SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WARBURG PINCUS INTERNATIONAL EQUITY FUND, INC.
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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March 1999
IMPORTANT NEWS
FOR WARBURG PINCUS FUND SHAREHOLDERS
While we encourage you to read the full text of the enclosed Proxy Statement,
here's a brief overview of some matters affecting your Fund which require a
shareholder vote.
Q & A: QUESTIONS AND ANSWERS
Q. WHAT IS HAPPENING?
A. Credit Suisse Group ("Credit Suisse") has agreed to acquire Warburg
Pincus Asset Management, Inc. ("Warburg"), your Fund's investment
adviser, and intends to combine it with its existing U.S. asset
management business ("CSAM-U.S.") (together, the "Merger"). CSAM-U.S.
is part of Credit Suisse Asset Management ("CSAM"), which is the
institutional asset management and mutual fund arm of Credit Suisse,
with global assets under management of approximately $210 billion.
Credit Suisse is a global financial services company, providing a
comprehensive range of banking and insurance products.
In order for CSAM-U.S. to serve as investment adviser of your Fund
following the completion of the Merger, it is necessary for the Fund's
shareholders to approve a new investment advisory agreement. If your
Fund has a sub-investment advisory agreement to which Warburg currently
is a party, it is also necessary that a new sub-investment advisory
agreement be approved. The following pages give you additional
information on CSAM and the proposed new investment advisory and
sub-investment advisory agreements and certain other matters.
The most important matters to be voted upon by you are approval of the
new investment advisory and sub-investment advisory agreements and the
election of Board members. You will also be asked to ratify the
selection of PricewaterhouseCoopers LLP as your Fund's independent
accountants. THE BOARD MEMBERS OF YOUR FUND, INCLUDING THOSE WHO ARE
NOT AFFILIATED WITH THE FUND, WARBURG OR CREDIT SUISSE, RECOMMEND THAT
YOU VOTE FOR THESE PROPOSALS.
Q. WHY AM I BEING ASKED TO VOTE ON THE PROPOSED NEW INVESTMENT ADVISORY
AGREEMENT?
A. The Investment Company Act of 1940, which regulates investment
companies such as your Fund, requires a shareholder vote to approve a
new investment advisory agreement following certain types of business
combinations. Credit Suisse's acquisition of Warburg and Warburg's
combination with CSAM-U.S. require shareholder approval of a new
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investment advisory agreement and, where applicable, a new
sub-investment advisory agreement with your Fund.
Q. HOW WILL THE TRANSACTION AFFECT ME AS A
FUND SHAREHOLDER?
A. Your Fund and your Fund's investment objective will not change. You
will still own the same shares in the same Fund. The terms of the new
investment advisory agreement and any new sub-investment advisory
agreement are the same in all material respects as the current
agreements (except that there will be a new investment adviser
following the Merger). If shareholders do not approve the new
investment advisory agreement and any applicable new sub-investment
advisory agreement, the current agreements will terminate upon the
closing of the Merger and the governing Board of your Fund will take
such action as it deems to be in the best interests of your Fund and
its shareholders.
Q. WHAT ARE THE BENEFITS OF THE MERGER?
A. Warburg believes that the combined Warburg and Credit Suisse asset
management business resulting from the Merger will enhance Warburg's
current capabilities as a global asset manager. Warburg further
believes that the Merger will enable the combined businesses to deliver
improved services to you and your Fund and to fulfill its obligations
under the new investment advisory agreement and, if applicable,
sub-investment advisory agreement consistent with current practices.
Q. WILL THE INVESTMENT ADVISORY AND SUB-ADVISORY FEES REMAIN THE SAME?
A. Yes.
Q. HOW DO THE BOARD MEMBERS OF MY FUND RECOMMEND THAT I VOTE?
A. After careful consideration, the Board members of your Fund, including
those who are not affiliated with the Fund or Warburg, recommend that
you vote in favor of all the proposals on the enclosed proxy card(s).
Q. WHOM DO I CALL FOR MORE INFORMATION?
A. If you need more information, please call D.F. King & Co., Inc., your
Fund's information agent, at 1-800-848-3409.
Q. HOW CAN I VOTE MY SHARES?
A. Please choose one of the following options to vote your shares:
o By mail, with the enclosed proxy card(s);
o By telephone, with a toll-free call to the telephone number that
appears on your proxy card or, if no toll-free telephone number
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appears on your proxy card, to D.F. King & Co., Inc., the Funds'
proxy solicitor, at 1-800-848-3409;
o Through the Internet, by using the Internet address located on
your proxy card and following the instructions on the site; or
o In person at the meeting.
Q. WILL THE FUND PAY FOR THE PROXY SOLICITATION AND LEGAL COSTS ASSOCIATED
WITH THIS TRANSACTION?
A. No, Warburg and Credit Suisse will bear these costs.
Q. WHAT HAPPENS IF I OWN SHARES IN MORE THAN
ONE FUND?
A. If you have more than one Fund in an account in your name at the same
address, you will receive separate proxy cards for each Fund but only
one proxy statement for the account. Please vote all issues on each
proxy card that you receive.
THANK YOU FOR MAILING YOUR PROXY CARD(S) PROMPTLY.
<PAGE>
WARBURG PINCUS FUNDS
466 LEXINGTON AVENUE
NEW YORK, NY 10017
March 26, 1999
Dear Shareholder:
On February 15, 1999 the parent companies of Warburg Pincus Asset
Management, Inc. ("Warburg") entered into an agreement with Credit Suisse Group
("Credit Suisse") pursuant to which Credit Suisse will acquire Warburg.
Following such acquisition, Credit Suisse intends to combine Warburg with its
existing U.S. asset management business. As a result of this two-stage
transaction, it is necessary for the shareholders of each of the funds for which
Warburg acts as investment adviser, including your Fund, to approve a new
investment advisory agreement. If your Fund has a sub-investment advisory
agreement to which Warburg currently is a party, it is also necessary to approve
a new sub-investment advisory agreement.
Important facts about the acquisition are:
o The acquisition has no effect on the number of shares you own or
the value of those shares.
o The contractual advisory fee rates payable by your Fund under its
current investment advisory agreement will not increase.
o The investment objective and policies of your Fund will remain
the same.
Shareholders are also being asked to approve certain other matters that
have been set forth in the Fund's Notice of Meeting. THE BOARD MEMBERS OF YOUR
FUND BELIEVE THAT EACH OF THE PROPOSALS SET FORTH IN THE NOTICE OF MEETING FOR
YOUR FUND IS IMPORTANT AND RECOMMEND THAT YOU READ THE ENCLOSED MATERIALS
CAREFULLY AND THEN VOTE FOR ALL PROPOSALS.
Since all of the funds for which Warburg acts as investment adviser are
required to conduct shareholder meetings, if you own shares of more than one
fund, you will receive more than one proxy card. Please sign and return each
proxy card you receive.
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Your vote is important. PLEASE TAKE A MOMENT NOW TO VOTE, EITHER BY
COMPLETING AND RETURNING YOUR PROXY CARD(S) IN THE ENCLOSED POSTAGE-PAID RETURN
ENVELOPE, BY TELEPHONE OR THROUGH THE INTERNET. You may receive a telephone call
from our proxy solicitor, D.F. King & Co., Inc., or from employees of Warburg
reminding you to vote your shares.
Respectfully,
[GENE PODSIADLO SIGNATURE]
Eugene L. Podsiadlo
President
SHAREHOLDERS ARE URGED TO VOTE BY COMPLETING AND RETURNING THE PROXY CARD, BY
TELEPHONE OR THROUGH THE INTERNET TO ENSURE A QUORUM AT THE MEETING. YOUR VOTE
IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR SHAREHOLDINGS.
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WARBURG PINCUS FUNDS
Warburg Pincus Balanced Fund
Warburg Pincus Capital Appreciation Fund
Warburg Pincus Cash Reserve Fund
Warburg Pincus Emerging Growth Fund
Warburg Pincus Emerging Markets Fund
Warburg Pincus Fixed Income Fund
Warburg Pincus Global Fixed Income Fund
Warburg Pincus Global Post-Venture Capital Fund
Warburg Pincus Growth & Income Fund
Warburg Pincus Health Sciences Fund
Warburg Pincus Institutional Fund, Inc.
Warburg Pincus Intermediate Maturity Government Fund
Warburg Pincus International Equity Fund
Warburg Pincus International Small Company Fund
Warburg Pincus Japan Growth Fund
Warburg Pincus Japan Small Company Fund
Warburg Pincus Major Foreign Markets Fund
Warburg Pincus New York Intermediate Municipal Fund
Warburg Pincus New York Tax Exempt Fund
Warburg Pincus Post-Venture Capital Fund
Warburg Pincus Small Company Growth Fund
Warburg Pincus Small Company Value Fund
Warburg Pincus Trust
Warburg Pincus Trust II
Warburg Pincus WorldPerks Money Market Fund
Warburg Pincus WorldPerks Tax Free Money Market Fund
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
Please take notice that Special Meetings of Shareholders (each a
"Special Meeting") of each Warburg Pincus Fund listed above (each a "Fund" and,
collectively, the "Funds") will be held jointly at the offices of Warburg Pincus
Asset Management, Inc., 466 Lexington Avenue, 12th Floor, New York, NY 10017, on
May 21, 1999, at 3:00 p.m., Eastern time, for the following purposes:
(1) To approve or disapprove a new investment advisory agreement
between each Fund and a direct or indirect U.S. investment
advisory subsidiary of Credit Suisse Group (the "New Adviser");
(2) To elect Directors/Trustees of the Funds;
(3) For the shareholders of Warburg Pincus Post-Venture Capital Fund,
Warburg Pincus Global Post-Venture Capital Fund, the Post-Venture
Capital Portfolios of Warburg Pincus Institutional Fund, Inc. and
Warburg Pincus Trust, Warburg Pincus WorldPerks Money Market Fund
and Warburg Pincus WorldPerks Tax Free Money Market Fund ONLY: to
approve or disapprove a new sub-investment advisory
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agreement between each Fund, the New Adviser and the relevant
sub-investment adviser; and
(4) To ratify or reject the selection of PricewaterhouseCoopers LLP
as the independent accountants for each of the Funds for each
Fund's current fiscal year.
The appointed proxies, in their discretion, will vote on any other
business as may properly come before the Special Meeting or any adjournments
thereof.
Holders of record of shares of each Fund at the close of business on
March 9, 1999 are entitled to vote at the Special Meeting and at any
adjournments thereof. As a convenience to shareholders, you can now vote in any
one of four ways:
o By mail, with the enclosed proxy card(s);
o By telephone, with a toll-free call to the telephone number that
appears on your proxy card or, if no toll-free telephone number
appears on your proxy card, to D.F. King & Co., Inc., the Funds'
proxy solicitor, at 1-800-848-3409;
o Through the Internet, by using the Internet address located on
your proxy card and following the instructions on the site; or
o In person at the meeting.
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Special
Meeting with respect to one or more Funds or, where applicable, investment
portfolios of a Fund (each a "Portfolio" and together with those Funds that do
not have any separate investment portfolios, the "Portfolios"), the persons
named as proxies may propose one or more adjournments of the Special Meeting in
accordance with applicable law, to permit further solicitation of proxies. Any
such adjournment as to a matter requiring, respectively, a Fund-wide or
Portfolio by Portfolio vote will require the affirmative vote of the holders of
a majority of the concerned Fund's (for a Fund-wide vote) or, where applicable,
the concerned Portfolio's (for a Portfolio by Portfolio vote) shares present in
person or by proxy at the Special Meeting. The persons named as proxies will
vote in favor of such adjournment those proxies which they are entitled to vote
in favor and will vote against any such adjournment those proxies to be voted
against that proposal.
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We encourage you to vote by completing and returning your proxy card(s),
by telephone or through the Internet. These voting methods will reduce the time
and costs associated with the proxy solicitation. Whichever method you choose,
please read the full text of the proxy statement before your vote.
By order of the governing Boards,
[JANNA MANES SIGNATURE]
Janna Manes
Secretary
March 26, 1999
IMPORTANT--IN ORDER TO AVOID THE NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS
TO ENSURE A QUORUM AT THE SPECIAL MEETINGS, WE ASK THAT YOU VOTE YOUR SHARES
PROMPTLY.
<PAGE>
WARBURG PINCUS FUNDS
Warburg Pincus Balanced Fund
Warburg Pincus Capital Appreciation Fund
Warburg Pincus Cash Reserve Fund
Warburg Pincus Emerging Growth Fund
Warburg Pincus Emerging Markets Fund
Warburg Pincus Fixed Income Fund
Warburg Pincus Global Fixed Income Fund
Warburg Pincus Global Post-Venture Capital Fund
Warburg Pincus Growth & Income Fund
Warburg Pincus Health Sciences Fund
Warburg Pincus Institutional Fund, Inc.
Warburg Pincus Intermediate Maturity Government Fund
Warburg Pincus International Equity Fund
Warburg Pincus International Small Company Fund
Warburg Pincus Japan Growth Fund
Warburg Pincus Japan Small Company Fund
Warburg Pincus Major Foreign Markets Fund
Warburg Pincus New York Intermediate Municipal Fund
Warburg Pincus New York Tax Exempt Fund
Warburg Pincus Post-Venture Capital Fund
Warburg Pincus Small Company Growth Fund
Warburg Pincus Small Company Value Fund
Warburg Pincus Trust
Warburg Pincus Trust II
Warburg Pincus WorldPerks Money Market Fund
Warburg Pincus WorldPerks Tax Free Money Market Fund
466 LEXINGTON AVENUE
NEW YORK, NY 10017
JOINT PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors or Trustees, as the case may be (the "Board"),
of each of the Warburg Pincus Funds listed above (each a "Fund" and,
collectively, the "Funds") for use at the Special Meetings of Shareholders of
each Fund, to be held jointly at the offices of Warburg Pincus Asset Management,
Inc., 466 Lexington Avenue, 12th Floor, New York, NY 10017, on May 21, 1999 at
3:00 p.m., Eastern time, and at any and all adjournments thereof (the "Special
Meeting"). (In the descriptions of the various proposals below, the word "fund"
is sometimes used to mean investment companies or series thereof in general, and
not the Funds whose proxy statement this is.)
This Proxy Statement, the Notice of Special Meeting and the proxy cards
are first being mailed to shareholders on or about March 26, 1999 or as soon as
practicable thereafter. Any shareholder giving a proxy has the power to revoke
it on the Internet, by telephone, by mail (addressed to Janna Manes, Secretary
of the
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Warburg Pincus Funds, c/o Warburg Pincus Asset Management, Inc., 466
Lexington Avenue, New York, NY 10017), in person at the Special Meeting, by
executing a superseding proxy or by submitting a notice of revocation. All
properly executed proxies received in time for the Special Meeting will be voted
as specified in the proxy or, if no specification is made, in favor of each
proposal referred to in the Proxy Statement.
The presence at any Special Meeting, in person or by proxy, of the
holders of one-third (one-half in the case of certain Funds and Portfolios) of
the shares entitled to be cast of a Fund (for a Fund-wide vote) or an investment
portfolio of a Fund (each a "Portfolio" and together with those Funds that do
not have any separate investment portfolios, the "Portfolios") (for a Portfolio
by Portfolio vote) shall be necessary and sufficient to constitute a quorum for
the transaction of business requiring, respectively, Fund-wide or Portfolio by
Portfolio voting. The quorum requirement for each Fund and Portfolio is
indicated on Exhibit B to this Proxy Statement. In the event that the necessary
quorum to transact business or the vote required to approve or reject any
proposal is not obtained at the Special Meeting with respect to one or more
Funds or, where applicable, Portfolios, the persons named as proxies may propose
one or more adjournments of the Special Meeting in accordance with applicable
law to permit further solicitation of proxies with respect to any proposal which
did not receive the vote necessary for its passage or to obtain a quorum. With
respect to those proposals for which there is represented a sufficient number of
votes in favor, actions taken at the Special Meeting will be effective
irrespective of any adjournments with respect to any other proposals. Any such
adjournment as to a matter requiring, respectively, a Fund-wide or a Portfolio
by Portfolio vote will require the affirmative vote of the holders of a majority
of the concerned Fund's (for a Fund-wide vote) or Portfolio's (for a Portfolio
by Portfolio vote) shares present in person or by proxy at the Special Meeting.
The persons named as proxies will vote in favor of such adjournment those
proxies which they are entitled to vote in favor for that proposal and will vote
against any such adjournment those proxies to be voted against that proposal.
For purposes of determining the presence of a quorum for transacting business at
the Special Meeting, abstentions and broker "non-votes" will be treated as
shares that are present but which have not been voted. Broker non-votes are
proxies received from brokers or nominees when the broker or nominee has neither
received instructions from the beneficial owner or other persons entitled to
vote nor has discretionary power to vote on a particular matter. Accordingly,
shareholders are urged to forward their voting instructions promptly.
Proposals 1 and 3 each requires the affirmative vote of a "majority of
the outstanding voting securities" of each Portfolio. The terms "majority of the
outstanding voting securities" as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), and as used in this Proxy Statement, means: the
affirmative vote of the lesser of (1) 67% of the voting securities of each
Portfolio present at the meeting if more than 50% of the outstanding shares of
the Portfolio
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are present in person or by proxy or (2) more than 50% of the outstanding shares
of each Portfolio. Approval of Proposal 2 requires the affirmative vote of a
plurality of the shares of each Fund voting at the Special Meeting. Approval of
Proposal 4 requires the affirmative vote of a majority of the shares of each
Fund voting at the Special Meeting.
Abstentions and broker non-votes will have the effect of a "no" vote for
Proposals 1 and 3, which require the approval of a specified percentage of the
outstanding shares of each Portfolio, if such vote is determined on the basis of
obtaining the affirmative vote of more than 50% of the outstanding shares of the
Portfolio. Abstentions and broker non-votes will not constitute "yes" or "no"
votes, and will be disregarded in determining the voting securities "present" if
such vote is determined on the basis of the affirmative vote of 67% of the
voting securities of the Portfolio present at the Special Meeting with respect
to Proposals 1 and 3. Abstentions and broker non-votes will not be counted in
favor of, but will have no other effect on the vote for Proposals 2 and 4, which
require the approval of a plurality of the shares of each Fund, and a majority
of the shares of each Fund, respectively, voting at the Special Meeting.
The Portfolios of the Warburg Pincus Trust and Warburg Pincus Trust II
(the "Trust Portfolios") offer their shares only to certain insurance companies
("Participating Insurance Companies") for allocation to certain of their
separate accounts established for the purpose of funding variable annuity
contracts and variable life insurance contracts and tax qualified pension and
retirement plans. The shares of the Trust Portfolios are currently held only by
Participating Insurance Companies. Under current law, the Participating
Insurance Companies are required to solicit voting instructions from variable
annuity contract owners who beneficially own shares in any of the Trust
Portfolios as of the Record Date (as defined below) and must vote all shares
held in the separate account in proportion to the voting instructions received
for the Special Meeting, or any adjournment thereof. The Participating Insurance
Companies will vote shares of the Trust Portfolios for which no instructions
have been received in the same proportion as they vote shares for which they
have received instructions. Abstentions will have the effect of a negative vote
on the proposals. Unmarked voting instructions will be voted in favor of the
proposals.
Shareholders of each Portfolio will vote separately with respect to each
of Proposals 1 and 3 (if applicable); and shareholders of each Fund will vote
together on Proposals 2 and 4.
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The following table summarizes those voting requirements:
<TABLE>
<CAPTION>
SHAREHOLDERS VOTE REQUIRED
ENTITLED TO VOTE FOR APPROVAL
-------------------- --------------------
<S> <C> <C>
Proposal 1 Shareholders of each Approved by a "majority
(Approval of new Investment Portfolio vote separately of the outstanding voting
Advisory Agreement) securities" of each
Portfolio
Proposal 2 Shareholders of each Each nominee must be
(Election of Directors/ Fund vote together for elected by a plurality of
Trustees) each nominee (if a Fund the shares of the Fund
has several Portfolios, voting at the Special
shareholders of all Meeting
Portfolios vote together
as a single class)
Proposal 3 Shareholders of each Approved by a "majority
(Approval of new Portfolio vote separately of the outstanding voting
Sub-Investment Advisory securities" of each
Agreement) Portfolio
Proposal 4 Shareholders of each Approved by a majority
(Ratification of selection Fund vote together of the shares of each
of Accountants) Fund voting at the
Special Meeting
</TABLE>
Holders of record of the shares of common stock or beneficial interest,
as the case may be, of each Portfolio at the close of business on March 9, 1999
(the "Record Date"), as to any matter on which they are entitled to vote, will
be entitled to one vote per share on all business of the Special Meeting. The
table below sets forth the number of shares outstanding for each Portfolio as of
March 9, 1999.
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NUMBER OF SHARES
OUTSTANDING
NAME OF THE PORTFOLIO AS OF MARCH 9, 1999
- ---------------------- ------------------
Warburg Pincus Balanced Fund 2,614,749
Warburg Pincus Capital Appreciation Fund 37,732,489
Warburg Pincus Cash Reserve Fund 400,527,219
Warburg Pincus Emerging Growth Fund 50,234,561
Warburg Pincus Emerging Markets Fund 8,141,963
Warburg Pincus Fixed Income Fund 41,020,074
Warburg Pincus Global Fixed Income Fund 14,470,140
Warburg Pincus Global Post-Venture Capital Fund 327,555
Warburg Pincus Growth & Income Fund 41,767,596
Warburg Pincus Health Sciences Fund 4,933,314
Warburg Pincus Institutional Fund, Inc.:
Emerging Markets Portfolio 888,630
International Equity Portfolio 62,957,094
Japan Growth Portfolio 161,763
Post-Venture Capital Portfolio 133,554
Small Company Growth Portfolio 15,639,696
Small Company Value Portfolio 110,069
Value Portfolio 4,526,751
Warburg Pincus Intermediate Maturity Government Fund 7,040,498
Warburg Pincus International Equity Fund 72,090,291
Warburg Pincus International Small Company Fund 214,706
Warburg Pincus Japan Growth Fund 5,277,786
Warburg Pincus Japan Small Company Fund 15,890,620
Warburg Pincus Major Foreign Markets Fund 4,745,899
Warburg Pincus New York Intermediate Municipal Fund 10,294,827
Warburg Pincus New York Tax Exempt Fund 175,938,611
Warburg Pincus Post-Venture Capital Fund 3,392,816
Warburg Pincus Small Company Growth Fund 440,226
Warburg Pincus Small Company Value Fund 3,641,682
Warburg Pincus Trust:
Emerging Markets Portfolio 389,843
Growth & Income Portfolio 1,389,264
International Equity Portfolio 32,862,594
Post-Venture Capital Portfolio 5,174,101
Small Company Growth Portfolio 44,124,962
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NUMBER OF SHARES
OUTSTANDING
NAME OF THE PORTFOLIO AS OF MARCH 9, 1999
- ------------------------ ------------------
Warburg Pincus Trust II:
Fixed Income Portfolio 278,260
Global Fixed Income Portfolio 181,167
Warburg Pincus WorldPerks Money Market Fund 12,284,353
Warburg Pincus WorldPerks Tax Free Money Market Fund 11,029,904
Annex I attached hereto sets forth information as of March 9, 1999
regarding the persons known by each Portfolio to beneficially own more than 5%
of the outstanding shares of such Portfolio.
Each Portfolio provides periodic reports to all of its shareholders
which highlight relevant information, including investment results and a review
of portfolio changes. You may receive an additional copy of the most recent
annual report for each Portfolio and a copy of any more recent semiannual
report, without charge, by calling 800-WARBURG (800-927-2874) or by writing to
Warburg Pincus Funds, P.O. Box 9030, Boston, MA 02205-9030.
PROPOSAL 1: APPROVAL OF NEW
INVESTMENT ADVISORY AGREEMENT
INTRODUCTION
Warburg currently acts as the investment adviser to each Portfolio
pursuant to investment advisory agreements entered into between each Portfolio
and Warburg (each a "Current Advisory Agreement" and, collectively, the "Current
Advisory Agreements"). On February 15, 1999, the parent companies of Warburg
entered into a Merger Agreement and Plan of Reorganization (the "Merger
Agreement") with Credit Suisse Group ("Credit Suisse"). Under the terms of the
Merger Agreement, Credit Suisse will acquire the direct parent company of
Warburg (the "Acquisition"). Upon consummation of the Acquisition, Credit Suisse
intends to combine Warburg with Credit Suisse's existing U.S. asset management
business (the "Reorganization"), and such combined businesses are expected to be
conducted by a single direct or indirect wholly-owned U.S. subsidiary of Credit
Suisse, which would be organized as a limited liability company or a corporation
(the "New Adviser"). Following consummation of the Reorganization, the New
Adviser would act as the investment adviser to each Portfolio, as further
described below. It is currently anticipated that the New Adviser will operate
under the name "Credit Suisse Asset Management" (followed by an indication of
its status as a limited liability company or a corporation). However, it is
possible that the Acquisition will be consummated but that the Reorganization
will be delayed or ultimately not consummated, in which case Warburg (under
Credit Suisse ownership) would continue to act as the investment
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adviser to each Portfolio until such time (if ever) as the Reorganization is
consummated. The Acquisition and the Reorganization are together referred to
herein as the "Merger". Upon completion of the Reorganization, the headquarters
of the New Adviser will be in New York; until completion of the Reorganization,
the headquarters of Warburg are expected to remain in New York.
The Acquisition and the Reorganization are expected to be consummated
simultaneously. In such event, consummation of the Merger would constitute a
single "assignment," as that term is defined in the 1940 Act, of each
Portfolio's Current Advisory Agreement with Warburg. As required by the 1940
Act, each of the Current Advisory Agreements provides for its automatic
termination in the event of its assignment. In anticipation of the Merger, a new
investment advisory agreement (each a "New Advisory Agreement" and,
collectively, the "New Advisory Agreements," together with the Current Advisory
Agreements, the "Advisory Agreements") between each Fund and the New Adviser is
being proposed for approval by shareholders of each Portfolio to take effect
upon consummation of the Acquisition and Reorganization. However, if the
Acquisition is consummated but the Reorganization is delayed or not ultimately
consummated, each New Advisory Agreement would take effect between the
applicable Portfolio and Warburg (under Credit Suisse ownership) upon
consummation of the Acquisition, and would remain in effect with Warburg until
such time (if ever) as the Reorganization is consummated; approval of a New
Advisory Agreement at the Special Meeting will constitute shareholder approval
for such New Advisory Agreement to take effect with the New Adviser if the
Acquisition and the Reorganization are consummated simultaneously, and to take
effect with Warburg if the Acquisition is consummated prior to consummation of
the Reorganization.
In the event that the Acquisition and the Reorganization are not
simultaneously consummated, upon consummation of the Reorganization, each New
Advisory Agreement would be transferred to the New Adviser as part of the
combination of the businesses of Warburg and Credit Suisse's existing U.S. asset
management business, and the New Adviser thereafter would act as the investment
adviser to each Portfolio pursuant to such New Advisory Agreement. If not
consummated simultaneously with the Acquisition, consummation of the
Reorganization could be deemed to constitute a second "assignment" of each
Portfolio's investment advisory agreement (which would result in its automatic
termination, as discussed above); approval of a New Advisory Agreement at the
Special Meeting also will constitute shareholder approval for such New Advisory
Agreement to take effect with the New Adviser upon consummation of the
Reorganization (if consummated) in the event that the Reorganization is
consummated after consummation of the Acquisition.
A copy of the master form of the New Advisory Agreement is attached
hereto as Exhibit A. THE NEW ADVISORY AGREEMENT FOR EACH PORTFOLIO IS IN ALL
MATERIAL RESPECTS ON THE SAME TERMS AS THE CORRESPONDING CURRENT ADVISORY
AGREEMENT (except that the New Adviser will be the investment adviser following
consummation of the
-7-
<PAGE>
Reorganization). Conforming changes are being recommended to the New Advisory
Agreement in order to promote consistency among all of the funds currently
advised by Warburg and to permit ease of administration. The material terms of
each Current Advisory Agreement are described under "Description of the Current
Advisory Agreements" below.
BOARD RECOMMENDATION
On March 8, 1999, the Board of Directors or Trustees, as the case may be
(hereinafter referred to as "Directors"), of each Fund, including the Directors
who are not parties to any such agreement or "interested persons" (as defined
under the 1940 Act) of any such party (the "Non-interested Directors"), voted
unanimously to approve the New Advisory Agreements and to recommend their
respective approval to shareholders.
The Directors of each Fund recommend that the Fund's shareholders vote
in favor of the approval of the New Advisory Agreement for each Portfolio.
BOARD EVALUATION
On February 19, 1999, representatives of Warburg and Credit Suisse met
in person with the Non-interested Directors of each Fund. At that time, the
representatives described the general terms of the Merger and the anticipated
benefits for the Warburg organization and for the Funds and Warburg's other
investment advisory clients.
Credit Suisse subsequently furnished the Non-interested Directors with
additional information regarding the Merger, including the terms of the Merger
and additional information regarding Credit Suisse and its affiliates, including
its existing U.S. asset management business. In a subsequent in person meeting,
the Non-interested Directors discussed this information among themselves and
with representatives of Warburg and Credit Suisse. They were assisted in their
review of this information by their independent legal counsel.
In the course of these discussions, Warburg advised the Non-interested
Directors that it did not expect that the proposed Merger would have a material
effect on the operations of the Funds or their shareholders. Warburg has advised
the Non-interested Directors that the Merger Agreement, by its terms, does not
contemplate any changes in the structure or operations of the Funds (other than
certain changes in the Board as discussed under "Proposal 2: Election of
Directors/Trustees" below). However, Warburg has advised the Non-interested
Directors that, as a result of its operations being combined with Credit
Suisse's existing U.S. asset management business, it is possible that changes in
certain personnel and service providers currently involved in providing services
to the Funds may result from future efforts to combine the strengths and
efficiencies of both firms. Senior executives of Warburg are expected to retain
similar positions in the combined firm following consummation of the
Reorganization. In their discussions with the Non-interested Directors, Warburg
and Credit Suisse representatives also emphasized the strengths of the Credit
Suisse organization
-8-
<PAGE>
and its commitment to provide the combined asset management organization with
the resources necessary to continue to provide high quality services to the
Funds and other investment advisory clients of the organization.
The Board of each Fund was advised that Warburg intends to rely on
Section 15(f) of the 1940 Act, which provides a non-exclusive safe harbor for an
investment adviser to an investment company or any of the investment adviser's
affiliated persons (as defined under the 1940 Act) to receive any amount or
benefit in connection with a change in control of the investment adviser so long
as two conditions are met. First, for a period of three years after the
Acquisition, at least 75% of the board members of the investment company must
not be "interested persons" of the investment company's investment adviser or
its predecessor adviser. On or prior to the consummation of the Acquisition,
each of the Boards, assuming the election of the nominees that shareholders are
being asked to elect in "Proposal 2: Election of Directors/Trustees," would be
in compliance with this provision of Section 15(f). (See "Proposal 2: Election
of Directors/Trustees".) Second, an "unfair burden" must not be imposed upon the
investment company as a result of such transaction or any express or implied
terms, conditions or understandings applicable thereto. The term "unfair burden"
is defined in Section 15(f) to include any arrangement during the two-year
period after the transaction whereby the investment adviser, or any interested
person of any such adviser, receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or its shareholders (other
than fees for BONA FIDE investment advisory or other services) or from any other
person in connection with the purchase or sale of securities or other property
to, from or on behalf of the investment company (other than BONA FIDE ordinary
compensation as principal underwriter for such investment company). No such
compensation agreements are contemplated in connection with the Merger. Warburg
and Credit Suisse have undertaken to pay the costs of preparing and distributing
proxy materials to, and of holding the Special Meetings as well as other direct
fees and expenses incurred by the Funds in connection with the Merger, including
the fees and expenses of legal counsel to the Funds and the Non-interested
Directors.
During the course of their deliberations, the Non-interested Directors
considered a variety of factors including the nature, quality and extent of the
services that Warburg has provided and the New Adviser will provide to the
Portfolios; the continuity from and quality of personnel from Warburg to the New
Adviser; the increased complexity of the domestic and international securities
markets; current and developing conditions in the financial services industry,
including the entry into the industry of large and well capitalized companies
which are spending and appear to be prepared to continue to spend substantial
sums to engage personnel and to provide services to competing investment
companies; and the financial resources of Credit Suisse and the continuance of
appropriate incentives to assure that the New Adviser will furnish high quality
services to the Funds.
In addition to the foregoing factors, the Non-interested Directors gave
careful consideration to the likely impact of the Merger on the Funds and
-9-
<PAGE>
Warburg's asset management operations. In this regard, the Non-interested
Directors considered, among other things, the continuity of the day-to-day
management of the Portfolios after the Merger; the maintenance of the identical
contractual advisory fee rates; the substantially identical nature of the
Current Advisory Agreements to the New Advisory Agreements (other than the
change to the New Adviser as the investment adviser upon consummation of the
Reorganization); the structure of the Merger; Credit Suisse's commitment to the
New Adviser's paying compensation adequate to attract and retain top quality
personnel; Credit Suisse's strategy for the development of its asset management
business in the United States through the New Adviser; information regarding the
financial resources and business reputation of Credit Suisse and its asset
management operations; and the complementary nature of various aspects of the
current businesses of Warburg and Credit Suisse's asset management business and
the intention ultimately to develop a single brand in the U.S. mutual fund
business.
The Non-interested Directors considered the foregoing factors with
respect to each of the Portfolios. In their deliberations, the Board of each
Fund, including its Non-interested Directors, considered the above factors as
they relate to Warburg under the assumption that both the Reorganization is
consummated and that, alternatively, it is not.
On March 8, 1999, the Directors of each Fund, including the
Non-interested Directors of each Fund, unanimously approved the New Advisory
Agreements.
INFORMATION CONCERNING THE TRANSACTION, CREDIT SUISSE, CSAM AND THE NEW ADVISER
Under the Merger Agreement, Credit Suisse will pay up to $650 million to
Warburg, Pincus Counsellors G.P. ("Counsellors") for Warburg in a combination of
cash and Credit Suisse common stock, which includes an initial $450 million
payable at closing and additional contingent consideration of up to $200 million
payable over three years. Counsellors, 70% of which is owned by Warburg, Pincus
& Co. and 30% of which is owned by certain employees of Warburg, is the indirect
owner of Warburg.
The Acquisition is subject to a number of conditions, including (but not
limited to) the absence of any judgment or injunction preventing the
Acquisition, or any governmental litigation challenging the Acquisition or
seeking damages in connection therewith or private litigation that is reasonably
likely to succeed on the merits, and the continued accuracy of the
representations and warranties contained in the Merger Agreement; the consent to
the "assignment" of the advisory agreements resulting from the Acquisition by
Warburg advisory clients whose advisory contracts provide for the management of
at least $18 billion of assets (excluding for such purpose fluctuations in
market value of assets under management subsequent to December 31, 1998) and
$13.5 billion of assets (including all fluctuations in market value); the
approval of the governing Board and shareholders of each Fund having more than
$10 million of net assets of the
-10-
<PAGE>
matters set forth in Proposals 1 and 3 of this proxy statement; no more than 25%
of the Directors of any Fund being "interested persons" (as defined in the 1940
Act) of Counsellors, Credit Suisse or their respective affiliates; the
contemporaneous consummation of the Private Equity Investment (as described
below); Credit Suisse having been granted a perpetual, world-wide, royalty-free
license to use the "Warburg Pincus" name in the asset management sector of the
financial services industry; and all necessary regulatory approvals. Each of the
foregoing conditions may be waived in whole or in part in connection with the
consummation of the Acquisition. The Acquisition is expected to close in
mid-1999, although there is no assurance that it will be consummated.
Counsellors and Warburg Pincus Asset Management Holdings, Inc., the
parent company of Warburg, have agreed to use their reasonable best efforts to
assure, prior to the closing of the Acquisition, the satisfaction of the
conditions set forth in Section 15(f) of the 1940 Act with respect to each Fund
(see "Board Evaluation" above for Section 15(f) requirements). In addition, the
Merger Agreement provides that, as of the closing of the Acquisition, the Board
of each Fund shall be composed of eight Directors consisting of one Director
selected by Counsellors who is an officer of the parent company of Warburg (who
shall be the Vice-Chairman of the Board of such Fund), one Director selected by
Credit Suisse, who is an officer of Credit Suisse or one of its subsidiaries
(who shall be Chairman of the Board of such Fund) and six Directors who are not
"interested persons" of Counsellors, Credit Suisse or their respective
affiliates within the meaning of the 1940 Act.
In addition to acquiring Warburg, Credit Suisse also has agreed to
acquire an interest in the private equity business of Warburg, Pincus & Co., the
current ultimate parent company of Warburg. Credit Suisse has agreed to purchase
a 19.9% passive minority stake in Warburg, Pincus & Co.'s private equity
business (the "Private Equity Investment"). Warburg, Pincus & Co. manages over
$7 billion in private equity investments, with an additional $5 billion of
committed capital available for investment.
Each of Messrs. John L. Furth and Arnold M. Reichman, current directors
of the Funds (Mr. Reichman also being a nominee for Director of the Funds), is a
partner of Counsellors and of Warburg, Pincus & Co., the current ultimate parent
company of Warburg, and will share in the purchase prices received by
Counsellors and Warburg, Pincus & Co. from Credit Suisse in connection with the
Acquisition and the Private Equity Investment, respectively.
The information set forth above concerning the Merger has been provided
to the Funds by Warburg, and the information set forth below concerning Credit
Suisse and Credit Suisse Asset Management ("CSAM") has been provided to the
Funds by Credit Suisse.
-11-
<PAGE>
Credit Suisse Group
Credit Suisse Group is a global financial services company, providing a
comprehensive range of banking and insurance products. Active on every continent
and in all major financial centers, Credit Suisse comprises five business units
- -- CSAM (asset management), Credit Suisse First Boston (investment banking);
Credit Suisse Private Banking (private banking); Credit Suisse (retail banking);
and Winterthur (insurance). Credit Suisse has approximately $680 billion of
global assets under management and employs approximately 62,000 people
worldwide. The principal business address of Credit Suisse is Paradeplatz 8, CH
8070, Zurich, Switzerland.
Credit Suisse Asset Management
CSAM is the institutional asset management and mutual fund arm of Credit
Suisse. CSAM employs approximately 1,600 people worldwide and has global assets
under management of approximately $210 billion in multiple product services,
including equities, fixed income, derivatives and balanced portfolios. The
principal business address of CSAM is Uetlibergstrasse 231, CH 8045, Zurich,
Switzerland.
CSAM's U.S. asset management business, formerly known as BEA
Associates, changed its name to CSAM in January 1999 to more accurately reflect
its integration into Credit Suisse Asset Management. Together with its
predecessor firms, CSAM has been engaged in the investment advisory business in
the United States for over 60 years. In the United States, CSAM is an investment
manager for corporate and state pensions funds, endowments and other
institutions, and has assets under management of approximately $35 billion. The
principal business address of CSAM's U.S. operations is 153 East 53rd Street,
New York, NY 10022.
Currently, CSAM is organized as a general partnership with two general
partners, Credit Suisse Capital Corp. and Credit Suisse Advisors Corp. As part
of the Reorganization, CSAM will reorganize as a limited liability company or a
corporation, which will be a direct or indirect wholly-owned U.S. subsidiary of
Credit Suisse Group. This entity will be the New Adviser of Funds.
The New Adviser
William W. Priest will be the Chief Executive Officer of the New
Adviser. (See "Proposal 2: Election of Directors/Trustees" for information
regarding Mr. Priest.) It is anticipated that the directors of the New Adviser
will be Philip Ryan, Agnes Reicke, Hal Liebes and Michael Guarasci, each of whom
is currently an executive officer of Credit Suisse and/or its affiliates. The
business address for Mr. Ryan is Beaufort House, 15 St. Botolph Street, London,
EC3A 7JJ, England. The business address for Ms. Reicke is Uetlibergstrasse 231,
CH 8045, Zurich, Switzerland. The business address for Messrs. Liebes and
Guarasci is 153 East 53rd Street, New York, NY 10022. The New Adviser will also
have an operating committee consisting of senior investment professionals drawn
from the combined resources of Warburg and CSAM.
-12-
<PAGE>
DESCRIPTION OF THE CURRENT ADVISORY AGREEMENTS
Under each Current Advisory Agreement, Warburg provides each Portfolio
with ongoing investment advisory services. Warburg (a) manages each Portfolio's
assets in accordance with the Portfolio's investment objective and policies as
stated in the Portfolio's Prospectus and Statement of Additional Information,
(b) makes investment decisions for the Portfolio and (c) places purchase and
sale orders for securities on behalf of the Portfolio1. In providing those
services, Warburg provides investment research and supervision of the
Portfolio's investments and conducts a continual program of investment,
evaluation and, if appropriate, sale and reinvestment of the Portfolio's assets.
Under each Current Advisory Agreement, each Portfolio is responsible for
expenses other than those incurred by Warburg in performance of its services
under the Current Advisory Agreement (which would include fees payable to any
investment sub-adviser2) including: investment advisory and administration fees;
taxes, interest, brokerage fees and commissions, if any; fees of Directors of
the Fund who are not officers, directors, or employees of Warburg or any of its
affiliates; fees of any pricing service employed to value shares of the
Portfolio; Securities and Exchange Commission (the "SEC") fees and state blue
sky qualification fees; charges of custodians and transfer and dividend
disbursing agents; the Portfolio's proportionate share of insurance premiums;
outside auditing and legal expenses; costs of maintenance of the Portfolio's
existence; costs attributable to investor services, including, without
limitation, telephone and personnel expenses; costs of preparing and printing
prospectuses and statements of additional information for regulatory purposes
and for distribution to existing shareholders; costs of shareholders' reports
and meetings of the shareholders of the Portfolio and of the officers or
Directors of the Fund; and any extraordinary expenses. Each Portfolio is also
responsible for nonrecurring expenses which may arise, including costs of any
litigation to which the Portfolio is a party and of indemnifying officers and
Directors of the Fund with respect to such litigation and other expenses as
determined by the Directors.
Warburg is responsible for the payment of the compensation and expenses
of all Directors, officers and employees of each Fund who are affiliated with
Warburg.
In return for the services provided by Warburg as investment adviser,
and the expenses it assumes under each Current Advisory Agreement, each
Portfolio pays Warburg an advisory fee at an annual rate based on the
Portfolio's average
- -------------
(1) In the case of Warburg Pincus Cash Reserve Fund and Warburg Pincus New
York Tax Exempt Fund, Warburg makes only general investment decisions for
the Portfolio including decisions concerning (i) the specific types of
securities to be held by the Portfolio and the proportion of the Portfolio's
assets that should be allocated to such investments during particular market
cycles, (ii) the specific issuers whose securities will be purchased or sold
by the Portfolio, (iii) the appropriate maturity of its portfolio
investments and (iv) the appropriate average weighted maturity of its
portfolio in light of current market conditions.
(2) Except in the case of Warburg Pincus Cash Reserve Fund and Warburg Pincus
New York Tax Exempt Fund, where the sub-advisory fees are paid directly by
the Fund.
-13-
<PAGE>
daily net assets. The advisory fee rate for each Portfolio's most recently
completed fiscal year, after waivers and/or expense limitations, is set forth in
the table below. As of the end of each Portfolio's last fiscal year, each
Portfolio had net assets and paid an aggregate advisory fee to Warburg during
such period as set forth below. For each Portfolio's contractual advisory
fee rate, see Exhibit B attached to this Proxy Statement.
<TABLE>
<CAPTION>
FISCAL AGGREGATE
YEAR NET ADVISORY ADVISORY
PORTFOLIO ENDED ASSETS FEE RATE FEE PAID
- ---------------------------- -------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Warburg Pincus Balanced Fund 10/31/98 $35,709,713 0.43% $168,189
Warburg Pincus Capital
Appreciation Fund 10/31/98 $673,493,680 0.70% $4,861,495
Warburg Pincus Cash
Reserve Fund 12/31/98 $429,977,982 0.20% $1,059,673
Warburg Pincus Emerging
Growth Fund 10/31/98 $1,843,544,087 0.90% $18,191,066
Warburg Pincus Emerging
Markets Fund 10/31/98 $60,214,544 0.63% $617,226
Warburg Pincus Fixed Income
Fund 10/31/98 $426,594,201 0.46% $1,660,357
Warburg Pincus Global Fixed
Income Fund 10/31/98 $160,648,445 0.55% $990,043
Warburg Pincus Global Post-
Venture Capital Fund 10/31/98 $3,662,297 0% $0
Warburg Pincus Growth &
Income Fund 10/31/98 $800,205,636 0.75% $6,112,330
Warburg Pincus Health
Sciences Fund 10/31/98 $64,336,090 0.71% $306,871
Warburg Pincus
Institutional Fund, Inc.:
Emerging Markets Portfolio 10/31/98 $23,426,522 0.96% $300,838
International Equity
Portfolio 10/31/98 $1,019,241,760 0.67% $8,000,412
Japan Growth Portfolio 10/31/98 $1,475,800 0% $0
Post-Venture Capital
Portfolio 10/31/98 $1,180,152 0% $0
Small Company
Growth Portfolio 10/31/98 $194,163,769 0.72% $1,615,828
Small Company
Value Portfolio 10/31/98 $1,783,869 0% $0
Value Portfolio 10/31/98 $58,910,087 0.36% $184,664
Warburg Pincus Intermediate
Maturity Government Fund 10/31/98 $78,211,724 0.20% $108,969
Warburg Pincus International
Equity Fund 10/31/98 $1,583,939,442 1.00% $21,710,859
Warburg Pincus International
Small Company Fund 10/31/98 $1,242,153 0% $0
Warburg Pincus Japan
Growth Fund 10/31/98 $40,540,193 0.85% $295,908
Warburg Pincus Japan Small
Company Fund 10/31/98 $37,299,689 0.56% $237,435
-14-
<PAGE>
<CAPTION>
FISCAL AGGREGATE
YEAR NET ADVISORY ADVISORY
PORTFOLIO ENDED ASSETS FEE RATE FEE PAID
- ---------------------------- -------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Warburg Pincus Major Foreign
Markets Fund 10/31/98 $39,021,044 0.03% $5,985
Warburg Pincus New York
Intermediate Municipal Fund 10/31/98 $106,922,397 0.33% $319,390
Warburg Pincus New York Tax
Exempt Fund 12/31/98 $174,743,183 0.20% $307,690
Warburg Pincus Post-Venture
Capital Fund 10/31/98 $68,914,697 0.85% $792,485
Warburg Pincus Small Company
Growth Fund 10/31/98 $4,543,683 0% $0
Warburg Pincus Small Company
Value Fund 10/31/98 $80,370,895 0.99% $1,514,140
Warburg Pincus Trust:
Emerging Markets Portfolio 12/31/98 $2,695,772 0% $0
Growth & Income Portfolio 12/31/98 $14,380,769 0% $0
International Equity
Portfolio 12/31/98 $360,124,458 1.00% $3,689,492
Post-Venture Capital
Portfolio 12/31/98 $62,055,074 1.08% $476,111
Small Company Growth
Portfolio 12/31/98 $734,902,165 0.90% $6,094,569
Warburg Pincus Trust II:
Fixed Income Portfolio 12/31/98 $2,827,196 0% $0
Global Fixed Income
Portfolio 12/31/98 $1,790,442 0% $0
Warburg Pincus WorldPerks
Money Market Fund 12/31/98 $12,925,506 0% $0
Warburg Pincus WorldPerks Tax
Free Money Market Fund 12/31/98 $10,588,560 0% $0
</TABLE>
Each Current Advisory Agreement further provides that Warburg shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by any Portfolio in connection with matters to which such agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on the part of Warburg in the performance of its duties or from reckless
disregard by Warburg of its obligations and duties under such agreement.
Each Current Advisory Agreement may be terminated without penalty upon
ninety (90) days' written notice by Warburg and upon sixty (60) days' written
notice by the Fund. Each Portfolio may agree to terminate its Current Advisory
Agreement either by the vote of a majority of the outstanding voting securities
of the Portfolio, or by a vote of the Board. As stated above, each Current
Advisory Agreement automatically terminates in the event of its assignment.
-15-
<PAGE>
Warburg, CSAM and the relevant sub-advisers intend to apply for an
exemptive order from the SEC which, if granted, would permit the New Advisory
Agreements and sub-investment advisory agreements between each of the Portfolios
and the New Adviser to go into effect without shareholder approval beginning on
the consummation of the Merger and continuing for a period of up to 150 days,
through the date on which each of the new agreements are approved or disapproved
by the respective shareholders of each Portfolio. It is expected that the terms
of the exemptive order, if granted, would allow the New Adviser to receive
advisory fees pursuant to the New Advisory Agreements, provided that such fees
would be held in escrow pending shareholder approval for the agreements.
Warburg has acted as the investment adviser for each Portfolio since
each Portfolio commenced operations, except as shown below. Also shown below is
the date of each Current Advisory Agreement, the date when each Current Advisory
Agreement was last approved by the Directors and the shareholders of each
Portfolio and the date to which each Current Advisory Agreement was last
continued. Each Current Advisory Agreement was submitted to shareholders prior
to its becoming effective, as required by the 1940 Act.
-16-
<PAGE>
<TABLE>
<CAPTION>
DATE LAST APPROVED BY
------------------
DATE OF DATE
COMMENCEMENT ADVISORY SHARE- CONTINUED
PORTFOLIO OF OPERATIONS* AGREEMENT DIRECTORS HOLDERS TO
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Warburg Pincus Balanced Fund 10/6/88 3/4/96 3/8/99 2/28/96 4/17/00
Warburg Pincus Capital Appreciation Fund 8/17/87 7/10/87 3/8/99 1/20/87 4/17/00
Warburg Pincus Cash Reserve Fund 4/16/85 4/16/85 3/8/99 4/16/85 4/17/00
Warburg Pincus Emerging Growth Fund 1/21/88 1/21/88 3/8/99 1/19/88 4/17/00
Warburg Pincus Emerging Markets Fund 12/30/94 12/30/94 3/8/99 10/18/94 4/17/00
Warburg Pincus Fixed Income Fund 8/17/87 7/10/87 3/8/99 1/20/87 4/17/00
Warburg Pincus Global Fixed Income Fund 11/1/90 11/1/90 3/8/99 9/1/90 4/17/00
Warburg Pincus Global Post
-Venture Capital Fund 9/30/96 7/1/97 3/8/99 7/1/97 4/17/00
Warburg Pincus Growth & Income Fund 10/6/88 3/4/96 3/8/99 2/28/96 4/17/00
Warburg Pincus Health Sciences Fund 12/31/96 12/31/96 3/8/99 12/12/96 4/17/00
Warburg Pincus Institutional Fund, Inc.:
Emerging Markets Portfolio 9/30/96 9/30/96 3/8/99 7/23/96 4/17/00
International Equity Portfolio 9/1/92 9/1/92 3/8/99 5/13/92 4/17/00
Japan Growth Portfolio 10/31/97 10/31/97 3/8/99 7/30/97 4/17/00
Post-Venture Capital Portfolio 10/31/97 10/31/97 3/8/99 7/30/97 4/17/00
Small Company Growth Portfolio 12/29/95 12/29/95 3/8/99 12/29/95 4/17/00
Small Company Value Portfolio 10/31/97 10/31/97 3/8/99 7/30/97 4/17/00
Value Portfolio 6/30/97 6/30/97 3/8/99 1/15/97 4/17/00
Warburg Pincus Intermediate Maturity
Government Fund 8/22/88 8/22/88 3/8/99 7/19/88 4/17/00
Warburg Pincus International Equity Fund 5/2/89 4/17/89 3/8/99 4/12/89 4/17/00
Warburg Pincus International Small Company Fund 5/29/98 5/29/98 3/8/99 4/3/98 4/17/00
Warburg Pincus Japan Growth Fund 12/29/95 12/24/95 3/8/99 12/5/95 4/17/00
Warburg Pincus Japan Small Company Fund 9/30/94 9/27/94 3/8/99 9/21/94 4/17/00
Warburg Pincus Major Foreign Markets Fund 3/31/97 3/31/97 3/8/99 3/31/97 4/17/00
Warburg Pincus New York Intermediate
Municipal Fund 4/1/87 4/1/87 3/8/99 1/20/87 4/17/00
Warburg Pincus New York Tax Exempt Fund 4/18/85 4/17/85 3/8/99 4/17/85 4/17/00
Warburg Pincus Post-Venture Capital Fund 9/29/95 7/1/97 3/8/99 7/1/97 4/17/00
Warburg Pincus Small Company Growth Fund 12/31/96 12/31/96 3/8/99 12/12/96 4/17/00
Warburg Pincus Small Company Value Fund 12/29/95 12/29/95 3/8/99 12/5/95 4/17/00
Warburg Pincus Trust:
Emerging Markets Portfolio 12/31/97 7/2/96 3/8/99 4/16/96 4/17/00
Growth & Income Portfolio 10/31/97 10/10/97 3/8/99 7/30/97 4/17/00
International Equity Portfolio 6/30/95 6/20/95 3/8/99 6/9/95 4/17/00
Post-Venture Capital Portfolio 9/30/96 7/1/97 3/8/99 7/1/97 4/17/00
Small Company Growth Portfolio 6/30/95 6/30/95 3/8/99 6/9/95 4/17/00
Warburg Pincus Trust II:
Fixed Income Portfolio 3/31/97 1/15/97 3/8/99 1/15/97 4/17/00
Global Fixed Income Portfolio 3/31/97 1/15/97 3/8/99 1/15/97 4/17/00
Warburg Pincus WorldPerks Money Market Fund 10/1/98 9/30/98 3/8/99 7/20/98 4/17/00
Warburg Pincus WorldPerks Tax Free Money
Market Fund 10/1/98 9/30/98 3/8/99 7/20/98 4/17/00
</TABLE>
- -------------
* Warburg commenced providing investment advisory services for Warburg Pincus
Balanced and Warburg Pincus Growth & Income Funds on September 30, 1994 and
January 1, 1992, respectively.
-17-
<PAGE>
THE NEW ADVISORY AGREEMENTS
Shareholders are not being asked to approve or disapprove the Merger;
rather, they are being asked only to approve or disapprove the New Advisory
Agreements for the Portfolios. OTHER THAN IDENTIFICATION OF THE NEW ADVISER AND
THE EXECUTION AND TERMINATION DATES, THE NEW ADVISORY AGREEMENTS ARE
SUBSTANTIALLY SIMILAR TO THE CURRENT ADVISORY AGREEMENTS. IN PARTICULAR, THE
CONTRACTUAL ADVISORY FEE RATES CHARGED TO THE PORTFOLIOS WILL NOT BE CHANGED.
The New Advisory Agreement for each Portfolio will be dated as of the
date of the consummation of the Acquisition, which is expected to occur in
mid-1999. Each New Advisory Agreement will be in effect for an initial two-year
term ending on the second anniversary of the Acquisition, and may continue
thereafter from year to year with respect to a Portfolio only if specifically
approved at least annually by the Board of a relevant Fund or by the vote of "a
majority of the outstanding voting securities" of each Portfolio, and, in either
event, the vote of a majority of the Non-interested Directors, cast in person at
a meeting called for such purpose. In the event that shareholders of a Portfolio
do not approve the New Advisory Agreement, the corresponding Current Advisory
Agreement will remain in effect until the closing of the Acquisition, at which
time it would terminate. In such event, the Board of the relevant Fund will take
such action as it deems to be in the best interests of the relevant Portfolio
and its shareholders. In the event the Acquisition is not consummated, Warburg
will continue to provide services to each Portfolio in accordance with the terms
of each Current Advisory Agreement for such periods as may be approved at least
annually by the Board, including a majority of the Non-interested Directors.
DIFFERENCES BETWEEN THE CURRENT AND NEW ADVISORY AGREEMENTS
THE NEW ADVISORY AGREEMENTS ARE SUBSTANTIALLY THE SAME AS THE CURRENT
ADVISORY AGREEMENTS IN ALL MATERIAL RESPECTS (EXCEPT THAT THE NEW ADVISER WILL
BECOME A PARTY TO THE NEW ADVISORY AGREEMENTS FOLLOWING THE CONSUMMATION OF THE
REORGANIZATION (IF CONSUMMATED)). The principal changes that have been made are
summarized below. The New Advisory Agreements reflect conforming changes that
have been made in order to promote consistency among all Funds currently advised
by Warburg and to permit ease of administration. For example, the New Advisory
Agreements expressly grant the New Adviser the authority to exercise voting
rights with respect to portfolio securities, to engage and monitor sub-advisers
for the Portfolio and to negotiate brokerage commissions on behalf of the
Portfolio. These rights were not expressly provided in all of the Current
Advisory Agreements.
In addition, each New Advisory Agreement would change the provisions
governing the use of the Warburg Pincus name and expand such provisions to
permit certain uses of the name Credit Suisse. Pursuant to a License Agreement
to be entered into among Warburg, Pincus & Co., Credit Suisse and other parties
thereto, Credit Suisse will be granted by Warburg, Pincus & Co. an exclusive
-18-
<PAGE>
license of the rights to use and sublicense the names "Warburg Pincus" and
derivations and abbreviations thereof in the asset management sector of the
financial services industry (together the "Warburg Marks"). Under each New
Advisory Agreement, each Fund, with respect to each of its Portfolios, if any,
has the nonexclusive right to use one or more of the Warburg Marks and the name
"Credit Suisse" and derivations and abbreviations thereof (together the "CS
Marks") as part of its name or the names of certain classes of its shares, as
applicable, and to use the Warburg Marks and the CS Marks in the Fund's
investment products and services. This license continues only as long as the New
Advisory Agreement is in place, and with respect to the Warburg Marks only as
long as Credit Suisse continues to be a licensee of the Warburg Marks as
described above. As a condition of the license, each Fund, on behalf of each of
its Portfolios, if any, undertakes certain responsibilities and agrees to
certain restrictions, such as agreeing not to challenge the validity of the
Warburg Marks or the CS Marks or any ownership by Warburg, Pincus & Co. of the
Warburg Marks or Credit Suisse of the CS Marks, and the obligation to use the
names within commercially reasonable standards of quality. In the event the New
Advisory Agreement is terminated, each Fund, on behalf of each of its
Portfolios, if any, must not use a name likely to be confused with those
associated with the Warburg Marks or the CS Marks.
WARBURG AND CERTAIN AFFILIATES
Warburg is a professional investment firm which provides investment
services to investment companies, employee benefit plans, endowment funds,
foundations and other institutions and individuals. As of February 28, 1999,
Warburg managed approximately $21.8 billion of assets, including approximately
$10.2 billion of investment company assets. Incorporated in 1970, Warburg is
indirectly controlled by Warburg, Pincus & Co., which has no business other than
being a holding company of Warburg and its affiliates. Lionel I. Pincus, the
managing partner of Warburg, Pincus & Co., may be deemed to control both
Warburg, Pincus & Co. and Warburg. Warburg's principal business address is 466
Lexington Avenue, New York, NY 10017.
CO-ADMINISTRATORS. Each Portfolio employs Counsellors Funds Service,
Inc. ("Counsellors Service"), a wholly owned subsidiary of Warburg, as a
co-administrator. As co-administrator, Counsellors Service provides shareholder
liaison services to the Portfolio including responding to shareholder inquiries
and providing information on shareholder investments. Counsellors Service also
performs a variety of other services, including furnishing certain executive and
administrative services, acting as liaison between the Portfolio and its various
service providers, furnishing corporate secretarial services, which include
preparing materials for meetings of the Board, preparing proxy statements and
annual, semiannual and quarterly reports, assisting in other regulatory filings
as necessary and monitoring and developing compliance procedures for the Fund.
As compensation, each Portfolio pays Counsellors Service a fee calculated at an
annual rate of 0.10% of the Portfolio's average daily net assets, exclusive of
out-of-pocket expenses.
-19-
<PAGE>
Each Portfolio employs PFPC Inc. ("PFPC"), an indirect, wholly owned
subsidiary of PNC Bank Corp., as a co-administrator. As a co-administrator, PFPC
calculates the Portfolio's net asset value, provides accounting services for the
Portfolio and assists in related aspects of the Portfolio's operations. As
compensation, each Portfolio pays PFPC a fee calculated as set forth below,
exclusive of out-of-pocket expenses. The principal business address of PFPC is
400 Bellevue Parkway, Wilmington, DE 19809.
<TABLE>
<CAPTION>
PFPC
NAME OF PORTFOLIO CO-ADMINISTRATION FEE SCHEDULE
- --------------- ----------------------------
<S> <C>
Warburg Pincus Balanced Fund First $500 million at 15 basis points
Warburg Pincus Growth & Income Fund Next $1 billion at 10 basis points
Warburg Pincus Trust - Growth & Income Over $1.5 billion at 5 basis points
Portfolio
Warburg Pincus Capital Appreciation Fund First $500 million at 10 basis points
Warburg Pincus Emerging Growth Fund Next $1 billion at 7.5 basis points
Warburg Pincus Health Sciences Fund Over $1.5 billion at 5 basis points
Warburg Pincus Institutional Fund, Inc.:
Post-Venture Capital Portfolio
Small Company Growth Portfolio
Small Company Value Portfolio
Value Portfolio
Warburg Pincus Post-Venture Capital Fund
Warburg Pincus Small Company Growth Fund
Warburg Pincus Small Company Value Fund
Warburg Pincus Trust:
Post-Venture Capital Portfolio
Small Company Growth Portfolio
Warburg Pincus WorldPerks Money Market Fund
Warburg Pincus WorldPerks Tax Free Money Market Fund
-20-
<PAGE>
PFPC
NAME OF PORTFOLIO CO-ADMINISTRATION FEE SCHEDULE
- --------------- ----------------------------
<S> <C>
Warburg Pincus Emerging Markets Fund First $250 million at 12 basis points
Warburg Pincus Global Post-Venture Next $250 million at 10 basis points
Capital Fund Next $250 million at 8 basis points
Warburg Pincus Institutional Fund, Inc.: Over $750 million at 5 basis points
Emerging Markets Portfolio
International Equity Portfolio
Japan Growth Portfolio
Warburg Pincus International Equity Fund
Warburg Pincus International Small
Company Fund
Warburg Pincus Japan Growth Fund
Warburg Pincus Japan Small Company Fund
Warburg Pincus Major Foreign Markets Fund
Warburg Pincus Trust:
Emerging Markets Portfolio
International Equity Portfolio
Warburg Pincus Cash Reserve Fund 25 basis points
Warburg Pincus New York Tax Exempt
Fund
Warburg Pincus Fixed Income Fund 5 basis points
Warburg Pincus Global Fixed Income Fund
Warburg Pincus Intermediate Maturity
Government Fund
Warburg Pincus New York Intermediate
Municipal Fund
Warburg Pincus Trust II:
Fixed Income Portfolio
Global Fixed Income Portfolio
</TABLE>
-21-
<PAGE>
DISTRIBUTOR. Counsellors Securities Inc. ("Counsellors Securities")
serves as distributor of the shares of each Portfolio. Counsellors Securities is
a wholly owned subsidiary of Warburg and its principal business address is at
466 Lexington Avenue, New York, NY 10017. Counsellors Securities receives a fee
at an annual rate equal to 0.25% of the average daily net assets of certain
Portfolios' Common Shares and up to 0.75% (currently 0.50%) of the average daily
net assets of a Portfolio's Advisor Shares for distribution services, pursuant
to a shareholder servicing and distribution plan (the "12b-1 Plan") adopted by
the Portfolio pursuant to Rule 12b-1 under the 1940 Act. Amounts paid to
Counsellors Securities under the 12b-1 Plan may be used by Counsellors
Securities to cover expenses that are primarily intended to result in, or that
are primarily attributable to, the sale of the Common Shares or the Advisor
Shares, as the case may be, and ongoing servicing and/or maintenance of the
accounts of the respective class of shareholders of the Portfolio.
AGGREGATE AGGREGATE
FEE PAID TO FEE PAID TO
COUNSELLORS COUNSELLORS
SERVICE SECURITIES
FISCAL DURING LAST DURING LAST
PORTFOLIO YEAR ENDED FISCAL YEAR FISCAL YEAR
- ----------------------------- -------------- -------------- ------------
Warburg Pincus Balanced Fund 10/31/98 $38,982 $97,887
Warburg Pincus Capital
Appreciation Fund 10/31/98 $694,499 $166,239
Warburg Pincus Cash
Reserve Fund 12/31/98 $519,004 $0
Warburg Pincus Emerging
Growth Fund 10/31/98 $2,021,230 $1,957,786
Warburg Pincus Emerging
Markets Fund 10/31/98 $98,604 $247,287
Warburg Pincus Fixed
Income Fund 10/31/98 $359,847 $8,768
Warburg Pincus Global Fixed
Income Fund 10/31/98 $181,107 $38,716
Warburg Pincus Global Post-Venture
Capital Fund 10/31/98 $3,489 $8,724
Warburg Pincus Growth
& Income Fund 10/31/98 $849,366 $502,703
Warburg Pincus Health
Sciences Fund 10/31/98 $43,240 $108,100
Warburg Pincus Institutional
Fund, Inc.:
Emerging Markets Portfolio 10/31/98 $31,433 $0
International Equity Portfolio 10/31/98 $1,188,965 $0
Japan Growth Portfolio 10/31/98 $1,414 $0
Post-Venture Capital Portfolio 10/31/98 $1,622 $0
Small Company Growth Portfolio 10/31/98 $223,614 $0
Small Company Value Portfolio 10/31/98 $6,181 $0
Value Portfolio 10/31/98 $50,950 $0
-22-
<PAGE>
AGGREGATE AGGREGATE
FEE PAID TO FEE PAID TO
COUNSELLORS COUNSELLORS
SERVICE SECURITIES
FISCAL DURING LAST DURING LAST
PORTFOLIO YEAR ENDED FISCAL YEAR FISCAL YEAR
- ----------------------------- -------------- -------------- ------------
Warburg Pincus Intermediate
Maturity Government Fund 10/31/98 $54,802 $17
Warburg Pincus International
Equity Fund 10/31/98 $2,171,086 $1,982,695
Warburg Pincus International
Small Company Fund 10/31/98 $457 $1,143
Warburg Pincus Japan Growth
Fund 10/31/98 $35,042 $87,669
Warburg Pincus Japan Small
Company Fund 10/31/98 $42,122 $105,308
Warburg Pincus Major Foreign
Markets Fund 10/31/98 $23,200 $2,142
Warburg Pincus New York
Intermediate Municipal Fund 10/31/98 $96,633 $0
Warburg Pincus New York Tax
Exempt Fund 12/31/98 $157,551 $0
Warburg Pincus Post-Venture
Capital Fund 10/31/98 $93,788 $234,763
Warburg Pincus Small Company
Growth Fund 10/31/98 $10,574 $0
Warburg Pincus Small Company
Value Fund 10/31/98 $153,007 $382,903
Warburg Pincus Trust:
Emerging Markets Portfolio 12/31/98 $1,409 $0
Growth & Income Portfolio 12/31/98 $7,835 $0
International Equity Portfolio 12/31/98 $368,949 $0
Post-Venture Capital Portfolio 12/31/98 $45,364 $0
Small Company Growth Portfolio 12/31/98 $677,174 $0
Warburg Pincus Trust II:
Fixed Income Portfolio 12/31/98 $1,324 $0
Global Fixed Income Portfolio 12/31/98 $1,679 $0
Warburg Pincus WorldPerks
Money Market Fund 12/31/98 $0 $7,419
Warburg Pincus WorldPerks Tax
Free Money Market Fund 12/31/98 $0 $6,932
Counsellors Service is expected to continue to provide services to the
Portfolios under the current arrangements if the New Advisory Agreements are
approved. However, upon or shortly following the closing of the Acquisition,
Counsellors Securities is expected to cease to be the principal underwriter of
each Portfolio and will no longer perform certain other distribution services
due to restrictions imposed by regulations applicable to Credit Suisse and its
subsidiaries under the Bank Holding Company Act of 1956, as amended. Such
discontinuation
-23-
<PAGE>
of Counsellors Securities' services may be delayed for an initial period if
appropriate regulatory approvals are received which will provide the Funds with
additional time to select an appropriate new principal underwriter. During any
such period, Counsellors Securities would be expected to continue to serve under
the current arrangements.
Exhibit C sets forth the fees and other information regarding other U.S.
registered investment companies advised by Warburg or CSAM.
BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS
In selecting brokers and dealers with which to place portfolio
transactions for a Portfolio, neither Warburg nor the New Adviser will consider
sales of shares of funds currently advised by either of them, although each may
place such transactions with brokers and dealers that sell shares of funds
currently advised by either of them. Allocation of Fund portfolio transactions
is supervised by Warburg. The Portfolios currently do not execute portfolio
transactions through Counsellors Securities or any other affiliate of Warburg.
Following the closing of the Acquisition, the Portfolios may be authorized to
execute portfolio transactions through Credit Suisse First Boston, an affiliate
of CSAM, or another Credit Suisse affiliated broker-dealer (including
Counsellors Securities), subject to compliance with the 1940 Act.
REQUIRED VOTE
Approval of the New Advisory Agreement for any Portfolio requires the
affirmative vote of a "majority of the outstanding voting securities," as
defined above, of the Portfolio. The Directors of each Fund, including the
Non-interested Directors, unanimously recommend that the shareholders of each
Portfolio vote in favor of this Proposal 1.
PROPOSAL 2: ELECTION OF
DIRECTORS/TRUSTEES FOR EACH FUND
At the Special Meeting, eight (8) Directors are to be elected who will
constitute the Board of each Fund. For election of Directors at the Special
Meeting, each Fund's Board has approved the nomination of the following
individuals: William W. Priest, Arnold M. Reichman, Richard H. Francis, Jack W.
Fritz, Jeffrey E. Garten, James S. Pasman, Jr., Steven N. Rappaport and
Alexander B. Trowbridge. The election of Messrs. Priest, Francis, Pasman and
Rappaport to a Fund's Board will take effect only upon the closing of the
Acquisition (assuming Proposal 1 is approved by such Fund, or at least one
Portfolio of such Fund, where applicable); the election of Messrs. Reichman,
Fritz, Garten and Trowbridge will be immediately effective in any event as they
currently are members of each Board, although Messrs. Reichman and Garten have
not previously been presented to shareholders of certain Funds. Effective upon
the closing of the Acquisition, assuming Proposal 1 is approved by a Fund (or at
least one Portfolio of such Fund, where applicable), each of Richard N. Cooper,
John L. Furth and Thomas A. Melfe will resign as current Directors of such Fund.
-24-
<PAGE>
The persons named as proxies on the enclosed proxy card will vote for
the election of the nominees named above unless authority to vote for any or all
of the nominees is withheld in the proxy. Each Director so elected will serve as
a Director of the respective Fund until the next meeting of shareholders, if
any, called for the purpose of electing Directors and until the election and
qualification of a successor or until such Director sooner resigns, dies or is
removed as provided in the organizational documents of each Fund.
Each of the nominees has indicated that he is willing to serve as a
Director. If any or all of the nominees should become unavailable for election
due to events not now known or anticipated, the persons named as proxies will
vote for such other nominee or nominees as the Directors may recommend.
The following table sets forth certain information concerning the
current Directors and the nominees. Unless otherwise noted, each of the
Directors and nominees has engaged in the principal occupation listed in the
following table for more than five years, but not necessarily in the same
capacity.
NOMINEES
PRESENT OFFICE WITH THE FUNDS
(DATE NOMINEE BECAME DIRECTOR),
PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
NAME (AGE) DIRECTORSHIPS
- ------------------- ---------------------------------------------
William W. Priest* (56) Nominee for Director of the Funds;
c/o Credit Suisse Asset Chairman- Management Committee, Chief
Management Executive Officer and Executive Director of
153 East 53rd Street CSAM (U.S.) since 1990; Director of TIG
New York, NY 10022 Holdings, Inc.; Director of other investment
companies advised by CSAM.
Arnold M. Reichman *+ (50) Director of the Funds since February 8, 1996;
c/o Warburg Pincus Asset Managing Director and Chief Operating
Management, Inc. Officer of Warburg; Associated with Warburg
466 Lexington Avenue since 1984; Director of The RBB Fund, Inc.
New York, NY 10017-3147 since July 1991; Officer of Counsellors
Securities and other companies affiliated
with Warburg; Director/Trustee of other
investment companies in the Warburg Pincus
family of funds.
-25-
<PAGE>
PRESENT OFFICE WITH THE FUNDS
(DATE NOMINEE BECAME DIRECTOR),
PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
NAME (AGE) DIRECTORSHIPS
- ------------------- ---------------------------------------------
Richard H. Francis (65) Nominee for Director of the Funds; Currently
40 Grosvenor Road retired; Executive Vice President and Chief
Short Hills, NJ 07078 Financial Officer of Pan Am Corporation and
Pan American World Airways, Inc. from 1988
to 1991; Director of one other investment
company advised by CSAM; Director of The
Infinity Mutual Funds, BISYS Group
Incorporated.
Jack W. Fritz (71) Director of the Funds since their inception;
2425 North Fish Creek Road Private investor; Consultant and Director of
P.O. Box 483 Fritz Broadcasting, Inc. and Fritz
Wilson, WY 83014 Communications; Director of Advo, Inc.;
Director/Trustee of other investment
companies in the Warburg Pincus family of
funds.
Jeffrey E. Garten (52) Director of the Funds since February 6, 1998;
Box 208200 Dean of Yale School of Management and
New Haven, CT 06520-8200 William S. Beinecke Professor in the Practice
of International Trade and Finance;
Undersecretary of Commerce for International
Trade from November 1993 to October 1995.
James S. Pasman, Jr. (68) Nominee for Director of the Funds; Currently
29 The Trillium retired; President and Chief Operating Officer
Pittsburgh, PA 15238 of National InterGroup, Inc. from April 1989
to March 1991; Chairman of Permian Oil Co.
from April 1989 to March 1991; Director of
two other investment companies advised by
CSAM; Director of Education Management
Corp., Tyco International Ltd.; Trustee, BT
Insurance Funds Trust.
-26-
<PAGE>
PRESENT OFFICE WITH THE FUNDS
(DATE NOMINEE BECAME DIRECTOR),
PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
NAME (AGE) DIRECTORSHIPS
- ------------------- ---------------------------------------------
Steven N. Rappaport (49) Nominee for Director of the Funds; President
c/o Loanet, Inc. of Loanet, Inc. since 1997; Executive Vice
153 East 53rd Street, President of Loanet, Inc. from 1994 to 1997;
Suite 5500 Director, President, North American
New York, NY 10022 Operations, and former Executive Vice
President from 1992 to 1993 of Worldwide
Operations of Metallurg Inc.; Executive Vice
President, Telerate, Inc. from 1987 to 1992;
Partner in the law firm of Hartman & Craven
until 1987; Director of other investment
companies advised by CSAM.
Alexander B. Trowbridge (69) Director of the Funds since their inception;
1317 F Street, N.W., Currently retired; President of Trowbridge
5th Floor Partners, Inc. from January 1990 to November
Washington, DC 20004 1996; Director or Trustee of New England Life
Insurance Co., ICOS Corporation, The Rouse
Company, Harris Corp., The Gillette Co.,
Sunoco, Inc. and IRI International, Inc.;
Director/Trustee of other investment
companies in the Warburg Pincus family
of funds.
- -------------
* Nominees considered by the Funds and their counsel to be "interested
persons" (as defined in the 1940 Act) of the Funds or of their investment
adviser because of their employment by Warburg or CSAM.
+ Mr. Reichman, as a partner of Counsellors and of Warburg, Pincus & Co., the
current ultimate parent company of Warburg, will share in the purchase
prices received by Counsellors and Warburg, Pincus & Co. from Credit Suisse
in connection with the Acquisition and the Private Equity Investment,
respectively.
-27-
<PAGE>
CURRENT DIRECTORS NOT STANDING FOR RE-ELECTION:
PRESENT OFFICE WITH THE FUNDS
(DATE NOMINEE BECAME DIRECTOR),
PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
NAME (AGE) DIRECTORSHIPS
- ------------------- ---------------------------------------------
Richard N. Cooper* (64) Director of the Funds since their inception;
c/o Harvard University Professor at Harvard University; National
1737 Cambridge Street Intelligence Council from June 1995 until
Cambridge, MA 02138 January 1997; Director or Trustee of
CircuitCity Stores, Inc. and Phoenix Home
Mutual Life Insurance Company;
Director/Trustee of other investment
companies in the Warburg Pincus family
of funds.
John L. Furth*+ (68) Director of the Funds since their inception;
c/o Warburg Pincus Asset Chairman of the Board of the Funds and
Management, Inc. Warburg and Managing Director of Warburg;
466 Lexington Avenue Associated with Warburg since 1970; Director
New York, NY 10017-3147 of other companies affiliated with Warburg;
Chairman of the Board of Directors/Trustees
of other investment companies in the Warburg
Pincus family of funds.
Thomas A. Melfe* (67) Director of the Funds since their inception;
c/o Piper & Marbury, L.L.P Partner in the law firm of Piper & Marbury,
1251 Avenue of the Americas L.L.P.; Partner in the law firm of Donovan
29th Floor Leisure Newton & Irvine from April 1984 to
New York, NY 10020-1104 April 1998; Chairman of the Board, Municipal
Fund for New York Investors, Inc.; Director/
Trustee of other investment companies in the
Warburg Pincus family of funds.
- -------------
* Directors considered by the Funds and their counsel to be "interested
persons" (as defined in the 1940 Act) of the Funds or of their investment
adviser. Mr. Furth is considered an "interested person" because of his
employment by Warburg. Mr. Cooper is considered an "interested person"
because he provides economic consulting services to a controlling person of
Warburg. Mr. Melfe is considered an "interested person" of Warburg Pincus
Intermediate Maturity Government Fund and Warburg Pincus Global Fixed Income
Fund because his law firm provided certain legal services to these Funds
within the past two fiscal years of the Funds.
+ Mr. Furth, as a partner of Counsellors and of Warburg, Pincus & Co., the
current ultimate parent company of Warburg, will share in the purchase
prices received by Counsellors and Warburg, Pincus & Co. from Credit Suisse
in connection with the Acquisition and the Private Equity Investment,
respectively.
-28-
<PAGE>
The table below sets forth the number of shares of each Portfolio owned
directly or beneficially by the nominees to and Directors of the relevant Board
and the executive officers of each Fund as of March 9, 1999. Nominees or
Directors who do not own any Shares have been omitted from the table. Portfolios
which are not owned by any nominees, Directors or executive officers also have
been omitted from the table.
NUMBER OF PERCENTAGE
SHARES OF
PORTFOLIO NAME OF BENEFICIALLY OUTSTANDING
NAME DIRECTOR/NOMINEE OWNED (1) SHARES
- ---------------------- ----------------------- ------------- -----------
Warburg Pincus Current Directors/
Balanced Fund executive officers
as a group 556 *
Warburg Pincus Capital A.M. Reichman 7,305 *
Appreciation Fund J.W. Fritz 35,754 *
J.L. Furth 737 *
T.A. Melfe 15,853 *
Current Directors/
executive officers
as a group 62,287 *
Warburg Pincus Cash A.M. Reichman 1,080 *
Reserve Fund J.W. Fritz 192,576 *
J.L. Furth 1,061 *
Current Directors/
executive officers
as a group 288,157 *
Warburg Pincus Emerging A.M. Reichman 16,159 *
Growth Fund J.W. Fritz 12,413 *
R.N. Cooper 5,046 *
J.L. Furth 286 *
T.A. Melfe 5,265 *
Current Directors/
executive officers
as a group 57,984 *
Warburg Pincus Emerging Current Directors/
Markets Fund executive officers
as a group 4,940 *
Warburg Pincus Fixed J.W. Fritz 77,698 *
Income Fund J.L. Furth 3,057 *
T.A. Melfe 52,594 *
-29-
<PAGE>
NUMBER OF PERCENTAGE
SHARES OF
PORTFOLIO NAME OF BENEFICIALLY OUTSTANDING
NAME DIRECTOR/NOMINEE OWNED (1) SHARES
- ---------------------- ----------------------- ------------- -----------
Current Directors/
executive officers
as a group 133,350 *
Warburg Pincus Global J.L. Furth 467 *
Fixed Income Fund
Current Directors/
executive officers
as a group 850 *
Warburg Pincus Global Current Directors/
Post-Venture executive officers
Capital Fund as a group 61 *
Warburg Pincus Growth J.W. Fritz 21,953 *
& Income Fund J.L. Furth 344 *
T.A. Melfe 9,794 *
Current Directors/
executive officers
as a group 35,336 *
Warburg Pincus Health J.W. Fritz 6,251 *
Sciences Fund
Current Directors/
executive officers
as a group 6,393 *
Warburg Pincus Current Directors/
Intermediate Maturity executive officers
Government Fund as a group 4,690 *
Warburg Pincus A.M. Reichman 7,320 *
International R.N. Cooper 6,646 *
Equity Fund J.L. Furth 491 *
Current Directors/
executive officers
as a group 30,802 *
Warburg Pincus A.M. Reichman 7,288 *
Japan Growth Fund
Current Directors/
executive officers
as a group 41,227 *
-30-
<PAGE>
NUMBER OF PERCENTAGE
SHARES OF
PORTFOLIO NAME OF BENEFICIALLY OUTSTANDING
NAME DIRECTOR/NOMINEE OWNED (1) SHARES
- ---------------------- ----------------------- ------------- -----------
Warburg Pincus Japan Current Directors/
Small Company Fund executive officers
as a group 4,324 *
Warburg Pincus Major A.M. Reichman 962 *
Foreign Markets Fund T.A. Melfe 17,883 *
Current Directors/
executive officers
as a group 18,845 *
Warburg Pincus New J.L. Furth 50,615 *
York Intermediate
Municipal Fund Current Directors/
executive officers
as a group 50,615 *
Warburg Pincus A.M. Reichman 483,817 *
New York Tax
Exempt Fund Current Directors/
executive officers
as a group 483,817 *
Warburg Pincus Post- R.N. Cooper 8,283 *
Venture Capital Fund
Current Directors/
executive officers
as a group 31,825 *
Warburg Pincus Small Current Directors/
Company Growth Fund executive officers
as a group 6,312 1.4%
Warburg Pincus Small Current Directors/
Company Value Fund executive officers
as a group 2,827 *
- -------------
(1) The information as to beneficial ownership is based on statements furnished
to the Funds by each Director, nominee and executive officer. Each
individual listed above has sole voting and investment power with respect
to shares deemed to be beneficially owned by him/her, except in certain
instances where the individual may share voting and investment power with
spouse and/or other immediate family members.
* Less than 1% of the total shares outstanding of such Portfolio.
-31-
<PAGE>
The table below sets forth the aggregate number of shares, and
percentage of the outstanding shares of certain Portfolios owned by certain
accounts on March 9, 1999 for which Warburg acts as investment adviser. Lionel
I. Pincus may be deemed to be a beneficial owner of such shares by virtue of his
indirect ownership interest in Warburg but disclaims any beneficial ownership in
such shares.
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF SHARES
OF SHARES OUTSTANDING
AS OF AS OF
NAME OF PORTFOLIO MARCH 9, 1999 MARCH 9, 1999
- --------------------------------- ---------------- --------------
<S> <C> <C>
Warburg Pincus Balanced Fund 28,052 1.07%
Warburg Pincus Capital Appreciation Fund 18,206,634 48.25%
Warburg Pincus Cash Reserve Fund 210,307,053 52.51%
Warburg Pincus Emerging Growth Fund 4,913,833 9.78%
Warburg Pincus Emerging Markets Fund 534,282 6.65%
Warburg Pincus Fixed Income Fund 15,034,834 36.65%
Warburg Pincus Global Fixed Income Fund 67,315 0.46%
Warburg Pincus Global Post-Venture
Capital Fund 154,295 47.11%
Warburg Pincus Growth & Income Fund 3,047,186 7.30%
Warburg Pincus Health Sciences Fund 982,955 19.93%
Warburg Pincus Institutional Fund, Inc.:
Emerging Markets Portfolio 416,172 46.83%
International Equity Portfolio 4,647,824 7.38%
Japan Growth Portfolio 161,755 100.00%
Post-Venture Capital Portfolio 131,674 98.59%
Small Company Growth Portfolio 1,136,293 7.27%
Small Company Value Portfolio 109,337 99.35%
Value Portfolio 1,232,173 27.21%
Warburg Pincus Intermediate Maturity
Government Fund 2,962,656 42.08%
Warburg Pincus International Equity Fund 3,126,483 4.34%
Warburg Pincus International Small
Company Fund 80,403 0.52%
Warburg Pincus Japan Growth Fund 34,073 0.65%
Warburg Pincus Japan Small Company Fund 19,649 0.12%
Warburg Pincus Major Foreign Markets Fund 3,218,897 67.83%
Warburg Pincus New York Intermediate
Municipal Fund 7,444,467 72.31%
-32-
<PAGE>
PERCENTAGE
NUMBER OF SHARES
OF SHARES OUTSTANDING
AS OF AS OF
NAME OF PORTFOLIO MARCH 9, 1999 MARCH 9, 1999
- --------------------------------- ---------------- --------------
<S> <C> <C>
Warburg Pincus New York Tax Exempt Fund 78,746,888 44.76%
Warburg Pincus Post-Venture Capital Fund 283,842 8.37%
Warburg Pincus Small Company Growth Fund 191,905 43.59%
Warburg Pincus Small Company Value Fund 523,363 14.37%
Warburg Pincus Trust:
Emerging Markets Portfolio 100,000 25.65%
Growth & Income Portfolio 9,507 0.68%
International Equity Portfolio 5,348 0.02%
Small Company Growth Portfolio 5,000 0.01%
Warburg Pincus Trust II:
Fixed Income Portfolio 62,760 22.55%
Global Fixed Income Portfolio 181,159 100.00%
Warburg Pincus WorldPerks Money Market Fund 101,833 0.83%
Warburg Pincus WorldPerks Tax Free
Money Market Fund 100,991 0.92%
</TABLE>
To the best of each Fund's knowledge, as of March 9, 1999, no person
owned beneficially more than 5% of any Portfolio's outstanding shares except as
stated above or in Annex I.
RESPONSIBILITIES OF THE BOARD -- BOARD AND COMMITTEE MEETINGS
The Board of Directors of each Fund is responsible for the general
oversight of Fund business. A majority of the Board's members are not affiliated
with Warburg. These Non-interested Directors have primary responsibility for
assuring that each Fund is managed in a manner consistent with the best
interests of its shareholders.
Each Board meets in person at least quarterly to review the investment
performance of the Portfolios and other operational matters, including policies
and procedures designed to assure compliance with various regulatory
requirements. At least annually, the Non-interested Directors review the fees
paid to Warburg and its affiliates for investment advisory services and
administrative and distribution services.
The Board of each Fund has both an Audit Committee and a Nominating
Committee, the responsibilities of which are described below.
-33-
<PAGE>
AUDIT COMMITTEE
The Board of each Fund has an Audit Committee consisting of Messrs.
Cooper, Fritz, Garten, Melfe and Trowbridge. The Audit Committee reviews with
management and the independent accountants for each Portfolio, among other
things, the scope of the audit and the internal controls for each Portfolio and
its agents, reviews and approves in advance the type of services to be rendered
by independent accountants, recommends the selection of independent accountants
for each Portfolio to the Board and, in general, considers and reports to the
Board on matters regarding each Portfolio's accounting and bookkeeping
practices.
NOMINATING COMMITTEE
The Board of each Fund has a Nominating Committee consisting of all the
Non-interested Directors. The Committee is charged with the duty of making all
nominations of Non-interested Directors and consideration of other related
matters. Shareholders' recommendations as to nominees received by Fund
management would be referred to the Committee for its consideration and action.
The following chart sets forth the number of meetings of the Board, the
Audit Committee and the Nominating Committee of each Fund during the calendar
year 1998.
NUMBER OF BOARD AND COMMITTEE MEETINGS HELD
DURING THE CALENDAR YEAR 1998
BOARD OF AUDIT NOMINATING
DIRECTORS COMMITTEE COMMITTEE
NAME OF PORTFOLIO MEETINGS MEETINGS MEETINGS
- ------------------------------------ ------------ ------------ ------------
Warburg Pincus Balanced Fund 5 2 1
Warburg Pincus Capital Appreciation Fund 5 2 1
Warburg Pincus Cash Reserve Fund 5 2 1
Warburg Pincus Emerging Growth Fund 5 2 1
Warburg Pincus Emerging Markets Fund 5 2 1
Warburg Pincus Fixed Income Fund 5 2 1
Warburg Pincus Global Fixed Income Fund 6 2 1
Warburg Pincus Global Post-Venture
Capital Fund 5 2 1
Warburg Pincus Growth & Income Fund 5 2 1
Warburg Pincus Health Sciences Fund 5 2 1
-34-
<PAGE>
BOARD OF AUDIT NOMINATING
DIRECTORS COMMITTEE COMMITTEE
NAME OF PORTFOLIO MEETINGS MEETINGS MEETINGS
- ------------------------------------ ------------ ------------ ------------
Warburg Pincus Institutional Fund, Inc. 6 2 1
Warburg Pincus Intermediate Maturity
Government Fund 5 2 1
Warburg Pincus International Equity Fund 5 2 1
Warburg Pincus International Small
Company Fund 2 1 0
Warburg Pincus Japan Growth Fund 5 2 1
Warburg Pincus Japan Small Company Fund 6 2 1
Warburg Pincus Major Foreign Markets Fund 5 2 1
Warburg Pincus New York Intermediate
Municipal Fund 5 2 1
Warburg Pincus New York Tax Exempt Fund 5 2 1
Warburg Pincus Post-Venture Capital Fund 5 2 1
Warburg Pincus Small Company
Growth Fund 6 2 1
Warburg Pincus Small Company Value Fund 6 2 1
Warburg Pincus Trust 6 2 1
Warburg Pincus Trust II 6 2 1
Warburg Pincus WorldPerks Money
Market Fund 1 1 0
Warburg Pincus WorldPerks Tax Free
Money Market Fund 1 1 0
Each incumbent Director attended at least 75% of the total number of
Board meetings and meetings of committees on which he served during each Fund's
last full fiscal year.
-35-
<PAGE>
EXECUTIVE OFFICERS
The following persons are executive officers of each of the Funds:
PRESENT OFFICE WITH THE FUNDS
(YEAR FIRST BECAME AN OFFICER);
PRINCIPAL OCCUPATION OR
NAME (AGE) EMPLOYMENT (1)(2)
- ------------------------- ------------------------------------------
Eugene L. Podsiadlo (42) PRESIDENT (1994)
466 Lexington Avenue Managing Director of Warburg; Associated
New York, NY 10017-3147 with Warburg since 1991; Officer of
Counsellors Securities and of other
companies affiliated with Warburg and
investment companies in the Warburg Pincus
family of funds.
Steven B. Plump (40) EXECUTIVE VICE PRESIDENT (1998)
466 Lexington Avenue Senior Vice President of Warburg; Associated
New York, NY 10017-3147 with Warburg since 1995; Associated with
Chemical Investment Services and its
affiliates from 1993 until 1995; Officer of
other investment companies in the Warburg
Pincus
family of funds.
Stephen Distler (45) VICE PRESIDENT (1985)
466 Lexington Avenue Managing Director of Warburg; Associated
New York, NY 10017-3147 with Warburg since 1984; Officer of
Counsellors Securities and of other
companies affiliated with Warburg and
investment companies in the Warburg Pincus
of funds.
Lynn Martin (46) VICE PRESIDENT OF WARBURG PINCUS
466 Lexington Avenue EMERGING GROWTH FUND, WARBURG PINCUS
New York, NY 10017-3147 GLOBAL POST-VENTURE CAPITAL FUND, WARBURG
PINCUS POST-VENTURE CAPITAL FUND, WARBURG
PINCUS SMALL COMPANY GROWTH FUND, WARBURG
PINCUS SMALL COMPANY VALUE FUND, WARBURG
PINCUS INSTITUTIONAL FUND, INC. AND WARBURG
PINCUS TRUST ONLY (1998) Managing Director
of Warburg; Associated with Warburg since
1992.
-36-
<PAGE>
PRESENT OFFICE WITH THE FUNDS
(YEAR FIRST BECAME AN OFFICER);
PRINCIPAL OCCUPATION OR
NAME (AGE) EMPLOYMENT (1)(2)
- ------------------------- ------------------------------------------
Janna Manes, Esq. (31) VICE PRESIDENT AND SECRETARY (1996)
466 Lexington Avenue Vice President, Secretary and General Counsel
New York, NY 10017-3147 of Warburg; Associated with Warburg since
1996; Associated with the law firm of
Willkie Farr & Gallagher from 1993 to 1996;
Officer of Counsellors Securities and of
other companies affiliated with Warburg and
investment companies in the Warburg Pincus
family of funds.
Howard Conroy, CPA (45) VICE PRESIDENT AND CHIEF FINANCIAL
466 Lexington Avenue OFFICER (1996)
New York, NY 10017-3147 Vice President of Warburg; Associated
with Warburg since 1992; Officer of
Counsellors Securities and of other
companies affiliated with Warburg and
investment companies in the Warburg
Pincus family of funds.
Daniel S. Madden, CPA (33) TREASURER AND CHIEF ACCOUNTING
466 Lexington Avenue OFFICER (1996)
New York, NY 10017-3147 Vice President of Warburg; Associated
with Warburg since 1995; Associated
with BlackRock Financial Management,
Inc. from September 1994 to October
1996; Associated with CSAM from April
1993 to September 1994; Officer of other
investment companies in the Warburg Pincus
family of funds.
It is presently contemplated that certain of the executive officers of
the Funds may change and that additional executive officers may be added
following consummation of the Acquisition, subject in each case to Board
approval and compliance with any restrictions imposed by regulations applicable
to Credit Suisse and its subsidiaries under the Bank Holding Company Act of
1956, as amended.
- -------------
(1) Unless otherwise stated, all of the executive officers have been associated
with their respective companies for more than five years, although not
necessarily in the same capacity.
(2) Unless otherwise stated, all of the executive officers have been associated
with their respective companies for more than five years, although not
necessarily in the same capacity.
-37-
<PAGE>
COMPENSATION OF DIRECTORS AND OFFICERS
Each Fund pays each Director who is not an employee of Warburg an annual
fee and an annual Audit Committee fee plus specified amounts for Board meetings
attended and compensates him for out-of-pocket expenses related to Fund
business.
Warburg supervises each Portfolio's investments, pays the compensation
and certain expenses of its personnel who serve as Directors and officers of
each Fund and receives an advisory fee for its services. Several of each Fund's
officers and Directors are also officers, Directors, employees or indirect
shareholders of Warburg and participate in the fees paid to that firm, although
each such Fund makes no direct payments to them.
The following Compensation Table provides in tabular form the following
data:
Column (1) Name of each Fund from which each Director receives
compensation.
Column (2) Aggregate compensation received by each Director of
each Fund during the calendar year 1998 and total
compensation received by each Director from the 39
investment companies comprising the Warburg Pincus Funds
(collectively, the "Fund Complex") during the calendar
year 1998.
The Directors do not receive any pension or retirement benefits from any
Fund in the Fund Complex.
<TABLE>
<CAPTION>
COMPENSATION TABLE
AGGREGATE COMPENSATION (2)
----------------------------------------------------------------------
NAME OF RICHARD N. DONALD JACK W. JEFFREY E. THOMAS A. ALEXANDER B.
FUND (1) COOPER DONAHUE FRITZ GARTEN MELFE TROWBRIDGE
- ---------------- ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Warburg Pincus
Balanced Fund $1,900 $ 475 $2,150 $1,675 $2,150 $2,250
Warburg Pincus Capital
Appreciation Fund $2,400 $ 600 $2,650 $2,050 $2,650 $2,750
Warburg Pincus Cash
Reserve Fund $4,400 $1,100 $4,900 $3,800 $4,900 $5,000
Warburg Pincus
Emerging Growth Fund $2,400 $ 600 $2,650 $2,050 $2,650 $2,750
Warburg Pincus
Emerging Markets Fund $1,900 $ 475 $2,150 $1,675 $2,150 $2,250
Warburg Pincus Fixed
Income Fund $2,400 $ 600 $2,650 $2,050 $2,650 $2,750
Warburg Pincus Global
Fixed Income Fund $2,650 $ 600 $2,900 $2,300 $1,700 $2,750
Warburg Pincus Global
Post-Venture Capital
Fund $1,900 $ 475 $2,150 $1,675 $2,150 $2,250
Warburg Pincus Growth
& Income Fund $1,900 $ 475 $2,150 $1,675 $2,150 $2,250
Warburg Pincus Health
Sciences Fund $1,900 $ 475 $2,150 $1,675 $2,150 $2,250
-38-
<PAGE>
<CAPTION>
AGGREGATE COMPENSATION (2)
----------------------------------------------------------------------
NAME OF RICHARD N. DONALD JACK W. JEFFREY E. THOMAS A. ALEXANDER B.
FUND (1) COOPER DONAHUE FRITZ GARTEN MELFE TROWBRIDGE
- ---------------- ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Warburg Pincus
Institutional Fund, Inc. $2,150 $ 475 $2,400 $1,925 $2,400 $2,250
Warburg Pincus
Intermediate Maturity
Government Fund $2,400 $ 600 $2,650 $2,050 $1,450 $2,750
Warburg Pincus
International Equity
Fund $2,400 $ 600 $2,650 $2,050 $2,650 $2,750
Warburg Pincus
International Small
Company Fund $ 500 $ 0 $ 500 $ 500 $ 500 $ 500
Warburg Pincus Japan
Growth Fund $2,150 $ 475 $2,400 $1,675 $2,400 $2,500
Warburg Pincus Japan
Small Company Fund $1,900 $ 475 $2,150 $1,675 $2,150 $2,250
Warburg Pincus Major
Foreign Markets Fund $1,900 $ 475 $2,150 $1,675 $2,150 $2,250
Warburg Pincus New
York Intermediate
Municipal Fund $2,400 $ 600 $2,650 $2,050 $2,650 $2,750
Warburg Pincus New
York Tax Exempt Fund $4,400 $1,100 $4,900 $3,800 $4,900 $5,000
Warburg Pincus Post-
Venture Capital Fund $1,900 $ 475 $2,150 $1,675 $2,150 $2,250
Warburg Pincus Small
Company Growth Fund $2,150 $ 475 $2,400 $1,925 $2,400 $2,250
Warburg Pincus Small
Company Value Fund $2,150 $ 475 $2,400 $1,925 $2,400 $2,250
Warburg Pincus Trust $2,150 $ 475 $2,400 $1,925 $2,400 $2,250
Warburg Pincus Trust II $2,150 $ 475 $2,400 $1,925 $2,400 $2,250
Warburg Pincus
WorldPerks Money
Market Fund $ 250 $ 0 $ 250 $ 250 $ 250 $ 250
Warburg Pincus
WorldPerks Tax Free
Money Market Fund $ 250 $ 0 $ 250 $ 250 $ 250 $ 250
- ------------------------------------------------------------------------------------------------
Total Compensation from
the Funds and Fund Complex
paid to each Director $56,600 $13,525 $63,100 $49,325 $60,700 $64,000
</TABLE>
Arnold M. Reichman and John L. Furth receive compensation from
affiliates of Warburg and, accordingly, receive no compensation from the Fund or
any other investment company in the Fund Complex.
Donald Donahue resigned as Director/Trustee of each Fund effective
February 6, 1998.
REQUIRED VOTE
Election of each of the listed nominees for Director requires the
affirmative vote of a plurality of the votes of each Fund cast at the Special
Meeting in person or by proxy. This means that the eight nominees receiving the
largest number of votes will be elected. The Directors of each Fund, including
the Non-interested Directors, unanimously recommend that the shareholders of
each Fund vote in favor of each of the nominees listed in this Proposal 2.
-39-
<PAGE>
PROPOSAL 3: APPROVAL OF NEW
SUB-INVESTMENT ADVISORY AGREEMENT
As investment adviser to Warburg Pincus WorldPerks Money Market, Warburg
Pincus WorldPerks Tax Free Money Market, Warburg Pincus Post-Venture Capital and
Warburg Pincus Global Post-Venture Capital Funds and the Post-Venture Capital
Portfolios of Warburg Pincus Institutional Fund, Inc. and Warburg Pincus Trust,
Warburg is a party to the sub-investment advisory agreement that each such Fund
(a "Sub-Advised Fund") has entered into with the relevant sub-investment adviser
(each, a "Current Sub-Advisory Agreement"). The sub-adviser to Warburg Pincus
WorldPerks Money Market and Warburg Pincus WorldPerks Tax Free Money Market
Funds is BlackRock Institutional Management Corporation ("BlackRock"); and the
sub-adviser to the Warburg Pincus Post-Venture Capital and Warburg Pincus Global
Post-Venture Capital Funds and the Post-Venture Capital Portfolios of Warburg
Pincus Institutional Fund, Inc. and Warburg Pincus Trust is Abbott Capital
Management, LLC ("Abbott"). Abbott and BlackRock are each herein referred to as
the Sub-Adviser, as applicable. The Merger has no effect on either BlackRock or
Abbott or on the services that they are and have been providing to the
Sub-Advised Funds.
As is the case with the Current Advisory Agreements, consummation of the
Acquisition would constitute an "assignment" of the Current Sub-Advisory
Agreements, as that term is defined in the 1940 Act, merely because Warburg is a
party to them, and, if later consummated, consummation of the Reorganization
could be deemed to constitute a second "assignment". As a result, each Current
Sub-Advisory Agreement will terminate upon consummation of the Merger and,
therefore, in anticipation of the Merger a new sub-investment advisory agreement
(each a "New Sub-Advisory Agreement" and collectively, the "New Sub-Advisory
Agreements") among each Sub-Advised Fund, the New Adviser and the relevant
sub-adviser is being proposed for approval by shareholders of each Sub-Advised
Fund to take effect upon consummation of the Acquisition and Reorganization.
However, if the Acquisition is consummated but the Reorganization is
delayed or not ultimately consummated, each New Sub-Advisory Agreement would
take effect between the applicable Sub-Adviser and Warburg (under Credit Suisse
ownership) upon consummation of the Acquisition, and would remain in effect with
Warburg until such time (if ever) as the Reorganization is consummated; approval
of a New Sub-Advisory Agreement at the Special Meeting will constitute
shareholder approval for such New Sub-Advisory Agreement to take effect with the
New Adviser if the Acquisition and the Reorganization are consummated
simultaneously, and to take effect with Warburg if the Acquisition is
consummated prior to consummation of the Reorganization.
In the event that the Acquisition and the Reorganization are not
simultaneously consummated, upon consummation of the Reorganization, each New
Sub-Advisory Agreement would be transferred to the New Adviser as part of the
combination of the businesses of Warburg and Credit Suisse's existing U.S.
-40-
<PAGE>
asset management business. If not consummated simultaneously with the
Acquisition, consummation of the Reorganization could be deemed to constitute a
second "assignment" of each Sub-Advised Fund's sub-investment advisory agreement
(which would result in its automatic termination, as discussed above); approval
of a New Sub-Advisory Agreement at the Special Meeting also will constitute
shareholder approval for such New Sub-Advisory Agreement to take effect with the
New Adviser upon consummation of the Reorganization (if consummated) in the
event that the Reorganization is consummated after consummation of the
Acquisition.
A copy of the master form of the New Sub-Advisory Agreement for
BlackRock Sub-Advised Funds is attached hereto as Exhibit D-1 and that for the
Abbott Sub-Advised Funds is attached hereto as Exhibit D-2. THE NEW SUB-ADVISORY
AGREEMENT FOR EACH SUB-ADVISED FUND IS IN ALL MATERIAL RESPECTS ON THE SAME
TERMS AS THE CORRESPONDING CURRENT SUB-ADVISORY AGREEMENT (except that the New
Adviser will be the investment adviser thereunder following the consummation of
the Reorganization (if consummated)). The material terms of each current
Sub-Advisory Agreement are described under "Description of the Current
Sub-Advisory Agreements" below.
BOARD EVALUATION AND RECOMMENDATION
At the same time and in the same manner that the Board of each Fund
considered the New Advisory Agreements, the relevant Boards considered the New
Sub-Advisory Agreements. (See "Board Evaluation" under "Proposal 1: Approval of
New Investment Advisory Agreement".) Since neither of the Sub-Advisers nor the
services they perform nor the compensation they receive will be affected by the
Merger, no considerations arise with regard to approval of the New Sub-Advisory
Agreements that are not also present for the New Advisory Agreements.
Each of Messrs. John L. Furth and Arnold M. Reichman, current directors
of Funds (Mr. Reichman also being a nominee for Director of the Funds), is a
partner of Counsellors and of Warburg, Pincus & Co., the current ultimate parent
company of Warburg, and will share in the purchase prices received by
Counsellors and Warburg, Pincus & Co. from Credit Suisse in connection with the
Acquisition and the Private Equity Investment, respectively.
On March 8, 1999, the Directors of each relevant Fund, including the
Non-interested Directors of each relevant Fund, unanimously approved the New
Sub-Advisory Agreements.
DESCRIPTION OF THE CURRENT SUB-ADVISORY AGREEMENTS
Under the Current Sub-Advisory Agreements entered into with BlackRock,
BlackRock supervises the day-to-day operations of and provides ongoing
investment advisory services to each Sub-Advised Fund. BlackRock (a) provides
investment research and credit analysis concerning the Sub-Advised Fund's
investments, (b) conducts a continual program of investment of the Sub-Advised
-41-
<PAGE>
Fund's assets, (c) places orders for all purchases and sales of the investments
made for the Fund and (d) maintains the books and records required in connection
with its duties thereunder.
Under the Current Sub-Advisory Agreements entered into with Abbott,
Abbott provides each Sub-Advised Fund with ongoing specialized investment
advisory services. Abbott (a) determines whether to purchase, retain or sell
interests in United States or foreign private investment vehicles which invest
in debt and equity securities of companies in the venture-capital and
post-venture-capital stages of development or companies engaged in special
situations or changes in corporate control, including buyouts, (b) authorizes
the execution and orders for the execution of the foregoing investments on
behalf of the Sub-Advised Fund, (c) assists the custodian and accounting agent
of the Sub-Advised Fund to determine or confirm the value of these investments,
(d) monitors the execution of orders for the purchase or sale of these
investments and the settlement and clearance of these orders, (e) exercises
voting rights in respect of these investments, and (d) provides reports to the
Sub-Advised Fund's Board. In providing these services, Abbott may contract at
its own expense with third parties for the acquisition of research.
In return for the services provided by the Sub-Adviser as sub-investment
adviser, and the expenses it assumes under each Current Sub-Advisory Agreement,
Warburg pays the Sub-Adviser an advisory fee which is accrued daily and payable
monthly to BlackRock and quarterly to Abbott out of the advisory fee that
Warburg receives from the relevant Sub-Advised Fund.
Each Current Sub-Advisory Agreement further provides that the
Sub-Adviser shall not be liable for any error of judgment or mistake of law or
for any loss suffered by any Sub-Advised Fund in connection with matters to
which such agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of the Sub-Adviser in the performance
of its duties or from reckless disregard by the Sub-Adviser of its obligations
and duties under such agreement.
Each Current Sub-Advisory Agreement may be terminated without penalty
upon sixty (60) days' written notice by the Sub-Adviser, the Sub-Advised Fund or
Warburg.* Each Sub-Advised Fund may agree to terminate its Current
Sub-Advisory Agreement either by a vote of the Board or by the vote of a
majority of the outstanding voting securities of the Sub-Advised Fund. As stated
above, each Current Sub-Advisory Agreement automatically terminates in the event
of its assignment.
Each Sub-Adviser has acted as the sub-investment adviser for each
Sub-Advised Fund since each Sub-Advised Fund commenced operations, except as
shown below. Also shown below is the date of each Current Sub-Advisory
- -------------
* In the case of the Current Sub-Advisory Agreements with BlackRock, the
Sub-Advised Fund can terminate the agreements immediately.
-42-
<PAGE>
Agreement, the date when each Current Sub-Advisory Agreement was last approved
by the Board and the shareholders of each Sub-Advised Fund and the date to which
each Current Sub-Advisory Agreement was last continued. Each Current
Sub-Advisory Agreement was last submitted to shareholders prior to its becoming
effective, as required by the 1940 Act.
<TABLE>
<CAPTION>
DATE LAST APPROVED BY
---------------------
DATE OF DATE
COMMENCEMENT SUB-ADVISORY SHARE- CONTINUED
FUND OF OPERATIONS* AGREEMENT DIRECTORS HOLDERS TO
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Warburg Pincus Global Post-Venture
Capital Fund 9/30/96 7/1/97 3/8/99 7/1/97 4/17/00
Warburg Pincus Institutional Fund, Inc.
- Post-Venture Capital Portfolio 10/31/97 10/31/97 3/8/99 10/31/97 4/17/00
Warburg Pincus Post-Venture Capital Fund 9/29/95 7/1/97 3/8/99 7/1/97 4/17/00
Warburg Pincus Trust
- Post-Venture Capital Portfolio 9/30/96 7/1/97 3/8/99 7/1/97 4/17/00
Warburg Pincus WorldPerks
Money Market Fund 10/1/98 9/30/98 3/8/99 9/30/98 4/17/00
Warburg Pincus WorldPerks Tax Free
Money Market Fund 10/1/98 9/30/98 3/8/99 9/30/98 4/17/00
</TABLE>
THE NEW SUB-ADVISORY AGREEMENTS
Shareholders of the Sub-Advised Funds are not being asked to approve or
disapprove the Merger; rather, they are being asked only to approve or
disapprove the New Sub-Advisory Agreements for the relevant Portfolios. OTHER
THAN THE EXECUTION AND TERMINATION DATES AND THE IDENTIFICATION OF THE NEW
ADVISER AS THE INVESTMENT ADVISER THEREUNDER FOLLOWING THE CONSUMMATION OF THE
REORGANIZATION (IF CONSUMMATED), THE NEW SUB-ADVISORY AGREEMENTS ARE
SUBSTANTIALLY IDENTICAL TO THE CURRENT SUB-ADVISORY AGREEMENTS. IN PARTICULAR,
THE SUB-ADVISORY FEES WILL CONTINUE TO BE PAID BY NEW ADVISER RATHER THAN BY THE
SUB-ADVISED FUND.
The New Sub-Advisory Agreement for each Fund will be dated as of the
date of the consummation of the Merger, which is expected to occur in mid-1999.
Each New Sub-Advisory Agreement will be in effect for an initial two-year term
ending on the second anniversary of the Acquisition, and may continue thereafter
from year to year only if specifically approved at least annually by the Board
or by the vote of "a majority of the outstanding voting securities" of each
Sub-Advised Fund, and, in either event, the vote of a majority of the
Non-interested Directors, cast in person at a meeting called for such purpose.
In the event that shareholders of a Sub-Advised Fund do not approve the New
Sub-Advisory Agreement, the corresponding Current Sub-Advisory Agreement will
remain in effect until the closing of the Acquisition, at which time it would
terminate. In such event, the Board of the relevant Sub-Advised Fund will take
such action as it deems to be in the best interests of the relevant Sub-Advised
Fund and its shareholders. In the
- -------------
* Abbott commenced providing investment advisory services for Warburg Pincus
Post-Venture Capital Fund on May 28, 1996.
-43-
<PAGE>
event the Acquisition is not consummated, each Sub-Adviser will continue to
provide services to each Sub-Advised Fund in accordance with the terms of each
Current Sub-Advisory Agreement for such periods as may be approved at least
annually by the Board, including a majority of the Non-interested Directors.
DIFFERENCES BETWEEN THE CURRENT AND NEW SUB-ADVISORY AGREEMENTS
THE NEW SUB-ADVISORY AGREEMENTS ARE SUBSTANTIALLY THE SAME AS THE
CURRENT SUB-ADVISORY AGREEMENTS IN ALL MATERIAL RESPECTS (EXCEPT THAT THE NEW
ADVISER WILL BECOME A PARTY TO THE NEW SUB-ADVISORY AGREEMENTS FOLLOWING THE
CONSUMMATION OF THE REORGANIZATION (IF CONSUMMATED)).
REQUIRED VOTE
Approval of the New Sub-Advisory Agreement for any Sub-Advised Fund
requires the affirmative vote of a "majority of the outstanding voting
securities," as defined above, of the Portfolio. The Directors of each
Sub-Advised Fund, including the Non-interested Directors, unanimously recommend
that the shareholders of each relevant Sub-Advised Fund vote in favor of this
Proposal 3.
PROPOSAL 4: RATIFICATION OR REJECTION
OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors of each of the Funds, including a majority of the
Non-interested Directors, has selected PricewaterhouseCoopers LLP to act as
independent accountants for each of the Portfolios for each Portfolio's current
fiscal year. PricewaterhouseCoopers LLP are independent accountants and have
advised the Portfolios that they have no direct financial interest or material
indirect financial interest in the Portfolios. One or more representatives of
PricewaterhouseCoopers LLP are expected to be present at the Special Meeting and
will have an opportunity to make a statement if they so desire. Such
representatives are expected to be available to respond to appropriate questions
posed by shareholders or management.
REQUIRED VOTE
Ratification of the selection of independent accountants requires the
affirmative vote of a majority of the votes of each Fund cast at the Special
Meeting in person or by proxy. The Directors of each Fund unanimously recommend
that the shareholders of each Fund vote in favor of this Proposal 4.
ADDITIONAL INFORMATION
GENERAL
The cost of preparing, printing and mailing the enclosed proxy,
accompanying notice and proxy statement and all other costs incurred in
connection with the solicitation of proxies, including any additional
solicitation made by letter or telephone, will be paid by Warburg and Credit
Suisse. In addition to solicitation by mail, certain officers and
representatives of each Fund, officers
-44-
<PAGE>
and employees of Warburg and certain financial services firms and their
representatives, who will receive no extra compensation for their services, may
solicit proxies in person or by telephone.
D.F. King & Co., Inc. (the "Agent") has been engaged to assist in the
solicitation of proxies. As the Special Meeting date approaches, certain
shareholders of each Portfolio may receive a telephone call from a
representative of the Agent if their vote has not yet been received.
Authorization to permit the Agent to execute proxies may be obtained by
telephonic or electronic transmitted instructions from shareholders of each
Portfolio. Proxies that are obtained telephonically will be recorded in
accordance with the procedures set forth below. The Directors believe that these
procedures are reasonably designed to ensure that the identity of the
shareholder casting the vote and the shareholder's voting instructions are
accurately determined.
In all cases where a telephonic proxy is solicited, the Agent's
representative is required to ask for each shareholder's full name, address,
last four digits of the shareholder's social security or tax identification
number, title of the person and whether such person is authorized to direct the
voting of such shares (if an entity), the number of shares owned, if known, and
to confirm that the shareholder has received the proxy statement and proxy card
in the mail. If the information solicited agrees with the information provided
to the Agent, then the Agent representative has the responsibility to explain
the process, read the proposals listed on the proxy card, and ask for the
shareholder's instructions on each proposal. The Agent's representative,
although he or she is permitted to answer questions about the process, is not
permitted to recommend to the shareholder how to vote, other than to read any
recommendation set forth in the proxy statement. The Agent will record the
shareholder's instructions on the card. Within 72 hours, the shareholder will be
sent a letter by first class mail to confirm his or her vote and asking the
shareholder to call the Agent immediately if his or her votes are not correctly
reflected in the confirmation.
If the shareholder wishes to participate in the Special Meeting, but
does not wish to give his or her proxy by telephone, or by the Internet, the
shareholder may still submit the proxy card originally sent with the proxy
statement or attend in person. Should shareholders require additional
information regarding the proxy or replacement proxy cards, they may contact the
Agent toll-free at 1-800-848-3409. Any proxy given by a shareholder, whether in
writing, by telephone or by the Internet, is revocable.
PROPOSALS OF SHAREHOLDERS
Shareholders wishing to submit proposals for inclusion in a proxy
statement for a shareholder meeting subsequent to the Special Meeting, if any,
should send their written proposals to Janna Manes, Secretary of the Warburg
Pincus Funds, c/o Warburg Pincus Asset Management, Inc., 466 Lexington
-45-
<PAGE>
Avenue, New York, NY 10017, within a reasonable time before the solicitation of
proxies for such meeting. The timely submission of a proposal does not guarantee
its inclusion.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
No Board is aware of any matters that will be presented for action at
the Special Meeting other than the matters set forth herein. Should any other
matters requiring a vote of shareholders arise, the proxy in the accompanying
form will confer upon the person or persons entitled to vote the shares
represented by such proxy the discretionary authority to vote the shares as to
any such other matters in accordance with their best judgment in the interest of
each Fund and/or Portfolio.
PLEASE COMPLETE, SIGN AND RETURN THE
ENCLOSED PROXY CARD(S) PROMPTLY. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES.
By order of the governing Boards,
/s/ [Janna Manes signature]
Janna Manes
Secretary
-46-
<PAGE>
[PROXY]
WARBURG PINCUS FUNDS
[FUND NAME]
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints EUGENE L. PODSIADLO, JANNA
MANES and STUART J. COHEN, and each of them, as proxies of the undersigned, each
with the power to appoint his or her substitute, and hereby authorizes a
majority of them, or any one if only one be present, to represent and to vote,
as designated on the reverse side, all the shares of the Warburg Pincus Fund
named above held of record by the undersigned, or with respect to which the
undersigned is entitled to vote or act, at the Special Meeting of Shareholders
to be held on May 21, 1999 at 3:00 p.m., Eastern time, for the purposes referred
to on the reverse side.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as your name(s) appear(s) hereon. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title as such.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------ ------------------------------------
- ------------------------------ ------------------------------------
- ------------------------------ ------------------------------------
<PAGE>
[REVERSE SIDE]
PLEASE MARK VOTES
AS IN THIS EXAMPLE [ ]
- ------------------------------------------
WARBURG PINCUS FUNDS
- ------------------------------------------
For Against Abstain
[ ] [ ] [ ]
1. To approve or disapprove a new investment advisory
agreement for the Fund.
VOTE THIS CARD TODAY!
BY MAIL, BY PHONE AT 1-800-848-3409
OR ON-LINE AT WWW.WARBURG.COM
For All Withheld For all
Nominees Except
[ ] [ ] [ ]
2. To elect Directors/Trustees of the Fund:
R.H. Francis W.W. Priest
J.W. Fritz S.N. Rappaport
J.E. Garten A.M. Reichman
J.C. Pasman A.B. Trowbridge
INSTRUCTION: To withhold authority to vote for any
individual nominee, mark the "For All Except" box and
strike a line through the name(s) of the nominee(s).
For Against Abstain
[ ] [ ] [ ]
3. To approve or disapprove a new sub-investment
advisory agreement for the Fund.
For Against Abstain
[ ] [ ] [ ]
4. To ratify the selection of Pricewaterhouse Coopers
LLP as independent accountants for the Fund for the
current fiscal year.
Please be sure to sign and date this Proxy.
Date Mark box at right if comments or address change
have been noted on the reverse side of this card. [ ]
- ------------------------ -------------------------
Shareholder sign here Co-owner sign here RECORD DATE SHARES:
<PAGE>
EXHIBIT A
NEW ADVISORY AGREEMENT
MASTER FORM
INVESTMENT ADVISORY AGREEMENT
June __, 1999
______________ Asset Management, Inc.
466 Lexington Avenue
New York, New York 10017-3147
Dear Sirs:
[______________________________] Fund, Inc. (the "Fund"), [a corporation
organized and existing under the laws of the State of Maryland,] [a business
trust organized under the laws of the Commonwealth of Massachusetts,] herewith
confirms its agreement with [___________________] Asset Management, Inc.
(the "Adviser") as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund desires to employ the capital of the Fund by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in its [Articles of Incorporation,] [Agreement and Declaration of
Trust,] as may be amended from time to time, and in the Fund's Prospectus(es)
and Statement(s) of Additional Information as from time to time in effect (the
"Prospectus" and "SAI," respectively), and in such manner and to such extent as
may from time to time be approved by the Board of [Directors] [Trustees] of the
Fund. Copies of the Fund's Prospectus and SAI have been or will be submitted to
the Adviser. The Fund desires to employ and hereby appoints the Adviser to act
as investment adviser to the Fund. The Adviser accepts the appointment and
agrees to furnish the services for the compensation set forth below.
2. SERVICES AS INVESTMENT ADVISER
Subject to the supervision and direction of the Board of [Directors]
[Trustees] of the Fund, the Adviser will (a) act in strict conformity with the
Fund's [Articles of Incorporation,] [Agreement and Declaration of Trust,] the
Investment Company Act of 1940 (the "1940 Act") and the Investment Advisers Act
of 1940, as the same may from time to time be amended, (b) manage the Fund's
assets in accordance with the Fund's investment objective and policies as stated
in the Fund's Prospectus and SAI, (c) make investment decisions for the Fund,(1)
(d) place purchase and sale orders for securities on behalf of the Fund, (e)
exercise voting rights in respect of portfolio securities and other investments
for the Fund,(2) and (f) monitor and evaluate the services provided by the
Fund's
<PAGE>
investment sub-adviser(s), if any, under the terms of the applicable investment
sub-advisory agreement(s). In providing those services, the Adviser will provide
investment research and supervision of the Fund's investments and conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. In addition, the Adviser will furnish the
Fund with whatever statistical information the Fund may reasonably request with
respect to the securities that the Fund may hold or contemplate purchasing.
Subject to the approval of the Board of [Directors] [Trustees] of the
Fund and where required, the Fund's shareholders, the Adviser may engage an
investment sub-adviser or sub-advisers to provide advisory services in respect
of the Fund and may delegate to such investment sub-adviser(s) the
responsibilities described in subparagraphs (b), (c), (d) and (e) above. In the
event that an investment sub-adviser's engagement has been terminated, the
Adviser shall be responsible for furnishing the Fund with the services required
to be performed by such investment sub-adviser(s) under the applicable
investment sub-advisory agreements or arranging for a successor investment
sub-adviser(s) to provide such services on terms and conditions acceptable to
the Fund and the Fund's Board of [Directors] [Trustees] and subject to the
requirements of the 1940 Act.
3. BROKERAGE(3)
In executing transactions for the Fund, selecting brokers or dealers and
negotiating any brokerage commission rates, the Adviser will use its best
efforts to seek the best overall terms available. In assessing the best overall
terms available for any portfolio transaction, the Adviser will consider all
factors it deems relevant including, but not limited to, breadth of the market
in the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of any
commission for the specific transaction and for transactions executed through
the broker or dealer in the aggregate. In selecting brokers or dealers to
execute a particular transaction and in evaluating the best overall terms
available, the Adviser may consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934,
as the same may from time to time be amended) provided to the Fund and/or other
accounts over which the Adviser or an affiliate exercises investment discretion.
- -------------
(1) In the case of Warburg Pincus Cash Reserve Fund and Warburg Pincus New
York Tax-Exempt Fund, the Adviser will make only GENERAL investment
decisions for the Fund including decisions concerning (i) the specific types
of securities to be held by the Fund and the proportion of the Fund's assets
that should be allocated to such investments during particular market
cycles, (ii) the specific issuers whose securities will be purchased or sold
by the Fund, (iii) the appropriate maturity of its portfolio investments and
(iv) the appropriate average weighted maturity of its portfolio in light of
current market conditions.
(2) These services will not be provided by the Adviser in the case of Warburg
Pincus Cash Reserve Fund or Warburg Pincus New York Tax-Exempt Fund.
(3) Section 3. Brokerage will be omitted in the Investment Advisory
Agreements for Warburg Pincus Cash Reserve Fund and Warburg Pincus New York
Tax-Exempt Fund.
-A-2-
<PAGE>
4. INFORMATION PROVIDED TO THE FUND
The Adviser will keep the Fund informed of developments materially
affecting the Fund, and will, on its own initiative, furnish the Fund from time
to time with whatever information the Adviser believes is appropriate for this
purpose.
5. STANDARD OF CARE
The Adviser shall exercise its best judgment in rendering the services
listed in paragraphs 2, 3 and 4 above. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect the Adviser
against any liability to the Fund or to shareholders of the Fund to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or by reason of
the Adviser's reckless disregard of its obligations and duties under this
Agreement.
6. COMPENSATION
In consideration of the services rendered pursuant to this Agreement,
the Fund will pay the Adviser an annual fee calculated at an annual rate of
[___%](4) of the Fund's average daily net assets. The fee for the period from
the date of this Agreement to the end of the year shall be prorated according to
the proportion that such period bears to the full yearly period. Upon any
termination of this Agreement before the end of a year, the fee for such part of
that year shall be prorated according to the proportion that such period bears
to the full yearly period and shall be payable upon the date of termination of
this Agreement. For the purpose of determining fees payable to the Adviser, the
value of the Fund's net assets shall be computed at the times and in the manner
specified in the Fund's Prospectus or SAI.
7. EXPENSES
The Adviser will bear all expenses in connection with the performance of
its services under this Agreement[, including the fees payable to any investment
sub-adviser engaged pursuant to paragraph 2 of this Agreement(5)]. The Fund will
bear its proportionate share of certain other expenses to be incurred in its
operation, including: investment advisory and administration fees; taxes,
interest, brokerage fees and commissions, if any; fees of [Directors] [Trustees]
of the Fund who are not officers, directors, or employees of the Adviser, any
sub-adviser or any of their affiliates; fees of any pricing service employed to
value shares of the Fund;
- -------------
(4) For fee rates for each Fund, see Exhibit B.
(5) Except in the case of Warburg Pincus Cash Reserve Fund and Warburg Pincus
New York Tax-Exempt Fund, where the sub-advisory fees are paid to the
sub-adviser directly by the respective Fund.
-A-3-
<PAGE>
Securities and Exchange Commission fees and state blue sky qualification fees;
charges of custodians and transfer and dividend disbursing agents; the Fund's
proportionate share of insurance premiums; outside auditing and legal expenses;
costs of maintenance of the Fund's existence; costs attributable to investor
services, including, without limitation, telephone and personnel expenses; costs
of preparing and printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing shareholders; costs of
shareholders' reports and meetings of the shareholders of the Fund and of the
officers or Board of [Directors] [Trustees] of the Fund; and any extraordinary
expenses.
The Fund will be responsible for nonrecurring expenses which may arise,
including costs of litigation to which the Fund is a party and of indemnifying
officers and [Directors] [Trustees] of the Fund with respect to such litigation
and other expenses as determined by the [Directors] [Trustees].
8. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Fund understands that the Adviser now acts, will continue to act and
may act in the future as investment adviser to fiduciary and other managed
accounts and to one or more other investment companies or series of investment
companies, and the Fund has no objection to the Adviser so acting, provided that
whenever the Fund and one or more other accounts or investment companies or
portfolios advised by the Adviser have available funds for investment,
investments suitable and appropriate for each will be allocated in accordance
with a formula believed to be equitable to each entity. The Fund recognizes that
in some cases this procedure may adversely affect the size of the position
obtainable for the Fund. In addition, the Fund understands that the persons
employed by the Adviser to assist in the performance of the Adviser's duties
hereunder will not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict the right of the Adviser or any
affiliate of the Adviser to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature, provided that doing
so does not adversely affect the ability of the adviser to perform its services
under this Agreement.
9. TERM OF AGREEMENT
This Agreement shall continue for an initial two-year period commencing
on the date first written above, and thereafter shall continue automatically for
successive annual periods, provided such continuance is specifically approved at
least annually by (a) the Board of [Directors] [Trustees] of the Fund or (b) a
vote of a "majority" (as defined in the 1940 Act) of the Fund's outstanding
voting securities, provided that in either event the continuance is also
approved by a majority of the Board of [Directors] [Trustees] who are not
"interested persons" (as defined in said Act) of any party to this Agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable, without penalty, on 60 days' written
notice, by the Board of [Directors] [Trustees] of the Fund or by vote of holders
of a majority of the Fund's shares, or
-A-4-
<PAGE>
upon 90 days' written notice, by the Adviser. This Agreement will also terminate
automatically in the event of its assignment (as defined in said Act).
10. REPRESENTATION BY THE FUND
The Fund represents that a copy of its [Articles of Incorporation,]
[Agreement and Declaration of Trust,] dated [_________________], together with
all amendments thereto, is on file in the [Department of Assessments and
Taxation of the State of Maryland.] [office of the Secretary of State of the
Commonwealth of Massachusetts.]
INCLUDE THE FOLLOWING SECTION 11 ONLY FOR FUNDS THAT ARE MASSACHUSETTS
BUSINESS TRUSTS
[11. LIMITATION OF LIABILITY
It is expressly agreed that this Agreement was executed by or on behalf
of the Fund and not by the Trustees of the Fund or its officers individually,
and the obligations of the Fund hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Fund
individually, but bind only the assets and property of the Fund, as provided in
the Agreement and Declaration of Trust of the Fund. The execution and delivery
of this Agreement have been authorized by the Trustees and the sole shareholder
of the Fund and signed by an authorized officer of the Fund, acting as such, and
neither such authorization by such Trustees and shareholder nor such execution
and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Fund as provided in its Agreement and
Declaration of Trust.]
[11.] [12.] MISCELLANEOUS
The Fund recognizes that directors, officers and employees of the
Adviser may from time to time serve as directors, trustees, officers and
employees of corporations and business trusts (including other investment
companies) and that such other corporations and trusts or certain classes of its
shares, as applicable, may include the name "Warburg Pincus", "Credit Suisse" or
any derivation or abbreviation thereof as part of their names, and that the
Adviser or its affiliates may enter into advisory or other agreements with such
other corporations and trusts. If the Adviser ceases to act as the investment
adviser of the Fund's shares, the Fund agrees that, at the Adviser's request,
the Fund's license to use the words "Warburg Pincus", "Credit Suisse" or any
derivation or abbreviation thereof will terminate and that the Fund will take
all necessary action to change the name of the Fund to names not including the
words "Warburg Pincus", "Credit Suisse" or any derivation or abbreviation
thereof. As a condition of the Fund's license, the Fund agrees (a) not to
challenge the validity of any Warburg Pincus or Credit Suisse trademarks or the
ownership by Warburg, Pincus & Co. or Credit Suisse Group or their respective
affiliates of any of their respective trademarks; and (b) to use the names
"Warburg Pincus", "Credit Suisse" or any derivation or abbreviation thereof
within commercially reasonable standards of quality.
-A-5-
<PAGE>
Please confirm that the foregoing is in accordance with your understanding by
indicating your acceptance hereof at the place below indicated, whereupon it
shall become a binding agreement between us.
Very truly yours,
[_____________] FUND, INC.
By: __________________________________
Name: ____________________________
Title: ___________________________
Accepted:
[__________________] ASSET MANAGEMENT, INC.
By: _________________________________
Name: ____________________________
Title: ____________________________
-A-6-
<PAGE>
EXHIBIT B
CONTRACTUAL ADVISORY FEE RATE
FOR EACH PORTFOLIO
CONTRACTUAL
ADVISORY
NAME OF PORTFOLIO FEE RATE
- ----------------- ---------
Warburg Pincus Balanced Fund 0.90%
Warburg Pincus Capital Appreciation Fund 0.70%
Warburg Pincus Cash Reserve Fund* 0.25%
Warburg Pincus Emerging Growth Fund* 0.90%
Warburg Pincus Emerging Markets Fund 1.25%
Warburg Pincus Fixed Income Fund* 0.50%
Warburg Pincus Global Fixed Income Fund* 1.00%
Warburg Pincus Global Post-Venture Capital Fund 1.25%
Warburg Pincus Growth & Income Fund 0.75%
Warburg Pincus Health Sciences Fund 1.00%
Warburg Pincus Institutional Fund, Inc.*:
Emerging Markets Portfolio* 1.00%
International Equity Portfolio* 0.80%
Japan Growth Portfolio* 1.10%
Post-Venture Capital Portfolio* 1.10%
Small Company Growth Portfolio* 0.90%
Small Company Value Portfolio* 0.90%
Value Portfolio* 0.75%
Warburg Pincus Intermediate Maturity Government Fund 0.50%
Warburg Pincus International Equity Fund 1.00%
Warburg Pincus International Small Company Fund 1.10%
Warburg Pincus Japan Growth Fund 1.25%
Warburg Pincus Japan Small Company Fund 1.25%
Warburg Pincus Major Foreign Markets Fund 1.00%
Warburg Pincus New York Intermediate Municipal Fund* 0.40%
Warburg Pincus New York Tax Exempt Fund* 0.25%
Warburg Pincus Post-Venture Capital Fund 1.25%
Warburg Pincus Small Company Growth Fund 1.00%
Warburg Pincus Small Company Value Fund 1.00%
Warburg Pincus WorldPerks Money Market Fund 0.40%
Warburg Pincus WorldPerks Tax Free Money Market Fund 0.40%
<PAGE>
CONTRACTUAL
ADVISORY
NAME OF PORTFOLIO FEE RATE
- ----------------- ---------
Warburg Pincus Trust*:
International Equity Portfolio* 1.00%
Growth & Income Portfolio* 0.75%
Emerging Markets Portfolio* 1.25%
Post-Venture Capital Portfolio* 1.25%
Small Company Growth Portfolio* 0.90%
Warburg Pincus Trust II*:
Fixed Income Portfolio* 0.50%
Global Fixed Income Portfolio* 1.00%
- -------------
* For this Portfolio (for a Portfolio by Portfolio vote) or Fund (for a
Fund-wide vote), the holders of a majority of the shares entitled to be cast
of such Fund or Portfolio shall be necessary and sufficient to constitute a
quorum.
-B-2-
<PAGE>
EXHIBIT C
OTHER U.S. REGISTERED INVESTMENT COMPANIES
ADVISED BY WARBURG OR CSAM:
FEES AND OTHER INFORMATION
NET ASSETS CONTRACTUAL
AS OF ADVISORY
NAME OF FUND MARCH 9, 1999 FEE RATE+
- ------------- ------------- ----------
CSAM Advised Funds
- ------------------
Warburg Pincus International $ 703,898,808 0.800%
Growth Fund
Warburg Pincus Emerging Markets II $ 18,917,319 1.000% (0.620%)
Fund
Warburg Pincus U.S. Core Equity Fund $ 70,911,268 0.750% (0.710%)
Fund
Warburg Pincus U.S. Core Fixed $ 371,626,283 0.375% (0.250%)
Income Fund
Warburg Pincus Strategic Global $ 28,138,016 0.500% (0.240%)
Fixed Income Fund
Warburg Pincus High Yield Fund $ 141,616,190 0.700% (0.430%)
Warburg Pincus Municipal Bond Fund $ 23,920,713 0.700% (0.450%)
Warburg Pincus Global $ 8,059,443 1.000% (0.000%)
Telecommunications Fund
Warburg Pincus Long-Short Market $ 27,183,024 1.500%
Neutral Fund
Warburg Pincus Long-Short Equity $ 1,220,497 0.100% (0.000%)
Fund
Warburg Pincus Select Economic $ 35,211,091 0.750% (0.720%)
Value Equity Fund
Warburg Pincus European Equity $ 27,225,754 1.000% (0.300%)
Fund
Warburg Pincus Central & Eastern $ 0 ++
Europe Fund
- -------------
+ Advisory fee rate after waivers and/or expense limitations, if applicable,
appears in parentheses next to the contractual advisory fee rate.
++ As of March 9, 1999, shares of this Fund has not been offered or sold to the
public, and this Fund has not entered into an investment advisory agreement.
<PAGE>
NET ASSETS CONTRACTUAL
AS OF ADVISORY
NAME OF FUND MARCH 9, 1999 FEE RATE
- ------------- ------------- ----------
CSAM Advised Fund*
- -----------------
AUL American Series Fund, Inc. - $ 6,651,596 0.650%
Aggressive Investor
AUL American Series Fund, Inc. - $ 6,407,227 0.650%
Conservative Investor
AUL American Series Fund, Inc. - $ 6,967,607 0.650%
Moderate Investor
American Odyssey Fund - $ 84,097,618 0.425%
Global High Yield Bond
Panorama Series Fund I: LifeSpan $ 44,502,829 0.450%
Diversified Income
Panorama Series Fund I: LifeSpan $ 83,605,068 0.450%
Balanced
Panorama Series Fund I: LifeSpan $ 70,164,417 0.450%
Capital Appreciation
Frank Russell Investment Company $ 452,799,326 0.250%
Fixed Income III Fund
Frank Russell Investment Company $ 573,143,095 0.250%
Multistrategy Bond Fund
Centurion U.S. Equity Fund $ 56,876,293 0.100%
Centurion International Equity Fund $ 59,214,418 0.100%
Centurion U.S. Contra Fund $ 40,962,933 0.850%
SEI High Yield Bond Portfolio $ 404,605,550 0.338%
Touchstone International Equity $ 11,581,113 0.850%
Fund A & C
Touchstone International Equity $ 33,207,057 0.850%
Fund II
American General Annuity - Credit $ 19,878,524 0.500%
Suisse Growth & Income Fund
- -------------
* CSAM is a co-manager of these funds. Net Assets are based on total fund
assets.
-C-2-
<PAGE>
NET ASSETS CONTRACTUAL
AS OF ADVISORY
NAME OF FUND MARCH 9, 1999 FEE RATE
- ------------- ------------- ----------
Warburg Sub-Advised Funds
- ------------------------
EQ Advisors Trust - WP Small $ 145,012,684 0.500%
Company Value Portfolio
Jefferson Pilot Variable Fund, Inc. $ 66,833,467 0.500%
- Growth & Income Portfolio
Nationwide Separate Account Trust $ 69,665,161 0.600%
- Nationwide Small Company Fund
North American Funds $ 1,026,732 0.550%
- Emerging Growth Fund
Style Select Series - Aggressive $ 55,655,781 0.550%
Growth Portfolio
WM Trust II - International $ 147,557,297 0.500%
Growth Fund
WM Variable Trust - International $ 59,134,216 0.500%
Growth Fund
Variable Investors Series Trust - $ 28,412,592 0.500%
Growth & Income Portfolio
Manufacturers Investment Trust - $ 281,630,547 0.550%
Emerging Small Company Trust **
- -------------
** Effective April 30, 1999, Warburg will no longer serve as sub-investment
adviser to this Fund.
-C-3-
<PAGE>
EXHIBIT D-1
FORM OF NEW ABBOTT SUB-ADVISORY AGREEMENT
June , 1999
Abbott Capital Management, LLC
50 Rowes Wharf
Boston, MA 02110
Dear Sirs:
[_______] Post-Venture Capital Fund, Inc. (the "Fund"), a corporation
organized and existing under the laws of the State of Maryland, and
[_____________] Asset Management, Inc., as its investment adviser (the
"Adviser"), herewith confirm their agreement with Abbott Capital Management, LLC
(the "Sub-Adviser") as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund desires to employ the capital of the Fund by investing and
reinvesting in securities of the kind and in accordance with the limitations
specified in the Fund's Articles of Incorporation, as may be amended from time
to time (the "Articles of Incorporation"), and in the Prospectus and Statement
of Additional Information, as from time to time in effect (the "Prospectus" and
"SAI," respectively), and in such manner and to such extent as may from time to
time be approved by the Board of Directors of the Fund. Copies of the
Prospectus, SAI and Articles of Incorporation have been or will be submitted to
the Sub-Adviser. The Fund agrees to provide the Sub-Adviser copies of all
amendments to the Prospectus and SAI on an on-going basis. The Fund employs the
Adviser as its investment adviser. The Adviser desires to employ and hereby
appoints the Sub-Adviser to act as its sub-investment adviser upon the terms set
forth in this Agreement. The Sub-Adviser accepts the appointment and agrees to
furnish the services set forth below for the compensation provided for herein.
2. SERVICES AS SUB-ADVISER
(a) Subject to the supervision and direction of the Adviser, the
Sub-Adviser will provide investment advisory assistance and portfolio management
advice to the Fund in accordance with (a) the Articles of Incorporation, (b) the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Investment
Advisers Act of 1940, as amended (the "Advisers Act"), and all applicable Rules
and Regulations of the Securities and Exchange Commission (the "SEC") and all
other applicable laws and regulations and (c) the Fund's investment objective
and policies as stated in the Prospectus and SAI and investment parameters
provided by the Adviser from time to time. In connection therewith, the
Sub-Adviser will:
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(i) determine whether to purchase, retain or sell interests in
United States or foreign private investment vehicles that themselves
invest in debt and equity securities of companies in the venture
capital and post-venture capital stages of development or companies
engaged in special situations or changes in corporate control,
including buyouts ("Investments"). The Sub-Adviser is hereby authorized
to execute, or place orders for the execution of, all Investments on
behalf of the Fund;
(ii) assist the custodian and accounting agent for the Fund in
determining or confirming, consistent with the procedures and policies
stated in the Prospectus and SAI, the value of any Investments for
which the custodian and accounting agent seek assistance from or
identify for review by the Sub-Adviser;
(iii) monitor the execution of orders for the purchase or sale
of Investments and the settlement and clearance of those orders;
(iv) exercise voting rights in respect of Investments; and
(v) provide reports to the Fund's Board of Directors for
consideration at quarterly meetings of the Board on the Investments and
furnish the Adviser and the Fund's Board of Directors with such
periodic and special reports as the Fund or the Adviser may reasonably
request.
(b) In connection with the performance of the services of the
Sub-Adviser provided for herein, the Sub-Adviser may contract at its own expense
with third parties for the acquisition of research, clerical services and other
administrative services that would not require such parties to be required to
register as an investment adviser under the Advisers Act; provided that the
Sub-Adviser shall remain liable for the performance of its duties hereunder.
3. EXECUTION OF TRANSACTIONS
(a) The Sub-Adviser will not effect orders for the purchase or sale of
securities on behalf of the Fund through brokers or dealers as agents.
(b) It is understood that the services of the Sub-Adviser are not
exclusive, and nothing in this Agreement shall prevent the Sub-Adviser from
providing similar services to other investment companies or from engaging in
other activities, provided that those activities do not adversely affect the
ability of the Sub-Adviser to perform its services under this Agreement. The
Fund and the Adviser further understand and acknowledge that the persons
employed by the Sub-Adviser to assist in the performance of its duties under
this Agreement will not devote their full time to that service. Nothing
contained in this Agreement will be deemed to limit or restrict the right of the
Sub-Adviser or any affiliate of the
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Sub-Adviser to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature, provided that doing so does not
adversely affect the ability of the Sub-Adviser to perform its services under
this Agreement.
(c) On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as of other investment
advisory clients of the Sub-Adviser, the Sub-Adviser may, to the extent
permitted by applicable laws and regulations, but shall not be obligated to,
aggregate the securities to be so sold or purchased with those of its other
clients. In such event, allocation of the securities so purchased or sold, as
well as the expenses incurred in the transaction, will be made by the
Sub-Adviser in a manner that is fair and equitable, in the judgment of the
Sub-Adviser, in the exercise of its fiduciary obligations to the Fund and to
such other clients. The Sub-Adviser shall provide to the Adviser and the Fund
all information reasonably requested by the Adviser and the Fund relating to the
decisions made by the Sub-Adviser regarding allocation of securities purchased
or sold, as well as the expenses incurred in a transaction, among the Fund and
the Sub-Adviser's other investment advisory clients.
(d) In connection with the purchase and sale of securities for the Fund,
the Sub-Adviser will provide such information as may be reasonably necessary to
enable the custodian and co-administrators to perform their administrative and
recordkeeping responsibilities with respect to the Fund.
4. DISCLOSURE REGARDING THE SUB-ADVISER
(a) The Sub-Adviser has reviewed the disclosure about the Sub-Adviser
contained in the Fund's registration statement and represents and warrants that,
with respect to such disclosure about the Sub-Adviser or information related,
directly or indirectly, to the Sub-Adviser, such registration statement
contains, as of the date hereof, no untrue statement of any material fact and
does not omit any statement of a material fact which is required to be stated
therein or necessary to make the statements contained therein not misleading.
(b) The Sub-Adviser agrees to notify the Adviser and the Fund promptly
of any (i) statement about the Sub-Adviser contained in the Fund's registration
statement that becomes untrue in any material respect or (ii) omission of a
material fact about the Sub-Adviser in the Fund's registration statement which
is required to be stated therein or necessary to make the statements contained
therein not misleading or (iii) any reorganization or change in the Sub-Adviser,
including any change in its ownership or key employees.
(c) Prior to the Fund or the Adviser or any affiliated person (as
defined in the 1940 Act, an "Affiliate") of either using or distributing sales
literature or other promotional material referring to the Sub-Adviser, the
Sub-Adviser shall have the right to approve the general advertising or
promotional plan pursuant to which such literature or material is being utilized
or distributed; provided that the Sub-Adviser shall be deemed to have approved
such advertising or plan if it
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has not objected to its use within ten (10) business days after such material
has been sent to it. The Fund or the Adviser will use all reasonable efforts to
ensure that all advertising, sales and promotional material used or distributed
by or on behalf of the Fund or the Adviser that refers to the Sub-Adviser will
comply with the requirements of the Advisers Act, the 1940 Act and the rules and
regulations promulgated thereunder.
(d) The Sub-Adviser has supplied the Adviser and the Fund copies of its
Form ADV with all exhibits and attachments thereto and will hereinafter supply
The Adviser, promptly upon preparation thereof, copies of all amendments or
restatements of such document.
5. CERTAIN REPRESENTATIONS AND WARRANTIES OF THE SUB-ADVISER
(a) The Sub-Adviser represents and warrants that it is a duly registered
investment adviser under the Advisers Act, a duly registered investment adviser
in any and all states of the United States in which the Sub-Adviser is required
to be so registered and has obtained all necessary licenses and approvals in
order to perform the services provided in this Agreement. The Sub-Adviser
covenants to maintain all necessary registrations, licenses and approvals in
effect during the term of this Agreement.
(b) The Sub-Adviser represents that it has read and understands the
Prospectus and SAI and warrants that in investing the Fund's assets it will use
all reasonable efforts to adhere to the Fund's investment objectives, policies
and restrictions contained therein.
6. COMPLIANCE
(a) The Sub-Adviser agrees that it shall promptly notify The Adviser and
the Fund (i) in the event that the SEC or any other regulatory authority has
censured its activities, functions or operations; suspended or revoked its
registration as an investment adviser; or has commenced proceedings or an
investigation that may result in any of these actions, (ii) in the event that
there is a change in the Sub-Adviser, financial or otherwise, that adversely
affects its ability to perform services under this Agreement or (iii) upon
having a reasonable basis for believing that, as a result of the Sub-Adviser's
investing the Fund's assets, the Fund's investment portfolio has ceased to
adhere to the Fund's investment objective, policies and restrictions as stated
in the Prospectus or SAI or is otherwise in violation of applicable law.
(b) The Adviser agrees that it shall promptly notify the Sub-Adviser in
the event that the SEC has censured the Adviser or the Fund; placed limitations
upon any of their activities, functions or operations; suspended or revoked the
Adviser's registration as an investment adviser; or has commenced proceedings or
an investigation that may result in any of these actions.
(c) The Fund and the Adviser shall be given access to the records of the
Sub-Adviser at reasonable times solely for the purpose of monitoring compliance
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with the terms of this Agreement and the rules and regulations applicable to the
Sub-Adviser relating to its providing investment advisory services to the Fund,
including without limitation records relating to trading by employees of the
Sub-Adviser for their own accounts and on behalf of other clients. The
Sub-Adviser agrees to cooperate with the Fund and the Adviser and their
representatives in connection with any such monitoring efforts.
7. BOOKS AND RECORDS
(a) In compliance with the requirements of Rule 31a-3 under the 1940
Act, the Sub-Adviser hereby agrees that all records which it maintains for the
Fund are the property of the Fund and further agrees to surrender promptly to
either the Adviser or the Fund any of such records upon the request of either of
them. The Sub-Adviser further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act and to preserve the records required by Rule 204-2
under the Advisers Act for the period specified therein.
(b) The Sub-Adviser hereby agrees to furnish to regulatory authorities
having the requisite authority any information or reports in connection with
services that the Sub-Adviser renders pursuant to this Agreement which may be
requested in order to ascertain whether the operations of the Fund are being
conducted in a manner consistent with applicable laws and regulations.
8. PROVISION OF INFORMATION; PROPRIETARY AND CONFIDENTIAL INFORMATION
(a) The Adviser agrees that it will furnish to the Sub-Adviser
information related to or concerning the Fund that the Sub-Adviser may
reasonably request.
(b) The Sub-Adviser agrees on behalf of itself and its employees to
treat confidentially and as proprietary information of the Fund all records and
other information relative to the Fund, the Adviser and prior, present or
potential shareholders and not to use such records and information for any
purpose other than performance of its responsibilities and duties hereunder
except after prior notification to and approval in writing of the Fund, which
approval shall not be unreasonably withheld and may not be withheld where the
Sub-Adviser may be exposed to civil or criminal contempt proceedings for failure
to comply or when requested to divulge such information by duly constituted
authorities.
(c) The Sub-Adviser represents and warrants that neither it nor any
affiliate will use the name of the Fund, the Adviser or any of their affiliates
in any prospectus, sales literature or other material in any manner without the
prior written approval of the Fund or the Adviser, as applicable.
9. STANDARD OF CARE
The Sub-Adviser shall exercise its best judgment in rendering the
services described herein. The Sub-Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund or the Adviser
in connection
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with the matters to which this Agreement relates, except that the Sub-Adviser
shall be liable for a loss resulting from a breach of fiduciary duty by the
Sub-Adviser with respect to the receipt of compensation for services; provided
that nothing herein shall be deemed to protect or purport to protect the
Sub-Adviser against any liability to the Fund or the Adviser or to shareholders
of the Fund to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Sub-Adviser's reckless disregard
of its obligations and duties under this Agreement. The Fund and the Adviser
understand and agree that the Sub-Adviser may rely upon information furnished to
it reasonably believed by the Sub-Adviser to be accurate and reliable and,
except as herein provided, the Sub-Adviser shall not be accountable for loss
suffered by the Fund by reason of such reliance of the Sub-Adviser.
10. INDEMNIFICATION
(a) The Sub-Adviser agrees to indemnify and hold harmless the Fund, the
Adviser, any affiliate thereof, and each person, if any, who, within the meaning
of Section 15 of the Securities Act of 1933, as amended (the "1933 Act"),
controls ("controlling person") any or all of the Fund and the Adviser (all of
such persons being referred to as "Fund Indemnified Persons") against any and
all losses, claims, damages, liabilities or litigation (including legal and
other expenses) to which any Fund Indemnified Person may become subject under
the 1933 Act, the 1940 Act, the Advisers Act, the Internal Revenue Code of 1986,
as amended (the "Code"), or under any other statute, at common law or otherwise,
arising out of the Sub-Adviser's responsibilities as Sub-Adviser to the Fund
which (i) may be based upon any misfeasance, malfeasance or nonfeasance by the
Sub-Adviser, or any of its employees or representatives, or any affiliate of or
any person acting on behalf of the Sub-Adviser, (ii) may be based upon a failure
to comply with paragraph 5(b) of this Agreement, or (iii) may be based upon any
untrue statement or alleged untrue statement of a material fact about the
Sub-Adviser contained in the registration statement covering the shares of the
Fund, or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact about the Sub-Adviser known or which
should have been known to the Sub-Adviser and was required to be stated therein
or necessary to make the statements therein not misleading, if such a statement
or omission was made in reliance upon information furnished to the Adviser, the
Fund or any affiliate thereof by the Sub-Adviser or any affiliate of the
Sub-Adviser; provided that in no case shall the indemnity in favor of any Fund
Indemnified Person be deemed to protect such persons against any liability to
which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties under this
Agreement.
(b) The Fund agrees to indemnify and hold harmless the Sub-Adviser, any
of its affiliates, and each controlling person, if any, of the Sub-Adviser (all
of such persons being referred to as "Sub-Adviser Indemnified Persons") against
any
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and all losses, claims, damages, liabilities or litigation (including legal
and other expenses) to which any Sub-Adviser Indemnified Person may become
subject under the 1933 Act, the 1940 Act, the Advisers Act, the Code or under
any other statute, at common law or otherwise, which (i) may be based upon any
misfeasance, malfeasance or nonfeasance by the Fund or the Adviser, or any of
their respective employees or representatives, or any affiliate of or any person
acting on behalf of the Fund or the Adviser, (ii) may be based upon a failure by
the Fund or the Adviser to comply with this Agreement, or (iii) may be based
upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement covering the shares of the Fund, or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact known or which should have been known to the Fund and
was required to be stated therein or necessary to make the statements therein
not misleading, unless such a statement or omission was made in reliance upon
information furnished to the Adviser, the Fund or any affiliate thereof by the
Sub-Adviser or any affiliate of the Sub-Adviser; provided that in no case shall
the indemnity in favor of any Sub-Adviser Indemnified Person be deemed to
protect such persons against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement.
(c) A party (the "Indemnifying Person") shall not be liable under
paragraphs 10(a) or 10(b) herein with respect to any claim made against any Fund
Indemnified Person or Sub-Adviser Indemnified Person, as applicable (a Fund
Indemnified Person and a Sub-Adviser Indemnified Person may be referred to in
this paragraph 10(c) as an "Indemnified Person"), unless such Indemnified Person
shall have notified the Indemnifying Person in writing within a reasonable time
after the summons, notice or other first legal process or notice giving
information of the nature of the claim shall have been served upon such
Indemnified Person (or after such Indemnified Person shall have received notice
of such service on any designated agent), but failure to notify the Indemnifying
Person of any such claim shall not relieve the Indemnifying Person from any
liability which it may have to any Indemnified Person against whom such action
is brought otherwise than on account of this paragraph 10. In case any such
action is brought against any Indemnified Person, the Indemnifying Person will
be entitled to participate, at its own expense, in the defense thereof or, after
notice to the Indemnified Person, to assume the defense thereof, with counsel
satisfactory to the Indemnified Person. If the Indemnifying Person assumes the
defense of any such action and the selection of counsel by the Indemnifying
Person to represent the Indemnifying Person and the Indemnified Person would
result in a conflict of interests and therefore would not, in the reasonable
judgment of the Indemnified Person, adequately represent the interests of the
Indemnified Person, the Indemnifying Person will, at its own expense, assume the
defense with counsel to the Indemnifying Person and, also at its own expense,
with separate counsel to the Indemnified Person which counsel shall be
satisfactory to the Indemnifying Person and to the Indemnified Person. The
Indemnified Person shall bear the fees and expenses of any additional counsel
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retained by it, and the Indemnifying Person shall not be liable to the
Indemnified Person under this Agreement for any legal or other expenses
subsequently incurred by the Indemnified Person independently in connection with
the defense thereof other than reasonable costs of investigation. The
Indemnifying Person shall not have the right to compromise on or settle the
litigation without the prior written consent of the Indemnified Person if such
compromise or settlement results, or may result, in a finding of wrongdoing on
the part of the Indemnified Person.
11. COMPENSATION
In consideration of the services rendered pursuant to this Agreement,
the Adviser will pay the Sub-Adviser a quarterly fee calculated at an annual
rate of 1.00% of the net asset value of the Investments as of the last day of
each calendar quarter. The fee for the period from the date of this Agreement to
the end of the quarter during which this Agreement commenced shall be prorated
according to the proportion that such period bears to the full quarterly period.
Such fee shall be paid by the Adviser to the Sub-Adviser within ten (10)
business days after the last day of each quarter or, upon termination of this
Agreement before the end of a quarter, within ten (10) business days after the
effective date of such termination. Upon any termination of this Agreement
before the end of a quarter, the fee for such part of that quarter shall be
prorated according to the proportion that such period bears to the full
quarterly period. For the purpose of determining fees payable to the
Sub-Adviser, the value of the Investments shall be computed in the manner
specified in the Prospectus or SAI. The Sub-Adviser shall have no right to
obtain compensation directly from the Fund for services provided hereunder and
agrees to look solely to the Adviser for payment of fees due.
12. EXPENSES
(a) The Sub-Adviser will bear all expenses in connection with the
performance of its services under this Agreement, which shall not include the
Fund's expenses listed in paragraph 12(b).
(b) The Fund will bear certain other expenses to be incurred in its
operation, including: investment advisory and administration fees; taxes,
interest, brokerage fees and commissions, if any; fees of Directors of the Fund
who are not officers, directors, or employees of the Fund, the Adviser or the
Sub-Adviser or affiliates of any of them; fees of any pricing service employed
to value shares of the Fund; SEC fees, state Blue Sky qualification fees and any
foreign qualification fees; charges of custodians and transfer and dividend
disbursing agents; the Fund's proportionate share of insurance premiums; outside
auditing and legal expenses; costs of maintenance of the Fund's existence; costs
attributable to investor services, including, without limitation, telephone and
personnel expenses; costs of preparing and printing prospectuses and statements
of additional information for regulatory purposes and for distribution to
existing shareholders; costs of shareholders' reports and meetings of the
shareholders of the Fund and of the officers or Board of Directors of the Fund;
and any extraordinary expenses.
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13. TERM OF AGREEMENT
This Agreement shall continue for an initial two-year period commencing
on the date first written above, and thereafter shall continue automatically for
successive annual periods, provided such continuance is specifically approved at
least annually by (a) the Board of Directors of the Fund or (b) a vote of a
"majority" (as defined in the 1940 Act) of the Fund's outstanding voting
securities, provided that in either event the continuance is also approved by a
majority of the Board of Directors who are not "interested persons" (as defined
the 1940 Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement is
terminable, without penalty, (i) by the Adviser on 60 (sixty) days' written
notice to the Fund and the Sub-Adviser, (ii) by the Board of Directors of the
Fund or by vote of holders of a majority of the Fund's shares on 60 (sixty)
days' written notice to the Adviser and the Sub-Adviser, or (iii) by the
Sub-Adviser upon 60 (sixty) days' written notice to the Fund and the Adviser.
This Agreement will also terminate automatically in the event of its assignment
(as defined in the 1940 Act) by any party hereto. In the event of termination of
this Agreement for any reason, all records relating to the Fund kept by the
Sub-Adviser shall promptly be returned to the Adviser or the Fund, free from any
claim or retention of rights in such records by the Sub-Adviser. In the event
this Agreement is terminated or is not approved in the foregoing manner, the
provisions contained in paragraph numbers 4(c), 7, 8, 9 and 10 shall remain in
effect.
14. AMENDMENTS
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved by
an affirmative vote of (a) the holders of a majority of the outstanding voting
securities of the Fund and (b) the Board of Directors of the Fund, including a
majority of Directors who are not "interested persons" (as defined in the 1940
Act) of the Fund or of either party to this Agreement, by vote cast in person at
a meeting called for the purpose of voting on such approval, if such approval is
required by applicable law.
15. NOTICES
All communications hereunder shall be given (a) if to the Sub-Adviser,
to Abbott Capital Management, LLC, 1330 Avenue of the Americas, Suite 2800, New
York, New York 10019 (Attention: Raymond L. Held), telephone: (212) 757-2700,
telecopy: (212) 757-0835, (b) if to the Adviser, to [___________] Asset
Management, Inc., 466 Lexington Avenue, New York, New York 10017-3147
(Attention: President), telephone: (212) 878-0600, telecopy: (212) 878-9351, and
(c) if to the Fund, c/o [_________________] Asset Management, Inc., 466
Lexington Avenue, New York, New York 10017-3147, telephone: (212) 878-0600,
telecopy: (212) 878-9351 (Attention: President).
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16. CHOICE OF LAW
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York in the United States, including choice of law
principles; provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or any applicable rules,
regulations or orders of the SEC.
17. MISCELLANEOUS
(a) The captions of this Agreement are included for convenience only and
in no way define or limit any of the provisions herein or otherwise affect their
construction or effect.
(b) If any provision of this Agreement shall be held or made invalid by
a court decision, by statute or otherwise, the remainder of this Agreement shall
not be affected thereby and, to this extent, the provisions of this Agreement
shall be deemed to be severable.
(c) Nothing herein shall be construed to make the Sub-Adviser an agent
of the Adviser or the Fund.
(d) This Agreement may be executed in counterparts, with the same effect
as if the signatures were upon the same instrument.
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
[___________] ASSET MANAGEMENT, INC.
By: _________________________________
Name:
Title:
[__________] POST-VENTURE CAPITAL FUND, INC.
By: _________________________________
Name:
Title:
ABBOTT CAPITAL MANAGEMENT, LLC
By: _______________________________
Name:
Title:
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EXHIBIT D-2
FORM OF NEW BLACKROCK SUB-ADVISORY AGREEMENT
AGREEMENT dated as of June __, 1999 between [___________] ASSET
MANAGEMENT, INC., a Delaware corporation (herein called the "Investment
Advisor") and BLACKROCK INSTITUTIONAL MANAGEMENT CORPORATION, a Delaware
corporation (herein called the "Sub-Advisor").
WHEREAS, the Investment Advisor is the investment advisor to [________]
WORLDPERKS [_____________] FUND, INC. (herein called the "Fund"), an open-end,
diversified, management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Investment Advisor wishes to retain the Sub-Advisor to
assist the Investment Advisor in providing investment advisory services to the
Fund; and
WHEREAS, the Sub-Advisor is willing to provide such services to the
Investment Advisor upon the conditions and for the compensation set forth below.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, it is agreed between
the parties hereto as follows:
1. APPOINTMENT. The Investment Advisor hereby appoints the Sub-Advisor
its sub-advisor with respect to the Fund as provided for in the Investment
Advisory Agreement between the Investment Advisor and the Fund dated as of June
__, 1999 (such Agreement or the most recent successor advisory agreement between
such parties is herein called the "Advisory Agreement").
The Sub-Advisor accepts such appointment and agrees to render the
services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Investment Advisor shall provide to the
Sub-Advisor copies of the Fund's most recent prospectus and statement of
additional information (including any supplement thereto) which relate to any
class of shares representing interests in the Fund (each such prospectus and
statement of additional information as presently in effect, and as they shall
from time to time be amended and supplemented, is herein respectively called a
"Prospectus" and a "Statement of Additional Information").
3. SUB-ADVISORY SERVICES TO THE FUND. Subject to the supervision of the
Investment Advisor, the Sub-Advisor will supervise the day-to-day operations of
the Fund and perform the following services: (i) provide investment research and
credit analysis concerning the Fund's investments, (ii) conduct a continual
program of investment of the Fund's assets, (iii) place orders for all purchases
and sales of the investments made for the Fund and (iv) maintain the books and
records required in connection with its duties hereunder. In addition, the
Sub-Advisor will
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keep the Investment Advisor promptly informed in writing of developments
materially affecting the Fund. The Sub-Advisor will communicate to the
Investment Advisor on each day that a purchase or sale of a security is effected
for the Fund (i) the name of the issuer, (ii) the amount of the purchase or
sale, (iii) the name of the broker or dealer, if any, through which the purchase
or sale will be effected, (iv) the CUSIP number of the security, if any, and (v)
such other information as the Investment Advisor may reasonably require for
purposes of fulfilling its obligations to the Fund under the Advisory Agreement.
The Sub-Advisor will render to the Fund's Board of Directors such periodic and
special reports as the Investment Advisor may reasonably request. The
Sub-Advisor will provide the services rendered by it hereunder in accordance
with the Fund's investment objectives, policies and restrictions as stated in
the Prospectus and Statement of Additional Information.
4. BROKERAGE. The Sub-Advisor may place orders pursuant to its
investment determinations for the Fund either directly with the issuer or with
any broker or dealer. In placing orders, the Sub-Advisor will consider the
experience and skill of the firm's securities traders as well as the firm's
financial responsibility and administrative efficiency. The Sub-Advisor will
attempt to obtain the best price and the most favorable execution of its orders.
Consistent with these obligations, the Sub-Advisor may, subject to the approval
of the Board of Directors, select brokers on the basis of the research,
statistical and pricing services they provide to the Fund. A commission paid to
such brokers may be higher than that which another qualified broker would have
charged for effecting the same transaction, provided that the Sub-Advisor
determines in good faith that such transaction is reasonable in terms either of
the transaction or the overall responsibility of the Sub-Advisor to the Fund and
its other clients and that the total commissions paid by the Fund will be
reasonable in relation to the benefits to the Fund over the long-term. In no
instance will portfolio securities be purchased from or sold to the Fund's
principal distributor, the Investment Advisor, or any affiliate thereof, except
to the extent permitted by an exemptive order of the Securities and Exchange
Commission or by applicable law.
5. COMPLIANCE WITH LAWS; CONFIDENTIALITY. The Sub-Advisor agrees that it
will comply with all applicable rules and regulations of all federal and state
regulatory agencies having jurisdiction over the Sub-Advisor in performance of
its duties hereunder (herein called the "Rules"). The Sub-Advisor will treat
confidentially and as proprietary information of the Fund all records and
information relative to the Fund, and will not use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing by the
Fund, which approval shall not be unreasonably withheld and may not be withheld
where the Sub-Advisor may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Fund.
6. CONTROL BY THE FUND'S BOARD OF DIRECTORS. Any recommendations
-D-12-
<PAGE>
concerning the Fund's investment program proposed by the Sub-Advisor to the Fund
and the Investment Advisor pursuant to this Agreement, as well as any other
activities undertaken by the Sub-Advisor on behalf of the Fund pursuant thereto,
shall at all times be subject to any applicable directives of the Board of
Directors of the Fund.
7. SERVICES NOT EXCLUSIVE. The Sub-Advisor's services hereunder are
not deemed to be exclusive, and the Sub-Advisor shall be free to render similar
services to others so long as its services under this Agreement are not impaired
thereby.
8. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Advisor hereby agrees that all records which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any such records upon the Fund's request. The
Sub-Advisor further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act, the records required to be maintained by the Sub-Advisor
hereunder pursuant to Rule 31a-1 and Rule 2a-7 under the 1940 Act.
9. EXPENSES. During the term of this Agreement, the Sub-Advisor will
bear all expenses in connection with the performance of its services under this
Agreement. The Sub-Advisor shall not bear certain other expenses related to the
operation of the Fund including, but not limited to: taxes, interest, brokerage
fees and commissions and any extraordinary expense items.
10. COMPENSATION. For the services which the Sub-Advisor will render to
the Investment Advisor under this Agreement, the Investment Advisor will pay to
the Sub-Advisor on the first day of each month, a fee for the previous month
calculated daily, at an annual rate of .06% of the Fund's average daily net
assets.
11. LIMITATION ON LIABILITY. The Sub-Advisor will not be liable for any
error of judgment or mistake of law or for any loss suffered by the Investment
Advisor or by the Fund in connection with the matters to which this Agreement
relates, except that it shall be liable to the Investment Advisor and the Fund
for a loss resulting from a breach of fiduciary duty with respect to the receipt
of compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations or duties under this Agreement.
12. DURATION AND TERMINATION. This Agreement shall become effective with
respect to the Fund upon approval of this Agreement by vote of a majority of the
outstanding voting securities of the Fund and, unless sooner terminated as
provided herein, shall continue in effect with respect to the Fund for an
initial two-year period commencing on the date first written above. Thereafter,
if not terminated, this Agreement shall continue in effect for successive annual
periods, provided such continuance is specifically approved at least annually
(a) by the vote of a majority of those members of the Board of Directors of the
Fund who are not interested persons of the Fund or any party to this Agreement,
cast in person at a
-D-13-
<PAGE>
meeting called for the purpose of voting on such approval, and (b) by the Board
of Directors of the Fund or by vote of a majority of the outstanding voting
securities of the Fund. Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by the Fund (by vote
of the Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Fund), or by the Investment Advisor or the
Sub-Advisor on sixty (60) days' written notice. This Agreement will immediately
terminate in the event of its assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meaning as such terms have in the 1940 Act.)
13. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, discharge or
termination is sought, and no amendment of this Agreement affecting the Fund
shall be effective until approved by vote of the holders of a majority of the
outstanding voting securities of the Fund.
14. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any provisions
hereof or otherwise affect their construction or effect. If any provision of
this Agreement shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of this Agreement shall not be affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and shall be governed by Delaware
law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
[_________] ASSET MANAGEMENT, INC.
By:_________________________
Title:
BLACKROCK INSTITUTIONAL
MANAGEMENT CORPORATION
By:_________________________
Title:
-D-14-
<PAGE>
Annex I
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS BALANCED FUND
Charles Schwab & Co. Inc.* 1,251,843 47.88%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp.* 346,440 13.25%
FBO Customers
Church Street Station
P.O. Box 3908
New York, NY 10008-3908
Carn & Co. 169,178 6.47%
FBO Whiting Swenson Employees Savings Plan
A/C# 022194-01
P.O. Box 96211
Washington DC 20090-6211
WARBURG PINCUS CAPITAL APPRECIATION FUND
Charles Schwab & Co. Inc.* 3,291,140 8.72%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
Bank One Securities 2,456,105 6.51%
FBO The One Investment Solution
733 Greenrest Drive
Westerville, OH 43081-4903
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS CASH RESERVE FUND
Fiduciary Trust Co. International* 74,795,100 18.67%
Customer Account Attn: Felyce Porr
Securities Services Group
Church Street Station
P. O. Box 3199New York, NY 10008-3199
Neuberger & Berman* 155,967,694 38.94%
Attn: Operations Control Dept.
55 Water Street, 27th Floor
New York, NY 10041-0001
The Bank of New York* 31,205,959 7.79%
c/o Frank Notaro
Special Processing Dept.
One Wall Street, 2nd Floor
New York, NY 10005-2501
WARBURG PINCUS EMERGING GROWTH FUND
Charles Schwab & Co. Inc.* 6,658,989 13.26%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
Nationwide Life Insurance Company 4,976,057 9.91%
Nationwide QPVA
c/o IPO Portfolio Accounting
P. O. Box 182029
Columbus, OH 43218-2029
National Financial Services Corp.* 2,942,461 5.86%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
Fidelity Investment Institutional Operations 3,716,110 7.40%
Cnt as Agent for Certain Employee
Benefit Plans
100 Magellan Way
Covington, KY 41015-1999
-I-2-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
First Trust National Association 2,781,008 5.54%
Trustee for United Healthcare Corp.
401(k) Savings Plan
Attn: Mutual Funds A/C #21740224
P.O. Box 64010
St. Paul, MN 55164-0010
Connecticut General Life Insurance. Co.* 8,053,191 16.03%
On behalf of its Separate Accounts
55G c/o Melissa Spencer M110
CIGNA Corp.
P. O. Box 2975
Hartford, CT 06104-2975
WARBURG PINCUS EMERGING MARKETS FUND
Salomon Smith Barney Inc* 1,607,299 19.75%
Book Entry Account
Attn: Matt Maesstri
333 West 34th Street
Mutual Fund Dept., 7th Floor
New York, NY 10001-2483
Charles Schwab & Co. Inc.* 2,395,430 29.43%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp.* 888,011 10.91%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
-I-3-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS FIXED INCOME FUND
Salomon Smith Barney Inc.* 3,966,019 9.67%
Book Entry Account
Attn: Matt Maestri
333 West 34th Street
Mutual Funds Dept., 7th Floor
New York, NY 10001-2483
Charles Schwab & Co. Inc.* 12,802,307 31.21%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
John L. Vogelstein 2,445,914 5.96%
c/o E.M. Warburg Pincus & Co.
466 Lexington Avenue
New York, NY 10017-3140
WARBURG PINCUS GLOBAL FIXED INCOME FUND
Salomon Smith Barney Inc.* 2,534,931 17.52%
Book Entry Account
Attn: Matt Maestri
333 West 34th Street
Mutual Funds Dept., 7th Floor
New York, NY 10001-2483
Charles Schwab & Co. Inc.* 4,639,219 32.06%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
Donaldson Lufkin & Jenrette Securities Corp.* 784,640 5.42%
Pershing Division
Mutual Fund Balancing
1 Pershing Plaza, 14th Floor
Jersey City, NJ 07399-0001
-I-4-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
National Financial Services Corp.* 1,878,333 12.98%
FBO Customers
P. O. Box 3908
New York, NY 10008-3908
Prudential Securities Inc.* 936,489 6.47%
For exclusive benefit of customers PC
1 New York Plaza
New York, NY 10004-1901
WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND
Charles Schwab & Co. Inc.* 29,865 9.12%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
Elizabeth Dater 20,836 6.36%
c/o E.M. Warburg Pincus & Co.
466 Lexington Avenue
New York, NY 10017-3140
Warburg Pincus Asset Management, Inc.** 104,074 31.78%
Attn: Stephen Distler
466 Lexington Avenue, 10th Floor
New York, NY 10017-3140
WARBURG PINCUS GROWTH & INCOME FUND
Charles Schwab & Co. Inc.* 10,063,058 24.09%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp.* 10,028,018 24.01%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
-I-5-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
Connecticut General Life Insurance Co.* 4,642,187 11.11%
On behalf of its Separate Accounts
55S c/o Melissa Spencer M110
CIGNA Corp.
P. O. Box 2975
Hartford, CT 06104-2975
WARBURG PINCUS HEALTH SCIENCES FUND
Charles Schwab & Co. Inc.* 1,234,502 25.02%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp.* 727,769 14.75%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
WARBURG PINCUS INSTITUTIONAL FUND, INC. -
EMERGING MARKETS PORTFOLIO
American Jewish Committee Retirement Plan 99,935 11.25%
c/o Clifford Surloff
165 East. 56th Street
New York, NY 10022-2746
David Mitchell 111,560 12.55%
The Taft School
110 Woodbury Road
Watertown, CT 06795-2100
The Greenwall Foundation 148,303 16.69%
William C. Stubing
2 Park Avenue
New York, NY 10016-5675
-I-6-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
Beekman Vista Inc. 199,067 22.40%
c/o Robert Julien
5646 Milton Street, Suite 128
Dallas, TX 75206-3929
The Juilliard School 324,100 36.47%
60 Lincoln Center Plaza
New York, NY 10023-6588
WARBURG PINCUS INSTITUTIONAL FUND, INC.
- - INTERNATIONAL EQUITY PORTFOLIO
Vanguard Fiduciary Trust Co. 3,575,676 5.68%
Trust Agreement
FBO Compaq Computer Corporation
U/A dated 7/1/95
P.O. Box 2600 VM613
Valley Forge, PA 19482-2900
Northern Trust Co. 3,236,601 5.14%
FBO Harnishfeger Ind
P.O. Box 92956
Chicago, IL 60675-2956
WARBURG PINCUS INSTITUTIONAL FUND, INC.
- - JAPAN GROWTH PORTFOLIO
Warburg Pincus Asset Management, Inc.** 149,869 92.65%
Attn: Stephen Distler
466 Lexington Ave., 10th Floor
New York, NY 10017-3140
WARBURG PINCUS INSTITUTIONAL FUND, INC.
- - POST-VENTURE CAPITAL PORTFOLIO
Warburg Pincus Asset Management, Inc.** 100,100 74.95%
Attn: Stephen Distler
466 Lexington Avenue, 10th Floor
New York, NY 10017-3140
Guarantee & Trust Co. 12,495 9.36%
Stuart Goode IRA R/O
70 East 77th Street, Apt. 9A
New York, NY 10021-1811
-I-7-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS INSTITUTIONAL FUND, INC.
- - SMALL COMPANY GROWTH PORTFOLIO
Mac & Co. 1,008,085 6.45%
A/C OBRF3331022
Mutual Fund Operations
P. O. Box 3198
Pittsburgh, PA 15230-3198
National City Bank of Kentucky 817,305 5.23%
Trustee Baptist Healthcare System
UAD 05/06/97
Attn: Trust Mutual Funds
P. O. Box 94777
Cleveland, OH 44101-4777
Northern Trust Co. Trustee 877,715 5.61%
FBO Southern California Rock Products
A/C 22-05395
P. O. Box 92956
Chicago, IL 60675-2956
Key Trust Co., Trustee 801,884 5.13%
FBO Thunderbird Mining
A/C 2020200-1067163
Dtd 03/01/98
P. O. Box 94871
Cleveland, OH 44101-4871
Mac & Co. 1,936,204 12.38%
A/C BUCF1831132
Mutual Funds Operations
P. O. Box 3198
Pittsburgh, PA 15230-3198
-I-8-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
Mac & Co. 855,653 5.47%
A/C BUCF1731752
Mutual Funds Operations
P. O. Box 3198
Pittsburgh, PA 15230-3198
Trustees of Amherst College 1,779,720 11.38%
Amherst College
Ms. Sharon Siegel, Treasurer Office
Box 2203 P. O. Box 5000
Amherst, MA 01002-5000
WARBURG PINCUS INSTITUTIONAL FUND, INC.
- - SMALL COMPANY VALUE PORTFOLIO
Newman-Stein Profit Sharing Plan 15,582 14.16%
c/o Mr. William Stein
902 Broadway
New York, NY 10010-6002
Delaware Charter Guarantee & Trust Co. 9,275 8.43%
FBO Charles A. Steinberg
P.O. Box 8963
Wilmington, DE 19899-8963
Guarantee & Trust Co. 12,952 11.77%
Stuart Goode IR R/O
70 East 77th Street, Apt. 9A
New York, NY 10021-1811
Wendel & Co. 47,393 43.06%
c/o The Bank of New York
Mutual Fund/Reorg Dept.
Wall Street Station
P. O. Box 1066
New York, NY 10268-1066
-I-9-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS INSTITUTIONAL FUND, INC.
- - VALUE PORTFOLIO
Mandel Associated Foundations 720,920 15.93%
1750 Euclid Avenue
Cleveland, OH 44115-2106
Foundations Investments of Ohio 323,330 7.14%
P. O. Box 6609
Cleveland, OH 44101-1609
National Financial Services Corp.* 3,299,001 72.88%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
WARBURG PINCUS INTERMEDIATE MATURITY GOVERNMENT FUND
Charles Schwab & Co. Inc.* 2,462,580 34.98%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp.* 542,307 7.70%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
WARBURG PINCUS INTERNATIONAL EQUITY FUND
Charles Schwab & Co. Inc.* 15,475,619 21.47%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp.* 5,605,325 7.78%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
-I-10-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
Connecticut General Life Insurance Co.* 15,175,186 21.05%
On behalf of its separate accounts
55F c/o Melissa Spencer M110
CIGNA Corp. P. O. Box 2975
Hartford, CT 06104-2975
WARBURG PINCUS INTERNATIONAL SMALL COMPANY FUND
Warburg Pincus Asset Management, Inc.** 50,000 23.29%
Attn: Stephen Distler
466 Lexington Avenue, 10th Floor
New York, NY 10017-3140
Charles V. Prothro 51,116 23.81%
2304 Midwestern Parkway, Suite 200
Wichita Falls, TX 76308-2334
WARBURG PINCUS JAPAN GROWTH FUND
Charles Schwab & Co. Inc.* 1,688,184 31.99%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
Donaldson Lufkin & Jenrette Securities Corp.* 357,905 6.78%
Pershing Division
Mutual Fund Balancing
1 Pershing Plaza, 14th Floor
Jersey City, NJ 07399-0001
National Financial Services Corp.* 1,669,369 31.64%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
Susquehanna Financial Group Inc 294,985 5.59
401 E. City Avenue, Suite 220
Bala Cynwyd, PA 19004-1117
National Investor Services Corp.* 269,633 5.11%
For the exclusive benefit of our customers
55 Water Street, 32nd Floor
New York, NY 10041-3299
-I-11-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS JAPAN SMALL COMPANY FUND
Charles Schwab & Co. Inc.* 5,847,315 36.80%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp.* 4,640,762 29.20%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
National Investor Services Corp.* 2,180,629 13.72%
For the exclusive benefit of our customers
55 Water Street, 32nd Floor
New York, NY 10041-3299
WARBURG PINCUS MAJOR FOREIGN MARKETS FUND
Christian Childrens Fund Inc. 247,633 5.22%
c/o D. Wayne Ball
P. O. Box 26484
2400 Emerywood Parkway
Richmond, VA 23261-6484
The Northern Trust Co. Trustee 1,014,873 21.38%
FBO GATX Master Trust Retirement Trust
Dtd 12/19/79
500 W. Monroe St.
Chicago, IL 60661-3630
-I-12-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND
Christopher W. Brody 539,392 5.24%
c/o E.M. Warburg Pincus & Co.
466 Lexington Avenue
New York, NY 10017-3140
Charles Schwab & Co. Inc.* 1,010,169 9.81%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
Chase Manhattan Bank* 9,104,103 5.17%
Client Service Dept
1 Chase Manhattan Plaza, 16th Floor
New York, NY 10005-1401
Fiduciary Trust Co. International* 60,978,500 34.66%
Customer A/C Attn: Felyce Porr
Securities Services Group
Church Street Station
P. O. Box 3199
New York, NY 10008-3199
Neuberger & Berman* 93,636,350 53.22%
Attn: Operations Control Dept.
Steve Gallaro
55 Water Street, 27th Floor
New York, NY 10041-0001
-I-13-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
Charles Schwab & Co. Inc.* 919,759 27.11%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp.* 430,220 12.68%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
WARBURG PINCUS SMALL COMPANY GROWTH FUND
1991 Trust #1 27,844 6.32%
Edwin Gustafson Jr., Trustee
c/o Warburg Pincus Asset Management, Inc.
466 Lexington Avenue
New York, NY 10017-3140
1991 Trust #2 27,844 6.32%
Edwin Gustafson Jr., Trustee
c/o Warburg Pincus Asset Management, Inc.
466 Lexington Avenue
New York, NY 10017-3140
Charles Schwab & Co. Inc.* 88,068 20.01%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
The Wooden Nickel Foundation** 52,751 11.98%
c/o E.M. Warburg Pincus & Co.
466 Lexington Avenue
New York, NY 10017-3140
-I-14-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
National Financial Services Corp.* 40,705 9.25%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
WARBURG PINCUS SMALL COMPANY VALUE FUND
Charles Schwab & Co. Inc.* 971,109 26.67%
Special Custody Account for
the Exclusive Benefit of Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
Donaldson Lufkin & Jenrette Securities Corp.* 214,882 5.90%
Pershing Division
Mutual Fund Balancing
1 Pershing Plaza, 14th Floor
Jersey City, NJ 07399-0001
National Financial Services Corp.* 559,779 15.37%
FBO Customers
Church Street Station
P. O. Box 3908
New York, NY 10008-3908
Wendel & Co. A/C 828274 186,159 5.11%
c/o The Bank of New York
Attn: Mutual Fund/ Reorg Dept.
Wall Street Station
P. O. Box 1066
New York, NY 10268-1066
-I-15-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS TRUST - EMERGING MARKETS PORTFOLIO
Warburg Pincus Asset Management, Inc.** 100,000 25.65%
Attn: Stephen Distler
466 Lexington Avenue, 10th Floor
New York, NY 10017-3140
Sun Life of Canada (US) 30,845 7.91%
c/o Retirement Products &
Services Accounting Control
P. O. Box 9134
Boston, MA 02117-9134
The Travelers SEP Account 86,436 22.17%
ABD2 for variable annuities of the
Travelers Insurance Co.
1 Tower Square
Hartford, CT 06183-0002
The Travelers SEP Account 30,080 7.72%
ABD for Variable Annuities of the
Travelers Insurance Co.
1 Tower Square
Hartford, CT 06183-0002
The Travelers SEP Account 120,199 30.83%
TM2 for Variable Annuities of the
Travelers Insurance Co.
1 Tower Square
Hartford, CT 06183-0002
-I-16-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS TRUST - GROWTH & INCOME PORTFOLIO
Nationwide Life Insurance Company 75,064 5.40%
NWVLI - 4
c/o IPO Portfolio Accounting
P. O. Box 182029
Columbus, OH 43218-2029
Nationwide Life Insurance Company 1,258,741 90.60%
NWVA - 9
c/o IPO Portfolio Accounting
P. O. Box 182029
Columbus, OH 43218-2029
WARBURG PINCUS TRUST - INTERNATIONAL EQUITY PORTFOLIO
Nationwide Life Insurance Company 19,111,647 58.16%
Nationwide Variable Account II
c/o IPO Portfolio Accounting
P. O. Box 182029
Columbus, OH 43218-2029
Equitable Life Insurance Co. of Iowa 3,742,221 11.39%
Separate Account A
Danelle Knopf
909 Locust St.
Des Moines, IA 50309-2803
Golden American Life 6,487,792 19.74%
Separate Account B
1001 Jefferson St., Suite 400
Wilmington, DE 19801-1493
-I-17-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS TRUST - POST-VENTURE CAPITAL PORTFOLIO
Nationwide Life Insurance Company 1,812,513 35.03%
Nationwide Variable Account II
c/o IPO Portfolio Accounting
P. O. Box 182029
Columbus, OH 43218-2029
Pruco Life Flexible Premium 1,806,833 34.92%
Variable Annuity Account
213 Washington St., 7th Floor
Newark, NJ 07102-2917
Nationwide Life Insurance Company 594,944 11.50%
NWVA-9
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029
Fidelity Investments Life Insurance Company 514,316 9.94%
Attn: Sean Locke
82 Devonshire St. #R25B
Boston, MA 02109-3605
WARBURG PINCUS TRUST - SMALL COMPANY GROWTH PORTFOLIO
Nationwide Life Insurance Company 18,030,581 40.86%
Nationwide Variable Account II
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029
IDS Life Insurance Company 21,249,876 48.16
c/o American Express Financial Advisors
Attn: Flex Variable Annuity T11-125
IDS Tower 10
Minneapolis, MN 55440
-I-18-
<PAGE>
PERCENTAGE
OWNERSHIP OF
NAME AND ADDRESS SHARES HELD OUTSTANDING SHARES
- ----------------- ----------- ------------------
WARBURG PINCUS TRUST II - FIXED INCOME PORTFOLIO
Warburg Pincus Asset Management, Inc.** 62,760 22.55%
Attn: Stephen Distler
466 Lexington Avenue, 10th Floor
New York, NY 10017-3140
United Life & Annuity 215,493 77.44%
Separate Account One
c/o Marketing One, Inc.
Attn: Ron Hyde
851 SW Sixth Avenue
Portland, OR 97204
WARBURG PINCUS TRUST II - GLOBAL FIXED INCOME PORTFOLIO
Warburg Pincus Asset Management, Inc.** 181,159 100.00%
Attn: Stephen Distler
466 Lexington Ave., 10th Floor
New York, NY 10017-3140
WARBURG PINCUS WORLDPERKS MONEY MARKET FUND
Louis Bluver 1,522,948 12.40%
1901 Walnut Street, Apt. 1901
Philadelphia, PA 19103-4645
WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND
Credit Suisse Asset Management Fund 6,070,597 55.04%
Holding (Luxembourg) S.A.***
5 Rue Jean Monnet
B P 369
L-2013 Luxembourg
- -------------
* The Portfolio believes this entity, the holder of record of these shares, is
not the beneficial owner of such shares.
** Warburg will vote its shares of this Portfolio in the same proportion as the
votes received by the Portfolio from other shareholders of this Portfolio.
*** Credit Suisse Asset Management Fund Holding (Luxembourg) S.A. will vote its
shares of this Portfolio in the same proportion as the votes received by the
Portfolio from other shareholders of this Portfolio.
-I-19-
<PAGE>
March 26, 1999
[Client Name]
[Client Organization]
[Client Address]
Re: PROXY STATEMENT
Dear [Client]:
As you know, Warburg, Pincus & Co. and Credit Suisse Group recently announced an
agreement for Credit Suisse Group to acquire Warburg Pincus Asset Management,
Inc. and combine it with its U.S. subsidiary, Credit Suisse Asset Management,
New York. We believe that this combination will enhance the depth and range of
our investment capabilities and customized service. The senior professionals of
Warburg Pincus Asset Management will join the new firm with a continued
commitment to delivering the best possible investment products and service.
As a result of this transaction, it is necessary for the shareholders of record
on March 9, 1999 of the funds for which Warburg Pincus acts as an investment
advisor to approve a new investment advisory agreement. Shareholders are also
being asked to approve certain other matters. The board members of your Fund
believe that each proposal set forth in the Notice of Meeting is important and
recommend that you vote FOR all the proposals.
Proxy statements have been sent to all shareholders to the registration contact
and address as designated. Detailed materials included with the proxy statement
describe all the proposals and the methods available to vote on them. It would
be appreciated if you would see that your shares are voted on in a timely
fashion.
Thank you for your consideration in this matter. We greatly appreciate our
relationship with you. Please call me at [phone #] with any questions about this
proxy statement or the pending transaction.
Sincerely,
[Client Contact]
[Title]
