
and is taxable to shareholders as long-term capital gain, regardless of the
length of time the shareholder has held his shares, whether such gain was
recognized by the Fund prior to the date on which a shareholder acquired shares
of the Fund and whether the distribution was paid in cash or reinvested in
shares. The aggregate amount of distributions designated by any Fund as capital
gain dividends may not exceed the net capital gain of such Fund for any taxable
year, determined by excluding any net long-term capital loss attributable to
transactions occurring after October 31 of such year and by treating any such
loss as if it arose on the first day of the following taxable year. Such
distributions will be designated as capital gain dividends in a written notice
mailed by the Company to shareholders not later than 60 days after the close of
each Fund's respective taxable year.
In the case of corporate shareholders, distributions (other than
capital gain dividends) of a Fund for any taxable year will qualify for the
dividends received deduction, only to the extent of the gross amount of
"qualifying dividends" received by such Fund for the year. Generally, a
dividend will be treated as a "qualifying dividend" only if it has been received
from a domestic corporation. However, if a Fund owns at least 10 percent of the
stock (by vote and value) of certain foreign corporations with U.S. source
income, then a portion of
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the dividends paid by such foreign corporations may constitute "qualifying
dividends." A dividend received by a taxpayer will not be treated as a
"qualifying dividend" if (1) it has been received with respect to any share of
stock that the taxpayer has held for 45 days (90 days in the case of certain
preferred stock) or less (excluding any day more than 45 days (or 90 days in the
case of certain preferred stock) after the date on which the stock becomes ex-
dividend), or (2) to the extent that the taxpayer is under an obligation
(pursuant to a short sale or otherwise) to make related payments with respect to
positions in substantially similar or related property. The Company will
designate the portion, if any, of the distribution made by a Fund that qualifies
for the dividends received deduction in a written notice mailed by the Company
to shareholders not later than 60 days after the close of the Fund's taxable
year.
Ordinary income of individuals will be taxable at a maximum
marginal rate of 39.6%. However, due to the phase-out of personal exemptions
and the enactment of limitations on itemized deductions for individual
taxpayers whose adjusted gross income exceeds certain threshold amounts that
depend on the taxpayer's filing status, the actual maximum effective marginal
rate may be significantly greater. By contrast, the maximum rate on the net
capital gain of individuals, trusts and estates remains 28%. Capital gains
and ordinary income of corporate taxpayers will continue to be taxed at a
nominal maximum rate of 35%. Investors should be aware that any loss realized
upon the sale, exchange or redemption of shares held for six months or less
will be treated as a long-term capital loss to the extent any capital gain
dividends have been paid with respect to such shares.
Exempt interest dividends may be subject to alternative minimum tax
(currently imposed at the rate of 26-28% in the case of non-corporate
taxpayers and at the rate of 20% in the case of corporate taxpayers), in two
circumstances. First, exempt interest dividends derived from "private
activity" bonds issued after August 7, 1986, will generally constitute an item
of tax preference for both corporate and non-corporate taxpayers. Second,
exempt interest dividends derived from all bonds, regardless of the date of
issue, must be taken into account by corporate taxpayers in determining
certain adjustments for alternative minimum tax purposes. In addition,
exempt interest dividends paid to corporate taxpayers may be subject to tax
under the environmental tax, which is imposed at the rate of 0.12% on the
excess of the modified alternative minimum taxable income over $2 million.
Receipt of exempt interest dividends may result in collateral federal income
tax consequences to certain other taxpayers, including financial
institutions, property and casualty insurance companies, individual
recipients of Social Security or Railroad Retirement benefits, and foreign
corporations engaged in trade or business in the United States. Prospective
investors should consult their own tax advisors as to such circumstances.
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If for any taxable year any Fund does not qualify as a regulated
investment company, all of its taxable income will be subject to tax at regular
corporate rates without any deduction for distributions to shareholders, and all
distributions will be taxable as ordinary dividends to the extent of such Fund's
current and accumulated earning and profits. Such distributions will be
eligible for the dividends received deduction in the case of corporate
shareholders. Investors should be aware that any loss realized on a sale of
shares of a Fund will be disallowed to the extent an investor repurchases shares
of the same Fund within a period of 61 days (beginning 30 days before and ending
30 days after the day of disposition of the shares). Dividends paid by a Fund
in the form of shares within the 61-day period would be treated as a purchase
for this purpose.
A shareholder will recognize gain or loss upon a redemption of shares
or an exchange of shares of a Fund for shares of another Fund upon exercise of
the exchange privilege, to the extent of any difference between the price at
which the shares are redeemed or exchanged and the price or prices at which the
shares were originally purchased for cash.
The Code imposes a non-deductible 4% excise tax on regulated
investment companies that do not distribute with respect to each calendar year
an amount equal to 98% of their ordinary income for the calendar year plus 98%
of their capital gain net income for the one-year period ending on October 31 of
such calendar year. The balance of such income must be
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distributed during the next calendar year. For the foregoing purposes, a
company is treated as having distributed any amount on which it is subject to
income tax for any taxable year ending in such calendar year. Because each Fund
intends to distribute all of its taxable income currently, no Fund anticipates
incurring any liability for this excise tax. However, investors should note
that a Fund may in certain circumstances be required to liquidate investments in
order to make sufficient distributions to avoid excise tax liability.
The Company will be required in certain cases to withhold and remit to
the United States Treasury 31% of dividends paid to any shareholder (1) who has
provided either an incorrect tax identification number or no number at all, (2)
who is subject to backup withholding by the Internal Revenue Service for failure
to report the receipt of interest or dividend income properly, or (3) who has
failed to certify to the Company that he is not subject to backup withholding or
that he is an "exempt recipient."
The foregoing general discussion of federal income tax consequences is
based on the Code and the regulations issued thereunder as in effect on the date
of this Statement of Additional Information. Future legislative or
administrative changes or court decisions may significantly change the
conclusions expressed herein, and any such changes or decisions may have a
retroactive effect with respect to the transactions contemplated herein.
Although each Fund expects to qualify as a "regulated investment
company" and to be relieved of all or substantially all federal income taxes,
depending upon the extent of its activities in states and localities in which
its offices are maintained, in which its agents or independent contractors are
located or in which it is otherwise deemed to be conducting business, each Fund
may be subject to the tax laws of such states or localities.
Certain states exempt from state income taxation dividends paid by a
regulated investment company that are derived from interest on U.S. Government
obligations. Each Fund will accordingly inform its shareholders annually of the
percentage, if any, of its ordinary dividends that is derived from interest on
U.S. Government obligations. Shareholders should consult with their tax
advisers as to the availability and extent of any applicable state income tax
exemption.
SPECIAL TAX CONSIDERATIONS. The following discussion relates to the
particular federal income tax consequences of the investment policies of the
Funds. The ability of the Funds to engage in options, short sale and futures
activities will be somewhat limited by the requirements for their continued
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qualification as regulated investment companies under the Code, in particular
the Distribution Requirement, the Short-Short Gain Test and the Asset
Diversification Requirement.
STRADDLES. The options transactions that the Funds enter into may
result in "straddles" for federal income tax purposes. The straddle rules of
the Code may affect the character of gains and losses realized by the Funds. In
addition, losses realized by the Funds on positions that are part of a straddle
may be deferred under the straddle rules, rather than being taken into account
in calculating the investment company taxable income and net capital gain of the
Funds for the taxable year in which such losses are realized. Losses realized
prior to October 31 of any year may be similarly deferred under the straddle
rules in determining the "required distribution" that the Funds must make in
order to avoid federal excise tax. Furthermore, in determining their investment
company taxable income and ordinary income, the Funds may be required to
capitalize, rather than deduct currently, any interest expense on indebtedness
incurred or continued to purchase or carry any positions that are part of a
straddle. The tax consequences to the Funds of holding straddle positions may
be further affected by various elections provided under the Code and Treasury
regulations, but at the present time the Funds are uncertain which (if any) of
these elections they will make.
Because only a few regulations implementing the straddle rules have
been promulgated by the U.S. Treasury, the tax consequences to the Funds of
engaging in options transactions are not entirely clear. Nevertheless, it is
evident that application of the straddle rules may substantially increase or
decrease the amount which must be distributed to shareholders in satisfaction of
the Distribution Requirement (or to avoid federal excise tax liability) for any
taxable year in comparison to a fund that did not engage in options
transactions. For purposes of the Short-Short Gain Test, current Treasury
regulations provide that (except to the extent that the short sale rules
discussed below would otherwise apply) the straddle rules will have no effect on
the holding period of any straddle position. However, the U.S. Treasury has
announced that it is continuing to study the application of the straddle rules
for this purpose.
OPTIONS AND SECTION 1256 CONTRACTS. The writer of a covered put or
call option generally does not recognize income upon receipt of the option
premium. If the option expires unexercised or is closed on an exchange, the
writer generally recognizes short-term capital gain. If the option is
exercised, the premium is included in the consideration received by the writer
in determining the capital gain or loss recognized in the resultant sale.
However, certain options transactions that the Funds enter into, as well as
futures transactions and
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transactions in forward foreign currency contracts that are traded in the
interbank market entered into by the Funds, will be subject to special tax
treatment as "Section 1256 contracts." Section 1256 contracts are treated as if
they are sold for their fair market value on the last business day of the
taxable year (i.e., marked-to-market), regardless of whether a taxpayer's
obligations (or rights) under such contracts have terminated (by delivery,
exercise, entering into a closing transaction or otherwise) as of such date.
Any gain or loss recognized as a consequence of the year-end mark-to-market
of Section 1256 contracts is combined (after application of the straddle rules
that are described above) with any other gain or loss that was previously
recognized upon the termination of Section 1256 contracts during that taxable
year. The net amount of such gain or loss for the entire taxable year is
generally treated as 60% long-term capital gain or loss and 40% short-term
capital gain or loss, except in the case of marked-to-market forward foreign
currency contracts for which such gain or loss is treated as ordinary income or
loss. Such short-term capital gain (and, in the case of marked-to-market
forward foreign currency contracts, such ordinary income) would be included in
determining the investment company taxable income of the relevant Fund for
purposes of the Distribution Requirement, even if it were wholly attributable to
the year-end mark-to-market of Section 1256 contracts that the relevant Fund
continued to hold. Investors should also note that Section 1256 contracts will
be treated as having been sold on October 31 in calculating the "required
distribution" that a Fund must make to avoid federal excise tax liability.
Each of the Funds may elect not to have the year-end mark-to-market
rule apply to Section 1256 contracts that are part of a "mixed straddle" with
other investments of such Fund that are not Section 1256 contracts (the "Mixed
Straddle Election"). It is unclear under present law how certain gains that the
Funds may derive from trading in Section 1256 contracts for which a Mixed
Straddle Election is not made will be treated for purposes of the Short-Short
Gain Test. The Funds may seek a ruling from the Internal Revenue Service in
order to resolve this issue.
FOREIGN CURRENCY TRANSACTIONS. In general, gains from "foreign
currencies" and from foreign currency options, foreign currency futures and
forward foreign exchange contracts relating to investments in stock, securities
or foreign currencies will be qualifying income for purposes of determining
whether the Fund qualifies as a RIC. It is currently unclear, however, who will
be treated as the issuer of a foreign currency instrument or how foreign
currency options, futures or forward foreign currency contracts will be valued
for purposes of the Asset Diversification Requirement. A Fund may request a
private letter
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ruling from the Internal Revenue Service for guidance on some or all of these
issues.
Under Code Section 988, special rules are provided for certain
transactions in a foreign currency other than the taxpayer's functional currency
(I.E., unless certain special rules apply, currencies other than the U.S.
dollar). In general, foreign currency gains or losses from certain forward
contracts, from futures contracts that are not "regulated futures contracts",
and from unlisted options will be treated as ordinary income or loss. In
certain circumstances where the transaction is not undertaken as part of a
straddle, a Fund may elect capital gain or loss treatment for such transactions.
Alternatively, a Fund may elect ordinary income or loss treatment for
transactions in futures contracts and options on foreign currency that would
otherwise produce capital gain or loss. In general, gains or losses from a
foreign currency transaction subject to Code Section 988 will increase or
decrease the amount of the Fund's investment company taxable income available to
be distributed to shareholders as ordinary income, rather than increasing or
decreasing the amount of the Fund's net capital gain. Additionally, if losses
from a foreign currency transaction subject to Code Section 988 exceed other
investment company taxable income during a taxable year, a Fund will not be able
to make any ordinary dividend distributions, and any distributions made before
the losses were realized but in the same taxable year would be recharacterized
as a return of capital to shareholders, thereby reducing each shareholder's
basis in his Shares.
PASSIVE FOREIGN INVESTMENT COMPANIES. If a Fund acquires shares in
certain foreign investment entities, called "passive foreign investment
companies" ("PFIC"), such Fund may be subject to "deferred" federal income tax
on a portion of any "excess distribution" received with respect to such shares
or on a portion of any gain recognized upon a disposition of such shares,
notwithstanding the distribution of such income to the shareholders of such
Fund. Additional charges in the nature of interest may also be imposed on a
Fund in respect of such deferred taxes. However, in lieu of sustaining the
foregoing tax consequences, a Fund may elect to have its investment in any PFIC
taxed as an investment in a "qualified electing fund" ("QEF"). A Fund making a
QEF election would be required to include in its income each year a ratable
portion, whether or not distributed, of the ordinary earnings and net capital
gain of the QEF. Any such QEF inclusions would have to be taken into account by
a Fund for purposes of satisfying the Distribution Requirement and the excise
tax distribution requirement.
The Internal Revenue Service has proposed regulations that would
permit a Fund to elect (in lieu of paying deferred tax or making a QEF election)
to mark-to-market annually any PFIC shares that it owned and to include any
gains (but not losses)
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that it was deemed to realize as ordinary income. A Fund generally would not be
subject to deferred federal income tax on any gains that it was deemed to
realize as a consequence of making a mark-to-market election, but such gains
would be taken into account by the Fund for purposes of satisfying the
Distribution Requirement and the excise tax distribution requirement. The
proposed regulations would generally apply only prospectively, to taxable years
ending after their promulgation as final regulations.
SHORT-SHORT GAIN TEST. Because of the Short-Short Gain Test, the
Funds may have to limit the sale of appreciated (but not depreciated) securities
that they have held for less than three months. The short sale of (including
for this purpose the acquisition of a put option on) (1) securities held on the
date of the short sale or acquired after the short sale and on or before the
date of closing thereof or (2) securities which are "substantially identical" to
securities held on the date of the short sale or acquired after the short sale
and on or before the date of the closing thereof may reduce the holding period
of such securities for purposes of the Short-Short Gain Test.
Any increase in value of a position that is part of a "designated
hedge" will be offset by any decrease in value (whether realized or not) of the
offsetting hedging position during the period of such hedge for purposes of the
Short-Short Gain Test. Thus, only the net gain, if any, from the designated
hedge will be included in gross income for purposes of the Short-Short Gain
Test. Each of the Funds anticipates engaging in hedging transactions that
qualify as designated hedges. However, because of the failure of the U.S.
Treasury to promulgate regulations as authorized by the Code, it is not clear at
the present time whether this treatment will be available to all of the Funds'
hedging transactions. To the extent the Funds' transactions do not qualify as
designated hedges, the Funds, investments in short sales, options or other
transactions may be limited.
ASSET DIVERSIFICATION REQUIREMENT. For purposes of the Asset
Diversification Requirement, the issuer of a call option on a security
(including an option written on an exchange) will be deemed to be the issuer of
the underlying security. The Internal Revenue Service has informally ruled,
however, that a call option that is written by a fund need not be counted for
purposes of the Asset Diversification Requirement where the fund holds the
underlying security. However, the Internal Revenue Service has also informally
ruled that a put option written by a fund must be treated as a separate asset
and its value measured by "the value of the underlying security" for purposes of
the Asset Diversification Requirement, regardless (apparently) of whether it is
"covered" under the rules of the exchange. The Internal Revenue Service has not
explained whether in valuing a written
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put option in this manner a fund should use the current value of the underlying
security (its prospective future investment); the cash consideration that must
be paid by the fund if the put option is exercised (its liability); or some
other measure that would take into account the fund's unrealized profit or loss
in writing the option. Under the Code, a fund may not rely on informal rulings
of the Internal Revenue Service issued to other taxpayers. Consequently, a Fund
may find it necessary to seek a ruling from the Internal Revenue Service on this
issue or to curtail its writing of options in order to stay within the limits of
the Asset Diversification Requirement.
ADDITIONAL INFORMATION CONCERNING FUND SHARES
The Company has authorized capital of thirty billion shares of Common
Stock, $.001 par value per share, of which 13.67 billion shares are currently
classified as follows: 100 million shares are classified as Class A Common
Stock, 100 million shares are classified as Class B Common Stock, 100 million
shares are classified as Class C Common Stock, 100 million shares are classified
as Class D Common Stock, 500 million shares are classified as Class E Common
Stock (Money), 500 million shares are classified as Class F Common Stock
(Municipal Money), 500 million shares are classified as Class G Common Stock
(Money), 500 million shares are classified as Class E Common Stock (Municipal
money), 1 billion shares are classified as Class I Common Stock (Money), 500
million shares are classified as Class J Common Stock (Municipal Money), 500
million shares are classified as Class K Common Stock (U.S. Government Money),
1,500 million shares are classified as Class L Common Stock (Money), 500 million
shares are classified as Class M Common Stock (Municipal Money), 500 million
shares are classified as Class N Common Stock (U.S. Government Money), 500
million shares are classified as Class 0 Common Stock (N.Y. Money), 100 million
shares are classified as Class P Common Stock (Government), 100 million shares
are classified as Class Q Common Stock, 500 million shares are classified as
Class R Common Stock (Municipal Money), 500 million shares are classified as
Class S Common Stock (U.S. Government Money), 500 million shares are classified
as Class T Common Stock (International), 500 million shares are classified as
Class U Common Stock (High Yield), 500 million shares are classified as Class V
Common Stock (Emerging), 100 million shares are classified as Class W Common
Stock (Laffer/Canto Equity), 50 million shares are classified as Class X Common
Stock (U.S. Core Equity), 50 million shares are classified as Class Y Common
Stock (U.S. Core Fixed Income), 50 million shares are classified as Class Z
Common Stock (Strategic Global Fixed Income), 50 million shares are classified
as Class AA Common Stock (Municipal Bond), 50 million shares are classified as
Class BB Common Stock (BEA Balanced), 50 million shares are classified as Class
CC Common Stock (Short Duration),
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100 million shares are classified as Class DD Common Stock, 100 million shares
are classified as Class EE Common Stock, 50 million shares are classified as
Class FF Common Stock (n/i Micro Cap), So million shares are classified as Class
GG Common Stock (n/i Growth), 50 million shares are classified as Class HH
Common Stock (n/i Growth & Value), 100 million shares are classified as Class II
Common Stock (BEA Investor International), 100 million shares are classified as
Class JJ Common Stock (BEA Investor Emerging), 100 million shares are classified
as Class KK Common Stock (BEA Investor High Yield), 100 million shares are
classified as Class LL Common Stock (BEA Investor Global Telecom), 100 million
shares are classified as Class MM Common Stock (BEA Advisor International), 100
million shares are classified as Class NN Common Stock (BEA Advisor Emerging),
100 million shares are classified as Class 00 Common Stock (BEA Advisor High
Yield), 100 million shares are classified as Class PP Common Stock (BEA Advisor
Global Telecom), 100 million shares are classified as Class QQ Common Stock
(Boston Partners Institutional Large Cap), 100 million shares are classified as
Class RR Common Stock (Boston Partners Investor Large Cap), 100 million shares
are classified as Class SS Common Stock (Boston Partners Advisor Large Cap), 100
million shares are classified as Class TT Common Stock (Boston Partners Investor
Mid Cap), 100 million shares are classified as Class UU Common Stock (Boston
Partners Institutional Mid Cap), 700 million shares are classified as Class
Janney Montgomery Money Common Stock, 200 million shares are classified as Class
Janney Montgomery Municipal Money Common Stock, 500 million shares are
classified as Class Janney Montgomery Government Obligations Money Common Stock,
100 million shares are classified as Class Janney Montgomery N.Y. Municipal
Money Common Stock, 1 million shares are classified as Class Beta 1 Common Stock
(money), 1 million shares are classified as Class Beta 2 Common Stock (Municipal
Money), 1 million shares are classified as Class Beta 3 Common Stock (U.S.
Government Money), 1 million shares are classified as Class Beta 4 Common Stock
(N.Y. Money), 1 million shares are classified as Gamma 1 Common Stock (Money), 1
million shares are classified as Gamma 2 Common Stock (Municipal Money), 1
million shares are classified as Gamma 3 Common Stock (U.S. Government Money), 1
million shares are classified as Gamma 4 Common Stock (N.Y. Money), 1 million
shares are classified as Delta 1 Common Stock (Money), 1 million shares are
classified as Delta 2 Common Stock (Municipal Money), 1 million shares are
classified as Delta 3 Common Stock (U.S. Government Money), 1 million shares are
classified as Delta 4 Common Stock (N.Y. Money), 1 million shares are classified
as Epsilon 1 Common Stock (Money), 1 million shares are classified as Epsilon 2
Common Stock (Municipal Money), 1 million shares are classified as Epsilon 3
Common Stock (U.S. Government Money), 1 million shares are classified as Epsilon
4 Common Stock (N.Y. Money), 1 million shares are classified as Zeta I Common
Stock (Money), 1 million shares are classified as Zeta 2 Common Stock (Municipal
Money), 1 million
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shares are classified as Zeta 3 Common Stock (U.S. Government Money), 1 million
shares are classified as Zeta 4 Common Stock (N.Y. Money), 1 million shares are
classified as Eta 1 Common Stock (Money), 1 million shares are classified as Eta
2 Common Stock (Municipal Money), 1 million shares are classified as Eta 3
Common Stock (U.S. Government Money), 1 million shares are classified as Eta 4
Common Stock (N.Y. Money), 1 million shares are classified as Theta I Common
Stock (Money), 1 million shares are classified as Theta 2 Common Stock
(Municipal Money), 1 million shares are classified as Theta 3 Common Stock (U.S.
Government Money), and 1 million shares are classified as Theta 4 Common Stock
(N.Y. Money). Shares of the Class MM, NN, 00 and PP Common Stock constitute the
BEA Advisor classes. Under the Company's charter, the Board of Directors has
the power to classify or reclassify any unissued shares of Common Stock from
time to time.
The classes of Common Stock have been grouped into sixteen separate
"families": the RBB Family, the Cash Preservation Family, the Sansom Street
Family, the Bedford Family, the Bradford Family, the BEA Family, the Janney
Montgomery Scott Money Family, the n/i Family, Boston Partners Family, the Beta
Family, the Gamma Family, the Delta Family, the Epsilon Family, the Zeta Family,
the Eta Family and the Theta Family. The RBB Family represents interests in one
non-money market portfolio as well as the Money Market and Municipal Money
Market Portfolios; the Cash Preservation Family represents interests in the
Money Market and Municipal Money Market Portfolios; the Sansom Street Family
represents interests in the Money market, Municipal Money Market and Government
Obligations Money Market Portfolios; Bedford Family represents interests in the
Money Market, Municipal Money Market, Government Obligations Money Market and
New York Municipal Money Market Portfolios; the Bradford Family represents
interests in the Municipal Money Market and Government Obligations Money Market
Portfolios; the BEA Funds represents interests in ten non-money market
portfolios; the n/i Family represents interests in three non-money market
portfolios; the Boston Partners Family represents interests in two non-money
market portfolios; the Janney Montgomery Scott Family and the Beta, Gamma,
Delta, Epsilon, Zeta, Eta and Theta Families represent interests in the Money
Market, Municipal Money Market, Government Obligations Money Market and New York
Municipal Money Market Portfolios.
The Company does not currently intend to hold annual meetings of
shareholders except as required by the 1940 Act or other applicable law. The
Company's amended By-Laws provide that shareholders collectively owning at least
ten percent of the outstanding shares of all classes of Common Stock of the
Company have the right to call for a meeting of shareholders to consider the
removal of one or more directors. To the extent required by
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law, the Company will assist in shareholder communication in such matters.
As stated in the Prospectus, holders of shares of each class of the
Company will vote in the aggregate and not by class on all matters, except where
otherwise required by law. Further, shareholders of the Company will vote in
the aggregate and not by portfolio except as otherwise required by law or when
the Board of Directors determines that the matter to be voted upon affects only
the interests of the shareholders of a particular portfolio. Rule 18f-2 under
the Investment Company Act provides that any matter required to be submitted by
the provisions of such Act or applicable state law, or otherwise, to the holders
of the outstanding securities of an investment company such as the Company shall
not be deemed to have been effectively acted upon unless approved by the holders
of a majority of the outstanding shares of each portfolio affected by the
matter. Rule 18f-2 further provides that a portfolio shall be deemed to be
affected by a matter unless it is clear that the interests of each portfolio in
the matter are identical or that the matter does not affect any interest of the
Fund. Under the Rule, the approval of an investment advisory agreement or any
change in a fundamental investment policy would be effectively acted upon with
respect to a portfolio only if approved by the holders of a majority of the
outstanding voting securities of such portfolio. However, the Rule also
provides that the ratification of the selection of independent public
accountants, the approval of principal underwriting contracts and the election
of directors are not subject to the separate voting requirements and may be
effectively acted upon by shareholders of an investment company voting without
regard to portfolio.
Notwithstanding any provision of Maryland law requiring a greater vote
of shares of the Company's common stock (or of any class voting as a class) in
connection with any corporate action, unless otherwise provided by law, (for
example by Rule 18f-2 discusses above) or by the Company's Articles of
Incorporation, the Company may take or authorize such action upon the favorable
vote of the holders of more than 50% of all of the outstanding shares of Common
Stock voting without regard to class (or portfolio).
MISCELLANEOUS
COUNSEL. The law firm of Drinker Biddle & Reath LLP, Philadelphia
National Bank Building, 1345 Chestnut Street, Philadelphia, Pennsylvania 19107-
3496, serves as counsel to the Company.
-67-
<PAGE>
INDEPENDENT ACCOUNTANTS. Coopers & Lybrand L.L.P., 2400 Eleven Penn
Center, Philadelphia, Pennsylvania 19103, serves as the Company's independent
accountants.
CONTROL PERSONS. As of May 1, 1997, to the Company's knowledge, the
following named persons at the addresses shown below owned of record
approximately 5% or more of the total outstanding shares of the class of the
Company indicated below. See "Additional Information Concerning Fund Shares"
above. The Company does not know whether such persons also beneficially own
such shares.
PERCENT
PORTFOLIO NAME AND ADDRESS OWNED
--------- ---------------- -------
Cash Preservation Jewish Family and Children's Agency of 44.8
Money Market Portfolio Philadelphia
(Class G) Capital Campaign
Attn: S. Ramm
1610 Spruce Street
Philadelphia, PA 19103
Dominic & Barbara Pisciotta 19.8
and Successors in Trust
The Dominic & Barbara Pisciotta
Caring Trust
207 Woodmere Way
St. Charles, MO 63303
Cash Preservation Kenneth Farwell and 12.4
Municipal Money Market Valerie Farwell JTTEN
Portfolio 3854 Sullivan
(Class H) St. Louis, MO 63107
Gary L. Lange and 21.4
Susan D. Lange JTTEN
1354 Shady Knoll Court
Longwood, Fl 32750
Andrew Diederich and 6.8
Doris Diederich JTTEN
1003 Lindenman
Des Peres, MO 63131
Gwendolyn Haynes 5.8
2757 Geyer
St. Louis, MO 63104
-68-
<PAGE>
PERCENT
PORTFOLIO NAME AND ADDRESS OWNED
--------- ---------------- -------
Savannah Thomas Trust 6.3
200 Madison Ave.
Rock Hill, MO 63119
Ralph R. Moreno, Trustee 5.5
Ralph R. Moreno Caring Trust
418 N. Concord Street
Los Angeles, CA 90063
Emil R. Hunter and Mary J. Hunter JTTEN 5.2
428 W. Jefferson
Kirkwood,MO 63122
Sansom Street Money Wasner & Co. 14.9
Market Portfolio FAO PaineWebber and Managed Assets
(Class I) Sundry Holdings
Attn: Joe Domizio
200 Stevens Drive
Lester, PA 19113
Saxon and Co. 77.4
FBO PaineWebber
P.O. Box 7780 1888
Philadelphia, PA 19182
Robertson Stephens & Co. 7.7
FBO Exclusive Benefit Investors
c/o Eric Moore
555 California Street /#2600
San Francisco, CA 94104
Bradford Municipal J.C. Bradford & Co. 100.0
Money (Class R) 330 Commerce Street
Nashville, TN 37201
Bradford Government J.C. Bradford & Co. 100.0
Obligations Money 330 Commerce Street
(Class S) Nashville, TN 37201
BEA International Blue Cross & Blue Shield of 6.4
Equity Institutional Massachusetts Inc.
Class (Class T) Retirement Income Trust
100 Summer Street
Boston, MA 02110
Credit Suisse Private Banking 7.8
Dividend Reinvestment Plan
12 E. 49th St., 40th Floor
New York, NY 10017
-69-
<PAGE>
PERCENT
PORTFOLIO NAME AND ADDRESS OWNED
--------- ---------------- -------
BEA International State Street Bank & Trust Co. 9.5
Equity Advisor Class Cust. for the IRA of
(Class MM) Alice R. Sterling
7101 Golf Colony Ct. Apt. 106
Lake Worth, FL 33467
Transcorp 90.4
FBO William E. Burns
P.O. Box 6535
Englewood, CO 80155
BEA High Yield Guenter Full 16.7
Portfolio Michelin North America Inc.
Institutional Master Trust
Class (Class U) P.O. Box 19001
Greenville, SC 29602
Flour Corporation 6.0
Master Retirement Trust
2333 Michelson Drive
Irvine, CA 92612
CS First Boston Pension Fund 5.9
Park Avenue Plaza, 34th Floor
Attn: Steve Medici
55 E. 52nd Street
New York, NY 10055
SC Johnson & Son, Inc. Retirement Plan 12.0
1525 Howe Street Mail Stat 447
Racine, WI 53403
Southdown Inc. Pension Plan 9.2
MAC & Co.
Mutual Fund Operations
P.O. Box 3198
Pittsburgh, PA 15230
BEA High Yield Richard A. Wilson TTEE 96.8
Portfolio Advisor E. Frances Wilson TTEE
Class (Class OO) The Wilson Family Trust
7612 March Avenue
West Hills, CA 91304
BEA Emerging Markets Wachovia Bank North Carolina Power & 22.0
Equity Portfolio Light Co. Supplemental Retirement Trust
Institutional Class 301 N. Main Street
(Class V) Winston-Salem, NC 27101
-70-
<PAGE>
PERCENT
PORTFOLIO NAME AND ADDRESS OWNED
--------- ---------------- -------
Hall Family Foundation 42.7
P.O. Box 419580
Kansas City, MO 64141
Arkansas Public Employee 15.4
Retirement System
124 W. Capitol Avenue
Little Rock, AR 72201
Berklee College of Music Inc. 5.7
40 Pleasant St.
Portsmouth, NH 03801
BEA Emerging Markets Charles Schwab & Co. 94.9
Equity Portfolio Special Custody Account for the
Advisor Class Exclusive Benefit of Customers
(Class NN) 101 Montgomery Street
San Francisco, CA 94104
BEA US Core Equity Corestates Bank 43.1
Portfolio Trust Buckeye Pipe Line
(Class X) One Wall Street
New York, NY 10005
Werner & Pfleiderer Pension Plan 7.5
Employees
663 E. Crescent Avenue
Ramsey, NJ 07446
Washington Hebrew Congregation 11.3
3935 Macomb St. NW
Washington, DC 20016
Fleet National Bank Trust 5.9
Hospital St. Raphael
Malpractice
P.O. Box 92800
Rochester, NY 14692
Credit Suisse Private Banking 14.3
Dividend Reinvestment Plan
12 E. 49th St., 40th Fl.
New York, NY 10017
BEA US Core Fixed New England UFCW & Employers' Pension 21.9
Income Portfolio Fund Board of Trustees
(Class Y) 161 Forbes Road, Suite 201
Braintree, MA 02184
-71-
<PAGE>
PERCENT
PORTFOLIO NAME AND ADDRESS OWNED
--------- ---------------- -------
Kollmorgen Corporation 5.2
Pension Trust
1601 Thapelo Road
Waltham, MA 02154
Patterson & Co. 8.0
P.O. Box 7829
Philadelphia, PA 19101
MAC & Co 6.3
Mutual Funds Operations
P.O. Box 3198
Pittsburgh, PA 15230
Bank of New York 9.5
Fenway Partners Master Trust
Attn: Mohamed Khalil, 7th Floor
One Wall Street, 12th floor
New York, NY 10286
Citibank NA Trust for CS First Boston 11.5
Corp Emp S/P
Attn: Sheila Adams
111 Wall Street, 20th Floor Z1
New York, NY 10043
The Valley Foundation 8.6
c/o Enterprise Trust
16450 Los Gatos Blvd., Suite 210
Los Gatos, CA 95032
BEA Strategic Global Sunkist Master Trust 33.1
Fixed Income Portfolio 14130 Riverside Drive
(Class Z) Sherman Oaks, CA 91423
Patterson & Co. 23.7
P.O. Box 7829
Philadelphia, PA 19101
Key Trust Co. of Ohio 19.1
FBO Eastern Enterp.
Collective Inv. Trust
P.O. Box 94870
Cleveland, OH 44101
Credit Suisse Private Banking 8.5
Dividend Reinvestment Plan
12 E. 49th St., 40th Fl.
New York, NY 10017
-72-
<PAGE>
PERCENT
PORTFOLIO NAME AND ADDRESS OWNED
--------- ---------------- -------
Credit Suisse Private Banking 5.2
Cash Election Plan
12 E. 49th Streets, 40th Floor
New York, New York 10017
Hard & Co. Abtco Inc. Ret. Plan 9.4
c/o Associated Bank, N.A.
100 W. Wisconsin Avenue
Neenah, WI 54956
BEA Municipal Bond Irwin Bard 6.4
Fund Portfolio 1750 North East 183rd St.
(Class AA) North Miami Beach, FL 33179
Arnold Leon 12.8
c/o Fiduciary Trust Company
P.O. Box 3199
Church Street Station
New York, NY 10008
William A. Marquard 38.5
2199 Maysville Rd.
Carlisle, KY 40311
Matthew M. Sloves and 5.1
Diane Decker Sloves
Tenants in Common
1304 Stagecoach Road, S.E.
Albuquerque, NM 87123
BEA Global E.M. Warburg, Pincus & Co., Inc. 19.9
Telecommunications 466 Lexington Ave.
Advisor Class New York, NY 10017
(Class PP)
William W. Priest 5.4
2 E. 70th Street #5
New York, NY 10021
John B. Hurford 54.1
153 E. 53rd Street, Floor 57
New York, NY 10022
n/i Micro Cap Fund Charles Schwab & Co. Inc. 12.2
(Class FF) Special Custody Account for the
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
-73-
<PAGE>
PERCENT
PORTFOLIO NAME AND ADDRESS OWNED
--------- ---------------- -------
Janis Claflin Bruce Fetzer 5.1
and Winston Franklin
Robert Lehman
TRST John E. Fetzer
Institute Inc.
9292 West KL Lane
Kalamazoo, MI 49009
Public Inst. for Social Security 11.3
1001 19th St. N., 16th Flr.
Arlington, VA 22209
Portland General Corporation 24.1
Investment Trust
Attn: William J. Valach
121 S.W. Salmon Street
Portland, OR 97202
n/i Growth Fund Charles Schwab & Co. Inc. 15.2
(Class GG) Special Custody Account for the
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
U.S. Equity Investment 7.5
Portfolio LP
c/o Asset Management Advisors Inc.
1001 N. US Hwy 1
Suite 800
Jupiter, FL 33447
Citibank FSB 22.6
Sargent & Lundy Retirement Trust
c/o Citicorp
Attn: D. Erwin Jr.
1410 N. West Shore Boulevard
Tampa, FL 33607
Portland General Corp. 6.9
VEBA Plan
Attn: William Valach
121 SW Salmon Street
Portland, OR 97202
-74-
<PAGE>
PERCENT
PORTFOLIO NAME AND ADDRESS OWNED
--------- ---------------- -------
Union Bank of California 5.3
Sunkist Growers-Match-SVGS PLN
Mutual Funds Department
P.O. Box 109
San Diego, CA 92112
n/i Growth and Value Charles Schwab & Co. Inc. 22.2
Fund Special Custody Account for the
(Class HH) Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
Chase Manhattan Bank 9.6
Collins Group Trust I
840 Newport Center Drive
Newport Beach, CA 92660
Janney Montgomery Janney Montgomery Scott 100.0
Scott Money Market 1801 Market Street
Portfolio (Class Philadelphia, PA 19103-1675
Janney Money Market)
Janney Montgomery Janney Montgomery Scott 100.0
Scott Municipal Money 1801 Market Street
Market Portfolio Philadelphia, PA 19103-1675
(Class Janney
Municipal Money
Market)
Janney Montgomery Janney Montgomery Scott 100.0
Scott Government 1801 Market Street
Obligations Money Philadelphia, PA 19103-1675
Market Portfolio
(Class Janney
Government Obligations
Money)
Janney Montgomery Janney Montgomery Scott 100.0
Scott Municipal Money 1801 Market Street
Market Portfolio Philadelphia, PA 19103-1675
(Class Janney N.Y.
Municipal Money)
-75-
<PAGE>
PERCENT
PORTFOLIO NAME AND ADDRESS OWNED
--------- ---------------- -------
Boston Partners Large Dr. Janice B. Yost 37.4
Cap Value Fund TRST Mary Black Foundation, Inc.
Institutional Class Bell Hill - 945 E. Main St.
(Class QQ) Spartanburg, SC 29302
Dolomite Products Company, Inc. 8.7
Gardner C. Odenbach, Treasurer
1150 Penfield Road
Rochester, NY 14625
Shady Side Academy Endownment 19.2
423 Fox Chapel Rd.
Pittsburgh, PA 15238
Saxon and Co. 25.7
FBO UOF Equity Funds
P.O. Box 77780-1888
Philadelphia, PA 19182
Boston Partners Miles Coverdale Jr 8.3
Large Cap Value 19 Old Village Road
Fund Investor Class Acton, MA 01720
(Class RR)
Fleet National Bank 9.7
TTEE Testa Hurwitz THIB
FBO Brian Pastuszenski
P.O. Box 92800
Rochester, NY 14692
Fleet National Bank 24.6
TTEE Testa Hurwitz THIB
FBO Scott Birnbaum
P.O. Box 92800
Rochester, NY 14692
Jay Schwartz and 8.1
Lila Schwartz JTTEN
9 Woodland Place
Great Neck, NY 11021
Mark R. Scott and 14.1
Maryann Scott JTTEN
2543 Longmount Drive
Wexford, PA 15090
Stanley B. Smith Jr. and Elizabeth B. 19.5
Smith JTTEN
140 Beach Bluff Avenue
Swampscott, MA 01907
-76-
<PAGE>
PERCENT
PORTFOLIO NAME AND ADDRESS OWNED
--------- ---------------- -------
Michael F. Walsh 7.7
IRA
117 Millstone Lane
Pittsburgh, PA 15238
Joan L. Smith 8.1
25 Orne Street
Marblehead, MA 01945
As of the above date, directors and officers as a group owned less
than one percent of the shares of RBB.
LITIGATION. There is currently no material litigation affecting the
Company.
-77-
<PAGE>
FINANCIAL STATEMENTS. The unaudited financial statments for the BEA
Advisor Funds are included in the Semi-Annual Report to Shareholders with
respect to the Funds for the period ended February 28, 1997, which has been
filed with the Securities and Exchange Commission. The financial statements
in such Semi-Annual Report (the "Financial Statements") are incorporated by
reference into this Statement of Additional Information. No other parts of
the Semi-Annual Report are incorporated herein by reference.
-78-
<PAGE>
APPENDIX
CORPORATE LONG-TERM DEBT RATINGS
The following summarizes the ratings used by Standard & Poor's for
corporate debt:
"AAA" - This designation represents the highest rating assigned by
Standard & Poor's to a debt obligation and indicates an extremely strong
capacity to pay interest and repay principal.
"AA" - Debt is considered to have a very strong capacity to pay
interest and repay principal and differs from "AAA" issues only in small degree.
"A" - Debt is considered to have a strong capacity to pay interest and
repay principal although such issues are somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher-rated categories.
"BBB" - Debt is regarded as having an adequate capacity to pay
interest and repay principal. Whereas such issues normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher-rated categories.
"BB," "B," and "CCC" - Debt that possesses one of these ratings is
regarded, on balance, as predominantly speculative with respect to capacity to
pay interest and repay principal in accordance with the terms of the obligation.
"BB" indicates the lowest degree of speculation and "CCC" the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
"CC" - This rating is reserved for issues that are currently in
arrears on dividends or sinking fund payments but that are currently paying.
"C" - This rating is reserved for income bonds on which no interest is
being paid.
"D" - Debt is in default, and payment of interest and/or repayment of
principal is in arrears.
PLUS (+) OR MINUS - The ratings from "AA" through "CCC" may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.
A-1
<PAGE>
The following summarizes the ratings used by Moody's for corporate
long-term debt:
"Aaa" - Bonds are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge"
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
"Aa" - Bonds are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in "Aaa"
securities.
"A" - Bonds possess many favorable investment attributes and are to be
considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds considered medium-grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
"Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of these
ratings provide questionable protection of interest and principal ("Ba"
indicates some speculative elements; "B" indicates a general lack of
characteristics of desirable investment; "Caa" represents a poor standing; "Ca"
represents obligations which are speculative in a high degree; and "C"
represents the lowest rated class of bonds). "Caa," "Ca" and "C" bonds may be
in default.
Moody's applies numerical modifiers 1, 2 and 3 in each generic
classification from "Aa" to "B" in its bond rating system. The modifier 1
indicates that the company ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks at the lower end of its generic rating category.
A-2
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
(1) Included in Part A of the Registration Statement:
Unaudited Financial Highlights for the Advisor Class of the BEA
International Equity, BEA Emerging Markets Equity and High Yield Funds
for the period from November 1, 1996 (inception of Advisor Classes of
these Funds) through February 28, 1997 and unaudited Financial
Highlights for the Registrant's BEA Global Telecommunications Fund for
the period from December 4, 1996 (inception of the Advisor Class of
this Fund) through February 28, 1997.
(2) Included in or incorporated by reference into Part B:
Unaudited Financial Statements for the Advisor Class of the BEA
International Equity, BEA Emerging Markets Equity and High Yield Funds
for the period from November 1, 1996 (inception) through February 28,
1997 are included in the Semi-Annual Report to Shareholders for such
Funds and are incorporated by reference into the Statement of
Additional Information. Unaudited Financial Statements for the BEA
Global Telecommunications Fund for the period from December 4, 1996
(inception) through February 28, 1997 are included in the Semi-Annual
Report to Shareholders for such Fund and are incorporated by reference
into the Statement of Additional Information.
(3) All required financial statements are included in or incorporated by
reference into Parts A and B hereof. All other financial statements
and schedules are inapplicable.
(b) Exhibits: SEE NOTE #
----------
(1) (a) Articles of Incorporation of Registrant 1
(b) Articles Supplementary of Registrant. 1
(c) Articles of Amendment to Articles of 2
Incorporation of Registrant.
(d) Articles Supplementary of Registrant. 2
(e) Articles Supplementary of Registrant. 5
(f) Articles Supplementary of Registrant. 6
(g) Articles Supplementary of Registrant. 9
(h) Articles Supplementary of Registrant. 10
(i) Articles Supplementary of Registrant. 14
(j) Articles Supplementary of Registrant. 14
(k) Articles Supplementary of Registrant. 19
(l) Articles Supplementary of Registrant. 19
(m) Articles Supplementary of Registrant. 19
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(n) Articles Supplementary of Registrant. 19
(o) Articles Supplementary of Registrant. 20
(p) Articles Supplementary of Registrant. 23
(q) Articles Supplementary of Registrant. 25
(r) Articles Supplementary of Registrant.
(2) Amended By-Laws adopted August 16, 1988. 3
(a) Amendment to By-Laws adopted July 25, 1989. 4
(b) By-Laws amended through October 24, 1989. 5
(c) By-Laws amended through April 24, 1996. 23
(3) None.
(4) (a) See Articles VI, VII, VIII, IX and XI of 1
Registrant's Articles of Incorporation dated
February 17, 1988.
(b) See Articles II, III, VI, XIII, and XIV of 23
Registrant's By-Laws as amended through April
26, 1996.
(5) (a) Investment Advisory Agreement (Money Market) 3
between Registrant and Provident
Institutional Management Corporation, dated
as of August 16, 1988.
(b) Sub-Advisory Agreement (Money Market) between 3
Provident Institutional Management
Corporation and Provident National Bank, dated
as of August 16, 1988.
(c) Investment Advisory Agreement (Tax-Free Money 3
Market) between Registrant and Provident
Institutional Management Corporation, dated
as of August 16, 1988.
(d) Sub-Advisory Agreement (Tax-Free Money 3
Market) between Provident Institutional
Management Corporation and Provident National
Bank, dated as of August 16, 1988.
(e) Investment Advisory Agreement (Government 3
Obligations Money Market) between Registrant
and Provident Institutional Management
Corporation, dated as of August 16, 1988.
(f) Sub-Advisory Agreement (Government 3
Obligations Money Market) between Provident
Institutional Management Corporation and
Provident National Bank, dated as of August
16, 1988.
(k) Investment Advisory Agreement (Balanced) 3
between Registrant and Provident
Institutional Management Corporation, dated
as of August 16, 1988.
-2-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(l) Sub-Advisory Agreement (Balanced) between 4
Provident Institutional Management
Corporation and Provident National Bank,
dated as of August 16, 1988.
(m) Investment Advisory Agreement (Tax-Free) 3
between Registrant and Provident
Institutional Management Corporation, dated
as of August 16, 1988.
(n) Sub-Advisory Agreement (Tax-Free) between 3
Provident Institutional Management
Corporation and Provident National Bank,
dated as of August 16, 1988.
(s) Investment Advisory Agreement (Government 8
Securities) between Registrant and Provident
Institutional Management Corporation dated as
of April 8, 1991.
(t) Investment Advisory Agreement (High Yield 8
Bond) between Registrant and Provident
Institutional Management Corporation dated as
of April 8, 1991.
(u) Sub-Advisory Agreement (High Yield Bond) 8
between Registrant and Warburg, Pincus
Counsellors, Inc. dated as of April 8, 1991.
(v) Investment Advisory Agreement (New York 9
Municipal Money Market) between Registrant
and Provident Institutional Management
Corporation dated November 5, 1991.
(w) Investment Advisory Agreement (Equity) 10
between Registrant and Provident
Institutional Management Corporation dated
November 5, 1991.
(x) Sub-Advisory Agreement (Equity) between 10
Registrant, Provident Institutional
Management Corporation and Warburg, Pincus
Counsellors, Inc. dated November 5, 1991.
(y) Investment Advisory Agreement (Tax-Free Money 10
Market) between Registrant and Provident
Institutional Management Corporation dated
April 21, 1992.
(z) Investment Advisory Agreement (BEA 11
International Equity Portfolio) between
Registrant and BEA Associates.
(aa) Investment Advisory Agreement (BEA Strategic 11
Fixed Income Portfolio) between Registrant
and BEA Associates.
(bb) Investment Advisory Agreement (BEA Emerging 11
Markets Equity Portfolio) between Registrant
and BEA Associates.
-3-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(cc) Investment Advisory Agreement (Laffer/Canto 14
Equity Portfolio) between Registrant and
Laffer Advisors Incorporated, dated as of
July 21, 1993.
(dd) Sub-Advisory Agreement (Laffer/Canto Sector 12
Equity Portfolio) between PNC Institutional
Management Corporation and Laffer Advisors
Incorporated, dated as of July 21, 1993.
(ee) Investment Advisory Agreement (BEA U.S. Core 15
Equity Portfolio) between Registrant and BEA
Associates, dated as of October 27, 1993.
(ff) Investment Advisory Agreement (BEA U.S. Core 15
Fixed Income Portfolio) between Registrant
and BEA Associates, dated as of October 27,
1993.
(gg) Investment Advisory Agreement (BEA Global 15
Fixed Income Portfolio) between Registrant
and BEA Associates, dated as of October 27,
1993.
(hh) Investment Advisory Agreement (BEA Municipal 15
Bond Fund Portfolio) between Registrant
and BEA Associates, dated as of October 27, 1993.
(ii) Investment Advisory Agreement (Warburg Pincus 14
Growth and Income Fund) between Registrant
and Warburg, Pincus Counsellors, Inc.
(jj) Investment Advisory Agreement (Warburg Pincus 16
Balanced Fund) between Registrant and
Warburg, Pincus Counsellors, Inc.
(kk) Investment Advisory Agreement (BEA Balanced) 16
between Registrant and BEA Associates.
(ll) Investment Advisory Agreement (BEA Short 16
Duration Portfolio) between Registrant and
BEA Associates.
(mm) Investment Advisory Agreement (Warburg Pincus 21
Tax Free Fund) between Registrant and
Warburg, Pincus Counsellors, Inc.
(nn) Investment Advisory Agreement (ni Micro Cap 23
Fund) between Registrant and Numeric
Investors, L.P.
(oo) Investment Advisory Agreement (ni Growth 23
Fund) between Registrant and Numeric
Investors, L.P.
(pp) Investment Advisory Agreement (ni Growth & 23
Value Fund) between Registrant and Numeric
Investors, L.P.
(qq) Investment Advisory Agreement (BEA Global 24
Telecommunications Portfolio) between
Registrant and BEA Associates,
-4-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(rr) Investment Advisory Agreement (Boston 26
Partners Large Cap Value Fund) between
Registrant and Boston Partners Asset
Management, L.P.
(6) (r) Distribution Agreement and Supplements 8
(Classes A through Q) between the Registrant
and Counsellors Securities Inc. dated as of
April 10, 1991.
(s) Distribution Agreement Supplement (Classes L, 9
M, N and 0) between the Registrant and
Counsellors Securities Inc. dated as of
November 5, 1991.
(t) Distribution Agreement Supplements (Classes 9
R, S, and Alpha 1 through Theta 4) between
the Registrant and Counsellors Securities
Inc. dated as of November 5, 1991.
(u) Distribution Agreement Supplement (Classes T, 10
U and V) between the Registrant and
Counsellors Securities Inc. dated as of
September 18, 1992.
(v) Distribution Agreement Supplement (Class W) 14
between the Registrant and Counsellors
Securities Inc. dated as of July 21, 1993
(w) Distribution Agreement Supplement (Classes X, 14
Y, Z and AA) between the Registrant and
Counselors Securities Inc.
(x) Distribution Agreement Supplement (Classes BB 18
and CC) between Registrant and Counsellors
Securities Inc. dated as of October 26, 1994.
(y) Distribution Agreement Supplement (Classes DD 18
and EE) between Registrant and Counsellors
Securities Inc. dated as of October 26, 1994.
(z) Distribution Agreement Supplement (Classes L, 19
M, N and O) between the Registrant and
Counsellors Securities Inc.
(aa) Distribution Agreement Supplement (Classes R, 19
S) between the Registrant and Counsellors
Securities Inc.
(bb) Distribution Agreement Supplements (Classes 19
Alpha 1 through Theta 4) between the
Registrant and Counsellors Securities Inc.
(cc) Distribution Agreement Supplement Janney 20
Classes (Alpha 1, Alpha 2, Alpha 3 and Alpha
4) between the Registrant and Counsellors
Securities Inc.
(dd) Distribution Agreement Supplement ni Classes 23
(Classes FF, GG and HH) between Registrant
and Counsellors Securities Inc.
-5-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(ee) Distribution Agreement Supplement (Classes 24
II, JJ, KK, and LL) between Registrant and
Counsellors Securities Inc.
(ff) Distribution Agreement Supplement (Classes 24
MM, NN, OO, and PP) between Registrant and
Counsellors Securities Inc.
(gg) Distribution Agreement Supplement (Class QQ) 26
between Registrant and Counsellors Securities
Inc.
(hh) Distribution Agreement Supplement (Class RR)
between Registrant and Counsellors Securities
Inc.
(ii) Distribution Agreement Supplement (Class SS)
between Registrant and Counsellors Securities
Inc.
(7) Fund Office Retirement Profit-Sharing and Trust 7
Agreement, dated as of October 24, 1990.
(8) (a) Custodian Agreement between Registrant and 3
Provident National Bank dated as of
August 16, 1988.
(b) Sub-Custodian Agreement among The Chase 10
Manhattan Bank, N.A., the Registrant and
Provident National Bank, dated as of July 13,
1992, relating to custody of Registrant's
foreign securities.
(e) Amendment No. 1 to Custodian Agreement dated 9
August 16, 1988.
(f) Agreement between Brown Brothers Harriman & 10
Co. and Registrant on behalf of BEA
International Equity Portfolio, dated
September 18, 1992.
(g) Agreement between Brown Brothers Harriman & 10
Co. and Registrant on behalf of BEA Strategic
Fixed Income Portfolio, dated September 18,
1992.
(h) Agreement between Brown Brothers Harriman & 10
Co. and Registrant on behalf of BEA Emerging
Markets Equity Portfolio, dated September 18,
1992.
(i) Agreement between Brown Brothers Harriman & 15
Co. and Registrant on behalf of BEA Emerging
Markets Equity, BEA International Equity, BEA
Strategic Fixed Income and BEA Global Fixed
Income Portfolios, dated as of November 29,
1993.
(j) Agreement between Brown Brothers Harriman & 15
Co. and Registrant on behalf of BEA U.S. Core
Equity and BEA U.S. Core Fixed Income
Portfolios dated as of November 29, 1993.
-6-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(k) Custodian Contract between Registrant and 18
State Street Bank and Trust Company.
(l) Custody Agreement between Registrant and 23
Custodial Trust Company on behalf of ni Micro
Cap Fund, ni Growth Fund and ni Growth &
Value Fund Portfolios of the Registrant.
(m) Custodian Agreement Supplement Between 26
Registrant and PNC Bank, National Association
dated October 16, 1996.
(n) Custodian Agreement Supplement between
Registrant and Brown Brothers Harriman &
Co. on behalf of the BEA Municipal Bond
Fund.
(9) (a) Transfer Agency Agreement (Sansom Street) 3
between Registrant and Provident Financial
Processing Corporation, dated as of
August 16, 1988.
(b) Transfer Agency Agreement (Cash Preservation) 3
between Registrant and Provident Financial
Processing Corporation, dated as of
August 16, 1988.
(c) Shareholder Servicing Agreement (Sansom 3
Street Money Market).
(d) Shareholder Servicing Agreement (Sansom 3
Street Tax-Free Money Market).
(e) Shareholder Servicing Agreement (Sansom 3
Street Government Obligations Money Market).
(f) Shareholder Services Plan (Sansom Street 3
Money Market).
(g) Shareholder Services Plan (Sansom Street Tax- 3
Free Money Market).
(h) Shareholder Services Plan (Sansom Street 3
Government Obligations Money Market).
(i) Transfer Agency Agreement (SafeGuard) between 3
Registrant and Provident Financial Processing
Corporation, dated as of August 16, 1988.
(j) Transfer Agency Agreement (Bedford) between 3
Registrant and Provident Financial Processing
Corporation, dated as of August 16, 1988.
(k) Transfer Agency Agreement (Income 7
Opportunities) between Registrant and
Provident Financial Processing Corporation
dated June 25, 1990.
(l) Administration and Accounting Services 8
Agreement between Registrant and Provident
Financial Processing Corporation, relating to
Government Securities Portfolio, dated as of
April 10, 1991.
-7-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(m) Administration and Accounting Services 9
Agreement between Registrant and Provident
Financial Processing Corporation, relating to
New York Municipal Money Market Portfolio
dated as of November 5, 1991.
(n) Administration and Accounting Services 9
Agreement between Registrant and Provident
Financial Processing Corporation, relating to
Equity Portfolio dated as of November 5, 1991.
(o) Administration and Accounting Services 9
Agreement between Registrant and Provident
Financial Processing Corporation, relating to
High Yield Bond Portfolio, dated as of
April 10, 1991.
(p) Administration and Accounting Services 10
Agreement between Registrant and Provident
Financial Processing Corporation (BEA
International Equity) dated September 18,
1992.
(q) Administration and Accounting Services 10
Agreement between Registrant and Provident
Financial Processing Corporation (BEA
Strategic Fixed Income) dated September 18,
1992.
(r) Administration and Accounting Services 10
Agreement between Registrant and Provident
Financial Processing Corporation (BEA
Emerging Markets Equity) dated September 18,
1992.
(s) Transfer Agency Agreement and Supplements 9
(Bradford, Alpha (now known as Janney), Beta,
Gamma, Delta, Epsilon, Zeta, Eta and Theta)
between Registrant and Provident Financial
Processing Corporation dated as of November
5, 1991.
(t) Transfer Agency Agreement Supplement (BEA) 10
between Registrant and Provident Financial
Processing Corporation dated as of September
19, 1992.
(u) Administrative Services Agreement between 10
Registrant and Counsellor's Fund Services,
Inc. (BEA Portfolios) dated September 18,
1992.
(v) Administration and Accounting Services 10
Agreement between Registrant and Provident
Financial Processing Corporation, relating to
Tax-Free Money Market Portfolio, dated as
of April 21, 1992.
(w) Transfer Agency Agreement Supplement 12
(Laffer/Canto) between Registrant and PFPC
Inc. dated as of July 21, 1993.
-8-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(x) Administration and Accounting Services 12
Agreement between Registrant and PFPC Inc.,
relating to Laffer/Canto Equity Fund, dated
July 21, 1993.
(y) Transfer Agency Agreement Supplement (BEA 15
U.S. Core Equity, BEA U.S. Core Fixed Income,
BEA Global Fixed Income and BEA Municipal
Bond Fund Portfolios) between Registrant and
PFPC Inc. dated as October 27, 1993.
(z) Administration and Accounting Services 15
Agreement between Registrant and PFPC Inc.
relating to BEA U.S. Core Equity Portfolio
dated as of October 27, 1993.
(aa) Administration and Accounting Services 15
Agreement between Registrant and PFPC Inc.
(BEA U.S. Core Fixed Income Portfolio)
dated October 27, 1993.
(bb) Administration and Accounting Services 15
Agreement between Registrant and PFPC Inc.
(International Fixed Income Portfolio) dated
October 27, 1993.
(cc) Administration and Accounting Services 15
Agreement between Registrant and PFPC Inc.
(Municipal Bond Fund Portfolio) dated
October 27, 1993.
(dd) Transfer Agency Agreement Supplement (BEA 18
Balanced and Short Duration Portfolios)
between Registrant and PFPC Inc. dated
October 26, 1994.
(ee) Administration and Accounting Services 18
Agreement between Registrant and PFPC Inc.
(BEA Balanced Portfolio) dated October 26,
1994.
(ff) Administration and Accounting Services 18
Agreement between Registrant and PFPC Inc.
(BEA Short Duration Portfolio) dated
October 26, 1994.
(gg) Co-Administration Agreement between 18
Registrant and PFPC Inc. (Warburg Pincus
Growth & Income Fund) dated August 4, 1994.
(hh) Co-Administration Agreement between 18
Registrant and PFPC Inc. (Warburg Pincus
Balanced Fund) dated August 4, 1994.
(ii) Co-Administration Agreement between 18
Registrant and Counsellors Funds Services,
Inc. (Warburg Pincus Growth & Income Fund)
dated August 4, 1994.
(jj) Co-Administration Agreement between 18
Registrant and Counsellors Funds Services,
Inc. (Warburg Pincus Balanced Fund) dated
August 4, 1994.
-9-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(kk) Administrative Services Agreement Supplement 18
between Registrant and Counsellors Fund
Services, Inc. (BEA Classes) dated
October 26, 1994.
(ll) Co-Administration Agreement between 21
Registrant and PFPC Inc. (Warburg Pincus Tax
Free Fund) dated March 31, 1995.
(mm) Co-Administration Agreement between 21
Registrant and Counsellors Funds Services,
Inc. (Warburg Pincus Tax-Free Fund)
dated March 31, 1995.
(nn) Transfer Agency and Service Agreement between 21
Registrant and State Street Bank and Trust
Company and PFPC, Inc. dated February 1,
1995.
(oo) Supplement to Transfer Agency and Service 21
Agreement between Registrant, State Street
Bank and Trust Company, Inc. and PFPC dated
April 10, 1995.
(pp) Amended and Restated Credit Agreement dated 22
December 15, 1994.
(qq) Transfer Agency Agreement Supplement (ni 23
Micro Cap Fund, ni Growth Fund and ni Growth
& Value Fund) between Registrant and PFPC,
Inc. dated April 14, 1996.
(rr) Administration and Accounting Services 23
Agreement between Registrant and PFPC, Inc.
(ni Micro Cap Fund) dated April 24, 1996.
(ss) Administration and Accounting Services 23
Agreement between Registrant and PFPC, Inc.
(ni Growth Fund) dated April 24, 1996.
(tt) Administration and Accounting Services 23
Agreement between Registrant and PFPC, Inc.
(ni Growth, & Value Fund) dated April 24,
1996.
(uu) Administrative Services Agreement between 23
Registrant and Counsellors Fund Services,
Inc. (ni Micro Cap Fund, ni Growth Fund and
ni Growth & Value Fund) dated April 24, 1996.
(vv) Administration and Accounting Services 24
Agreement between Registrant and PFPC, Inc.
(BEA Global Telecommunications Portfolio).
(ww) Co-Administration Agreement between 24
Registrant Investor and BEA Associates (BEA
International Equity Investor Portfolio).
(xx) Co-Administration Agreement between 24
Registrant and BEA Associates (BEA
International Equity Advisor Portfolio).
-10-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(yy) Co-Administration Agreement between 24
Registrant and BEA Associates (BEA Emerging
Markets Equity Investor Portfolio).
(zz) Co-Administration Agreement between 24
Registrant and BEA Associates (BEA Emerging
Markets Equity Advisor Portfolio).
(aaa) Co-Administration Agreement between 24
Registrant and BEA Associates (BEA High Yield
Investor Portfolio).
(bbb) Co-Administration Agreement between 24
Registrant and BEA Associates (BEA High
Yield Advisor Portfolio).
(ccc) Co-Administration Agreement between 24
Registrant and BEA Associates (BEA Global
Telecommunications Investor Portfolio).
(ddd) Co-Administration Agreement between 24
Registrant and BEA Associates (BEA Global
Telecommunications Advisor Portfolio).
(eee) Transfer Agreement and Service Agreement 24
between Registrant and State Street Bank and
Trust Company.
(fff) Administration and Accounting Services
Agreement between the Registrant and PFPC
Inc. dated October 16, 1996 (Boston Partners
Large Cap Value Fund).
(ggg) Transfer Agency Agreement Supplement 26
between Registrant and PFPC Inc.
(Boston Partners Institutional Class).
(hhh) Transfer Agency Agreement Supplement between 26
Registrant and PFPC Inc. (Boston Partners
Investor Class).
(iii) Transfer Agency Agreement Supplement between 26
Registrant and PFPC Inc. (Boston Partners
Advisor Class).
(10) (a) Incorporated by reference herein to
Registrant's 24f-2 Notice for the fiscal year
ended August 31, 1996 filed on October 28,
1996. Opinion of Counsel.
(11) (a) Consent of Counsel.
(b) Consent of Independent Accountants.
(12) None.
(13) (a) Subscription Agreement (relating to Classes A 2
through N).
(b) Subscription Agreement between Registrant and 7
Planco Financial Services, Inc., relating to
Classes O and P.
-11-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(c) Subscription Agreement between Registrant 7
and Planco Financial Services, Inc., relating to
Class Q.
(d) Subscription Agreement between Registrant and 9
Counsellors Securities Inc. relating to
Classes R, S, and Alpha 1 through Theta 4.
(e) Subscription Agreement between Registrant and 10
Counsellors Securities Inc. relating to
Classes T, U and V.
(f) Subscription Agreement between Registrant and 18
Counsellor's Securities Inc. relating to
Classes BB and CC.
(g) Purchase Agreement between Registrant and 21
Counsellors Securities Inc. relating to Class
DD (Warburg Pincus Growth & Income Fund
Series 2).
(h) Purchase Agreement between Registrant and 21
Counsellors Securities Inc. relating to Class
EE (Warburg Pincus Balanced Fund Series 2).
(i) Purchase Agreement between Registrant and 23
Numeric Investors, L.P. relating to Class FF
(ni Micro Cap Fund).
(j) Purchase Agreement between Registrant and 23
Numeric Investors, L.P. relating to Class GG
(ni Growth Fund).
(k) Purchase Agreement between Registrant and 23
Numeric Investors, L.P. relating to Class HH
(ni Growth & Value Fund).
(l) Subscription Agreement between Registrant and 24
Counsellors Securities, Inc. relating to
Classes II through PP.
(m) Purchase Agreement between Registrant and
Boston Partners Asset Management, L.P.
relating to Classes QQ, RR and SS. (Boston
Partners Large Cap Value Fund).
(14) None.
(15) (a) Plan of Distribution (Sansom Street Money Market). 3
(b) Plan of Distribution (Sansom Street Tax-Free 3
Money Market).
(c) Plan of Distribution (Sansom Street 3
Government Obligations Money Market).
(d) Plan of Distribution (Cash Preservation Money). 3
(e) Plan of Distribution (Cash Preservation Tax- 3
Free Money Market).
(f) Plan of Distribution (SafeGuard Equity). 3
-12-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(g) Plan of Distribution (SafeGuard Fixed Income). 3
(h) Plan of Distribution (SafeGuard Balanced). 3
(i) Plan of Distribution (SafeGuard Tax-Free). 3
(j) Plan of Distribution (SafeGuard Money Market). 3
(k) Plan of Distribution (SafeGuard Tax-Free 3
Money Market).
(1) Plan of Distribution (Bedford Money Market). 3
(m) Plan of Distribution (Bedford Tax-Free Money 3
Market).
(n) Plan of Distribution (Bedford Government 3
Obligations Money Market).
(o) Plan of Distribution (Bedford New York 7
Municipal Money).
(p) Plan of Distribution (SafeGuard Government 7
Securities).
(q) Plan of Distribution (Income Opportunities 7
High Yield).
(r) Amendment No. 1 to Plans of Distribution 8
(Classes A through Q).
(s) Plan of Distribution (Bradford Tax-Free Money 9
Market).
(t) Plan of Distribution (Bradford Government 9
Obligations Money Market).
(u) Plan of Distribution (Alpha (now known as 9
Janney) Money Market).
(v) Plan of Distribution (Alpha (now known as 9
Janney) Tax-Free Money Market (now known as
the Municipal Money Market)).
(w) Plan of Distribution (Alpha (now known as 9
Janney) Government Obligations Money Market).
(x) Plan of Distribution (Alpha (now known as 9
Janney) New York Municipal Money Market).
(y) Plan of Distribution (Beta Money Market). 9
(z) Plan of Distribution (Beta Tax-Free Money 9
Market).
(aa) Plan of Distribution (Beta Government 9
Obligations Money Market).
(bb) Plan of Distribution (Beta New York Money 9
Market).
(cc) Plan of Distribution (Gamma Money Market). 9
-13-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(dd) Plan of Distribution (Gamma Tax-Free Money 9
Market).
(ee) Plan of Distribution (Gamma Government 9
Obligations Money Market).
(ff) Plan of Distribution (Gamma New York 9
Municipal Money Market).
(gg) Plan of Distribution (Delta Money Market). 9
(hh) Plan of Distribution (Delta Tax-Free Money 9
Market).
(ii) Plan of Distribution (Delta Government 9
Obligations Money Market).
(jj) Plan of Distribution (Delta New York 9
Municipal Money Market).
(kk) Plan of Distribution (Epsilon Money Market). 9
(ll) Plan of Distribution (Epsilon Tax-Free Money 9
Market).
(mm) Plan of Distribution (Epsilon Government 9
Municipal Money Market).
(nn) Plan of Distribution (Epsilon New York 9
Municipal Money Market).
(oo) Plan of Distribution (Zeta Money Market). 9
(pp) Plan of Distribution (Zeta Tax-Free Money 9
Market).
(qq) Plan of Distribution (Zeta Government 9
Obligations Money Market).
(rr) Plan of Distribution (Zeta New York Municipal 9
Money Market).
(ss) Plan of Distribution (Eta Money Market). 9
(tt) Plan of Distribution (Eta Tax-Free Money 9
Market).
(uu) Plan of Distribution (Eta Government 9
Obligations Money Market).
(vv) Plan at Distribution (Eta New York Municipal 9
Money Market).
(ww) Plan of Distribution (Theta Money Market). 9
(xx) Plan of Distribution (Theta Tax-Free Money 9
Market).
(yy) Plan of Distribution (Theta Government 9
Obligations Money Market).
(zz) Plan of Distribution (Theta New York 9
Municipal Money Market).
(aaa) Plan at Distribution (Laffer Equity). 12
-14-
<PAGE>
(b) Exhibits: SEE NOTE #
----------
(bbb) Plan Distribution (Warburg Pincus Growth & 18
Income Series 2).
(ccc) Plan of Distribution (Warburg Pincus Balanced 18
Series 2).
(ddd) Plan of Distribution (BEA International 24
Equity Investor).
(eee) Plan of Distribution (BEA International 24
Equity Advisor).
(fff) Plan of Distribution (BEA Emerging Markets 24
Equity Investor).
(ggg) Plan of Distribution (BEA Emerging Markets 24
Equity Advisor).
(hhh) Plan of Distribution (BEA High Yield 24
Investor).
(iii) Plan of Distribution (BEA High Yield 24
Advisor).
(jjj) Plan of Distribution (BEA Global 24
Telecommunications Investor).
(kkk) Plan of Distribution (BEA Global 24
Telecommunications Advisor).
(lll) Plan of Distribution (Boston Partners Large 26
Cap Value Fund Institutional Class)
(mmm) Plan of Distribution (Boston Partners Large
Cap Value Fund Investor Class)
(nnn) Plan of Distribution (Boston Partners Large
Cap Value Fund Advisor Class)
(ooo) Plan of Distribution (Boston Partners Mid Cap
Value Fund Investor Class)
(ppp) Plan of Distribution (Boston Partners Mid Cap
Value Fund Institutional Class)
(16) (a) Schedule of computation of Performance 3
Quotations
(17) Financial Data Schedules.
(18) Rule 18f-3 Plan as amended.
NOTE #
1 Incorporated herein by reference to the same exhibit number of Registrant's
Registration Statement (No. 33-20827) filed on March 24, 1988.
2 Incorporated herein by reference to the same exhibit number of
Pre-Effective Amendment No. 2 to Registrant's Registration Statement (No.
33-20827) filed on July 12, 1988.
-15-
<PAGE>
3 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 1 to Registrant's Registration Statement (No.
33-20827) filed on March 23, 1989.
4 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 2 to Registrant's Registration Statement (No.
33-20827) filed on October 25, 1989.
5 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 3 to the Registrant's Registration Statement
(No. 33-20827) filed on April 27, 1990.
6 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 4 to the Registrant's Registration Statement
(No. 33-20827) filed on May 1, 1990.
7 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 5 to the Registrant's Registration Statement
(No. 33-20827) filed on December 14, 1990.
8 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 6 to the Registrant's Registration Statement
(No. 33-20827) filed on October 24, 1991.
9 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 7 to the Registrant's Registration Statement
(No. 33-20827) filed on July 15, 1992.
10 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 8 to the Registrant's Registration Statement
(No. 33-20827) filed on October 22, 1992.
11 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 9 to the Registrant's Registration Statement
(No. 33-20827) filed on December 16, 1992.
12 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 11 to the Registrant's Registration Statement
(No. 33-20827) filed on June 21, 1993.
13 Incorporated herein by reference to the same exhibit number Post-Effective
Amendment No. 12 to the Registrant's Registration Statement (No. 33-20827)
filed on July 27, 1993.
14 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 13 to the Registrant's Registration Statement
(No. 33-20827) filed on October 29, 1993.
15 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 14 to the Registrant's Registration Statement
(No. 33-20827) filed on December 21, 1993.
16 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 19 to the Registrant's Registration Statement
(No. 33-20827) filed on October 14, 1994.
17 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 20 to the Registrant's Registration Statement
(No. 33-20827) filed on October 21, 1994.
-16-
<PAGE>
18 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 21 to the Registrant's Registration Statement
(No. 33 20827) filed on October 28, 1994.
19 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 22 to the Registrant's Registration Statement
(No. 33-20827) filed an December 19, 1994.
20 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 27 to the Registrant's Registration Statement
(No. 33-20827) filed on March 31, 1995.
21 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 28 to the Registrant's Registration Statement
(No. 33-20827) filed on October 6, 1995.
22 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 29 to the Registrant's Registration Statement
(No. 33-20827) filed on October 25, 1995.
23 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 34 to the Registrant's Registration Statement
(No. 33-20827) filed on May 16, 1996.
24 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 37 to the Registrant's Registration Statement
(No. 33-20827) filed July 30, 1996.
25 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 39 to the Registrant's Registration Statement
(No. 33-20827) filed on October 11, 1996.
26 Incorporated herein by reference to the same Exhibit No. of Post-Effective
Amendment No. 41 to the Registrant's Registration Statement (No. 33-30827)
filed on November 27, 1996.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 26. NUMBER OF HOLDERS OF SECURITIES
The following information is given as of May 1, 1997.
TITLE OF CLASS OF COMMON STOCK NUMBER OF RECORD HOLDERS
a) RBB Money Market 0
b) RBB Municipal Money Market 0
c) Cash Preservation Money Market 43
d) Cash Preservation Municipal Money Market 62
e) Sansom Street Money Market 3
f) Sansom Street Municipal Money Market 0
g) Sansom Street Government Obligations Money Market 0
h) Bedford Money Market 111,972
i) Bedford Municipal Money Market 4,266
j) Bedford Government Obligations Money Market 3,652
k) Bedford New York Municipal Money Market 3,082
l) RBB Government Securities 573
m) Bradford Municipal Money Market 1
n) Bradford Government Obligations Money Market 1
o) BEA International Equity - Institutional Class 201
p) BEA International Equity - Investor Class 0
q) BEA International Equity - Advisor Class 7
-17-
<PAGE>
r) BEA High Yield - Institutional Class 76
s) BEA High Yield - Investor Class 0
t) BEA High Yield - Advisor Class 7
u) BEA Emerging Markets Equity - Institutional Class 30
v) BEA Emerging Markets Equity - Investor Class 0
w) BEA Emerging Markets Equity - Advisor Class 5
x) BEA U.S. Core Equity 58
y) BEA U.S. Core Fixed Income 50
z) BEA Strategic Global Fixed Income 13
aa) BEA Municipal Bond Fund 35
bb) BEA Short Duration 0
cc) BEA Balanced 0
dd) BEA Global Telecommunications - Investor Class 0
ee) BEA Global Telecommunications - Advisor Class 20
ff) Janney Montgomery Scott
Money Market 1
gg) Janney Montgomery Scott
Municipal Money Market 1
hh) Janney Montgomery Scott
Government Obligations Money Market 1
ii) Janney Montgomery Scott
New York Municipal Money Market 1
jj) ni Micro Cap 1,782
kk) ni Growth 2,850
ll) ni Growth & Value 1,101
mm) Boston Partners Large Cap Value Fund - Institutional Class 11
nn) Boston Partners Large Cap Value Fund - Investor Class 9
oo) Boston Partners Large Cap Value Fund - Advisor Class 0
Item 27. INDEMNIFICATION
Sections 1, 2, 3 and 4 of Article VIII of Registrant's Articles of
Incorporation, as amended, incorporated herein by reference as Exhibits 1(a) and
1(c), provide as follows:
Section 1. To the fullest extent that limitations on the liability of
directors and officers are permitted by the Maryland General Corporation Law, no
director or officer of the Corporation shall have any liability to the
Corporation or its shareholders for damages. This limitation on liability
applies to events occurring at the time a person serves as a director or officer
of the Corporation whether or not such person is a director or officer at the
time of any proceeding in which liability is asserted.
Section 2. The Corporation shall indemnify and advance expenses to
its currently acting and its former directors to the fullest extent that
indemnification of directors is permitted by the Maryland General
Corporation Law. The Corporation shall indemnify and advance expenses to
its officers to the same extent as its directors and to such further extent
as is consistent with law. The Board of Directors may by-law, resolution or
agreement make further provision for indemnification of directors,
officers, employees and agents to the fullest extent permitted by the
Maryland General Corporation law.
Section 3. No provision of this Article shall be effective to protect
or purport to protect any director or officer of the Corporation against
any liability to the Corporation or its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his office.
Section 4. References to the Maryland General Corporation Law in this
Article are to the law as from time to time amended. No further
-18-
<PAGE>
amendment to the Articles of Incorporation of the Corporation shall
decrease, but may expand, any right of any person under this Article based
on any event, omission or proceeding prior to such amendment.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a director, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Information as to any other business, profession, vocation or employment of
substantial nature in which any directors and officers of PIMC, BEA, Numeric and
Boston Partners are, or at any time during the past two (2) years have been,
engaged for their own accounts or in the capacity of director, officer,
employee, partner or trustee is incorporated herein by reference to Schedules A
and D of PIMC's FORM ADV (File No. 801-13304) filed on March 28, 1993, Schedules
B and D of BEA's FORM ADV (File No. 801-37170) filed on March 30, 1993,
Schedules B and D of Numeric's FORM ADV (File No. 801-35649) filed on November
2, 1995, and Schedules of Boston Partners' FORM ADV (File No. 801-49059) filed
on October 2, 1996, respectively.
There is set forth below information as to any other business, profession,
vocation or employment of a substantial nature in which each director or officer
of PNC Bank, National Association (successor by merger to Provident National
Bank) ("PNC Bank"), is, or at any time during the past two years has been,
engaged for his own account or in the capacity of director, officer, employee,
partner or trustee.
<TABLE>
<CAPTION>
PNC INSTITUTIONAL MANAGEMENT CORPORATION
DIRECTORS AND OFFICERS
POSITION WITH OTHER BUSINESS TYPE OF
PIMC NAME CONNECTIONS BUSINESS
- ------------- ------------------- ---------------------------------- -----------
<S> <C> <C> <C>
Chairman and J. Richard Carnall Executive Vice President Banking
Director PNC Bank, National Association (1)
Director Banking
PNC National Bank (2)
Chairman and Director Financial-
PFPC Inc. (3) Related
Services
Director Fiduciary
PNC Trust Company of New York (11) Activities
-19-
<PAGE>
POSITION WITH OTHER BUSINESS TYPE OF
PIMC NAME CONNECTIONS BUSINESS
- ------------- ------------------- ---------------------------------- -----------
<S> <C> <C> <C>
Director Equipment
Hayden Bolts, Inc.*
Director Real Estate
Parkway Real Estate Company*
Director Investment
Provident Capital Management Advisory
Inc. (5)
Director
PNC Asset Management Group, Inc.
Director Financial-
PFPC International Ltd. Related
Services
Director Financial-
PFPC International (Cayman) Ltd. Related
Services
Director Investment
Advanced Investment Management Advisory
Chairman
International Dollar Reserve Fund,
Ltd.
Director Richard C. Caldwell Executive Vice President Banking
PNC Bank, National Association (1)
Director PNC National Bank (2) Banking
Director Fiduciary
PNC Trust Company Activities
of New York (11)
Director
Provident Capital Management Investment
Inc. (5) Advisory
Executive Vice President Banking
PNC Bank Corp. (14) Holding
Company
Director Banking
PNC Bank, New Jersey
National Association (16)
Director Financial-
PFPC Inc. (3) Related
Services
Chairman, Director & CEO
PNC Asset Management Group, Inc.
Director Mutual Fund
Compass Capital Group, Inc.
-20-
<PAGE>
POSITION WITH OTHER BUSINESS TYPE OF
PIMC NAME CONNECTIONS BUSINESS
- ------------- ------------------- ---------------------------------- -----------
<S> <C> <C> <C>
Director Investment
BlackRock Financial Advisory
Management, Inc.
Director Investment
PNC Equity Advisors Co. Advisory
Director Banking
PNC Bank, New England
Director Laurence D. Fink Chairman and Chief Executive
Officer
BlackRock Financial Management,
Inc.
Director and Vice President
PNC Asset management Group, Inc.
Director Richard L. Smoot President and Chief Banking
Executive Officer
PNC Bank, National Association
(Phila.)(1)
Senior Vice President Bank
PNC Bank Corp.(14) Holding
Company
Director Financial-
PFPC Inc. (3) Related
Services
Director Fiduciary
PNC Trust Company of NY (11) Activities
Director, Chairman and President Banking
PNC Bank, New Jersey,
National Association (16)
Director, Chairman and CEO Banking
PNC National Bank (2)
Chairman & Director Leasing
PNC Credit Corp. (13)
Director and Nicholas M. Marsini, Senior Vice President Banking
Chief Jr. PNC Bank, National Association(1)
Financial Officer
Director Financial-
PFPC Inc. (3) Related
Services
Senior Vice President Banking
and Chief Financial Officer
PNC Bank, Delaware(20)
Director, Vice President and Banking
Treasurer
PNC National Bank(2)
-21-
<PAGE>
POSITION WITH OTHER BUSINESS TYPE OF
PIMC NAME CONNECTIONS BUSINESS
- ------------- ------------------- ---------------------------------- -----------
<S> <C> <C> <C>
Director Banking
PNC Bank, New Jersey
National Association(16)
Director Fiduciary
PNC Trust Company of New York(11) Activities
Director and Treasurer Holding
PNC Bancorp, Inc. (9) Company
Director and Treasurer Investment
PNC Capital Corp.(17) Activities
Director and Treasurer Banking
PNC Holding Corp.(18)
Director and Treasurer Investment
PNC Venture Corp.(19) Activities
President and Thomas H. Nevin None.
Chief
Investment
Officer
Vice Michelle L. Petrilli Chief Counsel Banking
President and PNC Bank, DE (20)
Secretary
Secretary Financial-
PFPC Inc.(3) Related
Services
Senior Vice Vincent J. Ciavardini President, Chief Financial-
President Financial Officer Related
and Director Services
PFPC Inc.(3)
Director
PNC Asset Management Group, Inc.
Director & President Financial-
PFPC International Ltd. Related
Services
Director Financial-
PFPC International (Cayman) Ltd. Related
Services
Director
International Dollar Reserve
Fund, Ltd.
Senior Vice John N. Parthemore None.
President
-22-
<PAGE>
POSITION WITH OTHER BUSINESS TYPE OF
PIMC NAME CONNECTIONS BUSINESS
- ------------- ------------------- ---------------------------------- -----------
<S> <C> <C> <C>
Vice Stephen M. Wynne Executive Vice President and Financial-
President, Chief Accounting Officer Related
Chief PFPC Inc. (3) Services
Accounting
Officer and
Assistant
Secretary
Director Financial-
PFPC Trustee & Custodial Related
Services, Ltd. Services
Director Financial-
PFPC International (Cayman) Ltd. Related
Services
Executive Vice President Financial-
PFPC International Ltd. Related
Services
Controller Pauline M. Heintz Vice President Financial-
PFPC Inc. (3) Related
Services
Vice Jeffrey W. Carson None.
President
Vice Katherine A. Chuppe None.
President
Vice Mary J. Coldren None.
President
Vice Michele C. Dillon None.
President
Vice Patrick J. Ford None.
President
Vice Richard Hoerner None.
President
Vice Michael S. Hutchinson None.
President
Vice Michael J. Milligan None.
President
Vice G. Keith Robertshaw None.
President
Vice William F. Walsh None.
President
Vice Karen J. Walters None.
President
</TABLE>
- -----------------------------------
-23-
<PAGE>
* Information regarding these corporations can be obtained from the office of
the Secretary.
<TABLE>
<CAPTION>
PNC BANK, NATIONAL ASSOCIATION
DIRECTORS
POSITION WITH OTHER BUSINESS TYPE OF
PIMC NAME CONNECTIONS BUSINESS
- ------------- ------------------- ---------------------------------- -----------
<S> <C> <C> <C>
Director B.R. Brown President and C.E.O. of Coal
Consol, Inc.
Consol Plaza
Pittsburgh, PA 15241
Director Constance E. Clayton Associate Dean, School of Medical
Health & Professor of
Pediatrics
Medical College of PA
Hanemann University
430 East Sedgwick St.
Philadelphia, PA 19119
Director Eberhard Faber IV Chairman and C.E.O. Manufacturing
E.F.L., Inc.
4 50 Hedge Road
P.O. Box 49
Bearcreek, PA 18602
Director Dr. Stuart Heydt President and C.E.O. Medical
Geisinger Foundation
100 N. Academy Avenue
Danville, PA 17822
Director Edward P. Junker, III Vice Chairman Banking
PNC Bank, N.A.
Ninth and State Streets
Erie, PA 16553
Director Thomas A. McConomy President, C.E.O. and Manufacturing
Chairman, Calgon Carbon
Corporation
413 Woodland Road
Sewickley, PA 15143
Director Thomas H. O'Brien Chairman Banking
PNC Bank, National
Association
One PNC Plaza,
30th Floor
Pittsburgh, PA 15265
Director Dr. J. Dennis O'Connor Provost, The Smithsonian Education
Institution
1000 Jefferson Drive, S.W.
Room 230, MRC 009
Washington, DC 20560
Director Rocco A. Ortenzio Chairman and C.E.O. Medical
Continental Medical Systems, Inc.
P.O. Box 715
Mechanicsburg, PA 17055
-24-
<PAGE>
Director Jane G. Pepper President Horticulture
Pennsylvania Horticulture
Society
325 Walnut Street
Philadelphia, PA 19106
Director Robert C. Robb, Jr. President, Lewis, Eckert, Financial and
Robb & Company Management
425 One Plymouth Meeting Consultants
Plymouth Meeting, PA 19462
Director James E. Rohr President and C.E.O. Bank Holding
PNC Bank, National Company
Association
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265
Director Daniel M. Rooney President, Pittsburgh Football
Steelers
Football Club of the
National Football League
300 Stadium Circle
Pittsburgh, PA 15212
Director Seth E. Schofield Chairman, President and Airline
C.E.O.
USAir Group, Inc. and
USAir, Inc.
2345 Crystal Drive
Arlington, VA 22227
</TABLE>
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
John E. Alden Senior Vice President
James C. Altman Senior Vice President
Lila M. Bachelier Senior Vice President
R. Perrin Baker Chief Market Counsel, Northwest PA
James R. Bartholomew Senior Vice President
Peter R. Begg Senior Vice President
Donald G. Berdine Senior Vice President
Ben Berzin, Jr. Senior Vice President
James H. Best Senior Vice President
Eva T. Blum Senior Vice President
Susan B. Bohn Senior Vice President
George Brikis Executive Vice President
Michael Brundage Senior Vice President
-25-
<PAGE>
Anthony J. Cacciatore Senior Vice President
Richard C. Caldwell Executive Vice President
Craig T. Campbell Senior Vice President
J. Richard Carnall Executive Vice President
Edward V. Caruso Executive Vice President
Peter K. Classen President & CEO, PNC Bank, Northwest, PA
James P. Conley Senior Vice President/Credit Policy
Andra D. Cochran Senior Vice President
Sharon Coghlan Coordinating Market Chief Counsel, Philadelphia
John F. Calligan Senior Vice President
James P. Conley Senior Vice President
C. David Cook Senior Vice President
Alfred F. Cordasco Supervising Counsel, Pittsburgh, PA
Robert Crouse Senior Vice President
Peter M. Crowley Senior Vice President
Keith P. Crytzer Senior Vice President
John J. Daggett Senior Vice President
Peter J. Donchak Senior Vice President
Anuj Dhanda Senior Vice President
Victor M. DiBattista Chief Regional Counsel
Frank H. Dilenschneider Senior Vice President
Thomas C. Dilworth Senior Vice President
Alfred J. DiMatteis Senior Vice President
James Dionise Senior Vice President and C.F.O.
Patrick S. Doran Vice President, Head of Consumer Lending
Robert D. Edwards Senior Vice President
David J. Egan Senior Vice President
J. Lynn Evans Senior Vice President & Controller
William E. Fallon Senior Vice President
James M. Ferguson, III Senior Vice President
Charles J. Ferrero Senior Vice President
Frederick C. Frank, III Executive Vice President
-26-
<PAGE>
William J. Friel Executive Vice President
John F. Fulgoney Coordinating Market Chief Counsel,
Northeast PA
Brian K. Garlock Senior Vice President
George D. Gonczar Senior Vice President
Richard C. Grace Senior Vice President
James S. Graham Senior Vice President
Michael J. Hannon Senior Vice President
Stephen G. Hardy Senior Vice President
Michael J. Harrington Senior Vice President
Marva H. Harris Senior Vice President
Maurice H. Hartigan, II Executive Vice President
G. Thomas Hewes Senior Vice President
Sylvan M. Holzer Senior Vice President
Bruce C. Iacobucci Senior Vice President
John M. Infield Senior Vice President
Philip C. Jackson Senior Vice President
William J. Johns Controller
William R. Johnson Audit Director
Edward P. Junker, III Vice Chairman
Robert D. Kane Senior Vice President
Michael D. Kelsey Chief Compliance Counsel
Jack Kelly Senior Vice President
Geoffrey R. Kimmel Senior Vice President
Randall C. King Senior Vice President
Christopher M. Knoll Senior Vice President
Richard C. Krauss Senior Vice President
Frank R. Krepp Senior Vice President & Chief Credit Policy
Officer
Kenneth P. Leckey Senior Vice President
Marilyn R. Levins Senior Vice President
Carl J. Lisman Executive Vice President
George Lula Senior Vice President
-27-
<PAGE>
Jane E. Madio Senior Vice President
Nicholas M. Marsini, Jr. Senior Vice President
John A. Martin Senior Vice President
David O. Matthews Senior Vice President
Walter B. McClellan Senior Vice President
James F. McGowan Senior Vice President
Charlotte B. McLaughlin Senior Vice President
James C. Mendelson Senior Vice President
James W. Meighen Senior Vice President
Scott C. Meves Senior Vice President
Ralph S. Michael, III Executive Vice President
J. William Mills Senior Vice President
Barbara A. Misner Senior Vice President
Marlene D. Mosco Senior Vice President
Scott Moss Senior Vice President
Peter F. Moylan Senior Vice President
Michael B. Nelson Executive Vice President
Thomas J. Nist Senior Vice President
Thomas H. O'Brien Chairman
James F. O'Day Senior Vice President
Cynthia G. Osofsky Senior Vice President
Thomas E. Paisley, III Senior Vice President
Barbara Z. Parker Executive Vice President
George R. Partridge Senior Vice President
Daniel J. Panlick Senior Vice President
David M. Payne Senior Vice President
Charles C. Pearson, Jr. President and CEO, PNC Bank, Central PA
Helen P. Pudlin Senior Vice President
Edward V. Randall, Jr. President and CEO, PNC Bank, Pittsburgh
Arthur F. Rodman, III Senior Vice President
Richard C. Rhoades Senior Vice President
Bryan W. Ridley Senior Vice President
-28-
<PAGE>
James E. Rohr President and Chief Executive Officer
Gary Royer Senior Vice President
Robert T. Saltarelli Senior Vice President
Robert V. Sammartino Senior Vice President
William Sayre, Jr. Senior Vice President
Alfred J. Schiavetti Senior Vice President
David W. Schoffstall Executive Vice President
Seymour Schwartzberg Senior Vice President
Timothy G. Shack Senior Vice President
Douglas E. Shaffer Senior Vice President
Alfred A. Silva Senior Vice President
George R. Simon Senior Vice President
Richard L. Smoot President and CEO of PNC Bank, Philadelphia
Timothy N. Smyth Senior Vice President
Kenneth S. Spatz Senior Vice President
Darcel H. Steber Senior Vice President
William F. Strome Senior Vice President and Secretary
Robert L. Tassome Senior Vice President
Jane B. Tompkins Senior Vice President
Robert B. Trempe Senior Vice President
Kevin M. Tucker Senior Vice President
Alan P. Vail Senior Vice President
Frank T. VanGrofski Executive Vice President
Ronald H. Vicari Senior Vice President
William A. Wagner Senior Vice President
Patrick M. Wallace Senior Vice President
Annette M. Ward-Kredel Senior Vice President
Robert S. Wrath Senior Vice President
Arlene M. Yocum Senior Vice President
Carole Yon Senior Vice President
George L. Ziminski, Jr. Senior Vice President
-29-
<PAGE>
<TABLE>
<CAPTION>
PNC ASSET MANAGEMENT GROUP
DIRECTORS AND OFFICERS
TYPE OF
POSITION WITH PAMC NAME OTHER BUSINESS CONNECTIONS BUSINESS
- ------------------ ------------------- ---------------------------------- -----------
<S> <C> <C> <C>
Chairman, Director Richard C. Executive Vice President Banking
and CEO Caldwell PNC Bank, National Association(1)
Director Banking
PNC National Bank(2)
Director Fiduciary
PNC Trust Company Activities
of New York(11)
Director Investment Investment
Provident Capital Management Inc.(5) Advisory
Executive Vice President Bank Holding
PNC Bank Corp.(14) Company
Director Banking
PNC Bank, New Jersey, National
Association(16)
Director Financial
PFPC Inc.(3) Related
Services
Director
PNC Institutional Management
Corp.
Director
Compass Capital Group, Inc.
Director
BlackRock Financial Management,
Inc.
Director
PNC Equity Advisors Co.
Director
PNC Bank, New England
Vice President Laurence D. Chairman and CEO
and Director Fink BlackRock Financial
Management, Inc.
Director
PNC Institutional Management
Corp.
Secretary Pamela Fraser Chief Counsel, Asset Management Banking
Wilford & Trust
PNC Bank, National
Association(1)
</TABLE>
-30-
<PAGE>
<TABLE>
<CAPTION>
TYPE OF
POSITION WITH PAMC NAME OTHER BUSINESS CONNECTIONS BUSINESS
- ------------------ ------------------- ---------------------------------- -----------
<S> <C> <C> <C>
Treasurer Brian Lilly None.
and CFO
Assistant Thomas R. Moore Secretary Financial
Secretary PNC International Investment Related
Corporation Services
Vice President and Secretary
Pinaco, Inc.
Vice President and Secretary PNC
Mortgage Bank, N.A.
Secretary and Treasurer
PNC Brokerage Corp.
Vice President
Provcor Properties, Inc. Real Estate
Vice President
Provident Realty Mgmt., Inc.
Director Vincent J. President, CFO and Director PFPC Financial
Ciavardini Inc.(3) Related
Services
Senior Vice President
PNC Institutional Management
Corp.
Director Financial
PFPC International Ltd. Related
Services
Director PFPC International Financial
(Cayman) Ltd. Related
Services
Director J. Richard Executive Vice President Banking
Carnall PNC Bank, National
Association(1)
Director Banking
PNC National Bank(2)
Chairman and Director Financial
PFPC Inc.(3) Related
Services
Director Fiduciary
PNC Trust Company Activities
of New York(11)
Director Equipment
Hayden Bolts, Inc.*
Director Real Estate
Parkway R.E. Company*
</TABLE>
-31-
<PAGE>
<TABLE>
<CAPTION>
TYPE OF
POSITION WITH PAMC NAME OTHER BUSINESS CONNECTIONS BUSINESS
- ------------------ ------------------- ---------------------------------- -----------
<S> <C> <C> <C>
Director Investment
Provident Capital Management Advisory
Inc.(5)
Chairman and Director Financial
PNC Institutional Management Related
Corp. Services
Director
PFPC International Ltd.
Director Financial
PFPC International (Cayman) Ltd. Related
Services
Director Investment
Advanced Investment Management Advisory
Chairman Mutual Fund
International Dollar Reserve
Fund, Ltd.
Chief Equity Young D. Chin Chairman, President, CEO, Chief Investment
Officer Investment Officer and Director Advisory
Provident Capital Management
Inc.(5)
Chairman
PNC Equity Advisors Company
Director
CastleRock Capital Management
Director Ralph L. President
Schlosstein BlackRock Financial
Management, Inc.
</TABLE>
(1) PNC Bank, National Association, 120 S. 17th Street, Philadelphia, PA 19103
Broad and Chestnut Streets, Philadelphia, PA 19101, 17th and Chestnut
Streets, Philadelphia, PA 19103.
(2) PNC National Bank, 103 Bellevue Parkway, Wilmington, DE 19809.
(3) PFPC Inc., 103 Bellevue Parkway, Wilmington, DE 19809.
(4) PNC Service Corp., 103 Bellevue Parkway, Wilmington, DE 19809.
(5) Provident Capital Management, Inc., 30 S. 17th Street, Suite 1500,
Philadelphia, PA 19103.
(6) PNC Investment Corp., Broad and Chestnut Street, Philadelphia, PA 19101.
(7) Provident Realty Management, Inc., Broad and Chestnut Streets,
Philadelphia, PA 19101.
(8) Provident Realty, Inc., Broad and Chestnut Streets, Philadelphia, PA
19101.
(9) PNC Bancorp, Inc., 222 Delaware Avenue, Wilmington, DE 19810.
-32-
<PAGE>
(10) PNC New Jersey Credit Corp, 1415 Route 70 East, Suite 604, Cherry Hill,
NJ 08034.
(11) PNC Trust Company of New York, 40 Broad Street, New York, NY 10084.
(12) Provcor Properties, Inc., Broad and Chestnut Streets, Philadelphia, PA
19101.
(13) PNC Credit Corp, 103 Bellevue Parkway, Wilmington, DE 19809.
(14) PNC Bank Corp., 5th Avenue and Wood Streets, Pittsburgh, PA 15265.
(16) PNC Bank, New Jersey, National Association, Woodland Falls Corporate
Park, 210 Lake Drive East, Cherry Hill, NJ 08002.
(17) PNC Capital Corp, 5th Avenue and Woods Streets, Pittsburgh, PA 15265.
(18) PNC Holding Corp, 222 Delaware Avenue, P.O. Box 791, Wilmington, DE
19899.
(19) PNC Venture Corp, 5th Avenue and Woods Streets, Pittsburgh, PA 15265.
(20) PNC Bank, Delaware, 300 Delaware Avenue, Wilmington, DE 19801.
(21) Bank of Delaware Corp., 300 Delaware Avenue, Wilmington, DE 19801.
(22) Del-Vest, Inc., 300 Delaware Avenue, Wilmington, DE 19801.
(23) Marand Corp., 222 Delaware Avenue, Wilmington, DE 19801.
(24) Millsboro Insurance Agency, 300 Delaware Avenue, Wilmington, DE 19801.
(25) Roney-Richards, Inc., 300 Delaware Avenue, Wilmington, DE 19801.
Item 29. PRINCIPAL UNDERWRITER
(a) Counsellors Securities Inc. (the "Distributor") acts as
distributor for the following investment companies:
Warburg Pincus Cash Reserve Fund
Warburg Pincus New York Tax Exempt Fund
Warburg Pincus New York Intermediate Municipal Bond Fund
Warburg Pincus Intermediate Maturity Government Fund
Warburg Pincus Fixed Income Fund
Warburg Pincus Global Fixed Income Fund
Warburg Pincus Capital Appreciation Fund
Warburg Pincus Emerging Growth Fund
Warburg Pincus International Equity Fund
Warburg Pincus Japan OTC Fund
Warburg Pincus Growth & Income Fund
Warburg Pincus Balanced Fund
Warburg Pincus Tax Free Fund
Warburg Pincus Emerging Markets Fund
Warburg Pincus Global Post-Venture Capital Fund
Warburg Pincus Health Sciences Fund
Warburg Pincus Institutional Fund
Warburg Pincus Japan Growth Fund
Warburg Pincus Post-Venture Capital Fund
Warburg Pincus Small Company Growth Fund
Warburg Pincus Small Company Value Fund
Warburg Pincus Strategic Value Fund
Warburg Pincus Trust
Warburg Pincus Trust II
-33-
<PAGE>
The Distributor acts as a principal underwriter, depositor or investment adviser
for the following investment companies: None other than Registrant and companies
listed above.
(b) The information required by this item 29(b) is incorporated by
reference to Form BD (SEC File No. 15-654) filed by Distributor with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
(c) Information as to commissions and other compensation received by the
principal underwriter from the Registrant is set forth below.
NET COMPENSATION
NAME OF UNDERWRITING ON REDEMPTION
PRINCIPAL DISCOUNTS AND AND BROKERAGE OTHER
UNDERWRITER COMMISSIONS REPURCHASE COMMISSIONS COMPENSATION
- ----------- ------------- ------------- ----------- ------------
Counsellors $ 0 $ 0 $ 0 $17,199,881
Securities
Inc.
The amounts reported above in the "Other Compensation" column are 12b-1
fees paid by the Registrant to the Registrant's distributor during fiscal year
1996 on behalf of all of the Registrant's funds that have 12b-1 Plans. A
description of the services performed by the distributor in connection with
these fees is contained in Registrant's prospectuses relating to these funds.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
(1) PNC Bank, National Association (successor by merger to Provident
National Bank), 1600 Market Street, Philadelphia, PA 19103 (records
relating to its functions as sub-adviser and custodian).
(2) Counsellors Securities Inc., 466 Lexington Avenue, New York, New York
10017 (records relating to its functions as distributor).
(3) PNC Institutional Management Corporation (formerly Provident
Institutional Management Corporation), Bellevue Corporate Center, 103
Bellevue Parkway, Wilmington, Delaware 19809 (records relating to its
functions as investment adviser, sub-adviser and administrator).
(4) PFPC Inc. (formerly Provident Financial Processing Corporation),
Bellevue Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware
19809 (records relating to its functions as transfer agent and
dividend disbursing agent).
(5) Drinker Biddle & Reath LLP., Philadelphia National Bank Building, 1345
Chestnut Street, Philadelphia, Pennsylvania 19107-3496 (Registrant's
Articles of Incorporation, By-Laws and Minute Books).
(6) BEA Associates, One Citicorp Center, 153 East 53rd Street, New York,
New York 10022 (records relating to its function as investment
adviser).
(7) Numeric Investors, L.P., 1 Memorial Drive, Cambridge, Massachusetts
02142 (records relating to its function as investment adviser).
-34-
<PAGE>
(8) Boston Partners Assets Management, L.P., One Financial Center, 43rd
Floor, Boston, Massachusetts 02111 (records relating to its function
as investment adviser).
Item 31. MANAGEMENT SERVICES
None.
Item 32. UNDERTAKINGS
(a) Registrant hereby undertakes to hold a meeting of shareholders for the
purpose of considering the removal of directors in the event the
requisite number of shareholders so request.
-35-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment No. 45 to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to its Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Wilmington, and State of Delaware, on the 9th day of May, 1997.
THE RBB FUND, INC.
By: /S/EDWARD J. ROACH
------------------------
Edward J. Roach
President and
Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to Registrant's Registration Statement has been signed
below by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/Edward J. Roach President (Principal May 9, 1997
- ----------------------
Edward J. Roach Executive Officer) and
Treasurer (Principal
Financial and Accounting
Officer)
/s/Donald van Roden Director May 9, 1997
- ----------------------
Donald van Roden
/s/Francis J. McKay Director May 9, 1997
- ----------------------
Francis J. McKay
/s/Marvin E. Sternberg Director May 9, 1997
- ----------------------
Marvin E. Sternberg
/s/Julian A. Brodsky Director May 9, 1997
- ----------------------
Julian A. Brodsky
/s/Arnold M. Reichman Director May 9, 1997
- ----------------------
Arnold M. Reichman
/s/Robert Sablowsky Director May 9, 1997
- ----------------------
Robert Sablowsky
-36-
<PAGE>
THE RBB FUND, INC.
EXHIBIT INDEX
EXHIBITS
(1)(r) Articles Supplementary of Registrant.
(6)(hh) Distribution Agreement Supplement (Class RR) between
Registrant and Counsellors Securities Inc.
(6)(ii) Distribution Agreement Supplement (Class SS) between
Registrant and Counsellors Securities Inc.
(8)(n) Custodian Agreement Supplement (BEA Municipal Bond Fund)
between Registrant and Brown Brothers Harriman & Co.
(9)(fff) Administration and Accounting Services Agreement between the
Registrant and PFPC Inc. dated October 16, 1996 (Boston
Partners Large Cap Value Fund).
(11)(a) Consent of Drinker Biddle & Reath LLP.
(11)(b) Consent of Independent Accountants.
(13)(m) Purchase Agreement between Registrant and Boston Partners
Asset Management, L.P. relating to Classes QQ, RR and SS
(Boston Partners Large Cap Value Fund).
(15)(mmm) Plan of Distribution (Boston Partners Large Cap Value Fund
Investor Class).
(15)(nnn) Plan of Distribution (Boston Partners Large Cap Value Fund
Advisor Class).
(15)(ooo) Plan of Distribution (Boston Partners Mid Cap Value Fund
Investor Class).
(15)(ppp) Plan of Distribution (Boston Partners Mid Cap Value Fund
Institutional Class).
(17)(a) Financial Data Schedules with respect to the BEA Global
Telecommunications Fund Advisor Class.
(17)(b) Financial Data Schedules with respect to the BEA
International Equity Fund Advisor Class.
(17)(c) Financial Data Schedules for the BEA Emerging Markets Equity
Advisor Class.
<PAGE>
(17)(d) Financial Data Schedules for the BEA High Yield Fund Advisor
Class.
(18) Rule 18f-3 Plan as amended.
<PAGE>
Exhibit 1(r)
THE RBB FUND, INC.
ARTICLES SUPPLEMENTARY TO THE
CHARTER
THE RBB FUND, INC., a Maryland corporation having its principal office
in Baltimore, Maryland (hereinafter called the "Corporation"), hereby certifies
to the State Department of Assessments and Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation, an open-end
investment company registered under the Investment Company Act of 1940, as
amended, and having authorized capital of thirty billion (30,000,000,000) shares
of common stock, par value $.001 per share, has adopted a unanimous resolution
increasing the number of shares of common stock that are classified (but not
increasing the aggregate number of authorized shares) into separate classes by:
classifying an additional one hundred million (100,000,000) of the
previously authorized, unissued and unclassified shares of the common
stock, par value $.001 per share, with an aggregate par value of one
hundred thousand dollars ($100,000), as Class TT Common Stock (Boston
Partners Mid Cap Value Fund Investor Portfolio);
classifying an additional one hundred million (100,000,000) of the
previously authorized, unissued and unclassified shares of the common
stock, par value $.001 per
<PAGE>
share, with an aggregate par value of one hundred thousand dollars
($100,000), as Class UU Common Stock (Boston Partners Mid Cap Value Fund
Institutional Portfolio);
SECOND: A description of the shares so classified with the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption as set or changed by the Board of Directors of the Corporation is as
follows:
A description of the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications and terms and
conditions or redemption of each class of common stock of the Corporation is set
forth in Article VI, Section (6) of the Corporation's Charter, and has not been
changed by the Board of Directors of the Corporation.
THIRD: The shares aforesaid have been duly classified by the Board of
Directors of the Corporation pursuant to authority and power contained in the
charter of the Corporation.
FOURTH: Immediately before the increase in the number of shares of
common stock that have been classified into separate classes:
(a) the Corporation had authority to issue thirty billion
(30,000,000,000) shares of its common stock and the aggregate par value of all
the shares of all classes was thirty million dollars ($30,000,000);
-2-
<PAGE>
(b) the number of shares of each authorized class of common
stock was as follows:
Class A - one hundred million (100,000,000), par value $.001 per share;
Class B - one hundred million (100,000,000), par value $.001 per share;
Class C - one hundred million (100,000,000), par value $.001 per share;
Class D - one hundred million (100,000,000), par value $.001 per share;
Class E - five hundred million (500,000,000), par value $.001 per share;
Class F - five hundred million (500,000,000), par value $.001 per share;
Class G - five hundred million (500,000,000), par value $.001 per share;
Class H - five hundred million (500,000,000), par value $.001 per share;
Class I - one billion (1,000,000,000), par value $.001 per share;
Class J - five hundred million (500,000,000), par value $.001 per share;
Class K - five hundred million (500,000,000), par value $.001 per share;
Class L - one billion five hundred million (1,500,000,000), par value $.001
per share;
-3-
<PAGE>
Class M - five hundred million (500,000,000), par value $.001 per share;
Class N - five hundred million (500,000,000), par value $.001 per share;
Class O - five hundred million (500,000,000), par value $.001 per share;
Class P - one hundred million (100,000,000), par value $.001 per share;
Class Q - one hundred million (100,000,000), par value $.001 per share;
Class R - five hundred million (500,000,000), par value $.001 per share;
Class S - five hundred million (500,000,000), par value $.001 per share;
Class T - five hundred million (500,000,000), par value $.001 per share;
Class U - five hundred million (500,000,000), par value $.001 per share;
Class V - five hundred million (500,000,000), par value $.001 per share;
Class W - one hundred million (100,000,000), par value $.001 per share;
Class X - fifty million (50,000,000), par value $.001 per share;
Class Y - fifty million (50,000,000), par value $.001 per share;
Class Z - fifty million (50,000,000), par value $.001 per share;
-4-
<PAGE>
Class AA - fifty million (50,000,000), par value $.001 per share;
Class BB - fifty million (50,000,000), par value $.001 per share;
Class CC - fifty million (50,000,000), par value $.001 per share;
Class DD - one hundred million (100,000,000), par value $.001 per share;
Class EE - one hundred million (100,000,000), par value $.001 per share;
Class FF - fifty million (50,000,000), par value $.001 per share;
Class GG - fifty million (50,000,000), par value $.001 per share;
Class HH - fifty million (50,000,000), par value $.001 per share;
Class II - one hundred million (100,000,000), par value $.001 per share;
Class JJ - one hundred million (100,000,000), par value $.001 per share;
Class KK - one hundred million (100,000,000), par value $.001 per share;
Class LL - one hundred million (100,000,000), par value $.001 per share;
Class MM - one hundred million (100,000,000), par value $.001 per share;
-5-
<PAGE>
Class NN - one hundred million (100,000,000), par value $.001 per share;
Class OO - one hundred million (100,000,000), par value $.001 per share;
Class PP - one hundred million (100,000,000), par value $.001 per share;
Class QQ - one hundred million (100,000,000), par value $.001 per share;
Class RR - one hundred million (100,000,000), par value $.001 per share;
Class SS - one hundred million (100,000,000), par value $.001 per share;
Class Alpha 1 - seven hundred million (700,000,000), par value $.001 per
share;
Class Alpha 2 - two hundred million (200,000,000), par value $.001 per
share;
Class Alpha 3 - five hundred million (500,000,000), par value $.001 per
share;
Class Alpha 4 - one hundred million (100,000,000), par value $.001 per
share;
Class Beta 1 - one million (1,000,000), par value $.001 per share;
Class Beta 2 - one million (1,000,000), par value $.001 per share;
Class Beta 3 - one million (1,000,000), par value $.001 per share;
-6-
<PAGE>
Class Beta 4 - one million (1,000,000), par value $.001 per share;
Class Gamma 1 - one million (1,000,000), par value $.001 per share;
Class Gamma 2 - one million (1,000,000), par value $.001 per share;
Class Gamma 3 - one million (1,000,000), par value $.001 per share;
Class Gamma 4 - one million (1,000,000), par value $.001 per share;
Class Delta 1 - one million (1,000,000), par value $.001 per share;
Class Delta 2 - one million (1,000,000), par value $.001 per share;
Class Delta 3 - one million (1,000,000), par value $.001 per share;
Class Delta 4 - one million (1,000,000), par value $.001 per share;
Class Epsilon 1 - one million (1,000,000), par value $.001 per share;
Class Epsilon 2 - one million (1,000,000), par value $.001 per share;
Class Epsilon 3 - one million (1,000,000), par value $.001 per share;
Class Epsilon 4 - one million (1,000,000), par value $.001 per share;
-7-
<PAGE>
Class Zeta 1 - one million (1,000,000), par value $.001 per share;
Class Zeta 2 - one million (1,000,000), par value $.001 per share;
Class Zeta 3 - one million (1,000,000), par value $.001 per share;
Class Zeta 4 - one million (1,000,000), par value $.001 per share;
Class Eta 1 - one million (1,000,000), par value $.001 per share;
Class Eta 2 - one million (1,000,000) par value $.001 per share;
Class Eta 3 - one million (1,000,000), par value $.001 per share;
Class Eta 4 - one million (1,000,000), par value $.001 per share;
Class Theta 1 - one million (1,000,000), par value $.001 per share;
Class Theta 2 - one million (1,000,000), par value $.001 per share;
Class Theta 3 - one million (1,000,000), par value $.001 per share; and
Class Theta 4 - one million (1,000,000), par value $.001 per share;
-8-
<PAGE>
for a total of thirteen billion four hundred seventy-eight million
(13,478,000,000) shares classified into separate classes of common stock.
After the increase in the number of shares of common stock that have
been classified into separate classes:
(c) the Corporation has the authority to issue thirty billion
(30,000,000,000) shares of its common stock and the aggregate par value of all
the shares of all classes is now thirty million dollars ($30,000,000); and
(d) the number of authorized shares of each class is now as
follows:
Class A - one hundred million (100,000,000), par value $.001 per share;
Class B - one hundred million (100,000,000), par value $.001 per share;
Class C - one hundred million (100,000,000), par value $.001 per share;
Class D - one hundred million (100,000,000), par value $.001 per share;
Class E - five hundred million (500,000,000), par value $.001 per share;
Class F - five hundred million (500,000,000), par value $.001 per share;
Class G - five hundred million (500,000,000), par value $.001 per share;
-9-
<PAGE>
Class H - five hundred million (500,000,000), par value $.001 per share;
Class I - one billion (1,000,000,000), par value $.001 per share;
Class J - five hundred million (500,000,000), par value $.001 per share;
Class K - five hundred million (500,000,000), par value $.001 per share;
Class L - one billion five hundred million (1,500,000,000), par value $.001
per share;
Class M - five hundred million (500,000,000), par value $.001 per share;
Class N - five hundred million (500,000,000), par value $.001 per share;
Class O - five hundred million (500,000,000), par value $.001 per share;
Class P - one hundred million (100,000,000), par value $.001 per share;
Class Q - one hundred million (100,000,000), par value $.001 per share;
Class R - five hundred million (500,000,000), par value $.001 per share;
Class S - five hundred million (500,000,000), par value $.001 per share;
Class T - five hundred million (500,000,000), par value $.001 per share;
-10-
<PAGE>
Class U - five hundred million (500,000,000), par value $.001 per share;
Class V - five hundred million (500,000,000), par value $.001 per share;
Class W - one hundred million (100,000,000), par value $.001 per share;
Class X - fifty million (50,000,000), par value $.001 per share;
Class Y - fifty million (50,000,000), par value $.001 per share;
Class Z - fifty million (50,000,000), par value $.001 per share;
Class AA - fifty million (50,000,000), par value $.001 per share;
Class BB - fifty million (50,000,000), par value $.001 per share;
Class CC - fifty million (50,000,000), par value $.001 per share;
Class DD - one hundred million (100,000,000), par value $.001 per share;
Class EE - one hundred million (100,000,000), par value $.001 per share;
Class FF - fifty million (50,000,000), par value $.001 per share;
Class GG - fifty million (50,000,000), par value $.001 per share;
Class HH - fifty million (50,000,000), par value $.001 per share;
-11-
<PAGE>
Class II - one hundred million (100,000,000), par value $.001 per share;
Class JJ - one hundred million (100,000,000), par value $.001 per share;
Class KK - one hundred million (100,000,000), par value $.001 per share;
Class LL - one hundred million (100,000,000), par value $.001 per share;
Class MM - one hundred million (100,000,000), par value $.001 per share;
Class NN - one hundred million (100,000,000), par value $.001 per share;
Class OO - one hundred million (100,000,000), par value $.001 per share;
Class PP - one hundred million (100,000,000), par value $.001 per share;
Class QQ - one hundred million (100,000,000), par value $.001 per share;
Class RR - one hundred million (100,000,000), par value $.001 per share;
Class SS - one hundred million (100,000,000), par value $.001 per share;
Class TT - one hundred million (100,000,000), par value $.001 per share;
Class UU - one hundred million (100,000,000), par value $.001 per share;
-12-
<PAGE>
Class Alpha 1 - seven hundred million (700,000,000), par value $.001 per
share;
Class Alpha 2 - two hundred million (200,000,000), par value $.001 per
share;
Class Alpha 3 - five hundred million (500,000,000), par value $.001 per
share;
Class Alpha 4 - one hundred million (100,000,000), par value $.001 per
share;
Class Beta 1 - one million (1,000,000), par value $.001 per share;
Class Beta 2 - one million (1,000,000), par value $.001 per share;
Class Beta 3 - one million (1,000,000), par value $.001 per share;
Class Beta 4 - one million (1,000,000), par value $.001 per share;
Class Gamma 1 - one million (1,000,000), par value $.001 per share;
Class Gamma 2 - one million (1,000,000), par value $.001 per share;
Class Gamma 3 - one million (1,000,000), par value $.001 per share;
Class Gamma 4 - one million (1,000,000), par value $.001 per share;
Class Delta 1 - one million (1,000,000), par value $.001 per share;
-13-
<PAGE>
Class Delta 2 - one million (1,000,000), par value $.001 per share;
Class Delta 3 - one million (1,000,000), par value $.001 per share;
Class Delta 4 - one million (1,000,000), par value $.001 per share;
Class Epsilon 1 - one million (1,000,000), par value $.001 per share;
Class Epsilon 2 - one million (1,000,000), par value $.001 per share;
Class Epsilon 3 - one million (1,000,000), par value $.001 per share;
Class Epsilon 4 - one million (1,000,000), par value $.001 per share;
Class Zeta 1 - one million (1,000,000), par value $.001 per share;
Class Zeta 2 - one million (1,000,000), par value $.001 per share;
Class Zeta 3 - one million (1,000,000), par value $.001 per share;
Class Zeta 4 - one million (1,000,000), par value $.001 per share;
Class Eta 1 - one million (1,000,000), par value $.001 per share;
Class Eta 2 - one million (1,000,000) par value $.001 per share;
-14-
<PAGE>
Class Eta 3 - one million (1,000,000), par value $.001 per share;
Class Eta 4 - one million (1,000,000), par value $.001 per share;
Class Theta 1 - one million (1,000,000), par value $.001 per share;
Class Theta 2 - one million (1,000,000), par value $.001 per share;
Class Theta 3 - one million (1,000,000), par value $.001 per share;
Class Theta 4 - one million (1,000,000), par value $.001 per share;
for a total of thirteen billion six hundred seventy-eight million
(13,678,000,000) shares classified into separate classes of common stock.
-15-
<PAGE>
IN WITNESS WHEREOF, The RBB Fund, Inc. has caused these presents to be
signed and attested in its name and on its behalf by its President and Secretary
on May 9, 1997.
THE RBB FUND, INC.
ATTEST:
/s/ Morgan R. Jones /s/ Edward J. Roach
- ------------------------ -------------------------------
Morgan R. Jones Edward J. Roach
Secretary President
-16-
<PAGE>
THE UNDERSIGNED, President of The RBB Fund, Inc., who executed on
behalf of said corporation the foregoing Articles Supplementary to the Charter,
of which this certificate is made a part, hereby acknowledges, in the name and
on behalf of said Corporation, and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects, under the
penalties of perjury.
/s/ Edward J. Roach
------------------------------
Edward J. Roach
President
-17-
<PAGE>
Exhibit 6(hh)
DISTRIBUTION AGREEMENT SUPPLEMENT
(Boston Partners Large Cap Value Fund)
(Investor Class)
This supplemental agreement is entered into this 16th day of October,
1996, by and between THE RBB FUND, INC. (the "Fund") and COUNSELLORS SECURITIES,
INC. (the "Distributor").
The Fund is a corporation organized under the laws of the State of
Maryland and is an open-end management investment company. The Fund and the
Distributor have entered into a Distribution Agreement, dated as of April 10,
1991 (as from time to time amended and supplemented, the "Distribution
Agreement"), pursuant to which the Distributor has undertaken to act as
distributor for the Fund, as more fully set forth therein. Certain capitalized
terms used without definition in this Distribution Agreement Supplement have the
meaning specified in the Distribution Agreement.
The Fund agrees with the Distributor as follows:
1. ADOPTION OF DISTRIBUTION AGREEMENT. The Distribution Agreement
is hereby adopted for the Boston Partners Large Cap Value Fund Investor Class of
Common Stock (Class RR) of the Fund.
2. PAYMENT OF FEES. For all services to be rendered, facilities
furnished and expenses paid or assumed by the Distributor as provided in the
Distribution Agreement and herein, the Fund shall pay the Distributor a monthly
12b-1 fee on the first business day of each month, based upon the average daily
value (as determined on each business day at the time set forth in the
Prospectus for determining net asset value per share) of the net assets of the
Class during the preceding month, at an annual rate of 0.25%.
3. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement,
intending to be legally bound hereby, as of the date and year first above
written.
THE RBB FUND, INC. COUNSELLORS SECURITIES, INC.
By: /s/ Edward J. Roach By: /s/ Eugene Podsiadlo
------------------------- ----------------------------------
Name: Edward J. Roach Name: Eugene Podsiadlo
Title: President Title: Senior V.P.
<PAGE>
Exhibit 6(ii)
DISTRIBUTION AGREEMENT SUPPLEMENT
(Boston Partners Large Cap Value Fund)
(Advisor Class)
This supplemental agreement is entered into this 16th day of October,
1996, by and between THE RBB FUND, INC. (the "Fund") and COUNSELLORS SECURITIES,
INC. (the "Distributor").
The Fund is a corporation organized under the laws of the State of
Maryland and is an open-end management investment company. The Fund and the
Distributor have entered into a Distribution Agreement, dated as of April 10,
1991 (as from time to time amended and supplemented, the "Distribution
Agreement"), pursuant to which the Distributor has undertaken to act as
distributor for the Fund, as more fully set forth therein. Certain capitalized
terms used without definition in this Distribution Agreement Supplement have the
meaning specified in the Distribution Agreement.
The Fund agrees with the Distributor as follows:
1. ADOPTION OF DISTRIBUTION AGREEMENT. The Distribution Agreement
is hereby adopted for the Boston Partners Mid Cap Value Fund Advisor Class of
Common Stock (Class SS) of the Fund.
2. PAYMENT OF FEES. For all services to be rendered, facilities
furnished and expenses paid or assumed by the Distributor as provided in the
Distribution Agreement and herein, the Fund shall pay the Distributor a monthly
12b-1 fee on the first business day of each month, based upon the average daily
value (as determined on each business day at the time set forth in the
Prospectus for determining net asset value per share) of the net assets of the
Class during the preceding month, at an annual rate of 0.75%.
3. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement,
intending to be legally bound hereby, as of the date and year first above
written.
THE RBB FUND, INC. COUNSELLORS SECURITIES, INC.
By: /s/ Edward J. Roach By: /s/ Eugene Podsiadlo
-------------------------- -----------------------------------
Name: Edward J. Roach Name: Eugene Podsiadlo
Title: President Title: Senior V.P.
<PAGE>
Exhibit 8(n)
BROWN BROTHERS HARRIMAN & CO.
APPENDIX "C"
TO
CUSTODIAN AGREEMENT
BETWEEN
THE RBB FUND, INC. and BROWN BROTHERS HARRIMAN & CO.
Dated as of April 23, 1997
The following is a list of Portfolios for which the Custodian shall serve under
a Custodian Agreement dated as of November 29, 1993 (the "Agreement"):
BEA GLOBAL TELECOMMUNICATIONS FUND
BEA EMERGING MARKETS EQUITY FUND
BEA HIGH YIELD FUND
BEA INTERNATIONAL EQUITY FUND
BEA STRATEGIC GLOBAL FIXED INCOME FUND
BEA U.S. CORE FIXED INCOME FUND
BEA U.S. EQUITY FUND
BEA MUNICIPAL BOND FUND
BEA SHORT DURATION FUND*
BEA BALANCED FUND*
* inactive
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to be
executed in its name and on behalf of each such Fund.
THE RBB FUND, INC. BROWN BROTHERS HARRIMAN & CO.
By: /s/ Edward J. Roach By: /s/ Kristen F. Giarrusso
--------------------- --------------------------
Name: Edward J. Roach Name: Kristen F. Giarrusso
Title: President Title: Senior Manager
<PAGE>
Exhibit 9(fff)
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
TERMS AND CONDITIONS
This Agreement is made as of October 16, 1996 by and between THE RBB
FUND, INC., a Maryland corporation (the "Fund"), and PFPC INC., a Delaware
corporation ("PFPC"), which is an indirect wholly-owned subsidiary of PNC Bank
Corp.
The Fund is registered as an open-end, non-diversified investment
company under the Investment Company Act of 1940, as amended (the "1940 Act").
The Fund wishes to retain PFPC to provide administration and accounting services
to its Boston Partners Large Cap Value Fund (the "Portfolio"), and PFPC wishes
to furnish such services.
In consideration of the promises and mutual covenants herein
contained, the parties agree as follows:
1. DEFINITIONS.
(a) "1933 ACT" means the Securities Act of 1933, as amended.
(b) "1934 ACT" means the Securities Exchange Act of 1934, as amended.
(c) "AUTHORIZED PERSON" means any officer of the Fund and any other
person, duly authorized by the Fund's Board of Directors, to give Oral and
Written Instructions on behalf of the Fund and listed on the Certificate
attached hereto as Appendix B or any amendment thereto as may be received by
PFPC from time to time. An Authorized Person's scope of authority may be
limited by the Fund by setting forth such limitation on the Certificate.
<PAGE>
(d) "BOOK-ENTRY SYSTEM" means Federal Reserve Treasury book-entry
system for United States and federal agency securities, its successor or
successors, and its nominee or nominees and any book-entry system maintained by
an exchange registered with the SEC under the 1934 Act.
(e) "ORAL INSTRUCTIONS" mean oral instructions received by PFPC
from an Authorized Person or from a person reasonably believed by PFPC to be
an Authorized Person.
(f) "SEC" means the Securities and Exchange Commission.
(g) SHARES" mean the shares of common stock of the Fund representing
an interest in the Portfolio.
(h) "PROPERTY" means:
(i) any and all securities and other investment items of the
Portfolio which the Fund may from time to time deposit, or
cause to be deposited, with PFPC or which PFPC may from time
to time hold for the Fund on behalf of the Portfolio;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of Shares which are received by
PFPC from time to time, from or on behalf of the Fund.
(i) "WRITTEN INSTRUCTIONS" mean written instructions signed by two
Authorized Persons and received by PFPC. The instructions may be delivered by
hand, mail, tested telegram, cable, telex or facsimile sending device.
2
<PAGE>
2. APPOINTMENT. The Fund hereby appoints PFPC to provide administration
and accounting services to the Portfolio, in accordance with the terms set forth
in this Agreement. PFPC accepts such appointment and agrees to furnish such
services.
3. DELIVERY OF DOCUMENTS.
The Fund has provided or, where applicable, will
provide PFPC with the following:
(a) certified or authenticated copies of the resolutions of the
Fund's Board of Directors, approving the appointment of PFPC to
provide services pursuant to this Agreement;
(b) a copy of the Fund's most recent effective registration
statement;
(c) a copy of the Fund's advisory agreement or agreements with
respect to the Portfolio;
(d) a copy of the Fund's distribution agreement or agreements with
respect to the Portfolio;
(e) a copy of any additional administration agreement with respect to
the Portfolio;
(f) copies of any shareholder servicing agreements made in respect of
the Portfolio; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. COMPLIANCE WITH GOVERNMENT RULES AND REGULATIONS.
PFPC undertakes to comply with all applicable requirements of the 1933
Act, the 1934 Act and the 1940 Act, and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to all duties to be
performed by PFPC hereunder. Except as specifically set forth herein, PFPC
assumes no responsibility for such compliance by the Fund.
3
<PAGE>
5. INSTRUCTIONS.
Unless otherwise provided in this Agreement, PFPC shall act only upon
oral and Written Instructions.
PFPC shall be entitled to rely upon any Oral and Written Instructions
it receives from an Authorized Person (or from a person reasonably believed by
PFPC to be an Authorized Person) pursuant to this Agreement. PFPC may assume
that any Oral or Written Instruction received hereunder is not in any way
inconsistent with the provisions of organizational documents or this Agreement
or of any vote, resolution or proceeding of the Fund's Board of Directors or of
the Fund's shareholders.
The Fund agrees to forward to PFPC Written Instructions confirming
Oral Instructions so that PFPC receives the Written Instructions by the close of
business on the same day that such Oral Instructions are received. The fact
that such confirming Written Instructions are not received by PFPC shall in no
way invalidate the transactions or enforceability of the transactions authorized
by the Oral Instructions. The Fund further agrees that PFPC shall incur no
liability to the Fund in acting upon Oral or Written Instructions provided such
instructions reasonably appear to have been received from an Authorized Person.
6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PFPC is in doubt as to any action it
should or should not take, PFPC may request directions or advice, including Oral
or Written Instructions, from the Fund.
4
<PAGE>
(b) ADVICE OF COUNSEL. If PFPC shall be in doubt as to any questions
of law pertaining to any action it should or should not take, PFPC may request
advice at its own cost from such counsel of its own choosing (who may be counsel
for the Fund, the Fund's advisor or PFPC, at the option of PFPC).
(c) CONFLICTING ADVICE. In the event of a conflict between
directions, advice or Oral or Written Instructions PFPC receives from the Fund,
and the advice it receives from counsel, PFPC shall be entitled to rely upon and
follow the advice of counsel.
(d) PROTECTION OF PFPC. PFPC shall be protected in any action it
takes or does not take in reliance upon directions, advice or Oral or Written
Instructions it receives from the Fund or from counsel and which PFPC believes,
in good faith, to be consistent with those directions, advice and Oral or
Written Instructions.
Nothing in this paragraph shall be construed so as to impose an
obligation upon PFPC (i) to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such directions, advice or Oral
or Written Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of PFPC's properly taking or not taking such
action.
7. RECORDS.
The books and records pertaining to the Fund, which are in the
possession of PFPC, shall be the property of the Fund.
5
<PAGE>
Such books and records shall be prepared and maintained as required by the 1940
Act and other applicable securities laws, rules and regulations. The Fund and
Authorized Persons shall have access to such books and records at all times
during PFPC's normal business hours. Upon the reasonable request of the Fund,
copies of any such books and records shall be provided by PFPC to the Fund or to
an Authorized Person at the Fund's expense to be paid from the assets of the
Portfolio.
PFPC shall keep the following records:
(a) all books and records with respect to the Portfolios books of
account;
(b) records of the Portfolio's securities transactions;
(c) all other books and records as PFPC is required to maintain
pursuant to Rule 3la-1 of the 1940 Act and as specifically set
forth in Appendix B hereto.
8. CONFIDENTIALITY.
PFPC agrees to keep confidential all records of the Fund and
information relative to the Fund and its shareholders (past, present and
potential), unless the release of such records or information is otherwise
consented to, in writing, by the Fund. The Fund agrees that such consent shall
not be unreasonably withheld. The Fund further agrees that, should PFPC be
required to provide such information or records to duly constituted authorities
(who may institute civil or criminal contempt proceedings for failure to
comply), PFPC shall not be
6
<PAGE>
required to seek the Fund's consent prior to disclosing such information.
9. LIAISON WITH ACCOUNTANTS.
PFPC shall act as liaison with the Fund's independent public
accountants and shall provide account analyses, fiscal year summaries, and other
audit-related schedules, all with respect to the Portfolio. PFPC shall take all
reasonable action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such accountants for
the expression of their opinion, as such may be required by the Fund from time
to time.
10. DISASTER RECOVERY.
PFPC shall enter into and shall maintain in effect with appropriate
parties one or more agreements making reasonable provision of emergency use of
electronic data processing equipment to the extent appropriate equipment is
available. In the event of equipment failures, PFPC shall, at no additional
expense to the Fund, take reasonable steps to minimize service interruptions but
shall have no liability with respect thereto.
11. COMPENSATION.
As compensation for services rendered by PFPC during the term of this
Agreement, the Fund will pay to PFPC from the assets of the Portfolio a fee or
fees as may be agreed to in writing by the Fund and PFPC.
7
<PAGE>
12. INDEMNIFICATION.
The Fund agrees to indemnify and hold harmless PFPC and its nominees
from all taxes, charges, expenses, assessments, claims and liabilities
(including, without limitation, liabilities arising under the 1933 Act, the 1934
Act and the 1940 Act, and any state and foreign securities and blue sky laws,
and amendments thereto, and expenses, including (without limitation) attorneys'
fees and disbursements, arising directly or indirectly from any action which
PFPC takes or does not take (i) at the request or on the direction of or in
reliance on the advice of the Fund or (ii) upon Oral or Written Instructions.
Neither PFPC, nor any of its nominees, shall be indemnified against any
liability to the Fund or to its shareholders (or any expenses incident to such
liability) arising out of PFPC's own willful misfeasance, gross negligence or
reckless disregard of its duties and obligations under this Agreement.
13. RESPONSIBILITY OF PFPC.
PFPC shall be under no duty to take any action on behalf of the Fund
except as specifically set forth herein or as may be specifically agreed to by
PFPC in writing. PFPC shall be obligated to exercise care and diligence in the
performance of its duties hereunder, to act in good faith and to use its best
efforts, within reasonable limits, in performing services provided for under
this Agreement. PFPC shall be responsible for failure to perform its duties
under this Agreement arising out of PFPC's gross negligence. Notwithstanding
the foregoing, PFPC
8
<PAGE>
shall not be responsible for losses beyond its control, provided that PFPC has
acted in accordance with the standard of care set forth above; and provided
further that PFPC shall only be responsible for that portion of losses or
damages suffered by the fund that are attributable to the gross negligence of
PFPC.
Without limiting the generality of the foregoing or of any other
provision of this Agreement, PFPC, in connection with its duties under this
Agreement, shall not be liable for (a) the validity or invalidity or authority
or lack thereof of any Oral or Written Instruction, notice or other instrument
which conforms to the applicable requirements of this Agreement, and which PFPC
reasonably believes to be genuine; or (b) delays or errors or loss of data
occurring by reason of circumstances beyond PFPC's control, including acts of
civil or military authority, national emergencies, labor difficulties, fire,
flood or catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
Notwithstanding anything in this Agreement to the contrary, PFPC shall
have no liability to the Fund for any consequential, special or indirect losses
or damages which the Fund may incur or suffer by or as a consequence of PFPC's
performance of the services provided hereunder, whether or not the likelihood of
such losses or damages was known by PFPC.
9
<PAGE>
14. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUING BASIS.
PFPC will perform the following accounting functions
with respect to the Portfolio if required:
(i) Journalize investment, capital share and income and expense
activities;
(ii) verify investment buy/sell trade tickets when received from the
investment advisor (the "Advisor") and transmit trades to the
Fund's foreign custodian (the "Custodian") for proper settlement;
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances with the Custodian, and
provide the Advisor with the beginning cash balance available for
investment purposes;
(vi) Update the cash availability throughout the day as required by
the Advisor;
(vii) Post to and prepare the Statement of Assets and Liabilities and
the Statement of Operations;
(viii) Calculate various contractual expenses (E.G., advisory and
custody fees);
(ix) Monitor the expense accruals and notify an officer of the Fund
of any proposed adjustments;
(x) Control all disbursements and authorize such disbursements upon
Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Obtain security market quotes from independent pricing services
approved by the Advisor, or if such quotes are unavailable, then
obtain such prices from Advisor, and in either case calculate the
market value of the investments;
10
<PAGE>
(xiv) Transmit or mail a copy of the daily portfolio valuation to the
Advisor;
(xv) Compute net asset value;
(xvi) As appropriate, compute yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average
dollar-weighted maturity; and
(xvii) Prepare a monthly financial statement, which will includes the
following items:
Schedule of Investments
Statement of Assets and Liabilities Statement of Operations
Cash Statement
Schedule of Capital Gains and Losses.
15. DESCRIPTION OF ADMINISTRATION SERVICES ON A CONTINUING BASIS.
PFPC will perform the following administration services
with respect to the Portfolio:
(i) Prepare quarterly broker security transactions summaries;
(ii) Prepare monthly security transaction listings;
(iii) (a) Assist in the preparation of support schedules necessary for
completion of federal and state tax returns; or (b) prepare for
execution and file the Fund's federal and state tax returns;
(iv) (a) Assist in the preparation of Semi-Annual Reports with the SEC
on Form N-SAR; or (b) prepare and file the Fund's Semi-Annual
Reports with the SEC on Form N-SAR.
(v) Assist in the preparation of annual, semi-annual, and quarterly
shareholder reports; or (b) prepare and file with the SEC the
Fund's annual, semi-annual, and quarterly shareholder reports;
(vi) Assist with the preparation of registration statements and other
filings relating to the registration of Shares;
11
<PAGE>
(vii) Monitor the Portfolio's status as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as
amended; and
(viii) Coordinate contractual relationships and communications between
the Fund and its service providers.
16. DURATION AND TERMINATION.
This Agreement shall continue until terminated by the Fund or by PFPC
on sixty (60) days' prior written notice to the other party.
17. NOTICES.
All notices and other communications, including written Instructions,
shall be in writing or by confirming telegram, cable, telex or facsimile sending
device. If notice is sent by confirming telegram, cable, telex or facsimile
sending device, it shall be deemed to have been given immediately. If notice is
sent by first-class mail, it shall be deemed to have been given three days after
it has been mailed. If notice is sent by messenger, it shall be deemed to have
been given on the day it is delivered. Notices shall be addressed (a) if to
PFPC at PFPC's address, 400 Bellevue Parkway, Wilmington, Delaware 19809; (b) if
to the Fund, at the address of the Fund; or (c) if to neither of the foregoing,
at such other address as shall have been notified to the sender of any such
Notice or other communication.
12
<PAGE>
18. AMENDMENTS.
This Agreement, or any term thereof, may be changed or waived only by
written amendment, signed by the party against whom enforcement of such change
or waiver is sought.
19. DELEGATION.
PFPC may assign its rights and delegate its duties hereunder to any
wholly owned director indirect subsidiary of PNC Bank, National Association or
PNC Bank Corp., provided that (i) PFPC gives the Fund thirty (30) days' prior
written notice; (ii) the delegate agrees with PFPC to comply with all relevant
provisions of the 1940 Act; and (iii) PFPC and such delegate promptly provide
such information as the Fund may request, and respond to such questions as the
Fund may ask, relative to the delegation, including (without limitation) the
capabilities of the delegate.
20. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
21. FURTHER ACTIONS.
Each Party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes hereof.
13
<PAGE>
22. MISCELLANEOUS.
This Agreement embodies the entire agreement and understanding between
the parties and supersedes all prior agreements and understandings relating to
the subject matter hereof, provided that the parties may embody in one or more
separate documents their agreement, if any, with respect to delegated and/or
Oral Instructions.
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
This Agreement shall be deemed to be a contract made in Delaware and
governed by Delaware law. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement
shall be binding and shall inure to the benefit off the parties hereto and
their respective successors.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below on the day and year first above
written.
PFPC INC.
By: /s/ Stephen M. Wynne
---------------------------
Name: Stephen M. Wynne
Title: Vice President
THE RBB FUND, INC.
By: /s/ Edward J. Roach
---------------------------
Name: Edward J. Roach
Title: President &
Treasurer
15
<PAGE>
October 16, 1996
The RBB Fund Inc.
Re: Administration and Accounting Services Fees
Boston Partners Large Cap Value Fund
-------------------------------------------
Dear Sir/Madam:
This letter constitutes our agreement with respect to compensation
to be paid to PFPC Inc. ("PFPC") under the terms of an Administration and
Accounting Services Agreement dated October 16, 1996 between PFPC and The RBB
Fund, Inc. (the "Fund") on behalf of its Boston Partners Large Cap Value Fund
(the "Portfolio"). In consideration of the services to be provided by PFPC,
the Fund on behalf of the Portfolio will pay PFPC an annual administration
and accounting fee, to be calculated daily and paid monthly. The Fund on
behalf of the Portfolio will also reimburse PFPC for its out-of-pocket
expenses incurred on behalf of the Portfolio, including, but not limited to,
postage and handling, telephone, telex, Federal Express and outside pricing
service charges.
The annual administration and accounting fee shall be .125% of the
Portfolio's average daily net assets, exclusive of out-of-pocket expenses, with
a monthly minimum fee of $6,250.
The fee for the period from the date hereof until the end of that
calendar year shall be pro-rated according to the proportion which such period
bears to the full annual period commencing on the date hereof.
16
<PAGE>
If the foregoing accurately sets forth our agreement, and you intend
to be legally bound thereby, please execute a copy of this letter and return it
to us.
Very truly yours,
PFPC, INC.
By: /s/ Stephen M. Wynne
-------------------------
Name: Stephen M. Wynne
Title: Vice President
Accepted:
THE RBB FUND, INC.
By: /s/ Edward J. Roach
-----------------------------
Name: Edward J. Roach
Title: President & Treasurer
17
<PAGE>
October 16, 1996
The RBB Fund Inc.
Re: Administration and Accounting Services Fees Waiver
Boston Partners Large Cap Value Fund
--------------------------------------------------
Dear Sir/Madam:
PFPC Inc. ("PFPC") agrees to waive certain fees under an
Administration and Accounting Services Agreement dated October 16, 1996
between PFPC and The RBB Fund, Inc. on behalf of its Boston Partners Large
Cap Value Fund (the "Portfolio") as follows: for the first two years of the
Portfolio's operations PFPC shall waive 50% of its minimum fee (excluding
miscellaneous fees and out-of-pocket costs) to the extent the minimum fee is
applicable; thereafter, PFPC's minimum fee shall be charged in full. Thus,
during the twenty-fifth calendar month and thereafter, the Portfolio shall
pay 100% of the minimum fee.
Very truly yours,
PFPC INC.
By: /s/ Stephen M. Wynne
-------------------------
Name: Stephen M. Wynne
Title: Vice President
Acknowledged:
The RBB FUND, INC.
By: /s/ Edward J. Roach
-----------------------------
Name: Edward J. Roach
Title: President & Treasurer
18
<PAGE>
Exhibit 11(a)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the reference to
our Firm under the caption "Counsel" in the Prospectus and the caption
"Miscellaneous-Counsel" in the Statement of Additional Information included
in Post-Effective Amendment No. 45 to the Registration Statement (File No.
33-20827; and File No. 811-5518) on Form N-1A under the Securities Act of
1933 and the Investment Company Act of 1940, as amended, of The RBB Fund,
Inc. This consent does not constitute a consent under Section 7 of the
Securities Act of 1933, and in consenting to the use of our name and the
references to our Firm under such caption we have not certified any part of
the Registration Statement and do not otherwise come within the categories of
persons whose consent is required under said Section 7 or the rules and
regulations of the Securities and Exchange Commission thereunder.
/s/ Drinker Biddle & Reath LLP
------------------------------
DRINKER BIDDLE & REATH LLP
Philadelphia, Pennsylvania
May 9, 1997
<PAGE>
Exhibit 11(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent in this Post-Effective Amendment No. 45 Under the Securities
Act of 1933, as amended, to this Registration Statement on Form N-1A (File
No. 33-20827) of The RBB Fund, Inc. to the reference to our Firm under the
heading "Miscellaneous - Independent Accountants" in the Statement of
Additional Information.
/s/COOPERS & LYBRAND L.L.P.
- ---------------------------
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
May 8, 1997
<PAGE>
Exhibit 13(m)
PURCHASE AGREEMENT
The RBB Fund, Inc. (the "Fund"), a Maryland corporation, and Boston
Partners Asset Management, L.P. ("BPAM"), intending to be legally bound, hereby
agree with each other as follows:
1. The Fund hereby offers BPAM and BPAM hereby purchases $1,000
worth of shares of each of Classes QQ, RR and SS Common Stock of the Fund (par
value $.001 per share) (such shares hereinafter sometimes collectively known as
"Shares") at a price per Share equivalent to the net asset value per share of
the Shares of the Fund as determined on October 16, 1996.
The Fund hereby acknowledges receipt from BPAM of funds in the amount of $3,000
in full payment for the Shares.
2. BPAM represents and warrants to the Fund that the Shares are
being acquired for investment purposes and not with a view to the distribution
thereof.
3. This agreement may be executed in counterparts, and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 16th day of October, 1996.
THE RBB FUND, INC.
By: /s/ Edward J. Roach
-------------------------------
President
BOSTON PARTNERS ASSET
MANAGEMENT, L.P.
BY: BOSTON PARTNERS, INC.,
THE GENERAL PARTNER
By: /s/ William Kelly
-------------------------------
Treasurer
<PAGE>
Exhibit 15(mmm)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE RBB FUND, INC.
(Boston Partners Large Cap Value Fund Investor Class)
WHEREAS, The RBB Fund, Inc. (the "Fund") intends to engage in business
as an open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Fund desires to adopt a Plan of Distribution pursuant to
Rule 12b-1 under the Act with respect to shares of its Class RR Common Stock,
par value $.001 per share (the "Class RR Shares") and the Board of Directors has
determined that there is a reasonable likelihood that adoption of this Plan of
Distribution will benefit the Fund and its stockholders; and
WHEREAS, the Fund intends to employ Counsellors Securities, Inc. (the
"Distributor") as distributor of the Class RR Shares; and
WHEREAS, the Fund and the Distributor intend to enter into a separate
Distribution Agreement with the Fund for Class RR Shares, pursuant to which the
Fund will employ the Distributor as distributor for the continuous offering of
Class RR Shares;
NOW, THEREFORE, the Fund hereby adopts, and the Distributor hereby
agrees to the terms of, this Plan of Distribution (the "Plan") in accordance
with Rule 12b-1 under the Act on the following terms and conditions:
1. The Fund shall pay to the Distributor, as the distributor of the
Class RR Shares, compensation for distribution of its shares at an annual rate
not to exceed .25% of the average daily net assets of the Class RR Shares. The
amount of such compensation shall be agreed upon by the Board of Directors of
the Fund and by the Distributor and shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of Directors and the
Distributor shall mutually agree.
2. The amount set forth in paragraph 1 of this Plan shall be paid
for the Distributor's services as distributor of the Class RR Shares. Such
amount may be spent by the Distributor on any activities or expenses primarily
intended to result in the
<PAGE>
sale of Class RR Shares, including, but not limited to: compensation to and
expenses of employees of the Distributor who engage in or support distribution
of the Class RR Shares, including overhead and telephone expenses; printing of
prospectuses and reports for other than existing shareholders; preparation,
printing and distribution of sales literature and advertising materials; and
compensation to certain financial institutions ("Service Organizations") who
sell Class RR Shares. The Distributor may negotiate with any such Service
Organizations the services to be provided by the Service Organization to
shareholders in connection with the sale of Class RR Shares ("Distribution
Services"), and all or any portion of the compensation paid to the Distributor
under paragraph 1 of this Plan may be reallocated by the Distributor to Service
Organizations who sell Class RR Shares.
The compensation paid to Service Organizations with respect to
Distribution Services will compensate Service Organizations to cover certain
expenses primarily intended to result in the sale of Class RR Shares, including,
but not limited to: (a) costs of payments made to employees that engage in the
sale of Class RR Shares; (b) payments made to, and expenses of, persons who
provide support services in connection with the sale of Class RR Shares,
including, but not limited to, office space and equipment, telephone facilities,
processing shareholder transactions and providing any other shareholder services
not otherwise provided by the Fund's transfer agent; (c) costs relating to the
formulation and implementation of marketing and promotional activities,
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (d) costs of printing and
distributing prospectuses, statements of additional information and reports
relating to the Class RR Shares to prospective shareholders of the Class RR
Shares; (e) costs involved in preparing, printing and distributing sales
literature pertaining to the Class RR Shares; and (f) costs involved in
obtaining whatever information, analyses and reports with respect to marketing
and promotional activities that the Service Organization may, from time to time,
deem advisable.
The compensation paid to Service Organizations with respect to
Shareholder Services will compensate Service Organizations for personal service
and/or the maintenance of shareholder accounts, including but not limited to (a)
responding to inquiries of customers or clients of the Service Organization who
beneficially own Class RR Shares ("Customers"), (b) providing information on
Customer investments and (c) providing other shareholder liaison services.
The compensation paid to Service Organizations with respect to
Administrative Services will compensate Service Organizations for administrative
and accounting services to their
-2-
<PAGE>
Customers, including, but not limited to: (a) aggregating and processing
purchase and redemption requests from Customers and placing net purchase and
redemption orders with the Fund's distributor or transfer agent; (b) providing
Customers with a service that invests the assets of their accounts in the Class
RR Shares; (c) processing dividend payments from the Class RR Shares on behalf
of Customers; (d) providing information periodically to Customers showing their
positions in the Class RR Shares; (e) arranging for bank wires; (f) providing
sub-accounting with respect to Class RR Shares beneficially owned by Customers
or the information to the Fund necessary for sub-accounting; (g) forwarding
shareholder communications from the Fund (for example, proxies, shareholder
reports, annual and semi-annual financial statements and dividend, distribution
and tax notices related to the Class RR Shares) to Customers, if required by
law; and (h) providing other similar services to the extent permitted under
applicable statutes, rules and regulations.
3. This Plan shall not take effect until it has been approved by a
vote of at least a majority (as defined in the Act) of the outstanding Class RR
Shares.
4. In addition to the approval required by paragraph 3 above, this
Plan shall not take effect until it has been approved, together with any related
agreements, by votes of a majority of both (a) the Board of Directors of the
Fund and (b) those directors of the Fund who are not "interested persons" of the
Fund (as defined in the Act) and have no direct or indirect financial interest
in the operation of this Plan or any agreements related to it (the "Rule 12b-1
Directors"), cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan and such related agreements.
5. This Plan shall continue in effect until
August 16, 1997. Thereafter, this Plan shall continue in effect for so long as
such continuance is specifically approved at least annually in the manner
provided for approval of this Plan in paragraph 4.
6. The Distributor shall provide to the Board of Directors of the
Fund and the Board of Directors shall review, at least quarterly, a written
report of the amounts expended pursuant to this Plan and the purposes for which
such expenditures were made, including commissions, advertising, printing,
interest, carrying charges and allocated overhead expenses.
7. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Directors, or by a vote of a majority of the outstanding Class RR
Shares.
-3-
<PAGE>
8. This Plan may not be amended to increase materially the amount of
compensation provided for in paragraph 1 hereof unless such amendment is
approved in the manner provided for initial approval in paragraph 3 hereof, and
no material amendment to the Plan of any kind, including an amendment which
would increase materially the amount of compensation, shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 4
hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Fund
shall be committed to the discretion of the then current Directors who are not
interested persons (as defined in the Act) of the Fund.
10. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof for a period of
not less than six years from the date of this Plan, the agreements or such
reports, as the case may be, the first two years in an easily accessible place.
Dated: October 16, 1996
-4-
<PAGE>
Exhibit 15(nnn)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE RBB FUND, INC.
(Boston Partners Large Cap Value Fund Advisor Class)
WHEREAS, The RBB Fund, Inc. (the "Fund") intends to engage in business
as an open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Fund desires to adopt a Plan of Distribution pursuant to
Rule 12b-1 under the Act with respect to shares of its Class SS Common Stock,
par value $.001 per share (the "Class SS Shares") and the Board of Directors has
determined that there is a reasonable likelihood that adoption of this Plan of
Distribution will benefit the Fund and its stockholders; and
WHEREAS, the Fund intends to employ Counsellors Securities Inc. (the
"Distributor") as distributor of the Class SS Shares; and
WHEREAS, the Fund and the Distributor intend to enter into a separate
Distribution Agreement with the Fund for Class SS Shares, pursuant to which the
Fund will employ the Distributor as distributor for the continuous offering of
Class SS Shares;
NOW, THEREFORE, the Fund hereby adopts, and the Distributor hereby
agrees to the terms of, this Plan of Distribution (the "Plan") in accordance
with Rule 12b-1 under the Act on the following terms and conditions:
1. The Fund shall pay to the Distributor, as the distributor of the
Class SS Shares, compensation for distribution of its shares at an annual rate
not to exceed .75% of the average daily net assets of the Class SS Shares. The
amount of such compensation shall be agreed upon by the Board of Directors of
the Fund and by the Distributor and shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of Directors and the
Distributor shall mutually agree.
2. The amount set forth in paragraph 1 of this Plan shall be paid
for the Distributors services as distributor of the Class SS Shares. Such
amount may be spent by the Distributor on any activities or expenses primarily
intended to result in the
-1-
<PAGE>
sale of Class SS Shares, including, but not limited to: compensation to and
expenses of employees of the Distributor who engage in or support distribution
of the Class SS Shares, including overhead and telephone expenses; printing of
prospectuses and reports for other than existing shareholders; preparation,
printing and distribution of sales literature and advertising materials; and
compensation to certain financial institutions ("Service Organizations") who
sell Class SS Shares. The Distributor may negotiate with any such Service
organizations the services to be provided by the Service organization to
shareholders in connection with the sale of Class SS Shares ("Distribution
Services"), and all or any portion of the compensation paid to the Distributor
under paragraph 1 of this Plan may be reallocated by the Distributor to Service
Organizations who sell Class SS Shares.
The compensation paid to Service organizations with respect to
Distribution services will compensate Service Organizations to cover certain
expenses primarily intended to result in the sale of Class SS Shares, including,
but not limited to: (a) costs of payments made to employees that engage in the
sale of Class SS Shares; (b) payments made to, and expenses of, persons who
provide support services in connection with the sale of Class SS Shares,
including, but not limited to, office space and equipment, telephone facilities,
processing shareholder transactions and providing any other shareholder services
not otherwise provided by the Fund's transfer agent; (c) costs relating to the
formulation and implementation of marketing and promotional activities,
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (d) costs of printing and
distributing prospectuses, statements of additional information and reports
relating to the Class SS Shares to prospective shareholders of the Class SS
Shares; (e) costs involved in preparing, printing and distributing sales
literature pertaining to the Class SS Shares; and (f) costs involved in
obtaining whatever information, analyses and reports with respect to marketing
and promotional activities that the service Organization may, from time to time,
deem advisable.
The compensation paid to Service organizations with respect to
Shareholder services will compensate Service Organizations for personal service
and/or the maintenance of shareholder accounts, including but not limited to (a)
responding to inquiries of customers or clients of the Service organization who
beneficially own Class SS Shares ("Customers"), (b) providing information on
Customer investments and (c) providing other shareholder liaison services.
The compensation paid to Service organizations with respect to
Administrative Services will compensate Service Organizations for administrative
and accounting services to their
-2-
<PAGE>
Customers, including, but not limited to: (a) aggregating and processing
purchase and redemption requests from Customers and placing net purchase and
redemption orders with the Fund's distributor or transfer agent; (b) providing
Customers with a service that invests the assets of their accounts in the Class
SS Shares; (c) processing dividend payments from the Class SS Shares on behalf
of Customers; (d) providing information periodically to Customers showing their
positions in the Class SS Shares; (e) arranging for bank wires; (f) providing
sub-accounting with respect to Class SS Shares beneficially owned by Customers
or the information to the Fund necessary for sub-accounting; (g) forwarding
shareholder communications from the Fund (for example, proxies, shareholder
reports, annual and semi-annual financial statements and dividend, distribution
and tax notices related to the Class SS Shares) to Customers, if required by
law; and (h) providing other similar services to the extent permitted under
applicable statutes, rules and regulations.
3. This Plan shall not take effect until it has been approved by a
vote of at least a majority (as defined in the Act) of the outstanding Class SS
Shares.
4. In addition to the approval required by paragraph 3 above, this
Plan shall not take effect until it has been approved, together with any related
agreements, by votes of a majority of both (a) the Board of Directors of the
Fund and (b) those directors of the Fund who are not "interested persons" of the
Fund (as defined in the Act) and have no direct or indirect financial interest
in the operation of this Plan or any agreements related to it (the "Rule 12b-1
Directors"), cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan and such related agreements.
5. This Plan shall continue in effect until August 16, 1997.
Thereafter, this Plan shall continue in effect for so long as such continuance
is specifically approved at least annually in the manner provided for approval
of this Plan in paragraph 4.
6. The Distributor shall provide to the Board of Directors of the
Fund and the Board of Directors shall review, at least quarterly, a written
report of the amounts expended pursuant to this Plan and the purposes for which
such expenditures were made, including commissions, advertising, printing,
interest, carrying charges and allocated overhead expenses.
7. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Directors, or by a vote of a majority of the outstanding Class SS
Shares.
-3-
<PAGE>
8. This Plan may not be amended to increase materially the amount of
compensation provided for in paragraph 1 hereof unless such amendment is
approved in the manner provided for initial approval in paragraph 3 hereof, and
no material amendment to the Plan of any kind, including an amendment which
would increase materially the amount of compensation, shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 4
hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Fund
shall be committed to the discretion of the then current Directors who are not
interested persons (as defined in the Act) of the Fund.
10. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof for a period of
not less than six years from the date of this Plan, the agreements or such
reports, as the case may be, the first two years in an easily accessible place.
Dated: October 16, 1996
-4-
<PAGE>
Exhibit 15(ooo)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE RBB FUND, INC.
(Boston Partners Mid Cap Value Fund Investor Class)
WHEREAS, The RBB Fund, Inc. (the "Fund") intends to engage in business
as an open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Fund desires to adopt a Plan of Distribution pursuant to
Rule 12b-1 under the Act with respect to shares of its Class TT Common Stock,
par value $.001 per share (the "Class TT Shares") and the Board of Directors has
determined that there is a reasonable likelihood that adoption of this Plan of
Distribution will benefit the Fund and its stockholders; and
WHEREAS, the Fund intends to employ Counsellors Securities, Inc. (the
"Distributor") as distributor of the Class TT Shares; and
WHEREAS, the Fund and the Distributor intend to enter into a separate
Distribution Agreement with the Fund for Class TT Shares, pursuant to which the
Fund will employ the Distributor as distributor for the continuous offering of
Class TT Shares;
NOW, THEREFORE, the Fund hereby adopts, and the Distributor hereby
agrees to the terms of, this Plan of Distribution (the "Plan") in accordance
with Rule 12b-1 under the Act on the following terms and conditions:
1. The Fund shall pay to the Distributor, as the distributor of the
Class TT Shares, compensation for distribution of its shares at an annual rate
not to exceed .75% of the average daily net assets of the Class TT Shares. The
amount of such compensation shall be agreed upon by the Board of Directors of
the Fund and by the Distributor and shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of Directors and the
Distributor shall mutually agree.
2. The amount set forth in paragraph 1 of this Plan shall be paid
for the Distributor's services as distributor of the Class TT Shares. Such
amount may be spent by the Distributor on any activities or expenses primarily
intended to result in the
<PAGE>
sale of Class TT Shares, including, but not limited to: compensation to and
expenses of employees of the Distributor who engage in or support distribution
of the Class TT Shares, including overhead and telephone expenses; printing of
prospectuses and reports for other than existing shareholders; preparation,
printing and distribution of sales literature and advertising materials; and
compensation to certain financial institutions ("Service Organizations") who
sell Class TT Shares. The Distributor may negotiate with any such Service
Organizations the services to be provided by the Service Organization to
shareholders in connection with the sale of Class TT Shares ("Distribution
Services"), and all or any portion of the compensation paid to the Distributor
under paragraph 1 of this Plan may be reallocated by the Distributor to Service
Organizations who sell Class TT Shares.
The compensation paid to Service Organizations with respect to
Distribution Services will compensate Service Organizations to cover certain
expenses primarily intended to result in the sale of Class TT Shares, including,
but not limited to: (a) costs of payments made to employees that engage in the
sale of Class TT Shares; (b) payments made to, and expenses of, persons who
provide support services in connection with the sale of Class TT Shares,
including, but not limited to, office space and equipment, telephone facilities,
processing shareholder transactions and providing any other shareholder services
not otherwise provided by the Fund's transfer agent; (c) costs relating to the
formulation and implementation of marketing and promotional activities,
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (d) costs of printing and
distributing prospectuses, statements of additional information and reports
relating to the Class TT Shares to prospective shareholders of the Class TT
Shares; (e) costs involved in preparing, printing and distributing sales
literature pertaining to the Class TT Shares; and (f) costs involved in
obtaining whatever information, analyses and reports with respect to marketing
and promotional activities that the Service Organization may, from time to time,
deem advisable.
The compensation paid to Service Organizations with respect to
Shareholder Services will compensate Service Organizations for personal
service and/or the maintenance of shareholder accounts, including but not
limited to (a) responding to inquiries of customers or clients of the Service
Organization who beneficially own Class TT Shares ("Customers"), (b)
providing information on Customer investments and (c) providing other
shareholder liaison services.
The compensation paid to Service Organizations with respect to
Administrative Services will compensate Service Organizations for administrative
and accounting services to their
-2-
<PAGE>
Customers, including, but not limited to: (a) aggregating and processing
purchase and redemption requests from Customers and placing net purchase and
redemption orders with the Fund's distributor or transfer agent; (b) providing
Customers with a service that invests the assets of their accounts in the Class
TT Shares; (c) processing dividend payments from the Class TT Shares on behalf
of Customers; (d) providing information periodically to Customers showing their
positions in the Class TT Shares; (e) arranging for bank wires; (f) providing
sub-accounting with respect to Class TT Shares beneficially owned by Customers
or the information to the Fund necessary for sub-accounting; (g) forwarding
shareholder communications from the Fund (for example, proxies, shareholder
reports, annual and semi-annual financial statements and dividend, distribution
and tax notices related to the Class TT Shares) to Customers, if required by
law; and (h) providing other similar services to the extent permitted under
applicable statutes, rules and regulations.
3. This Plan shall not take effect until it has been approved by a
vote of at least a majority (as defined in the Act) of the outstanding Class TT
Shares.
4. In addition to the approval required by paragraph 3 above, this
Plan shall not take effect until it has been approved, together with any related
agreements, by votes of a majority of both (a) the Board of Directors of the
Fund and (b) those directors of the Fund who are not "interested persons" of the
Fund (as defined in the Act) and have no direct or indirect financial interest
in the operation of this Plan or any agreements related to it (the "Rule 12b-1
Directors"), cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan and such related agreements.
5. This Plan shall continue in effect until August 16, 1997.
Thereafter, this Plan shall continue in effect for so long as such continuance
is specifically approved at least annually in the manner provided for approval
of this Plan in paragraph 4.
6. The Distributor shall provide to the Board of Directors of the
Fund and the Board of Directors shall review, at least quarterly, a written
report of the amounts expended pursuant to this Plan and the purposes for which
such expenditures were made, including commissions, advertising, printing,
interest, carrying charges and allocated overhead expenses.
7. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Directors, or by a vote of a majority of the outstanding Class TT
Shares.
-3-
<PAGE>
8. This Plan may not be amended to increase materially the amount of
compensation provided for in paragraph 1 hereof unless such amendment is
approved in the manner provided for initial approval in paragraph 3 hereof, and
no material amendment to the Plan of any kind, including an amendment which
would increase materially the amount of compensation, shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 4
hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Fund
shall be committed to the discretion of the then current Directors who are not
interested persons (as defined in the Act) of the Fund.
10. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof for a period of
not less than six years from the date of this Plan, the agreements or such
reports, as the case may be, the first two years in an easily accessible place.
Dated: April 23, 1997
-4-
<PAGE>
Exhibit 15(ppp)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE RBB FUND, INC.
(Boston Partners Mid Cap Value Fund Institutional Class)
WHEREAS, The RBB Fund, Inc. (the "Fund") intends to engage in business
as an open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Fund desires to adopt a Plan of
Distribution pursuant to Rule 12b-1 under the Act with respect to shares of its
Class UU Common Stock, par value $.001 per share (the "Class UU Shares") and the
Board of Directors has determined that there is a reasonable likelihood that
adoption of this Plan of Distribution will benefit the Fund and its
stockholders; and
WHEREAS, the Fund intends to employ Counsellors Securities Inc. (the
"Distributor") as distributor of the Class UU Shares; and
WHEREAS, the Fund and the Distributor intend to enter into a separate
Distribution Agreement with the Fund for Class UU Shares, pursuant to which the
Fund will employ the Distributor as distributor for the continuous offering of
Class UU Shares;
NOW, THEREFORE, the Fund hereby adopts, and the Distributor hereby
agrees to the terms of, this Plan of Distribution (the "Plan") in accordance
with Rule 12b-1 under the Act on the following terms and conditions:
1. The Fund shall pay to the Distributor, as the distributor of the
Class UU Shares, compensation for distribution of its shares at an annual rate
not to exceed 0.15% of the average daily net assets of the Class UU Shares. The
amount of such compensation shall be agreed upon by the Board of Directors of
the Fund and by the Distributor and shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of Directors and the
Distributor shall mutually agree.
2. The amount set forth in paragraph 1 of this Plan shall be paid
for the Distributor's services as distributor of the Class UU Shares. Such
amount may be spent by the Distributor on any activities or expenses primarily
intended to result in the sale of Class UU Shares, including, but not limited
to: compensation to and expenses of employees of the Distributor who
<PAGE>
engage in or support distribution of the Class UU Shares, including overhead and
telephone expenses; printing of prospectuses and reports for other than existing
shareholders; preparation, printing and distribution of sales literature and
advertising materials; and compensation to certain financial institutions
("Service Organizations") who sell Class UU Shares. The Distributor may
negotiate with any such Service Organizations the services to be provided by the
Service Organization to shareholders in connection with the sale of Class UU
Shares ("Distribution Services"), and all or any portion of the compensation
paid to the Distributor under paragraph 1 of this Plan may be reallocated by the
Distributor to Service Organizations who sell Class UU Shares.
The compensation paid to Service Organizations with respect to
Distribution Services will compensate Service Organizations to cover certain
expenses primarily intended to result in the sale of Class UU Shares, including,
but not limited to: (a) costs of payments made to employees that engage in the
sale of Class UU Shares; (b) payments made to, and expenses of, persons who
provide support services in connection with the sale of Class UU Shares,
including, but not limited to, office space and equipment, telephone facilities,
processing shareholder transactions and providing any other shareholder services
not otherwise provided by the Fund's transfer agent; (c) costs relating to the
formulation and implementation of marketing and promotional activities,
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (d) costs of printing and
distributing prospectuses, statements of additional information and reports
relating to the Class UU Shares to prospective shareholders of the Class UU
Shares; (e) costs involved in preparing, printing and distributing sales
literature pertaining to the Class UU Shares; and (f) costs involved in
obtaining whatever information, analyses and reports with respect to marketing
and promotional activities that the Service Organization may, from time to time,
deem advisable.
The compensation paid to Service Organizations with respect to
Shareholder Services will compensate Service Organizations for personal service
and/or the maintenance of shareholder accounts, including but not limited to (a)
responding to inquiries of customers or clients of the Service Organization who
beneficially own Class UU Shares ("Customers"), (b) providing information on
Customer investments and (c) providing other shareholder liaison services.
The compensation paid to Service Organizations with respect to
Administrative Services will compensate Service Organizations for administrative
and accounting services to their
-2-
<PAGE>
Customers, including, but not limited to: (a) aggregating and processing
purchase and redemption requests from Customers and placing net purchase and
redemption orders with the Fund's distributor or transfer agent; (b) providing
Customers with a service that invests the assets of their accounts in the Class
UU Shares; (c) processing dividend payments from the Class UU Shares on behalf
of Customers; (d) providing information periodically to Customers showing their
positions in the Class UU Shares; (e) arranging for bank wires; (f) providing
sub-accounting with respect to Class UU Shares beneficially owned by Customers
or the information to the Fund necessary for sub-accounting; (g) forwarding
shareholder communications from the Fund (for example, proxies, shareholder
reports, annual and semi-annual financial statements and dividend, distribution
and tax notices related to the Class UU Shares to Customers, if required by law;
and (h) providing other similar services to the extent permitted under
applicable statutes, rules and regulations.
3. This Plan shall not take effect until it has been approved by a
vote of at least a majority (as defined in the Act) of the outstanding Class UU
Shares.
4. In addition to the approval required by paragraph 3 above, this
Plan shall not take effect until it has been approved, together with any related
agreements, by votes of a majority of both (a) the Board of Directors of the
Fund and (b) those directors of the Fund who are not "interested persons" of the
Fund (as defined in the Act) and have no direct or indirect financial interest
in the operation of this Plan or any agreements related to it (the "Rule 12b-1
Directors"), cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan and such related agreements.
5. This Plan shall continue in effect until August 16, 1997.
Thereafter, this Plan shall continue in effect for so long as such continuance
is specifically approved at least annually in the manner provided for approval
of this Plan in paragraph 4.
6. The Distributor shall provide to the Board of Directors of the
Fund and the Board of Directors shall review, at least quarterly, a written
report of the amounts expended pursuant to this Plan and the purposes for which
such expenditures were made, including commissions, advertising, printing,
interest, carrying charges and allocated overhead expenses.
7. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Directors, or by a vote of a majority of the outstanding Class UU
Shares.
-3-
<PAGE>
8. This Plan may not be amended to increase materially the amount of
compensation provided for in paragraph 1 hereof unless such amendment is
approved in the manner provided for initial approval in paragraph 3 hereof, and
no material amendment to the Plan of any kind, including an amendment which
would increase materially the amount of compensation, shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 4
hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Fund
shall be committed to the discretion of the then current Directors who are not
interested persons (as defined in the Act) of the Fund.
10. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof for a period of
not less than six years from the date of this Plan, the agreements or such
reports, as the case may be, the first two years in an easily accessible place.
Dated: April 24, 1997
-4-
<PAGE>
Exhibit 18
RULE 18f-3 PLAN
RULE 18f-3 PLAN
1. A Portfolio of the Fund ("Portfolio") may issue more than one class of
voting stock ("Class"), provided that:
(a) Each such Class:
(1) (i) Shall have a different arrangement for shareholder
services or the distribution of securities or both, and shall pay all of
the expenses of that arrangement; and
(ii) May pay a different share of other expenses, not
including advisory or custodial fees or other expenses related to the
management of the Portfolio's assets, if those expenses are actually
incurred in a different amount by that Class, or if the Class receives
services of a different kind or to a different degree than other Classes;
(2) Shall have exclusive voting rights on any matter submitted
to shareholders that relates solely to its arrangement;
(3) Shall have separate voting rights on any matter submitted to
shareholders in which the interests of one Class differ from the interests
of any other Class; and
(4) Shall have in all other respects the same rights and
obligations as each other class.
(b) Expenses may be waived or reimbursed by the Portfolio's adviser,
underwriter, or any other provider of services to the Portfolio.
(c) (1) Any payments made under paragraph (a)(1)(i) of this Plan
shall conform to Appendix A to this Plan, as such Appendix A shall be
amended from time to time by the Board.
(2) Before any vote on the Plan or the Appendix, the Directors
shall be provided, and any agreement relating to a Class arrangement shall
require the parties thereto to furnish, such information as may be
reasonably necessary to evaluate the Plan.
(3) The provisions of the Plan in Appendix A are severable for
each Class, and whenever any action is to be taken with respect to the Plan
in Appendix A, that action will be taken separately for each Class.
<PAGE>
(d) A Portfolio may offer a Class with an exchange privilege
providing that securities of the Class may be exchanged for certain
securities of another Portfolio. Such exchange privileges are summarized
in Appendix B, as may be modified by the Board from time to time, and are
set forth in greater detail in the prospectuses of each of the Classes.
-2-
<PAGE>
<TABLE>
<CAPTION>
APPENDIX A
RBB FUND
CURRENT DISTRIBUTION FEE LEVELS
OCTOBER 16, 1996
- -------------------------------------------------------
A. MONEY MARKET PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Sansom Street (Class I) fee 0.05% 4/10/91
Shareholder Service Fee 0.10% 8/16/88
2. Bedford (Class L) fee 0.60% 11/17/94
3. Cash Preservation (Class G) fee 0.40% 4/10/91
4. RBB Family (Class E) fee 0.40% 4/10/91
5. Janney (Class Alpha 1) fee 0.60% 2/l/95
B. MUNICIPAL MONEY MARKET PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Sansom Street (Class J) fee 0.05% 4/10/91
Shareholder Service Fee 0.10% 8/16/88
2. Bedford (Class M) fee 0.60% 11/17/94
3. Bradford (Class R) fee 0.60% 11/17/94
4. Cash Preservation (Class H) fee 0.40% 4/10/91
5. RBB Family (Class F) fee 0.40% 4/10/91
6. Janney (Class Alpha 2) fee 0.60% 2/l/95
-3-
<PAGE>
C. GOVERNMENT OBLIGATION MONEY MARKET PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Sansom Street (Class K) fee 0.05% 4/10/91
Shareholder Service Fee 0.10% 8/16/88
2. Bedford (Class N) fee 0.60% 11/17/94
3. Bradford (Class S) fee 0.60% 11/17/94
4. Janney (Class Alpha 3) fee 0.60% 2/l/95
D. GOVERNMENT SECURITIES PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. RBB Family (Class P) fee 0.40% 4/10/91
E. NEW YORK MUNICIPAL MONEY MARKET PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Bedford (Class O) fee 0.60% 11/17/94
2. Janney (Class Alpha 4) fee 0.60% 2/l/95
F. BEA INTERNATIONAL EQUITY PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA Institutional(Class T) None None
2. BEA Investor (Class II) fee .50% 7/10/96
3. BEA Advisor (Class MM) fee .25% 7/10/96
G. BEA EMERGING MARKETS PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA Institutional(Class V) None None
2. BEA Investor (Class JJ) fee .50% 7/10/96
3. Bea Advisor (Class NN) fee .25% 7/10/96
-4-
<PAGE>
H. BEA STRATEGIC FIXED INCOME PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA Institutional(Class U) None None
2. BEA Investor (Class KK) fee .50% 7/10/96
3. BEA Advisor (Class OO) fee .25% 7/10/96
I. BEA U.S. CORE EQUITY PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA Institutional (Class X) None None
J. BEA U.S. CORE FIXED INCOME PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA Institutional (Class Y) None None
K. BEA GLOBAL FIXED INCOME PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA Institutional (Class Z) None None
L. BEA MUNICIPAL BOND FUND
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA Institutional (Class AA) None None
M. BEA SHORT DURATION PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA Institutional (Class BB) None None
-5-
<PAGE>
N. BEA BALANCED PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA Institutional (Class CC) None None
O. BEA GLOBAL TELECOMMUNICATIONS PORTFOLIO
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. BEA Investor (Class LL) fee .50% 7/10/96
2. BEA Advisor (Class PP) fee .25% 7/10/96
P. BOSTON PARTNERS LARGE CAP VALUE FUND
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Institutional Class (Class QQ) fee 0.04% 10/16/96
2. Advisor Class (Class SS) fee 0.50% 10/16/96
3. Investor Class (Class RR) fee 0.25% 10/16/96
Q. BOSTON PARTNERS MID CAP VALUE FUND
Current Distribution
Class Fee Level Effective Date
----- -------------------- --------------
<S> <C> <C>
1. Institutional Class (Class TT) fee 0.04% 6/1/97
2. Investor Class (Class UU) fee 0.25% 6/1/97
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
APPENDIX B
EXCHANGE PRIVILEGES OF THE PORTFOLIOS
OF THE RBB FUND, INC.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
FAMILY EACH PORTFOLIO (CLASS)... MAY BE EXCHANGED FOR ANY OF
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BEA (Institutional Classes) International Equity (T) International Equity (T)
Strategic Fixed Income (U) Strategic Fixed Income (U)
Emerging Markets Equity (V) Emerging Markets Equity (V)
U.S. Core Equity (X) U.S. Core Equity (X)
U.S. Core Fixed Income (Y) U.S. Core Fixed Income (Y)
Global Fixed Income (Z) Global Fixed Income (Z)
Municipal Bond Fund (AA) Municipal Bond Fund (AA)
Balanced Fund (BB) Balanced Fund (BB)
Short Duration Fund (CC) Short Duration Fund (CC)
- ----------------------------------------------------------------------------------------------------------------------------
BEA (Investor Classes) International Equity (II) International Equity (II)
Emerging Markets Equity (JJ) Emerging Markets Equity (JJ)
High Yield (KK) High Yield (KK)
Global Telecommunications (LL) Global Telecommunications (LL)
Investor Shares of other non-RBB funds Investor Shares of other non-RBB funds
advised by BEA Associates Advised by BEA Associates
- ----------------------------------------------------------------------------------------------------------------------------
BEA (Advisor Classes) International Equity (MM) International Equity (MM)
Emerging Markets Equity (NN) Emerging Markets Equity (NN)
High Yield (OO) High Yield (OO)
Global Telecommunications (PP) Global Telecommunications (PP)
Advisor Shares of other non-RBB funds Advisor Shares of other non-RBB funds
advised by BEA Associates advised by BEA Associates
- ----------------------------------------------------------------------------------------------------------------------------
Cash Preservation Money Market (G) Money Market (G)
Municipal Money Market (H) Municipal Money Market (H)
- ----------------------------------------------------------------------------------------------------------------------------
RBB Money Market (E) Money Market (E)
Municipal Money Market (F) Municipal Money Market (F)
Government Securities (P) Government Securities (P)
- ----------------------------------------------------------------------------------------------------------------------------
Bedford (Bear Stearns) Money Market (L) Common Shares of other non-RBB funds
advised or sponsored by Bear, Stearns &
Co. Inc.
- ----------------------------------------------------------------------------------------------------------------------------
Bedford (Valley Forge) Money Market (L) Common Shares of other non-RBB funds
advised or sponsored by Valley Forge
Capital Holdings, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
ni Micro Cap (FF) Micro Cap (FF)
Growth (GG) Growth (GG)
Growth & Value (HH) Growth & Value (HH)
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
FAMILY EACH PORTFOLIO (CLASS)... MAY BE EXCHANGED FOR ANY OF
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Boston Partners Institutional Classes Mid Cap Value (TT) Mid Cap Value (TT)
Large Cap Value (QQ) Large Cap Value (QQ)
- ----------------------------------------------------------------------------------------------------------------------------
Boston Partners Mid Cap Value (UU) Mid Cap Value (UU)
(Investor Classes) Large Cap Value (RR) Large Cap Value (RR)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
-8-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000831114
<NAME> THE RBB FUND, INC.
<SERIES>
<NUMBER> 22
<NAME> BEA GLOBAL TELECOMMUNICATIONS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 467707
<INVESTMENTS-AT-VALUE> 492291
<RECEIVABLES> 34
<ASSETS-OTHER> 85
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 492410
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 917
<TOTAL-LIABILITIES> 917
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 463251
<SHARES-COMMON-STOCK> 30374
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (126)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3784
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 24584
<NET-ASSETS> 491493
<DIVIDEND-INCOME> 164
<INTEREST-INCOME> 1131
<OTHER-INCOME> 0
<EXPENSES-NET> 1636
<NET-INVESTMENT-INCOME> (341)
<REALIZED-GAINS-CURRENT> 3999
<APPREC-INCREASE-CURRENT> 24584
<NET-CHANGE-FROM-OPS> 28242
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 473251
<NUMBER-OF-SHARES-REDEEMED> 10000
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 491493
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 991
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2801
<AVERAGE-NET-ASSETS> 425683
<PER-SHARE-NAV-BEGIN> 15.00
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 1.19
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.18
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000831114
<NAME> THE RBB FUND, INC.
<SERIES>
<NUMBER> 112
<NAME> BEA INTERNATIONAL EQUITY PORTFOLIO-ADVISOR CLASS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
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