<PAGE>1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WARBURG, PINCUS GLOBAL POST-VENTURE CAPITAL FUND, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -----------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
<PAGE>2
[ ] 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:
<PAGE>3
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WARBURG, PINCUS POST-VENTURE CAPITAL FUND, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -----------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
<PAGE>4
[ ] 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:
<PAGE>5
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WARBURG, PINCUS TRUST
(Post-Venture Capital Portfolio Only)
- -----------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -----------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
<PAGE>6
[ ] 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:
<PAGE>7
WARBURG, PINCUS GLOBAL POST-VENTURE CAPITAL FUND, INC.
WARBURG, PINCUS POST-VENTURE CAPITAL FUND, INC.
WARBURG, PINCUS TRUST
(Post-Venture Portfolio only)
466 Lexington Avenue
New York, New York 10017-3147
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
_________, 1997
Dear Shareholders:
A special meeting of the shareholders of each of the Warburg, Pincus
Global Post-Venture Capital Fund, Inc., Warburg, Pincus Post-Venture Capital
Fund, Inc. and the Post-Venture Capital Portfolio of the Warburg, Pincus Trust
(each, a "Fund" and collectively, the "Funds") will be held on Friday, January
17, 1997, at 3:00 p.m., Eastern Time, at the offices of the Funds, 466
Lexington Avenue, New York, New York 10017-3147 (10th Floor), or any
adjournment thereof, for the following purposes:
(1) To approve or disapprove the new Sub-Investment Advisory
Agreement (the "New Sub-Advisory Agreement") among each Fund, Warburg, Pincus
Counsellors, Inc. ("Warburg") and Abbott Capital Management, L.P. ("Abbott")
with respect to the Fund; and
(2) To transact such other business as may properly come before
the meeting.
Three important points are these:
APPROVAL OF THE NEW SUB-ADVISORY AGREEMENTS WILL NOT INCREASE THE
TOTAL FEES AND EXPENSES OF FUND SHAREHOLDERS.
THE GOVERNING BOARD OF EACH FUND UNANIMOUSLY RECOMMENDS THAT YOU
VOTE FOR APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT.
THE COSTS ASSOCITATED WITH THIS PROXY ARE BEING PAID FOR BY
WARBURG AND NOT BY ANY FUND.
Approval of the New Sub-Advisory Agreements will allow a Fund to
continue utilizing the extensive experience of Abbott in investing a portion of
the Fund's assets in private investment vehicles that themselves invest in
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. Pursuant to the New Sub-Advisory Agreements, however,
Warburg will pay an increased sub-advisory fee to Abbott out of its own assets.
<PAGE>8
EACH FUND WILL CONSIDER THE APPROVAL OF THE PROPOSAL SET FORTH ABOVE
SEPARATELY, AND THE APPROVAL OR DISAPPROVAL BY ONE FUND WILL NOT AFFECT THE
APPROVAL OR DISAPPROVAL BY ANOTHER FUND.
You are entitled to vote at the meeting and any adjournments thereof if
you owned shares of the Fund at the close of business on November 15, 1996. If
you attend the meeting, you may vote your shares in person. If you do not expect
to attend the meeting, please complete, date, sign and return the enclosed proxy
in the enclosed postage paid envelope.
By Order of the Board of Directors/Trustees,
Eugene P. Grace
Vice President and Secretary
________, 1996
A FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST
RECENT ANNUAL REPORT TO A SHAREHOLDER UPON REQUEST. ANY SUCH REQUEST SHOULD BE
DIRECTED TO THE FUND BY CALLING (800) 927-2874 OR BY WRITING TO THE FUND, 466
LEXINGTON AVENUE, NEW YORK, NEW YORK 10017-3147.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER
SOLICITATION, WE ASK THAT YOU MAIL YOUR PROXY PROMPTLY NO MATTER HOW MANY
SHARES YOU OWN.
YOUR VOTE IS IMPORTANT.
<PAGE>9
WARBURG, PINCUS GLOBAL POST-VENTURE CAPITAL FUND, INC.
WARBURG, PINCUS POST-VENTURE CAPITAL FUND, INC.
WARBURG, PINCUS TRUST
(Post-Venture Capital Portfolio only)
466 Lexington Avenue
New York, New York 10017-3147
-----------------
PROXY STATEMENT
-----------------
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
January 17, 1997
This document is a combined proxy statement for Warburg, Pincus Global
Post-Venture Capital Fund, Inc. (the "Global Fund"), an open-end investment
company having two classes of common stock, Warburg, Pincus Post-Venture Capital
Fund, Inc. (the "Domestic Fund"), an open-end investment company having two
classes of common stock and the Post-Venture Capital Portfolio of the Warburg,
Pincus Trust (the "Portfolio"), an open-end series investment company having one
class of common stock (each, a "Fund" and collectively, the "Funds"). This
combined proxy statement, which will be mailed to each Fund's shareholders on or
about November 25, 1996 is furnished in connection with the solicitation of
proxies by the Board of Directors or Trustees of each Fund (each, a "Board") to
be used at the Fund's Special Meeting of Shareholders (the "Meetings"). The
Meetings will be held on Friday, January 17, 1996, at 3:00 p.m., Eastern Time,
at the offices of the Funds, 466 Lexington Avenue, New York, New York 10017-3147
(10th floor), for the purposes set forth in the Fund's Notice of Meeting.
The proxies named on the proxy card of a Fund will vote in accordance
with the directions indicated thereon if your proxy card is received properly
executed. If you properly execute your proxy card and give no voting
instruction, your shares will be voted FOR the proposal set forth herein.
Abstentions will be counted as present for purposes of determining a quorum, but
will not be counted as voting. Broker non-votes (i.e., proxies received from
brokers or nominees indicating that such persons have not received instructions
from the beneficial owner or other persons entitled to vote the shares on a
particular matter with respect to which the broker or nominees do not have
discretionary power) will be treated the same as abstentions. Proxies may be
revoked at any time prior to
<PAGE>10
their exercise by execution of a subsequent proxy card, by written notice to
the Secretary of a Fund or by voting in person at the Meeting.
Approval of the proposal set forth herein will require the Majority
Vote (as defined below) of the outstanding shares of a Fund, voting in the
aggregate without regard to class, in person or by proxy, if a quorum is
present. "Majority Vote" for purposes of this combined proxy statement, and
under the 1940 Act, means the lesser of (i) 67% of the shares represented at a
meeting at which more than 50% of the outstanding shares of a Fund are
represented or (ii) more than 50% of the outstanding shares of a Fund. EACH FUND
WILL CONSIDER THE APPROVAL OF THE PROPOSAL SET FORTH HEREIN SEPARATELY, AND THE
APPROVAL OR DISAPPROVAL BY ONE FUND WILL NOT AFFECT THE APPROVAL OR DISAPPROVAL
BY ANOTHER FUND. in the event that a quorum is present at a fund's meeting but
sufficient votes to approve a proposal are not received, the persons named as
proxies by the Fund may propose one or more adjournments of the Meeting to
permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of the Fund's shares represented at the Meeting
in person or by proxy.
The costs of the Meetings (estimated at $________ including the
solicitation of proxies) will be paid entirely by Warburg, Pincus Counsellors,
Inc. ("Warburg"). The principal solicitation of proxies will be by the mailing
of this combined proxy statement, but proxies may also be solicited by telephone
and/or in person by representatives of a Fund and regular employees of Warburg
or its affiliate(s). Such representatives and employees will not receive
additional compensation for solicitation activities. Warburg has retained the
services of D.F. King & Co., Inc. to assist in the solicitation of proxies.
Each full share outstanding is entitled to one vote and each fractional
share outstanding is entitled to a proportionate share of one vote. As of
November 15, 1996, the Global Fund had outstanding __________ Common Shares and
_________ Advisor Shares, the Domestic Fund had outstanding ________ Common
Shares and ___ Advisor Shares and the Portfolio had outstanding _______ shares.
The persons who owned more than 5% of any class of a Fund's outstanding shares
as of November 15, 1996, to the knowledge of the Fund, are set forth in APPENDIX
A hereto.
<PAGE>11
PROPOSAL -- APPROVAL OF NEW SUB-INVESTMENT ADVISORY AGREEMENT
The shareholders of each Fund will be asked at the Meeting to approve a
new Sub-Investment Advisory Agreement (the "New Sub-Advisory Agreement") among
the Fund, Warburg and Abbott Capital Management, L.P. ("Abbott") with respect to
the Fund. The New Sub-Advisory Agreement was unanimously approved by the Board
of each Fund, including all of the Directors or Trustees who are not parties to
the New Sub-Advisory Agreement or interested persons of such parties
("independent directors"), at a meeting held on November 4, 1996. Warburg, as
investment adviser to the Fund, had recommended to the Boards that the Funds
continue to retain Abbott to serve as the sub-investment adviser for the Funds
and that Warburg pay Abbott an increased sub-advisory fee pursuant to each New
Sub-Advisory Agreement. Warburg's principal office is located at 466 Lexington
Avenue, New York, New York 10017-3147, and Abbott's principal office is located
at 50 Rowes Wharf, Suite 240, Boston, Massachusetts 02110-3328. A form of the
New Sub-Advisory Agreement among a Fund, Warburg and Abbott is attached as
APPENDIX B. THE INCREASED FEE PAID TO ABBOTT PURSUANT TO THE NEW SUB-ADVISORY
AGREEMENTS WILL BE PAID BY WARBURG OUT OF ITS OWN ASSETS AND WILL NOT IN ANY
MANNER INCREASE THE FEES OR EXPENSES OTHERWISE INCURRED BY A FUND'S
SHAREHOLDERS.
The Global Fund, the Domestic Fund and the Portfolio commenced
investment operations on September 30, 1996, September 29, 1995 and July 2,
1996, respectively, with Warburg serving as each Fund's investment adviser from
that date. Each Fund focuses its investments on equity securities of
post-venture capital companies, as described more fully in each Fund's
Prospectuses. Warburg believes that it is advantageous to invest a portion of a
Fund's assets in private investment vehicles that themselves invest in 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. Because this is an area in which Abbott has extensive
experience, Warburg recommended that each Fund continue to retain Abbott as
sub-investment adviser and that Warburg pay Abbott an increased sub-advisory fee
pursuant to the New Sub-Advisory Agreements. Warburg will monitor the activities
and performance of Abbott and may, in its discretion, increase or decrease the
portion of a Fund's assets allocated to Abbott for investment. Each Fund has
determined initially that Warburg may allocate up to 10% of the Fund's assets to
Abbott, which can be changed by the Board at any time.
<PAGE>12
The Funds' other service agreements will not be affected by the New
Sub-Advisory Agreement. Currently, the Funds employ as co-administrators
Counsellors Funds Service, Inc. ("Counsellors") and PFPC Inc. ("PFPC").
Counsellors' address is 466 Lexington Avenue, New York, New York 10017-3147.
PFPC has its principal offices at 400 Bellevue Parkway, Wilmington, Delaware
19809. The Funds employ PNC Bank, National Association ("PNC") as custodian of
their respective U.S. assets and Fiduciary Trust Company International
("Fiduciary") as custodian of their respective non-U.S. assets. PNC's
principal business address is Broad and Chestnut Streets, Philadelphia,
Pennsylvania 19101. Fiduciary's principal business address is Two World Trade
Center, New York, New York 10048. The Funds employ Counsellors Securities
Inc., a subsidiary of Warburg, as distributor of the shares of the Funds.
The New Sub-Advisory Agreement as approved by each Fund's Board is now
being submitted for approval by the shareholders of each Fund. If it is approved
by a Majority Vote of the outstanding shares of a Fund, it will continue in
effect for an initial term ending April 17, 1998, and will continue from year to
year thereafter, subject to approval annually by the Board or by a Majority Vote
of the outstanding shares of the Fund, and also, in either event, approval by a
majority of the independent directors who are not parties to the New
Sub-Advisory Agreement or interested persons (as defined in the Investment
Company Act of 1940, as amended (the "1940 Act")) of any such party at a meeting
called for the purpose of voting on such approval. If the shareholders of a Fund
should fail to approve the New Sub-Advisory Agreement, the Board shall consider
appropriate action with respect to such non-approval of the New Sub-Advisory
Agreement. EACH FUND WILL CONSIDER THE APPROVAL OF THE PROPOSAL SET FORTH HEREIN
SEPARATELY, AND THE APPROVAL OR DISAPPROVAL BY ONE FUND WILL NOT AFFECT THE
APPROVAL OR DISAPPROVAL BY ANOTHER FUND.
INVESTMENT ADVISORY AGREEMENT
Warburg, a professional investment counseling firm, serves as each
Fund's investment adviser. Incorporated in 1970, Warburg is a wholly owned
subsidiary of Warburg, Pincus Counsellors, G.P. ("Counsellors G.P."), a New
York general partnership. E.M. Warburg, Pincus & Co., Inc. controls Warburg
through its ownership of a class of voting preferred stock of Warburg.
Counsellors G.P. has no business other than being a holding company of Warburg
and its subsidiaries.
Pursuant to the Investment Advisory Agreements between Warburg and the
Global Fund, the Domestic Fund and the Portfolio,
<PAGE>13
dated September 30, 1996, September 29, 1995 and July 2, 1996, respectively
(the "Advisory Agreements"), and subject to the supervision and direction of
each Board, Warburg is responsible for managing a Fund in accordance with the
Fund's stated investment objective and policies. As compensation for its
services to the Fund, Warburg receives compensation at the annual rate of 1.25%
of the average daily net assets of each Fund. For the fiscal year or period
ended October 31, 1996, Warburg earned, $______, $_______ and $______ under the
Advisory Agreements with the Global Fund, the Domestic Fund and the Portfolio,
respectively. [Disclosure of waivers, if any.] WHETHER THE NEW SUB-ADVISORY
AGREEMENTS ARE APPROVED OR NOT, WARBURG WILL CONTINUE TO SERVE AS INVESTMENT
ADVISER TO THE FUNDS PURSUANT TO THE ADVISORY AGREEMENTS.
Warburg is responsible for providing investment advisory services as
well as conducting a continual program of investment, evaluation and, if
appropriate, sale and reinvestment of a Fund's assets. In addition to expenses
that Warburg may incur in performing its services under the Advisory Agreements,
Warburg pays the compensation, fees and related expenses of all Directors of a
Fund who are affiliated persons of Warburg or any of its subsidiaries and, if
the New Sub-Advisory Agreement is approved by the shareholders of a Fund, will
pay an increased sub-advisory fee to Abbott. Each Fund pays all other expenses
incurred in its operations, including general administrative expenses.
CURRENT SUB-ADVISORY AGREEMENTS
The services of Abbott under the current Sub-Advisory Agreements with
each Fund are not exclusive. Abbott has the right to provide similar services to
other investment companies or to engage in other activities, provided that those
activities do not adversely affect Abbott's ability to perform its services
under the current Sub-Advisory Agreement with each Fund.
Subject to the supervision of Warburg, the current Sub-Advisory
Agreements require Abbott, in the exercise of its best judgment, to provide
investment advisory assistance and portfolio management advice to a Fund in
accordance with (a) the Fund's Articles of Incorporation or Declaration of
Trust, as the case may be, (b) 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 prospectuses (the "Prospectuses") and Statement of Additional
Information (the "SAI") and investment parameters provided by Warburg from time
to time.
<PAGE>14
In connection with the current Sub-Advisory Agreements, Abbott:
(i) determines 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 buy-outs ("Investments"). Abbott may execute, or
place orders for the execution of, all Investments on behalf of a Fund;
(ii) assists the custodian and accounting agent for a
Fund in determining or confirming, consistent with the procedures and
policies stated in each Fund's Prospectuses and SAI, the value of any
Investments for which the custodian and accounting agent seek
assistance from or identify for review by Abbott;
(iii) monitors the execution of orders for the
purchase or sale of Investments and the settlement and clearance of
those orders;
(iv) exercises voting rights in respect of
Investments; and
(v) provides reports to the Board of each Fund for
consideration at quarterly meetings of each Board on the Investments
and furnishes Warburg and each Board with such periodic and special
reports as a Fund or Warburg may reasonably request.
In connection with the performance of the services of Abbott as
provided for in the current Sub-Advisory Agreements, Abbott 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 Abbott remains liable to each Fund for the performance of its
duties.
Each current Sub-Advisory Agreement will terminate automatically in the
event of its assignment. In addition, it may be terminated by Warburg upon 60
days' written notice to Abbott and a Fund; by Abbott upon 60 days' written
notice to Warburg and a Fund; or by a Fund, upon the vote of a majority of the
Fund's Board or a majority of the outstanding voting securities of the Fund,
upon 60 days' written notice to Warburg and Abbott.
<PAGE>15
Under the current Sub-Advisory Agreements, Warburg pays Abbott a fee,
payable quarterly, based on the aggregate average daily net assets of a Fund, at
the annual rate of .55% 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 a current
Sub-Advisory Agreement to the end of the quarter during which the current
Sub-Advisory Agreement commences is prorated according to the proportion that
such period bears to the full quarterly period. Upon any termination of a
current Sub-Advisory Agreement before the end of a quarter, the fee for such
part of that quarter shall be prorated according to the proportion that such
period bears to the full quarterly period. WARBURG PAYS ABBOTT THIS SUB-ADVISORY
FEE OUT OF ITS OWN ASSETS. ABBOTT HAS NO RIGHT TO OBTAIN COMPENSATION DIRECTLY
FROM A FUND FOR SERVICES PROVIDED UNDER THE CURRENT SUB-ADVISORY AGREEMENTS AND
MAY LOOK SOLELY TO WARBURG FOR PAYMENT OF FEES DUE.
NEW SUB-ADVISORY AGREEMENTS
The New Sub-Advisory Agreements are identical to the current
Sub-Advisory Agreements in all material respects except for the amount of the
sub-advisory fee paid by Warburg to Abbott. Under the New Sub-Advisory
Agreements, Warburg would pay Abbott a quarterly fee at the annual rate of 1.00%
of a Fund's average daily net assets, rather than the .55% rate paid to Abbott
under the current Sub-Advisory Agreements. HOWEVER, THE FUNDS WOULD STILL NOT
PAY ANY FEE DIRECTLY TO ABBOTT.
INFORMATION ABOUT ABBOTT
Abbott, which was founded in 1986, is an independent specialized
investment firm with assets under management of approximately $3.5 billion.
Abbott is a registered investment adviser which concentrates on venture capital,
buyout and special situations partnership investments. Abbott's management team
provides full-service private equity programs to clients.
The general partners and principal executive officers of Abbott and
their principal occupations are as shown below. The business address of Mr.
Pratt is 50 Rowes Wharf, Suite 240, Boston, Massachusetts 02110-3328 and that of
Messrs. Held, Solomon and Gray is 1330 Avenue of the Americas, Suite 2800, New
York, New York 10019.
<PAGE>16
Position With Abbott
Name And Principal Occupation
- ---- ------------------------
Raymond L. Held.................. General Partner; investment manager.
Stanley E. Pratt................. General Partner; investment manager.
Gary H. Solomon.................. General Partner; investment manager.
Thaddeus I. Gray, CFA............ Limited Partner; investment manager.
For tax and other business purposes, the partners of Abbott plan to
merge Abbott with and into, or transfer all of the assets of Abbott to, a
newly-formed Delaware limited liability company ("Abbott LLC"), with Abbott LLC
to survive and assume all of the liabilities of Abbott as part of the
transaction. This transaction, which is expected to occur on or about May 31,
1997 and is subject to certain contingencies, will not involve any material
change in the management, ownership, personnel, operations or activities of
Abbott. The present partners of Abbott will be members of Abbott LLC and will
hold officerships and other positions in Abbott LLC carrying responsibilities
generally commensurate with their present responsibilities. Pursuant to new
Sub-Advisory Agreements with each Fund (the "Abbott LLC Sub-Advisory
Agreements"), Abbott LLC, as successor to Abbott, will perform the services
then being performed by Abbott. The Abbott LLC Sub-Advisory Agreements will be
substantially identical to the New Sub-Advisory Agreements, except for the
change of the service provider from Abbott to Abbott LLC. Prior to its
effectiveness, the Abbott LLC Sub-Advisory Agreements will be approved by the
Board of Directors of each Fund. Shareholder approval of the New Sub-Advisory
Agreements will be deemed to represent approval of the Abbott LLC Sub-Advisory
Agreements. A Form of the Abbott LLC Sub-Advisory Agreement is attached hereto
as APPENDIX C.
THE DIRECTORS' RECOMMENDATION
In determining whether it was appropriate to approve the New
Sub-Advisory Agreements and to recommend approval to shareholders, each Board,
including the Directors or Trustees who are not interested persons of Warburg
or Abbott, considered
<PAGE>17
various matters and materials provided by Abbott. The Boards considered,
primarily, the continued benefits to a Fund of retaining a specialized
sub-adviser to manage a portion of the Fund's assets in venture capital, special
situations and change of control private fund investments (as described above).
The Boards also carefully considered Abbott's extensive expertise in managing
these types of investments, including Abbott's personnel and research
capabilities and Abbott's methodology in managing portfolios for institutional
clients, and the efforts required by Abbott in analyzing and monitoring private
fund investments, which can be greater than that for publicly traded securities.
The Board also took into account the lack of any anticipated adverse impact to a
Fund as a result of the New Sub-Advisory Agreements, particularly that THE
INCREASED COMPENSATION TO BE RECEIVED BY ABBOTT WILL NOT INCREASE THE FEES
OTHERWISE INCURRED BY A FUND'S SHAREHOLDERS, BUT WILL CONTINUE TO BE PAID OUT OF
WARBURG'S OWN ASSETS.
THE BOARD OF DIRECTORS/TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR THIS PROPOSAL.
* * * * * * * * * * * * *
SHAREHOLDER PROPOSALS
As a general matter, each Fund does not hold annual meetings of
shareholders. Shareholders wishing to submit proposals for inclusion in a proxy
statement for a subsequent meeting of shareholders should send their written
proposals to the Secretary of Warburg, Pincus Global Post-Venture Capital Fund,
Inc., Warburg, Pincus Post-Venture Capital Fund, Inc. or Warburg, Pincus Trust,
as the case may be, 466 Lexington Avenue, New York, New York 10017-3147.
Proposals must be received at a reasonable time prior to the date of a meeting
of shareholders to be considered for inclusion in the materials for a Fund's
meeting. Timely submission of a proposal does not, however, necessarily mean
that such proposal will be included.
OTHER BUSINESS
Management knows of no business to be presented to the Meetings other
than the matter set forth in this combined proxy statement, but should any other
matter requiring the vote of shareholders arise, the proxies will vote thereon
according to their best judgment in the interests of a Fund.
By Order of the Board of Directors/Trustees,
Eugene P. Grace
Vice President and Secretary
New York, New York
_______, 199_
<PAGE>18
[PROXY CARD]
[WARBURG PINCUS FUND]
PROXY SOLICITED BY THE BOARD OF DIRECTORS
I hereby instruct Arnold M. Reichman and Eugene P. Grace to vote the shares of
[Warburg Pincus Fund] as to which I am entitled to vote, as shown on the reverse
side, at a Special Meeting of the Shareholders of the Fund (the "Meeting") to be
held on Friday, January 17, 1997, at 3:00 p.m., Eastern Time, at the offices of
the Fund, 466 Lexington Avenue, New York, New York 10017-3147 (10th Floor), and
any adjournments thereof, as follows:
I hereby revoke any and all proxies with respect to such shares previously given
by me. I acknowledge receipt of the Proxy Statement dated _______ __, 199_. THIS
PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL
BE VOTED "FOR" PROPOSAL 1.
This instruction may be revoked at any time prior to its exercise at the Meeting
by execution of a subsequent proxy card, by written notice to the Secretary of
the Fund or by voting in person at the Meeting.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY IN ENCLOSED ENVELOPE.
Signature should be exactly as the name or names appear on this proxy card. If
the individual signing the proxy card is a fiduciary (e.g., attorney, executor,
trustee, guardian, etc.), the individual's signature must be followed by his
full title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------ ------------------------
- ------------------------ ------------------------
- ------------------------ ------------------------
<PAGE>19
[REVERSE SIDE]
<TABLE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
.
<C> <S>
VOTE THIS PROXY CARD TODAY! THE BOARD OF DIRECTORS/TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS A VOTE
YOUR PROMPT RESPONSE WILL SAVE FOR PROPOSAL 1.
THE EXPENSE OF ADDITIONAL MAILINGS
This proxy, if properly For Against Abstain
executed, will be voted in 1) To approve the new Sub-Investment [ ] [ ] [ ]
this manner directed by the Advisory Agreement between the Fund,
undersigned shareholder. Warburg, Pincus Counselors, Inc.
IF NO DIRECTION IS MADE, THIS and Abbott Capital Management, L.P.
PROXY WILL
BE VOTED "FOR" APPROVAL OF
PROPOSAL 1.
2) To transact such other business as may properly come before the Meeting or
any adjournment thereof.
RECORD DATE SHARES:
Please be sure to sign and date Mark box at right if comments or address change
this Proxy. Date have been noted on the reverse side. [ ]
Shareholder sign here Co-owner sign here:
- ------------------- -------------------
DETACH CARD
</TABLE>
<PAGE>20
APPENDIX A
WARBURG, PINCUS GLOBAL POST-VENTURE CAPITAL FUND, INC.
OWNERS OF MORE THAN
5% OF THE OUTSTANDING SHARES
OF A CLASS OF THE FUND
COMMON SHARES
Number of Percent of
Common Shares Common Shares
Owned of Record Outstanding
Name and Address --------------- -------------
- ----------------
ADVISOR SHARES
Number of
Advisor Shares Percent of
Beneficially Advisor Shares
Owned Outstanding
Name and Address -------------- --------------
Warburg, Pincus Counsellors, Inc.
Attn.: Stephen Distler
466 Lexington Avenue
New York, NY 10017
* The Fund believes that these entities are not the beneficial owners of
shares held of record by them.
<PAGE>21
WARBURG, PINCUS POST-VENTURE CAPITAL FUND, INC.
OWNERS OF MORE THAN
5% OF THE OUTSTANDING SHARES
OF A CLASS OF THE FUND
COMMON SHARES
Number of Percent of
Common Shares Common Shares
Owned of Record Outstanding
Name and Address --------------- -------------
- ----------------
Charles Schwab & Co., Inc. [991,604.095] [24.55%]
Reinvest Account
Attn.: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Charles Schwab & Co., Inc. [204,783.412] [5.07%]
Cash Account
Attn.: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. [382,100.804] [9.46%]
P.O. Box 3908
Church Street Station
New York, NY 10008
ADVISOR SHARES
Number of
Advisor Shares Percent of
Beneficially Advisor Shares
Owned Outstanding
Name and Address -------------- --------------
Warburg, Pincus Counsellors, Inc. [100] [83.88%]
Attn.: Stephen Distler
466 Lexington Avenue
New York, NY 10017
* The Fund believes that these entities are not the beneficial owners of
shares held of record by them.
<PAGE>22
WARBURG, PINCUS TRUST
(POST-VENTURE CAPITAL PORTFOLIO)
OWNERS OF MORE THAN
5% OF THE OUTSTANDING SHARES
OF A CLASS OF THE FUND
Number of Percent of
Shares Shares
Owned of Record Outstanding
Name and Address --------------- ------------
- ----------------
<PAGE>23
APPENDIX B
FORM OF
SUB-INVESTMENT ADVISORY AGREEMENT
______ __, 199_
Abbott Capital Management, L.P.
50 Rowes Wharf
Boston, MA 02110
Dear Sirs:
Warburg, Pincus ______ Fund (the "Fund"), a [corporation/
business trust] organized and existing under the laws of [the State of
Maryland/The Commonwealth of Massachusetts], and Warburg, Pincus Counsellors,
Inc., as its investment adviser ("Warburg"), herewith confirms their agreement
with Abbott Capital Management, L.P. (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-Advisor copies
of all amendments to the Prospectus and SAI on an on-going basis. The Fund
employs Warburg as its investment adviser. Warburg 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-Investment Adviser
(a) Subject to the supervision and direction of Warburg, 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
1940 Act and the Investment Advisers Act of 1940, as amended (the
<PAGE>24
"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 Warburg from time to
time. In connection therewith, the Sub-Adviser will:
(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 Trust's Board of
Directors for consideration at quarterly meetings of the Board on the
Investments and furnish Warburg and the Fund's Board of Directors with
such periodic and special reports as the Fund or Warburg 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.
<PAGE>25
(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 Warburg 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 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 Warburg and the Fund all
information reasonably requested by Warburg 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 Portfolio, 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
Portfolio.
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
<PAGE>26
which is required to be stated therein or necessary to make the statements
contained therein not misleading.
(b) The Sub-Adviser agrees to notify Warburg 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 Warburg 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 has not objected to its use within ten (10)
business days after such material has been sent to it. The Fund or Warburg 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 Warburg 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 Warburg and the Fund copies
of its Form ADV with all exhibits and attachments thereto and will hereinafter
supply Warburg, 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
<PAGE>27
the Fund's investment objectives, policies and restrictions contained therein.
6. Compliance
(a) The Sub-Adviser agrees that it shall promptly notify
Warburg 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 objectives, policies and restrictions
as stated in the Prospectus or SAI or is otherwise in violation of applicable
law.
(b) Warburg agrees that it shall promptly notify the
Sub-Adviser in the event that the SEC has censured Warburg or the Fund; placed
limitations upon any of their activities, functions or operations; suspended or
revoked Warburg'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 Warburg shall be given access to the records
of the Sub-Adviser at reasonable times solely for the purpose of monitoring
compliance 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 Warburg 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 Warburg 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.
<PAGE>28
(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) Warburg 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, Warburg 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, Warburg 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 Warburg, 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 Warburg in
connection 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 Warburg 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 Warburg
understand and agree
<PAGE>29
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, Warburg, 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 Warburg (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 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 Warburg, 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 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
Internal Revenue Code or under any other statute, at common law or otherwise,
which (i) may be based upon any
<PAGE>30
misfeasance, malfeasance or nonfeasance by the Fund or Warburg, or any of their
respective employees or representatives, or any affiliate of or any person
acting on behalf of the Fund or Warburg, (ii) may be based upon a failure by
the Fund or Warburg 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 Warburg, 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
Portfolio 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
<PAGE>31
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 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, Warburg 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 Warburg 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 Warburg 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, Warburg or the
Sub-Adviser or affiliates of any of them; fees of any pricing
<PAGE>32
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.
13. Term of Agreement
This Agreement shall commence on the date first written above
and shall continue until April 17, 1998, 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 Funds
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 Warburg 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 shares on 60 (sixty)
days' written notice to Warburg and the Sub-Adviser, or (iii) by the Sub-Adviser
upon 60 (sixty) days' written notice to the Fund and Warburg. 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 Warburg 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
<PAGE>33
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, L.P., 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 Warburg, to Warburg, Pincus
Counsellors, Inc., 466 Lexington Avenue, New York, New York 10017-3147
(Attention: Eugene P. Grace), telephone: (212) 878-0600, telecopy: (212)
878-9351, and (c) if to the Fund, c/o Warburg Pincus Funds, 466 Lexington
Avenue, New York, New York 10017-3147, telephone: (212) 878-0600, telecopy:
(212) 878-9351 (Attention: President).
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 Warburg or the Fund.
(d) This Agreement may be executed in counterparts, with the
same effect as if the signatures were upon the same instrument.
<PAGE>34
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below
indicated, whereupon it shall become a binding agreement between us.
Very truly yours,
WARBURG, PINCUS COUNSELLORS, INC.
By: _________________________________
Name:
Title:
WARBURG PINCUS ________ FUND
By: _________________________________
Name:
Title:
Accepted:
ABBOTT CAPITAL MANAGEMENT, L.P.
By: _______________________________
Name:
Title:
<PAGE>35
APPENDIX C
FORM OF
SUB-INVESTMENT ADVISORY AGREEMENT
________ __, 199_
Abbott Capital Management, L.L.C.
50 Rowes Wharf
Boston, MA 02110
Dear Sirs:
Warburg, Pincus __________ Fund (the "Fund"), a
[corporation/business trust] organized and existing under the laws of [the State
of Maryland/The Commonwealth of Massachusetts], and Warburg, Pincus Counsellors,
Inc., as its investment adviser ("Warburg"), herewith confirms their agreement
with Abbott Capital Management, L.L.C. (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-Advisor copies
of all amendments to the Prospectus and SAI on an on-going basis. The Fund
employs Warburg as its investment adviser. Warburg 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-Investment Adviser
(a) Subject to the supervision and direction of Warburg,
the Sub-Adviser will provide investment advisory assistance and portfolio
management advice to the Fund in
<PAGE>36
accordance with (a) the Articles of Incorporation, (b) 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 Warburg from time to time. In connection
therewith, the Sub-Adviser will:
(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 Warburg and the Fund's Board of Directors with
such periodic and special reports as the Fund or Warburg 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.
<PAGE>37
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 Warburg 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 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 Warburg and the Fund all
information reasonably requested by Warburg 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
<PAGE>38
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 Warburg 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 Warburg 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 has not objected to its use within ten (10)
business days after such material has been sent to it. The Fund or Warburg 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 Warburg 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 Warburg and the Fund copies
of its Form ADV with all exhibits and attachments thereto and will hereinafter
supply Warburg, 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,
<PAGE>39
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
Warburg 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 objectives, policies and restrictions
as stated in the Prospectus or SAI or is otherwise in violation of applicable
law.
(b) Warburg agrees that it shall promptly notify the
Sub-Adviser in the event that the SEC has censured Warburg or the Fund; placed
limitations upon any of their activities, functions or operations; suspended or
revoked Warburg'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 Warburg shall be given access to the records
of the Sub-Adviser at reasonable times solely for the purpose of monitoring
compliance 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 Warburg 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 Warburg or the Fund any of such records upon the request of
either of
<PAGE>40
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) Warburg 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, Warburg 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, Warburg 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 Warburg, 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 Warburg in
connection 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
<PAGE>41
any liability to the Fund or Warburg 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 Warburg 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, Warburg, 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 Warburg (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 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 Warburg, 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
<PAGE>42
as "Sub-Adviser Indemnified Persons") against any 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 Internal Revenue 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 Warburg, or any of their
respective employees or representatives, or any affiliate of or any person
acting on behalf of the Fund or Warburg, (ii) may be based upon a failure by
the Fund or Warburg 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 Warburg, 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
Portfolio 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
<PAGE>43
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 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, Warburg 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 Warburg 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 Warburg 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).
<PAGE>44
(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, Warburg 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.
13. Term of Agreement
This Agreement shall commence on the date first written above
and shall continue until April 17, 1998, 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 Warburg 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 Portfolio's shares on 60
(sixty) days' written notice to Warburg and the Sub-Adviser, or (iii) by the
Sub-Adviser upon 60 (sixty) days' written notice to the Fund and Warburg. 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 Warburg 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.
<PAGE>45
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 Portfolio 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, L.L.C., 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 Warburg, to Warburg, Pincus
Counsellors, Inc., 466 Lexington Avenue, New York, New York 10017-3147
(Attention: Eugene P. Grace), telephone: (212) 878-0600, telecopy: (212)
878-9351, and (c) if to the Fund, c/o Warburg Pincus Funds, 466 Lexington
Avenue, New York, New York 10017-3147, telephone: (212) 878-0600, telecopy:
(212) 878-9351 (Attention: President).
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.
<PAGE>46
(c) Nothing herein shall be construed to make the Sub-Adviser
an agent of Warburg 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,
WARBURG, PINCUS COUNSELLORS, INC.
By: _________________________________
Name:
Title:
WARBURG PINCUS _________ FUND
By: _________________________________
Name:
Title:
ABBOTT CAPITAL MANAGEMENT, L.L.C.
By: _______________________________
Name:
Title:
