As filed with the Securities and Exchange Commission on November 1, 2002
Securities Act File No. 33-20827
Investment Company Act File No. 811-5518
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. __ [_]
Post-Effective Amendment No. 80 [X]
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and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 82 [X]
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----------------------
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THE RBB FUND, INC.
(Exact Name of Registrant as Specified in Charter)
Bellevue Park Corporate Center
400 Bellevue Parkway
Wilmington, DE 19809
(Address of Principal Executive Offices)
Registrant's Telephone Number: (302) 792-2555
Copies to:
TIMOTHY K. BIEDRZYCKI MICHAEL P. MALLOY, ESQUIRE
PFPC, Inc. Drinker Biddle & Reath LLP
400 Bellevue Parkway One Logan Square
Wilmington, DE 19809 18/th/ & Cherry Streets
(Name and Address of Agent for Service) Philadelphia, PA 19103-6996
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It is proposed that this filing will become effective (check appropriate box)
[_] immediately upon filing pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[X] on December 31, 2002 pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[_] This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Title of Securities Being Registered ............... Shares of Common Stock
n/i numeric investors family of funds
n/i numeric investors Emerging Growth Fund
(formerly Micro Cap Fund)
n/i numeric investors Growth Fund
n/i numeric investors Mid Cap Fund
n/i numeric investors Small Cap Value Fund
advised by Numeric Investors L.P.(R)
The securities described in this prospectus have been registered with the Securities and Exchange Commission (SEC). The SEC, however, has not judged these securities for their investment merit and has not determined the accuracy or adequacy of this prospectus. Anyone who tells you otherwise is committing a criminal offense.
Prospectus
December 31, 2002
TABLE OF CONTENTS
INTRODUCTION TO RISK/RETURN SUMMARY
Who Should Invest...................................... 1
Numeric's Investment Style............................. 1
DESCRIPTIONS OF THE FUNDS
n/i numeric investors Emerging Growth Fund (formerly Micro
A look at the goals, Cap Fund)............................................ 3
strategies, risks, n/i numeric investors Growth Fund...................... 5
expenses and financial n/i numeric investors Mid Cap Fund..................... 7
history of each Fund. n/i numeric investors Small Cap Value Fund............. 9
Additional Information on Fund Investments............. 12
MANAGEMENT
Details on the Investment Adviser..................................... 12
management and Service Provider Chart................................. 14
operations of the Funds.
SHAREHOLDER INFORMATION
Policies and instructions for Pricing of Fund Shares................................. 15
opening, maintaining and Purchase of Fund Shares................................ 15
closing an account in any of Redemption of Fund Shares.............................. 17
the Funds. Exchange Privilege..................................... 19
Dividends and Distributions............................ 20
Taxes.................................................. 20
FINANCIAL HIGHLIGHTS......................................... 21
FOR MORE INFORMATION....................... See Back Cover
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INTRODUCTION TO RISK/RETURN SUMMARY
This Prospectus has been written to provide you with the information you need to make an informed decision about whether to invest in the n/i numeric investors family of funds of The RBB Fund, Inc. (the "Company").
The four classes of common stock of the Company represent interests in the n/i numeric investors Emerging Growth Fund (formerly the Micro Cap Fund), n/i numeric investors Growth Fund, n/i numeric investors Mid Cap Fund and n/i numeric investors Small Cap Value Fund (each a "Fund," collectively the "Funds"). This Prospectus and the Statement of Additional Information incorporated herein relate solely to the n/i numeric investors family of funds of the Company.
This Prospectus has been organized so that each Fund has its own short section with important facts about that particular Fund. After you read this introduction and the short sections about Fund strategies and risks, read the sections about Purchase and Redemption of Fund Shares, which apply to all the Funds offered by this Prospectus.
Who Should Invest?
Long-Term Investors Seeking Capital Appreciation. The Funds are intended for investors who are seeking long-term capital appreciation, and who do not need to earn current income from their investment in the Funds. Because of the risks associated with common stock investments, the Funds are intended to be a long-term investment vehicle and are not designed to provide investors with a means of speculating on short-term stock market movements. The Funds should not be considered a complete investment program. Most investors should maintain diversified holdings of securities with different risk characteristics--including common stocks, bonds and money market instruments. Investors may also wish to complement an investment in the Funds with other types of common stock investments.
General Considerations for Taxable Investors. High portfolio turnover (100% or more) can adversely affect taxable investors, especially those in higher marginal tax brackets, in two ways. First, short-term capital gains, which are a by-product of high turnover investment strategies, are currently taxed at rates comparable to ordinary income rates. Ordinary income tax rates are higher than long-term capital gain tax rates for middle and upper income taxpayers. Second, the frequent realization of gains, which causes taxes to be paid frequently, is less advantageous than infrequent realization of gains. Infrequent realization of gains allows the payment of taxes to be deferred to later years, allowing more of the gains to compound before taxes are paid. Numeric Investors L.P.(R) advises all of its investors to consider their ability to allocate tax-deferred assets (such as IRAs and other retirement plans) to active strategies, and taxable assets to lower turnover passive strategies, when considering their investment options.
Numeric's Investment Style
Quantitative Approach. To meet each Fund's investment objective, Numeric Investors L.P.(R) ("Numeric"), the Funds' investment adviser, uses quantitative investment techniques. These quantitative techniques rely on several proprietary computer models developed by Numeric to aid in the stock selection process. Currently, Numeric classifies their models into the following types:
. the Fair Value Stock Model--This model attempts to identify companies whose stocks Numeric believes are mispriced relative to their projected earnings, growth and quality. In searching for stocks with market valuations lower than the average market valuation of stocks, this model considers, among other characteristics, price to earnings ratios and price to book ratios.
. the Growth Stock Model or Estrend(TM) Model--This model attempts to identify companies whose earnings are improving more rapidly than the earnings of the average company. It also measures recent changes in Wall Street analysts' earnings forecasts for each company, selecting for purchase companies judged likely to experience upward revisions in earnings estimates, and for sale companies thought likely to suffer downward revisions.
. the Quality of Earnings Model--This model measures the quality of earnings that a company is reporting. The Quality of Earnings Model aims to differentiate between companies with aggressive and conservative accounting practices. Numeric believes that companies using aggressive accounting practices may be prone to future
earnings and revenue shocks whereas companies pursuing conservative accounting practices may have more of a cushion to make their estimates in the future. Careful analysis of balance sheet, income statement, accounting practices and cash flow statements leads to a Quality of Earnings score for each company.
The Fair Value Stock, Growth Stock and Quality of Earnings Models are intentionally complementary to each other. The insights they provide about each stock are from different perspectives and Numeric believes each model tends to be more effective during periods when one of the others is less effective. Combined, Numeric believes they are more likely to generate more consistent excess returns. Numeric's models incorporate dozens of characteristics for more than 2,000 companies analyzed, rapidly incorporating new market information during each trading day. The Funds' portfolio managers closely monitor this flow of information to identify what they believe are the most immediate investment opportunities.
Capital Limitation. Numeric pursues an unusual business strategy for an investment manager in that it strictly limits the amount of capital that it accepts into a Fund. It is Numeric's belief that as a pool of assets in any one strategy grows larger, the transaction costs associated with buying and selling securities for the strategy correspondingly increase. Numeric believes that too large a pool of capital in any one strategy will inevitably reduce its ability to achieve investment results that meet its objectives.
As a result, each of the Funds will close to further investment when increasing transaction costs begin to diminish the Fund's performance. Generally, when a Fund is closed to further investment, its shares are offered only to existing shareholders of the Fund and certain other persons, who generally are subject to cumulative, maximum purchase amounts, as follows: (i) persons who already hold shares of this Fund directly or through accounts maintained by brokers by arrangement with the Company, (ii) existing and future clients of financial advisors and planners whose clients already hold shares of this Fund, and (iii) employees of Numeric and their spouses and children. Other persons who are shareholders of other n/i numeric investors Funds are not permitted to acquire shares of a closed Fund by exchange. Distributions to all shareholders of the closed Fund will continue to be reinvested unless a shareholder has elected otherwise.
Numeric reserves the right to reopen a closed Fund to new investments at any time or to further restrict sales of its shares.
Currently, the n/i numeric investors Emerging Growth Fund is closed to new investments, subject to the general limitations described above.
DESCRIPTIONS OF THE FUNDS
n/i numeric investors Emerging Growth Fund (formerly the Micro Cap Fund)
Ticker Symbol: NIMCX
Investment Goal
The Fund's investment goal is to provide long-term capital appreciation.
Primary Investment Strategies
As noted under "Capital Limitation" on page 2 of this prospectus, the Fund is currently closed to new investments.
Under normal circumstances, the Fund invests in common stock of companies with micro and small sized capitalizations, similar to companies represented in the Russell 2000 Growth Index, and higher than average forecast earnings growth rates. Numeric determines its stock selection decisions for this Fund primarily on the basis of its Growth Stock and Quality of Earnings Models. Considered, but of less importance, is the Fair Value Stock Model.
The Fund may use futures to reduce risk to the Fund as a whole (hedge); they may also be used to maintain liquidity, commit cash pending investment or increase returns.
As noted under "Capital Limitation" on page 2 of this prospectus, the Fund is currently closed to new investors.
Key Risks
. Common stocks may decline over short or even extended periods of time. Equity markets tend to be cyclical; there are times when stock prices generally increase, and other times when they generally decrease. Therefore, you could lose money by investing in the Fund.
. The net asset value of the Fund will change with changes in the market value of its portfolio positions.
. Investments in micro-cap companies involve greater risk than is customarily associated with larger more established companies due to the greater business risks of small size, limited markets and financial resources, narrow product lines and frequent lack of depth of management.
. The securities of smaller-sized companies may be subject to more abrupt or erratic market movements than securities of larger more established companies.
. The Fund's micro-cap securities may underperform small-cap, mid-cap or large-cap securities, or the equity markets as a whole when they are out of favor.
. The Fund's use of futures may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security or a market to fluctuate significantly in price within a short time period.
Portfolio Turnover--The more often stocks are traded, the more the Fund will be charged brokerage commissions and other transaction costs that lower performance. In addition to higher transaction costs, high portfolio turnover, such as that experienced by the Fund, could result in the realization of taxable capital gains. Because the Fund has higher than average portfolio turnover and resultant transaction costs, the Fund is better suited for tax-deferred type accounts because of the potential for taxable capital gains.
Risk/Return Information
The chart below illustrates the Fund's long-term performance. The information shows you how the Fund's performance has varied year by year and provides some indication of the risks of investing in the Fund. The chart and table below both assume reinvestment of dividends and distributions. As with all such investments, past performance is not an indication of future results. Performance reflects fee waivers in effect. If fee waivers were not in place, the Fund's performance would be reduced.
Annual Total Returns
As of December 31
[CHART]
1997 1998 1999 2000 2001
------ ------ ------ ----- -----
30.86% 16.27% 34.46% 2.23% 0.15%
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Year-to-date total return for the nine months ended September 30, 2002: 0.00%
Best and Worst Quarterly Performance (for the periods reflected in the chart above)
Best Quarter: 28.66% (quarter ended
December 31, 1998)
Worst Quarter: (19.55)% (quarter ended
September 30, 2001)
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Average Annual Total Returns
The table below compares the Fund's average annual total returns for the past 1 and 5 calendar years and since inception to the average annual total returns of a broad-based securities market index for the same periods. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The table, like the bar chart, provides some indication of the risks of investing in the Fund by showing how the Fund's average annual total returns for 1 year, 5 years and since inception compare with those of a broad measure of market performance. Past performance is not necessarily an indicator of how the Fund will perform in the future.
Average Annual Total Returns
As of December 31, 2001
Since
1 Year 5 Years inception
------ ------- ---------
n/i numeric investors
Emerging Growth Fund
Before Taxes................ 0.15% 15.94% 17.40%*
----- ----- -----
n/i numeric investors
Emerging Growth Fund
After Taxes on
Distributions............... 0.15% 9.48% 11.52%
----- ----- -----
n/i numeric investors
Emerging Growth Fund
After Taxes on
Distributions and Sale of
Fund Shares................. 0.09% 9.74% 11.39%
----- ----- -----
Russell 2000 Growth Index
(reflects no deduction for
fees, expenses or taxes)/1/ (9.23)% 2.84% 1.21%
----- ----- -----
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* Commenced operations on June 3, 1996.
/1/ The Russell 2000 Growth Index contains stocks from the Russell 2000 with greater-than-average growth orientation. Companies in this index generally have higher price to book and price to earnings ratios. The Russell 2000 is an index of stocks 1,001 through 3,000 in the Russell 3000 Index as ranked by the total market capitalization. This index is segmented into growth and value categories.
Expenses and Fees
As a shareholder you pay certain fees and expenses. Annual Fund operating expenses are paid out of Fund assets and are reflected in the Fund's price.
The table below describes the fees and expenses that you may pay if you buy and hold shares of the Fund. The table is based on expenses for the most recent fiscal year ended (August 31, 2002) restated to reflect the reduction of fee waivers.
Shareholder Fees (fees paid directly from your investment)
Maximum sales charge imposed on purchases................. None Maximum deferred sales charge.. None Maximum sales charge imposed on reinvested dividends......... None Redemption fee(*).............. 2.00% Exchange fee................... None Maximum account fee............ None |
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
Management fees..................... 0.75%
Rule 12b-1 fees..................... None
Other expenses/1/................... 0.51%
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Total annual Fund operating expenses 1.26%
-----
Fee waivers**....................... (0.01)%
-----
Net expenses**...................... 1.25%
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* To prevent the Fund from being adversely affected by the transaction costs associated with short-term shareholder transactions, effective August 12, 2002, the Fund will redeem shares at a price equal to the net asset value of the shares, less an additional transaction fee equal to 2.00% of the net asset value of all such shares redeemed that have been held for less than one year. Such fees are not sales charges or contingent deferred sales charges, but are retained by the Fund for the benefit of all shareholders. Shares purchased prior to August 12, 2002 and held for less than one year are subject to a transaction fee upon redemption of 1.50% of the net asset value of all such shares redeemed.
**Numeric has agreed that until December 31, 2003, it will waive advisory fees and reimburse expenses to the extent that total annual Fund operating expenses exceed 1.25%.
/1/"Otherexpenses" include audit, administration, custody, legal, registration, transfer agency and miscellaneous other charges.
Example
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of each period. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual cost may be higher or lower, based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- $127 $399 $691 $1,522 ---- ---- ---- ------ |
n/i numeric investors Growth Fund
Ticker Symbol: NISGX
Investment Goal
The Fund's investment goal is to provide long-term capital appreciation.
Primary Investment Strategies
Under normal circumstances, the Fund invests in common stock of companies with small and mid-sized capitalizations, similar to companies represented in the Russell 2500 Growth Index, and higher than average forecast earnings growth rates. Numeric determines its stock selection decisions for this Fund primarily on the basis of its Growth Stock and Quality of Earnings Models. Considered, but of less importance, is the Fair Value Stock Model.
The Fund may use futures to reduce risk to the Fund as a whole (hedge); they may also be used to maintain liquidity, commit cash pending investment or increase returns.
Key Risks
. Common stocks may decline over short or even extended periods of time. Equity markets tend to be cyclical; there are times when stock prices generally increase, and other times when they generally decrease. Therefore, you could lose money by investing in the Fund.
. The net asset value of the Fund will change with changes in the market value of its portfolio positions.
. Investments in smaller-cap companies involve greater risk than is customarily associated with larger more established companies due to the greater business risks of small size, limited markets and financial resources, narrow product lines and frequent lack of depth of management.
. The securities of smaller-sized companies may be subject to more abrupt or erratic market movements than securities of larger more established companies.
. The Fund's securities may underperform other securities, or the equity markets as a whole when they are out of favor.
. The Fund's use of futures may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security or a market to fluctuate significantly in price within a short time period.
Portfolio Turnover--The more often stocks are traded, the more the Fund will be charged brokerage commissions and other transaction costs that lower performance. In addition to higher transaction costs, high portfolio turnover, such as that experienced by the Fund, could result in the realization of taxable capital gains. Because the Fund has higher than average portfolio turnover and resultant transaction costs, the Fund is better suited for tax-deferred type accounts because of the potential for taxable capital gains.
Risk/Return Information
The chart below illustrates the Fund's long-term performance. The information shows you how the Fund's performance has varied year by year and provides some indication of the risks of investing in the Fund. The chart assumes reinvestment of dividends and distributions. As with all such investments, past performance is not an indication of future results. Performance reflects fee waivers in effect. If fee waivers were not in place, the Fund's performance would be reduced.
Annual Total Returns
As of December 31
[CHART]
1997 1998 1999 2000 2001
------ ----- ------ ------- --------
15.61% 2.22% 49.47% (4.31)% (14.91)%
|
Year-to-date total return for the nine months ended September 30, 2002: (5.81)%
Best and Worst Quarterly Performance (for the periods reflected in the chart above)
Best Quarter: 31.08% (quarter ended
December 31, 1999 )
Worst Quarter: (25.96)% (quarter ended
September 30, 1998)
|
The table below compares the Fund's average annual total returns for the past 1 and 5 calendar years and since inception to the average annual total returns of a broad-based securities market index for the same periods. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The table, like the bar chart, provides some indication of the risks of investing in the Fund by showing how the Fund's average annual total returns for 1 year, 5 years and since inception compare with those of a broad measure of market performance. Past performance is not necessarily an indicator of how the Fund will perform in the future.
Average Annual Total Returns
As of December 31, 2001
Since
1 Year 5 Years inception
------ ------- ---------
n/i numeric investors
Growth Fund Before
Taxes....................... (14.91)% 7.54% 8.64%*
n/i numeric investors
Growth Fund After Taxes
on Distributions............ (14.91)% 3.41% 4.89%
n/i numeric investors
Growth Fund After Taxes
on Distributions and Sale
of Fund Shares.............. (9.08)% 4.43% 5.53%
Russell 2500 Growth Index
(reflects no deduction for
fees, expenses or taxes)/1/ (10.83)% 6.59% 5.35%
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* Commenced operations on June 3, 1996.
/1 /The Russell 2500 Growth Index is an index of stocks 501 through 3,000 in the Russell 3000 Index, as ranked by total market capitalization. This index is segmented into growth and value categories. The Russell 2500 Growth Index contains stocks from the Russell 2500 with greater-than-average growth orientation. Companies in this index generally have higher price to book and price to earnings ratios.
Expenses and Fees
As a shareholder you pay certain fees and expenses. Annual Fund operating expenses are paid out of Fund assets and are reflected in the Fund's price.
The table below describes the fees and expenses that you may pay if you buy and hold shares of the Fund. The table is based on expenses for the most recent fiscal year ended (August 31, 2002) restated to reflect the maximum performance fee adjustment to which Numeric may be entitled under certain performance arrangements.
Shareholder Fees (fees paid directly from your investment)
Maximum sales charge imposed on purchases................. None Maximum deferred sales charge.. None Maximum sales charge imposed on reinvested dividends......... None Redemption fee(*).............. 2.00% Exchange fee................... None Maximum account fee............ None |
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
Management fees+.................... 1.35%
Rule 12b-1 fees..................... None
Other expenses/1/................... 0.68%
-----
Total annual Fund operating expenses 2.03%
-----
Fee waivers**....................... (0.18)%
-----
Net expenses**...................... 1.85%
=====
|
may be applicable only if the Fund outperforms the Russell 2500 Growth Index by 900 basis points (9%). See "Management--Investment Adviser" for a further discussion. Prior to January 1, 2001, Numeric was entitled to a management fee of 0.75% of the Fund's average daily net assets.
* To prevent the Fund from being adversely affected by the transaction costs associated with short-term shareholder transactions, effective August 12, 2002, the Fund will redeem shares at a price equal to the net asset value of the shares, less an additional transaction fee equal to 2.00% of the net asset value of all such shares redeemed that have been held for less than one year. Such fees are not sales charges or contingent deferred sales charges, but are retained by the Fund for the benefit of all shareholders. Shares purchased prior to August 12, 2002 and held for less than one year are subject to a transaction fee upon redemption of 1.50% of the net asset value of all such shares redeemed.
**Numeric has agreed that until December 31, 2003, it will reimburse expenses to the extent that the Fund's other expenses exceed 0.50%. For the fiscal year ended August 31, 2002, the Fund's other expenses were 0.68% before fee waivers and expense reimbursements.
/1/"Otherexpenses" include audit, administration, custody, legal, registration, transfer agency and miscellaneous other charges.
Example
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of each period. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your cost would be:
1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- $188 $619 $1,077 $2,344 ------ ------- ------- -------- |
n/i numeric investors Mid Cap Fund
Ticker Symbol: NIGVX
Investment Goal
The Fund's investment goal is to provide long-term capital appreciation.
Primary Investment Strategies
Under normal circumstances, the Fund invests at least 80% of net assets (including borrowings for investment purposes) in common stock of companies with mid-sized capitalizations which the Fund defines as the 151st to the 1,000th largest companies (excluding American Depositary Receipts) as ranked by market capitalization. The Fund will notify shareholders sixty days in advance of any change in this policy. Numeric determines its stock selection decisions for this Fund based on its Growth Stock, Fair Value Stock and Quality of Earnings Models.
The Fund may use futures to reduce risk to the Fund as a whole (hedge); they may also be used to maintain liquidity, commit cash pending investment or increase returns.
Key Risks
. Common stocks may decline over short or even extended periods of time. Equity markets tend to be cyclical; there are times when stock prices generally increase, and other times when they generally decrease. Therefore, you could lose money by investing in the Fund.
. The net asset value of the Fund will change with changes in the market value of its portfolio positions.
. Investments in smaller-cap companies involve greater risk than is customarily associated with larger more established companies due to the greater business risks of small size, limited markets and financial resources, narrow product lines and frequent lack of depth of management.
. The securities of smaller-sized companies may be subject to more abrupt or erratic market movements than securities of larger more established companies.
. The Fund's securities may underperform other securities, or the equity markets as a whole when they are out of favor.
. The Fund's use of futures may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security or a market to fluctuate significantly in price within a short time period.
Portfolio Turnover--The more often stocks are traded, the more the Fund will be charged brokerage commissions and other transaction costs that lower performance. In addition to higher transaction costs, high portfolio turnover, such as that experienced by the Fund, could result in the realization of taxable capital gains. Because the Fund has higher than average portfolio turnover and resultant transaction costs, the Fund is better suited for tax-deferred type accounts because of the potential for taxable capital gains.
Risk/Return Information
The chart below illustrates the Fund's long-term performance. The information shows you how the Fund's performance has varied year by year and provides some indication of the risks of investing in the Fund. The chart assumes reinvestment of dividends and distributions. As with all such investments, past performance is not an indication of future results. Performance reflects fee waivers in effect. If fee waivers were not in place, the Fund's performance would be reduced.
Annual Total Returns
As of December 31
[CHART]
1997 1998 1999 2000 2001
------ ------ ------ ------ --------
33.07% 13.88% 20.70% 12.11% (12.39)%
|
Year-to-date total return for the nine months ended September 30, 2002: (3.24)%
Best and Worst Quarterly Performance (for the periods reflected in the chart above)
Best Quarter: 20.51% (quarter ended
December 31, 1998)
Worst Quarter: (19.23)% (quarter ended
September 30, 2001)
|
Average Annual Total Returns
The table below compares the Fund's average annual total returns for the past 1 and 5 calendar years and since inception to the average annual total returns of a broad-based securities market index for the same periods. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The table, like the bar chart, provides some indication of the risks of investing in the Fund by showing how the Fund's average annual total returns for 1 year, 5 years and since inception compare with those of a broad measure of market performance. Past performance is not necessarily an indicator of how the Fund will perform in the future.
Average Annual Total Returns
As of December 31, 2001
Since
1 Year 5 Years inception
------ ------- ---------
n/i numeric investors
Mid Cap Fund Before
Taxes....................... (12.39)% 12.43% 13.25%*
n/i numeric investors
Mid Cap Fund After
Taxes on Distributions...... (12.57)% 7.50% 8.75%
n/i numeric investors
Mid Cap Fund After
Taxes on Distributions
and Sale of Fund Shares (7.56)% 7.65% 8.62%
S&P MidCap 400 Index
(reflects no deduction for
fees, expenses or taxes)/1/ (0.60)% 16.10% 15.81%
|
* Commenced operations on June 3, 1996.
/1/ A broad-based index of 400 companies with market capitalizations currently from $102 million to $9,650 million. The Standard & Poor's MidCap 400 Index is a widely accepted, unmanaged index of overall mid-cap stock market performance.
Expenses and Fees
As a shareholder you pay certain fees and expenses. Annual Fund operating expenses are paid out of Fund assets and are reflected in the Fund's price.
The table below describes the fees and expenses that you may pay if you buy and hold shares of the Fund. The table is based on expenses for the most recent fiscal year ended (August 31, 2002) restated to reflect the maximum performance fee adjustment to which Numeric may be entitled under certain performance arrangements.
Shareholder Fees (fees paid directly from your investment)
Maximum sales charge imposed on purchases................. None Maximum deferred sales charge.. None Maximum sales charge imposed on reinvested dividends......... None Redemption fee(*).............. 2.00% Exchange fee................... None Maximum account fee............ None |
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
Management fees+.................... 1.35%
Rule 12b-1 fees..................... None
Other expenses/1/................... 0.92%
-----
Total annual Fund operating expenses 2.27%
-----
Fee waivers**....................... (0.42)%
-----
Net expenses**...................... 1.85%
=====
|
* To prevent the Fund from being adversely affected by the transaction costs associated with short-term shareholder transactions, effective August 12, 2002, the Fund will redeem shares at a price equal to the net asset value of the shares, less an additional transaction fee equal to 2.00% of the net asset value of all such shares redeemed that have been held for less than one year. Such fees are not sales charges or contingent deferred sales charges, but are retained by the Fund for the benefit of all shareholders. Shares purchased prior to August 12, 2002 and held for less than one year are subject to a transaction fee upon redemption of 1.50% of the net asset value of all such shares redeemed.
**Numeric has agreed that until December 31, 2003, it will reimburse expenses to the extent that the Fund's other expenses exceed 0.50%. For the fiscal year ended August 31, 2002, the Fund's other expenses were 0.92% before fee waivers and expense reimbursements.
/1/"Otherexpenses" include audit, administration, custody, legal, registration, transfer agency and miscellaneous other charges.
Example
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of each period. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your cost would be:
1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- $188 $669 $1,177 $2,573 ---- ---- ------ ------ |
n/i numeric investors
Small Cap Value Fund
Ticker Symbol: NISVX
Investment Goal
The Fund's investment goal is to provide long-term capital appreciation.
Primary Investment Strategies
Under normal circumstances, the Fund invests at least 80% of its net assets (including borrowings for investment purposes) in value-oriented common stock of companies with market capitalizations of $2.0 billion or less. The Fund will notify shareholders sixty days in advance of any change in this policy. Numeric determines its stock selection decisions for this Fund primarily on the basis of its Fair Value
Stock and Quality of Earnings Models. Also considered, but of less importance, is the Growth Stock Model.
The Fund may use futures to reduce risk to the Fund as a whole (hedge); they may also be used to maintain liquidity, commit cash pending investment or increase returns.
Key Risks
. Common stocks may decline over short or even extended periods of time. Equity markets tend to be cyclical; there are times when stock prices generally increase, and other times when they generally decrease. Therefore, you could lose money by investing in the Fund.
. The net asset value of the Fund will change with changes in the market value of its portfolio positions.
. Investments in smaller-cap companies involve greater risk than is customarily associated with larger more established companies due to the greater business risks of small size, limited markets and financial resources, narrow product lines and frequent lack of depth of management.
. The securities of smaller-sized companies may be subject to more abrupt or erratic market movements than securities of larger more established companies.
. The Fund's small-cap securities may underperform mid-cap or large-cap securities, or the equity markets as a whole when they are out of favor.
. The Fund's use of futures may reduce returns and/or increase volatility. Volatility is defined as the characteristic of a security or a market to fluctuate significantly in price within a short time period.
Portfolio Turnover--The more often stocks are traded, the more the Fund will be charged brokerage commissions and other transaction costs that lower performance. In addition to higher transaction costs, high portfolio turnover, such as that experienced by the Fund, could result in the realization of taxable capital gains. Because the Fund has higher than average portfolio turnover and resultant transaction costs, the Fund is better suited for tax-deferred type accounts because of the potential for taxable capital gains.
Risk/Return Information
The chart below illustrates the Fund's long-term performance. The information shows you how the Fund's performance has varied year by year and provides some indication of the risks of investing in the Fund. The chart assumes reinvestment of dividends and distributions. As with all such investments, past performance is not an indication of future results. Performance reflects fee waivers in effect. If fee waivers were not in place, the Fund's performance would be reduced.
Annual Total Return
As of December 31
[CHART]
1999 2000 2001
------- ------ ------
(0.63)% 35.61% 27.89%
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Year-to-date total return for the nine months ended September 30, 2002: 14.75%
Best and Worst Quarterly Performance (for the periods reflected in the chart above)
Best Quarter: 22.07% (quarter ended
June 30, 1999)
Worst Quarter: (10.27)% (quarter ended
March 31, 1999)
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Average Annual Total Returns
The table below compares the Fund's average annual total returns for the past calendar year and since inception to the average annual total returns of a broad-based securities market index for the same periods. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The table, like the bar chart, provides some indication of the risks of investing in the Fund by showing how the Fund's average annual total returns for 1 year and since
inception compare with those of a broad measure of market performance. Past performance is not necessarily an indicator of how the Fund will perform in the future.
Average Annual Total Returns
As of December 31, 2001
Since
1 Year inception
------ ---------
n/i numeric investors
Small Cap Value Fund Before
Taxes.............................. 27.89% 20.47%*
n/i numeric investors
Small Cap Value Fund After
Taxes on Distributions............. 20.72% 16.24%
n/i numeric investors
Small Cap Value Fund After
Taxes on Distributions and Sale of
Fund Shares........................ 17.10% 14.43%
Russell 2000 Index (reflects no
deduction for fees, expenses or
taxes)/1/ 14.02% 11.93%
|
* Commenced operations on November 30, 1998.
/1/ The Russell 2000 Value Index contains stocks from the Russell 2000 with greater-than-average value orientation. Companies in this index generally have lower price to book and price to earnings ratios. The Russell 2000 is an index of stocks 1,001 through 3,000 in the Russell 3000 Index as ranked by total market capitalization. This index is segmented into growth and value categories.
Expenses and Fees
As a shareholder you pay certain fees and expenses. Annual Fund operating expenses are paid out of Fund assets and are reflected in the Fund's price.
The table below describes the fees and expenses that you may pay if you buy and hold shares of the Fund. The table is based on expenses for the most recent fiscal year ended (August 31, 2002) restated to reflect the maximum performance fee adjustment to which Numeric may be entitled under certain performance arrangements.
Shareholder Fees (fees paid directly from your investment)
Maximum sales charge imposed on purchases................. None Maximum deferred sales charge.. None Maximum sales charge imposed on reinvested dividends......... None Redemption fee(*).............. 2.00% Exchange fee................... None Maximum account fee............ None |
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
Management fees+.................... 1.35%
Rule 12b-1 fees..................... None
Other expenses/1/................... 0.53%
-----
Total annual Fund operating expenses 1.88%
-----
Fee waivers**....................... (0.03)%
-----
Net expenses**...................... 1.85%
=====
|
* To prevent the Fund from being adversely affected by the transaction costs associated with short-term shareholder transactions, effective August 12, 2002, the Fund will redeem shares at a price equal to the net asset value of the shares, less an additional transaction fee equal to 2.00% of the net asset value of all such shares redeemed that have been held for less than one year. Such fees are not sales charges or contingent deferred sales charges, but are retained by the Fund for the benefit of all shareholders. Shares purchased prior to August 12, 2002 and held for less than one year are subject to a transaction fee upon redemption of 1.50% of the net asset value of all such shares redeemed.
**Numeric has agreed that until December 31, 2003, it will reimburse expenses to the extent that the
Fund's other expenses exceed 0.50%. For the fiscal year ended August 31, 2002, the Fund's other expenses were 0.53% before fee waivers and expense reimbursements.
/1/ "Other expenses" include audit, administration, custody, legal, registration, transfer agency and miscellaneous other charges.
Example
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of each period. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your cost would be:
1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- $188 $588 $1,013 $2,199 ---- ---- ------ ------ |
ADDITIONAL INFORMATION ON FUND INVESTMENTS
Each Fund may lend its portfolio securities to financial institutions. A Fund will receive collateral in cash or high quality securities equal to the current value of the loaned securities. These loans will be limited to 33 1/3% of the value of the Fund's total assets. Lending a Fund's portfolio securities involves the risk of a delay in additional collateral if the value of the securities goes up while they are on loan. There is also the risk of delay in recovering the loaned securities and of losing rights to the collateral if the borrower goes bankrupt.
A Fund may borrow money for temporary or emergency (not leveraging) purposes. Each Fund will not make any additional investments while borrowings exceed 5% of its total assets.
MANAGEMENT
Investment Adviser
Numeric Investors L.P.(R) serves as investment adviser to the Funds. Numeric, whose principal business address is One Memorial Drive, Cambridge, Massachusetts 02142, was organized in October 1989 as a Delaware limited partnership. The firm, which specializes in the active management of U.S. and international equity portfolios using internally developed quantitative stock selection and portfolio risk-control techniques, currently has approximately $4.5 billion in assets under management for individuals, limited partnerships, mutual funds, offshore funds, pension plans and endowment accounts.
Langdon B. Wheeler, CFA is the founder and President of Numeric. Mr. Wheeler received his MBA from Harvard University and an undergraduate degree from Yale University. All investment decisions with respect to the Funds are made by a team of Numeric's Portfolio Management Department. No one person is responsible for making recommendations to that team. The general partner of Numeric is WBE & Associates, LLC, a Delaware limited liability company. The President of WBE & Associates, LLC is Mr. Wheeler.
For the Funds' fiscal year ended August 31, 2002, for its advisory services to the n/i numeric investors Emerging Growth Fund, n/i numeric investors Growth Fund, n/i numeric investors Mid Cap Fund and n/i numeric investors Small Cap Value Fund, Numeric received investment advisory fees of 0.75%, 0.79%, 0.06% and 1.35%, respectively, of each Fund's average daily net assets, after fee waivers and expense reimbursements, if any.
Numeric is entitled to a management fee of 0.75% of the n/i numeric investors Micro Cap Fund's average daily net assets before fee waivers and expense reimbursements, if any.
Numeric is entitled to a performance based fee for the n/i numeric investors Growth Fund, n/i numeric investors Mid Cap Fund and n/i numeric investors Small Cap Value Fund. The performance based fee is calculated at the end of each month using a basic fee of 0.85% of average daily net assets, and a performance fee adjustment based upon each Fund's performance during the last rolling 12-month period. Each Fund's net performance would be compared with the performance of its benchmark index during that same rolling 12-month period. When a Fund's performance is at least 5.00% better than its benchmark, it would pay Numeric more than the basic fee. If a Fund did not perform at least 4.00%
better than its benchmark, Numeric would be paid less than the basic fee. Each 1.00% of the difference in performance between a Fund and its benchmark plus 4.00% during the performance period would result in a 0.10% adjustment to the basic fee. The benchmark index for each of the Growth, Mid Cap and Small Cap Value Funds is the Russell 2500 Growth Index, S&P MidCap 400 Index and Russell 2000 Value Index, respectively.
The maximum annualized performance adjustment rate would be + or - 0.50% of average daily net assets which would be added to or deducted from the basic fee if a Fund outperformed its benchmark index over a rolling 12-month period by 9.00% or more or if it underperformed its benchmark index over a rolling 12-month period. Under the fulcrum fee arrangement, Numeric's fee would never be greater than 1.35% nor less than 0.35% of a Fund's average annualized daily net assets for the preceding month.
Other Service Providers
The following chart shows the Funds' other service providers and includes their addresses and principal activities.
[LOGO]
[LOGO]
SHAREHOLDERS
DISTRIBUTION AND PRINCIPAL DISTRIBUTOR TRANSFER AGENT
SHAREHOLDER PFPC Distributors, Inc. PFPC Inc.
SERVICES 760 Moore Road 400 Bellevue Parkway
Valley Forge, PA 19406 Wilmington, DE 19809
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Distributes shares of the Funds. Handles shareholder services including record-keeping and statements, distribution of dividends and processing of buy and sell requests.
ASSET INVESTMENT ADVISER CUSTODIAN
MANAGEMENT Numeric Investors L.P.(R) Custodial Trust Company
One Memorial Drive 101 Carnegie Center
Cambridge, MA 02142 Princeton, NJ 05840
Manages each Fund's business Holds each Fund's assets,
and investment activities. settles all portfolio trades.
FUND CO-ADMINISTRATOR
OPERATIONS Bear Stearns Funds Management Inc.
383 Madison Avenue
New York, NY 10179
Assists each of the Funds in all
aspects of their administration
and operations
CO-ADMINISTRATOR
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Provides facilities, equipment and
personnel to carry out administrative
services related to each Fund and
calculates each Fund's NAV,
dividends and distributions.
|
BOARD OF DIRECTORS
Supervises the Funds' activities.
SHAREHOLDER INFORMATION
Pricing of Fund Shares
Shares of the Funds are priced at their net asset value ("NAV"). The NAV of each Fund is calculated by adding the value of all its securities to cash and other assets, deducting its actual and accrued liabilities and dividing by the total number of shares outstanding.
Each Fund's NAV is calculated once daily at the close of regular trading on the New York Stock Exchange ("NYSE") (currently 4:00 p.m. Eastern time), each day the NYSE is open. Fund shares will not be priced on the days that the NYSE is closed.
Securities which are listed on stock exchanges are valued at the last sale price on the day the securities are valued or, lacking any sales on such day, at the mean of the bid and asked prices available prior to valuation. In cases where securities are traded on more than one exchange, the securities are generally valued on the exchange designated by the Board of Directors as the primary market. Securities traded in the over-the-counter market and listed on the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") are valued at the last trade price listed on the NASDAQ at the close of regular trading (generally 4:00 p.m. Eastern Time); securities listed on NASDAQ for which there were no sales on that day and other over-the-counter securities are valued at the mean of the bid and asked prices available prior to valuation. Short term debt investments having maturities of 60 days or less are amortized to maturity based on their cost. With the approval of the Company's Board of Directors, a Fund may use a pricing service, bank or broker-dealer experienced in providing valuations to value a Fund's securities. If market quotations are unavailable or deemed unreliable by Numeric's Valuation Committee, securities will be valued at fair value as determined by procedures adopted by the Board.
Purchase of Fund Shares
You may purchase Shares of each Fund at the NAV per share next calculated after your order is received by the Transfer Agent in proper form as described below under "Initial Investment by Mail." After an initial purchase is made, the Transfer Agent will set up an account for you on the Company's records. The minimum initial investment in any Fund is $3,000 and the minimum additional investment is $100. You can only purchase Shares of each Fund on days the NYSE is open and through the means described below.
Initial Investment By Mail. Subject to acceptance by the Company, an account may be opened by completing and signing the application included with this Prospectus and mailing it to the Transfer Agent at the address noted below, together with a check ($3,000 minimum) payable to n/i numeric investors family of funds:
n/i numeric investors family of funds c/o PFPC Inc.
P.O. Box 9832
Providence, RI 02940
The name of the Fund(s) to be purchased should be designated on the application and should appear on the check. Subject to acceptance by the Company, payment for the purchase of Shares received by mail will be credited to a shareholder's account at the NAV per share of the Fund next determined after receipt of payment in good order.
Initial Investment By Wire. Subject to acceptance by the Company, Shares of each Fund may be purchased by wiring federal funds to PNC Bank (see instructions below). In order to use this option your investment must be at least $3,000. A wire charge of $7.50 is assessed and charged to the shareholder. A completed application should be forwarded to the Company at the address noted above under "Initial Investment by Mail" in advance of the wire. For each Fund, notification for purchase of shares must be given to the Transfer Agent at 1-800-348-5031 prior to the close of trading on the NYSE (usually 4:00 p.m. Eastern time) on the same day. (Prior notification must also be received from investors with existing accounts.) Funds should be wired to:
PNC Bank
Philadelphia, Pennsylvania
From: (your name)
ABA# 031-0000-53
Account # 86-1108-2312
F/B/O n/i numeric investors family of funds
Ref. (Fund Name and Account Number)
Federal funds purchases will be accepted only on a day on which the NYSE and PNC Bank are open for business.
Additional Investments. Additional investments may be made at any time by mailing a check to the Transfer Agent at the address noted above under "Initial Investment by Mail" (payable to n/i numeric investors family of funds), or by wiring monies to PNC Bank as outlined above under "Initial Investment by Wire." Additional investments by wire must be at least $3,000. For each Fund, notification for purchase of shares must be given to the Transfer Agent at 1-800-348-5031 prior to the close of trading on the NYSE (usually 4:00 p.m. Eastern time), on the same day. Initial and additional purchases made by check cannot be redeemed until payment of the purchase has been collected.
Additional Investments Via the Internet. You may also purchase Shares of the Funds, up to $25,000 per day with no single trade over $10,000, via the Internet. In order to engage in Internet transactions you must complete and return a separate Internet account application. You can request an Internet account application by contacting Numeric at http://www.numeric.com or by calling 1-800-numeric (686-3742).
After your Internet application is received, you will receive a Welcome Letter that will provide you with further instructions.
The Company employs reasonable procedures to confirm that instructions communicated over the Internet are genuine. Such procedures include, but are not limited to, requiring a separate application for Internet access services and appropriate personal identification for each on-line session, providing written confirmations to the address of record and employing other precautions reasonably designed to protect the integrity, confidentiality and security of shareholder information. Neither the Company, Numeric, PFPC Distributors, PFPC Inc., BSFM nor any agent of the Company will be liable for any loss, liability, cost or expense for following instructions communicated via the Internet that they reasonably believe to be genuine or for following such security procedures. In the event that high volume on the Internet or other technical difficulties make Internet access unavailable, investors may contact the Company through the other methods described herein.
Shareholder Organizations. Shares of the Funds may also be sold to corporations or other institutions such as trusts, foundations or broker-dealers purchasing for the accounts of others ("Shareholder Organizations"). If you purchase and redeem shares of the Funds through a Shareholder Organization, you may be charged a transaction-based fee or other fee for the services of such organization. Each Shareholder Organization is responsible for transmitting to its customers a schedule of any such fees and information regarding any additional or different conditions regarding purchases and redemptions. Customers of Shareholder Organizations should read this Prospectus in light of the terms governing accounts with their organization. The Company does not pay to or receive compensation from Shareholder Organizations for the sale of Shares. The Company officers are authorized to waive the minimum initial and subsequent investment requirements.
Automatic Investment Plan. Additional investments in Shares of the Funds may be made automatically by authorizing the Transfer Agent to withdraw funds from your bank account through an Automatic Investment Plan. Investors desiring to participate in an Automatic Investment Plan should call the Transfer Agent at 1-800-348-5031 to obtain the appropriate forms, or complete the appropriate section of the Application included with this Prospectus. The minimum initial investment for an Automatic Investment Plan is $1,000, with minimum monthly payments of $100.
IRA Accounts. Shares of the Funds may be purchased in conjunction with individual retirement accounts ("IRAs"), rollover IRAs, or pension, profit-sharing or other employer benefit plans. Contact the Transfer Agent for further information as to applications and annual fees. To determine whether the benefits of an IRA are available and/or appropriate, a shareholder should consult with a tax adviser.
Other Purchase Information. The Company reserves the right, in its sole discretion, to suspend the offering of shares of its Funds or to reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Funds.
Closing of Funds. Numeric will monitor the Funds' total assets and may close any of the Funds at any time to new investments or new accounts due to concerns that a significant increase in the size of a Fund may adversely affect the implementation of Numeric's investment strategy. Numeric may also
choose to reopen a closed fund to new investments at any time, and may subsequently close such Fund again should concerns regarding Fund size recur. Numeric reserves the right while a Fund is closed to accept new investments from any of its employees or their spouses, parents or children, or to further restrict the sale of its shares. If a Fund closes to new investments, the following may apply:
. The closed Fund would only be offered to certain existing shareholders of that Fund and certain other persons, who are generally subject to cumulative, maximum purchase amounts, as follows:
a.persons who already hold shares of the closed Fund directly or through accounts maintained by brokers by arrangement with the Company,
b.existing and future clients of financial advisors and planners whose clients already hold shares of the closed Fund, and
c.employees of Numeric and their spouses and children.
Other persons who are shareholders of other n/i numeric investors family of funds are not permitted to acquire shares of the closed Fund by exchange. Other purchase limitations may be implemented at the time of closing. Distributions to all shareholders of the closed Fund will continue to be reinvested unless a shareholder elected otherwise.
Redemption of Fund Shares
You may redeem Shares of the Funds at the next NAV calculated after a redemption request is received by the Transfer Agent in proper form. The NAV is calculated as of the close of trading on the NYSE (usually 4:00 p.m. Eastern time). You can only redeem shares of the Funds on days the NYSE is open and through the means described below.
You may redeem Shares of each Fund by mail, or, if you are authorized, by telephone or via the Internet. There is no charge for a redemption. However, effective August 12, 2002, if you redeem Shares held for less than one year, a transaction fee of 2.00% of the net asset value of the Shares redeemed at the time of the redemption will be charged. Shares purchased during the period prior to August 12, 2002 which are held for less than one year are subject to a transaction fee of 1.50% of the net asset value of all such shares upon redemption. This additional transaction fee is paid to the affected Fund, not the adviser, distributor or transfer agent as reimbursement for transaction costs associated with redemptions. The value of Shares redeemed may be more or less than the purchase price, depending on the market value of the investment securities held by the Fund. For purposes of this redemption feature, Shares purchased first will be considered to be Shares first redeemed.
Redemption By Mail. Your redemption requests should be addressed to n/i numeric investors family of funds, c/o PFPC Inc., P.O. Box 9832, Providence, RI 02940 and must include:
a.a letter of instruction specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are registered;
b.any required signature guarantees, which are required when (i) the redemption request proceeds are to be sent to someone other than the registered shareholder(s) or (ii) the redemption request is for $10,000 or more. A signature guarantee may be obtained from a domestic bank or trust company, broker, dealer, clearing agency or savings association who are participants in a Medallion Program recognized by the Securities Transfer Association. The three recognized Medallion Programs are Securities Transfer Agent Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange, Inc. Medallion Program (MSP). Signature guarantees which are not a part of these programs will not be accepted. Please note that a notary public stamp or seal is not acceptable; and
c.other supporting legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pension and profit sharing plans and other organizations.
Redemption By Telephone. In order to request a telephone redemption, you must have returned your account application containing a telephone election. To add a telephone redemption option to an existing account, contact the Transfer Agent by calling 1-800-348-5031.
Once you are authorized to utilize the telephone redemption option, a redemption of Shares may be requested by calling the Transfer Agent at 1-800-348-5031 and requesting that the redemption proceeds be mailed to the primary registration address or wired per the authorized instructions. A wire charge of $7.50 is assessed and charged to the shareholder. If the telephone redemption option or the telephone exchange option (as described below) is authorized, the Transfer Agent may act on telephone instructions from any person representing himself or herself to be a shareholder and believed by the Transfer Agent to be genuine. The Transfer Agent's records of such instructions are binding and shareholders, not the Company or the Transfer Agent, bear the risk of loss in the event of unauthorized instructions reasonably believed by the Company or the Transfer Agent to be genuine. The Transfer Agent will employ reasonable procedures to confirm that instructions communicated are genuine and, if it does not, it may be liable for any losses due to unauthorized or fraudulent instructions. The procedures employed by the Transfer Agent in connection with transactions initiated by telephone include tape recording of telephone instructions and requiring some form of personal identification prior to acting upon instructions received by telephone.
For accounts held of record by Shareholder Organizations, additional documentation or information regarding the scope of a caller's authority is required. Finally, for telephone transactions in accounts held jointly, additional information regarding other account holders is required. Telephone transactions will not be permitted in connection with IRA or other retirement plan accounts or by an attorney-in-fact under power of attorney.
Redemption Via the Internet. You may also redeem and exchange Shares of the Funds, up to $25,000 per day with no single trade over $10,000, via the Internet. In order to engage in Internet transactions you must complete and return a separate Internet account application. You can request an Internet account application by contacting Numeric at http://www.numeric.com or by calling 1-800-numeric (686-3742).
After your Internet application is received, you will receive a Welcome Letter that will provide you with further instructions.
The Company employs reasonable procedures to confirm that instructions communicated over the Internet are genuine. Such procedures include, but are not limited to, requiring a separate application for Internet access services and appropriate personal identification for each on-line session, providing written confirmations to the address of record and employing other precautions reasonably designed to protect the integrity, confidentiality and security of shareholder information. Neither the Company, Numeric, PFPC Distributors, PFPC Inc., BSFM nor any agent of the Company will be liable for any loss, liability, cost or expense for following instructions communicated via the Internet that they reasonably believe to be genuine or for following such security procedures. In the event that high volume on the Internet or other technical difficulties make Internet access unavailable, investors may contact the Company through the other methods described herein.
Automatic Withdrawal. Automatic withdrawal permits you to request withdrawal of a specified dollar amount (minimum of $25) on either a monthly, quarterly or annual basis if you have a $10,000 minimum account balance. An application for automatic withdrawal can be obtained from the Transfer Agent. Automatic withdrawal may be ended at any time by the investor, the Company or the Transfer Agent. Purchases of additional shares concurrently with withdrawals generally are undesirable as a shareholder may incur additional expenses and such transactions may have tax consequences.
Transaction Fee on Certain Redemptions of the Funds. Effective August 12, 2002, the Funds require the payment of a transaction fee on redemptions of Shares held for less than one year equal to 2.00% of the net asset value of such Shares redeemed at the time of redemption. Shares purchased during the period prior to August 12, 2002 which are held for less than one year are subject to a transaction fee of 1.50% of the net asset value of all such shares upon redemption. This additional transaction fee is paid to each Fund, not to the adviser, distributor or transfer agent. It is not a sales charge or a contingent deferred sales charge. The fee does not apply to redeemed Shares that were purchased through reinvested dividends or capital gain distributions. In addition, redemptions resulting from IRS minimum distribution requirements or the death of a shareholder are excluded from the fee. The additional transaction fee is intended to limit short-term trading in the Funds or, to the extent that short-term trading
persists, to impose the costs of that type of activity on the Shareholders who
engage in it. These costs include: (1) brokerage costs; (2) market impact
costs--i.e., the decrease in market prices which may result when a Fund sells
certain securities in order to raise cash to meet the redemption request; (3)
the realization of capital gains by the other shareholders in each Fund; and
(4) the effect of the "bid-ask" spread in the over-the-counter market. The
2.00% amount represents each Fund's estimate of the brokerage and other
transaction costs which may be incurred by each Fund in disposing of stocks in
which each Fund may invest. Without the additional transaction fee, each Fund
would generally be selling its shares at a price less than the cost to each
Fund of acquiring the portfolio securities necessary to maintain its investment
characteristics, resulting in reduced investment performance for all
shareholders in the Funds. With the additional transaction fee, the transaction
costs of selling additional stocks are not borne by all existing shareholders,
but the source of funds for these costs is the transaction fee paid by those
investors making redemptions of the Funds. The Company reserves the right, at
its discretion, to waive, modify or terminate the additional transaction fee.
Involuntary Redemption. The Company reserves the right to redeem a shareholder's account in any Fund at any time the net asset value of the account in such Fund falls below $500 as the result of a redemption or an exchange request. Shareholders will be notified in writing that the value of their account in a Fund is less than $500 and will be allowed 30 days to make additional investments before the redemption is processed. The transaction fee will not be charged when shares are involuntarily redeemed.
Other Redemption Information. Redemption proceeds for Shares of the Funds recently purchased by check may not be distributed until payment for the purchase has been collected, which may take up to fifteen days from the purchase date. Shareholders can avoid this delay by utilizing the wire purchase option.
Other than as described above, redemption proceeds will ordinarily be paid within seven days after a redemption request is received by the Transfer Agent in proper form. The Company may suspend the right of redemption or postpone the date at times when the NYSE is closed or under any emergency circumstances as determined by the SEC.
If the Board of Directors determines that it would be detrimental to the best interests of the remaining shareholders of the Funds to make payment wholly or partly in cash, redemption proceeds may be paid in whole or in part by a distribution in-kind of readily marketable securities held by a Fund instead of cash in conformity with applicable rules of the SEC. Investors generally will incur brokerage charges on the sale of portfolio securities so received in payment of redemptions. The Funds have elected, however, to be governed by Rule 18f-1 under the 1940 Act, so that a Fund is obligated to redeem its Shares solely in cash up to the lesser of $250,000 or 1% of its net asset value during any 90-day period for any one shareholder of a Fund.
Exchange Privilege
The exchange privilege is available to shareholders residing in any state in which the Shares being acquired may be legally sold. A shareholder may exchange Shares of any Fund for Shares of any other Fund up to three (3) times per year (at least 30 days apart). Such exchange will be effected at the net asset value of the exchanged Fund and the net asset value of the Fund to be acquired next determined after the Transfer Agent's receipt of a request for an exchange. An exchange of Shares held for less than one year (with the exception of Shares purchased through dividend reinvestment or the reinvestment of capital gains) will be subject to the 2.00% transaction fee. In addition, the Company reserves the right to impose a $5.00 administrative fee for each exchange. An exchange of Shares will be treated as a sale for federal income tax purposes. A shareholder wishing to make an exchange may do so by sending a written request to the Transfer Agent or, if authorized, by telephone or Internet.
If the exchanging shareholder does not currently own Shares of the Fund whose Shares are being acquired, a new account will be established with the same registration, dividend and capital gain options as the account from which shares are exchanged, unless otherwise specified in writing by the shareholder with all signatures guaranteed. See "Redemption By Mail" for information on signature guarantees. The exchange privilege may be modified or terminated at any time, or from time to time, by the Company, upon 60 days' written notice to shareholders.
If an exchange is to a new n/i numeric investors Fund, the dollar value of Shares acquired should equal or exceed the Company's minimum for a new account; if to an existing account, the dollar value
should equal or exceed the Company's minimum for subsequent investments. If an amount remains in the n/i numeric investors Fund from which the exchange is being made that is below the minimum account value required, the account will be subject to involuntary redemption.
The Funds' exchange privilege is not intended to afford shareholders a way to speculate on short-term movements in the market. Accordingly, in order to prevent excessive use of the exchange privilege that may potentially disrupt the management of the Funds and increase transactions costs, the Funds have established a policy of limiting excessive exchange activity. Shareholders are entitled to three (3) exchange redemptions (at least 30 days apart) from each Fund during any twelve-month period. Notwithstanding these limitations, the Funds reserve the right to reject any purchase request (including exchange purchases from other n/i numeric investors Funds) that the investment adviser reasonably deems to be disruptive to efficient portfolio management.
Dividends and Distributions
Each Fund will distribute substantially all of its net investment income and net realized capital gains, if any, to its shareholders. Its distributions are reinvested in additional full and fractional Shares of the Fund unless a shareholder elects otherwise.
The Funds expect to declare and pay dividends from net investment income annually. Net realized capital gains (including net short-term capital gains), if any, will be distributed at least annually.
Taxes
Each Fund contemplates declaring as dividends each year all or substantially all of its taxable income, including its net capital gain (the excess of long-term capital gain over short-term capital loss). Distributions attributable to the net capital gain of a Fund will be taxable to you as long-term capital gain, regardless of how long you have held your shares. Other Fund distributions (other than exempt-interest dividends, discussed below) will generally be taxable as ordinary income. You will be subject to income tax on Fund distributions regardless whether they are paid in cash or reinvested in additional shares. You will be notified annually of the tax status of distributions to you.
You should note that if you purchase shares just before a distribution, the purchase price will reflect the amount of the upcoming distribution, but you will be taxed on the entire amount of the distribution received, even though, as an economic matter, the distribution simply constitutes a return of a portion of your purchase price. This is known as "buying into a dividend."
You will recognize taxable gain or loss on a sale, exchange or redemption of your shares, including an exchange for shares of another Fund, based on the difference between your tax basis in the shares and the amount you receive for them. (To aid in computing your tax basis, you generally should retain your account statements for the periods during which you held shares.) Generally, this gain or loss will be long-term or short-term depending on whether your holding period for the shares exceeds 12 months, except that any loss realized on shares held for six months or less will be treated as a long-term capital loss to the extent of any capital gain dividends that were received on the shares. Additionally, any loss realized on a sale or redemption of shares of a Fund may be disallowed under "wash sale" rules to the extent the shares disposed of are replaced with other shares of a Fund within a period of 61 days beginning 30 days before and ending 30 days after the shares are disposed of, such as pursuant to a dividend reinvestment in shares of a Fund. If disallowed, the loss will be reflected in an adjustment to the basis of the shares acquired.
The one major exception to these tax principles is that distributions on, and sales, exchanges and redemptions of, shares held in an IRA (or other tax-qualified plan) are not currently taxable.
The foregoing is only a summary of certain tax considerations under current law, which may be subject to change in the future. Shareholders who are nonresident aliens, foreign trusts or estates, or foreign corporations or partnerships, may be subject to different United States federal income tax treatment. You should consult your tax adviser for further information regarding federal, state, local and/or foreign tax consequences relevant to your specific situation.
State and Local Taxes. Shareholders may also be subject to state and local taxes on distributions and redemptions. State income taxes may not apply however, to the portions of each Fund's distributions, if any, that are attributable to interest on federal securities. Shareholders should consult their tax advisers regarding the tax status of distributions in their state and locality.
FINANCIAL HIGHLIGHTS
The table below sets forth certain financial information for the periods indicated, including per share information results for a single Fund share. The term "Total Investment Return" indicates how much your investment would have increased or decreased during this period of time and assumes that you have reinvested all dividends and distributions, if any. This information has been derived from each Fund's financial statements audited by PricewaterhouseCoopers LLP, the Company's independent accountants. This information should be read in conjunction with each Fund's financial statements which, together with the report of independent accountants, are included in the Funds' annual report, which is available upon request (see back cover for ordering instructions).
Emerging Growth Fund*
-------------------------------------------------
Fiscal Fiscal Fiscal Fiscal Fiscal
Year Year Year Year Year
Ended Ended Ended Ended Ended
8/31/02 8/31/01 8/31/00 8/31/99 8/31/98
------- -------- -------- ------- -------
Per Share Operating Performance
Net asset value, beginning of year.................. $ 12.73 $ 20.99 $ 18.03 $ 12.52 $ 18.47
------- -------- -------- ------- -------
Net investment loss................................. (0.10) (0.07) (0.10) (0.18) (0.07)
Net realized and unrealized gain/(loss) on
investments and futures transactions, if any(1)... (0.82) (3.58) 7.39 6.72 (3.23)
------- -------- -------- ------- -------
Net increase/(decrease) in net assets resulting from
operations........................................ (0.92) (3.65) 7.29 6.54 (3.30)
------- -------- -------- ------- -------
Distributions to shareholders from:
Net realized capital gains......................... -- (4.61) (4.33) (1.03) (2.65)
------- -------- -------- ------- -------
Net asset value, end of year........................ $ 11.81 $ 12.73 $ 20.99 $ 18.03 $ 12.52
======= ======== ======== ======= =======
Total investment return(2).......................... (7.23)% (20.16)% 54.42% 56.09% (20.74)%
======= ======== ======== ======= =======
Ratios/Supplemental Data
Net assets, end of year (000's omitted)............. $96,865 $139,927 $134,533 $76,349 $99,266
Ratio of expenses to average net assets(3).......... 1.12% 1.07% 1.00% 1.00% 1.00%
Ratio of expenses to average net assets, without
waivers and expense reimbursements, if any........ 1.26% 1.25% 1.28% 1.26% 1.23%
Ratio of net investment loss to average net
assets(3)......................................... (0.75)% (0.67)% (0.55)% (0.46)% (0.41)%
Portfolio turnover rate............................. 216.40 % 280.00 % 297.08 % 316.02 % 408.70 %
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* Formerly known as Micro Cap Fund.
(1)The amounts shown for a share outstanding throughout the respective periods are not in accord with the changes in the aggregate gains and losses on investments during the respective periods because of the timing of the sales and repurchases of fund shares in relation to fluctuating net asset values during the respective periods.
(2)Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total investment returns are not annualized.
(3)Reflects waivers and expense reimbursements, if any.
Growth Fund
-----------------------------------------------
Fiscal Fiscal Fiscal Fiscal Fiscal
Year Year Year Year Year
Ended Ended Ended Ended Ended
8/31/02 8/31/01 8/31/00 8/31/99 8/31/98
------- ------- ------- ------- -------
Per Share Operating Performance
Net asset value, beginning of year........................ $ 10.48 $ 23.69 $ 14.89 $ 9.75 $ 16.29
------- ------- ------- ------- -------
Net investment loss....................................... (0.10) (0.10) (0.12) (0.18) (0.07)
Net realized and unrealized gain/(loss) on investments and
futures transactions, if any(1)......................... (1.31) (6.59) 9.29 5.33 (3.98)
------- ------- ------- ------- -------
Net increase/(decrease) in net assets resulting from
operations.............................................. (1.41) (6.69) 9.17 5.15 (4.05)
------- ------- ------- ------- -------
Distributions to shareholders from:
Net realized capital gains............................... -- (6.52) (0.37) (0.01) (2.49)
------- ------- ------- ------- -------
Net asset value, end of year.............................. $ 9.07 $ 10.48 $ 23.69 $ 14.89 $ 9.75
======= ======= ======= ======= =======
Total investment return(2)................................ (13.45)% (36.45)% 63.11% 52.80% (29.03)%
======= ======= ======= ======= =======
Ratios/Supplemental Data
Net assets, end of year (000's omitted)................... $34,034 $39,930 $79,520 $62,376 $77,840
Ratio of expenses to average net assets(3)................ 1.35% 1.08% 1.00% 1.00% 1.00%
Ratio of expenses to average net assets, without waivers
and expense reimbursements, if any...................... 1.54% 1.36% 1.32% 1.30% 1.24%
Ratio of net investment loss to average net assets(3)..... (0.96)% (0.70)% (0.59)% (0.45)% (0.50)%
Portfolio turnover rate................................... 241.28 % 271.29 % 228.69 % 309.60 % 338.40 %
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(1)The amounts shown for a share outstanding throughout the respective periods are not in accord with the changes in the aggregate gains and losses on investments during the respective periods because of the timing of the sales and repurchases of fund shares in relation to fluctuating net asset values during the respective periods.
(2)Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total investment returns are not annualized.
(3)Reflects waivers and expense reimbursements, if any.
Mid Cap Fund
-------------------------------------------------
Fiscal Fiscal Fiscal Fiscal
Fiscal Year Year Year Year Year
Ended Ended Ended Ended Ended
8/31/02 8/31/01 8/31/00 8/31/99 8/31/98
----------- ------- ------- ------- --------
Per Share Operating Performance
Net asset value, beginning of year..................... $ 13.16 $ 19.22 $ 16.89 $ 13.30 $ 17.16
--------- ------- ------- ------- --------
Net investment income.................................. 0.08 0.06 0.08 0.05 0.05
Net realized and unrealized gain/(loss) on
investments and futures transactions, if any(1)...... (1.22) (2.98) 4.25 4.97 (1.24)
--------- ------- ------- ------- --------
Net increase/(decrease) in net assets resulting from
operations........................................... (1.14) (2.92) 4.33 5.02 (1.19)
--------- ------- ------- ------- --------
Dividends and distributions to shareholders from:
Net investment income................................. (0.06) (0.08) (0.03) (0.06) (0.06)
Net realized capital gains............................ -- (3.06) (1.97) (1.37) (2.61)
--------- ------- ------- ------- --------
Total dividends and distributions to shareholders... (0.06) (3.14) (2.00) (1.43) (2.67)
--------- ------- ------- ------- --------
Redemption Fees........................................ 0.02 -- -- -- --
--------- ------- ------- ------- --------
Net asset value, end of year........................... $ 11.98 $ 13.16 $ 19.22 $ 16.89 $ 13.30
========= ======= ======= ======= ========
Total investment return(2)............................. (8.48)% (17.42)% 29.61% 41.61% (8.97)%
========= ======= ======= ======= ========
Ratios/Supplemental Data
Net assets, end of year (000's omitted)................ $ 25,109 $31,198 $44,430 $49,156 $110,176
Ratio of expenses to average net assets(3)............. 0.85% 0.91% 1.00% 1.00% 1.00%
Ratio of expenses to average net assets, without
waivers and expense reimbursements, if any........... 1.27% 1.39% 1.61% 1.33% 1.26%
Ratio of net investment income to average net assets(3) 0.59% 0.39% 0.40% 0.31% 0.36%
Portfolio turnover rate................................ 270.77% 318.28% 378.17% 384.71% 341.73%
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(1)The amounts shown for a share outstanding throughout the respective periods are not in accord with the changes in the aggregate gains and losses on investments during the respective periods because of the timing of the sales and repurchases of fund shares in relation to fluctuating net asset values during the respective periods.
(2)Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total investment returns are not annualized.
(3)Reflects waivers and expense reimbursements, if any.
Small Cap Value Fund
-------------------------------------
Fiscal Fiscal Fiscal Period
Year Year Year 11/30/98*
Ended Ended Ended to
8/31/02 8/31/01 8/31/00 8/31/99
-------- ------- ------- ---------
Per Share Operating Performance
Net asset value, beginning of period.......................... $ 17.61 $ 12.91 $ 12.86 $ 12.00
-------- ------- ------- -------
Net investment income/(loss).................................. (0.05) 0.02 0.15 0.10
Net realized and unrealized gain on investments and futures
transactions, if any(1)..................................... 1.71 4.79 1.32 0.76
-------- ------- ------- -------
Net increase in net assets resulting from operations.......... 1.66 4.81 1.47 0.86
-------- ------- ------- -------
Dividends and distributions to shareholders from:
Net investment income........................................ (0.02) (0.14) (0.10) --
Net realized capital gains................................... (2.58) -- (1.32) --
-------- ------- ------- -------
Total dividends and distributions to shareholders.......... (2.60) (0.14) (1.42) --
-------- ------- ------- -------
Redemption Fees............................................... 0.19 0.03 -- --
-------- ------- ------- -------
Net asset value, end of period................................ $ 16.86 $ 17.61 $ 12.91 $ 12.86
======== ======= ======= =======
Total investment return(2).................................... 13.31% 37.97% 13.94% 7.17%
======== ======= ======= =======
Ratios/Supplemental Data
Net assets, end of period (000's omitted)..................... $130,380 $35,564 $13,481 $11,498
Ratio of expenses to average net assets(3).................... 1.73% 1.67% 1.00% 1.00%(4)
Ratio of expenses to average net assets, without waivers and
expense reimbursements, if any.............................. 1.88% 2.14% 2.34% 2.59%(4)
Ratio of net investment income/(loss) to average net assets(3) (0.35)% 0.17% 1.35% 1.15%(4)
Portfolio turnover rate....................................... 275.73% 277.28% 256.28% 212.55%
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* Commencement of operations.
(1)The amounts shown for a share outstanding throughout the respective periods are not in accord with the changes in the aggregate gains and losses on investments during the respective periods because of the timing of the sales and repurchases of fund shares in relation to fluctuating net asset values during the respective periods.
(2)Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total investment returns are not annualized.
(3)Reflects waivers and expense reimbursements, if any.
(4)Annualized.
n/i numeric investors family of funds
1-800-numeric (686-3742) http://www.numeric.com
For More Information:
This prospectus contains important information you should know before you invest. Read it carefully and keep it for future reference. More information about the n/i numeric investors family of funds is available free, upon request, including:
Annual/Semi-Annual Report
These reports contain additional information about each of the Funds' investments, describe the Funds' performance, list portfolio holdings, and discuss recent market conditions and economic trends. The Annual Report includes fund strategies for the last fiscal year.
Statement of Additional Information (SAI)
A Statement of Additional Information, dated December 31, 2002 (SAI), has been filed with the Securities and Exchange Commission. The SAI, which includes additional information about the n/i numeric investors family of funds, may be obtained free of charge, along with the n/i numeric investors family of funds annual and semi-annual reports, by calling (800) 348-5031. The SAI, as supplemented from time to time, is incorporated by reference into this Prospectus and is legally considered a part of this Prospectus.
Shareholder Inquiries
Representatives are available to discuss account balance information, mutual
fund prospectuses, literature, programs and services available. Hours: 8
a.m. to 6 p.m. (Eastern time) Monday-Friday. Call: (800) 348-5031 or visit
Numeric's website at http://www.numeric.com.
Written Correspondence
Street Address: n/i numeric investors family of funds
c/o PFPC Inc., 400 Bellevue Parkway
Wilmington, DE 19809
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Securities and Exchange Commission (SEC)
You may also view and copy information about The RBB Fund, Inc. and the funds, including the SAI, by visiting the SEC's Public Reference Room in Washington, D.C. or the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You may also obtain copies of Fund documents by paying a duplicating fee and sending an electronic request to the following e-mail address: publicinfo@sec.gov, or by sending your request and a duplicating fee to the SEC's Public Reference Section, Washington, D.C. 20549-0102. You may obtain information on the operation of the public reference room by calling the SEC at 1-202-942-8090.
INVESTMENT COMPANY ACT FILE NO. 811-05518
n/i numeric investors Emerging Growth Fund (formerly Micro Cap Fund)
n/i numeric investors Growth Fund
n/i numeric investors Mid Cap Fund
n/i numeric investors Small Cap Value Fund
(Investment Portfolios of The RBB Fund, Inc.)
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 31, 2002
This Statement of Additional Information ("SAI") provides information about the n/i numeric investors Emerging Growth Fund, formerly the Micro Cap Fund (the "Emerging Growth Fund"), the n/i numeric investors Growth Fund (the "Growth Fund"), the n/i numeric investors Mid Cap Fund (the "Mid Cap Fund") and the n/i numeric investors Small Cap Value Fund (the "Small Cap Value Fund") (each a "Fund," collectively, the "Funds") of The RBB Fund, Inc. ("RBB"). This information is in addition to the information contained in the n/i numeric investors family of funds Prospectus dated December 31, 2002 (the "Prospectus").
This SAI is not a prospectus. It should be read in conjunction with the Prospectus and the Funds' Annual Report dated August 31, 2002. The financial statements and notes contained in the Annual Report are incorporated by reference into this SAI. Copies of the Prospectus and Annual Report may be obtained from Numeric Investors L.P.(R) ("Numeric") by calling toll-free (800) NUMERIC [686-3742].
GENERAL INFORMATION........................................................ 5
INVESTMENT INSTRUMENTS AND POLICIES........................................ 5
INVESTMENT LIMITATIONS..................................................... 19
MANAGEMENT OF THE COMPANY.................................................. 22
Directors and Officers............................................ 22
Directors' Compensation........................................... 26
Code of Ethics.................................................... 27
CONTROL PERSONS............................................................ 27
INVESTMENT ADVISORY, DISTRIBUTION AND SERVICING ARRANGEMENTS............... 35
Advisory Agreements............................................... 35
Custodian Agreements.............................................. 40
Transfer Agency Agreements........................................ 40
Co-Administration Agreements...................................... 40
Administrative Services Agent..................................... 42
Distributor....................................................... 43
FUND TRANSACTIONS................................................. 43
ADDITIONAL INFORMATION CONCERNING RBB SHARES............................... 46
PURCHASE AND REDEMPTION INFORMATION........................................ 48
TELEPHONE TRANSACTION PROCEDURES........................................... 49
VALUATION OF SHARES........................................................ 50
PERFORMANCE INFORMATION........................................... 51
TAXES...................................................................... 56
MISCELLANEOUS.............................................................. 56
Counsel........................................................... 56
Independent Accountants........................................... 56
FINANCIAL STATEMENTS....................................................... 57
APPENDIX A................................................................. 1
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GENERAL INFORMATION
RBB was organized as a Maryland corporation on February 29, 1988 and is registered under the Investment Company Act of 1940 (the "1940 Act") as an open-end management investment company currently operating or proposing to operate 15 separate investment portfolios. This Statement of Additional Information pertains to Shares representing interests in the diversified Funds offered by the Prospectus dated December 31, 2002.
INVESTMENT INSTRUMENTS AND POLICIES
The following supplements the information contained in the Prospectus concerning the investment objectives and policies of the Funds.
Equity Markets.
The Funds invest primarily in equity markets at all times. Equity markets can be highly volatile, so that investing in the Funds involves substantial risk. In addition, the Funds can and will typically invest in stocks that are riskier and more volatile than the average stock. As a result, investing in these Funds involves risk of substantial loss of capital.
Micro Cap and Small Cap Stocks.
Securities of companies with micro and small capitalizations tend to be riskier than securities of companies with medium or large capitalizations. This is because micro and small cap companies typically have smaller product lines and less access to liquidity than mid cap or large cap companies, and are therefore more sensitive to economic downturns. In addition, growth prospects of micro and small cap companies tend to be less certain than mid or large cap companies, and the dividends paid on micro and small cap stocks are frequently negligible. Moreover, micro and small cap stocks have, on occasion, fluctuated in the opposite direction of large cap stocks or the general stock market. Consequently, securities of micro and small cap companies tend to be more volatile than those of mid and large cap companies. The market for micro cap securities may be thinly traded and, as a result, greater fluctuations in the price of micro cap securities may occur.
Market Fluctuation.
Because the investment alternatives available to each Fund may be limited by the specific objectives of that Fund, investors should be aware that an investment in a particular Fund may be subject to greater market fluctuation than an investment in a portfolio of securities representing a broader range of investment alternatives. In view of the specialized nature of the investment activities of each Fund, an investment in any single fund should not be considered a complete investment program.
Futures and Options.
The Funds may write covered call options, buy put options, buy call options and write put options, without limitation except as noted below. Such options may relate to particular securities or to various
indexes and may or may not be listed on a national securities exchange or issued by the Options Clearing Corporation. The Funds may also invest in futures contracts and options on futures contracts (index futures contracts or interest rate futures contracts, as applicable) for hedging purposes, including conversion of cash to equity.
The risks related to the use of options and futures contracts include:
(i) the correlation between movements in the market price of a Fund's
investments (held or intended for purchase) being hedged and in the price of the
futures contract or option may be imperfect; (ii) possible lack of a liquid
secondary market for closing out options or futures positions; (iii) the need
for additional portfolio management skills and techniques; and (iv) losses due
to unanticipated market movements. Successful use of options and futures by the
Funds is subject to Numeric's ability to predict correctly movements in the
direction of the market. For example, if a Fund uses future contracts as a hedge
against the possibility of a decline in the market adversely affecting
securities held by it and securities prices increase instead, the Fund will lose
part or all of the benefit of the increased value of its securities which it has
hedged because it will have approximately equal offsetting losses in its futures
positions. The risk of loss in trading futures contracts in some strategies can
be substantial, due both to the low margin deposits required, and the extremely
high degree of leverage involved in futures pricing. As a result, a relatively
small price movement in a futures contract may result in immediate and
substantial loss or gain to the investor. Thus, a purchase or sale of a futures
contract may result in losses or gains in excess of the amount invested in the
contract.
Futures.
Futures Contracts. To enter into a futures contract, the Funds must make a deposit of an initial margin with their custodian in a segregated account in the name of the futures broker or directly with the futures broker itself. Subsequent payments to or from the broker, called variation margin, will be made on a daily basis as the price of the underlying security or index fluctuates, making the long and short positions in the futures contracts more or less valuable.
When a Fund purchases a futures contract, it agrees to purchase a specified underlying instrument at a specified future date. When a Fund sells a futures contract, it agrees to sell the underlying instrument at a specified future date. The price at which the purchase and sale will take place is fixed when a Fund enters into the contract. The underlying instrument may be a specified type of security, such as U.S. Treasury bonds or notes.
The majority of futures contracts are closed out by entering into an offsetting purchase or sale transaction in the same contract on the exchange where they are traded, rather than being held for the life of the contract. Futures contracts are closed out at their current prices, which may result in a gain or loss.
If a Fund holds a futures contract until the delivery date, it will be required to complete the purchase and sale contemplated by the contract. In the case of futures contracts on securities, the purchaser generally must deliver the agreed-upon purchase price in cash, and the seller must deliver securities that meet the specified characteristics of the contract.
A Fund may purchase futures contracts as an alternative to purchasing actual securities. For example, if a Fund intended to purchase bonds but had not yet done so, it could purchase a futures contract in order to lock in current bond prices while deciding on particular investments. This strategy is sometimes known as an anticipatory hedge. Alternatively, a Fund could purchase a futures contract if it had cash and short-term securities on hand that it wished to invest in longer-term securities, but at the same time that Fund wished to maintain a highly liquid position in order to be prepared to meet redemption requests or other obligations. In these strategies a Fund would use futures contracts to attempt to achieve an overall return -- whether positive or negative -- similar to the return from longer-term securities, while taking advantage of potentially greater liquidity that futures contracts may offer. Although the Funds would hold cash and liquid debt securities in a segregated account with a value sufficient to cover their open futures obligations, the segregated assets would be available to the Funds immediately upon closing out the futures position, while settlement of securities transactions can take several days.
The Fund may sell futures contracts to hedge its other investments against changes in value, or as an alternative to sales of securities. For example, if the Adviser anticipated a decline in the price of a particular security, but did not wish to sell such securities owned by the Fund, it could sell a futures contract in order to lock in a current sale price. If prices subsequently fell, the futures contract's value would be expected to rise and offset all or a portion of the loss in the securities that the Fund has hedged. Of course, if prices subsequently rose, the futures contract's value could be expected to fall and offset all or a portion of the benefit of the Fund.
Futures margin payments. The purchaser or seller of a futures contract is not required to deliver or pay for the underlying instrument unless the contract is held until the delivery date. However, both the purchaser and seller are required to deposit "initial margin" with a futures broker (known as a futures commission merchant, or FCM), when the contract is entered into. Initial margin deposits are equal to a percentage of the contract's value, as set by the exchange where the contract is traded, and may be maintained in cash or high quality liquid securities. If the value of either party's position declines, that party will be required to make additional "variation margin" payments to settle the change in value on a daily basis. The party that has a gain may be entitled to receive all or a portion of this amount. Initial and variation margin payments are similar to good faith deposits or performance bonds, unlike margin extended by a securities broker, and initial and variation margin payments do not constitute purchasing securities on margin for purposes of a Fund's investment limitations. In the event of the bankruptcy of an FCM that holds margin on behalf of a Fund, that Fund may be entitled to a return of margin owed to it only in proportion to the amount received by the FCM's other customers. The investment adviser will attempt to minimize this risk by careful monitoring of the creditworthiness of the FCMs with which a Fund does business.
Correlation of price changes. The prices of futures contracts depend primarily on the value of their underlying instruments. Because there are a limited number of types of futures contracts, it is likely that the standardized futures contracts available to a Fund will not match that Fund's current or anticipated investments. Futures prices can also diverge from the prices of their underlying instruments, even if the underlying instruments match a Fund's investments well. Futures prices are affected by such factors as current and anticipated short-term interest rates, changes in volatility of the underlying instrument, and the time remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation between a Fund's investments and its futures positions may also result from differing levels of demand in the futures markets and the securities markets, from structural differences in how futures and securities are traded, or from imposition of daily price fluctuation limits for futures contracts. The Funds may purchase or sell futures contracts with a greater or lesser value than the securities they wish to hedge or intend to purchase in order to attempt to compensate for differences in historical volatility between the futures contract and the securities, although this may not be successful in all cases. If price changes in a Fund's futures positions are poorly correlated with its other investments, its futures positions may fail to produce anticipated gains or result in losses that are not offset by the gains in the Fund's other investments.
Liquidity of futures contracts. Because futures contracts are generally settled within a day from the date they are closed out, compared with a settlement period of seven days for some types of securities, the futures markets can provide liquidity superior to the securities markets in many cases. Nevertheless, there is no assurance a liquid secondary market will exist for any particular futures contract at any particular time. In addition, futures exchanges may establish daily price fluctuation limits for futures contracts and may halt trading if a contract's price moves upward or downward more than the limit in a given day. On volatile trading days when the price fluctuation limit is reached, it may be impossible for a Fund to enter into new positions or close out existing positions. If the secondary market for a futures contract is not liquid because of price fluctuation limits or otherwise, it would prevent prompt liquidation of unfavorable futures positions, and potentially could require a Fund to continue to hold a futures position until the delivery date regardless of changes in its value. As a result, a Fund's access to other assets held to cover its futures positions could also be impaired. The ultimate result of these factors may be a loss of dollars.
Put and Call Options.
Options trading is a highly specialized activity which entails greater than ordinary investment risks. A call option for a particular security gives the purchaser of the option the right to buy, and a writer the obligation to sell, the underlying security at the stated exercise price at any time prior to the expiration of the option, regardless of the market price of the security. The premium paid to the writer is in consideration for undertaking the obligations under the option contract. A put option for a particular security gives the purchaser the right to sell the underlying security at the stated exercise price at any time prior to the expiration date of the option, regardless of the market price of the security. In contrast to an option on a particular security, an option on an index provides the holder with the right to make or receive a cash settlement upon exercise of the option. The amount of this settlement will be equal to the difference between the closing price of the index at the time of exercise and the exercise price of the option expressed in dollars, times a specified multiple.
The Funds will engage in unlisted over-the-counter options only with broker-dealers deemed creditworthy by Numeric. Closing transactions in certain options are usually effected directly with the same broker-dealer that effected the original option transaction. The Funds bear the risk that the broker-dealer will fail to meet its obligations. There is no assurance that the Funds will be able to close an unlisted option position. Furthermore, unlisted options are not subject to the protections afforded purchasers of listed options by the Options Clearing Corporation, which performs the obligations of its members who fail to do so in connection with the purchase or sale of options.
Purchasing Put Options. By purchasing a put option, a Fund obtains the right (but not the obligation) to sell the option's underlying instrument at a fixed strike price. The option may give a Fund the right to sell only on the option's expiration date, or may be exercisable at any time up to and including that date. In return for this right, a Fund pays the current market price for the option (known as the option premium). The option's underlying instrument may be a security or a futures contract.
A Fund may terminate its position in a put option it has purchased by allowing it to expire or by exercising the option. If the option is allowed to expire, the Fund will lose the entire premium it paid. If the Fund exercises the option, it completes the sale of the underlying instrument at the strike price. If a Fund exercises a put option on a futures contract, it assumes a seller's position in the underlying futures contract. Purchasing an option on a futures contract does not require a Fund to make futures margin payments unless it exercises the option. A Fund may also terminate a put option position by closing it out in the secondary market at its current price, if a liquid secondary market exists.
Put options may be used by a Fund to hedge securities it owns, in a manner similar to selling futures contracts, by locking in a minimum price at which the Fund can sell. If security prices fall, the value of the put option would be expected to rise and offset all or a portion of the Fund's resulting losses. The put thus acts as a hedge against a fall in the price of such securities. However, all other things being equal (including securities prices) option premiums tend to decrease over time as the expiration date nears. Therefore, because of the cost of the option in the form of the premium (and transaction costs), a Fund would expect to suffer a loss in the put option if prices do not decline sufficiently to offset the deterioration in the value of the option premium. This potential loss represents the cost of the hedge against a fall in prices. At the same time, because the maximum a Fund has at risk is the cost of the option, purchasing put options does not eliminate the potential for a Fund to profit from an increase in the value of the securities hedged to the same extent as selling a futures contract.
Purchasing Call Options. The features of call options are essentially the same as those of put options, except that the purchaser of a call option obtains the right to purchase, rather than sell, the underlying instrument at the option's strike price (call options on futures contracts are settled by purchasing the underlying futures contract). By purchasing a call option, a Fund would attempt to participate in potential price increases of the underlying instrument, with results similar to those obtainable from purchasing a futures contract, but with risk limited to the cost of the option if security prices fell. At the same time, a Fund can expect to suffer a loss if security prices do not rise sufficiently to offset the cost of the option.
The Funds will purchase call options only in connection with "closing purchase transactions." A Fund may terminate its position in a call option by entering into a closing purchase transaction. A closing purchase transaction is the purchase of a call option on the same security with the same exercise price and call period as the option previously written by a Fund. If a Fund is unable to enter into a closing purchase transaction, the Fund may be required to hold a security that it might otherwise have sold to protect against depreciation.
Writing Put Options. When a Fund writes a put option, it takes the opposite side of the transaction from the option's purchaser. In return for receipt of the premium, a Fund assumes the obligation to pay the strike price for the option's underlying instrument if the other party to the option
chooses to exercise it. When writing an option on a futures contract a Fund will be required to make margin payments to an FCM as described above for futures contracts. A Fund may seek to terminate its position in a put option it writes before exercise by closing out the option in the secondary market at its current price. If the secondary market is not liquid for an option a Fund has written, however, the Fund must continue to be prepared to pay the strike price while the option is outstanding, regardless of price changes, and must continue to set aside assets to cover its position.
A Fund may write put options as an alternative to purchasing actual securities. If security prices rise, the Fund would expect to profit from a written put option, although its gain would be limited to the amount of the premium it received. If security prices remain the same over time, it is likely that the Fund will also profit, because it should be able to close out the option at a lower price. If security prices fall, the Fund would expect to suffer a loss. This loss should be less than the loss the Fund would have experienced from purchasing the underlying instrument directly, however, because the premium received for writing the option should mitigate the effects of the decline. As with other futures and options strategies used as alternatives for purchasing securities, a Fund's return from writing put options generally will involve a smaller amount of interest income than purchasing longer-term securities directly, because a Fund's cash will be invested in shorter-term securities which usually offer lower yields.
Writing Call Options. Writing a call option obligates a Fund to sell or deliver the option's underlying instrument, in return for the strike price, upon exercise of the option. The characteristics of writing call options are similar to those of writing put options, as described above, except that writing covered call options generally is a profitable strategy if prices remain the same or fall. Through receipt of the option premium, a Fund would seek to mitigate the effects of a price decline. At the same time, because a Fund would have to be prepared to deliver the underlying instrument in return for the strike price, even if its current value is greater, the Fund would give up some ability to participate in security price increases when writing call options.
Combined Option Positions. A Fund may purchase and write options in combination with each other to adjust the risk and return characteristics of the overall position. For example, a Fund may purchase a put option and write a call option on the same underlying instrument, in order to construct a combined position whose risk and return characteristics are similar to selling a futures contract. Another possible combined position would involve writing a call option at one strike price and buying a call option at a lower price, in order to reduce the risk of the written call option in the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out.
Risks of Options Transactions. Options are subject to risks similar to those described above with respect to futures contracts, including the risk of imperfect correlation between the option and a Fund's other investments and the risk that there might not be a liquid secondary market for the option. In the case of options on futures contracts, there is also a risk of imperfect correlation between the option and the underlying futures contract. Options are also subject to the risks of an illiquid secondary market, particularly in strategies involving writing options, which a Fund cannot terminate by exercise. In general, options whose strike prices are close to their underlying instruments' current value will have the highest trading volume, while options whose strike prices are further away may be
less liquid. The liquidity of options may also be affected if options exchanges impose trading halts, particularly when markets are volatile.
Asset Coverage for Futures and Options Positions. A Fund will not use leverage in its options and futures strategies. A Fund will hold securities or other options or futures positions whose values are expected to offset its obligations under the hedge strategies. A Fund will not enter into an option or futures position that exposes the Fund to an obligation to another party unless it owns either (i) an offsetting position in securities or other options or futures contracts or (ii) cash, receivables and short-term debt securities with a value sufficient to cover its potential obligations. A Fund will comply with guidelines established by the SEC with respect to coverage of options and futures strategies by mutual funds, and if the guidelines so require will set aside cash and high grade liquid debt securities in a segregated account with its custodian bank in the amount prescribed. Securities held in a segregated account cannot be sold while the futures or option strategy is outstanding, unless they are replaced with similar securities. As a result, there is a possibility that segregation of a large percentage of a Fund's assets could impede portfolio management or the Fund's ability to meet redemption requests or other current obligations. Depending on the asset levels that are required to be segregated, a Fund may be required to sell assets it would not otherwise liquidate.
Limitations on Futures and Options Transactions. RBB, on behalf of the Funds, has filed a notice of eligibility for exclusion from the definition of the term "commodity pool operator" with the Commodity Futures Trading Commission ("CFTC") and the National Futures Association, which regulate trading in the futures markets. Pursuant to Section 4.5 of the regulations under the Commodity Exchange Act, the Funds will not enter into any commodity futures contract or option on a commodity futures contract for non-hedging purposes if, as a result, the sum of initial margin deposits on commodity futures contracts and related commodity options and premiums paid for options on commodity futures contracts the Funds have purchased would exceed 5% of a Fund's net assets after taking into account unrealized profits and losses on such contracts, except as may be otherwise permitted under applicable regulations.
The Funds' limitations on investments in futures contracts and their policies regarding futures contracts and the limitations on investments in options and its policies regarding options discussed above in this Statement of Additional Information, are not fundamental policies and may be changed as regulatory agencies permit. The Funds will not modify the above limitations to increase its permissible futures and options activities without supplying additional information in a current Prospectus or Statement of Additional Information that has been distributed or made available to the Funds' shareholders.
Short Sales.
Short sales are transactions in which a Fund sells a security it does not own in anticipation of a decline in the market value of that security. To complete such a transaction, the Fund must borrow the security to make delivery to the buyer. The Fund then is obligated to replace the security borrowed by purchasing it at the market price at the time of replacement. The price at such time may be more or less than the price at which the security was sold by the Fund. Until the security is replaced, the Fund is required to pay to the lender amounts equal to any dividend which accrues during the period of the loan. To borrow the security, the Fund also may be required to pay a premium, which would increase the cost of
the security sold. The proceeds of the short sale will be retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out.
Until a Fund replaces a borrowed security in connection with a short sale, the Fund will: (a) maintain daily a segregated account, containing cash, cash equivalents, or liquid marketable securities, at such a level that (i) the amount deposited in the account plus the amount deposited with the broker as collateral will equal the current value of the security sold short and (ii) the amount deposited in the segregated account plus the amount deposited with the broker as collateral will not be less than the market value of the security at the time it was sold short; or (b) otherwise cover its short position in accordance with positions taken by the Staff of the Securities and Exchange Commission.
A Fund will incur a loss as a result of the short sale if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund will realize a gain if the security declines in price between those dates. This result is the opposite of what one would expect from a cash purchase of a long position in a security. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of any premium or amounts in lieu of interest the Fund may be required to pay in connection with a short sale. A Fund may purchase call options to provide a hedge against an increase in the price of a security sold short by the Fund. See "Futures and Options" above.
The Funds anticipate that the frequency of short sales will vary substantially in different periods, and they do not intend that any specified portion of their assets, as a matter of practice, will be invested in short sales. However, no securities will be sold short if, after effect is given to any such short sale, the total market value of all securities sold short would exceed 25% of the value of a Fund's net assets.
Short Sales "Against the Box."
In addition to the short sales discussed above, the Funds may make short sales "against the box," a transaction in which a Fund enters into a short sale of a security that the Fund owns. The proceeds of the short sale will be held by a broker until the settlement date at which time the Fund delivers the security to close the short position. The Fund receives the net proceeds from the short sale. It currently is anticipated that the Funds will make short sales against the box for purposes of protecting the value of the Funds' net assets.
In a short sale, a Fund sells a borrowed security and has a corresponding obligation to the lender to return the identical security. A Fund may engage in short sales if at the time of the short sale it owns or has the right to obtain, at no additional cost, an equal amount of the security being sold short. This investment technique is known as a short sale "against the box." In a short sale, a seller does not immediately deliver the securities sold and is said to have a short position in those securities until delivery occurs. If a Fund engages in a short sale, the collateral for the short position will be maintained by the Fund's custodian or a qualified sub-custodian. While the short sale is open, the Fund will maintain in a segregated account an amount of securities equal in kind and amount to the securities sold short or securities convertible into or exchangeable for such equivalent securities. These securities constitute a Fund's long position. The Funds will not engage in short sales against the box for speculative purposes. A Fund may, however, make a short sale as a hedge, when it believes that the price of a security may decline, causing a decline in the value of a security owned by the Fund
(or a security convertible or exchangeable for such security), or when the Fund wants to sell the security at an attractive current price, but also wishes possibly to defer recognition of gain or loss for federal income tax purposes. (A short sale against the box will defer recognition of gain for federal income tax purposes only if the Portfolio subsequently closes the short position by making a purchase of the relevant securities no later than 30 days after the end of the taxable year. The original long position must also be held for the sixty days after the short position is closed.) In such case, any future losses in a Fund's long position should be reduced by a gain in the short position. Conversely, any gain in the long position should be reduced by a loss in the short position. The extent to which such gains or losses are reduced will depend upon the amount of the security sold short relative to the amount a Fund owns. There will be certain additional transaction costs associated with short sales against the box, but the Funds will endeavor to offset these costs with the income from the investment of the cash proceeds of short sales.
Lending of Fund Securities.
The Funds may lend their portfolio securities to financial institutions. Such loans would involve risks of delay in receiving additional collateral in the event the value of the collateral decreases below the value of the securities loaned or of delay in recovering the securities loaned or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans will be made only to borrowers which Numeric deems to be of good standing and only when, in Numeric's judgment, the income to be earned from the loans justifies the attendant risks. A Fund may not make loans in excess of 33 1/3% of the value of its total assets.
Borrowing Money.
The Funds are permitted to borrow to the extent permitted under the 1940 Act and to mortgage, pledge or hypothecate their respective assets in connection with such borrowings in amounts not in excess of 125% of the dollar amounts borrowed. The 1940 Act permits an investment company to borrow in an amount up to 33 1/3% of the value of such company's total assets. However, the Funds currently intend to borrow money only for temporary or emergency (not leveraging) purposes, in an amount up to 15% of the value of their respective total assets (including the amount borrowed) valued at the lesser of cost or market, less liabilities (not including the amount borrowed) at the time the borrowing is made. If the securities held by a Fund should decline in value while borrowings are outstanding, the net asset value of a Fund's outstanding shares will decline in value by proportionately more than the decline in value suffered by a Fund's securities. As a result, a Fund's share price may be subject to greater fluctuation until the borrowing is paid off. No Fund will make any additional investments while borrowings exceed 5% of its total assets.
Section 4(2) Paper.
"Section 4(2) paper" is commercial paper which is issued in reliance on the "private placement" exemption from registration which is afforded by Section 4(2) of the Securities Act of 1933 (the "Securities Act"). Section 4(2) paper is restricted as to disposition under the federal securities laws and is generally sold to institutional investors such as the Funds which agree that they are purchasing the paper for investment and not with a view to public distribution. Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper normally is resold to other institutional investors through or
with the assistance of investment dealers who make a market in the Section 4(2) paper, thereby providing liquidity. See "Illiquid Securities" below and Appendix "A" for a list of commercial paper ratings.
Rights Offerings and Purchase Warrants.
Rights offerings and purchase warrants are privileges issued by a corporation which enable the owner to subscribe to and purchase a specified number of shares of the corporation at a specified price during a specified period of time. Subscription rights normally have a short lifespan to expiration. The purchase of rights or warrants involves the risk that a Fund could lose the purchase value of a right or warrant if the right to subscribe to additional shares is not executed prior to the rights and warrants expiration. Also, the purchase of rights and/or warrants involves the risk that the effective price paid for the right and/or warrant added to the subscription price of the related security may exceed the value of the subscribed security's market price such as when there is no movement in the level of the underlying security.
Illiquid Securities.
A Fund may not invest more than 15% of its net assets in illiquid securities, including repurchase agreements which have a maturity of longer than seven days and securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions on resale. Securities that have legal or contractual restrictions on resale but have a readily available market are not considered illiquid for purposes of this limitation. Repurchase agreements subject to demand are deemed to have a maturity equal to the notice period.
Mutual funds do not typically hold a significant amount of illiquid securities because of the potential for delays on resale and uncertainty in valuation. Limitations on resale may have an adverse effect on the marketability of portfolio securities and a mutual fund might be unable to dispose of restricted or other illiquid securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemptions within seven days. A mutual fund might also have to register such restricted securities in order to dispose of them resulting in additional expense and delay. Adverse market conditions could impede such a public offering of securities.
The Funds may purchase securities which are not registered under the Securities Act but which may be sold to "qualified institutional buyers" in accordance with Rule 144A under the Securities Act. These securities will not be considered illiquid so long as it is determined by the Fund's adviser that an adequate trading market exists for the securities. This investment practice could have the effect of increasing the level of illiquidity in a Fund during any period that qualified institutional buyers become uninterested in purchasing restricted securities.
The Adviser will monitor the liquidity of restricted securities in the Funds under the supervision of the Board of Directors. In reaching liquidity decisions, the Adviser may consider, among others, the following factors: (1) the unregistered nature of the security; (2) the frequency of trades and quotes for the security; (3) the number of dealers wishing to purchase or sell the security and the number of other potential purchasers; (4) dealer undertakings to make a market in the security
and (5) the nature of the security and the nature of the marketplace trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of the transfer).
Depositary Receipts.
The Funds' assets may be invested in the securities of foreign issuers in the form of American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs") or Global Depositary Receipts ("GDRs"). These securities may not necessarily be denominated in the same currency as the securities into which they may be converted. ADRs and EDRs are receipts typically issued by a United States or European bank or trust company which evidence ownership of underlying securities issued by a foreign corporation. GDRs are depositary receipts structured like global debt issues to facilitate international trading. The Funds may invest in ADRs, EDRs and GDRs through "sponsored" or "unsponsored" facilities. A sponsored facility is established jointly by the issuer of the underlying security and a depositary, whereas a depositary may establish an unsponsored facility without participation by the issuer of the deposited security. Holders of unsponsored depositary receipts generally bear all the costs of such facilities and the depositary of an unsponsored facility frequently is under no obligation to distribute shareholder communications received from the issuer of the deposited security or to pass through voting rights to the holders of such receipts in respect of the deposited securities.
European Currency Unification.
On January 1, 1999, the European Economic and Monetary Union (EMU) introduced a new single currency called the euro. The euro has replaced the national currencies of the following member countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.
The new European Central Bank has control over each member country's monetary policies. Therefore, the member countries no longer control their own monetary policies by directing independent interest rates for their currencies. The national governments of the participating countries, however, have retained the authority to set tax and spending policies and public debt levels.
The change to the euro as a single currency is new and untested. The elimination of currency risk among EMU countries may change the economic environment and behavior of investors, particularly in European markets, but the impact of those changes cannot be assessed at this time. It is not possible to predict the impact of the euro on currency values or on the business or financial condition of European countries and issuers, and issuers in other regions, whose securities the Fund may hold, or the impact, if any, on Fund performance. During the first two years of the euro's existence, the exchange rates of the euro versus many of the world's major currencies has declined. In this environment, U.S. and other foreign investors experienced erosion of their investment returns on their euro-denominated securities. In addition, the introduction of the euro presents other unique uncertainties, including the fluctuation of the euro relative to non-euro currencies; whether the interest rate, tax and labor regimes of European countries participating in the euro will converge over time; and whether the conversion of the currencies of other countries that now are or may in the future become members of the European Union ("EU") will have an impact on the euro. Also, it is possible that the euro could be abandoned in the future by countries that have already adopted its use. These or other
events, including political and economic developments, could cause market disruptions, and could adversely affect the value of securities held by the Fund. Because of the number of countries using this single currency, a significant portion of the assets held by the Fund may be denominated in the euro.
Investment Company Securities.
The Funds may invest in securities issued by other investment companies. Under the 1940 Act, the Funds' investments in such securities currently are limited to, subject to certain exceptions, (i) 3% of the total voting stock of any one investment company, (ii) 5% of a Fund's net assets with respect to any one investment company and (iii) 10% of a Fund's net assets in the aggregate. Investments in the securities of other investment companies will involve duplication of advisory fees and certain other expenses. The Funds presently intend to invest in other investment companies only as investment vehicles for short-term cash. The Funds will only invest in securities of other investment companies which are purchased on the open market with no commission or profit to a sponsor or dealer, other than the customary brokers commission, or when the purchase is part of a plan of merger, consolidation, reorganization or acquisition.
Convertible Securities.
The Funds may invest in convertible securities, such as convertible debentures, bonds and preferred stock, primarily for their equity characteristics. Convertible securities may be converted into common stock at a specified share price or ratio. Because the price of the common stock may fluctuate above or below the specified price or ratio, a Fund may have the opportunity to purchase the common stock at below market price. On the other hand, fluctuations in the price of the common stock could render the right of conversion worthless.
Debt Securities.
The Funds may invest in debt securities rated no less than investment grade by either Standard & Poor's Ratings Services ("S&P") or Moody's Investors Service, Inc. ("Moody's"). Bonds in the lowest investment grade debt category (e.g., bonds rated BBB by S&P or Baa by Moody's) have speculative characteristics, and changes in economic conditions or other circumstances are more likely to lead to a weakened capacity to make principal and interest payments than is the case with higher grade bonds. The Funds will not retain a bond that was rated as investment grade at the time of purchase but whose rating is subsequently downgraded below investment grade. The value of debt securities held by a Fund will tend to vary inversely in relation to changes in prevailing interest rates. Thus, if interest rates have increased from the time a debt security was purchased, such security, if sold, might be sold at a price less than its cost. Conversely, if interest rates have declined from the time a debt security was purchased, the debt security, if sold, might be sold at a price greater than its cost.
Short-Term Debt Obligations.
The Funds may purchase money market instruments to the extent consistent with their investment objectives and policies. Such instruments include U.S. Government obligations, repurchase agreements, certificates of deposit, bankers acceptances and commercial paper.
U.S. Government Obligations.
Examples of types of U.S. Government obligations include U.S. Treasury Bills, Treasury Notes and Treasury Bonds and the obligations of Federal Home Loan Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal Housing Administration, Farmers Home Administration, Export-Import Bank of the United States, Small Business Administration, Federal National Mortgage Association, Government National Mortgage Association, General Services Administration, Student Loan Marketing Association, Federal Home Loan Mortgage Corporation, Federal Intermediate Credit Banks, and the Maritime Administration.
Repurchase Agreements.
The Funds may agree to purchase securities from financial institutions subject to the seller's agreement to repurchase them at an agreed-upon time and price ("repurchase agreements"). The financial institutions with whom the Funds may enter into repurchase agreements will be banks and broker/dealers which Numeric considers creditworthy pursuant to criteria approved by the Board of Directors. Numeric will consider, among other things, whether a repurchase obligation of a seller involves minimal credit risk to a Fund in determining whether to have the Fund enter into a repurchase agreement. The seller under a repurchase agreement will be required to maintain the value of the securities subject to the agreement at not less than the repurchase price plus accrued interest. Numeric will mark to market daily the value of the securities and will, if necessary, require the seller to maintain additional securities, to ensure that the value is not less than the repurchase price. Default by or bankruptcy of the seller would, however, expose a Fund to a possible loss because of adverse market action or delays in connection with the disposition of the underlying obligations.
The repurchase price under repurchase agreements generally equals the price paid by the Fund involved plus interest negotiated on the basis of current short-term rates (which may be more or less than the rate on the securities underlying the repurchase agreement). Securities subject to repurchase agreements will be held by RBB's custodian in the Federal Reserve/Treasury book-entry system or by another authorized securities depository. Repurchase agreements are considered to be loans by the Fund involved under the 1940 Act.
Reverse Repurchase Agreements.
Reverse repurchase agreements involve the sale of securities held by a Fund pursuant to the Fund's agreement to repurchase the securities at an agreed upon price, date and rate of interest. Such agreements are considered to be borrowings under the 1940 Act, and may be entered into only for temporary or emergency purposes. While reverse repurchase transactions are outstanding, a Fund will maintain in a segregated account with its custodian or a qualified sub-custodian, cash, U.S. Government securities or other liquid, high-grade debt securities of an amount at least equal to the market value of the securities, plus accrued interest, subject to the agreement and will monitor the account to ensure that such value is maintained. Reverse repurchase agreements involve the risk that the market value of the securities sold by a Fund may decline below the price of the securities the Fund is obligated to repurchase and the return on the cash exchanged for the securities.
When-Issued Securities and Forward Commitments.
Each Fund may purchase securities on a "when-issued" basis and may purchase or sell securities on a "forward commitment" basis. These transactions involve a commitment by a Fund to purchase or sell particular securities with payment and delivery taking place at a future date (perhaps one or two months later), and permit a Fund to lock-in a price or yield on a security it owns or intends to purchase, regardless of future changes in interest rates. When-issued and forward commitment transactions involve the risk, however, that the price or yield obtained in a transaction may be less favorable than the price or yield available in the market when the securities delivery takes place. A Fund's when-issued purchases and forward commitments are not expected to exceed 25% of the value of its total assets absent unusual market conditions. Each Fund does not intend to engage in when-issued purchases and forward commitments for speculative purposes but only in furtherance of their investment objectives.
Portfolio Turnover.
The Funds may be subject to a greater degree of turnover and thus a higher incidence of short-term capital gains taxable as ordinary income than might be expected from portfolios which invest substantially all of their assets on a long-term basis, and correspondingly larger brokerage charges and other transaction costs can be expected to be borne by the Funds. Investment strategies which require periodic changes to portfolio holdings with the expectation of outperforming equity indices are called "active" strategies. These compare with "passive" or "index" strategies which hold only the stocks in the equity indices. Passive strategies trade infrequently -- only as the indices change. Most equity mutual funds, including the Funds, pursue active strategies, which have higher turnover than passive strategies.
High portfolio turnover (100% or more) can adversely affect taxable investors, especially those in higher marginal tax brackets, in two ways: First, short term capital gains, which are a by-product of high turnover investment strategies, are currently taxed at rates comparable to ordinary income rates. Ordinary income tax rates are higher than long term capital gain tax rates for middle and upper income taxpayers. Second, the frequent realization of gains, which causes taxes to be paid frequently, is less advantageous than infrequent realization of gains. Infrequent realization of gains allows the payment of taxes to be deferred to later years, allowing more of the gains to compound before taxes are paid. Consequently after-tax compound rates of return will generally be higher for taxable investors using investment strategies with very low turnover, all else being equal.
Although tax considerations should not typically drive an investment decision, investors should consider their ability to allocate tax-deferred (such as IRAs and 401(k) plans) versus taxable assets when considering where to invest. For further information, see "Taxes" below.
The portfolio turnover rate is calculated by dividing the lesser of a Fund's annual sales or purchases of portfolio securities (exclusive of purchases or sales of securities whose maturities at the time of acquisition were one year or less) by the monthly average value of the securities in the portfolio during the year.
* * *
The Funds' investment objectives and policies described above may be changed by RBB's Board of Directors without shareholder approval. Shareholders will be provided 30 days prior written notice of any change in a Fund's investment objectives. There is no assurance that the investment objective of the Funds will be achieved.
INVESTMENT LIMITATIONS
The Funds have adopted the following fundamental investment limitations which may not be changed without the affirmative vote of the holders of a majority of the Funds' outstanding shares (as defined in Section 2(a)(42) of the 1940 Act). As used in this Statement of Additional Information and in the Prospectus, "shareholder approval" and a "majority of the outstanding shares" of a class, series or Fund means, with respect to the approval of an investment advisory agreement, a distribution plan or a change in a fundamental investment limitation, the lesser of (1) 67% of the shares of the particular class, series or Fund represented at a meeting at which the holders of more than 50% of the outstanding shares of such class, series or Fund are present in person or by proxy, or (2) more than 50% of the outstanding shares of such class, series or Fund.
The Funds may not:
1. Purchase securities of any one issuer, other than securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, if immediately after and as a result of such purchase more than 5% of a Fund's total assets would be invested in the securities of such issuer, or more than 10% of the outstanding voting securities of such issuer would be owned by a Fund, except that up to 25% of the value of a Fund's assets may be invested without regard to such limitation.
2. Borrow money, except to the extent permitted under the 1940 Act or mortgage, pledge or hypothecate any of their respective assets in connection with any such borrowing except in amounts not in excess of 125% of the dollar amounts borrowed. The 1940 Act permits an investment company to borrow in an amount up to 33 1/3% of the value of such company's total assets. For purposes of this Investment Restriction, the entry into options, forward contracts, futures contracts, including those relating to indexes, and options on futures contracts or indexes shall not constitute borrowing.
3. Purchase any securities which would cause, at the time of purchase, 25% or more of the value of the total assets of a Fund to be invested in the obligations of issuers in any industry, provided that there is no limitation with respect to investments in U.S. Government obligations.
4. Make loans, except that a Fund may purchase or hold debt obligations in accordance with its investment objective, policies and limitations, may enter into repurchase agreements for securities, and may lend portfolio securities against collateral consisting of cash or securities which are consistent with the Fund's permitted investments, which is equal at all times to at least 100% of the value of the securities loaned. There is no investment restriction on the amount of securities that may be loaned, except that payments received on such loans, including amounts received during the loan on
account of interest on the securities loaned, may not (together with all non-qualifying income) exceed 10% of a Fund's annual gross income (without offset for realized capital gains) unless, in the opinion of counsel to RBB, such amounts are qualifying income under Federal income tax provisions applicable to regulated investment companies.
5. Purchase securities on margin, except for short-term credit necessary for clearance of portfolio transactions, and except that the Fund may establish margin accounts in connection with its use of options, forward contracts, futures contracts, including those relating to indexes, and options on futures contracts or indexes.
6. Underwrite securities of other issuers, except to the extent that, in connection with the disposition of portfolio securities, a Fund may be deemed an underwriter under federal securities laws.
7. Purchase or sell real estate or real estate limited partnership interests, provided that a Fund may invest in securities secured by real estate or interests therein or issued by companies which invest in real estate or interests therein or in real estate investment trusts.
8. Purchase or sell commodities or commodity contracts, except that a Fund may purchase and sell options, forward contracts, futures contracts, including those relating to indexes, and options on futures contracts or indexes.
9. Invest in oil, gas or mineral-related exploration or development programs or leases.
10. Purchase any securities issued by any other investment company, except to the extent permitted by the 1940 Act and except in connection with the merger, consolidation or acquisition of all the securities or assets of such an issuer.
11. Make investments for the purpose of exercising control or management, but each Fund will vote those securities it owns in its portfolio as a shareholder in accordance with its views.
12. Issue any senior security, as defined in section 18(f) of the 1940 Act, except to the extent permitted by the 1940 Act.
13. Pledge, mortgage or hypothecate its assets, except to the extent necessary to secure permitted borrowings as described in Limitation 2 above and to the extent related to the purchase of securities on a when-issued or forward commitment basis and the deposit of assets in escrow in connection with writing covered put and call options and collateral and initial or variation margin arrangements with respect to options, forward contracts, futures contracts, including those relating to indexes, and options on futures contracts or indexes.
* * *
If a percentage restriction under one of the Fund's investment policies or limitations or the use of assets is adhered to at the time a transaction is effected, later changes in percentage resulting from changing values will not be considered a violation (except with respect to any restrictions that may apply to borrowings or senior securities issued by the Fund).
MANAGEMENT OF THE COMPANY
Directors and Officers.
The business and affairs of RBB are managed under the direction of the RBB's Board of Directors. RBB is organized under and managed pursuant to Maryland law. The Directors and executive officers of RBB, their ages, business addresses and principal occupations during the past five years are:
INDEPENDENT DIRECTORS*:
Number of
Portfolios
in Fund Other
Position(s) Term of Office Complex Directorships
Name, Address, and Held with and Length of Principal Occupation(s) During Past Overseen by Held by
Age--** RBB Time Served*** Five Years Director**** Director*****
Julian A. Brodsky Director Since 1988 Director and Vice Chairman, Comcast 14 Director, Comcast
Age: 69 Corporation (cable television and Corporation;
communications) since 1969. Director, NDS
Group, PLC
(provider of
systems and
applications for
digital pay TV).
|
** Each Director may be contacted by writing to the Director, c/o Edward J.
Roach, The RBB Fund, Inc., Suite 100, Bellevue Park Corporate Center,
400 Bellevue Parkway, Wilmington, DE 19809.
*** Each Director holds office until the earliest of (i) the next meeting of shareholders, if any, called for the purpose of considering the election or re-election of such Director and until the election and qualification of his or her successor, if any, elected, at such meeting, or (ii) the date a Director resigns or retires, or a Director is removed by the Board of Directors or shareholders.
**** RBB consists of 14 portfolios, including the portfolios described in this Statement of Additional Information. The Fund Complex includes RBB and all other registered investment companies for which the investment advisers of RBB or their affiliates serve as investment adviser and hold out to investors as related companies for purposes of investment.
***** This column includes only directorships of companies required to report to the SEC under the Securities Exchange Act of 1934 (i.e. public companies) or other investment companies registered under the 1940 Act.
Number of
Portfolios
in Fund Other
Position(s) Term of Office Complex Directorships
Name, Address, and Held with and Length of Principal Occupation(s) During Past Overseen by Held by
Age** RBB Time Served*** Five Years Director**** Director*****
Francis J. McKay Director Since 1988 Executive Vice President, Fox Chase 14 None
Age: 66 Cancer Center (biomedical research and
medical care) since 1963.
Arnold M. Reichman Director Since 1991 Drector, Gabelli Partners, L.P. (an 14 None
Age: 54 investment partnership) since December
2000; Chief Operating Officer and
member of the Board of Directors of
Outercurve Technologies (wireless
enabling services) until April 2001;
Chief Operating Officer and a member
of the Executive Operating Committee
of Warburg Pincus Asset Management,
Inc., Executive Officer and Director
of Credit Suisse Asset Management
Securities, Inc. (formerly Counsellors
Securities, Inc.) and Director/Trustee
of various investment companies
advised by Warburg Pincus Asset
Management, Inc. until September 15,
1999; Managing Director of Warburg
Pincus Asset Management, Inc until 1997.
Marvin E. Sternberg Director Since 1988 Chairman, Director and President, Moyco 14 Chairman and
Age: 68 Technologies, Inc. (manufacturer of Director, Moyco
precision coated and industrial abrasives) Technologies, Inc.
since 1974; Director, Pennsylvania
Business Bank since 1999.
|
INTERESTED DIRECTORS*:
Number of
Portfolios in Other
Position(s) Term of Office Fund Complex Directorships
Name, Address, and Held with and Length of Principal Occupation(s) During Past Overseen by Held by
Age--** RBB Time Served*** Five Years Director**** Director*
J. Richard Carnall/1/ Director and Since 2002 Director of PFPC Inc. (financial 14 None
Age: 64 Chairman of services) since 1987; Chairman and
the Board Chief Executive Officer of PFPC Inc.
from 1987 to 2002; Executive Vice
President of PNC Bank, National
Association from 1981 to 2002;
Director of PFPC International Ltd.
(financial services) from 1993 to
2002; Director of PFPC International
(Cayman) Ltd. (financial services)
from 1996 to 2002; Director of
International Dollar Reserve Fund,
Ltd. (Cayman Mutual Fund Company) from
1993 until 2002; Governor of the
Investment Company Institute
(investment company industry trade
organization) from 1996 to 2002;
Director of PNC Asset Management, Inc.
(investment advisory) from 1994 to
1998; Director of PNC National Bank
from 1995 to 1997; Director of Haydon
Bolts, Inc. (bolt manufacturer); and
Director of Parkway Real Estate Company
(subsidiary of Haydon Bolts, Inc.) since
1984. Mr. Carnall provides consulting
services from time to time to PFPC Inc.
Robert Sablowsky/1/ Director Since 1991 Senior Vice President of Fahnestock & 14 None
Age: 64 Co., Inc. (financial services) since
2002 and employed by Fahnestock & Co.,
Inc. for greater than 5 years.
|
/1/ Mr. Carnall is considered an "interested Director" of RBB because he owns shares of The PNC Financial Services Group, Inc. The investment adviser to RBB's Money Market Portfolio, BlackRock Institutional Management Corporation, and RBB's principal underwriter, PFPC Distributors, Inc., are indirect subsidiaries of The PNC Financial Services Group, Inc. Mr. Carnall also owns shares of PFPC Inc., RBB's administrator. Mr. Sablowsky is considered an "interested Director" of RBB by virtue of his position as an officer of a registered broker-dealer.
OFFICERS OF THE COMPANY+:
Position(s)
Held with the Term of Office and
Name, Address, and Age Company Length of Time Served Principal Occupation(s) During Past Five Years
---------------------- ------- --------------------- ----------------------------------------------
Edward J. Roach President Since 1991 Certified Public Accountant; Vice Chairman of the Board, Fox
Bellevue Park Corporate And Chase Cancer Center (biomedical research and medical care);
Center Treasurer Since 1988 Trustee Emeritus, Pennsylvania School for the Deaf; Trustee
400 Bellevue Parkway Emeritus, Immaculata University; President or Vice President
Wilmington, DE 19809 and Treasurer of various investment companies advised by
Age: 78 subsidiaries of PNC Bank Corp. from 1981 to 1997; Managing
General Partner and President of Chestnut Street Exchange
Fund; Director of the Bradford Funds, Inc. from 1996 to 2000.
Timothy K. Biedrzycki Secretary Since 2000 Director and Vice President, Fund Accounting and
Bellevue Park Corporate and Administration, PFPC Inc. since 1998; Director and Vice
Center Assistant Since 1998 President, Fund Accounting and Administration of Federated
400 Bellevue Parkway Treasurer Services Company (financial services) from 1994 to 1997.
Wilmington, DE 19809
Age: 54
|
+ Each officer holds office at the pleasure of the Board of Directors until the next annual meeting of RBB or until his or her successor is duly elected and qualified, or until he or she dies, resigns, is removed, or becomes disqualified.
Standing Board Committees
The Board of Directors has established three standing committees in connection with their governance of RBB: Audit; Executive; and Nominating.
Messrs. McKay, Sternberg and Brodsky are members of the Audit Committee of the Board of Directors. The Audit Committee, among other things, reviews results of the annual audit and recommends to RBB the firm to be selected as independent auditors. The Audit Committee convened two times during the fiscal year ended August 31, 2002.
Messrs. Reichman and McKay are members of the Executive Committee of the Board of Directors. The Executive Committee may generally carry on and manage the business of RBB when the Board of Directors is not in session. The Executive Committee did not convene during the fiscal year ended August 31, 2002.
Messrs. McKay and Brodsky are members of the Nominating Committee of the Board of Directors. The Nominating Committee recommends to the Board all persons to be nominated as directors of RBB. The Nominating Committee will consider nominees recommended by shareholders. Recommendations should be submitted to the Committee in care of RBB's Secretary. The Nominating Committee convened once during the fiscal year ended August 31, 2002.
Director Ownership of Shares of the Company
The following table shows the dollar range of shares of RBB owned by each Director in the investment portfolios of RBB as of December 31, 2001.
Independent Directors
Dollar Range of Equity Securities Owned
----------------------------------------------------------------------------------
Julian A. Francis J. Arnold M. Marvin Donald
Fund Brodsky McKay Reichman Sternberg van Roden*
---- -------- ---------- -------- --------- ----------
n/i numeric Small Cap Value None None None None None
n/i numeric Emerging Growth None $10,001-50,000 None None None
n/i numeric Growth None $1-10,000 None None None
n/i numeric Mid Cap None $10,001-50,000 None None None
--------------------------------------------------------------------------------------------------------------------------
Aggregate Dollar Range of
Equity Securities in All
Portfolios in RBB
Family None $50,001-100,000 None None None
|
Interested Directors
Dollar Range of Equity Securities Owned
-------------------------------------------------
Fund J. Richard Carnall** Robert Sablowsky
---- -------------------- ----------------
n/i numeric Small Cap Value None None
n/i numeric Emerging Growth None $10,001-50,000
n/i numeric Growth None $10,001-50,000
n/i numeric Mid Cap None $10,001-50,000
------------------------------------------------------------------------------------------
Aggregate Dollar Range of
Equity Securities in All
Portfolios in RBB
Family None over $100,000
|
* Retired from the Board as of July 1, 2002. ** Elected to the Board on August 30, 2002.
Directors' Compensation.
Directors' Compensation
RBB currently pays directors $15,000 annually and $1,250 per meeting of the Board or any committee thereof that is not held in conjunction with a Board meeting. In addition, the Chairman of the Board receives an additional fee of $6,000 per year for his services in this capacity. Directors are reimbursed for any expenses incurred in attending meetings of the Board of Directors or any committee thereof. For the year ended August 31, 2002, each of the following members of the Board of Directors received compensation from RBB in the following amounts:
Pension or Total Compensation
Aggregate Retirement Benefits Estimated Annual From Fund and Fund
Compensation from Accrued as Part of Benefits Upon Complex Paid to
Name of Director Registrant Fund Expenses Retirement Directors
--------------------------------------------------------------------------------------------------------------------------
Julian A. Brodsky, Director $20,000 N/A N/A $20,000
Francis J. McKay, Director $23,750 N/A N/A $23,750
Arnold M. Reichman, Director $23,750 N/A N/A $23,750
Marvin E. Sternberg, Director $22,500 N/A N/A $22,500
Donald van Roden, former $20,750 N/A N/A $20,750
Director and former
Chairman*
--------------------------------------------------------------------------------------------------------------------------
J. Richard Carnall, Director $ 1,750 N/A N/A $ 1,750
and Chairman**
Robert Sablowsky, Director $22,500 N/A N/A $22,550
|
* Retired from the Board as of July 1, 2002. ** Elected to the Board on August 30, 2002.
On October 24, 1990, RBB adopted, as a participating employer, the Fund Office Retirement Profit-Sharing Plan and Trust Agreement, a retirement plan for employees (currently Edward J. Roach), pursuant to which RBB will contribute on a quarterly basis amounts equal to 10% of the quarterly compensation of each eligible employee. By virtue of the services performed by RBB's advisers, custodians, administrators and distributor, RBB itself requires only one part-time employee. No officer, director or employee of the Adviser or the Distributor currently receives any compensation from RBB.
Code of Ethics.
RBB, the Adviser and PFPC Distributors, Inc. have adopted codes of ethics that permit personnel subject to the codes to invest in securities, including securities that may be purchased or held by RBB.
CONTROL PERSONS
As of October 3, 2002, to RBB's knowledge, the following named persons at the addresses shown below owned of record approximately 5% or more of the total outstanding
shares of the class of RBB indicated below. See "Additional Information Concerning Fund Shares" below. RBB does not know whether such persons also beneficially own such shares. Any shareholder who owns 25% or more of the outstanding shares of a portfolio may be presumed to "control," as that term is defined in the 1940 Act, the portfolio. Shareholders controlling a portfolio could have the ability to vote a majority of the shares of the portfolio on any matter requiring approval of the shareholders of the portfolio.
----------------------------------------------------------------------------------------------------------------------
FUND NAME SHAREHOLDER NAME AND ADDRESS PERCENTAGE OF FUND HELD
----------------------------------------------------------------------------------------------------------------------
SANSOM STREET MONEY MARKET Saxon and Co.
c/o PNC Bank, N.A. 89.74%
F6-F266-02-2
8800 Tinicum Blvd.
Philadelphia, PA 19153-3111
----------------------------------------------------------------------------------------------------------------------
Paine Webber 9.03%
c/o Sal Pace Managed Account Services
A/C 32 32 400 4000038
1200 Harbor Blvd., Suite 3
Weehawken, NJ 07086-6728
----------------------------------------------------------------------------------------------------------------------
N/I EMERGING GROWTH FUND Public Inst. For Social Security 26.75%
1001 19th St., N.
16/th/ Flr.
Arlington, VA 22209-1722
----------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co., Inc 10.10%
Special Custody Account for the Exclusive
Benefit of Customers
Attn: Mutual Funds A/C 3143-0251
101 Montgomery St.
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------------------------------
McKinsey Master Retirement Trust 9.79%
c/o McKinsey & Company Inc.
114 W. 47/th/ St.
20/th/ Floor
New York, NY 10036
----------------------------------------------------------------------------------------------------------------------
Janis Claflin, Bruce Fetzer and 7.75%
Winston Franklin
Robert Lehman Trust.
The John E. Fetzer Institute, Inc.
U/A DTD 06-1992
Attn: Christina Adams
9292 West KL Ave.
Kalamazoo, MI 49009-5316
----------------------------------------------------------------------------------------------------------------------
|
----------------------------------------------------------------------------------------------------------------------
FUND NAME SHAREHOLDER NAME AND ADDRESS PERCENTAGE OF FUND HELD
----------------------------------------------------------------------------------------------------------------------
National Investor Services Corp. 5.24%
for Exclusive Benefit of Our Customers Mutual Funds
Department
55 Water St.,
32/nd/ Floor
New York, NY 10041-3299
----------------------------------------------------------------------------------------------------------------------
Louisa Stude Sarofin Foundation 5.16%
DTD 01/04/91
c/o Nancy Head
1001 Fannin St., Suite 4700
Houston, TX 77002-6798
----------------------------------------------------------------------------------------------------------------------
N/I GROWTH FUND Citibank North America Inc. 60.27%
Sargent & Lundy Retirement Trust
DTD. 06/01/96
Mutual Fund Unit
Bld. B Floor 1 Zone 7
3800 Citibank Center
Tampa, FL 33610-9122
----------------------------------------------------------------------------------------------------------------------
Louisa Stude Sarofim Foundation 7.13%
c/o Nancy Head
DTD. 01/04/91
Suite 4700
1001 Fannin St.
Houston, TX 77002-6798
----------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co., Inc 5.09%
Special Custody Account for the Exclusive
Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------------------------------
N/I MID CAP Charles Schwab & Co., Inc. 20.63%
Special Custody Account for the Exclusive
Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------------------------------
National Investors Services Corp. 5.16%
for the Exclusive Benefit of Our Customers
55 Water St.
32/nd/ Floor
New York, NY 10041-3299
----------------------------------------------------------------------------------------------------------------------
|
----------------------------------------------------------------------------------------------------------------------
FUND NAME SHAREHOLDER NAME AND ADDRESS PERCENTAGE OF FUND HELD
----------------------------------------------------------------------------------------------------------------------
N/I SMALL CAP VALUE FUND Charles Schwab & Co., Inc 31.50%
Special Custody Account for the Exclusive
Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------------------------------
National Investor Services Corp. 12.44%
For Exclusive Benefit of Our Customers
55 Water St.
32/nd/ Floor
New York, NY 10041-3299
----------------------------------------------------------------------------------------------------------------------
McKinsey Master Retirement Trust 5.71%
c/o McKinsey & Company Inc.
114 West 47th St.
20/th/ Floor
New York, NY 10036
----------------------------------------------------------------------------------------------------------------------
BOSTON PARTNERS LARGE CAP VALUE Charles Schwab & Co., Inc. 20.30%
FUND - INSTITUTIONAL SHARES Special Custody Account
for Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------------------------------
Northern Trust Company 14.58%
FBO AEFC Pension Trust
A/C 22-53582
P. O. Box 92956
Chicago, IL 60675-2956
----------------------------------------------------------------------------------------------------------------------
Swanee Hunt and Charles Ansbacher 13.29%
Trst. Swanee Hunt Family Foundation
c/o Beth Benham
168 Brattle St.
Cambridge, MA 02138-3309
----------------------------------------------------------------------------------------------------------------------
U.S. Bank National Association 12.22%
FBO A-Dec Inc. DOT 093098
P. O. Box 1787
Milwaukee, WI 53201-1787
----------------------------------------------------------------------------------------------------------------------
Union Bank of California 11.75%
FBO Service Employees
BP 610001265-01
P. O. Box 85484
San Diego, CA 92186-5484
----------------------------------------------------------------------------------------------------------------------
|
----------------------------------------------------------------------------------------------------------------------
FUND NAME SHAREHOLDER NAME AND ADDRESS PERCENTAGE OF FUND HELD
----------------------------------------------------------------------------------------------------------------------
Solomon R. Guggenheim Foundation 7.46%
General Endowment Fund
575 Broadway
3/rd/ Floor
New York, NY 10012-4233
----------------------------------------------------------------------------------------------------------------------
BOSTON PARTNERS LARGE CAP VALUE Charles Schwab & Co., Inc. 51.37%
FUND INVESTOR SHARES Special Custody Account
for Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------------------------------
SBSA c/o Coronation International 22.66%
Active Fund of Funds
P.O. Box 54
Cape Town 8000 South Africa
----------------------------------------------------------------------------------------------------------------------
National Financial Services Corp. 8.73%
for the Exclusive Benefit of Our Customers
Attn: Mutual Funds
5/th/ Floor
200 Liberty St.
1 World Financial Cr.
New York, NY 10281-1003
----------------------------------------------------------------------------------------------------------------------
JPMB(I) as Trustees for 7.42%
Coronation Global Equity
Boundary Terraces
1 Mariendahl Lane
Newlands 7700 South Africa
----------------------------------------------------------------------------------------------------------------------
BOSTON PARTNERS MID CAP VALUE FUND USB 20.23%
INSTITUTIONAL SHARES Custody SIS of the Order of St. Benedict
P.O. Box 1787
Milwaukee, WI 53201-1787
----------------------------------------------------------------------------------------------------------------------
MAC & Co. 19.33%
A/C CHIF1001182
FBO Childrens Hospital LA
P.O. Box 3198
Pittsburgh, PA 15230-3198
----------------------------------------------------------------------------------------------------------------------
American Express Trust Co. 18.31%
FBO American Express
Retirement Serv Plans
Attn: Pat Brown
50534 AXP Financial Ctr.
Minneapolis, MN 55474-0505
----------------------------------------------------------------------------------------------------------------------
|
----------------------------------------------------------------------------------------------------------------------
FUND NAME SHAREHOLDER NAME AND ADDRESS PERCENTAGE OF FUND HELD
----------------------------------------------------------------------------------------------------------------------
MAC & Co. 15.29%
A/C BPHF 3006002
Mutual Funds Operations
P.O. Box 3198
Pittsburgh, PA 15230-3198
----------------------------------------------------------------------------------------------------------------------
Belmont Hill School Inc. 8.53%
350 Prospect St.
Belmont, MA 02478-2656
----------------------------------------------------------------------------------------------------------------------
Houvis & Co. 5.07%
c/o AmSouth Bank
P.O. Box 12365
Birmingham, AL 35202
----------------------------------------------------------------------------------------------------------------------
BOSTON PARTNERS MID CAP VALUE FUND SBSA c/o Coronation International 53.59%
- INVESTOR SHARES Active Fund of Funds
P.O. Box 54
Cape Town 8000 South Africa
----------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co., Inc. 12.16%
Special Custody Account
for Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------------------------------
National Financial Services Corp. 11.30%
for Exclusive Benefit of Our Customers
Attn: Mutual Funds
5/th/ Floor
200 Liberty St.
New York, NY 10281-1003
----------------------------------------------------------------------------------------------------------------------
JPMB(I) as Trustees for 5.56%
Coronation Global Equity
Boundary Terraces
1 Mariendahl Lane
Newlands 7700 South Africa
----------------------------------------------------------------------------------------------------------------------
BOSTON PARTNERS National Financial Services Corp. 11.65%
SMALL CAP VALUE FUND II For the Exclusive Benefit for Our Customers
-INSTITUTIONAL SHARES Attention: Mutual Funds
5/th/ Floor
200 Liberty St.
1 World Financial Center
New York, NY 10281-1003
----------------------------------------------------------------------------------------------------------------------
|
----------------------------------------------------------------------------------------------------------------------
FUND NAME SHAREHOLDER NAME AND ADDRESS PERCENTAGE OF FUND HELD
----------------------------------------------------------------------------------------------------------------------
Plumbers and Steamfitters 11.17%
Local No. 7 Pension Fund
Robert M. Valenty, Administrator
Mary Allen Smith,
Assistant Administrator
308 Wolf Road
Latham, NY 12110-4802
----------------------------------------------------------------------------------------------------------------------
Hollowbeam & Co. 8.33%
For the Exclusive Benefit of Our Customers
Maine Health Access Foundation
200 Newport Avenue
7/th/ Floor
North Quincy, MA 02171
----------------------------------------------------------------------------------------------------------------------
Georgetown Memorial Hospital 7.19%
Depreciation Fund
P.O. Box 1718
Georgetown, SC 29442-1718
----------------------------------------------------------------------------------------------------------------------
BOSTON PARTNERS SMALL CAP VALUE Charles Schwab & Co., Inc. 41.50%
FUND II - INVESTOR SHARES Special Custody Account
for Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------------------------------
National Financial Services Corp. 34.81%
for the Exclusive Benefit of Our Customers
Attn: Mutual Funds
5/th/ Floor
200 Liberty St.
1 World Financial Center
New York, NY 10281-1003
----------------------------------------------------------------------------------------------------------------------
National Investors Services Corp. 6.99%
for the Exclusive Benefit of Our Customers
55 Water St.
New York, NY 10041-0004
----------------------------------------------------------------------------------------------------------------------
BOSTON PARTNERS LONG/SHORT EQUITY Charles Schwab & Co., Inc. 64.97%
FUND - INSTITUTIONAL SHARES Special Custody Account
for Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------------------------------
|
----------------------------------------------------------------------------------------------------------------------
FUND NAME SHAREHOLDER NAME AND ADDRESS PERCENTAGE OF FUND HELD
----------------------------------------------------------------------------------------------------------------------
National Financial Services Corp. 13.84%
for the Exclusive Benefit of Our Customers
Attn: Mutual Funds
5/th/ Floor
200 Liberty St.
1 World Financial Center
New York, NY 10281-1003
----------------------------------------------------------------------------------------------------------------------
National Investors Services Corp. 11.75%
for the Exclusive Benefit of Our Customers
55 Water St.
New York, NY 10041-0004
----------------------------------------------------------------------------------------------------------------------
BOSTON PARTNERS LONG/SHORT EQUITY National Financial Services Corp. 69.52%
FUND - for the Exclusive Benefit of Our Customers
INVESTOR SHARES Attn: Mutual Funds
5/th/ Floor
200 Liberty St.
1 World Financial Center
New York, NY 10281-1003
----------------------------------------------------------------------------------------------------------------------
BOSTON PARTNERS Boston Partners Asset Management LP Attn: Jan Penney 76.65%
ALL-CAP VALUE FUND - INSTITUTIONAL 28 State St.
SHARES Boston, MA 02109-1775
----------------------------------------------------------------------------------------------------------------------
Desmond J. Heathwood 15.72%
41 Chestnut St.
Boston, MA 02108-3506
----------------------------------------------------------------------------------------------------------------------
BOSTON PARTNERS Edward H. Grant and Carol A. Grant 94.37%
ALL-CAP VALUE FUND - INVESTOR SHARES JT TEN WROS
28 Windrush Lane
Osterville, MA 02655-2317
----------------------------------------------------------------------------------------------------------------------
Boston Partners Asset Management LP Attn: Jan Penney 5.63%
28 State St.
Boston, MA 02109-1775
----------------------------------------------------------------------------------------------------------------------
SCHNEIDER SMALL CAP VALUE FUND Charles Schwab & Co., Inc. 33.90%
Special Custody Account
for Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------------------------------
Ursinus College Endowment Fund 16.26%
P.O. Box 1000
Collegeville, PA 19426-1000
----------------------------------------------------------------------------------------------------------------------
|
----------------------------------------------------------------------------------------------------------------------
FUND NAME SHAREHOLDER NAME AND ADDRESS PERCENTAGE OF FUND HELD
----------------------------------------------------------------------------------------------------------------------
MAC & CO. 7.39%
A/C CPVF1854542
Mutual Fund Operations
P.O. Box 3198
Pittsburgh, PA 15230-3198
----------------------------------------------------------------------------------------------------------------------
John Frederick Lyness 5.84%
81 Hillcrest Ave.
Summit, NJ 07901-2012
----------------------------------------------------------------------------------------------------------------------
BOGLE SMALL CAP GROWTH FUND National Investors Services Corp. 10.20%
-INVESTOR SHARES for the Exclusive Benefit of Our Customers
55 Water St.
32/nd/ floor
New York, NY 10041-3299
----------------------------------------------------------------------------------------------------------------------
BOGLE SMALL CAP GROWTH FUND Charles Schwab & Co, Inc. 56.60%
-INSTITUTIONAL SHARES Special Custody Account
for the Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------------------------------
AMA U.S. Equity Master Fund L.P. 16.86%
3801 PGA Blvd.
Suite 555
Palm Beach Gardens, FL 33410
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
|
As of October 3, 2002, directors and officers as a group owned less than one percent of the shares of each class within RBB.
INVESTMENT ADVISORY, DISTRIBUTION
AND SERVICING ARRANGEMENTS
Advisory Agreements.
Numeric renders advisory services to the Funds pursuant to Investment Advisory Agreements. The Advisory Agreements relating to each of the Funds are dated April 24, 1996, except for the Small Cap Value Fund, which is dated November 30, 1998.
Numeric is entitled to receive a fee from its Emerging Growth Fund calculated at an annual rate of 0.75% of its average daily net assets. Until December 31, 2003, Numeric has agreed to waive its advisory fees and/or reimburse expenses for its Emerging Growth Fund (other than brokerage commissions, extraordinary items, interest and taxes) in excess of its advisory fees to the extent necessary to maintain an annualized expense ratio for its Emerging
Growth Fund of 1.25%. There can be no assurance that Numeric will continue such waivers and reimbursements thereafter.
Effective January 1, 2001, for the Growth, Mid Cap and Small Cap Value Funds, Numeric is entitled to a performance based fee calculated at the end of each month using a basic fee of 0.85% of average daily net assets and a performance fee adjustment based upon the Fund's performance during the last rolling 12 month period. Under this arrangement, the investment advisory fee would never be greater than 1.35% nor less than 0.35% of each of the Growth, Mid Cap and Small Cap Value Funds' average daily net assets for the preceding month. The table below details the performance based fee arrangements.
Percentage Point Difference Between Fund Performance (Net of Expenses Including Performance Advisory Fees) and Change in Adjustment Total Total Benchmark Index Basic Fee Rate Advisory Fee --------------------- --------- ---- ------------ +9% or more .............................. 0.85% 0.50% 1.35% +8% or more but less than +9% ............ 0.85% 0.40% 1.25% +7% or more but less than +8% ............ 0.85% 0.30% 1.15% +6% or more but less than +7% ............ 0.85% 0.20% 1.05% +5% or more but less than +6% ............ 0.85% 0.10% 0.95% +4% or more but less than +5% ............ 0.85% None 0.85% +3% or more but less than +4% ............ 0.85% -0.10% 0.75% +2% or more but less than +3% ............ 0.85% -0.20% 0.65% +1% or more but less than +2% ............ 0.85% -0.30% 0.55% +0% or more but less than +1% ............ 0.85% -0.40% 0.45% Less than 0% ............................. 0.85% -0.50% 0.35% |
From January 1, 2003 through December 31, 2003, Numeric has agreed to reimburse expenses (other than investment advisory fees, brokerage commissions, extraordinary items, interest and taxes) in an aggregate amount equal to the amount by which the Growth, Mid Cap and/or Small Cap Value Funds' total operating expenses (other than investment advisory fees, brokerage commissions, extraordinary items, interest and taxes)
exceeds a total operating expense ratio (other than investment advisory fees, brokerage commissions, extraordinary items, interest and taxes) of 0.50% of such Fund's average daily net assets.
Prior to January 1, 2001, Numeric was entitled to a management fee of 0.75% of the average daily net assets of each of the Growth, Mid Cap and Small Cap Value Funds.
For the fiscal years ended August 31, 2002, 2001 and 2000 the Funds paid Numeric advisory fees and Numeric waived advisory fees and reimbursed expenses in excess of its advisory fees as follows:
Advisory Fees Paid
(after waivers and
Fund reimbursements) Waivers Reimbursements
--------------------------------------------------------------------------------------------------
Fiscal year ended August 31, 2002
Emerging Growth $ 835,355 $ 0 $ 0
Growth $ 297,804 $ 23,912 $ 0
Mid Cap $ 15,810 $ 81,898 $ 834
Small Cap Value $1,319,946 $ 4,209 $ 0
Fiscal year ended August 31, 2001
Emerging Growth $ 856,458 $ 55,222 $ 0
Growth $ 300,062 $ 80,325 $ 0
Mid Cap $ 51,654 $123,208 $11,001
Small Cap Value $ 214,585 $ 66,265 $ 622
Fiscal year ended August 31, 2000
Emerging Growth $ 691,341 $160,187 $ 0
Growth $ 408,582 $125,333 $ 0
Mid Cap $ 115,878 $213,484 $ 0
Small Cap Value* $ 3,334 $ 75,193 $ 4,558
|
* The Small Cap Value Fund commenced operations on November 30, 1998.
The Funds bear all of their own expenses not specifically assumed by Numeric. General expenses of RBB not readily identifiable as belonging to a portfolio of RBB are allocated among all investment portfolios by or under the direction of RBB's Board of Directors in such manner as the Board determines to be fair and equitable. Expenses borne by a Fund include, but are not limited to the expenses listed in the prospectus and the following (or a Fund's share of the following): (a) the cost (including brokerage commissions) of securities purchased or sold by a Fund and any losses incurred in connection therewith; (b) expenses of organizing RBB that are not attributable to a class of RBB; (c) any costs, expenses or losses arising out of a liability of or claim for damages or other relief asserted against RBB or a Fund for violation of any law; (d) any extraordinary expenses; (e) fees, voluntary assessments and other expenses incurred in connection with membership in investment company organizations; (f) costs of mailing and tabulating proxies and costs of shareholders' and directors' meetings; and (g) the cost of investment company literature and other publications provided by RBB to its directors and officers. Distribution expenses, transfer agency expenses, expenses of preparation, printing and mailing prospectuses, statements of additional information, proxy statements and reports to shareholders, and organizational expenses and registration fees, identified as belonging to a particular class of RBB, are allocated to such class.
Under the Advisory Agreements, Numeric will not be liable for any error of judgment or mistake of law or for any loss suffered by RBB or the Funds in connection with the performance of an Advisory Agreement, except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of Numeric in the performance of its duties or from reckless disregard of its duties and obligations thereunder.
The Advisory Agreements for the Emerging Growth, Growth and Mid Cap Funds were approved on April 24, 1996 and were most recently reapproved on July 24, 2002, each time by
vote of RBB's Board of Directors, including a majority of those directors who are not parties to the Advisory Agreements or interested persons (as defined in the 1940 Act) of such parties. The Advisory Agreement for the Small Cap Value Fund was similarly approved on October 28, 1998 and was most recently reapproved on July 24, 2002. The Advisory Agreements are terminable by vote of RBB's Board of Directors or by the holders of a majority of the outstanding voting securities of the Funds, at any time without penalty, on 60 days' written notice to Numeric. The Advisory Agreements for the Emerging Growth, Growth and Mid Cap Funds became effective on May 20, 1996 and were approved by written consent of the sole shareholder of each of the Emerging Growth, Growth and Mid Cap Funds on May 28, 1996. Amendments to each of the Advisory Agreements for the Emerging Growth, Growth and Mid Cap Funds were approved at a Special Meeting of Shareholders held on November 22, 1999. The Advisory Agreement for the Small Cap Value Fund became effective on November 30, 1998 and was approved by written consent of the sole shareholder of the Fund on November 30, 1998. An amendment to the Advisory Agreement for the Small Cap Value Fund was approved at a Special Meeting of Shareholders held on November 22, 1999. The Advisory Agreements terminate automatically in the event of assignment thereof.
In connection with the approval of the Advisory Agreement, the
Directors considered, with the assistance of independent counsel, their legal
responsibilities and reviewed the nature and quality of the Numeric's services
to be provided to the Funds and the Numeric's experience and qualifications.
Among other items, the Directors also reviewed and considered: (1) a report on
the Funds' advisory and administration fee structure; (2) a report comparing:
(i) the contractual management fee for the Funds to that of comparable funds,
and (ii) the estimated expenses for the Funds to those of its peer group; and
(3) a report comparing the Funds' fees to Lipper averages.
After discussion, the Board of Directors concluded that Numeric had the capabilities, resources and personnel necessary to manage the Funds. The Board of Directors also concluded that based on the services that Numeric would provide to the Funds under the Advisory Agreement and the estimated expenses to be incurred by Numeric in the performance of such services, the compensation to be paid to Numeric was fair and equitable. Based upon such information as it considered necessary to the exercise of its reasonable business judgment, the Board of Directors concluded unanimously that it was in the best interests of RBB to approve the Advisory Agreement.
The Advisory Agreements provide that Numeric shall at all times have all rights in and to each Fund's name and all investment models used by or on behalf of the Funds. Numeric may use each Fund's name or any portion thereof in connection with any other mutual fund or business activity without the consent of any shareholder, and RBB has agreed to execute and deliver any and all documents required to indicate its consent to such use.
The Advisory Agreements further provide that no public reference to, or description of, Numeric or its methodology or work shall be made by RBB, whether in the Prospectus, Statement of Additional Information or otherwise, without the prior written consent of Numeric, which consent shall not be unreasonably withheld. In each case, RBB has agreed to provide
Numeric a reasonable opportunity to review any such reference or description before being asked for such consent.
Custodian Agreements.
Custodial Trust Company ("CTC"), with offices at 101 Carnegie Center, Princeton, NJ 08540, is custodian of the Funds' assets pursuant to custodian agreements dated as of May 20, 1996, as amended (the "Custodian Agreements"). Under the Custodian Agreements, CTC (a) maintains a separate account or accounts in the name of each of the Funds, (b) holds and transfers portfolio securities on account of each of the Funds, (c) accepts receipts and makes disbursements of money on behalf of each of the Funds, (d) collects and receives all income and other payments and distributions on account of each of the Funds' portfolio securities and (e) makes periodic reports to RBB's Board of Directors concerning the Funds' operations. CTC is authorized to select one or more banks or trust companies to serve as sub-custodian on behalf of the Funds, provided that CTC remains responsible for the performance of all its duties under the Custodian Agreements and holds RBB harmless from the acts and omissions of any sub-custodian. For its services to the Funds under the Custodian Agreements, CTC receives a fee calculated at 0.03% of each Fund's total assets as determined on the last business day of the month.
Transfer Agency Agreements.
PFPC Inc. ("PFPC"), with offices at 400 Bellevue Parkway, Wilmington, DE 19809, serves as the transfer and dividend disbursing agent for the Funds pursuant to a Transfer Agency Agreement dated August 16, 1988, as supplemented (collectively, the "Transfer Agency Agreement"). Under the Transfer Agency Agreement, PFPC (a) issues and redeems Shares of each of the Funds, (b) addresses and mails all communications by the Funds to record owners of shares of the Funds, including reports to shareholders, dividend and distribution notices and proxy materials for its meetings of shareholders, (c) maintains shareholder accounts and, if requested, sub-accounts and (d) makes periodic reports to RBB's Board of Directors concerning the operations of the Funds. For its services to the Funds under the Transfer Agency Agreement, PFPC receives a fee at the annual rate of $10 per account for the Funds, with a minimum annual fee of $36,000 payable monthly on a pro rata basis, exclusive of out-of-pocket expenses, and also receives reimbursement of its out-of-pocket expenses.
Co-Administration Agreements.
Bear Stearns Funds Management Inc. ("BSFM") with offices at 383 Madison Avenue, New York, NY 10179, serves as co-administrator to the Funds pursuant to Co-Administration Agreements dated April 24, 1996, as amended, for each of the Funds (the "BSFM Co-Administration Agreements"). BSFM has agreed to assist each of the Funds in all significant aspects of their administration and operations. The BSFM Co-Administration Agreements provide that BSFM shall not be liable for any error of judgment or mistake of law or any loss suffered by RBB or the Funds in connection with the performance of the agreement, except a loss resulting from willful misfeasance, bad faith or negligence, or reckless disregard of its duties and obligations thereunder. In consideration for providing services pursuant to the BSFM Co-Administration Agreements, BSFM receives a fee with respect to each of the Funds calculated at an annual rate of 0.05% of
the first $150 million of each Fund's average daily net assets and 0.02% on all assets above $150 million.
PFPC also serves as co-administrator to Funds pursuant to Co-Administration Agreements dated as of April 24, 1996, as amended (the "PFPC Co-Administration Agreements"). PFPC has agreed to calculate the Funds' net asset values, provide all accounting services for the Funds and assist in related aspects of the Funds' operations. The PFPC Co-Administration Agreements provide that PFPC shall not be liable for any error of judgment or mistake of law or any loss suffered by RBB or the Funds in connection with the performance of the agreement, except a loss resulting from willful misfeasance, bad faith or negligence, or reckless disregard of its duties and obligations thereunder. In consideration for providing services pursuant to the PFPC Co-Administration Agreements, PFPC receives a fee with respect to each of the Funds calculated at an annual rate of 0.125% of each Fund's average daily net assets, exclusive of out-of-pocket expenses and pricing charges. PFPC is currently waiving fees in excess of .1025% of average daily net assets for the Emerging Growth and Small Cap Value Funds. For the Growth and MidCap Funds, PFPC is currently waiving fees in excess of .115% of average daily net assets and is waiving an additional $5,000 per year.
For the fiscal years ended August 31, 2002, 2001 and 2000, the Funds paid administration fees to PFPC and BSFM, and PFPC waived administration fees as follows:
Co-Administration Fees Paid
Fund (After Waivers) Waivers
-----------------------------------------------------------------------------
For the fiscal year ended August 31, 2002.
(PFPC)
------
Emerging Growth $137,564 $ 8,891
Growth $ 80,527 $ 2,083
Mid Cap $ 78,508 $ 2,084
Small Cap Value $125,083 $ 11,831
(BSFM)
------
Emerging Growth $ 55,690 $ 0
Growth $ 18,786 $ 0
Mid Cap $ 14,186 $ 0
Small Cap Value $ 47,684 $ 0
For the fiscal year ended August 31, 2001.
(PFPC)
------
Emerging Growth $142,274 $ 9,693
Growth $ 76,300 $ 1,732
Mid Cap $ 74,999 $ 0
Small Cap Value $ 65,624 $ 9,375
(BSFM)
------
Emerging Growth $ 60,778 $ 0
Growth $ 26,185 $ 0
Mid Cap $ 18,638 $ 0
Small Cap Value $ 11,502 $ 0
For the fiscal year ended August 31, 2000.
(PFPC)
------
Emerging Growth $130,599 $ 11,354
Growth $ 82,562 $ 6,521
Mid Cap $ 74,999 $ 0
Small Cap Value* $ 37,498 $ 37,501
(BSFM)
------
Emerging Growth $ 56,768 $ 0
Growth $ 35,614 $ 0
Mid Cap $ 21,957 $ 0
Small Cap Value* $ 5,539 $ 0
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* The Small Cap Value Fund commenced operations on November 30, 1998.
Administrative Services Agent.
PFPC Distributors, Inc. ("PFPC Distributors"), with offices at 760 Moore Road, Valley Forge, PA 19406, provides certain administrative services to the Funds that are not provided by BSFM or PFPC. These services include furnishing data processing and clerical services, acting as liaison between the Funds and various service providers and coordinating the preparation of proxy statements and annual, semi-annual and quarterly reports. As compensation for such administrative services, PFPC Distributors is entitled to a monthly fee calculated at the annual rate of 0.15% of each Fund's average daily net assets. PFPC Distributors is currently waiving fees in excess of 0.02% of each Fund's average daily net assets.
Prior to January 2, 2001, Provident Distributors, Inc. ("PDI") acted as Administrative Services Agent pursuant to the same compensation as PFPC Distributors.
For the fiscal years ended August 31, 2002, 2001 and 2000, the Funds paid administrative services fees to PFPC Distributors and PDI, and PFPC Distributors and PDI waived administrative services fees as follows:
For the fiscal year ended August 31, 2002
(PFPC Distributors)
---- Emerging Growth $21,365 $145,706 Growth $ 9,752 $ 46,607 Mid Cap $ 7,348 $ 35,209 Small Cap Value $19,193 $127,935 |
For the period from January 2, 2001 through August 31, 2001
(PFPC Distributors)
------------------- Emerging Growth $19,602 $104,410 Growth $ 8,943 $ 36,739 Mid Cap $ 7,024 $ 28,096 Small Cap Value $ 5,436 $ 21,745 |
For the period from September 1, 2000 through January 1, 2001
(PDI)
----- Emerging Growth $7,881 $ 50,443 Growth $4,426 $ 28,767 Mid Cap $4,159 $ 16,637 Small Cap Value $1,465 $ 5,860 |
For the fiscal year ended August 31, 2000
(PDI)
----- Emerging Growth $22,708 $147,598 Growth $14,245 $ 92,597 Mid Cap $13,174 $ 52,698 Small Cap Value* $ 3,323 $ 13,294 |
* The Small Cap Value Fund commenced operations on November 30, 1998.
Distributor.
PFPC Distributors serves as distributor of the Shares pursuant to the terms of a distribution agreement dated as of January 2, 2001 (the "Distribution Agreement") entered into by PFPC Distributors and RBB. No compensation is payable by RBB to PFPC Distributors for distribution services with respect to the Funds. PDI served as distributor of the Shares prior to January 2, 2001 pursuant to the same compensation as PFPC Distributors.
FUND TRANSACTIONS
Subject to policies established by the Board of Directors and applicable rules, Numeric is responsible for the execution of portfolio transactions and the allocation of brokerage transactions for the Funds. In executing portfolio transactions, Numeric seeks to obtain the best price and most favorable execution for the Funds, taking into account such factors as the price (including the applicable brokerage commission or dealer spread), size of the order, difficulty of execution and operational facilities of the firm involved. While Numeric generally seeks reasonably competitive commission rates, payment of the lowest commission or spread is not necessarily consistent with obtaining the best price and execution in particular transactions.
No Fund has any obligation to deal with any broker or group of brokers in the execution of portfolio transactions. Numeric may, consistent with the interests of the Funds and subject to the approval of the Board of Directors, select brokers on the basis of the research, statistical and pricing services they provide to the Funds and other clients of Numeric. Information and research received from such brokers will be in addition to, and not in lieu of, the services required to be performed by Numeric under its respective contracts. A commission paid to such brokers may be higher than that which another qualified broker would have charged for effecting the same transaction, provided that Numeric, as applicable, determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of
Numeric, as applicable, to a Fund and its other clients and that the total commissions paid by a Fund will be reasonable in relation to the benefits to a Fund over the long-term.
For the fiscal year ended August 31, 2002, the Funds paid aggregate commissions to brokers on account of research services as follows:
Fund Brokerage Commissions ------------------------------------------- Emerging Growth $ 73,396 Growth $ 23,361 Mid Cap $ 43,335 Small Cap Value $213,508 |
Corporate debt and U.S. Government securities and many micro- and small-cap stocks are generally traded on the over-the-counter market on a "net" basis without a stated commission, through dealers acting for their own account and not as brokers. The Funds will primarily engage in transactions with these dealers or deal directly with the issuer unless a better price or execution could be obtained by using a broker. Prices paid to a dealer in debt, micro- or small-cap securities will generally include a "spread," which is the difference between the prices at which the dealer is willing to purchase and sell the specific security at the time, and includes the dealer's normal profit.
Numeric may seek to obtain an undertaking from issuers of commercial paper or dealers selling commercial paper to consider the repurchase of such securities from the Funds prior to their maturity at their original cost plus interest (sometimes adjusted to reflect the actual maturity of the securities), if it believes that the Funds' anticipated need for liquidity makes such action desirable. Any such repurchase prior to maturity reduces the possibility that the Funds would incur a capital loss in liquidating commercial paper (for which there is no established market), especially if interest rates have risen since acquisition of the particular commercial paper.
Investment decisions for the Funds and for other investment accounts managed by Numeric are made independently of each other in the light of differing conditions. However, the same investment decision may occasionally be made for two or more of such accounts. In such cases, simultaneous transactions are inevitable. Purchases or sales are then averaged as to price and allocated as to amount according to a formula deemed equitable to each such account. While in some cases this practice could have a detrimental effect upon the price or value of the security as far as a Fund is concerned, in other cases it is believed to be beneficial to the Funds. The Funds will not purchase securities during the existence of any underwriting or selling group relating to such security of which Numeric or any affiliated person (as defined in the 1940 Act) thereof is a member except pursuant to procedures adopted by RBB's Board of Directors pursuant to Rule 10f-3 under the 1940 Act.
In no instance will portfolio securities be purchased from or sold to PFPC Distributors, PNC Bank or Numeric or any affiliated person of the foregoing entities except as permitted by SEC exemptive order or by applicable law.
For the fiscal years ended August 31, 2002, 2001 and 2000, the Funds paid brokerage commissions on behalf of the Funds as follows:
Aggregate
Commissions
Fund 2002 2001 2000
----------------------------------------------------------------------
Emerging Growth $500,798 $668,413 $442,734
Growth $147,366 $230,499 $183,824
Mid Cap $127,915 $152,774 $209,571
Small Cap Value* $616,616 $144,152 $ 62,105
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* The Small Cap Value Fund commenced operations on November 30, 1998.
ADDITIONAL INFORMATION CONCERNING FUND SHARES
RBB has authorized capital of 30 billion shares of Common Stock at a par value of $0.001 per share. Currently, 21.073 billion shares have been classified into 95 classes as shown in the table below. Under RBB's charter, the Board of Directors has the power to classify and reclassify any unissued shares of Common Stock from time to time.
Number of Number of
Authorized Shares Authorized Shares
Class of Common Stock (millions) Class of Common Stock (millions)
---------------------------------------------------------- --------------------------------------------------------
A (Growth & Income) 100 YY (Schneider Capital Small Cap
Value) 100
B 100 ZZ 100
C (Balanced) 100 AAA 100
D (Tax-Free) 100 BBB 100
E (Money) 500 CCC 100
F (Municipal Money) 500 DDD (Boston Partners
Institutional Small Cap Value 100
Fund II)
G (Money) 500 EEE (Boston Partners Investors
Small Cap Value Fund II) 100
H (Municipal Money) 500 FFF 100
I (Sansom Money) 1500 GGG 100
J (Sansom Municipal Money) 500 HHH 100
K (Sansom Government Money) 500 III (Boston Partners
Institutional Long/Short Equity) 100
L (Bedford Money) 1500 JJJ (Boston Partners Investors
Long/Short Equity) 100
M (Bedford Municipal Money) 500 KKK (Boston Partners Institutional Fund) 100
N (Bedford Government Money) 500 LLL (Boston Partners Investors Fund) 100
O (Bedford N.Y. Money) 500 MMM (n/i numeric Small Cap Value) 100
P (RBB Government) 100 Class NNN (Bogle Institutional
Small Cap Growth) 100
Q 100 Class OOO (Bogle Investors Small
Cap Growth) 100
Class PPP (Schneider Value Fund) 100
R (Municipal Money) 500 Select (Money) 700
S (Government Money) 500 Beta 2 (Municipal Money) 1
T 500 Beta 3 (Government Money) 1
U 500 Beta 4 (N.Y. Money) 1
V 500 Principal Class (Money) 700
W 100 Gamma 2 (Municipal Money) 1
X 50 Gamma 3 (Government Money) 1
Y 50 Gamma 4 (N.Y. Money) 1
Z 50 Bear Stearns Money 2,500
AA 50 Bear Stearns Municipal Money 1,500
BB 50 Bear Stearns Government Money 1,000
CC 50 Delta 4 (N.Y. Money) 1
DD 100 Epsilon 1 (Money) 1
EE 100 Epsilon 2 (Municipal Money) 1
FF (n/i numeric Micro Cap) 50 Epsilon 3 (Government Money) 1
GG (n/i numeric Growth) 50 Epsilon 4 (N.Y. Money) 1
HH (n/i numeric Mid Cap) 50 Zeta 1 (Money) 1
II (Baker 500 Growth Fund) 100 Zeta 2 (Municipal Money) 1
JJ (Baker 500 Growth Fund) 100 Zeta 3 (Government Money) 1
KK 100 Zeta 4 (N.Y. Money) 1
LL 100 Eta 1 (Money) 1
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Number of Number of
Authorized Shares Authorized Shares
Class of Common Stock (millions) Class of Common Stock (millions)
---------------------------------------------------------- --------------------------------------------------------
MM 100 Eta 2 (Municipal Money) 1
NN 100 Eta 3 (Government Money) 1
OO 100 Eta 4 (N.Y. Money) 1
PP 100 Theta 1 (Money) 1
QQ (Boston Partners Institutional Theta 2 (Municipal Money) 1
Large Cap) 100
RR (Boston Partners Investors Large Theta 3 (Government Money) 1
Cap) 100
SS (Boston Partners Advisor Large Theta 4 (N.Y. Money) 1
Cap) 100
TT (Boston Partners Investors Mid
Cap) 100
UU (Boston Partners Institutional
Mid Cap) 100
VV (Boston Partners Institutional
All Cap Value) 100
WW (Boston Partners Investors All
Cap Value) 100
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The classes of Common Stock have been grouped into separate "families."
There are seven families that currently have operating portfolios, including:
the Sansom Street Family, the Bedford Family, the Schneider Capital Management
Family, the n/i numeric family of funds, the Boston Partners Family, the Bogle
Family and the Baker 500 Family. The Bedford Family and the Sansom Street Family
represent interests in the Money Market Portfolio; the n/i numeric investors
family of funds represents interests in four non-money market portfolios; the
Boston Partners Family represents interests in five non-money market portfolios;
the Bogle Family represents interests in one non-money market portfolio; the
Schneider Capital Management Family represents interests in two non-money market
portfolios; and the Baker 500 Family represents interests in one non-money
market portfolio.
Each share that represents an interest in a Fund has an equal proportionate interest in the assets belonging to such Fund with each other share that represents an interest in such Fund, even where a share has a different class designation than another share representing an interest in that Fund. Shares of RBB do not have preemptive or conversion rights. When issued for payment as described in the Prospectus, shares of RBB will be fully paid and non-assessable.
RBB does not currently intend to hold annual meetings of shareholders except as required by the 1940 Act or other applicable law. RBB's amended By-Laws provide that shareholders owning at least ten percent of the outstanding shares of all classes of Common Stock of RBB have the right to call for a meeting of shareholders to consider the removal of one or more directors. To the extent required by law, RBB will assist in shareholder communication in such matters.
Holders of shares of each class of RBB will vote in the aggregate and not by class on all matters, except where otherwise required by law. Further, shareholders of RBB will vote in the aggregate and not by portfolio except as otherwise required by law or when the Board of Directors determines that the matter to be voted upon affects only the interests of the
shareholders of a particular portfolio. Rule 18f-2 under the 1940 Act provides that any matter required to be submitted by the provisions of such Act or applicable state law, or otherwise, to the holders of the outstanding voting securities of an investment company such as RBB shall not be deemed to have been effectively acted upon unless approved by the holders of a majority of the outstanding voting securities, as defined in the 1940 Act, of each portfolio affected by the matter. Rule 18f-2 further provides that a portfolio shall be deemed to be affected by a matter unless it is clear that the interests of each portfolio in the matter are identical or that the matter does not affect any interest of the portfolio. Under the Rule, the approval of an investment advisory agreement or any change in a fundamental investment policy would be effectively acted upon with respect to a portfolio only if approved by the holders of a majority of the outstanding voting securities (as defined in the 1940 Act) of such portfolio. However, the Rule also provides that the ratification of the selection of independent public accountants and the election of directors are not subject to the separate voting requirements and may be effectively acted upon by shareholders of an investment company voting without regard to portfolio.
Notwithstanding any provision of Maryland law requiring a greater vote of shares of RBB's common stock (or of any class voting as a class) in connection with any corporate action, unless otherwise provided by law (for example by Rule 18f-2 discussed above), or by RBB's Articles of Incorporation, RBB may take or authorize such action upon the favorable vote of the holders of more than 50% of all of the outstanding shares of Common Stock voting without regard to class (or portfolio). The name "n/i numeric investors" may be used in the name of other portfolios managed by Numeric.
PURCHASE AND REDEMPTION INFORMATION
You may purchase shares through an account maintained by your brokerage firm and you may also purchase shares directly by mail or wire. The Funds reserve the right, if conditions exist that make cash payments undesirable, to honor any request for redemption or repurchase of a Fund's shares by making payment in whole or in part in securities chosen by RBB and valued in the same way as they would be valued for purposes of computing a Fund's net asset value. If payment is made in securities, a shareholder may incur transaction costs in converting these securities into cash. RBB has elected, however, to be governed by Rule 18f-1 under the 1940 Act so that a Fund is obligated to redeem its shares solely in cash up to the lesser of $250,000 or 1% of its net asset value during any 90-day period for any one shareholder of a Fund. A shareholder will bear the risk of a decline in market value and any tax consequences associated with a redemption in securities.
Under the 1940 Act, RBB may suspend the right to redemption or postpone the date of payment upon redemption for any period during which the New York Stock Exchange, Inc. (the "NYSE") is closed (other than customary weekend and holiday closings), or during which the SEC restricts trading on the NYSE or determines an emergency exists as a result of which disposal or valuation of portfolio securities is not reasonably practicable, or for such other periods as the SEC may permit. (A Fund may also suspend or postpone the recordation of the transfer of its shares upon the occurrence of any of the foregoing conditions.)
Shares of RBB are subject to redemption by RBB, at the redemption price of such shares as in effect from time to time, including, without limitation: to reimburse a Fund for any loss sustained by reason of the failure of a shareholder to make full payment for shares purchased by the shareholder or to collect any charge relating to a transaction effected for the benefit of a shareholder as provided in the Prospectus from time to time; if such redemption is, in the opinion of RBB's Board of Directors, desirable in order to prevent RBB or any Fund from being deemed a "personal holding company" within the meaning of the Internal Revenue Code of 1986, as amended; or if the net income with respect to any particular class of common stock should be negative or it should otherwise be appropriate to carry out RBB's responsibilities under the 1940 Act.
An illustration of the computation of the public offering price per share of each of the Funds, based on the value of the Funds' respective net assets as of August 31, 2002, is as follows:
Small Cap
Emerging Growth Mid Cap Value
Growth
------------------------------------------------------------------------------------------------
Net assets $ 96,865,111 $34,033,877 $25,108,829 $130,380,316
Outstanding shares 8,202,896 3,751,101 2,095,468 7,733,220
Net asset value per share $ 11.81 $ 9.07 $ 11.98 $ 16.86
Maximum sales charge -- -- -- --
Maximum Offering Price to $ 11.81 $ 9.07 $ 11.98 $ 16.86
Public
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TELEPHONE TRANSACTION PROCEDURES
RBB's telephone transaction procedures include the following measures:
(1) requiring the appropriate telephone transaction privilege forms; (2)
requiring the caller to provide the names of the account owners, the account
social security number and name of the Fund, all of which must match RBB's
records; (3) requiring RBB's service representative to complete a telephone
transaction form, listing all of the above caller identification information;
(4) permitting exchanges (if applicable) only if the two account registrations
are identical; (5) requiring that redemption proceeds be sent only by check to
the account owners of record at the address of record, or by wire only to the
owners of record at the bank account of record; (6) sending a written
confirmation for each telephone transaction to the owners of record at the
address of record within five (5) Business Days of the call; and (7) maintaining
tapes of telephone transactions for six months, if the Fund elects to record
shareholder telephone transactions. For accounts held of record by
broker-dealers (other than the Distributor), financial institutions, securities
dealers, financial planners and other industry professionals, additional
documentation or information regarding the scope of a caller's authority is
required. Finally, for telephone transactions in accounts held jointly,
additional information regarding other account holders is required. Telephone
transactions will not be permitted in connection with IRA or other retirement
plan accounts or by an attorney-in-fact under a power of attorney.
Shares of the Funds are subject to redemption by RBB, at the redemption price of such shares as in effect from time to time, including, without limitation: to reimburse a Fund for any
loss sustained by reason of the failure of a shareholder to make full payment for shares purchased by the shareholder or to collect any charge relating to a transaction effected for the benefit of a shareholder as provided in the Prospectus from time to time; if such redemption is, in the opinion of RBB's Board of Directors, desirable in order to prevent RBB or any Fund from being deemed a "personal holding company" within the meaning of the Internal Revenue Code of 1986, as amended; or if the net income with respect to any particular class of common stock should be negative or it should otherwise be appropriate to carry out RBB's responsibilities under the 1940 Act.
VALUATION OF SHARES
The net asset value per share of each Fund is calculated as of the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) on each Business Day. "Business Day" means each weekday when the NYSE is open. Currently, the NYSE is closed on New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day and on the preceding Friday or subsequent Monday when one of those holidays falls on a Saturday or Sunday. Securities which are listed on stock exchanges are valued at the last sale price on the day the securities are valued or, lacking any sales on such day, at the mean of the bid and asked prices available prior to the evaluation. In cases where securities are traded on more than one exchange, the securities are generally valued on the exchange designated by the Board of Directors as the primary market. Securities traded in the over-the-counter market and listed on the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") are valued at the last trade price listed on the NASDAQ at the close of regular trading (generally 4:00 p.m. Eastern Time); securities listed on NASDAQ for which there were no sales on that day and other over-the-counter securities are valued at the mean of the bid and asked prices available prior to valuation. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of RBB's Board of Directors. The amortized cost method of valuation may also be used with respect to debt obligations with sixty days or less remaining to maturity. Net asset value per share is calculated by adding the value of each Fund's securities, cash and other assets, subtracting the actual and accrued liabilities of the Fund, and dividing the result by the number of outstanding shares of the Fund.
In determining the approximate market value of portfolio investments, the Funds may employ outside organizations, which may use a matrix or formula method that takes into consideration market indices, matrices, yield curves and other specific adjustments. This may result in the securities being valued at a price different from the price that would have been determined had the matrix or formula method not been used. All cash, receivables and current payables are carried on the Funds' books at their face value. Other assets, if any, are valued at fair value as determined in good faith by or under the direction of RBB's Board of Directors.
PERFORMANCE INFORMATION
Total Return. For purposes of quoting and comparing the performance of the Funds to that of other mutual funds and to stock or other relevant indices in advertisements or in reports to shareholders, performance may be stated in terms of total return. Under the rules of the Securities and Exchange Commission, funds advertising performance must include total return quotes calculated according to the following formula:
P(1 + T)/n/ = ERV
Where: P = hypothetical initial payment of $1,000
T = average annual total return
n = number of years (1, 5 or 10)
ERV = ending redeemable value at the end of the 1, 5 or
10 year periods (or fractional portion thereof)
of a hypothetical $1,000 payment made at the
beginning of the 1, 5 or 10 year periods.
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Under the foregoing formula, the time periods used in advertising will be based on rolling calendar quarters, updated to the last day of the most recent quarter prior to submission of the advertisement for publication, and will cover one, five and ten year periods or a shorter period dating from the effectiveness of the Funds' registration statement. In calculating the ending redeemable value, the maximum sales load is deducted from the initial $1,000 payment and all dividends and distributions by the Funds are assumed to have been reinvested at net asset value, as described in the Prospectus, on the reinvestment dates during the period. Total return, or "T" in the formula above, is computed by finding the average annual compounded rates of return over the 1, 5 and 10 year periods (or fractional portion thereof) that would equate the initial amount invested to the ending redeemable value. Any sales loads that might in the future be made applicable at the time to reinvestments would be included, as would any recurring account charges that might be imposed by the Funds.
The formula for calculating aggregate total return is as follows:
ERV
Aggregate Total Return = [(----) - 1]
P
The calculations are made assuming that (1) all dividends and capital gain distributions are reinvested on the reinvestment dates at the price per share existing on the reinvestment date, (2) all recurring fees charged to all shareholder accounts are included, and (3) for any account fees that vary with the size of the account, a mean (or median) account size in the Fund during the periods is reflected. The ending redeemable value (variable "ERV" in the formula) is determined by assuming complete redemption of the hypothetical investment after deduction of all non-recurring charges at the end of the measuring period.
The Funds may compute an "average annual total return-after taxes on distributions" by determining the average annual compounded rate of return after taxes on distributions during specified periods that equates the initial amount invested to the ending value after taxes on distributions but not after taxes on redemption according to the following formula:
P (1+T)/n/ = ATV\\D\\
Where: P = a hypothetical initial payment of $1,000
T = average annual total return (after taxes on
distributions)
n = number of years
ATV\\D\\ = ending value of a hypothetical $1,000
payment made at the beginning of the
1-, 5-, or 10-year periods at the end of the
1-, 5-, or 10-year periods (or fractional
portion), after taxes on distributions but not
after taxes on redemption.
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Average annual total return (after taxes on distributions) for a specified period is derived by calculating the actual dollar amount of the investment return on a $1,000 investment made at the maximum public offering price applicable to the relevant class at the beginning of the period, and then calculating the annual compounded rate of return (after federal income taxes on distributions but not redemptions) which would produce that amount, assuming a redemption at the end of the period. This calculation assumes a complete redemption of the investment but further assumes that the redemption has no federal income tax consequences. This calculation also assumes that all dividends and distributions, less the federal income taxes due on such distributions, are reinvested at net asset value on the reinvestment dates during the period. In calculating the impact of federal income taxes due on distributions, the federal income tax rates used correspond to the tax character of each component of the distributions (e.g., ordinary income rate for ordinary income distributions, short-term capital gain rate for short-term capital gains distributions and long-term capital gain rate for long-term capital gain distributions). The highest individual marginal federal income tax rate in effect on the reinvestment date is applied to each component of the distributions on the reinvestment date. These tax rates may vary over the measurement period. The effect of applicable tax credits, such as the foreign tax credit, is also taken into account in accordance with federal tax law. The calculation disregards (i) the effect of phase-outs of certain exemptions, deductions and credits at various income levels, (ii) the impact of the federal alternative minimum tax and (iii) the potential tax liabilities other than federal tax liabilities (e.g., state and local taxes).
The Funds may compute an "average annual total return-after taxes on distributions and redemption" by determining the average annual compounded rate of return after taxes on distributions and redemption during specified periods that equates the initial amount invested to the ending redeemable value after taxes on distributions and redemption according to the following formula:
P (1+T)/n/ = ATV\\DR\\
Where: P = a hypothetical initial payment of $1,000
T = average annual total return (after taxes on
distributions and redemption)
n = number of years
ATV\\DR\\ = ending value of a hypothetical $1,000
payment made at the beginning of the
1-,5-, or 10-year periods at the end of the
1-,5-, or 10-year periods (or fractional
portion), after taxes on distributions and
redemption.
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Average annual total return (after taxes on distributions and redemptions) for a specified period is derived by calculating the actual dollar amount of the investment return on a $1,000 investment made at the maximum public offering price applicable to the relevant class at the beginning of the period, and then calculating the annual compounded rate of return (after federal income taxes on distributions and redemptions) which would produce that amount, assuming a redemption at the end of the period. This calculation assumes a complete redemption of the investment. This calculation also assumes that all dividends and distributions, less the federal income taxes due on such distributions, are reinvested at net asset value on the reinvestment dates during the period. In calculating the federal income taxes due on distributions, the federal income tax rates used correspond to the tax character of each component of the distributions (e.g., ordinary income rate for ordinary income distributions, short-term capital gain rate for short-term capital gains distributions and long-term capital gain rate for long-term capital gain distributions). The highest individual marginal federal income tax rate in effect on the reinvestment date is applied to each component of the distributions on the reinvestment date. These tax rates may vary over the measurement period. The effect of applicable tax credits, such as the foreign tax credit, is taken into account in accordance with federal tax law. The calculation disregards the (i) effect of phaseouts of certain exemptions, deductions and credits at various income levels, (ii) the impact of the federal alternative minimum tax and (iii) the potential tax liabilities other than federal tax liabilities (e.g., state and local taxes). In calculating the federal income taxes due on redemptions, capital gains taxes resulting from redemption are subtracted from the redemption proceeds and the tax benefits from capital losses resulting from the redemption are added to the redemption proceeds. The highest federal individual capital gains tax rate in effect on the redemption date is used in such calculation. The federal income tax rates used correspond to the tax character of any gains or losses (e.g., short-term or long-term).
Performance. From time to time, the Funds may advertise "average annual total return" over various periods of time. These total return figures show the average percentage change in value of an investment in the Funds from the beginning of the measuring period to the end of the measuring period. The figures reflect changes in the price of the Funds' shares assuming that any income dividends and/or capital gain distributions made by the Funds during the period were reinvested in shares of the Funds. Total return will be shown for recent one-, five- and ten-year periods, and may be shown for other periods as well (such as from commencement of the Fund's operations or on a year-by-year, quarterly or current year-to-date basis).
When considering average total return figures for periods longer than one year, it is important to note that the Funds' annual total return for one year in the period might have been greater or less than the average for the entire period. When considering total return figures for periods shorter than one year, investors should bear in mind that the Funds seek long-term appreciation and that such return may not be representative of the Funds' return over a longer market cycle. The Funds may also advertise aggregate total return figures for various periods, representing the cumulative change in value of an investment in the Funds for the specific period (again reflecting changes in the Funds' share prices and assuming reinvestment of dividends and distributions). Aggregate and average total returns may be shown by means of schedules, charts or graphs, may indicate various components of total return (i.e., change in value of initial investment, income dividends and capital gain distributions). Investors should note that total return figures are based on historical returns and are not intended to indicate future performance.
Calculated according to the above formulas, the total returns of the Funds were as follows:
---------------------------------------------------------------------------------------------------------------------
Average Average Annual
Annual Total Total Return
Average Return (after (after taxes on
Annual Total taxes on distribution and Aggregate Total
Return Distributions) redemption) Return
---------------------------------------------------------------------------------------------------------------------
For the fiscal year ended
August 31, 2002
---------------------------------------------------------------------------------------------------------------------
Emerging Growth (7.23)% (7.23)% (4.44)% (7.23)%
Growth (13.45)% (13.45)% (8.26)% (13.45)%
Mid Cap (8.48)% (8.67)% (5.21)% (8.48)%
Small Cap Value 13.31% 6.96% 7.92% 13.31%
---------------------------------------------------------------------------------------------------------------------
For the five years ended
August 31, 2002
---------------------------------------------------------------------------------------------------------------------
Emerging Growth 7.19% 1.22% 2.85% 41.50%
Growth (0.55)% (4.37)% (1.70)% (2.73)%
Mid Cap 4.78% 0.18% 1.61% 26.27%
---------------------------------------------------------------------------------------------------------------------
Since Inception (through
August 31, 2002)
---------------------------------------------------------------------------------------------------------------------
Emerging Growth/1/ 13.29% 8.21% 8.50% 117.98%
Growth/1/ 4.56% 1.33% 2.61% 31.14%
Mid Cap/1/ 10.01% 6.10% 6.32% 81.38%
Small Cap Value/2/ 18.81% 15.37% 13.50% 90.89%
---------------------------------------------------------------------------------------------------------------------
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/1/The Emerging Growth, Growth and Mid Cap Funds commenced operations on
June 3, 1996.
/2/The Small Cap Value Fund commenced operations on November 30, 1998.
Investors should note that total return figures are based on historical earnings and are not intended to indicate future performance.
In reports or other communications to investors or in advertising material, a Fund may describe general economic and market conditions affecting the Fund and may compare its performance with (1) that of other mutual funds as listed in the rankings prepared by Lipper Analytical Services, Inc. or similar investment services that monitor the performance of mutual funds or as set forth in the publications listed below; (2) with the S&P 500 Index or (3) other appropriate indices of investment securities or with data developed by the Adviser derived from such indices. Performance information may also include evaluation of the Fund by nationally recognized ranking services and information as reported in financial publications such as Business Week, Fortune, Institutional Investor, Money Magazine, Forbes, Barron's, The Wall Street Journal, The New York Times, or other national, regional or local publications.
In reports or other communications to investors or in advertising, each Fund may also describe the general biography or work experience of its portfolio managers and may include quotations attributable to the portfolio managers describing approaches taken in managing the Fund's investments, research methodology, underlying stock selection or the Fund's investment objective. The Fund may also discuss the continuum of risk and return relating to different investments, and the potential impact of foreign stock on a portfolio otherwise composed of domestic securities. In addition, each Fund may from time to time compare its expense ratios to those of investment companies with similar objectives and policies, as advertised by Lipper Analytical Services, Inc. or similar investment services that monitor mutual funds.
TAXES
Each Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, and to distribute out its income to shareholders each year, so that the Fund itself generally will be relieved of federal income and excise taxes. If a Fund were to fail to so qualify: (1) the Fund would be taxed at regular corporate rates without any deduction for distributions to shareholders; and (2) shareholders would be taxed as if they received ordinary dividends, although corporate shareholders could be eligible for the dividends received deduction. Moreover, if a Fund were to fail to make sufficient distributions in a year, the Fund would be subject to corporate income taxes and/or excise taxes in respect of the shortfall or, if the shortfall is large enough, the Fund could be disqualified as a regulated investment company.
A 4% non-deductible excise tax is imposed on regulated investment companies that fail to distribute with respect to each calendar year at least 98% of their ordinary taxable income for the calendar year and capital gain net income (excess of capital gains over capital losses) for the one year period ending October 31 of such calendar year and 100% of any such amounts that were not distributed in the prior year. Each Fund intends to make sufficient distributions or deemed distributions of its ordinary taxable income and any capital gain net income prior to the end of each calendar year to avoid liability for this excise tax.
Dividends declared in October, November or December of any year that are payable to shareholders of record on a specified date in such months will be deemed to have been received by shareholders and paid by the Fund on December 31 of such year if such dividends are actually paid during January of the following year.
Each Fund may be required to withhold a percentage of federal income tax ("backup withholding") from dividends and redemption proceeds paid to non-corporate shareholders. This tax may be withheld from dividends if (i) you fail to furnish the Fund with your correct taxpayer identification number, (ii) the Internal Revenue Service ("IRS") notifies the Fund that you have failed to report properly certain interest and dividend income to the IRS and to respond to notices to that effect, or (iii) when required to do so, you fail to certify that you are not subject to backup withholding. For 2002-2003, the withholding rate is 30%.
MISCELLANEOUS
Counsel. The law firm of Drinker Biddle & Reath LLP, One Logan Square, 18th and Cherry Streets, Philadelphia, Pennsylvania 19103-6996, serves as counsel to RBB and RBB's non-interested directors.
Independent Accountants. PricewaterhouseCoopers LLP, Two Commerce Square, Suite 1700, 2001 Market Street, Philadelphia, PA 19103, serves as RBB's independent accountants. PricewaterhouseCoopers LLP performs an annual audit of RBB's financial statements.
FINANCIAL STATEMENTS
The audited financial statements and notes thereto in the Funds' Annual Report to Shareholders for the fiscal year ended August 31, 2002 (the "2002 Annual Report") are incorporated by reference into this Statement of Additional Information. No other parts of the 2002 Annual Report are incorporated by reference herein. The financial statements included in the 2002 Annual Report have been audited by RBB's independent accountants, PricewaterhouseCoopers LLP, whose report thereon also appears in the 2002 Annual Report and is incorporated herein by reference. Such financial statements have been incorporated herein in reliance upon such reports given upon their authority as experts in accounting and auditing. Copies of the 2002 Annual Report may be obtained at no charge by telephoning the Distributor at the telephone number appearing on the front page of this Statement of Additional Information.
APPENDIX A
DESCRIPTION OF SECURITIES RATINGS
Short-Term Credit Ratings
A Standard & Poor's short-term issue credit rating is a current opinion of the creditworthiness of an obligor with respect to a specific financial obligation having an original maturity of no more than 365 days. The following summarizes the rating categories used by Standard & Poor's for short-term issues:
"A-1" - Obligations are rated in the highest category and indicate that the obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.
"A-2" - Obligations are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.
"A-3" - Obligations exhibit adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
"B" - Obligations have significant speculative characteristics. The obligor currently has the capacity to meet its financial commitment on the obligation. However, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.
"C" - Obligations are currently vulnerable to nonpayment and are dependent upon favorable business, financial and economic conditions for the obligor to meet its financial commitment on the obligation.
"D" - Obligations are in payment default. The "D" rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
Local Currency and Foreign Currency Risks - Country risk considerations are a standard part of Standard & Poor's analysis for credit ratings on any issuer or issue. Currency of repayment is a key factor in this analysis. An obligor's capacity to repay foreign currency obligations may be lower than its capacity to repay obligations in its local currency due to the sovereign government's own relatively lower capacity to repay external versus domestic debt.
These sovereign risk considerations are incorporated in the debt ratings assigned to specific issues. Foreign currency issuer ratings are also distinguished from local currency issuer ratings to identify those instances where sovereign risks make them different for the same issuer.
Moody's short-term ratings are opinions of the ability of issuers to honor senior financial obligations and contracts. These obligations have an original maturity not exceeding one year, unless explicitly noted. The following summarizes the rating categories used by Moody's for short-term obligations:
"Prime-1" - Issuers (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
leading market positions in well-established industries; high rates of return on
funds employed; conservative capitalization structure with moderate reliance on
debt and ample asset protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; and well-established access
to a range of financial markets and assured sources of alternate liquidity.
"Prime-2" - Issuers (or supporting institutions) have a strong ability to repay senior short-term debt obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation than is the case for Prime-1 securities. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.
"Prime-3" - Issuers (or supporting institutions) have an acceptable ability for repayment of senior short-term debt obligations. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt-protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained.
"Not Prime" - Issuers do not fall within any of the Prime rating categories.
Fitch short-term ratings apply to time horizons of less than 12 months for most obligations, or up to three years for U.S. public finance securities, and thus place greater emphasis on the liquidity necessary to meet financial commitments in a timely manner. The following summarizes the rating categories used by Fitch for short-term obligations:
"F1" - Securities possess the highest credit quality. This designation indicates the strongest capacity for timely payment of financial commitments and may have an added "+" to denote any exceptionally strong credit feature.
"F2" - Securities possess good credit quality. This designation indicates a satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of the higher ratings.
"F3" - Securities possess fair credit quality. This designation indicates that the capacity for timely payment of financial commitments is adequate; however, near-term adverse changes could result in a reduction to non-investment grade.
"B" - Securities possess speculative credit quality. This designation indicates minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse changes in financial and economic conditions.
"C" - Securities possess high default risk. Default is a real possibility. This designation indicates a capacity for meeting financial commitments which is solely reliant upon a sustained, favorable business and economic environment.
"D" - Securities are in actual or imminent payment default.
Long-Term Credit Ratings
The following summarizes the ratings used by Standard & Poor's for long-term issues:
"AAA" - An obligation rated "AAA" has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.
"AA" - An obligation rated "AA" differs from the highest rated obligations only in small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.
"A" - An obligation rated "A" is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.
"BBB" - An obligation rated "BBB" exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
Obligations rated "BB," "B," "CCC," "CC" and "C" are regarded as having significant speculative characteristics. "BB" indicates the least degree of speculation and "C" the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
"BB" - An obligation rated "BB" is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.
"B" - An obligation rated "B" is more vulnerable to nonpayment than obligations rated "BB," but the obligor currently has the capacity to meet its financial commitment on the
obligation. Adverse business, financial or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.
"CCC" - An obligation rated "CCC" is currently vulnerable to nonpayment and is dependent upon favorable business, financial and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
"CC" - An obligation rated "CC" is currently highly vulnerable to nonpayment.
"C" - A subordinated debt obligation rated "C" is currently highly vulnerable to nonpayment. The "C" rating may be used to cover a situation where a bankruptcy petition has been filed or similar action taken, but payments on this obligation are being continued.
"D" - An obligation rated "D" is in payment default. The "D" rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payment will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
- PLUS (+) OR MINUS (-) - The ratings from "AA" through "CCC" may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
The following summarizes the ratings used by Moody's for long-term debt:
"Aaa" - Bonds are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
"Aa" - Bonds are judged to be of high quality by all standards. Together with the "Aaa" group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in "Aaa" securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than the "Aaa" securities.
"A" - Bonds possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds are considered as medium-grade obligations, (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.
"Ba" - Bonds are judged to have speculative elements; their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.
"B" - Bonds generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.
"Caa" - Bonds are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.
"Ca" - Bonds represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings.
"C" - Bonds are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from "Aa" through "Caa." The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of its generic rating category.
The following summarizes long-term ratings used by Fitch:
"AAA" - Securities considered to be investment grade and of the highest credit quality. These ratings denote the lowest expectation of credit risk and are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
"AA" - Securities considered to be investment grade and of very high credit quality. These ratings denote a very low expectation of credit risk and indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.
"A" - Securities considered to be investment grade and of high credit quality. These ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings.
"BBB" - Securities considered to be investment grade and of good credit quality. These ratings denote that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment grade category.
"BB" - Securities considered to be speculative. These ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment grade.
"B" - Securities considered to be highly speculative. These ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment.
"CCC," "CC" and "C" - Securities have high default risk. Default is a real possibility, and capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. "CC" ratings indicate that default of some kind appears probable, and "C" ratings signal imminent default.
"DDD," "DD" and "D" - Securities are in default. The ratings of obligations in these categories are based on their prospects for achieving partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative and cannot be estimated with any precision, the following serve as general guidelines. "DDD" obligations have the highest potential for recovery, around 90%-100% of outstanding amounts and accrued interest. "DD" indicates potential recoveries in the range of 50%-90%, and "D" the lowest recovery potential, i.e., below 50%.
Entities rated in this category have defaulted on some or all of their obligations. Entities rated "DDD" have the highest prospect for resumption of performance or continued operation with or without a formal reorganization process. Entities rated "DD" and "D" are generally undergoing a formal reorganization or liquidation process; those rated "DD" are likely to satisfy a higher portion of their outstanding obligations, while entities rated "D" have a poor prospect for repaying all obligations.
PLUS (+) or MINUS (-) may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the "AAA" long-term rating category or to categories below "CCC."
Notes to Short-Term and Long-Term Credit Ratings
Standard & Poor's
CreditWatch: CreditWatch highlights the potential direction of a short- or long-term rating. It focuses on identifiable events and short-term trends that cause ratings to be placed
under special surveillance by Standard & Poor's analytical staff. These may include mergers, recapitalizations, voter referendums, regulatory action, or anticipated operating developments. Ratings appear on CreditWatch when such an event or a deviation from an expected trend occurs and additional information is necessary to evaluate the current rating. A listing, however, does not mean a rating change is inevitable, and whenever possible, a range of alternative ratings will be shown. CreditWatch is not intended to include all ratings under review, and rating changes may occur without the ratings having first appeared on CreditWatch. The "positive" designation means that a rating may be raised; "negative" means a rating may be lowered; and "developing" means that a rating may be raised, lowered or affirmed.
Rating Outlook: A Standard & Poor's Rating Outlook assesses the potential direction of a long-term credit rating over the intermediate to longer term. In determining a Rating Outlook, consideration is given to any changes in the economic and/or fundamental business conditions. An Outlook is not necessarily a precursor of a rating change or future CreditWatch action.
. Positive means that a rating may be raised.
. Negative means that a rating may be lowered.
. Stable means that a rating is not likely to change.
. Developing means a rating may be raised or lowered.
. N.M. means not meaningful.
Moody's
Watchlist: Watchlists list the names of credits whose ratings have a likelihood of changing. These names are actively under review because of developing trends or events which, in Moody's opinion, warrant a more extensive examination. Inclusion on this Watchlist is made solely at the discretion of Moody's Investors Service, and not all borrowers with ratings presently under review for possible downgrade or upgrade are included on any one Watchlist. In certain cases, names may be removed from this Watchlist without a change in rating.
Fitch
Withdrawn: A rating is withdrawn when Fitch deems the amount of information available to be inadequate for rating purposes, or when an obligation matures, is called, or refinanced.
Rating Watch: Ratings are placed on Rating Watch to notify investors that there is a reasonable probability of a rating change and the likely direction of such change. These are designated as "Positive", indicating a potential upgrade, "Negative", for a potential downgrade, or "Evolving", if ratings may be raised, lowered or maintained. Rating Watch is typically resolved over a relatively short period.
Rating Outlook: A Rating Outlook indicates the direction a rating is likely to move over a one to two-year period. Outlooks may be positive, stable or negative. A positive or negative Rating Outlook does not imply a rating change is inevitable. Similarly, companies whose outlooks are "stable" could be upgraded or downgraded before an outlook moves to a positive or
negative if circumstances warrant such an action. Occasionally, Fitch may be unable to identify the fundamental trend. In these cases, the Rating Outlook may be described as evolving.
Municipal Note Ratings
A Standard & Poor's note rating reflects the liquidity factors and market access risks unique to notes due in three years or less. The following summarizes the ratings used by Standard & Poor's for municipal notes:
"SP-1" - The issuers of these municipal notes exhibit a strong capacity to pay principal and interest. Those issues determined to possess a very strong capacity to pay debt service are given a plus (+) designation.
"SP-2" - The issuers of these municipal notes exhibit a satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.
"SP-3" - The issuers of these municipal notes exhibit speculative capacity to pay principal and interest.
In municipal debt issuance, there are three rating categories for short-term obligations that are considered investment grade. These ratings are designated Moody's Investment Grade ("MIG") and are divided into three levels - MIG 1 through MIG 3. In the case of variable rate demand obligations, a two-component rating is assigned. The first element represents Moody's evaluation of the degree of risk associated with scheduled principal and interest payments. The second element represents Moody's evaluation of the degree of risk associated with the demand feature, using the MIG rating scale. The short-term rating assigned to the demand feature is designated as VMIG. MIG ratings expire at note maturity. By contrast, VMIG ratings expirations will be a function of each issue's specific structural or credit features. The following summarizes the ratings by Moody's for these short-term obligations:
"MIG-1"/"VMIG-1" - This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support or demonstrated broad-based access to the market for refinancing.
"MIG-2"/"VMIG-2" - This designation denotes strong credit quality. Margins of protection are ample although not as large as in the preceding group.
"MIG-3"/"VMIG-3" - This designation denotes acceptable credit quality. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established.
"SG" - This designation denotes speculative-grade credit quality. Debt instruments in this category lack sufficient margins of protection.
Fitch uses the same ratings for municipal securities as described above for other short-term credit ratings.
About Credit Ratings
A Standard & Poor's issue credit rating is a current opinion of the creditworthiness of an obligor with respect to a specific financial obligation. The issue credit rating is not a recommendation to purchase, sell or hold a financial obligation. Credit ratings may be changed, suspended or withdrawn.
Moody's credit ratings must be construed solely as statements of opinion and not recommendations to purchase, sell or hold any securities.
Fitch credit ratings are an opinion on the ability of an entity or of a securities issue to meet financial commitments on a timely basis. Fitch credit ratings are used by investors as indications of the likelihood of getting their money back in accordance with the terms on which they invested. However, Fitch credit ratings are not recommendations to buy, sell or hold any security. Ratings may be changed or withdrawn.
PART C
OTHER INFORMATION
Item 23. EXHIBITS
SEE NOTE #
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(a) (1) Articles of Incorporation of Registrant. 1
(2) Articles Supplementary of Registrant. 1
(3) Articles of Amendment to Articles of Incorporation of Registrant. 2
(4) Articles Supplementary of Registrant. 2
(5) Articles Supplementary of Registrant. 5
(6) Articles Supplementary of Registrant. 6
(7) Articles Supplementary of Registrant. 9
(8) Articles Supplementary of Registrant. 10
(9) Articles Supplementary of Registrant. 11
(10) Articles Supplementary of Registrant. 11
(11) Articles Supplementary of Registrant. 13
(12) Articles Supplementary of Registrant. 13
(13) Articles Supplementary of Registrant. 13
(14) Articles Supplementary of Registrant. 13
(15) Articles Supplementary of Registrant. 14
(16) Articles Supplementary of Registrant. 17
(17) Articles Supplementary of Registrant. 19
(18) Articles Supplementary of Registrant. 21
(19) Articles of Amendment to Charter of the Registrant. 22
(20) Articles Supplementary of Registrant. 22
(21) Articles Supplementary of Registrant. 31
(22) Articles Supplementary of Registrant. 31
(23) Articles Supplementary of Registrant. 29
(24) Articles Supplementary of Registrant. 29
(25) Articles Supplementary of Registrant. 34
(26) Articles Supplementary of Registrant. 36
(27) Articles of Amendment to Charter of the Registrant. 37
(28) Articles Supplementary of Registrant. 37
(29) Articles Supplementary of Registrant. 37
(30) Articles of Amendment to Charter of the Registrant. 37
(31) Articles Supplementary of Registrant 38
(32) Articles Supplementary to Charter of the Registrant. 42
(33) Articles of Amendment to Charter of the Registrant. 42
(34) Articles Supplementary of Registrant. 43
(35) Articles Supplementary of Registrant. 44
(b) (1) By-Laws, as amended. 37
(c) (1) See Articles VI, VII, VIII, IX and XI of Registrant's Articles of 1
Incorporation dated February 17, 1988.
(2) See Articles II, III, VI, XIII, and XIV of Registrant's By-Laws as 17
amended through April 26, 1996.
(d) (1) Investment Advisory Agreement (Money Market) between Registrant and 3
Provident Institutional Management Corporation, dated as of
August 16, 1988.
(2) Sub-Advisory Agreement (Money Market) between Provident Institutional 3
Management Corporation and Provident National Bank, dated as of
August 16, 1988.
(3) Assumption Agreement (Money Market Fund) between PNC Bank, N.A. 34
and BlackRock Institutional Management Corporation (formerly
PNC Institutional Management Corporation) dated April 29, 1998.
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SEE NOTE #
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(4) Investment Advisory Agreement (Tax-Free Money Market) between 3
Registrant and Provident Institutional Management Corporation,
dated as of August 16, 1988.
(5) Sub-Advisory Agreement (Tax-Free Money Market) between 3
Provident Institutional Management Corporation and
Provident National Bank, dated as of August 16, 1988.
(6) Assumption Agreement (Municipal Money Market Fund) between PNC 34
Bank, N.A. and BlackRock Institutional Management Corporation (formerly
PNC Institutional Management Corporation) dated April 29, 1998.
(7) Investment Advisory Agreement (Government Obligations Money Market) 3
between Registrant and Provident Institutional Management Corporation,
dated as of August 16, 1988.
(8) Sub-Advisory Agreement (Government Obligations Money Market) between 3
Provident Institutional Management Corporation and Provident National
Bank, dated as of August 16, 1988.
(9) Assumption Agreement (Government Obligations Money Market Fund) between 34
PNC Bank, N.A. and BlackRock Institutional Management Corporation
(formerly PNC Institutional Management Corporation) dated April 29, 1998.
(10) Investment Advisory Agreement (Government Securities) between Registrant 8
and Provident Institutional Management Corporation dated as of April 8, 1991.
(11) Investment Advisory Agreement (New York Municipal Money Market) between 9
Registrant and Provident Institutional Management Corporation dated
November 5, 1991.
(12) Investment Advisory Agreement (Tax-Free Money Market) between Registrant 10
and Provident Institutional Management Corporation dated April 21, 1992.
(13) Investment Advisory Agreement (n/i Micro Cap Fund) between Registrant 17
and Numeric Investors, L.P.
(14) Investment Advisory Agreement (n/i Growth Fund) between Registrant and 17
Numeric Investors, L.P.
(15) Investment Advisory Agreement (n/i Mid Cap Fund - formerly Growth & Value) 17
between Registrant and Numeric Investors, L.P.
(16) Investment Advisory Agreement (Boston Partners Large Cap Value Fund) 20
between Registrant and Boston Partners Asset Management, L.P.
(17) Investment Advisory Agreement (Boston Partners Mid Cap Value Fund) 22
between Registrant and Boston Partners Asset Management, L.P.
(18) Investment Advisory Agreement (Boston Partners Bond Fund) between Registrant 24
and Boston Partners Asset Management, L.P. dated December 1, 1997.
(19) Investment Advisory Agreement (Schneider Small Cap Value Fund) between 29
Registrant and Schneider Capital Management Company.
(20) Investment Advisory Agreement (Boston Partners Small Cap Value Fund II 29
- formerly Micro Cap Value) between Registrant and Boston Partners
Asset Management, L.P.
(21) Investment Advisory Agreement (Boston Partners Long/Short Equity Fund - 31
formerly Market Neutral) between Registrant and Boston Partners Asset
Management, L.P.
(22) Investment Advisory Agreement (n/i Small Cap Value Fund) between 31
Registrant and Numeric Investors, L.P.
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SEE NOTE #
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(23) Form of Investment Advisory Agreement (Boston Partners Fund - 32
Formerly Long-Short Equity) between Registrant and Boston Partners
Asset Management, L. P.
(24) Investment Advisory Agreement (Bogle Small Cap Growth Fund) between 34
Registrant and Bogle Investment Management, L. P.
(25) Amendment No. 1 to Investment Advisory Agreement between Registrant and 38
Numeric Investors, L. P. for the n/I numeric investors Growth Fund.
(26) Amendment No. 1 to Investment Advisory Agreement between Registrant and 38
Numeric Investors, L. P. for the n/I numeric investors Mid Cap Fund.
(27) Amendment No. 1 to Investment Advisory Agreement between Registrant and 38
Numeric Investors, L. P. for the n/I numeric investors Small Cap Value
Fund.
(28) Investment Advisory Agreement between Registrant and Boston Partners 45
Asset Management, L. P.
(29) Investment Advisory Agreement between Registrant and Schneider Capital 45
Management Company
(30) Form of Investment Advisory Agreement between Registrant and 44
Baker 500 Corporation.
(e) (1) Distribution Agreement between Registrant and PFPC Distributors, 38
Inc. dated as of January 2, 2001.
(2) Distribution Agreement Supplement between Registrant and PFPC 40
Distributors, Inc. (Bear Stearns Money Class)
(3) Distribution Agreement Supplement between Registrant and PFPC 40
Distributors, Inc. (Bear Stearns Municipal Money Class)
(4) Distribution Agreement Supplement between Registrant and PFPC 40
Distributors, Inc. (Bear Stearns Government Money Class)
(5) Distribution Agreement Supplement between Registrant and PFPC 45
Distributors, Inc. (Boston Partners All-Cap Value Fund Investor Class).
(6) Distribution Agreement Supplement between Registrant and PFPC 45
Distributors, Inc. (Boston Partners All-Cap Value Fund Institutional
Class).
(7) Distribution Agreement Supplement between Registrant and PFPC 45
Distributors, Inc. (Schneider Value Fund).
(8) Form of Distribution Agreement Supplement between Registrant and PFPC 44
Distributors, Inc. (Baker 500 Growth Fund Institutional Class).
(9) Form of Distribution Agreement Supplement between Registrant 44
and PFPC Distributors, Inc. (Baker 500 Growth Fund Class S).
(f) (1) Fund Office Retirement Profit-Sharing and Trust Agreement, dated as 23
of October 24, 1990, as amended.
(2) Form of Amendment No. 1 to Fund Office Retirement Profit Sharing Plan 45
and Trust Reflecting EGTRRA.
(g) (1) Custodian Agreement between Registrant and Provident National Bank 3
dated as of August 16, 1988.
(2) Sub-Custodian Agreement among The Chase Manhattan Bank, N.A., the 10
Registrant and Provident National Bank, dated as of July 13, 1992,
relating to custody of Registrant's foreign securities.
(3) Amendment No. 1 to Custodian Agreement dated August 16, 1988. 9
(4) Custodian Contract between Registrant and State Street Bank and Trust 12
Company.
(5) Custody Agreement between Registrant and Custodial Trust Company on 17
behalf of n/I Micro Cap Fund, n/I Growth Fund and n/I Mid Cap Fund
(formerly Growth & Value) Portfolios of the Registrant.
(6) Custodian Agreement Supplement Between Registrant and PNC Bank, 20
National Association dated October 16, 1996.
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SEE NOTE #
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(7) Custodian Agreement Supplement between Registrant and PNC Bank, 22
National Association, on behalf of the Boston Partners Mid Cap Value
Fund.
(8) Custodian Agreement Supplement between Registrant and PNC Bank, N.A. on 24
behalf of the Boston Partners Bond Fund.
(9) Custodian Agreement Supplement between Registrant and PNC Bank, N.A. on 29
behalf of the Schneider Small Cap Value Fund.
(10) Custodian Agreement Supplement between Registrant and PNC Bank, N.A. on 29
behalf of the Boston Partners Small Cap Value Fund II (formerly Micro
Cap Value).
(11) Custodian Agreement Supplement between Registrant and PNC Bank, N.A. on 31
behalf of Boston Partners Long/Short Equity Fund (formerly Market
Neutral).
(12) Custodian Agreement Supplement between Registrant and Custodial Trust 31
Company on behalf of n/I Small Cap Value Fund.
(13) Form of Custodian Agreement Supplement between Registrant and PFPC Trust 32
Company (Boston Partners Fund - formerly Long Short Equity)
(14) Custodian Agreement Supplement between Registrant and PFPC Trust Company 34
(Bogle Small Cap Growth Fund)
(15) Letter Agreement among Registrant, The Chase Manhattan Bank and PFPC Trust 42
Company, dated as of July 2, 2001, relating to custody of Registrant's
foreign securities
(16) Custodian Agreement Supplement between Registrant and PFPC Trust Company 45
(Boston Partners All-Cap Value Fund).
(17) Custodian Agreement Supplement between Registrant and PFPC Trust Company 45
(Schneider Value Fund).
(18) Form of Custodian Agreement Supplement between Registrant and PFPC Trust 44
Company (Baker 500 Growth Fund).
(h) (1) Transfer Agency Agreement (Sansom Street) between Registrant and 3
Provident Financial Processing Corporation, dated as of August 16, 1988.
(2) Transfer Agency Agreement (Cash Preservation) between Registrant and 3
Provident Financial Processing Corporation, dated as of August 16, 1988.
(3) Shareholder Servicing Agreement (Sansom Street Money Market). 3
(4) Shareholder Servicing Agreement (Sansom Street Tax-Free Money Market). 3
(5) Shareholder Servicing Agreement (Sansom Street Government Obligations 3
Money Market).
(6) Shareholder Services Plan (Sansom Street Money Market). 3
(7) Shareholder Services Plan (Sansom Street Tax-Free Money Market). 3
(8) Shareholder Services Plan (Sansom Street Government Obligations Money 3
Market).
(9) Transfer Agency Agreement (Bedford) between Registrant and Provident 3
Financial Processing Corporation, dated as of August 16, 1988.
(10) Administration and Accounting Services Agreement between Registrant and 8
Provident Financial Processing Corporation, relating to Government
Securities Portfolio, dated as of April 10, 1991.
(11) Administration and Accounting Services Agreement between Registrant and 9
Provident Financial Processing Corporation, relating to New York
Municipal Money Market Portfolio dated as of November 5, 1991.
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SEE NOTE #
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(12) Transfer Agency Agreement and Supplements (Bradford, Beta, Gamma, 9
Delta, Epsilon, Zeta, Eta and Theta) between Registrant and Provident
Financial Processing Corporation dated as of November 5, 1991.
(13) Administration and Accounting Services Agreement between Registrant and 10
Provident Financial Processing Corporation, relating to Tax-Free Money
Market Portfolio, dated as of April 21, 1992.
(14) Transfer Agency and Service Agreement between Registrant and State 15
Street Bank and Trust Company and PFPC, Inc. dated February 1, 1995.
(15) Supplement to Transfer Agency and Service Agreement between Registrant, 15
State Street Bank and Trust Company, Inc. and PFPC dated April 10, 1995.
(16) Amended and Restated Credit Agreement dated December 15, 1994. 16
(17) Transfer Agency Agreement Supplement (n/I Micro Cap Fund, n/I Growth 17
Fund and n/I Mid Cap Fund (formerly Growth & Value)) between Registrant
and PFPC, Inc. dated April 14, 1996.
(18) Administration and Accounting Services Agreement between Registrant and 17
PFPC, Inc. (n/I Micro Cap Fund) dated April 24, 1996.
(19) Administration and Accounting Services Agreement between Registrant and 17
PFPC, Inc. (n/I Growth Fund) dated April 24, 1996.
(20) Administration and Accounting Services Agreement between Registrant and 17
PFPC, Inc. (n/I Mid Cap Fund (formerly Growth & Value)) dated April 24,
1996.
(21) Transfer Agreement and Service Agreement between Registrant and State 18
Street Bank and Trust Company.
(22) Administration and Accounting Services Agreement between the Registrant 21
and PFPC Inc. dated October 16, 1996 (Boston Partners Large Cap Value
Fund).
(23) Transfer Agency Agreement Supplement between Registrant and PFPC Inc. 20
(Boston Partners Large Cap Value Fund, Institutional Class).
(24) Transfer Agency Agreement Supplement between Registrant and PFPC Inc. 20
(Boston Partners Large Cap Value Fund, Investor Class).
(25) Transfer Agency Agreement Supplement between Registrant and PFPC Inc. 20
(Boston Partners Large Cap Value Fund, Advisor Class).
(26) Transfer Agency Agreement Supplement between Registrant and PFPC Inc., 22
(Boston Partners Mid Cap Value Fund, Institutional Class).
(27) Transfer Agency Agreement Supplement between Registrant and PFPC Inc., 22
(Boston Partners Mid Cap Value Fund, Investor Class).
(28) Administration and Accounting Services Agreement between Registrant and 22
PFPC Inc. dated, May 30, 1997 (Boston Partners Mid Cap Value Fund).
(29) Transfer Agency Agreement Supplement between Registrant and PFPC, Inc. 24
dated December 1, 1997 (Boston Partners Bond Fund, Institutional Class).
(30) Transfer Agency Agreement Supplement between Registrant and PFPC, Inc. 24
dated December 1, 1997 (Boston Partners Bond Fund, Investor Class).
(31) Administration and Accounting Services Agreement between Registrant and 24
PFPC, Inc. dated December 1, 1997 (Boston Partners Bond Fund).
(32) Administration and Accounting Services Agreement between Registrant and 29
PFPC Inc. (Schneider Small Cap Value Fund).
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SEE NOTE #
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(33) Transfer Agency Agreement Supplement between 29
Registrant and PFPC Inc. (Schneider Small Cap Value
Fund).
(34) Transfer Agency Agreement Supplement between 29
Registrant and PFPC, Inc. (Boston Partners Small Cap
Value Fund II (formerly Micro Cap Value),
Institutional Class).
(35) Transfer Agency Agreement Supplement between 29
Registrant and PFPC, Inc. (Boston Partners Small Cap
Value Fund II (formerly Micro Cap Value), Investor
Class).
(36) Administration and Accounting Services Agreement 29
between Registrant and PFPC, Inc. (Boston Partners
Micro Cap Value Fund).
(37) Administrative Services Agreement between Registrant 26
and Provident 26 Distributors, Inc. dated as of May
29, 1998 and relating to the n/I funds, Schneider
Small Cap Value Fund and Institutional Shares of the
Boston Partners Funds.
(38) Administrative Services Agreement Supplement between 31
Registrant and Provident Distributors, Inc. relating
to the Boston Partners Long/Short Equity Fund
(formerly Market Neutral) - Institutional Class.
(39) Administrative and Accounting Services Agreement 31
between Registrant and PFPC, Inc. (Boston Partners
Long/Short Equity Fund (formerly Market Neutral) -
Institutional and Investor Classes).
(40) Transfer Agency Agreement Supplement between 31
Registrant and PFPC, Inc. (Boston Partners Long/Short
Equity Fund (formerly Market Neutral) - Institutional
and Investor Classes).
(41) Transfer Agency Agreement Supplement between 31
Registrant and PFPC, Inc. (n/I Small Cap Value Fund).
(42) Administration and Accounting Services Agreement 31
between Registrant and PFPC, Inc. (n/I Small Cap
Value Fund).
(43) Co-Administration Agreement between Registrant and 31
Bear Stearns Funds Management, Inc. (n/I Small Cap
Value Fund).
(44) Administrative Services Agreement between Registrant 31
and Provident Distributors, Inc. (n/I Small Cap Value
Fund).
(45) Form of Transfer Agency Agreement Supplement between 32
Registrant and PFPC, Inc. (Boston Partners Fund
(formerly Long-Short Equity)).
(46) Form of Administrative Services Agreement Supplement 32
between Registrant and Provident Distributors, Inc.
(Boston Partners Fund (formerly Long-Short Equity) -
Institutional Shares).
(47) Form of Administration and Accounting Services 32
Agreement between Registrant and PFPC, Inc. (Boston
Partners Fund (formerly Long-Short Equity)).
(48) Transfer Agency Agreement Supplement between 34
Registrant and PFPC, Inc. (Bogle Small Cap Growth
Fund).
(49) Administrative Services Agreement between Registrant 34
and Provident Distributors, Inc. (Bogle Small Cap
Growth Fund).
(50) Non 12b-1 Shareholder Services Plan and Agreement for 34
Bogle Small Cap Growth Investor Shares.
(51) Agreement between E*TRADE Group, Inc., 36
Registrant and Registrant's principal underwriter.
(52) Fee Waiver Agreement for n/I Numeric Investors Funds. 36
(53) Administration and Accounting Services Agreement 36
between Registrant and PFC, Inc. (Bogle Investment
Management Small Cap Growth Fund).
(54) Solicitation Agreement between n/I Numeric Investors 36
and Shareholder Communications Corporation.
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(55) Administrative Services Assignment Agreement between 38
Registrant and PFPC Distributors, Inc. dated January
2, 2001.
(56) Transfer Agency Supplement between Registrant and 40
PFPC Inc. for the Bear Stearns Money Market Family.
(57) Transfer Agency Supplement between Registrant and 45
PFPC Inc. for the Boston Partners All-Cap Value Fund.
(58) Form of Administration and Accounting Services 42
Agreement between Registrant and PFPC Inc. for the
Boston Partners All-Cap Value Fund.
(59) Administrative Services Agreement Supplement between 45
Registrant and PFPC Distributors Inc. for the Boston
Partners All-Cap Value Fund.
(60) Transfer Agency Supplement between Registrant and 45
PFPC Inc. for Schneider Value Fund.
(61) Form of Administration and Accounting Services 43
Agreement between Registrant and PFPC Inc. for the
Schneider Value Fund.
(62) Administrative Services Agreement Supplement between 45
Registrant and PFPC Distributors, Inc. for the
Schneider Value Fund.
(63) Form of Transfer Agency Agreement Supplement between 44
Registrant and PFPC Inc. for the Baker 500 Growth
Fund.
(64) Form of Administration and Accounting Services 44
Agreement between Registrant and PFPC Inc. for the
Baker 500 Growth Fund.
(65) Form of Administrative Services Agreement Supplement 44
between Registrant and PFPC Distributors, Inc. for
the Baker 500 Growth Fund.
(66) Form of Administration, Accounting, Transfer Agency 44
and Custodian Services Fee Letter Agreement between
Registrant and PFPC Inc. for the Baker 500 Growth
Fund.
(67) Form of Non - 12b-1 Shareholder Services Plan and 44
Related Form of Shareholder Servicing Agreement.
(68) Shareholder Servicing Agreement (Bogle Small Cap 45
Growth Fund).
(69) Administrative Services Agreement Supplement between 45
Registrant and PFPC Distributors, Inc. for Investor
Shares of the Boston Partners Funds.
(i) Opinion of Drinker Biddle & Reath LLP. 45
(j) (1) Consent of Drinker Biddle & Reath LLP. 45
(2) Consent of Independent Auditors. 45
(k) None.
(l) (1) Subscription Agreement (relating to Classes A 2
through N).
(2) Subscription Agreement between Registrant and Planco 7
Financial Services, Inc., relating to Classes O and
P.
(3) Subscription Agreement between Registrant and Planco 7
Financial Services, Inc., relating to Class Q.
(4) Subscription Agreement between Registrant and 9
Counsellors Securities Inc. relating to Classes R, S,
and Alpha 1 through Theta 4.
(5) Purchase Agreement between Registrant and Numeric 17
Investors, L.P. relating to Class FF (n/I Micro Cap
Fund).
(6) Purchase Agreement between Registrant and Numeric 17
Investors, L.P. relating to Class GG (n/I Growth
Fund).
(7) Purchase Agreement between Registrant and Numeric 17
Investors, L.P. relating to Class HH (n/I Mid Cap
Fund - formerly Growth & Value).
(8) Purchase Agreement between Registrant and Boston 21
Partners Asset Management, L.P. relating to Classes
QQ, RR and SS (Boston Partners Large Cap Value Fund).
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SEE NOTE#
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(9) Purchase Agreement between Registrant and Boston 22
Partners Asset Management, L.P. relating to Classes
TT and UU (Boston Partners Mid Cap Value Fund).
(10) Purchase Agreement between Registrant and Boston 24
Partners Asset Management L.P. relating to Classes VV
and WW (Boston Partners Bond Fund).
(11) Purchase Agreement between Registrant and Schneider 29
Capital Management Company relating to Class YY
(Schneider Small Cap Value Fund).
(12) Purchase Agreement between Registrant and Boston 29
Partners Asset Management, L.P. relating to Classes
DDD and EEE (Boston Partners Small Cap Value Fund II
(formerly Micro Cap Value)).
(13) Purchase Agreement between Registrant and Boston 31
Partners Asset Management relating to Classes III and
JJJ (Boston Partners Long/Short Equity Fund (formerly
Market Neutral)).
(14) Purchase Agreement between Registrant and Provident 31
Distributors, Inc. relating to Class MMM (n/I Small
Cap Value Fund).
(15) Form of Purchase Agreement between Registrant and 32
Boston Partners Asset Management, L. P. relating to
Classes KKK and LLL (Boston Partners Fund (formerly
Long-Short Equity)).
(16) Purchase Agreement between Registrant and Bogle 34
Investment Management, L. P. (Bogle Small Cap Growth
Fund)
(17) Purchase Agreement between Registrant and Boston 45
Partners Asset Management , L.P. (Boston Partners
All-Cap Value Fund).
(18) Purchase Agreement between Registrant and Schneider 45
Capital Management Company (Schneider Value Fund).
(19) Form of Purchase Agreement between Registrant and 44
Baker 500 Corporation (Baker 500 Growth Fund).
(m) (1) Plan of Distribution (Sansom Street Money Market). 3
(2) Plan of Distribution (Sansom Street Tax-Free Money 3
Market).
(3) Plan of Distribution (Sansom Street Government 3
Obligations Money Market).
(4) Plan of Distribution (Cash Preservation Money). 3
(5) Plan of Distribution (Cash Preservation Tax-Free 3
Money Market).
(6) Plan of Distribution (Bedford Money Market). 3
(7) Plan of Distribution (Bedford Tax-Free Money Market). 3
(8) Plan of Distribution (Bedford Government Obligations 3
Money Market).
(9) Plan of Distribution (Income Opportunities High 7
Yield).
(10) Amendment No. 1 to Plans of Distribution (Classes A 8
through Q).
(11) Plan of Distribution (Beta Tax-Free Money Market). 9
(12) Plan of Distribution (Beta Government Obligations 9
Money Market).
(13) Plan of Distribution (Beta New York Money Market). 9
(14) Plan of Distribution (Gamma Tax-Free Money Market). 9
(15) Plan of Distribution (Gamma Government Obligations 9
Money Market).
(16) Plan of Distribution (Gamma New York Municipal Money 9
Market).
(17) Plan of Distribution (Delta New York Municipal Money 9
Market).
(18) Plan of Distribution (Epsilon Money Market). 9
(19) Plan of Distribution (Epsilon Tax-Free Money Market). 9
(20) Plan of Distribution (Epsilon Government Obligations 9
Money Market).
(21) Plan of Distribution (Epsilon New York Municipal 9
Money Market).
(22) Plan of Distribution (Zeta Money Market). 9
(23) Plan of Distribution (Zeta Tax-Free Money Market). 9
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(24) Plan of Distribution (Zeta Government Obligations 9
Money Market).
(25) Plan of Distribution (Zeta New York Municipal Money 9
Market).
(26) Plan of Distribution (Eta Money Market). 9
(27) Plan of Distribution (Eta Tax-Free Money Market). 9
(28) Plan of Distribution (Eta Government Obligations 9
Money Market).
(29) Plan of Distribution (Eta New York Municipal Money 9
Market).
(30) Plan of Distribution (Theta Money Market). 9
(31) Plan of Distribution (Theta Tax-Free Money Market). 9
(32) Plan of Distribution (Theta Government Obligations 9
Money Market).
(33) Plan of Distribution (Theta New York Municipal Money 9
Market).
(34) Plan of Distribution (Boston Partners Large Cap Value 21
Fund Investor Class).
(35) Plan of Distribution (Boston Partners Large Cap Value 21
Fund Advisor Class).
(36) Plan of Distribution (Boston Partners Mid Cap Value 21
Fund Investor Class).
(37) Plan of Distribution (Boston Partners Bond Fund 24
Investor Class).
(38) Plan of Distribution (Boston Partners Small Cap Value 25
Fund II (formerly Micro Cap Value) Investor Class).
(39) Amendment to Plans of Distribution pursuant to Rule 31
12b-1.
(40) Plan of Distribution (Boston Partners Long/Short 30
Equity Fund (formerly Market Neutral) - Investor
Class).
(41) Plan of Distribution (Principal Money Market). 29
(42) Form of Plan of Distribution (Boston Partners Fund 32
(formerly Long Short Equity) - Investor Class).
(43) Plan of Distribution (Bear Stearns Money Market Fund) 40
(44) Plan of Distribution (Bear Stearns Municipal Money 40
Market Fund)
(45) Plan of Distribution (Bear Stearns Government 40
Obligations Money Market Fund)
(46) Plan of Distribution pursuant to Rule 12b-1 (Boston 45
Partners All-Cap Value Fund).
(n) (1) Form of Amended Rule 18f-3 Plan. 44
(p) (1) Code of Ethics of the Registrant. 37
(2) Code of Ethics of Boston Partners Asset Management, 39
L. P.
(3) Code of Ethics of Numeric Investors, L. P. 37
(4) Code of Ethics of Schneider Capital Management Company. 37
(5) Code of Ethics of Bogle Investment Management, L. P. 39
(6) Code of Ethics of PFPC Distributors, Inc. 39
(7) Code of Ethics of Baker 500 Corporation. 45
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NOTE #
1 Incorporated herein by reference to Registrant's Registration Statement
(No. 33-20827) filed on March 24, 1988, and refiled electronically with
Post-Effective Amendment No. 61 to Registrant's Registration Statement
filed on October 30, 1998.
2 Incorporated herein by reference to Pre-Effective Amendment No. 2 to
Registrant's Registration Statement (No. 33-20827) filed on July 12,
1988, and refiled electronically with Post-Effective Amendment No. 61
to Registrant's Registration Statement filed on October 30, 1998.
3 Incorporated herein by reference to Post-Effective Amendment No. 1 to
Registrant's Registration Statement (No. 33-20827) filed on March 23,
1989, and refiled electronically with Post-Effective Amendment No. 61
to Registrant's Registration Statement filed on October 30, 1998.
4 Incorporated herein by reference to Post-Effective Amendment No. 2 to
Registrant's Registration Statement (No. 33-20827) filed on October 25,
1989.
9
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5 Incorporated herein by reference to Post-Effective Amendment No. 3 to
the Registrant's Registration Statement (No. 33-20827) filed on April
27, 1990, and refiled electronically with Post-Effective Amendment No.
61 to Registrant's Registration Statement filed on October 30, 1998.
6 Incorporated herein by reference to Post-Effective Amendment No. 4 to
the Registrant's Registration Statement (No. 33-20827) filed on May 1,
1990, and refiled electronically with Post-Effective Amendment No. 61
to Registrant's Registration Statement filed on October 30, 1998.
7 Incorporated herein by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement (No. 33-20827) filed on
December 14, 1990.
8 Incorporated herein by reference to Post-Effective Amendment No. 6 to
the Registrant's Registration Statement (No. 33-20827) filed on October
24, 1991, and refiled electronically with Post-Effective Amendment No.
61 to Registrant's Registration Statement filed on October 30, 1998.
9 Incorporated herein by reference to Post-Effective Amendment No. 7 to
the Registrant's Registration Statement (No. 33-20827) filed on July
15, 1992, and refiled electronically with Post-Effective Amendment No.
61 to Registrant's Registration Statement filed on October 30, 1998.
10 Incorporated herein by reference to Post-Effective Amendment No. 8 to
the Registrant's Registration Statement (No. 33-20827) filed on October
22, 1992, and refiled electronically with Post-Effective Amendment No.
61 to Registrant's Registration Statement filed on October 30, 1998.
11 Incorporated herein by reference to Post-Effective Amendment No. 13 to
the Registrant's Registration Statement (No. 33-20827) filed on October
29, 1993, and refiled electronically with Post-Effective Amendment No.
61 to Registrant's Registration Statement filed on October 30, 1998.
12 Incorporated herein by reference to Post-Effective Amendment No. 21 to
the Registrant's Registration Statement (No. 33-20827) filed on October
28, 1994, and refiled electronically with Post-Effective Amendment No.
61 to Registrant's Registration Statement filed on October 30, 1998.
13 Incorporated herein by reference to Post-Effective Amendment No. 22 to
the Registrant's Registration Statement (No. 33-20827) filed on
December 19, 1994, and refiled electronically with Post-Effective
Amendment No. 61 to Registrant's Registration Statement filed on
October 30, 1998.
14 Incorporated herein by reference to Post-Effective Amendment No. 27 to
the Registrant's Registration Statement (No. 33-20827) filed on March
31, 1995.
15 Incorporated herein by reference to Post-Effective Amendment No. 28 to
the Registrant's Registration Statement (No. 33-20827) filed on October
6, 1995.
16 Incorporated herein by reference to Post-Effective Amendment No. 29 to
the Registrant's Registration Statement (No. 33-20827) filed on October
25, 1995.
17 Incorporated herein by reference to Post-Effective Amendment No. 34 to
the Registrant's Registration Statement (No. 33-20827) filed on May 16,
1996.
18 Incorporated herein by reference to Post-Effective Amendment No. 37 to
the Registrant's Registration Statement (No. 33-20827) filed on July
30, 1996.
19 Incorporated herein by reference to Post-Effective Amendment No. 39 to
the Registrant's Registration Statement (No. 33-20827) filed on October
11, 1996.
20 Incorporated herein by reference to Post-Effective Amendment No. 41 to
the Registrant's Registration Statement (No. 33-20827) filed on
November 27, 1996.
10
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21 Incorporated herein by reference to Post-Effective Amendment No. 45 to the
Registrant's Registration Statement (No. 33-20827) filed on May 9, 1997.
22 Incorporated herein by reference to Post-Effective Amendment No. 46 to the
Registrant's Registration Statement (33-20827) filed on September 25, 1997.
23 Incorporated herein by reference to Post-Effective Amendment No. 49 to the
Registrant's Registration Statement (33-20827) filed on December 1, 1997.
24 Incorporated herein by reference to Post-Effective Amendment No. 51 to the
Registrant's Registration Statement (33-20827) filed on December 8, 1997.
25 Incorporated herein by reference to Post-Effective Amendment No. 53 to the
Registrant's Registration Statement (33-20827) filed on April 10, 1998.
26 Incorporated herein by reference to Post-Effective Amendment No. 56 to the
Registrant's Registration Statement (33-20827) filed on June 25, 1998.
27 Incorporated herein by reference to Post-Effective Amendment No. 58 to the
Registrant's Registration Statement (33-20827) filed on August 25, 1998.
28 Incorporated herein by reference to Post-Effective Amendment No. 59 to the
Registrant's Registration Statement (33-20827) filed on September 15, 1998.
29 Incorporated herein by reference to Post-Effective Amendment No. 60 to the
Registrant's Registration Statement (33-20827) filed on October 29, 1998.
30 Incorporated herein by reference to Post-Effective Amendment No. 62 to the
Registrant's Registration Statement (33-20827) filed on November 12, 1998.
31 Incorporated herein by reference to Post-Effective Amendment No. 63 to the
Registrant's Registration Statement (33-20827) filed on December 14, 1998.
32 Incorporated herein by reference to Post-Effective Amendment No. 65 to the
Registrant's Registration Statement (33-20827) filed on May 19, 1999.
33 Incorporated herein by reference to Post-Effective Amendment No. 66 to the
Registrant's Registration Statement (33-20827) filed on July 2, 1999.
34 Incorporated herein by reference to Post-Effective Amendment No. 67 to the
Registrant's Registration Statement (33-20827) filed on September 30, 1999.
35 Incorporated herein by reference to Post-Effective Amendment No. 68 to the
Registrant's Registration Statement (33-20827) filed on September 30, 1999.
36 Incorporated herein by reference to Post-Effective Amendment No. 69 to the
Registrant's Registration Statement (33-20827) filed on December 1, 1999.
37 Incorporated herein by reference to Post-Effective Amendment No. 71 to the
Registrant's Registration Statement (33-20827) filed on December 29, 2000.
38 Incorporated herein by reference to Post-Effective Amendment No. 73 to the
Registrant's Registration Statement (33-20827) filed on March 15, 2001.
39 Incorporated herein by reference to Post-Effective Amendment No. 74 to the
Registrant's Registration Statement (33-20827) filed on December 4, 2001.
11
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40 Incorporated herein by reference to Post-Effective Amendment No. 75 to the
Registrant's Registration Statement (33-20827) filed on December 4, 2001.
41 Incorporated herein by reference to Post-Effective Amendment No. 76 to the
Registrant's Registration Statement (33-20827) filed on December 4, 2001.
42 Incorporated herein by reference to Post-Effective Amendment No. 77 to the
Registrant's Registration Statement (33-20827) filed on May 15, 2002.
43 Incorporated herein by reference to Post-Effective Amendment No. 78 to the
Registrant's Registration Statement (33-20827) filed on May 16, 2002.
44 Incorporated herein by reference to Post-Effective Amendment No. 79 to the
Registrant's Registration Statement (33-20827) filed on September 18, 2002.
45 A copy of such exhibit is filed electronically herewith.
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Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 25. INDEMNIFICATION
Sections 1, 2, 3 and 4 of Article VIII of Registrant's Articles of Incorporation, as amended, incorporated herein by reference as Exhibits (a)(1) and (a)(3), provide as follows:
Section 1. To the fullest extent that limitations on the liability of directors and officers are permitted by the Maryland General Corporation Law, no director or officer of the Corporation shall have any liability to the Corporation or its shareholders for damages. This limitation on liability applies to events occurring at the time a person serves as a director or officer of the Corporation whether or not such person is a director or officer at the time of any proceeding in which liability is asserted.
Section 2. The Corporation shall indemnify and advance expenses to its currently acting and its former directors to the fullest extent that indemnification of directors is permitted by the Maryland General Corporation Law. The Corporation shall indemnify and advance expenses to its officers to the same extent as its directors and to such further extent as is consistent with law. The Board of Directors may by law, resolution or agreement make further provision for indemnification of directors, officers, employees and agents to the fullest extent permitted by the Maryland General Corporation law.
Section 3. No provision of this Article shall be effective to protect or purport to protect any director or officer of the Corporation against any liability to the Corporation or its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.
Section 4. References to the Maryland General Corporation Law in this Article are to the law as from time to time amended. No further amendment to the Articles of Incorporation of the Corporation shall decrease, but may expand, any right of any person under this Article based on any event, omission or proceeding prior to such amendment.
Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Registrant pursuant to the foregoing provisions, or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a director, officer or controlling person of Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Sections 2 and 3 of the Assumption Agreements between PNC Bank, N.A. ("PNC") and Blackrock Institutional Management Corporation ("BIMC"), each dated April 29, 1998 and incorporated herein by reference to exhibits (d)(3), (d)(6) and (d)(9), provide for the indemnification of BIMC and PNC against certain losses.
Section 13 of the Investment Advisory Agreements between Registrant and Numeric
Investors, L.P. ("Numeric"), dated April 24, 1996, April 24, 1996, April 24,
1996, and November 30, 1998 and incorporated herein by reference to exhibits
(d)(13), (d)(14), (d)(15) and (d)(22), provides for the indemnification of
Numeric against certain losses.
Section 12 of the Investment Advisory Agreements between Registrant and Boston
Partners Asset Management, L.P. ("Boston Partners"), dated October 16, 1996, May
30, 1997, December 1, 1997, July 1, 1998, November 13, 1998 and July 1, 1999 and
incorporated herein by reference to exhibits (d)(16), (d)(17), (d)(18), (d)(20),
(d)(21), and (d)(23), provides for the indemnification of Boston Partners
against certain losses.
Section 12 of the Investment Advisory Agreement between Registrant and Boston Partners, dated July 1, 2002 and included herein as exhibit (d)(28), provides for the indemnification of Boston Partners against certain losses.
Section 12 of the Investment Advisory Agreement between Registrant and Bogle Investment Management, L.P. ("Bogle"), dated September 15, 1999 and incorporated herein by reference to exhibit (d)(24) provides for the indemnification of Bogle against certain losses.
Section 12 of the Form of Investment Advisory Agreement between Registrant and
Baker 500 Corporation ("Baker") incorporated herein by reference to exhibit
(d)(30) provides for the indemnification of Baker against certain losses.
Section 9 of the Distribution Agreement between Registrant and PFPC Distributors, Inc. ("PFPC"), dated January 2, 2001 and incorporated herein by reference to exhibit (e)(1) provides for the indemnification of PFPC Distributors against certain losses.
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The information required by this Item 26 with respect to each director and officer of BlackRock Institutional Management Corporation ("BIMC") is incorporated by reference to Schedules A and D of Form ADV filed by BIMC with the Securities and Exchange Commission pursuant to the Investment Advisers Act of 1940 (File No. 801-13304).
The information required by this Item 26 with respect to each director and officer of Numeric Investors, L. P. ("Numeric") is incorporated by reference to Schedules A and D of Form ADV filed by Numeric with the Securities and Exchange Commission pursuant to the Investment Advisers Act of 1940 (File No. 801-35649).
The information required by this Item 26 with respect to each director and officer of Bogle Investment Management, L. P. ("Bogle") is incorporated by reference to Schedules A and D of Form ADV filed by Bogle with the Securities and Exchange Commission pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-56815).
The information required by this Item 26 with respect to each director and officer of Boston Partners Asset Management, L.P. ("Boston Partners") is incorporated by reference to Schedules A and D of Form ADV filed by Boston Partners with the Securities and Exchange Commission pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-49059).
The information required by this Item 26 with respect to each director and officer of Schneider Capital Management Company ("Schneider") is incorporated by reference to Schedules A and D of Form ADV filed by Schneider with the Securities and Exchange Commission pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-55439).
L. Edward Baker, Baker 500 Corporation's founder and investment adviser, is the founder and Chief Manager of Baker 500, LLC and a Managing Member of Baker Capital LLC. Baker 500 Corporation, Baker 500, LLC, and Baker Capital LLC are affiliated entities and located at 601 Carlson Parkway, Suite 1050, Minnetonka, MN 55305.
Item 27. Principal Underwriter
(a) PFPC Distributors, Inc. (the "Distributor") acts as principal underwriter for the following investment companies as of August 1, 2002:
AB Funds Trust
AFBA 5 Star Funds, Inc.
Columbia Common Stock Fund, Inc.
Columbia Growth Fund, Inc.
Columbia International Stock Fund, Inc.
Columbia Special Fund, Inc.
Columbia Small Cap Fund, Inc.
Columbia Real Estate Equity Fund, Inc.
Columbia Balanced Fund, Inc.
Columbia Daily Income Company
Columbia U.S. Government Securities Fund, Inc.
Columbia Fixed Income Securities Fund, Inc.
Columbia Municipal Bond Fund, Inc.
Columbia High Yield Fund, Inc.
Columbia National Municipal Bond Fund, Inc.
Columbia Strategic Value Fund, Inc.
Columbia Technology Fund, Inc.
Deutsche Asset Management VIT Funds
Forward Funds, Inc.
GAMNA Series Funds, Inc.
Harris Insight Funds Trust
Hillview Investment Trust II
International Dollar Reserve Fund I, Ltd.
Kalmar Pooled Investment Trust
Matthews International Funds
Metropolitan West Funds
New Covenant Funds
Pictet Funds
The RBB Fund, Inc.
RS Investment Trust
Smith Graham Institutional Funds
Stratton Growth Fund, Inc.
Stratton Monthly Dividend REIT Shares, Inc.
The Stratton Funds, Inc.
Tomorrow Funds Retirement Trust
Trainer, Wortham First Mutual Funds
Undiscovered Managers Funds
Weiss, Peck & Greer Funds Trust
Weiss, Peck & Greer International Fund
Whitehall Funds Trust
Wilshire Target Funds, Inc.
WPG Large Cap Fund
WPG Tudor Fund
WT Investment Trust
Distributed by BlackRock Distributors, Inc., a wholly owned subsidiary of PFPC Distributors, Inc.:
BlackRock Provident Institutional Funds BlackRock Funds, Inc.
Distributed by Northern Funds Distributors, LLC., a wholly owned subsidiary of PFPC Distributors, Inc.:
Northern Funds Trust Northern Institutional Funds Trust
Distributed by Offit Funds Distributor, Inc., a wholly owned subsidiary of PFPC Distributors, Inc.:
The Offit Investment Fund, Inc. The Offit Variable Insurance Fund, Inc.
Distributed by ABN AMRO Distribution Services (USA), Inc., a wholly owned subsidiary of PFPC Distributors, Inc.:
ABN AMRO Funds
PFPC Distributors, Inc. is registered with the Securities and Exchange Commission as a broker-dealer and is a member of the National Association of Securities Dealers. PFPC Distributors, Inc. is located at 760 Moore Road, Valley Forge, PA 19406.
(b) The following is a list of the executive officers, directors, and partners of PFPC Distributors, Inc.:
Steven Turowski - Chairman, Chief Executive Officer, Director and President Brian Burns - Director Michael Denofrio - Director Susan Keller - Director Rita G. Adler - Chief Compliance Officer Christine A. Ritch - Chief Legal Officer Salvatore Faia - Secretary and Clerk Christopher S. Conner - Assistant Secretary and Assistant Clerk Bradley A. Stearns - Assistant Secretary and Assistant Clerk John L. Wilson - Assistant Secretary and Assistant Clerk John Coary - Treasurer Douglas D. Castagna - Controller and Assistant Treasurer Lisa Colon - Vice President Bruno DiStefano - Vice President Elizabeth T. Holtsbery - Vice President Susan K. Moscaritolo - Vice President Thomas Rodman - Vice President |
(c) Not applicable.
Item 28. LOCATION OF ACCOUNTS AND RECORDS
(1) PFPC Trust Company (assignee under custodian agreement), 8800 Tinicum Boulevard, Suite 200, Philadelphia, PA 19153 (records relating to its functions as sub-adviser and custodian).
(2) PFPC Distributors, Inc., 760 Moore Road, Valley Forge, PA 19406. (records relating to its functions as distributor).
(3) BlackRock Institutional Management Corporation, Bellevue Corporate Center, 100 Bellevue Parkway, Wilmington, Delaware 19809 (records relating to its functions as investment adviser, sub-adviser and administrator).
(4) PFPC Inc., Bellevue Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware 19809 (records relating to its functions as transfer agent and dividend disbursing agent).
(5) Drinker Biddle & Reath LLP, One Logan Square, 18/th/ and Cherry Streets, Philadelphia, Pennsylvania 19103 (Registrant's Articles of Incorporation, By-Laws and Minute Books).
(6) Numeric Investors, L.P., 1 Memorial Drive, Cambridge, Massachusetts 02142 (records relating to its function as investment adviser).
(7) Boston Partners Asset Management, L.P., One Financial Center, 43rd Floor, Boston, Massachusetts 02111 (records relating to its function as investment adviser).
(8) Schneider Capital Management Co., 460 East Swedesford Road, Suite 1080, Wayne, Pennsylvania 19087 (records relating to its function as investment adviser).
(9) Bogle Investment Management, L.P., 57 River Street, Suite 206, Wellesley, Massachusetts 02481 (records relating to its function as investment adviser).
(10) Bear Stearns & Co. Inc., Funds Management Department, 383 Madison Avenue, New York, NY 10179 (records relating to its function as co-administrator for investment portfolios advised by Numeric Investors L.P.)
(11) Baker 500 Corporation, 601 Carlson Parkway, Suite 1050, Minnetonka, MN 55305 (records relating to its function as investment adviser).
Item 29. MANAGEMENT SERVICES
None.
Item 30. UNDERTAKINGS
(a) Registrant hereby undertakes to hold a meeting of shareholders for the purpose of considering the removal of directors in the event the requisite number of shareholders so request.
(b) Registrant hereby undertakes to furnish each person to whom a prospectus is delivered a copy of Registrant's latest annual report to shareholders upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant has duly caused this Post-Effective Amendment No. 80 to be signed on its behalf by the undersigned, duly authorized, in the City of Wilmington, and State of Delaware on the 1/st/ day of November, 2002.
THE RBB FUND, INC.
By: /s/ Edward J. Roach
-----------------------------
Edward J. Roach
President and Treasurer
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Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment to Registrant's Registration Statement has been signed below by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
President (Principal Executive November 1, 2002
Edward J. Roach Officer) and Treasurer (Principal
Financial and Accounting Officer)
*J. Richard Carnall Director November 1, 2002
-------------------
J. Richard Carnall
*Francis J. McKay Director November 1, 2002
-----------------
Francis J. McKay
*Marvin E. Sternberg Director November 1, 2002
--------------------
Marvin E. Sternberg
*Julian A. Brodsky Director November 1, 2002
------------------
Julian A. Brodsky
*Arnold M. Reichman Director November 1, 2002
-------------------
Arnold M. Reichman
*Robert Sablowsky Director November 1, 2002
----------------
Robert Sablowsky
*By: /s/ Edward J. Roach November 1, 2002
---------------------
Edward J. Roach
Attorney-in-Fact
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THE RBB FUND, INC.
(the "Company")
POWER OF ATTORNEY
Know All Men by These Presents, that the undersigned, Francis J. McKay, hereby constitutes and appoints Edward J. Roach and Michael P. Malloy, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys being hereby ratified and approved.
DATED: November 9, 2000
/s/ Francis J. McKay
--------------------
Francis J. McKay
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THE RBB FUND, INC.
(the "Company")
POWER OF ATTORNEY
Know All Men by These Presents, that the undersigned, Marvin E. Sternberg, hereby constitutes and appoints Edward J. Roach and Michael P. Malloy, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys being hereby ratified and approved.
DATED: November 9, 2000
/s/ Marvin E. Sternberg
-----------------------
Marvin E. Sternberg
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THE RBB FUND, INC.
(the "Company")
POWER OF ATTORNEY
Know All Men by These Presents, that the undersigned, Julian Brodsky, hereby constitutes and appoints Edward J. Roach and Michael P. Malloy, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys being hereby ratified and approved.
DATED: November 9, 2000
/s/ Julian Brodsky
------------------
Julian Brodsky
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THE RBB FUND, INC.
(the "Company")
POWER OF ATTORNEY
Know All Men by These Presents, that the undersigned, Arnold Reichman, hereby constitutes and appoints Edward J. Roach and Michael P. Malloy, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys being hereby ratified and approved.
DATED: November 9, 2000
/s/ Arnold Reichman
-------------------
Arnold Reichman
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THE RBB FUND, INC.
(the "Company")
POWER OF ATTORNEY
Know All Men by These Presents, that the undersigned, Robert Sablowsky, hereby constitutes and appoints Edward J. Roach and Michael P. Malloy, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys being hereby ratified and approved.
DATED: November 9, 2000
/s/ Robert Sablowsky
--------------------
Robert Sablowsky
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THE RBB FUND, INC.
(the "Company")
POWER OF ATTORNEY
Know All Men by These Presents, that the undersigned, J. Richard Carnall, hereby constitutes and appoints Edward J. Roach and Michael P. Malloy, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys being hereby ratified and approved.
DATED: September 10, 2002
/s/ J. Richard Carnall
----------------------
J. Richard Carnall
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EXHIBIT INDEX
Exhibit No. Exhibit
---------- -------
(d)(28) Investment Advisory Agreement between Registrant and Boston
Partners Asset Management, L.P.
(d)(29) Investment Advisory Agreement between Registrant and
Schneider Capital Management Company.
(e)(5) Distribution Agreement Supplement between Registrant and
PFPC Distributors, Inc. (Boston Partners All-Cap Value Fund
Investor Class).
(e)(6) Distribution Agreement Supplement between Registrant and
PFPC Distributors, Inc. (Boston Partners All-Cap Value Fund
Institutional Class).
(e)(7) Distribution Agreement Supplement between Registrant and
PFPC Distributors, Inc. (Schneider Value Fund).
(f)(2) Form of Amendment No. 1 to Fund Office Retirement Profit
Sharing Plan and Trust Reflecting EGTRRA.
(g)(16) Custodian Agreement Supplement between Registrant and PFPC
Trust Company (Boston Partners All-Cap Value Fund).
(g)(17) Custodian Agreement Supplement between Registrant and PFPC
Trust Company (Schneider Value Fund).
(h)(57) Transfer Agency Supplement between Registrant and PFPC Inc.
for the Boston Partners All-Cap Value Fund.
(h)(59) Administrative Services Agreement Supplement between
Registrant and PFPC Distributors Inc. for the Boston
Partners All-Cap Value Fund.
(h)(60) Transfer Agent Supplement between Registrant and PFPC Inc.
for Schneider Value Fund.
(h)(62) Administrative Services Agreement Supplement between
Registrant and PFPC Distributors, Inc. for the Schneider
Value Fund.
(h)(68) Shareholder Servicing Agreement (Bogle Small Cap Growth
Fund).
(h)(69) Administrative Services Agreement Supplement between
Registrant and PFPC Distributors, Inc. for Investor Shares
of the Boston Partners Funds.
(i) Opinion of Drinker Biddle & Reath LLP.
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(j)(1) Consent of Drinker Biddle & Reath LLP.
(j)(2) Consent of Independent Auditors.
(l)(17) Purchase Agreement between Registrant and Boston Partners
Asset Management, L.P. for the Boston Partners All-Cap Value
Fund.
(l)(18) Purchase Agreement between Registrant and Schneider Capital
Management Company (Schneider Value Fund).
(m)(46) Plan of Distribution pursuant to Rule 12b-1 (Boston Partners
All-Cap Value Fund).
(p)(7) Code of Ethics of Baker 500 Corporation.
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Exhibit (d)(28)
INVESTMENT ADVISORY AGREEMENT
Boston Partners All-Cap Value Fund
AGREEMENT made as of July 1, 2002 between THE RBB FUND, INC., a Maryland corporation (herein called the "Fund"), and Boston Partners Asset Management, L.P. (herein called the "Investment Advisor").
WHEREAS, the Fund is registered as an open-end, management investment company under the Investment Company Act of 1940 (the "1940 Act") and currently offers or proposes to offer shares representing interests in separate investment portfolios; and
WHEREAS, the Fund desires to retain the Investment Advisor to render certain investment advisory services to the Fund with respect to the Fund's Boston Partners All-Cap Value Fund (the "Portfolio"), and the Investment Advisor is willing to so render such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound hereby, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Investment Advisor to act as investment advisor for the Portfolio for the period and on the terms set forth in this Agreement. The Investment Advisor accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.
2. Delivery of Documents. The Fund has furnished the Investment Advisor with copies properly certified or authenticated of each of the following:
(a) Resolutions of the Board of Directors of the Fund authorizing the appointment of the Investment Advisor and the execution and delivery of this Agreement;
(b) Each prospectus and statement of additional information relating to any class of Shares representing interests in the Portfolio of the Fund in effect under the 1933 Act (such prospectus and statement of additional information, as presently in effect and as they shall from time to time be amended and supplemented, are herein collectively called the "Prospectus" and "Statement of Additional Information," respectively).
The Fund will promptly furnish the Investment Advisor from time to time with copies, properly certified or authenticated, of all amendments of or supplements to the foregoing, if any.
In addition to the foregoing, the Fund will also provide the Investment Advisor with copies of the Fund's Charter and By-laws, and any registration statement or service contracts
related to the Portfolio, and will promptly furnish the Investment Advisor with any amendments of or supplements to such documents.
3. Management of the Portfolio. Subject to the supervision of the Board of Directors of the Fund, the Investment Advisor will provide for the overall management of the Portfolio including (i) the provision of a continuous investment program for the Portfolio, including investment research and management with respect to all securities, investments, cash and cash equivalents in the Portfolio, (ii) the determination from time to time of what securities and other investments will be purchased, retained, or sold by the Fund for the Portfolio, and (iii) the placement from time to time of orders for all purchases and sales made for the Portfolio. The Investment Advisor will provide the services rendered by it hereunder in accordance with the Portfolio's investment objectives, restrictions and policies as stated in the applicable Prospectus and the Statement of Additional Information, provided that the Investment Adviser has actual notice or knowledge of any changes by the Board of Directors to such investment objectives, restrictions or policies. The Investment Advisor further agrees that it will render to the Fund's Board of Directors such periodic and special reports regarding the performance of its duties under this Agreement as the Board may reasonably request. The Investment Advisor agrees to provide to the Fund (or its agents and service providers) prompt and accurate data with respect to the Portfolio's transactions and, where not otherwise available, the daily valuation of securities in the Portfolio.
4. Brokerage. Subject to the Investment Advisor's obligation to obtain best price and execution, the Investment Advisor shall have full discretion to select brokers or dealers to effect the purchase and sale of securities. When the Investment Advisor places orders for the purchase or sale of securities for the Portfolio, in selecting brokers or dealers to execute such orders, the Investment Advisor is expressly authorized to consider the fact that a broker or dealer has furnished statistical, research or other information or services for the benefit of the Portfolio directly or indirectly. Without limiting the generality of the foregoing, the Investment Advisor is authorized to cause the Portfolio to pay brokerage commissions which may be in excess of the lowest rates available to brokers who execute transactions for the Portfolio or who otherwise provide brokerage and research services utilized by the Investment Advisor, provided that the Investment Advisor determines in good faith that the amount of each such commission paid to a broker is reasonable in relation to the value of the brokerage and research services provided by such broker viewed in terms of either the particular transaction to which the commission relates or the Investment Advisor's overall responsibilities with respect to accounts as to which the Investment Advisor exercises investment discretion. The Investment Advisor may aggregate securities orders so long as the Investment Advisor adheres to a policy of allocating investment opportunities to the Portfolio over a period of time on a fair and equitable basis relative to other clients. In no instance will the Portfolio's securities be purchased from or sold to the Fund's principal underwriter, the Investment Advisor, or any affiliated person thereof, except to the extent permitted by SEC exemptive order or by applicable law.
The Investment Advisor shall report to the Board of Directors of the Fund at least quarterly with respect to brokerage transactions that were entered into by the Investment Advisor, pursuant to the foregoing paragraph, and shall certify to the Board that the commissions paid were reasonable in terms either of that transaction or the overall responsibilities of the Advisor to
the Fund and the Investment Advisor's other clients, that the total commissions paid by the Fund were reasonable in relation to the benefits to the Fund over the long term, and that such commissions were paid in compliance with Section 28(e) of the Securities Exchange Act of 1934.
5. Conformity with Law; Confidentiality. The Investment Advisor further agrees that it will comply with all applicable rules and regulations of all federal regulatory agencies having jurisdiction over the Investment Advisor in the performance of its duties hereunder. The Investment Advisor will treat confidentially and as proprietary information of the Fund all records and other information relating 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 Investment Advisor may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund.
6. Services Not Exclusive. The Investment Advisor and its officers may act and continue to act as investment managers for others, and nothing in this Agreement shall in any way be deemed to restrict the right of the Investment Advisor to perform investment management or other services for any other person or entity, and the performance of such services for others shall not be deemed to violate or give rise to any duty or obligation to the Portfolio or the Fund.
Nothing in this Agreement shall limit or restrict the Investment Advisor or any of its partners, officers, affiliates or employees from buying, selling or trading in any securities for its or their own account. The Fund acknowledges that the Investment Advisor and its partners, officers, affiliates, employees and other clients may, at any time, have, acquire, increase, decrease, or dispose of positions in investments which are at the same time being acquired or disposed of for the Portfolio. The Investment Advisor shall have no obligation to acquire for the Portfolio a position in any investment which the Investment Advisor, its partners, officers, affiliates or employees may acquire for its or their own accounts or for the account of another client, so long as it continues to be the policy and practice of the Investment Advisor not to favor or disfavor consistently or consciously any client or class of clients in the allocation of investment opportunities so that, to the extent practical, such opportunities will be allocated among clients over a period of time on a fair and equitable basis.
The Investment Advisor agrees that this Paragraph 6 does not constitute a waiver by the Fund of the obligations imposed upon the Investment Advisor to comply with Sections 17(d) and 17(j) of the 1940 Act, and the rules thereunder, nor constitute a waiver by the Fund of the obligations imposed upon the Investment Advisor under Section 206 of the Investment Advisers Act of 1940 and the rules thereunder. Further, the Investment Advisor agrees that this Paragraph 6 does not constitute a waiver by the Fund of the fiduciary obligation of the Investment Advisor arising under federal or state law, including Section 36 of the 1940 Act. The Investment Advisor agrees that this Paragraph 6 shall be interpreted consistent with the provisions of Section 17(i) of the 1940 Act.
7. Books and Records. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Investment Advisor hereby agrees that all records which it maintains for the Portfolio are the property of the Fund and further agrees to surrender promptly to the Fund any of such records upon the Fund's request. The Investment Advisor further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act.
8. Expenses. During the term of this Agreement, the Investment Advisor will pay all expenses incurred by it in connection with its activities under this Agreement. The Portfolio shall bear all of its own expenses not specifically assumed by the Investment Advisor. General expenses of the Fund not readily identifiable as belonging to a portfolio of the Fund shall be allocated among all investment portfolios by or under the direction of the Fund's Board of Directors in such manner as the Board determines to be fair and equitable. Expenses borne by the Portfolio shall include, but are not limited to, the following (or the portfolio's share of the following): (a) the cost (including brokerage commissions) of securities purchased or sold by the Portfolio and any losses incurred in connection therewith; (b) fees payable to and expenses incurred on behalf of the Portfolio by the Investment Advisor; (c) filing fees and expenses relating to the registration and qualification of the Fund and the Portfolio's shares under federal and/or state securities laws and maintaining such registrations and qualifications; (d) fees and salaries payable to the Fund's directors and officers; (e) taxes (including any income or franchise taxes) and governmental fees; (f) costs of any liability and other insurance or fidelity bonds; (g) any costs, expenses or losses arising out a liability of or claim for damages or other relief asserted against the Fund or the Portfolio for violation of any law; (h) legal, accounting and auditing expenses, including legal fees of special counsel for the independent directors; (i) charges of custodians and other agents; (j) expenses of setting in type and printing prospectuses, statements of additional information and supplements thereto for existing shareholders, reports, statements, and confirmations to shareholders and proxy material that are not attributable to a class; (k) costs of mailing prospectuses, statements of additional information and supplements thereto to existing shareholders, as well as reports to shareholders and proxy material that are not attributable to a class; (1) any extraordinary expenses; (m) fees, voluntary assessments and other expenses incurred in connection with membership in investment company organizations; (n) costs of mailing and tabulating proxies and costs of shareholders' and directors' meetings; (o) costs of independent pricing services to value a portfolio's securities; and (p) the costs of investment company literature and other publications provided by the Fund to its directors and officers. Distribution expenses, transfer agency expenses, expenses of preparation, printing and mailing, prospectuses, statements of additional information, proxy statements and reports to shareholders, and organizational expenses and registration fees, identified as belonging to a particular class of the Fund are allocated to such class.
9. Voting. The Investment Advisor shall have the authority to vote as agent for the Fund, either in person or by proxy, tender and take all actions incident to the ownership of all securities in which Portfolio's assets may be invested from time to time, subject to such policies and procedures as the Board of Directors of the Fund may adopt from time to time.
10. Reservation of Name. The Investment Advisor shall at all times have all rights in and to the Portfolio's name and all investment models used by or on behalf of the
Portfolio. The Investment Advisor may use the Portfolio's name or any portion thereof in connection with any other mutual fund or business activity without the consent of any shareholder and the Fund shall execute and deliver any and all documents required to indicate the consent of the Fund to such use.
11. Compensation.
(a) For the services provided and the expenses assumed pursuant to this Agreement with respect to the Portfolio, the Fund will pay the Investment Advisor from the assets of the Portfolio and the Investment Advisor will accept as full compensation therefor a fee, computed daily and payable monthly, at the annual rate of 1.00% of the Portfolio's average daily net assets.
(b) The fee attributable to the Portfolio shall be satisfied only against assets of the Portfolio and not against the assets of any other investment portfolio of the Fund.
12. Limitation of Liability of the Investment Advisor. The Investment Advisor shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with the matters to which this Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services or a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Investment Advisor in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement ("disabling conduct"). The Portfolio will indemnify the Investment Advisor against and hold it harmless from any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action or suit not resulting from disabling conduct by the Investment Advisor. Indemnification shall be made only following: (i) a final decision on the merits by a court or other body before whom the proceeding was brought that the Investment Advisor was not liable by reason of disabling conduct or (ii) in the absence of such a decision, a reasonable determination, based upon a review of the facts, that the Investment Advisor was not liable by reason of disabling conduct by (a) the vote of a majority of a quorum of directors of the Portfolio who are neither "interested persons" of the Portfolio nor parties to the proceeding ("disinterested non-party directors") or (b) an independent legal counsel in a written opinion. The Investment Advisor shall be entitled to advances from the Portfolio for payment of the reasonable expenses incurred by it in connection with the matter as to which it is seeking indemnification in the manner and to the fullest extent permissible under the Maryland General Corporation Law. The Investment Advisor shall provide to the Portfolio a written affirmation of its good faith belief that the standard of conduct necessary for indemnification by the Portfolio has been met and a written undertaking to repay any such advance if it should ultimately be determined that the standard of conduct has not been met. In addition, at least one of the following additional conditions shall be met: (a) the Investment Advisor shall provide a security in form and amount acceptable to the Portfolio for its undertaking; (b) the Portfolio is insured against losses arising by reason of the advance; or (c) a majority of a quorum of disinterested non-party directors, or independent legal counsel, in a written opinion, shall have determined, based upon a review of facts readily available to the Portfolio at the time the advance is proposed to be made, that there is reason to believe that the Investment Advisor will ultimately be found to be entitled to indemnification.
Any amounts payable by the Portfolio under this Section shall be satisfied only against the assets of the Portfolio and not against the assets of any other investment portfolio of the Fund.
The limitations on liability and indemnification provisions of this paragraph 12 shall not be applicable to any losses, claims, damages, liabilities or expenses arising from the Investment Advisor's rights to the Portfolio's name. The Investment Advisor shall indemnify and hold harmless the Fund and the Portfolio for any claims arising from the use of the term "Boston Partners" in the name of the Portfolio.
13. Duration and Termination. This Agreement shall become effective with respect to the Portfolio upon approval of this Agreement by vote of a majority of the outstanding voting securities of the Portfolio and, unless sooner terminated as provided herein, shall continue with respect to the Portfolio until August 16, 2003. Thereafter, if not terminated, this Agreement shall continue with respect to the Portfolio for successive annual periods ending on August 16 provided such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Directors of the Fund who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (b) by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Portfolio; provided, however, that this Agreement may be terminated with respect to the Portfolio by the Fund at any time, without the payment of any penalty, by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Portfolio, on 60 days' prior written notice to the Investment Advisor, or by the Investment Advisor at any time, without payment of any penalty, on 60 days' prior written notice to the Fund. 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).
14. Amendment of this Agreement. No provision of this Agreement may be changed, discharged or terminated orally, except by an instrument in writing signed by the party against which enforcement of the change, discharge or termination is sought, and no amendment of this Agreement affecting the Portfolio shall be effective until approved by vote of the holders of a majority of the outstanding voting securities of the Portfolio.
15. Miscellaneous. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and shall be governed by Delaware law.
16. Change in Membership. The Investment Advisor shall notify the Fund of any change in its membership within a reasonable time after such change.
17. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without giving effect to the conflicts of laws principles thereof.
18. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.
THE RBB FUND, INC.
By: /s/ Edward J. Roach
-------------------
Name: Edward J. Roach
Title: President & Treasurer
|
BOSTON PARTNERS ASSET
MANAGEMENT, L.P., by BOSTON
PARTNERS, INC., its General Partner
By: /s/ William J. Kelly
--------------------
Name: William J. Kelly
Title: Treasurer
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Exhibit (d)(29)
INVESTMENT ADVISORY AGREEMENT
Schneider Value Fund
AGREEMENT made as of August 1, 2002 between THE RBB FUND, INC., a Maryland corporation (herein called the "Fund"), and Schneider Capital Management Company, a Pennsylvania corporation (herein called the "Investment Adviser").
WHEREAS, the Fund is registered as an open-end, management investment company under the Investment Company Act of 1940 (the "1940 Act") and currently offers or proposes to offer shares representing interests in separate investment portfolios; and
WHEREAS, the Fund desires to retain the Investment Adviser to render certain investment advisory services to the Fund with respect to the Fund's Schneider Value Fund (the "Portfolio"), and the Investment Adviser is willing to so render such services.
NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and intending to be legally bound hereby, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Investment Adviser to act as investment adviser for the Portfolio for the period and on the terms set forth in this Agreement. The Investment Adviser accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.
2. Delivery of Documents. The Fund has furnished the Investment Adviser with copies properly certified or authenticated of each of the following:
(a) Resolutions of the Board of Directors of the Fund authorizing the appointment of the Investment Adviser and the execution and delivery of this Agreement;
(b) Each prospectus and statement of additional information relating to any class of Shares representing interests in the Portfolio of the Fund in effect under the 1933 Act (such prospectus and statement of additional information, as presently in effect and as they shall from time to time be amended and supplemented, are herein collectively called the "Prospectus" and "Statement of Additional Information," respectively).
The Fund will promptly furnish the Investment Adviser from time to time with copies, properly certified or authenticated, of all amendments of or supplements to the foregoing, if any.
In addition to the foregoing, the Fund will also provide the Investment Adviser with copies of the Fund's Charter and By-laws, and any registration statement or service contracts related to the Portfolio, and will promptly furnish the Investment Adviser with any amendments of or supplements to such documents.
3. Management of the Portfolio. Subject to the supervision of the Board of Directors of the Fund, the Investment Adviser will provide for the overall management of the Portfolio including (i) the provision of a continuous investment program for the Portfolio, including investment research and management with respect to all securities, investments, cash and cash equivalents in the Portfolio, (ii) the determination from time to time of what securities and other investments will be purchased, retained, or sold by the Fund for the Portfolio, and (iii) the placement from time to time of orders for all purchases and sales made for the Portfolio. The Investment Adviser will provide the services rendered by it hereunder in accordance with the Portfolio's investment objectives, restrictions and policies as stated in the applicable Prospectus and the Statement of Additional Information. The Investment Adviser further agrees that it will render to the Fund's Board of Directors such periodic and special reports regarding the performance of its duties under this Agreement as the Board may reasonably request. The Investment Adviser agrees to provide to the Fund (or its agents and service providers) prompt and accurate data with respect to the Portfolio's transactions and, where not otherwise available, the daily valuation of securities in the Portfolio.
4. Brokerage. Subject to the Investment Adviser's obligation to obtain best price and execution, the Investment Adviser shall have full discretion to select brokers or dealers to effect the purchase and sale of securities. When the Investment Adviser places orders for the purchase or sale of securities for the Portfolio, in selecting brokers or dealers to execute such orders, the Investment Adviser is expressly authorized to consider the fact that a broker or dealer has furnished statistical, research or other information or services for the benefit of the Portfolio directly or indirectly. Without limiting the generality of the foregoing, the Investment Adviser is authorized to cause the Portfolio to pay brokerage commissions which may be in excess of the lowest rates available to brokers who execute transactions for the Portfolio or who otherwise provide brokerage and research services utilized by the Investment Adviser, provided that the Investment Adviser determines in good faith that the amount of each such commission paid to a broker is reasonable in relation to the value of the brokerage and research services provided by such broker viewed in terms of either the particular transaction to which the commission relates or the Investment Adviser's overall responsibilities with respect to accounts as to which the Investment Adviser exercises investment discretion. The Investment Adviser may aggregate securities orders so long as the Investment Adviser adheres to a policy of allocating investment opportunities to the Portfolio over a period of time on a fair and equitable basis relative to other clients. In no instance will the Portfolio's securities be purchased from or sold to the Fund's principal underwriter, the Investment Adviser, or any affiliated person thereof, except to the extent permitted by SEC exemptive order or by applicable law.
The Investment Adviser shall report to the Board of Directors of the Fund at least quarterly with respect to brokerage transactions that were entered into by the Investment Adviser pursuant to the foregoing paragraph, and shall certify to the Board that the commissions paid
were reasonable in terms either of that transaction or the overall responsibilities of the Adviser to the Fund and the Investment Adviser's other clients, that the total commissions paid by the Fund were reasonable in relation to the benefits to the Fund over the long term, and that such commissions were paid in compliance with Section 28(e) of the Securities Exchange Act of 1934.
5. Conformity with Law; Confidentiality. The Investment Adviser further agrees that it will comply with all applicable rules and regulations of all federal regulatory agencies having jurisdiction over the Investment Adviser in the performance of its duties hereunder. The Investment Adviser will treat confidentially and as proprietary information of the Fund all records and other information relating 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 Investment Adviser 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. Services Not Exclusive. The Investment Adviser and its officers may act and continue to act as investment managers for others, and nothing in this Agreement shall in any way be deemed to restrict the right of the Investment Adviser to perform investment management or other services for any other person or entity, and the performance of such services for others shall not be deemed to violate or give rise to any duty or obligation to the Portfolio or the Fund.
7. Books and Records. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Investment Adviser hereby agrees that all records which it maintains for the Portfolio are the property of the Fund and further agrees to surrender promptly to the Fund any of such records upon the Fund's request. The Investment 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.
8. Expenses. During the term of this Agreement, the Investment Adviser will pay all expenses incurred by it in connection with its activities under this Agreement. The Portfolio shall bear all of its own expenses not specifically assumed by the Investment Adviser. General expenses of the Fund not readily identifiable as belonging to a portfolio of the Fund shall be allocated among all investment portfolios by or under the direction of the Fund's Board of Directors in such manner as the Board determines to be fair and equitable. Expenses borne by the Portfolio shall include, but are not limited to, the following (or the Portfolio's share of the following): (a) the cost (including brokerage commissions) of securities purchased or sold by the Portfolio and any losses incurred in connection therewith; (b) fees payable to and expenses incurred on behalf of the Portfolio by the Investment Adviser; (c) filing fees and expenses relating to the registration and qualification of the Fund and the Portfolio's shares under federal and/or state securities laws and maintaining such registrations and qualifications; (d) fees and salaries payable to the Fund's directors and officers; (e) taxes (including any income or franchise
taxes) and governmental fees; (f) costs of any liability and other insurance or fidelity bonds; (g) any costs, expenses or losses arising out a liability of or claim for damages or other relief asserted against the Fund or the Portfolio for violation of any law; (h) legal, accounting and auditing expenses, including legal fees of special counsel for the independent directors; (i) charges of custodians and other agents; (j) expenses of setting in type and printing prospectuses, statements of additional information and supplements thereto for existing shareholders, reports, statements, and confirmations to shareholders and proxy material that are not attributable to a class; (k) costs of mailing prospectuses, statements of additional information and supplements thereto to existing shareholders, as well as reports to shareholders and proxy material that are not attributable to a class; (1) any extraordinary expenses; (m) fees, voluntary assessments and other expenses incurred in connection with membership in investment company organizations; (n) costs of mailing and tabulating proxies and costs of shareholders' and directors' meetings; (o) costs of independent pricing services to value portfolio securities; and (p) the costs of investment company literature and other publications provided by the Fund to its directors and officers. Distribution expenses, transfer agency expenses, expenses of preparation, printing and mailing, prospectuses, statements of additional information, proxy statements and reports to shareholders, and organizational expenses and registration fees, identified as belonging to a particular class of the Fund are allocated to such class.
9. Voting. The Investment Adviser shall have the authority to vote as agent for the Fund, either in person or by proxy, tender and take all actions incident to the ownership of all securities in which Portfolio's assets may be invested from time to time, subject to such policies and procedures as the Board of Directors of the Fund may adopt from time to time.
10. Reservation of Name. The Investment Adviser shall at all times have all rights in and to the Portfolio's name and all investment models used by or on behalf of the Portfolio. The Investment Adviser may use the Portfolio's name or any portion thereof in connection with any other mutual fund or business activity without the consent of any shareholder and the Fund shall execute and deliver any and all documents required to indicate the consent of the Fund to such use.
11. Compensation.
(a) For the services provided and the expenses assumed pursuant to this Agreement with respect to the Portfolio, the Fund will pay the Investment Adviser from the assets of the Portfolio and the Investment Adviser will accept as full compensation therefor a fee, computed daily and payable monthly, at the annual rate of 0.70% of the Portfolio's average daily net assets.
(b) The fee attributable to the Portfolio shall be satisfied only against assets of the Portfolio and not against the assets of any other investment portfolio of the Fund.
12. Limitation of Liability of the Investment Adviser. The Investment 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, except a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for services or a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Investment Adviser in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement.
The limitations on liability of this paragraph 12 shall not be applicable to any losses, claims, damages, liabilities or expenses arising from the Fund's use of the Portfolio's name. The Investment Adviser shall indemnify and hold harmless the Fund and the Portfolio for any claims arising from the use of the term "Schneider" in the name of the Portfolio.
13. Duration and Termination. This Agreement shall become effective with respect to the Portfolio upon approval of this Agreement by vote of a majority of the outstanding voting securities of the Portfolio and, unless sooner terminated as provided herein, shall continue with respect to the Portfolio until August 16, 2003. Thereafter, if not terminated, this Agreement shall continue with respect to the Portfolio for successive annual periods ending on August 16 provided such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Directors of the Fund who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (b) by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Portfolio; provided, however, that this Agreement may be terminated with respect to the Portfolio by the Fund at any time, without the payment of any penalty, by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Portfolio, on 60 days' prior written notice to the Investment Adviser, or by the Investment Adviser at any time, without payment of any penalty, on 60 days' prior written notice to the Fund. 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).
14. Amendment of this Agreement. No provision of this Agreement may be changed, discharged or terminated orally, except by an instrument in writing signed by the party against which enforcement of the change, discharge or termination is sought, and no amendment of this Agreement affecting the Portfolio shall be effective until approved by vote of the holders of a majority of the outstanding voting securities of the Portfolio.
15. Miscellaneous. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and shall be governed by Delaware law.
16. Change in Membership. The Investment Adviser shall notify the Fund of any change in its membership within a reasonable time after such change.
17. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without giving effect to the conflicts of laws principles thereof.
18. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.
THE RBB FUND, INC.
By: /s/ Edward J Roach
---------------------
Name: Edward J. Roach
Title: President
|
SCHNEIDER CAPITAL MANAGEMENT
COMPANY
By: /s/ Steven J. Fellin
-----------------------------
Name: Steven J. Fellin
Title: Vice President and CFO
|
Exhibit (e)(5)
DISTRIBUTION AGREEMENT SUPPLEMENT
The RBB Fund, Inc.
Boston Partners All-Cap Value Fund
(Investor Class)
This supplemental agreement is entered into this 1/st/ day of July, 2002, by and between THE RBB FUND, INC. (the "Fund") and PFPC DISTRIBUTORS, INC. (the "Distributor").
The Fund is a corporation organized under the laws of the State of Maryland and is an open-end management investment company. The Fund and the Distributor have entered into a Distribution Agreement, dated as of January 2, 2001 (as from time to time amended and supplemented, the "Distribution Agreement"), pursuant to which the Distributor has undertaken to act as distributor for the Fund, as more fully set forth therein. Certain capitalized terms used without definition in this Distribution Agreement Supplement have the meaning specified in the Distribution Agreement.
The Fund agrees with the Distributor as follows:
1. Adoption of Distribution Agreement. The Distribution Agreement is hereby adopted for the Investor Class (the "Class") of Common Stock of the Boston Partners All-Cap Value Fund.
2. Payment of Fees. For all services to be rendered, facilities furnished and expenses paid or assumed by the Distributor as provided in the Distribution Agreement and herein, the Fund shall pay the Distributor a monthly 12b-1 fee on the first business day of each month, based upon the average daily value (as determined on each business day at the time set forth in the Prospectus for determining net asset value per share) of the net assets of the Class during the preceding month, at an annual rate of 0.25%.
3. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, intending to be legally bound hereby, as of the date and year first above written.
THE RBB FUND, INC. PFPC DISTRIBUTORS, INC.
By: /s/ Edward J. Roach By: /s/ Bruno DiStefano
------------------- --------------------
Edward J. Roach Bruno DiStefano
Title: President Title: Vice President
|
Exhibit (e)(6)
DISTRIBUTION AGREEMENT SUPPLEMENT
The RBB Fund, Inc.
Boston Partners All-Cap Value Fund
(Institutional Class)
This supplemental agreement is entered into this 1/st/ day of July, 2002, by and between THE RBB FUND, INC. (the "Fund") and PFPC DISTRIBUTORS, INC. (the "Distributor").
The Fund is a corporation organized under the laws of the State of Maryland and is an open-end management investment company. The Fund and the Distributor have entered into a Distribution Agreement, dated as of January 2, 2001 (as from time to time amended and supplemented, the "Distribution Agreement"), pursuant to which the Distributor has undertaken to act as distributor for the Fund, as more fully set forth therein. Certain capitalized terms used without definition in this Distribution Agreement Supplement have the meaning specified in the Distribution Agreement.
The Fund agrees with the Distributor as follows:
1. Adoption of Distribution Agreement. The Distribution Agreement is hereby adopted for the Institutional Class, (the "Class") of Common Stock of the Boston Partners All-Cap Value Fund.
2. Payment of Fees. For all services to be rendered, facilities furnished and expenses paid or assumed by the Distributor on behalf of the Class as provided in the Distribution Agreement and herein, the Fund shall pay the Distributor no compensation.
3. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, intending to be legally bound hereby, as of the date and year first above written.
THE RBB FUND, INC. PFPC DISTRIBUTORS, INC.
By: /s/ Edward J. Roach By: /s/ Bruno DiStefano
------------------- -------------------
Edward J. Roach Bruno DiStefano
Title: President Title: Vice President
|
Exhibit (e)(7)
DISTRIBUTION AGREEMENT SUPPLEMENT
The RBB Fund, Inc.
Schneider Value Fund
This supplemental agreement is entered into this 1st day of August, 2002, by and between THE RBB FUND, INC. (the "Fund") and PFPC DISTRIBUTORS, INC. (the "Distributor").
The Fund is a corporation organized under the laws of the State of Maryland and is an open-end management investment company. The Fund and the Distributor have entered into a Distribution Agreement, dated as of January 2, 2001 (as from time to time amended and supplemented, the "Distribution Agreement"), pursuant to which the Distributor has undertaken to act as distributor for the Fund, as more fully set forth therein. Certain capitalized terms used without definition in this Distribution Agreement Supplement have the meaning specified in the Distribution Agreement.
The Fund agrees with the Distributor as follows:
1. Adoption of Distribution Agreement. The Distribution Agreement is hereby adopted for the Schneider Value Fund Class of Common Stock (Class PPP) Fund.
2. Payment of Fees. For all services to be rendered, facilities furnished and expenses paid or assumed by the Distributor as provided in the Distribution Agreement and herein, the Fund shall pay the Distributor no compensation.
3. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, intending to be legally bound hereby, as of the date and year first above written.
THE RBB FUND, INC. PFPC DISTRIBUTORS, INC.
By: /s/ Edward J. Roach By: /s/ Bruno DiStefano
------------------- -------------------
Edward J. Roach Bruno DiStefano
Title: President Title: Vice President
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Exhibit (f)(2)
FORM OF AMENDMENT NO. 1 TO FUND OFFICE
RETIREMENT PROFIT SHARING PLAN AND TRUST
REFLECTING EGTRRA
PREAMBLE
WHEREAS, this Amendment No. 1 to the Fund Office Retirement Profit Sharing Plan (the "Plan") effective as of January 1, 1998 (Second Restatement) (the "Second 1998 Restatement") is adopted to reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA") and to conform to the claims procedure regulations set forth in 20 CFR (S)2560.503.1; and
WHEREAS, this Amendment is intended as good faith compliance with the requirements of EGTRRA and is to be construed in accordance with EGTRRA and guidance issued thereunder; and
WHEREAS, this Amendment shall be effective as of the first day of the first Plan Year beginning after December 31, 2001 except as otherwise specified below; and
WHEREAS, this Amendment shall supersede the provisions of the Second 1998 Restatement of the Plan to the extent those provisions are inconsistent with the provisions of this Amendment; and
WHEREAS, Section references in this Amendment refer to the relevant Plan sections found in the Second 1998 Restatement modified by the Amendment provision.
NOW, THEREFORE, the Plan is hereby amended in the following respects:
1. Section 2.9 of the Plan is hereby amended to add the following provision:
2.9 "Compensation"
* * *
(f) The annual Compensation of each Participant taken into account in determining allocations for any Plan Year beginning after December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with section 401(a)(17)(B) of the Code. Annual Compensation means Compensation during the Plan Year or such other consecutive 12-month period over which Compensation is otherwise determined under the Plan (the determination period). The cost-of-living adjustment in effect for a calendar year
applies to annual Compensation for the Determination Period that begins with or within such calendar year.
2. Effective January 1, 2002, Section 5.1(a) of the Plan is hereby amended as follows:
5.1 Rollover Contributions and Transferred Contributions.
(a) Rollover Contributions. Any Participant may make a Rollover contribution under the Plan. A Rollover contribution shall be in cash or in other property acceptable to the Trustee and shall mean:
(1) the contribution of an eligible rollover distribution as defined at Section 9.5(c)(1) which is transferred by the Eligible Employee to this Plan from (i) a qualified plan described in section 401(a) or 403(a) of the Code, (ii) an annuity contract described in section 403(b) of the Code, and (iii) an eligible plan under section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state. Such contribution must be made within sixty (60) days following his receipt thereof, or within such other time permitted under the Code.
(2) the contribution of an amount distributed from an individual retirement account or annuity described in section 408(a) or 408(b) of the Code that is eligible to be rolled over and would otherwise be includible in gross income and that is transferred by the Participant to this Plan within sixty (60) days of his receipt from such account, within such other time permitted under the Code.
(3) the direct payment of an eligible rollover distribution from (i) a qualified plan described in section 401(a) or 403(a) of the Code, excluding after-tax employer contributions, (ii) an annuity contract described in section 403(b) of the Code, excluding after-tax employee contributions, or (iii) an eligible plan under section 457(b) of the Code (which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state) to this Plan pursuant to Section 401(a)(31) of the Code.
(b) Transferred Contributions. Any Participant may transfer to the Trust Fund the Participant's entire interest from an eligible retirement plan,
excluding after-tax employee contributions; provided the transfer does not jeopardize the tax-exempt status of the Plan. The Plan shall not accept a direct transfer attributable to accumulated deductible employee contributions as defined by Section 72(o)(5)(B) of the Code. The Trustee may condition acceptance of such a trust to trust transfer upon receipt of such documents as it may require.
3. Effective for Limitation Years beginning after December 31, 2001,
Section 7.5(k)(2) of the Plan is hereby amended to read as follows:
7.5 Definitions
* * *
(k) "Maximum Permissible Amount"
* * *
(2) twenty-five (25%) percent (100% for Limitation Years beginning on or after December 1, 2002) of the Participant's Limitation Compensation for the Limitation Year. The compensation limitation referred to in this Section 7.5(k)(2) shall not apply to any contribution for medical benefits (within the meaning of Sections 401(h) or 419A(f)(2) of the Code) which is otherwise treated as an Annual Addition under Sections 415(l)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment changing the Limitation to a different twelve (12) consecutive-month period, the Maximum Permissible Amount will not exceed the Defined Contribution Dollar Limitation multiplied by the following fraction:
Number of months in the Short Limitation Year
4. A new subsection (d) is added to Section 9.3 of the Plan effective December 1, 2002 to read as follows:
9.3 Commencement Date of Distribution.
* * *
(d) For purposes of Section 9.3(a), the value of a Participant's
nonforfeitable Account balance shall be determined without regard
to that portion of the account balance that is attributable to
rollover contributions (and earnings allocable thereto) within
the meaning of Sections 402(c), 403(a)(4), 403(b)(8),
408(d)(3)(A)(ii), and 457(e)(16) of the Code. If the value of the
Participant's nonforfeitable Account balance as so determined is
$5,000 or less, the Plan shall immediately distribute the
participant's entire nonforfeitable account balance as provided
in Section 9.3(b).
5. Effective December 1, 2002, Sections 9.5(c)(1) and (2) of the Plan are hereby amended to read as follows:
9.5 Distribution Elections.
* * *
(c) Direct rollover Option.
* * *
(1) "Eligible Rollover Distribution" shall mean any distribution
of all or any portion of the balance to the credit of the
Distributee from an Eligible Retirement Plan, except that an
Eligible Rollover Distribution does not include: any distribution
that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life
expectancies of the Distributee and the Distributee's designated
beneficiary), or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities); and effective for
distributions made after December 31, 1999, any hardship
distribution described in Section 401(k)(2)(B)(I)(IV) of the
Code. For distributions made after December 31, 2001: (i) any
amount that is distributed on account of hardship shall not be an
Eligible Rollover Distribution, and (ii) a portion of a
distribution shall not fail to be an Eligible Rollover
Distribution merely because the portion consists of after-tax
employee contributions which are not includible in gross income.
However, such after-tax portion may be transferred only to an
IRA, or to a qualified defined contribution plan described in
Sections 401(a) or 403(a) of the Code that agrees to separately
account for amounts so transferred, including separately
accounting for the portion of such distribution which
is includible in gross income and the portion of such distribution which is not so includible.
(2) "Eligible Retirement Plan" shall mean an IRA or a Qualified Plan that accepts the Distributee's Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution made to a surviving spouse before January 1, 2002, an Eligible Retirement Plan is an IRA.
For distributions made after December 31, 2001, an Eligible Retirement Plan shall mean (i) an IRA; (ii) a Qualified Plan; (iii) an annuity contract described in Section 403(b) of the Code; and (iv) an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. This definition of Eligible Retirement Plan shall also apply in the case of a distribution after December 31, 2001 to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a Qualified Domestic Relations Order.
6. Section 2.30 is revised to read as follows:
2.30 "Key Employee" shall mean prior to December 1, 2002, any Employee or former Employee (and the Beneficiaries of such Employee) who at any time during the Determination Period, hereinafter defined, was an officer of the Employer if such individual's annual compensation exceeds fifty (50%) percent of the dollar limitation under Section 415(b)(1)(A) of the Code, an owner (or a person considered an owner under Section 318 of the Code) of one of the ten largest interests in the Employer if such individual's compensation exceeds 100 percent of the dollar limitation under Section 415(c)(1)(A) of the Code, a five (5%) percent owner of the Employer, or a one (1%) percent owner of the Employer who has an annual compensation of more than $150,000. Annual compensation means compensation as defined in Section 415(c) of the Code, but including amounts contributed by the Employer pursuant to a salary reduction agreement which are excludable from the Employee's gross income under Sections 125, 402(a)(8), 402(h), 403(b), or, effective for Limitation Years beginning on and after January 1, 2001, 132(f)(4) of the Code. The Determination Period is the Plan Year containing the Determination Date and the 4 preceding Plan Years.
Effective for Plan Years beginning on and after December 1, 2002, Key Employee means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the Determination Date was an officer of the employer having annual Compensation greater than
$130,000 (as adjusted under Section 416(i)(1) of the Code for Plan
Years beginning after December 31, 2002), a 5-percent owner of the
employer, or a 1-percent owner of the employer having annual
compensation of more than $150,000. For this purpose, annual
compensation means compensation within the meaning of Section
415(c)(3). The determination of who is a Key Employee will be made in
accordance with Section 416(i)(1) and the applicable regulations and
other guidance of general applicability issued thereunder.
7. Section 12.2(c) of the Plan is amended to add the following:
12.2 Determination of Top-Heavy Ratio
* * *
* * *
Notwithstanding the foregoing, effective for Plan Years beginning after December 31, 2001:
(1) Distributions During Year Ending on the Determination Date. The present values of accrued benefits and the amounts of Account balances of an Employee as of the Determination Date shall be increased by the distributions made with respect to the Employee under the Plan and any plan aggregated with the Plan under Section 416(g)(2) of the Code during the 1-year period ending on the Determination Date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the plan under section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting "5-year period" for "1-year period."
(2) Employees Not Performing Services During Year ending on the Determination Date. The accrued benefits and accounts of any individual who has not performed services for the Employer during the 1-year period ending on the Determination Date shall not be taken into account.
8. Effective January 1, 2002, Section 13.1(b) of the Plan is hereby deleted in its entirety.
9. Section 17.11 of the Plan is hereby amended, effective January 1, 2002 to read as
follows:
17.11 Claims Procedure.
(a) The right of any person to a benefit under the Plan. Except as otherwise provided in Section 17.11(b), if the Plan Administrator denies in whole or in part any claim for a benefit under the Plan by a Participant or a beneficiary, the Plan Administrator shall furnish the claimant with notice of the decision not later than 90 days after receipt of the claim, unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period. In no event shall such extension exceed the period of 90 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the final decision.
The written notice which the Plan Administrator shall provide to every claimant who is denied a claim for benefits shall set forth in a manner calculated to be understood by the claimant:
(1) the specific reason or reasons for the denial;
(2) specific reference to pertinent Plan provisions on which the denial is based;
(3) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary;
(4) a description of the Plan's review procedures and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under ERISA (S).502(a) following an adverse benefit determination on review;
(5) a statement that upon request, the Plan will provide to the claimant information sufficient for the claimant to make an informed decision whether to submit a request for review, and any information about the applicable rules, the claimant's right to representation.; and
(6) In the case of an adverse benefit determination involving a
determination of disability:
(A) if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either the specific rule, guideline, protocol, or other similar criterion; or a statement that such a rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of such rule, guideline, protocol, or other criterion will be provided free of charge to the claimant upon request; or
(B) if the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the plan to the claimant's medical circumstances, or a statement that such explanation will be provided free of charge upon request.
(b) Disability Claims. In the case of a claim for disability benefits, the Plan Administrator shall notify the claimant, in accordance with Section 17.11(a), of the Plan's adverse benefit determination within a reasonable period of time, but not later than 45 days after receipt of the claim by the Plan. This period may be extended by the Plan for up to 30 days, provided that the Plan Administrator both determines that such an extension is necessary due to matters beyond the control of the Plan and notifies the claimant, prior to the expiration of the initial 45-day period, of the circumstances requiring the extension of time and the date by which the Plan expects to render a decision. If, prior to the end of the first 30-day extension period, the Plan Administrator determines that, due to matters beyond the control of the Plan, a decision cannot be rendered within that extension period, the period for making the determination may be extended for up to an additional 30 days, provided that the Plan Administrator notifies the claimant, prior to the expiration of the first 30-day extension period, of the circumstances requiring the extension and the date as of which the Plan expects to render a decision. In the case of any extension under this paragraph, the notice of extension shall specifically explain the standards on which entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve those issues, and the claimant
shall be afforded at least 45 days within which to provide the specified information.
(c) Review Procedure. A claimant, or his or her authorized representative, may request a review of the denied claim by the Plan Administrator. Such request shall be made in writing and shall be presented to the Plan Administrator not more than 60 days after receipt by the claimant of written notification of the denial of a claim, or the date on which the claim is deemed to be denied, if no notice is given.
(1) The claimant shall have the opportunity to submit written comments, documents, records and other information relating to the claim for benefits. The claimant shall be provided, upon request and free of charge, reasonable access to, and copies of all documents, records and other information "relevant" (as defined below) to the claimant's claim for benefits.
(2) The determination on review shall take into account all documents, records, and other information submitted by the claimant relating to the claim without regard to whether such information was submitted or considered in the initial determination.
(3) The Plan Administrator shall make a benefit determination no later than the date of its regularly scheduled meeting that immediately follows the Plan's receipt of a request for review, unless the request for review is filed within 30 days preceding the date of such meeting. In such case, a benefit determination will be made by no later than the date of the second meeting following the Plan's receipt of the request for review. If special circumstances require a further extension of time for processing, a benefit determination shall be rendered not later than the third meeting of the Plan Administrator following the Plan's receipt of the request for review. If such an extension of time for review is required because of special circumstances, the Plan Administrator shall provide the claimant with written notice of the extension, describing the special circumstances and the date as of which the benefit determination will be made, prior to the commencement of the extension. The Plan Administrator shall notify the claimant, in accordance with Section 17.11(c)(iv) below, of its benefit determination as soon as possible, but not later than five days after the benefit determination is made.
(4) In the case of an adverse benefit determination, the notification shall set forth, in a manner calculated to be understood by the claimant:
(A) the specific reason or reasons for the adverse determination;
(B) reference to the specific plan provisions on which the benefit determination is based;
(C) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information "relevant" (as defined below) to the claimant's claim for benefits;
(D) a statement describing any voluntary appeal procedures offered by the Plan and the claimant's right to obtain the information about such procedures, and a statement of the claimant's right to bring an action under ERISA (S)502(a); and
(E) In the case of a review involving a determination of disability:
(i) if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either the specific rule, guideline, protocol, or other similar criterion; or a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the claimant upon request;
(ii) if the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the
terms of the plan to the claimant's medical circumstances, or a statement that such explanation will be provided free of charge upon request; and
(iii) the following statement: "You and your plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency."
(d) Relevance of Documents. For purposes of this Section 17.11, a document, record or other information shall be considered "relevant" to a claimant's claim if such document, record, or other information:
(1) was relied upon in making the initial determination;
(2) submitted, considered, or generated in the course of making the initial determination (whether or not actually used in making the determination); or
(3) demonstrates compliance with the administrative processes and safeguards required to ensure that claim determinations are made in accordance with the Plan documents and applied in a consistent manner to similarly situated claimants.
(e) Period of Review. The period of time within which a benefit determination on review is required to be made shall begin at the time a request for review is filed in accordance with the Plan's procedures, without regard to whether all the information necessary to make a benefit determination on review accompanies the filing. In the event that a period of time is extended due to a claimant's failure to submit information necessary to decide a claim, the period for making the benefit determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information.
(f) Compliance with Regulations. It is intended that both the initial claims procedures and the review procedures of this Plan be administered in accordance with the claims procedure regulations of the Department of Labor set forth in 29 CFR (S)2560.503-1.
This Amendment reflecting EGTRRA Amendments is adopted as of this ______ day of ________________, 2002.
CHESTNUT STREET EXCHANGE FUND
By:________________________________
Name:
Title:
RBB FUND
By:________________________________
Name:
Title:
Exhibit (g)(16)
CUSTODIAN AGREEMENT SUPPLEMENT
(Boston Partners All-Cap Value Fund of The RBB Fund, Inc.)
This supplemental agreement is entered into this 1/st/ day of July 2002 by and between THE RBB FUND, INC. (the "Fund") and PFPC Trust Company, ("PFPC Trust").
The Fund is a corporation organized under the laws of the State of Maryland and is an open-end management investment company. The Fund and PFPC Trust have entered into a Custodian Agreement, dated as of August 16, 1988 (as from time to time amended and supplemented, the "Custodian Agreement"), pursuant to which PFPC Trust has undertaken to act as custodian for the Fund with respect to the portfolios of the Fund, as more fully set forth therein. Certain capitalized terms used without definition in this Custodian Agreement Supplement have the meaning specified in the Custodian Agreement.
The Fund agrees with the Custodian as follows:
1. Adoption of Custodian Agreement. The Custodian Agreement is hereby adopted for the Boston Partners All-Cap Value Fund (the "Portfolio").
2. Compensation. As compensation for the services rendered by the Custodian during the term of the Custodian Agreement, the Fund will pay to the Custodian, with respect to the Portfolio, monthly fees as shall be agreed to from time to time by the Fund and PFPC Trust.
3. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, intending to be legally abound hereby, as of the date and year first above written.
THE RBB FUND, INC. PFPC TRUST COMPANY
By: /s/ Edward J. Roach By: /s/ Edward A. Smith III
------------------- -----------------------
Name: Edward J. Roach Name: Edward A. Smith III
--------------- -------------------
Title: President & Treasurer Title: Vice President
--------------------- --------------
|
Exhibit (g)(17)
CUSTODIAN AGREEMENT SUPPLEMENT
The RBB Fund, Inc.
Schneider Value Fund
This supplemental agreement is entered into this 1st day of August, 2002 by and between THE RBB FUND, INC. (the "Fund") and PFPC Trust Company ("PFPC Trust").
The Fund is a corporation organized under the laws of the State of Maryland and is an open-end management investment company. The Fund and PFPC Trust have entered into a Custodian Agreement, dated as of August 16, 1988 (as from time to time amended and supplemented, the "Custodian Agreement"), pursuant to which PFPC Trust has undertaken to act as custodian for the Fund with respect to the portfolios of the Fund, as more fully set forth therein. Certain capitalized terms used without definition in this Custodian Agreement Supplement have the meaning specified in the Custodian Agreement.
The Fund agrees with the Custodian as follows:
1. Adoption of Custodian Agreement. The Custodian Agreement is hereby adopted for the Schneider Value Fund (the "Portfolio").
2. Compensation. As compensation for the services rendered by the Custodian during the term of the Custodian Agreement, the Fund will pay to the Custodian, with respect to the Portfolio, monthly fees as shall be agreed to from time to time by the Fund and PFPC Trust.
3. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, intending to be legally abound hereby, as of the date and year above written.
THE RBB FUND, INC. PFPC TRUST COMPANY
By: /s/ Edward J. Roach By: /s/ Edward A. Smith III
------------------- -----------------------
Name: Edward J. Roach Name: Edward A. Smith III
Title: President Title: Vice President
|
Exhibit (h)(57)
TRANSFER AGENCY AGREEMENT SUPPLEMENT
(Boston Partners All-Cap Value Fund of The RBB Fund, Inc.)
This supplemental agreement is entered into this 1/st/ day of July 2002 by and between THE RBB FUND, INC. (the "Fund") and PFPC Inc., a Massachusetts corporation ("PFPC").
The Fund is a corporation organized under the laws of the State of Maryland and is an open-end management investment company. The Fund and PFPC have entered into a Transfer Agency Agreement, dated as of November 5, 1991 (as from time to time amended and supplemented, the "Transfer Agency Agreement"), pursuant to which PFPC has undertaken to act as transfer agent, registrar and dividend disbursing agent for the Fund with respect to the portfolios of the Fund, as more fully set forth therein. Certain capitalized terms used without definition in this Transfer Agency Agreement Supplement have the meaning specified in the Transfer Agency Agreement.
The Fund agrees with the Transfer Agent as follows:
1. Adoption of Transfer Agency Agreement. The Transfer Agency Agreement is hereby adopted for the Boston Partners All-Cap Value Fund (the "Portfolio").
2. Compensation. As compensation for the services rendered by PFPC during the term of the Transfer Agency Agreement, the Fund will pay to the Transfer Agent, with respect to the Portfolio, monthly fees that shall be agreed to from time to time by the Fund and PFPC, for each account open at any time during the month for which payment is being made, plus certain of PFPC's expenses relating to such services.
3. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, intending to be legally bound hereby, as of the date and year first above written.
THE RBB FUND, INC. PFPC INC.
By: /s/ Edward J. Roach By: /s/ Michael DeNofrio
------------------- --------------------
|
Name: Edward J. Roach Name: Michael DeNofrio
--------------- ----------------
Title: President & Treasurer Title: Executive Vice President,
--------------------- -------------------------
Senior Managing Director
------------------------
|
Exhibit (h)(59)
ADMINISTRATIVE SERVICES AGREEMENT SUPPLEMENT
The RBB Fund, Inc.
Boston Partners All-Cap Value Fund
This supplemental agreement is entered into this 1st day of July 2002, by and between THE RBB FUND, INC. (the "Company") and PFPC DISTRIBUTORS, INC. ("PFPC Distributors").
The Company is a corporation organized under the laws of the State of Maryland and is an open-end management investment company. The Company and PFPC Distributors have entered into a Administrative Services Agreement, dated as of May 29, 1998 (as from time to time amended and supplemented, the "Administrative Services Agreement"), pursuant to which PFPC Distributors has undertaken to provide certain administrative services to certain of the Company's portfolios and classes, as more fully set forth therein.
The Company agrees with PFPC Distributors as follows:
1. Adoption of Administrative Services Agreement. The Administrative Services Agreement is hereby adopted for the Investor Class and Institutional Class of Common Stock of the Boston Partners All-Cap Value Fund of the Company.
2. Payment of Fees. For all services to be rendered, facilities furnished and expenses paid or assumed by PFPC Distributors as provided in the Administrative Services Agreement and herein, the Company shall pay PFPC Distributors a monthly fee, as well as reimburse out-of-pocket expenses, on the first business day of each month, as provided in the Administrative Services Agreement.
3. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, intending to be legally bound hereby, as of the date and year first above written.
THE RBB FUND, INC. PFPC DISTRIBUTORS, INC.
By: /s/ Edward J. Roach By: /s/ Bruno DiStefano
------------------- --------------------
Edward J. Roach Bruno DiStefano
President Vice President
|
Exhibit (h)(60)
TRANSFER AGENCY AGREEMENT SUPPLEMENT
The RBB Fund, Inc.
Schneider Value Fund
This supplemental agreement is entered into this 1st day of August, 2002, by and between THE RBB FUND, INC. (the "Fund") and PFPC Inc., a Delaware corporation (the "Transfer Agent"), which is an indirect, wholly-owned subsidiary of PNC Worldwide, Inc.
The Fund is a corporation organized under the laws of the State of Maryland and is an open-end management investment company. The Fund and the Transfer Agent have entered into a Transfer Agency Agreement, dated as of November 5, 1991 (as from time to time amended and supplemented, the "Transfer Agency Agreement"), pursuant to which the Transfer Agent has undertaken to act as transfer agent, registrar and dividend disbursing agent for the Fund with respect to the Shares of the Fund, as more fully set forth therein. Certain capitalized terms used without definition in this Transfer Agency Agreement Supplement have the meaning specified in the Transfer Agency Agreement.
The Fund agrees with the Transfer Agent as follows:
1. Adoption of Transfer Agency Agreement. The Transfer Agency Agreement is hereby adopted for the Schneider Value Fund (the "Fund") Class of Common Stock (Class PPP) of the Fund. This shall constitute a "Class" as referred to in the Transfer Agency Agreement and its shares shall be "Shares" as referred to therein.
2. Compensation. As compensation for the services rendered by the Transfer Agent during the term of the Transfer Agency Agreement, the Fund will pay to the Transfer Agent, with respect to such Class of the Fund, monthly fees that shall be agreed to from time to time by the Fund and the Transfer Agent, for each account open at any time during the month for which payment is being made, plus certain of the Transfer Agent's expenses relating to such services, as shall be agreed to from time to time by the Fund and the Transfer Agent.
3. Counterparts. This agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, intending to be legally bound hereby, as of the date and year first above written.
THE RBB FUND, INC. PFPC INC.
By: /s/ Edward J. Roach By: /s/ Wayne D. Weaver
------------------- -------------------
Edward J. Roach Wayne D. Weaver
Title: President Title: Vice President
|
Exhibit (h)(62)
ADMINISTRATIVE SERVICES AGREEMENT SUPPLEMENT
The RBB Fund, Inc.
Schneider Value Fund
This supplemental agreement is entered into this 1st day of August 2002, by and between THE RBB FUND, INC. (the "Company") and PFPC DISTRIBUTORS, INC. ("PFPC Distributors").
The Company is a corporation organized under the laws of the State of Maryland and is an open-end management investment company. The Company and PFPC Distributors have entered into a Administrative Services Agreement, dated as of May 29, 1998 (as from time to time amended and supplemented, the "Administrative Services Agreement"), pursuant to which PFPC Distributors has undertaken to provide certain administrative services to certain of the Company's portfolios and classes, as more fully set forth therein.
The Company agrees with PFPC Distributors as follows:
1. Adoption of Administrative Services Agreement. The Administrative Services Agreement is hereby adopted for the Schneider Value Fund of the Company.
2. Payment of Fees. For all services to be rendered, facilities furnished and expenses paid or assumed by PFPC Distributors as provided in the Administrative Services Agreement and herein, the Company shall pay PFPC Distributors a monthly fee, as well as reimburse out-of-pocket expenses, on the first business day of each month, as provided in the Administrative Services Agreement.
3. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, intending to be legally bound hereby, as of the date and year first above written.
THE RBB FUND, INC. PFPC DISTRIBUTORS, INC.
By: /s/ Edward J. Roach By: /s/ Bruno DiStefano
------------------- -------------------
Edward J. Roach Bruno DiStefano
President Vice President
|
Exhibit (h)(68)
THE RBB FUND, INC.
400 Bellevue Parkway
Wilmington, Delaware 19809
SHAREHOLDER SERVICING AGREEMENT
Gentlemen:
We wish to enter into this Shareholder Servicing Agreement with you concerning the provision of support services to your clients ("Clients") who may from time to time beneficially own shares of Class OOO Common Stock, par value $.001 per share ("Class OOO Shares").
The terms and conditions of this Servicing Agreement are as follows:
Section 1. You agree to provide any or all of the following support
services to Clients who may from time to time beneficially own Class OOO Shares:
(i) aggregating and processing purchase and redemption requests for Class OOO
Shares from Clients and placing net purchase and redemption orders with our
transfer agent, PFPC Inc.; (ii) providing Clients with a service that invests
the assets of their account in Class OOO Shares pursuant to specific or
pre-authorizing instructions; (iii) processing dividend payments from us on
behalf of Clients; (iv) providing information periodically to Clients showing
their positions in Class OOO Shares; (v) arranging for bank wires; (vi)
responding to Client inquiries relating to the services performed by you; (vii)
providing subaccounting with respect to Class OOO Shares beneficially owned by
Clients or the information to us necessary for subaccounting; (viii) if required
by law, forwarding shareholder communications from us (such as proxies,
shareholder reports, annual and semi-annual financial statements and dividend,
distribution and tax notices) to Clients; (ix) responding to Client inquires
relating to dividends and distributions; (x) responding to Client inquires
relating to Client account statements; (xi) responding to Client inquires
relating to shareholder communications from us to Clients; (xii) providing
Clients with information relating to developments affecting their Class OOO
Shares; and (xiii) providing such other similar services as we may reasonably
request to the extent you are permitted to do so under applicable statutes,
rules or regulations.
Section 2. You represent that: (a) any fees charged by you to your Clients in connection with the investment of their assets in Class OOO Shares will be disclosed to your Clients; (b) you will retain payments received by you hereunder only if an investment in Class OOO Shares has been authorized by your Clients; and (c) the compensation paid to you hereunder will not be excessive or unreasonable.
Section 3. You will provide such office space and equipment, telephone facilities and personnel (which may be any part of the space, equipment and facilities currently used in your business, or any personnel employed by you) as may be reasonably necessary or beneficial in order to provide the aforementioned services to Clients.
Section 4. Neither you nor any of your officers, employees or agents are authorized to make any representations concerning us or Class OOO Shares except those contained in our then current prospectus for such Class OOO Shares, copies of which will be supplied by us, or caused to be supplied by our distributor, to you, or in such supplemental literature or advertising as may be authorized by us in writing.
Section 5. For all purposes of this Agreement you will be deemed to be an independent contractor, and will have no authority to act as agent for us or PFPC Distributors, Inc. in any matter or in any respect. By your written acceptance of this Agreement, you agree to and do release, indemnify and hold us harmless from and against any and all direct or indirect liabilities or losses resulting from requests, directions, actions or inactions of or by you or your officers, employees or agents regarding your responsibilities hereunder or the purchase, redemption, transfer or registration of Class OOO Shares by or on behalf of Clients. You and your employees will, upon request, be available during normal business hours to consult with us or our designees concerning the performance of your responsibilities under this Agreement.
Section 6. In consideration of the services and facilities provided by you hereunder, we will pay to you, and you will accept as full payment therefor, a fee at the annual rate of .10% of the average daily net asset value of the Class OOO Shares beneficially owned by your Clients for whom you are the dealer of record or holder of record or with whom you have a servicing relationship (the "Clients' Class OOO Shares"), which fee will be computed daily and payable monthly. For purposes of determining the fees payable under this Section 6, the average daily net asset value of the Clients' Class OOO Shares will be computed in the manner specified in your registration statement (as the same is in effect from time to time) in connection with the computation of the net asset value of Class OOO Shares for purposes of purchases and redemptions. The fee rate stated above may be prospectively increased or decreased by us, at our sole discretion, at any time upon notice to you. We may, in our discretion and without notice, suspend or withdraw the sale of Class OOO Shares, including the sale of such shares to you for the account of any Client or Clients.
Section 7. Any person authorized to direct the disposition of monies paid or payable by us pursuant to this Agreement will provide to our Board of Directors, and our Directors will review, at least quarterly, a written report of the amounts so expended and the purposes for which such expenditures were made. In addition, you will furnish us or our designees with such information as we or they may reasonably request (including, without limitation, periodic certifications confirming the provision to Clients of the services described herein), and will otherwise cooperate with us and our designees (including, without limitation, any auditors designated by us), in connection with the preparation of reports to our Board of Directors concerning this Agreement and the monies paid or payable by us pursuant hereto, as well as any other reports or filings that may be required by law.
Section 8. We may enter into other similar Shareholder Servicing Agreements with any other person or persons without your consent.
Section 9. By your written acceptance of this Agreement, you represent, warrant
and agree that in no event will any of the services provided by you hereunder be primarily intended to result in the sale of any shares issued by us.
Section 10. This Agreement will be effective as of March 1, 2002. Unless sooner terminated, this Agreement will continue until March 1, 2003 and thereafter will continue automatically for successive annual periods ending on March 1, provided such continuance is specifically approved at least annually by us in the manner described in Section 13 hereof. This Agreement is terminable, without penalty, at any time by us (which termination may be by vote of a majority of our Disinterested Directors as defined in Section 13 hereof) or by you upon notice to the other party herein.
Section 11. All notices and other communications to either you or us will be duly given if mailed, telegraphed, telexed or transmitted by similar telecommunications device to the appropriate address shown herein.
Section 12. This Agreement will be construed in accordance with the laws of the State of Maryland and is non-assignable by the parties hereto.
Section 13. The form of this Agreement has been approved by vote of a majority of (i) our Board of Directors and (ii) those Directors who are not "interested persons" (as defined in the Investment Company Act of 1940) of us and have no direct or indirect financial interest in the operation of the Amended and Restated Non-12b-1 Shareholder Services Plan adopted by us regarding the provision of support services to the beneficial owners of Class OOO Shares or in any agreements related thereto ("Disinterested Directors"), cast in person at a meeting called for the purpose of voting on such approval.
If you agree to be legally bound by the provisions of this Agreement, please sign a copy of this letter where indicated below and promptly return it to us, c/o PFPC Distributors, Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania 19406.
Very truly yours,
THE RBB FUND, INC.
Date: April 3, 2002 By: /s/ Edward J. Roach
--------------------
Edward J. Roach
Authorized Officer
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Accepted and Agreed to:
BOGLE INVESTMENT MANAGEMENT, L.P.
Address: 57 River Street
Suite 206
Wellesley, MA 02481
Date: March 7, 2002 By: /s/ John C. Bogle, Jr.
------------------------
Name: John C. Bogle, Jr.
Title: President
|
Exhibit (h)(69)
ADMINISTRATIVE SERVICES AGREEMENT SUPPLEMENT
Boston Partners Large Cap Value Fund
Boston Partners Mid Cap Value Fund
Boston Partners Small Cap Value Fund II
Boston Partners Bond Fund
and Boston Partners Long/Short Equity Fund
(Investor Class)
This supplemental agreement is entered into this 1st day of January 2002, by and between THE RBB FUND, INC. (the "Company") and PFPC DISTRIBUTORS, INC. ("PFPC Distributors").
The Company is a corporation organized under the laws of the State of Maryland and is an open-end management investment company. The Company and PFPC Distributors have entered into a Administrative Services Agreement, dated as of May 29, 1998 (as from time to time amended and supplemented, the "Administrative Services Agreement"), pursuant to which PFPC Distributors has undertaken to provide certain administrative services to certain of the Company's portfolios and classes, as more fully set forth therein.
The Company agrees with PFPC Distributors as follows:
1. Adoption of Administrative Services Agreement. The Administrative Services Agreement is hereby adopted for the Institutional Class of Common Stock of Boston Partners Large Cap Value Fund, Boston Partners Mid Cap Value Fund, Boston Partners Small Cap Value Fund II, Boston Partners Bond Fund and Boston Partners Long/Short Equity Fund of the Company.
2. Payment of Fees. For all services to be rendered, facilities furnished and expenses paid or assumed by PFPC Distributors as provided in the Administrative Services Agreement and herein, the Company shall pay PFPC Distributors a monthly fee, as well as reimburse out-of-pocket expenses, on the first business day of each month, as provided in the Administrative Services Agreement.
3. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, intending to be legally bound hereby, as of the date and year first above written.
THE RBB FUND, INC. PFPC DISTRIBUTORS, INC.
By: /s/Edward J. Roach By: /s/Lisa M. Colon
------------------ -----------------
Edward J. Roach Lisa M. Colon
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Exhibit (i)
November 1, 2002
The RBB Fund, Inc.
Bellevue Park Corporate Center
400 Bellevue Parkway
Wilmington, Delaware 19809
Re: Shares Registered by Post-Effective Amendment No. 80 to Registration Statement on Form N-1A (File No. 33-20827)
Ladies and Gentlemen:
We have acted as counsel to The RBB Fund, Inc. (the "Company") in connection with the preparation and filing with the Securities and Exchange Commission of Post-Effective Amendment No. 80 (the "Amendment") to the Company's Registration Statement on Form N-1A under the Securities Act of 1933, as amended (the "1933 Act"). The Board of Directors of the Company has authorized the issuance and sale by the Company of the following classes and numbers of shares of common stock, $.001 par value per share (collectively, the "Shares"), with respect to the Company's n/i numeric investors Emerging Growth Fund, the n/i numeric investors Growth Fund, the n/i numeric investors Mid Cap Fund and the n/i numeric investors Small Cap Value Fund:
Portfolio Class Authorized Shares
--------- ----- -----------------
n/i numeric investors FF 50 million
Emerging Growth Fund
n/i numeric investors GG 50 million
Growth Fund
n/i numeric investors HH 50 million
Mid Cap Fund
n/i numeric investors Small MMM 100 million
Cap Value Fund
|
The Amendment seeks to register an indefinite number of the Shares.
We have reviewed the Company's Certificate of Incorporation, ByLaws, resolutions of its Board of Directors, and such other legal and factual matters as we have deemed appropriate. This opinion is based exclusively on the Maryland General Corporation Law and the federal law of the United States of America.
Based upon and subject to the foregoing, it is our opinion that the Shares, when issued for payment as described in the Company's Prospectus offering the Shares and in
accordance with the Company's Articles of Incorporation for not less than $.001 per share, will be legally issued, fully paid and non-assessable by the Company.
We hereby consent to the filing of this opinion as an exhibit to the Amendment to the Company's Registration Statement.
Very truly yours,
/s/ DRINKER BIDDLE & REATH LLP ------------------------------ DRINKER BIDDLE & REATH LLP |
Exhibit (j)(1)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the reference to our Firm under the caption "Counsel" in the Statement of Additional Information that is included in Post-Effective Amendment No. 80 to the Registration Statement (No. 33-20827; 811-5518) on Form N-1A of The RBB Fund, Inc., under the Securities Act of 1933 and the Investment Company Act of 1940, respectively. This consent does not constitute a consent under section 7 of the Securities Act of 1933, and in consenting to the use of our name and the references to our Firm under such caption we have not certified any part of the Registration Statement and do not otherwise come within the categories of persons whose consent is required under said section 7 or the rules and regulations of the Securities and Exchange Commission thereunder.
/s/ DRINKER BIDDLE & REATH LLP
------------------------------
DRINKER BIDDLE & REATH LLP
Philadelphia, Pennsylvania
November 1, 2002
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Exhibit (j)(2)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of our report dated October 16, 2002, relating to the financial statements and financial highlights which appear in the August 31, 2002 Annual Report to Shareholders of The RBB Fund, Inc., which are also incorporated by reference into the Registration Statement. We also consent to the references to us under the headings "Financial Highlights", "Independent Accountants" and "Financial Statements" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP Philadelphia, Pennsylvania November 1, 2002 |
Exhibit (l)(17)
PURCHASE AGREEMENT
The RBB Fund, Inc. (the "Fund"), a Maryland corporation, and Boston Partners Asset Management, L.P. ("Boston Partners") intending to be legally bound, hereby agree with each other as follows:
1. The Fund hereby offers Boston Partners and Boston Partners hereby purchases $1,000 worth of shares of each of Classes VV and WW Common Stock of the Fund (par value $.001 per share) (such shares hereinafter sometimes collectively known as "Shares") at a price per Share $10.00.
2. The Fund hereby acknowledges receipt from Boston Partners of funds in the amount of $1,000 in full payment for the Shares.
3. Boston Partners represents and warrants to the Fund that the Shares are being acquired for investment purposes and not with a view to the distribution thereof.
4. This agreement may be executed in counterparts, and all such counterparts taken together shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the 1st day of July, 2002.
THE RBB FUND, INC.
By: /s/ Edward J. Roach
-------------------
Edward J. Roach
President & Treasurer
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BOSTON PARTNERS ASSET
MANAGEMENT, L.P., by BOSTON
PARTNERS, INC., its General Partner
By: /s/ William J. Kelly
---------------------
Name: William J. Kelly
Title: Treasurer
|
Exhibit (l)(18)
PURCHASE AGREEMENT
The RBB Fund, Inc. (the "Fund"), a Maryland corporation, and Schneider Capital Management Company ("Schneider Capital") intending to be legally bound, hereby agree with each other as follows:
1. The Fund hereby offers Schneider Capital and Schneider Capital hereby purchases $10.00 worth of shares of Class PPP Common Stock of the Schneider Value Fund (par value $.001 per share) (such shares hereinafter sometimes collectively known as "Shares") at price per Share of $10.00.
2. The Fund hereby acknowledges receipt from Schneider Capital of funds in the amount of $10.00 in full payment for the Shares.
3. Schneider Capital represents and warrants to the Fund that the Shares are being acquired for investment purposes and not with a view to the distribution thereof.
4. This agreement may be executed in counterparts, and all such counterparts taken together shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the 30th day of September, 2002.
THE RBB FUND, INC.
By: /s/ Edward J. Roach
-------------------
Name: Edward J. Roach
Title: President
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SCHNEIDER CAPITAL MANAGEMENT COMPANY
By: /s/ Steven J. Fellin
--------------------
Name: Steven J. Fellin
Title: Vice President and CFO
|
Exhibit (m)(46)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE RBB FUND, INC.
WHEREAS, The RBB Fund, Inc. (the "Fund") intends to engage in business as an open-end management investment company and is registered as such under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Fund desires to adopt a Plan of Distribution pursuant to Rule 12b-1 under the Act with respect to shares of the Investor Class Common Stock, par value $.001 per share (the "Investor Class Shares") of its Boston Partners All-Cap Value Fund and the Board of Directors has determined that there is a reasonable likelihood that adoption of this Plan of Distribution will benefit the Fund and its stockholders;
NOW, THEREFORE, the Fund hereby adopts, and the Fund's Distributor hereby agrees to the terms of, this Plan of Distribution (the "Plan") in accordance with Rule 12b-1 under the Act on the following terms and conditions:
1. The Fund shall pay to its distributor (the "Distributor"), as the distributor of the Investor Class Shares, compensation for distribution of its shares at an annual rate not to exceed .25% of the average daily net assets of the Investor Class Shares. The amount of such compensation shall be agreed upon by the Board of Directors of the Fund and by the Distributor and shall be calculated and accrued daily and paid monthly or at such other intervals as the Board of Directors and the Distributor shall mutually agree.
2. The amount set forth in paragraph 1 of this Plan shall be paid for the Distributor's services as distributor of the Investor Class Shares. Such amount may be spent by the Distributor on any activities or expenses primarily intended to result in the sale of Investor Class Shares, including, but not limited to: compensation to and expenses of employees of the Distributor who engage in or support distribution of the Investor Class Shares, including overhead and telephone expenses; printing of prospectuses and reports for other than existing shareholders; preparation, printing and distribution of sales literature and advertising materials; and compensation to certain financial institutions ("Service Organizations") who sell Investor Class Shares. The Distributor may negotiate with any such Service Organizations the services to be provided by the Service Organization to shareholders in connection with the sale of Investor Class Shares ("Distribution Services"), and all or any portion of the compensation paid to the Distributor under paragraph 1 of this Plan may be reallocated by the Distributor to Service Organizations who sell Investor Class Shares.
The compensation paid to Service Organizations with respect to
Distribution Services will compensate Service Organizations to cover certain
expenses primarily intended to result in the sale of Investor Class Shares,
including, but not limited to: (a) costs of payments made to employees that
engage in the sale of Investor Class Shares; (b) payments made to, and expenses
of, persons who provide support services in connection with the sale of Investor
Class Shares, including, but not limited to, office space and equipment,
telephone facilities, processing shareholder transactions and providing any
other shareholder services not otherwise provided by the Fund's transfer agent;
(c) costs relating to the formulation and implementation of marketing and
promotional activities, including, but not limited to, direct mail promotions
and television, radio, newspaper, magazine and other mass media advertising; (d)
costs of printing and distributing prospectuses, statements of additional
information and reports relating to the Investor Class Shares to prospective
shareholders of the Investor Class Shares; (e) costs involved in preparing,
printing and distributing sales literature pertaining to the Investor Class
Shares; and (f) costs involved in obtaining whatever information, analyses and
reports with respect to marketing and promotional activities that the Service
Organization may, from time to time, deem advisable.
The compensation paid to Service Organizations with respect to Shareholder Services will compensate Service Organizations for personal service and/or the maintenance of shareholder accounts, including but not limited to (a) responding to inquiries of customers or clients of the Service Organization who beneficially own Investor Class Shares ("Customers"), (b) providing information on Customer investments and (c) providing other shareholder liaison services.
The compensation paid to Service Organizations with respect to
Administrative Services will compensate Service Organizations for administrative
and accounting services to their Customers, including, but not limited to: (a)
aggregating and processing purchase and redemption requests from Customers and
placing net purchase and redemption orders with the Fund's distributor or
transfer agent; (b) providing Customers with a service that invests the assets
of their accounts in the Investor Class Shares; (c) processing dividend payments
from the Investor Class Shares on behalf of Customers; (d) providing information
periodically to Customers showing their positions in the Investor Class Shares;
(e) arranging for bank wires; (f) providing sub-accounting with respect to
Investor Class Shares beneficially owned by Customers or the information to the
Fund necessary for sub-accounting; (g) forwarding shareholder communications
from the Fund (for example, proxies, shareholder reports, annual and semi-annual
financial statements and dividend, distribution and tax notices related to the
Investor Class Shares) to Customers, if required by law; and (h) providing other
similar services to the extent permitted under applicable statutes, rules and
regulations.
3. This Plan shall not take effect until it has been approved, together with any related agreements, by votes of a majority of both (a) the Board of Directors of the Fund and (b) those directors of the Fund who are not "interested persons" of the Fund (as defined in the Act) and have no direct or indirect financial interest in the operation of this Plan or any agreements related to it (the "Rule 12b-1 Directors"), cast in person at a meeting (or meetings) called for the purpose of voting on this Plan and such related agreements.
4. This Plan shall continue in effect until August 16, 2002. Thereafter, this Plan shall continue in effect for so long as such continuance is specifically approved at least annually in the manner provided for approval of this Plan in paragraph 3.
5. The Distributor shall provide to the Board of Directors of the Fund and the Board of Directors shall review, at least quarterly, a written report of the amounts expended pursuant to this Plan and the purposes for which such expenditures were made, including commissions, advertising, printing, interest, carrying charges and allocated overhead expenses.
6. This Plan may be terminated at any time by vote of a majority of the Rule 12b-1 Directors, or by a vote of a majority of the outstanding Investor Class Shares.
7. This Plan may not be amended to increase materially the amount of compensation provided for in paragraph 1 hereof unless such amendment is approved by a vote of at least a majority (as defined in the Act) of the outstanding Investor Class Shares, and no material amendment to the Plan of any kind, including an amendment which would increase materially the amount of compensation, shall be made unless approved in the manner provided for in paragraph 3 hereof.
8. While this Plan is in effect, the selection and nomination of Directors who are not interested persons (as defined in the Act) of the Fund shall be committed to the discretion of the then current Directors who are not interested persons (as defined in the Act) of the Fund.
9. The Fund shall preserve copies of this Plan and any related agreements and all reports made pursuant to paragraph 5 hereof for a period of not less than six years from the date of this Plan, the agreements or such reports, as the case may be, the first two years in an easily accessible place.
Dated: July 1, 2002
Exhibit (p)(7)
BAKER 500 CORPORATION
CODE OF ETHICS
I. Legal Requirement.
Rule 17j-1 (b) under the Investment Company Act of 1940, as amended (the "1940 Act"), makes it unlawful for any officer or director of Baker 500 Corporation (the "Company"), in connection with the purchase or sale by such person of a security held or to be acquired by any investment company registered under the 1940 Act (each such investment company for which the Company is investment adviser, a "Fund"):
1. To employ any device, scheme or artifice to defraud any Fund;
2. To make to any Fund any untrue statement of a material fact or omit to state to any Fund a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading;
3. To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund; or
4. To engage in any manipulative practice with respect to any Fund's investment portfolios.
II. Purpose of the Code of Ethics.
The Company expects that its directors and officers will conduct their personal investment activities in accordance with (1) the duty at all times to place the interests of each Fund's shareholders first, (2) the requirement that all personal securities transactions be conducted consistent with this Code of Ethics (this "Code") and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual's position of trust and responsibility, and (3) the fundamental standard that an investment adviser's personnel should not take inappropriate advantage of their positions.
In view of the foregoing, the provisions of Section 17(j) of the 1940 Act, the Securities and Exchange Commission's 1940 Act Release No. 23958 "Personal Investment Activities of Investment Company Personnel" (August 24, 1999), the "Report of the Advisory Group on Personal Investing" issued by the Investment Company Institute on May 9, 1994 and the Securities and Exchange Commission's September 1994 Report on "Personal Investment Activities of Investment Company Personnel," the Company has determined to adopt this Code to specify a code of conduct for certain types of personal securities transactions which might
involve conflicts of interest or an appearance of impropriety, and to establish reporting requirements and enforcement procedures.
III. Definitions.
A. An "Access Person" means: (1) each director or officer of the Company; (2) each employee (if any) of the Company (or of any company in a control relationship to the Company) who in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding the purchase or sale of a security by any portfolio of which the Company is investment adviser, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and (3) any natural person in a control relationship to the Company who obtains information concerning recommendations made to any portfolio of which the Company is investment adviser, with regard to the purchase or sale of a security.
B. "Exempt Security" means:
1. Securities purchased or sold in a transaction which is non-volitional on the part of either the Access Person or the Company.
2. Securities acquired as a part of an automatic dividend reinvestment plan.
3. Securities acquired upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired.
4. Securities which the Company's investment portfolios are not permitted to purchase under the investment objectives and policies set forth in the Company's then current prospectus(es) under the Securities Act of 1933 or the Company's registration statement on Form N-1A.
C. "Non-Reportable Security" means:
1. Direct obligations of the Government of the United States; banker's acceptances; bank certificates of deposit; commercial paper; high quality short-term debt instruments (any instrument having a maturity at issuance of less than 366 days and that is rated in one of the two highest rating categories by a nationally recognized statistical rating organization), including repurchase agreements; and shares of registered open-end investment companies.
2. Securities purchased or sold in any account over which the Access Person has no direct or indirect influence or control.
D. An Access Person's "immediate family" includes that Access Person's
spouse, if any, and any minor children and adults living in the same household as that Access Person.
E. "Initial Public Offering" means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934.
F. "Investment Personnel" of the Company means:
(i) any employee of the Company (or of any company in a control relationship to the Company) who, in connection with his or her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by any portfolio of which the Company is investment adviser.
(ii) Any natural person who controls the Company and who obtains information concerning recommendations made by the Company regarding the purchase or sale of securities by any portfolio of which the Company is investment adviser.
G. "Limited Offering" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) or
Section 4(6) or pursuant to Rule 504, Rule 505, or Rule 506 under the Securities
Act of 1933.
H. "S & P 500 Index Portfolio" means any portfolio the investment objective of which is to provide investment results that, before taking into account the expenses of such portfolio, approximate that aggregate price and dividend performance of the securities included in the Standard & Poor's Composite 500 Index by investing in securities comprising that index.
I. "S & P 500 Index Security" means any security which, at the time in question, is included in the Standard & Poor's Composite 500 Index.
IV. Policies of the Company Regarding Personal Securities Transactions.
A. General Policy.
No Access Person shall engage in any act, practice or course of business that would violate the provisions of Rule 17j-1 (b) set forth above, or in connection with any personal investment activity, engage in conduct inconsistent with this Code.
B. Specific Policies.
1. Restrictions on Personal Securities Transactions By Access
Persons.
a. No Access Person may purchase or sell securities other than Non-Reportable Securities and Exempt Securities for his or her personal portfolio or the portfolio of another member of his or her immediate family without obtaining oral authorization from a Compliance Officer of the Company prior to effecting such transaction.
b. In addition to, and not in limitation of, the restrictions contained in the preceding paragraph IV.B.l.a, no Access Person may purchase any securities in an Initial Public Offering or a Limited Offering for his or her personal portfolio or the portfolio of another member of his or her immediate family without obtaining oral authorization from Senior Company Management prior to effecting such transaction.
c. If any authorization is granted to an Access Person who is also classified as Investment Personnel for a purchase of securities in an Initial Public Offering or a Limited Offering, a record of the decision and the reason supporting the decision to authorize that purchase shall be made by the Compliance Officer of the Company granting such authorization.
d. If oral authorization is granted for a purchase or sale of securities, a written authorization for such transaction will be provided by a Compliance Officer of the Company to the Access Person receiving the authorization in order to memorialize the oral authorization that was granted.
Note: If an Access Person has questions as to whether purchasing or selling a security for his or her personal portfolio or the portfolio of another member of his or her immediate family requires prior oral authorization, the Access Person should consult a Compliance Officer of the Company for authorization or denial of authorization to trade prior to effecting the transaction.
e. Any authorization granted for a transaction under paragraph (a) will expire at the close of business on the trading day after the date on which oral authorization was granted, and the Access Person receiving such authorization shall be required to receive a new oral authorization for the transaction if the trade is not completed before the authorization shall have expired.
f. No clearance will be given to an Access Person to purchase or sell any security (1) on a day when any non-indexed portfolio of the Company (whether proprietary fund or separately managed account) has a pending "buy" or "sell" order in the same security until that order is executed or withdrawn or (2) when the Compliance Officer has been advised by the investment adviser that the same security is being considered for purchase or sale for any non-indexed portfolio of the Company (whether proprietary fund or separately managed account).
2. Additional Restrictions on Personal Securities Transactions By Access Persons.
a. Persons employed by the Company are forbidden from profiting from the purchase and sale, sale and purchase, or any transaction deemed the same (i.e. puts, calls, use of derivatives, convertibles, etc.) of the same or equivalent securities within sixty (60) calendar days on any security held in the Baker 500 Growth Mutual Fund, or any Company client account.
b. Access Persons are expressly prohibited from receiving any gift or other thing of more than de minimis value from any person or entity that does business with or on behalf of the Company, its clients, Baker 500 Growth Fund.
c. Memberships or partnerships in any investment club by Access Persons are forbidden.
d. Access persons are prohibited from serving on the Board of Directors of publicly traded companies without prior authorization based on a determination that the Board service would be consistent with the interests of the Company and its clients.
V. Procedures.
A. In order to provide the Company with information to enable it to determine with reasonable assurance whether the provisions of this Code are being observed by its Access Persons:
1. Each Access Person will submit to a Compliance Officer of the Company an Initial Beneficial Ownership Report in the form attached hereto as Exhibit A that lists all securities other than Non-Reportable Securities beneficially owned/1/ by the Access Person. This report must be submitted within ten days of becoming an Access Person and must include the title of each security, the number of shares held, and the principal amount of the security and the name of any broker, dealer or bank with whom the Access person maintains an account in which only such securities are held.
2. Each Access Person will also submit annually to a Compliance Officer of the Company a Beneficial Ownership Report attached hereto as Exhibit A. The Annual Beneficial Ownership Report must list all securities other than Non-Reportable Securities beneficially owned by the Access Person, the title of each security, the number of shares held, and the principal amount of the security and the name of any broker, dealer or bank with whom the Access person maintains an account in which only such securities are held.
/1/ You will be treated as the "beneficial owner" of a security under this policy only if you have a direct or indirect pecuniary interest in the security.
(a) A direct pecuniary interest is the opportunity, directly or indirectly, to profit, or to share the profit, from the transaction.
(b) An indirect pecuniary interest is any nondirect financial interest, but is specifically defined in the rules to include securities held by members of your immediate family sharing the same household; securities held by a partnership of which you are a general partner; securities held by a trust of which you are the settlor if you can revoke the trust without the consent of another person, or a beneficiary if you have or share investment control with the trustee; and equity securities which may be acquired upon exercise of an option or other right, or through conversion.
For interpretive guidance on this test, you should consult counsel.
3. Each Access Person shall direct his or her broker to supply to a Compliance Officer of the Company, on a timely basis, duplicate copies of confirmations of all securities transactions other than Exempt Transactions in which the person has, or by reason of any transaction acquires, any direct or indirect beneficial ownership of any security and copies of periodic statements for all securities accounts.
4. Each Access Person shall, no later than the tenth
(10th) day after the end of each calendar quarter,
submit a report in the form attached hereto as
Exhibit B to a Compliance Officer of the Company,
showing each transaction in securities other than
Non-Reportable Securities in which the person has, or
by reason of such transaction acquires, any direct or
indirect beneficial ownership during the calendar
quarter in question, as well as all accounts
established with brokers, dealers or banks during the
calendar quarter in question for the direct or
indirect beneficial interest of the Access Person./2/
5. A Compliance Officer of the Company shall notify each Access Person who is subject to the transaction pre-authorization requirements or the reporting requirements of this Code that such person is subject to such the pre-authorization or reporting requirements and shall deliver a copy of this Code to each such person.
6. A Compliance Officer of the Company shall review the Initial Beneficial Ownership Reports, Annual Beneficial Ownership Reports, and Quarterly Transaction Reports received, and as appropriate compare the reports with the pre-authorizations received, and report to the Company's Board of Directors:
a. with respect to any transaction that appears to evidence a possible violation of this Code; and
b. apparent violations of the reporting requirement stated herein.
7. The Company's Board of Directors shall consider reports made to it hereunder and shall determine whether the policies established in Sections IV and V of this Code have been violated, and what sanctions, if any, should be imposed on the violator, including but not limited to a letter of censure, suspension or termination of the employment of the violator, or the unwinding of the transaction and the disgorgement of any profits. The Company's Board of Directors shall review the operation of this Code at least once a year.
8. At each quarterly meeting of the Company's Board of Directors a Compliance Officer of the Company shall provide a written report to the
/2/ See footnote 1 above.
Company's Board of Directors stating:
a. any reported securities transaction that occurred during the prior quarter that may have been inconsistent with the provisions of this Code; and
b. all disciplinary actions/3/ taken in response to such violations.
9. At least once a year, a Compliance Officer of the
Company shall provide to the Company's Board of
Directors and to the Board members of any registered
investment company for which the Company serves as
investment adviser a written report which contains:
(a) a summary of existing procedures concerning
personal investing by Access Persons and any changes
in the compliance procedures under this Code during
the past year; (b) an evaluation of current
compliance procedures under this Code and a report on
any recommended changes in existing restrictions or
any such procedures based upon the Company's
experience under this Code, industry practices, or
developments in applicable laws and regulations; (c)
a description of any issues arising under this Code
or the compliance procedures thereunder since the
last such report, including but not limited to,
information about material violations of this Code
and sanctions imposed in response to material
violations; and (d) a certification that the
procedures which have been adopted under this Code
are those reasonably necessary to prevent Access
Persons from violating this Code.
10. This Code, a copy of each report by an Access Person, any record of any violation of this Code and any action taken as a result thereof, any written, report hereunder by the any Compliance Officer of the Company, records of authorizations relating to the purchase of securities in Initial Public Offerings and Limited Offerings, and lists of all persons required to make reports and a list of all persons responsible for reviewing such reports shall be preserved with the Company's records for the period required by Rule 17j-1 under the 1940 Act and Rule 204-2(a)(12) of the Investment Advisers Act of 1940.
VI. Certification.
Each Access Person will be required to certify annually that he or she has read and understood this Code, and will abide by it at all times during which such person is an Access Person. Each Access Person will further certify that he or she has disclosed or reported all personal securities transactions required to be disclosed or reported under this Code of Ethics. A form of such certification is attached hereto as Exhibit C.
/3/ Disciplinary action includes but is not limited to any action that has a material financial effect upon the employee, such as fining, suspending, or demoting the employee, imposing a substantial fine or requiring the disgorgement of profits.
Exhibit A
BAKER 500 CORPORATION
Initial/Annual
Beneficial Ownership Report
For the Year/Period Ended___________________________________
(month/day/year)
[_] Check Here if this is an Initial Beneficial Ownership Report
To: Baker 500 Corporation (the "Company")
As of the calendar year/period referred to above, I have a direct or indirect beneficial ownership interest in the securities listed below which are required to be reported pursuant to the Company's Code of Ethics (the "Code"):
Title of Number Principal Security of Shares Amount -------- --------- ------ |
The name of any broker, dealer or bank with whom I maintain an account in which my securities are held for my direct or indirect benefit are as follows:
This report (i) excludes my beneficial ownership of "Non-Reportable Securities" as defined in the Code and (ii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities listed above.
Date:________________________________ Signature:__________________________ Print Name:_________________________
Exhibit B
BAKER 500 CORPORATION
Securities Transaction Report
For the Calendar Quarter Ended____________________________
(month/day/year)
To: Baker 500 Corporation (the "Company")
During the quarter referred to above, the following transactions were effected in securities of which I had, or by reason of such transactions acquired, direct or indirect beneficial ownership, and which are required to be reported pursuant to the Code of Ethics of the Company:
Nature of Broker/Dealer
Interest Rate Transaction Or Bank
Security Date of Number of Principal And Maturity (Purchase, Through Whom
--------
Transaction Shares Amount Date (if applicable) Sale, Other) Price Effected
----------- ------ ------ -------------------- ------------ ----- --------
|
During the quarter referred to above, I established the following accounts in which securities were held during the quarter for my direct or indirect benefit:
1. The name of the broker, dealer or bank with whom I established the account:
2. The date the account was established:
This report (i) excludes transactions in "Non-Reportable Securities" as defined in the Code, and (ii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities listed above.
Date:___________________________ Signature:____________________________ Print Name:___________________________
Exhibit C
BAKER 500 CORPORATION
ANNUAL CERTIFICATE
For the Calendar Year Ended _______________________________
(month/day/year)
To: Baker 500 Corporation (the "Company")
Pursuant to the requirements of the Company's Code of Ethics (the "Code"), the undersigned hereby certifies as follows:
1. I have read the Code.
2. I understand the Code and acknowledge that I am subject to it.
3. Since the date of the last Annual Certificate (if any) given pursuant to the Code, I have reported all personal securities transactions and provided any beneficial ownership reports required to be reported or provided, respectively, by me under the requirements of the Code.
Date: ____________________________________
Print Name
____________________________________
Signature
|