-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KVyAaV7KPQlE7rzt4/Ugy/LDtyQCFwnCRoCqrOqjVcvVPzH7mrvn5dM6k8laFdUZ lp5uEKWZHtZi2wmg/1JlaQ== 0000927016-99-003341.txt : 20000211 0000927016-99-003341.hdr.sgml : 20000211 ACCESSION NUMBER: 0000927016-99-003341 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 16 FILED AS OF DATE: 19990930 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RBB FUND INC CENTRAL INDEX KEY: 0000831114 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 033-20827 FILM NUMBER: 99720890 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 811-05518 FILM NUMBER: 99720891 BUSINESS ADDRESS: STREET 1: 400 BELLEVUE PKWY STE 100 CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 3027911791 MAIL ADDRESS: STREET 1: 103 BELLEVUE PKWY STREET 2: SUITE 152 CITY: WILMINGTON STATE: DE ZIP: 19809 FORMER COMPANY: FORMER CONFORMED NAME: FUND INC /DE/ DATE OF NAME CHANGE: 19600201 485APOS 1 PEA NO. 67 TO FORM N-1A REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on September 30, 1999 Securities Act File No. 33-20827 Investment Company Act File No. 811-5518 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X] Pre-Effective Amendment No. -- [_] Post-Effective Amendment No. 67 [X] and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X] Amendment No. 69 [X] ------------------ THE RBB FUND, INC. (Exact Name of Registrant as Specified in Charter) Bellevue Park Corporate Center 400 Bellevue Parkway, Suite 100 Wilmington, DE 19809 (Address of Principal Executive Offices) Registrant's Telephone Number: (302) 792-2555 GARY M. GARDNER, ESQUIRE Copies to: PFPC, Inc. Michael P. Malloy, Esquire 400 Bellevue Parkway Drinker Biddle & Reath LLP Wilmington, DE 19809 One Logan Square (Name and Address of Agent for Service) 18th & Cherry Streets Philadelphia, PA 19103-6996 It is proposed that this filing will become effective (check appropriate box) [_] immediately upon filin pursuant to paragraph (b) [_] on (date) pursuant to paragraph (b) [_] 60 days after filing pursuant to paragraph (a)(1) [X] on December 1, 1999 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. The purpose of this Post-Effective Amendment is to update certain information in the Registrant's Prospectuses and Statements of Additional Information, including requirements relating to amended Form N-1A and provisions of Rule 421 with respect to plain English principles, relating to Registrant's n/i numeric investors Micro Cap Fund, n/i numeric investors Growth Fund, n/i numeric investors Mid Cap Fund, n/i numeric investors Larger Cap Value Fund and n/i numeric investors Small Cap Value Fund. Title of Securities..................Shares of Common Stock n/i numeric investors family of funds n/i numeric investors Micro Cap Fund n/i numeric investors Growth Fund n/i numeric investors Mid Cap Fund n/i numeric investors Larger Cap Value Fund n/i numeric investors Small Cap Value Fund ___________________________________ advised by numeric investors lp(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 1, 1999 TABLE OF CONTENTS
========================================================================================================= INTRODUCTION TO RISK / RETURN SUMMARY ============================================================================= Who Should Invest........................................... 3 Numeric's Investment Style.................................. 3 ============================================================================= DESCRIPTIONS OF THE FUNDS ============================================================================= A look at the goals, n/i numeric investors Micro Cap Fund........................ 5 strategies, risks, n/i numeric investors Growth Fund........................... 8 expenses and financial n/i numeric investors Mid Cap Fund.......................... 11 history of each Fund. n/i numeric investors Larger Cap Value Fund................. 14 n/i numeric investors Small Cap Value Fund.................. 17 ============================================================================= MANAGEMENT ============================================================================= Details on the management Investment Adviser.......................................... 20 and operations of the Service Provider Chart...................................... 21 Funds. ============================================================================= SHAREHOLDER INFORMATION ============================================================================= Policies and instructions Pricing of Fund Shares...................................... 22 for opening, maintaining Purchase of Fund Shares..................................... 22 and closing an account in Redemption of Fund Shares................................... 24 any of the Funds. Exchange Privilege.......................................... 26 Dividends and Distributions................................. 26 Taxes....................................................... 27 ============================================================================= FINANCIAL HIGHLIGHTS............................................. 28 ============================================================================= FOR MORE INFORMATION................................. See back cover =========================================================================================================
-2- 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 five classes of common stock of the Company represent interest in the n/i numeric investors Micro Cap Fund, n/i numeric investors Growth Fund, n/i numeric investors Mid Cap Fund, n/i numeric investors Larger Cap Value Fund and n/i numeric investors Small Cap Value Fund. 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. 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. Investors should consider their ability to allocate tax-deferred (such as IRAs and 401(k) plans) versus taxable assets when considering where to invest. Numeric's Investment Style Quantitative Approach. To meet each Fund's investment objective, Numeric Investors L.P. ("Numeric"), the Funds' investment adviser, uses quantitative investment techniques. These quantitative techniques rely on two proprietary computer models developed by Numeric to aid in the stock selection process. Currently, Numeric classifies their models into two types: . the Value Stock Model -- This model attempts to find companies for purchase or sale whose stocks are determined to be mispriced relative to their projected earnings, growth and quality. In searching -3- 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 Value Stock Model is the primary model used in the management of the n/i numeric investors Larger Cap Value and n/i numeric investors Small Cap Value Funds. This model is given equal consideration in the management of the n/i numeric investors Mid Cap Fund along with the Growth Stock Model (described below). . the Growth Stock Model or EstrendTM Model -- This model attempts to find companies for purchase or sale 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 Growth Stock Model is the primary model used in the management of the n/i numeric investors Micro Cap and n/i numeric investors Growth Funds. This model is given equal consideration in the management of the n/i numeric investors Mid Cap Fund along with the Value Stock Model (described above). The Value Stock Model and Growth Stock Model are intentionally complementary to each other. The insights they provide about each stock are from different perspectives and each model tends to be more effective during periods when the other is less effective. Combined, they generate more consistent excess returns. Numeric's models incorporate dozens of characteristics for the 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 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 increases. 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. Currently, Numeric intends to close the n/i numeric investors Micro Cap and n/i numeric investors Growth Funds to new investors when total assets reach $125 million, the n/i numeric investors Mid Cap and n/i numeric investors Small Cap Funds, at $200 million, and the n/i numeric investors Larger Cap Value Fund at $400-500 million in total assets. -4- n/i numeric investors MICRO CAP FUND Ticker Symbol: NIMCX 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 65% of its total assets in common stock of companies with a market capitalization of $600 million or less, although the Fund may invest in companies with higher market capitalization. Numeric determines its stock selection decisions for this Fund primarily on the basis of its Growth Stock Model. Considered, but of significantly less importance, is the 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. The Fund may lend its portfolio securities to financial institutions. The 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. The Fund may borrow money for temporary or emergency (not leveraging) purposes. The Fund will not make any additional investments while borrowings exceed 5% of its total assets. Numeric may close the Fund to new investors if they believe a large increase in the size of the Fund would adversely affect their investment strategy. Accordingly, if the Fund's total assets exceed $125 million, Numeric will close the Fund to new investors. (See Closing of Funds under Purchase of Fund Shares.) The Company's Board of Directors can change the investment objective of the Fund. However, shareholders will be given 30 days notice before any change is made. 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. -5- . Lending the 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. 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 (generally considered over 100%) could result in the realization of taxable capital gains. Year 2000 -- The Fund, like any business, could be affected if the computer systems on which it relies do not properly process information beginning on January 1, 2000. While Year 2000 issues could have a negative effect on the Fund, Numeric is currently working to avoid such problems. The Company is also working with other systems providers and vendors to determine their systems' ability to handle Year 2000 problems. There is no guarantee, however, that systems will work properly on or after January 1, 2000. Year 2000 problems may also hurt issuers whose securities the Fund holds or securities markets generally. Risk/Return Information The chart and table below give you a picture of 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. As of 12/31 Annual Total Returns [BAR CHART APPEARS HERE] 1996 1997 1998 ---- ---- ---- 16.85% 30.86% 16.27% Year to date total return for the nine months ended September 30, 1999: ___% Best Quarter: 32.95% (quarter ended 10/31/97) Worst Quarter: 9.92% (quarter ended 9/30/96) -6- As of 12/31/98 Average Annual Total Returns - Comparison 1 Year Since Inception ------ --------------- n/i numeric investors Micro Cap Fund* 16.27% 24.98% Russell 2000 Growth Index** ___% ___% * Commenced operations on June 3, 1996. ** The Russell 2000 is an index of stocks 1001 through 3000 in the Russell 3000 Index as ranked by total market capitalization. This index is segmented into growth and value categories. 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/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. Annual Fund Operating Expenses (expenses that are deducted from Fund assets) Management fees[+].................................... 0.75% Rule 12b-1 fees....................................... None Other expenses........................................ 0.48% ----- Total annual Fund operating expenses.................. 1.23% Fee waivers*..........................................(0.23%) ----- Net expenses.......................................... 1.00% ===== [+ Until January 1, 2001, Numeric is entitled to a management fee of 0.75% of the Fund's average daily net assets. Thereafter, 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. See "Management-Investment Adviser" for a further discussion.] * Numeric has agreed that until December 31, 2000, it will waive advisory fees and reimburse expenses to the extent that total annual Fund operating expenses exceed 1.00%. 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. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses or fee waivers and redemption at the end of each period. 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 ------ ------- ------- -------- $ -- $ -- $ -- $ -- The above example is for comparison purposes only and is not a representation of the Fund's actual expenses and returns, either past or future. -7- n/i numeric investors GROWTH FUND Ticker Symbol: NISG 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 smaller ($1.2 billion or less) market capitalization or companies with substantial equity capital and higher than average earnings growth rates. Numeric determines its stock selection decisions for this Fund primarily on the basis of its Growth Stock Model. Considered, but of significantly less importance, is the 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. The Fund may lend its portfolio securities to financial institutions. The 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. The Fund may borrow money for temporary or emergency (not leveraging) purposes. The Fund will not make any additional investments while borrowing s exceeds 5% of its total assets. Numeric may close the Fund to new investors if they believe a large increase in the size of the Fund would adversely affect their investment strategy. Accordingly, if the Fund's total assets exceed $125 million, Numeric will close the Fund to new investors. (See Closing of Funds under Purchase of Fund Shares.) The Company's Board of Directors can change the investment objective of the Fund. However, shareholders will be given 30 days notice before any change is made. 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. -8- . Lending the 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. 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 (generally considered over 100%) could result in the realization of taxable capital gains. Year 2000 -- The Fund, like any business, could be affected if the computer systems on which it relies do not properly process information beginning on January 1, 2000. While Year 2000 issues could have a negative effect on the Fund, Numeric is currently working to avoid such problems. The Company is also working with other systems providers and vendors to determine their systems' ability to handle Year 2000 problems. There is no guarantee, however, that systems will work properly on or after January 1, 2000. Year 2000 problems may also hurt issuers whose securities the Fund holds or securities markets generally. Risk/Return Information The chart and table below give you a picture of 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. As of 12/31 Annual Total Returns [BAR CHART APPEARS HERE] 1996 1997 1998 ---- ---- ---- 10.42% 15.61% 2.20% Year to date total return for the nine months ended September 30, 1999: ___% Best Quarter: 28.22% (quarter ended September 30, 1997) Worst Quarter: (35.99)% (quarter ended September 30, 1998) -9- As of 12/31/98 Average Annual Total Returns - Comparison 1 Year Since Inception ------ --------------- n/i numeric investors Growth Fund* 2.22% 10.86% Russell 2500 Growth Index** ___% ___% * Commenced operations on June 3, 1996. ** The Russell 2500 is an index of stocks 501 through 3000 in the Russell 3000 Index, as ranked by total market capitalization. This index is segmented into growth and value categories. The Russell 2500 Growth Index contains stocks from the Russell 2500 with greater-than-average growth orientation. Companies in this index generally have higher price-to-book and price/earnings ratios. 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. Annual Fund Operating Expenses (expenses that are deducted from Fund assets) Management fees[+].................................... 0.75% Rule 12b-1 fees....................................... None Other expenses........................................ 0.49% ----- Total annual Fund operating expenses.................. 1.24% Fee waivers*..........................................(0.24%) ----- Net expenses.......................................... 1.00% ===== [+ Until January 1, 2001, Numeric is entitled to a management fee of 0.75% of the Fund's average daily net assets. Thereafter, 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. See "Management-Investment Adviser" for a further discussion.] * Numeric has agreed that until December 31, 2000, it will waive advisory fees and reimburse expenses to the extent that total annual Fund operating expenses exceed 1.00%. 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. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses or fee waivers and redemption at the end of each period. 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 ------ ------- ------- -------- $ -- $ -- $ -- $ -- The above example is for comparison purposes only and is not a representation of the Fund's actual expenses and returns, either past or future. -10- n/i numeric investors MID CAP FUND Ticker Symbol: NIGV 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 stocks of middle and large capitalization companies where Numeric believes that earnings per share are improving more rapidly than earnings per share of the average company, as well as companies whose securities have market valuations which are lower than the average market valuations of securities, as measured by such characteristics as price to earnings ratios and price to book ratios. Numeric determines its stock selection decisions for this Fund based on both the Growth Stock Model and the Value Stock Model. The Fund anticipates that it will invest 65% of its total assets in common stock of "mid cap" companies, which the Fund defines as the 151st to the 1000th largest companies (excluding American Depositary Receipts) as ranked by market capitalization. The market capitalization of the 1000th largest company is approximately $1.1 billion. 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. The Fund may lend its portfolio securities to financial institutions. The 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. The Fund may borrow money for temporary or emergency (not leveraging) purposes. The Fund will not make any additional investments while borrowings exceed 5% of its total assets. Numeric may close the Fund to new investors if they believe a large increase in the size of the Fund would adversely affect their investment strategy. Accordingly, if the Fund's total assets exceed $200 million, Numeric will close the Fund to new investors. (See Closing of Funds under Purchase of Fund Shares.) The Company's Board of Directors can change the investment objective of the Fund. However, shareholders will be given 30 days notice before any change is made. 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. -11- . 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. . Lending the 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. 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 (generally considered over 100%) could result in the realization of taxable capital gains. Year 2000 -- The Fund, like any business, could be affected if the computer systems on which it relies do not properly process information beginning on January 1, 2000. While Year 2000 issues could have a negative effect on the fund, Numeric is currently working to avoid such problems. The Company is also working with other systems providers and vendors to determine their systems' ability to handle Year 2000 problems. There is no guarantee, however, that systems will work properly on or after January 1, 2000. Year 2000 problems may also hurt issuers whose securities the Fund holds or securities markets generally. Risk/Return Information The chart and table below give you a picture of 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. As of 12/31 Annual Total Returns [BAR CHART APPEARS HERE] 1996 1997 1998 ---- ---- ---- 11.41% 33.07% 13.88% Year to date total return for the nine months ended September 30, 1999: ___% Best Quarter: 25.61% (quarter ended September 30, 1997) Worst Quarter: 3.83% (quarter ended September 30, 1996) -12- As of 12/31/98 Average Annual Total Returns - Comparison 1 Year Since Inception ------ --------------- n/i numeric investors Mid Cap Fund* 13.88% ___% S&P MidCap 400 Index** ___% ___% * Commenced operations on June 3, 1996. ** A broad-based index of 400 companies with market capitalizations currently from $200 million to $38 billion. 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. Annual Fund Operating Expenses (expenses that are deducted from Fund assets) Management fees[+]................................... 0.75% Rule 12b-1 fees...................................... None Other expenses....................................... 0.51% ----- Total annual Fund operating expenses................. 1.26% Fee waivers*.........................................(0.26%) ----- Net expenses......................................... 1.00% ===== [+ Until January 1, 2001, Numeric is entitled to a management fee of 0.75% of the Fund's average daily net assets. Thereafter, 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. See "Management-Investment Adviser" for a further discussion.] * Numeric has agreed that until December 31, 2000, it will waive advisory fees and reimburse expenses to the extent that total annual Fund operating expenses exceed 1.00%. 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. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses or fee waivers and redemption at the end of each period. 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 ------ ------- ------- -------- $-- $-- $-- $-- The above example is for comparison purposes only and is not a representation of the Fund's actual expenses and returns, either past or future. -13- n/i numeric investors LARGER CAP VALUE FUND Ticker Symbol: NILVX 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 65% of its total assets in common stock of companies with a market capitalization of $2 billion or more. The Fund may also invest in securities which are convertible into common stock, fixed income securities and money market securities. Numeric determines its stock selection decisions for this Fund primarily on the basis of its Value Stock Model. Also considered, but of less importance, is the Growth Stock Model. The Fund anticipates that it will invest a large portion of its total assets in common stock of the 1000th largest companies (excluding American Depositary Receipts) as ranked by market capitalization. The market capitalization of the 1000th largest company is approximately $1.1 billion. 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. The Fund may lend its portfolio securities to financial institutions. The 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. The Fund may borrow money for temporary or emergency (not leveraging) purposes. The Fund will not make any additional investments while borrowings exceed 5% of its total assets. The Company's Board of Directors can change the investment objective of the Fund. However, shareholders will be given 30 days notice before any change is made. 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. . 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. . Lending the 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. 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, -14- high portfolio turnover (generally considered over 100%) could result in the realization of taxable capital gains. Year 2000 -- The Fund, like any business, could be affected if the computer systems on which it relies do not properly process information beginning on January 1, 2000. While Year 2000 issues could have a negative effect on the Fund, Numeric is currently working to avoid such problems. The Company is also working with other systems providers and vendors to determine their systems' ability to handle Year 2000 problems. There is no guarantee, however, that systems will work properly on or after January 1, 2000. Year 2000 problems may also hurt issuers whose securities the Fund holds or securities markets generally. Risk/Return Information The chart and table below give you a picture of the Fund's long-term performance. 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. As of 12/31 Annual Total Returns [BAR CHART APPEARS HERE] 1998 ---- 10.78% Year to date total return for the nine months ended September 30, 1999: ___% Best Quarter: 41.35% (quarter ended June 30, 1998) Worst Quarter: 35.55% (quarter ended September 30, 1998) As of 12/31/98 Average Annual Total Returns - Comparison 1 Year Since Inception ------ --------------- n/i numeric investors Larger Cap Value 10.78% 10.75% Fund* Russell 1000 Value Index** ___% ___% * Commenced operations on December 9, 1997. ** The Russell 1000 Index consists of the 1,000 largest securities in the Russell 3000 Index as ranked by total market capitalization. This index is segmented into growth and value categories. The Russell 1000 Value Index contains stocks from the Russell 1000 with less than average growth orientation. Companies in this index generally have low price to book and price/earnings ratios, higher dividend yields, and lower forecasted growth values. -15- 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. Annual Fund Operating Expenses (expenses that are deducted from Fund assets) Management fees[+]................................. 0.75% Rule 12b-1 fees.................................... None Other expenses..................................... 1.45% ----- Total annual Fund operating expenses............... 2.20% Fee waivers*....................................... (1.20%) ----- Net expenses....................................... 1.00% ===== [+ Until January 1, 2001, Numeric is entitled to a management fee of 0.75% of the Fund's average daily net assets. Thereafter, 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. See "Management-Investment Adviser" for a further discussion.] * Numeric has agreed that until December 31, 2000, it will waive advisory fees and reimburse expenses to the extent that total annual Fund operating expenses exceed 1.00%. 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. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses or fee waivers and redemption at the end of each period. 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 ------ ------- ------- -------- $-- $-- $-- $-- The above example is for comparison purposes only and is not a representation of the Fund's actual expenses and returns, either past or future. -16- n/i numeric investors SMALL CAP VALUE FUND Ticker Symbol: NISV 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 65% of its total assets in common stock of companies with market capitalizations of $1.5 billion or less. Numeric determines its stock selection decisions for the Fund primarily on the basis of its Value Stock Model. 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. The Fund may lend its portfolio securities to financial institutions. The 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. The Fund may borrow money for temporary or emergency (not leveraging) purposes. The Fund will not make any additional investments while borrowing s exceeds 5% of its total assets. The Company's Board of Directors can change the investment objective of the Fund. However, shareholders will be given 30 days notice before any change is made. 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. . Lending the 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. -17- 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 (generally considered over 100%) could result in the realization of taxable capital gains. Year 2000 -- The Fund, like any business, could be affected if the computer systems on which it relies do not properly process information beginning on January 1, 2000. While Year 2000 issues could have a negative effect on the fund, Numeric is currently working to avoid such problems. The Company is also working with other systems providers and vendors to determine their systems' ability to handle Year 2000 problems. There is no guarantee, however, that systems will work properly on or after January 1, 2000. Year 2000 problems may also hurt issuers whose securities the Fund holds or securities markets generally. 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. Annual Fund Operating Expenses (expenses that are deducted from Fund assets) Management fees[+]................................... 0.75% Rule 12b-1 fees...................................... None Other expenses....................................... 1.06% ----- Total annual Fund operating expenses................. 1.81% Fee waivers*......................................... (0.81%) ----- Net expenses......................................... 1.00% ===== [+ Until January 1, 2001, Numeric is entitled to a management fee of 0.75% of the Fund's average daily net assets. Thereafter, 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. See "Management-Investment Adviser" for a further discussion.] * Numeric has agreed that until December 31, 2000, it will waive advisory fees and reimburse expenses to the extent that total annual Fund operating expenses exceed 1.00%. 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. We are assuming an initial investment of $10,000, 5% total return each year with no changes in operating expenses or fee waivers and redemption at the end of each period. The table below shows what you would pay if you invested $10,000 in the Fund over the various time periods indicated. 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 ------ ------- ------- -------- $-- $-- $-- $-- The above example is for comparison purposes only and is not a representation of the Fund's actual expenses and returns, either past or future. -18- MANAGEMENT Investment Adviser Numeric Investors L.P. 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 over $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 Investor's Portfolio Management Department, which is subject to the supervision of Mark F. Engerman, CFA. Mr. Engerman received a BS in Applied Mathematics and Economics from Brown University. 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, 1999, for its advisory services to the n/i numeric investors Micro Cap Fund, n/i numeric investors Growth Fund, n/i numeric investors Mid Cap Fund n/i numeric investors Larger Cap Value Fund, and n/i numeric investors Small Cap Value Fund, Numeric received investment advisory fees of ___%, ___%, ___%, ___% and ___%, respectively, of each Fund's average daily net assets, after fee waivers and reimbursements, if any. [Until January 1, 2001, Numeric is entitled to a management fee of 0.75% of each Fund's average daily net assets before fee waivers and expense reimbursements, if any. Thereafter, Numeric is entitled to a performance based fee. The current fee of 0.75% would only increase if performance exceeds benchmark by more than 4% in a given 12-month period and would be less than the current fee if performance does not exceed benchmark by 3% in a given 12-month period. 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 Micro Cap, Growth, MidCap, Larger Cap Value and Small Cap Value Funds is the Russell 2000 Growth Index, Russell 2500 Growth Index, S&P Mid Cap 400 Index, Russell 1000 Value Index and Russell 2000 Value Index, respectively.] Other Service Providers The following chart shows the Funds' other service providers and includes their addresses and principal activities. -19-
========================================= Shareholders ========================================= =================================== =================================== Distribution and Shareholder Principal Distributor Transfer Agent Services Provident Distributors, Inc. PFPC Inc. Four Falls Corporate Center, 6th Fl. 400 Bellevue Parkway West Conshohocken, PA 19428 Wilmington, DE 19809 Distributes shares of the Funds. Handles shareholder services, including record-keeping and statements, distribution of dividends and processing of buy and sell requests. =================================== =================================== =================================== =================================== Asset Management Investment Adviser Custodian n/i numeric investors lp/(R)/ Custodial Trust Company One Memorial Drive 101 Carnegie Center Cambridge, MA 02142 Princeton, NJ 05840 Manages each Fund's business and Holds each Fund's assets, investment activities. settles all portfolio trades and collects most of the valuation data for calculating each Fund's net asset value ("NAV"). =================================== =================================== =================================== Fund Operations Co-Administrator Bear Stearns Funds Management Inc. 575 Lexington Avenue - 9th Floor New York, NY 10022 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 Fund's activities. =========================================
-20- 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 held by a Fund are valued using the closing price or the last sale price on a national securities exchange or on the NASDAQ National Market System where they are traded. If there were no sales on that day or the securities are traded on other over-the-counter markets, the mean of the bid and asked prices is used. 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. 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 8966 Wilmington, DE 19899-8966 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 $10.00 may be assessed. 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 must be given to the Transfer Agent at 1-800-348-5031 -21- 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), 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 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. 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, PDI, PFPC, 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 -22- 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 PFPC at (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 PFPC 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 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. -23- 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, if you redeem Shares held for less than six months, a transaction fee of 1% of the net asset value of the Shares redeemed at the time of redemption will be charged. This additional transaction fee is paid to each 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. Redemption By Mail. Your redemption requests should be addressed to n/i numeric investors family of funds, c/o PFPC Inc., P.O. Box 8966, Wilmington, DE 19899- 8966 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. 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 -24- 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. 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, PDI, PFPC, 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. Transaction Fee on Certain Redemptions of the Funds. The Funds require the payment of a transaction fee on redemptions of Shares held for less than six months equal to 1.00% of the net asset value of such Shares redeemed at the time of 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. The purpose of the additional transaction fee is to indirectly allocate transaction costs associated with redemptions to those investors making redemptions after holding their shares for a short period, thus protecting existing shareholders. 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 1.00% 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. 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 -25- 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 business 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 PFPC's receipt of a request for an exchange. An exchange of Shares held for less than six months (with the exception of Shares purchased through dividend reinvestment or the reinvestment of capital gains) will be subject to the 1.00% 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 family fund, the dollar value of Shares acquired must equal or exceed the Company's minimum for a new account; if to an existing account, the dollar value must 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 -26- 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 just before a distribution, the purchase price will reflect the amount of the upcoming distribution, but you will be taxable on the entire amount of the distribution received, even though, as an economic matter, the distribution simply constitutes a return of capital. 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.) 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. 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) will not be 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. The Company may be required to withhold federal income tax at a rate of 31% ("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 Company with your correct taxpayer identification number, -27- (ii) the Internal Revenue Service ("IRS") notifies the Company that you have failed to report properly certain interest and dividends 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. State and Local Taxes. Shareowners 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 or interest on securities of the particular state or localities within the state. Shareowners should consult their tax advisers regarding the tax status of distributions in their state and locality. -28- FINANCIAL HIGHLIGHTS The financial information in the table below shows the Funds' financial performance for the periods indicated. Certain information reflects results for a single Fund share. The term "Total 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. These figures have been ____ by ______, the Company's _______. The ______ report, along with the Funds' _______, are included in the Funds' _________, which is available upon request (see back cover for ordering instructions). FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout Each Period)
MICRO CAP FUND GROWTH FUND ==================================================================================================================================== Year Year Year Period Year Year Year Period Ended Ended Ended 6/3/96* to Ended Ended Ended 6/3/96* to 8/31/99 8/31/98 8/31/97 8/31/96 8/31/99 8/31/98 8/31/97 8/31/96 ================================================================================= Net asset value, beginning of period $ 18.47 $ 11.67 $ 12.00 $ 16.29 $ 11.84 $ 12.00 ------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income (0.07) (0.01) 0.01 (0.07) (0.04) 0.01 Net realized and unrealized gain/(loss) on securities (3.23) 6.82 (0.34) (3.98) 4.50 (0.17) ------- -------- -------- -------- -------- -------- Total from investment operations (3.30) 6.81 (0.33) (4.05) 4.46 (0.16) ------- -------- -------- -------- -------- -------- Less Distributions: Distributions from net investment income -- (0.01) -- -- (0.01) -- Distributions from realized capital gains (2.65) -- -- (2.49) -- -- ------- -------- -------- -------- -------- -------- Total distributions (2.65) (0.01) -- (2.49) (0.01) -- ------- -------- -------- -------- -------- -------- Net asset value, end of period $ 12.52 $ 18.47 $ 11.67 $ 9.75 $ 16.29 $ 11.84 ======= ======== ======== ======== ======== ======== Total return (20.74)% 58.41% (2.75)% (29.03)% 37.69% (1.33)% ======= ======== ======== ======== ======== ======== Ratios/Supplemental Data Net assets, end of period (000) $99,266 $142,119 $ 14,100 $ 77,840 $117,724 $ 26,756 Ratios of expenses to average net assets: After advisory/administration fee waivers 1.00% 1.00% 1.00%** 1.00% 1.00% 1.00%** Before advisory/administration fee waivers 1.23% 1.45% 3.40% 1.24% 1.40% 2.62% Ratios of net investment income to average net assets After advisory/administration fee waivers (0.41)% (0.06)% 0.73%** (0.50)% (0.38)% 0.71%** Portfolio turnover rate 408.70% 233.49% 42.92% 338.40% 266.25% 19.21% ====================================================================================================================================
* Commenced operations. ** Annualized. -29-
SMALL CAP LARGER CAP VALUE MID CAP FUND VALUE FUND FUND ==================================================================================================================================== Year Year Year Period Year Period Period Ended Ended Ended 6/3/96* to Ended 12/9/97* to __/__98* to 8/31/99 8/31/98 8/31/97 8/31/96 8/31/99 8/31/98 8/31/99 ======================================================================================= Net asset value, beginning of period $ 17.16 $ 11.56 $ 12.00 $ 12.00 -------- -------- -------- -------- Income from investment operations: Net investment income 0.05 (0.08) 0.03 0.06 Net realized and unrealized gain/(loss) on securities (1.24) 5.58 (0.47) (1.22) -------- -------- -------- -------- Total from investment operations (1.19) 5.66 (0.44) (1.16) -------- -------- -------- -------- Less Distributions: Distributions from net investment income (0.06) (0.06) -- -- Distributions from realized capital gains (2.61) -- -- -- -------- -------- -------- Total distributions (2.67) (0.06) -- -- -------- -------- -------- Net asset value, end of period $ 13.30 $ 17.16 $ 11.56 $ 10.84 ======== ======== ======== ======== Total return (8.97)% 49.11% (3.67)% (9.67)% ======== ======== ======== ======== Ratios/Supplemental Data Net assets, end of period (000) $110,176 $ 52,491 $ 3,813 $ 25,257 Ratios of expenses to average net assets: After advisory/administration fee waivers 1.00% 1.00% 1.00%** 1.00%** Before advisory/administration fee waivers 1.26% 1.81% 8.98% 2.20%** Ratios of net investment income to average net assets After advisory/administration fee waivers (0.36)% (0.79)% 1.89%** 1.26%** Portfolio turnover rate 341.73% 263.83% 5.25% 166.81% ====================================================================================================================================
* Commenced operations. ** Annualized. -30- n/i numeric investors family of funds 1-800-numeric (686-3742) ACCOUNT APPLICATION Important Information: Please read before completing this Account Application. . Retirement Accounts. Do not use this form to open an individual retirement plan account (such as an IRA). For an IRA application or help with this Application, please call 1-800-numeric (686-3742). . Internet Transactions. If you wish to engage in Internet transactions, you must complete and return an additional Internet account application, which can be obtained by contacting Numeric on their website at http://www.numeric.com or by calling 1-800-numeric (686-3742). - -------------------------------------------------------------------------------- 1. ACCOUNT REGISTRATION: (Please check the appropriate box(es) below.) - -------------------------------------------------------------------------------- [_] Individual [_] Joint Tenant ________________________________________________________________________________ NAME ________________________________________________________________________________ SOCIAL SECURITY NUMBER OF PRIMARY OWNER ________________________________________________________________________________ NAME OF JOINT OWNER (if applicable) ________________________________________________________________________________ JOINT OWNER SOCIAL SECURITY NUMBER For joint accounts, the account registrants will be joint tenants with right of survivorship and not tenants in common unless tenants in common or community property registrations are requested. GIFT TO MINOR (if applicable): [_] Uniform Gifts/Transfers to Minor's Act ________________________________________________________________________________ NAME OF ADULT CUSTODIAN (ONLY ONE PERMITTED) ________________________________________________________________________________ NAME OF MINOR (ONLY ONE PERMITTED) ________________________________________________________________________________ MINOR'S SOCIAL SECURITY NUMBER DATE OF BIRTH CORPORATION, PARTNERSHIP, TRUST OR OTHER ENTITY (if applicable): ________________________________________________________________________________ ________________________________________________________________________________ NAME OF CORPORATION, PARTNERSHIP, OR OTHER ________________________________________________________________________________ NAME(S) OF TRUSTEE(S) ________________________________________________________________________________ TAXPAYER IDENTIFICATION NUMBER ________________________________________________________________________________ TRUST DATE - -------------------------------------------------------------------------------- 2. MAILING ADDRESS: - -------------------------------------------------------------------------------- ________________________________________________________________________________ STREET OR P.O. BOX APARTMENT NUMBER ________________________________________________________________________________ CITY STATE ZIP CODE ( ) ( ) - -------------------------------------------------------------------------------- DAY PHONE NUMBER EVENING PHONE NUMBER E-MAIL ADDRESS (REQUIRED FOR INTERNET ACCESS; OTHERWISE OPTIONAL BUT RECOMMENDED) - -------------------------------------------------------------------------------- 3. INVESTMENT AMOUNT: - -------------------------------------------------------------------------------- Minimum initial investment of $3,000 per Fund or $1,000 for an automatic investment plan. [_] n/i numeric investors Micro Cap (50) $___________ [_] n/i numeric investors Growth (51) $___________ [_] n/i numeric investors Mid Cap (52) $___________ [_] n/i numeric investors Larger Cap Value (53) $___________ [_] n/i numeric investors Small Cap Value (54) $___________ Make the check payable to n/i numeric investors family of funds. $ ============ Shareholders may not purchase shares of the n/i numeric investors Funds with a check issued by a third party and endorsed over to the Funds. Checks for investment must be made payable to the n/i numeric investors family of funds. - -------------------------------------------------------------------------------- 4. DISTRIBUTION OPTIONS: - -------------------------------------------------------------------------------- NOTE: Dividends and capital gains may be reinvested or paid by check. If no options are selected below, both dividends and capital gains will be reinvested in additional Fund shares. Dividends [_] Pay by check [_] Reinvest Capital Gains [_] Pay by check [_] Reinvest Please check one of the following options: [_] Please mail checks to Address of Record (Named in Section 2) [_] Please electronically credit my Bank of Record (Named in Section 8) - -------------------------------------------------------------------------------- 5. TELEPHONE EXCHANGE AND REDEMPTION: - -------------------------------------------------------------------------------- To use this option, you must initial the appropriate line below. I authorize the Transfer Agent to accept instructions from any person to exchange shares in my account(s) by telephone in accordance with the procedures and conditions set forth in the Fund's current prospectus. ________ _____________ Exchange shares for shares of another n/i initial joint initial numeric investors Fund. ________ _____________ Redeem shares, and send the proceeds to the initial joint initial address of record (not applicable to IRA accounts). - -------------------------------------------------------------------------------- 6. AUTOMATIC INVESTMENT PLAN (if applicable): - -------------------------------------------------------------------------------- Please attach an unsigned, voided check. The Automatic Investment Plan ($1,000 minimum initial investment), makes possible regularly scheduled purchases of Fund shares. The Fund's Transfer Agent can arrange for an amount of money selected by you ($100 minimum to be deducted from your checking account and used to purchase shares of a specified n/i numeric investors Fund. Please debit $______ from my checking account (named below) on or about the 20th of every month. $______________ into the Micro Cap Fund ___________ Start Month. ------------------ $100 minimum $______________ into the Growth Fund ___________ Start Month. ------------------ $100 minimum $______________ into the Mid Cap Fund ___________ Start Month. ------------------ $100 minimum $______________ into the Larger Cap Value Fund ___________ Start Month. ------------------ $100 minimum $______________ into the Small Cap Value Fund ___________ Start Month. ------------------ $100 minimum - -------------------------------------------------------------------------------- 7. SYSTEMATIC WITHDRAWAL PLAN (if applicable choose A or B): - -------------------------------------------------------------------------------- . A minimum account value of $10,000 in a single account is required to establish a Systematic Withdrawal Plan . Payments will be made on or near the 25th of the month A. For deposit of redemption proceeds into your Bank account. Please attach an unsigned, voided check To select this option please fill out the information below: Fund Name_______________________ Amount____________________ Startup Month___________________ Frequency Options: [_] Annually [_] Monthly [_] Quarterly B. For transfer to an existing n/i numeric investors Fund account: (For transfers from more than one existing account, please call 1-800- numeric (686-3742)) To select this option please fill out the information below: I authorize PFPC Inc. to withdraw a total of $____________($50 minimum per Fund) from my ________________________________________________________________________ (Fund Name) (Account Number) to purchase shares of the following Funds 1) _________________________(Fund Name) $________________ 2) _________________________(Fund Name) $________________ 3) _________________________(Fund Name) $________________ 4) _________________________(Fund Name) $________________ Startup Month________________ Frequency Options: [_] Annually [_] Monthly [_] Quarterly - -------------------------------------------------------------------------------- 8. BANK OF RECORD - -------------------------------------------------------------------------------- Complete only if you chose to have your dividends and/or capital gains electronically credited to your bank account (Section 4) or you are using Automatic Investment Plan (Section 6) or Systematic Withdrawal Plan (Section 7A) ________________________________________________________________________________ BANK NAME ________________________________________________________________________________ STREET ADDRESS OR P.O. BOX ________________________________________________________________________________ CITY STATE ZIP CODE ________________________________________________________________________________ BANK ABA NUMBER BANK ACCOUNT NUMBER - -------------------------------------------------------------------------------- 9. SIGNATURES: - -------------------------------------------------------------------------------- The undersigned warrants that I (we) have full authority and, if a natural person, I (we) am (are) of legal age to purchase shares pursuant to this Account Information Form, and I (we) have received a current prospectus for the n/i numeric investors Fund(s) in which I (we) am (are) investing. Under the Interest and Dividend Tax Compliance Act of 1983, the Fund is required to have the following certification: Under penalties of perjury, I certify that: (1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service that I am subject to 31% backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. Note: You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. The Internal Revenue Service does not require your consent to any provision of this document other than the certification required to audit backup withholding. ________________________________________________________________________________ SIGNATURE OF APPLICANT DATE ________________________________________________________________________________ PRINT NAME TITLE (IF APPLICABLE) ________________________________________________________________________________ SIGNATURE OF JOINT OWNER DATE ________________________________________________________________________________ PRINT NAME TITLE (IF APPLICABLE) (If you are signing for a corporation, you must indicate corporate office or title. If you wish additional signatories on the account, please include a corporate resolution. If signing as a fiduciary, you must indicate capacity.) For information on additional options, such as IRA Applications, rollover requests for qualified retirement plans, or for wire instructions, please call us at 1-800-numeric (686-3742). For information on new or existing accounts call 1-800-348-5031. Mail completed Account Application and check to: n/i numeric investors family of funds c/o PFPC Inc. P.O. Box 8966 Wilmington, DE 19899-8966 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, economic trends and fund strategies for the last fiscal year. Statement of Additional Information (SAI) A Statement of Additional Information, dated December 1, 1999 has been filed with the Securities and Exchange Commission (SEC). 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 Post Office Address: n/i numeric investors family of funds c/o PFPC, Inc. PO Box 8950 Wilmington, DE 19899-8950 Street Address: n/i numeric investors family of funds c/o PFPC, Inc. 400 Bellevue Parkway Wilmington, DE 19809 Securities and Exchange Commission (SEC) You may also view information about The RBB Fund, Inc. and the n/i numeric investors family of funds, including the SAI, by visiting the SEC Web site (http://www.sec.gov) or the SEC's Public Reference Room in Washington, D.C. Information about the operation of the public reference room can be obtained by calling the SEC directly at 1-800-SEC-0330. Copies of this information can be obtained, for a duplicating fee, by writing to the Public Reference Section of the SEC, Washington, D.C. 20549-6009. INVESTMENT COMPANY ACT FILE NO. 811-05518 n/i numeric investors Micro Cap Fund n/i numeric investors Growth Fund n/i numeric investors Mid Cap Fund n/i numeric investors Larger Cap Value Fund n/i numeric investors Small Cap Value Fund (Investment Portfolios of The RBB Fund, Inc.) STATEMENT OF ADDITIONAL INFORMATION DECEMBER 1, 1999 This Statement of Additional Information ("SAI") provides information about the n/i numeric investors Micro Cap Fund (the "Micro Cap Fund"), the n/i numeric investors Growth Fund (the "Growth Fund"), the n/i numeric investors Mid Cap Fund (the "Mid Cap Fund") (formerly, the n/i numeric investors Growth & Value Fund), the n/i numeric investors Larger Cap Value Fund (the "Larger Cap Value Fund") and the n/i numeric investors Small Cap Value Fund (the "Small Cap Value Fund") (together, 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 1, 1999 (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, 1999. 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. ("Numeric") by calling toll-free (800) NUMERIC [(800) 686-3742]. TABLE OF CONTENTS PAGE ---- GENERAL INFORMATION................................................. 3 INVESTMENT INSTRUMENTS AND POLICIES................................. 3 INVESTMENT LIMITATIONS.............................................. 16 MANAGEMENT OF THE COMPANY........................................... 19 Directors and Officers......................................... 19 Directors' Compensation........................................ 20 INVESTMENT ADVISORY, DISTRIBUTION AND SERVICING ARRANGEMENTS........ 21 Advisory Agreements............................................ 21 Custodian Agreements........................................... 23 Transfer Agency Agreements..................................... 24 Co-Administration Agreements................................... 24 Administrative Services Agent.................................. 25 Distributor.................................................... 26 FUND TRANSACTIONS................................................... 27 ADDITIONAL INFORMATION CONCERNING RBB SHARES........................ 29 PURCHASE AND REDEMPTION INFORMATION................................. 31 VALUATION OF SHARES................................................. 32 PERFORMANCE INFORMATION............................................. 33 TAXES............................................................... 36 MISCELLANEOUS....................................................... 38 Counsel........................................................ 38 Independent Accountants........................................ 38 Banking Laws................................................... 38 FINANCIAL STATEMENTS................................................ 39 APPENDIX A.......................................................... A-1 GENERAL INFORMATION RBB was organized as a Maryland corporation on February 29, 1988 and is an open-end management investment company currently operating or proposing to operate _____ separate investment portfolios. This Statement of Additional Information pertains to Shares representing interests in the Funds offered by the Prospectus dated December 1, 1999. 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. 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 -2- 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 -3- 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. 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 -4- 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 -5- 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. -6- 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. 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. 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. -7- 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 -8- 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.) 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 Investment Company Act of 1940 (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. 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. 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. -9- 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). -10- 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 Many European countries are in the process of adopting a single European currency, the "euro". On January 1, 1999, the euro became legal tender for all countries participating in the Economic and Monetary Union ("EMU"). A new European Central Bank was created to manage the monetary policy of the new unified region. On the same date, the exchange rates were irrevocably fixed between the EMU member countries. National currencies will continue to circulate until they are replaced by euro coins and bank notes by the middle of 2002. These changes are likely to significantly impact the European capital markets in which the Funds may invest and may result in a Fund facing additional risks in pursuing its investment objective. These risks, which include, but are not limited to, uncertainty as to the proper tax treatment of the currency conversion, volatility of currency exchange rates as a result of the conversion, uncertainty as to capital market reaction, conversion costs that may affect issuer profitability and creditworthiness, and lack of participation by some European countries, may increase the volatility of a Fund's net asset value per share. 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. -11- 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 -12- 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. 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 that 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 -13- 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 or 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. All else being equal, investors will earn better returns investing tax- deferred assets in active strategies, while using lower turnover passive strategies for taxable investments. 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 -14- 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 -15- 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). -16- MANAGEMENT OF THE COMPANY Directors and Officers The directors and executive officers of RBB, their ages, business addresses and principal occupations during the past five years are:
Position Principal Occupation Name, Address and Age with RBB During Past Five Years - ------------------------------------------------------------------------------------------------------------- *Arnold M. Reichman - 50 Director Chief Operating Officer of Credit Suisse (formerly 466 Lexington Avenue Warburg Pincus) Asset Management, Inc.; Executive 12/th/ Floor Officer and Director of Counsellors Securities Inc.; New York, NY 10017 Director/Trustee of various investment companies advised by Warburg Pincus Asset Management, Inc.; Prior to 1997, Managing Director of Warburg Pincus Asset Management, Inc. *Robert Sablowsky - 60 Director Senior Vice President of Fahnestock Co., Inc. (a Fahnestock & Company, Inc. registered broker-dealer); Prior to October 1996, 125 Broad Street Executive Vice President of Gruntal & Co., Inc. (a New York, NY 10004 registered broker-dealer) Francis J. McKay - 62 Director Since 1963, Executive Vice President, Fox Chase Fox Chase Cancer Institute Cancer Center (biomedical research and medical care). 7701 Burholme Avenue Philadelphia, PA 19111 Marvin E. Sternberg - 64 Director Since 1974, Chairman, Director and President, Moyco Moyco Technologies, Inc. Industries, Inc. (manufacturer of dental supplies and 200 Commerce Drive precision coated abrasives). Montgomeryville, PA 18936 Julian A. Brodsky - 65 Director Director and Vice Chairman, since 1969 Comcast 1500 Market Street Corporation (cable television and communications); 35th Floor Director, Comcast U.K. Philadelphia, PA 19102 Donald van Roden - 74 Director and Self-employed businessman. From February 1980 to 1200 Old Mill Lane Chairman of March 1987, Vice Chairman, SmithKline Beecham Wyomissing, PA 19610 the Board Corporation (pharmaceuticals); Director AAA Mid-Atlantic (auto service); Director, Keystone Insurance Co.
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Position Principal Occupation Name, Address and Age with RBB During Past Five Years - ------------------------------------------------------------------------------------------------------------- Edward J. Roach - 74 President and Certified Public Accountant; Vice Chairman of the Suite 100 Treasurer Board, Fox Chase Cancer Center; Trustee Emeritus, Bellevue Park Corporate Pennsylvania School for the Deaf; Trustee Emeritus, Center Immaculata College; President and Treasurer of 400 Bellevue Parkway Municipal Fund for New York Investors, Inc. (advised Wilmington, DE 19809 by BlackRock Institutional Management); Vice President and Treasurer of various investment companies advised by BlackRock Institutional Management Corporation; Treasurer of the Chestnut Street Exchange Fund. Morgan R. Jones - 59 Secretary Chairman, law firm of Drinker Biddle & Reath LLP; Drinker Biddle & Reath LLP Director, Nobel Learning Communities, Inc.; One Logan Square Secretary, Petroferm, Inc. 18/th/ and Cherry Streets Philadelphia, PA 19103
* Each of Mr. Sablowsky and Mr. Reichman is an "interested person" of RBB, as that term is defined in the 1940 Act, by virtue of his position with Fahnestock Co., Inc. and Counsellors Securities Inc., respectively, each a registered broker-dealer. Messrs. McKay, Sternberg and Brodsky are members of the Audit Committee of the Board of Directors. The Audit Committee, among other things, reviews results of the annual audit and recommends to RBB the firm to be selected as independent auditors. Messrs. Reichman, McKay and van Roden are members of the Executive Committee of the Board of Directors. The Executive Committee may generally carry on and manage the business of RBB when the Board of Directors is not in session. Messrs. McKay, Sternberg, Brodsky and van Roden are members of the Nominating Committee of the Board of Directors. The Nominating Committee recommends to the Board all persons to be nominated as directors of RBB. Directors' Compensation RBB pays directors who are not "affiliated persons" (as that term is defined in the 1940 Act) of any investment adviser or sub-adviser of the Fund or the Distributor and Mr. Sablowsky, who is considered to be an affiliated person, $12,000 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, 1999, each of the following members of the Board of Directors received compensation from RBB in the following amounts: -18-
Aggregate Pension or Retirement Compensation from Benefits Accrued as Estimated Annual Benefits Name of Person/Position Registrant Part of Fund Expenses Upon Retirement - -------------------------------------------------------------------------------------------------------------------- Julian A. Brodsky, Director $___ N/A N/A Francis J. McKay, Director $___ N/A N/A Arnold M. Reichman, Director $ 0 N/A N/A Robert Sablowsky, Director $___ N/A N/A Marvin E. Sternberg, Director $___ N/A N/A Donald van Roden, Director $___ N/A N/A and Chairman
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. Drinker Biddle & Reath LLP, of which Mr. Jones is a partner, receives legal fees as counsel to RBB. No officer, director or employee of Numeric or the Distributor currently receives any compensation from RBB. CONTROL PERSONS As of September 7, 1999, (except with respect to the Bedford Municipal Money Market Fund and Bedford Government Obligations Fund for which information is provided as of September 3, 1999 and September 8, 1999, respectively) to the Company's knowledge, the following named persons at the addresses shown below owned of record approximately 5% or more of the total outstanding shares of the class of the Company indicated below. See "Additional Information Concerning Fund Shares" above. The Company does not know whether such persons also beneficially own such shares.
- ------------------------------------------------------------------------------------------------ FUND NAME SHAREHOLDER NAME AND PERCENTAGE OF ADDRESS FUND HELD - ------------------------------------------------------------------------------------------------ BEDFORD MUNICIPAL MONEY Gabe Nechamkin 16.7% MARKET 27 Muchmore Road Harrison, NY 10528-1109 - ------------------------------------------------------------------------------------------------ BEDFORD GOVERNMENT St. Dominic Health Service Improvement Fund 6.3% OBLIGATIONS FUND D/NOYES Attn: Frank Quiriconi 969 Lakeland Drive Jackson, MS 39216-4602 - ------------------------------------------------------------------------------------------------ CASH PRESERVATION MONEY Harold T. Erfer 6.645% MARKET 414 Charles Ln. Wynnewood, PA 19096 - ------------------------------------------------------------------------------------------------ Marian E. Kunz 16.328% 52 Weiss Ave. Flourtown, PA 19031 - ------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------ FUND NAME SHAREHOLDER NAME AND PERCENTAGE OF ADDRESS FUND HELD - ------------------------------------------------------------------------------------------------ Karen M. McElhinny and Contribution Account 8.611% 4943 King Arthur Dr. Erie, PA 16506 - ------------------------------------------------------------------------------------------------ Luanne M. Garvey and Robert J. Garvey 13.465% 2729 Woodland Ave. Trooper, PA 19403 - ------------------------------------------------------------------------------------------------ John Robert Estrada and Shirley Ann Estrada 5.594% 1700 Raton Dr. Arlington, TX 76018 - ------------------------------------------------------------------------------------------------ Dominic and Barbara Pisciotta and Successors 13.381% in Tr. Under the Dominic Trst. And Barbara Pisciotta Caring Tr. Dtd. 01/24/92 207 Woodmere Way St. Charles, MO 63303 - ------------------------------------------------------------------------------------------------ Michael W. Preble 8.576% 1505 W. Cheyenne Dr. Chandler, AZ 85224 - ------------------------------------------------------------------------------------------------ SAMSON STREET MONEY MARKET Saxon and Co. 76.270% FBO Paine Webber A/C 32 32 400 4000038 P.O. Box 7780 1888 Phila., PA 19182 - ------------------------------------------------------------------------------------------------ Saxon and Co. 23.730% c/o PNC Bank, N. A. F3-F076-02-2 200 Stevens Drive Ste. 260/ACI Lester, PA 19113 - ------------------------------------------------------------------------------------------------ CASH PRESERVATION Gary L. Lange 76.032% MUNICIPAL MONEY MARKET and Susan D. Lange JT TEN 837 Timber Glen Ln. Ballwin, Mo 63021-6066 - ------------------------------------------------------------------------------------------------ RBB SELECT MONEY MARKET Warburg Pincus Capital Appreciation Fund 15.247% Attn. Joe Gajewski / PFPC, Inc. MS W3-F400-03-2 400 Bellevue Parkway Wilmington, DE 19809 - ------------------------------------------------------------------------------------------------ Warburg Pincus Emerging Growth Fund 30.420% Attn. Joe Gajewski / PFPC, Inc. MS W3-F400-03-2 400 Bellevue Parkway Wilmington, DE 19809 - ------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------ FUND NAME SHAREHOLDER NAME AND PERCENTAGE OF ADDRESS FUND HELD - ------------------------------------------------------------------------------------------------ Warburg Pincus Growth & Income Fund 5.866% Attn. Joe Gajewski / PFPC, Inc. MS W3-F400-03-2 400 Bellevue Parkway Wilmington, DE 19809 - ------------------------------------------------------------------------------------------------ Warburg Pincus Trust Small Company Growth 14.434% Portfolio Attn. Joe Gajewski / PFPC, Inc. MS W3-F400-03-2 400 Bellevue Parkway Wilmington, DE 19809 - ------------------------------------------------------------------------------------------------ Warburg Pincus Trust-International Equity 5.161% Portfolio Attn. Joe Gajewski / PFPC, Inc. MS W3-F400-03-2 400 Bellevue Parkway Wilmington, DE 19809 - ------------------------------------------------------------------------------------------------ Warburg Pincus Japan Small Company Fund 13.276% Attn. Joe Gajewski / PFPC, Inc. MS W3-F400-03-2 400 Bellevue Parkway Wilmington, DE 19809 - ------------------------------------------------------------------------------------------------ N/I MICRO CAP FUND Charles Schwab & Co. Inc 13.705% Special Custody Account for the Exclusive Benefit of Customers Attn: Mutual Funds A/C 3143-0251 101 Montgomery St. San Francisco, CA 94104 - ------------------------------------------------------------------------------------------------ Janis Claflin, Bruce Fetzer and 10.725% Winston Franklin Robert Lehman Trst. The John E. Fetzer Institute, Inc. U/A DTD 06-1992 Attn: Christina Adams 9292 West KL Ave. Kalamazoo, MI 49009 - ------------------------------------------------------------------------------------------------ Louisa Stude Sarofim Foundation 5.715% DTD. 01/04/91 c/o Nancy Head 1001 Fannin 4700 Houston, TX 77002 - ------------------------------------------------------------------------------------------------ Public Inst. For Social Security 15.038% 1001 19th St., N. 16th Flr. Arlington, VA 22209 - ------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------- FUND NAME SHAREHOLDER NAME AND PERCENTAGE OF ADDRESS FUND HELD - ------------------------------------------------------------------------------------------------- N/I GROWTH FUND Charles Schwab & Co. Inc 7.211% Special Custody Account for the Exclusive Benefit of Customers Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104 - ------------------------------------------------------------------------------------------------ Citibank North America Inc. 39.964% Trst. Sargent & Lundy Retirement Trust DTD. 06/01/96 Mutual Fund Unit Bld. B Floor 1 Zone 7 3800 Citibank Center Tampa Tampa, FL 33610-9122 - ------------------------------------------------------------------------------------------------ Louisa Stude Sarofim Foundation 5.804% c/o Nancy Head DTD. 01/04/91 1001 Fannin 4700 Houston, TX 77002 - ------------------------------------------------------------------------------------------------ The John E. Fetzer Institute, Inc. 5.279% Attn. Christina Adams 9292 W. KL Ave. Kalamazoo, MI 49009 - ------------------------------------------------------------------------------------------------ U.S. Equity Investment Portfolio LP 10.152% 1001 N. US Hwy. One Suite 800 Jupiter, FL 33477 - ------------------------------------------------------------------------------------------------ N/I GROWTH AND VALUE FUND Charles Schwab & Co. Inc. 21.083% Special Custody Account for the Exclusive Benefit of Customers Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104 - ------------------------------------------------------------------------------------------------ National Investors Services Corp. 7.419% For the Exclusive Benefit of our Customers S. 55 Water St. 32/nd/ Floor New York, NY 10041-3299 - ------------------------------------------------------------------------------------------------ N/I LARGER CAP VALUE FUND Charles Schwab & Co. Inc 49.045% Special Custody Account for the Exclusive Benefit of Customers Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104 - ------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------ FUND NAME SHAREHOLDER NAME AND PERCENTAGE OF ADDRESS FUND HELD - ------------------------------------------------------------------------------------------------ FTC & Co. 9.119% Attn: Datalynx 241 Attn: Datalynx 273 P. O. Box 173736 Denver, CO 80217-3736 - ------------------------------------------------------------------------------------------------ NFSC FEBO 108-436631 9.896% FMT c/o Cust. IRA Rollover FBO Warren E. Shaw 84 Rye Rd. Rye, NY 10580 - ------------------------------------------------------------------------------------------------ N/I SMALL CAP VALUE FUND State Street Bank and Trust Company 53.794% FBO Yale Univ. Ret. Pl. for Staff Emp. State Street Bank & Tr. Co. Master Tr. Div. Attn: Kevin Sutton Solomon Williard Bldg. One Enterprise Dr. North Quincy, MA 02171 - ------------------------------------------------------------------------------------------------ Yale University 26.757% Trst. Yale University Ret. Health Bene. Tr. Attention: Seth Alexander 230 Prospect St. New Haven, CT 06511 - ------------------------------------------------------------------------------------------------ BOSTON PARTNERS LARGE CAP Shady Side Academy Endowment 5.426% FUND INST SHARES 423 Fox Chapel Rd. Pittsburgh, PA 15238 - ------------------------------------------------------------------------------------------------ Charles Schwab & Co., Inc. 7.016% Special Custody Account for Bene. of Cust. Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104 - ------------------------------------------------------------------------------------------------ Swanee Hunt and Charles Ansbacher 16.498% Trst. The Hunt Alternatives Fund C/o Elizabeth Alberti 168 Brattle St. Cambridge, MA 02138 - ------------------------------------------------------------------------------------------------ Union Bank of California 9.292% FBO Service Employees BP 610001265-01 P. O. Box 85484 San Diego, CA 92186 - ------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------- FUND NAME SHAREHOLDER NAME AND PERCENTAGE OF ADDRESS FUND HELD - --------------------------------------------------------------------------------------------------- US Bank National Association 16.898% FBO A-Dec Inc. DOT 093098 Attn: Mutual Funds A/C 97307536 P. O. Box 64010 St. Paul, MN 55164-0010 - ------------------------------------------------------------------------------------------------ Northern Trust Company 16.038% FBO AEFC Pension Trust A/C 22-53582 P. O. Box 92956 Chicago, IL 60675 - ------------------------------------------------------------------------------------------------ James B. Beam 5.017% Trst World Publishing Co. Pft Shr Trust P.O. Box 1511 Wenatchee, WA 98807 - ------------------------------------------------------------------------------------------------ BOSTON PARTNERS LARGE CAP Charles Schwab & Co. Inc. 65.878% FUND INVESTOR SHARES Special Custody Account for Bene. of Cust. Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104 - ------------------------------------------------------------------------------------------------ Jupiter & Co. 6.743% c/o Investors Bank PO Box 9130 FPG90 Boston, MA 02110 - ------------------------------------------------------------------------------------------------ BOSTON PARTNERS MID CAP MAC & CO. 5.560% VALUE FUND INST. SHARES A/C CHIF1001182 FBO Childrens Hospital LA P.O. Box 3198 Pittsburgh, PA 15230-3198 - ------------------------------------------------------------------------------------------------ John M. Pontius, Jr. 6.142% FBO Hartwick College West Street Queens, NY 13820 - ------------------------------------------------------------------------------------------------ MAC & CO. 7.859% A/C LEMF5044062 Mutual Funds Operations P.O. Box 3198 Pittsburgh, PA 15230-3198 - ------------------------------------------------------------------------------------------------ BOSTON PARTNERS MID CAP National Financial Svcs. Corp. for Exclusive 16.139% VALUE FUND INV SHARES Bene. of Our Customers Sal Vella 200 Liberty St. New York, NY 10281 - ------------------------------------------------------------------------------------------------
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- -------------------------------------------------------------------------------------------------- FUND NAME SHAREHOLDER NAME AND PERCENTAGE OF ADDRESS FUND HELD - -------------------------------------------------------------------------------------------------- Charles Schwab & Co. Inc. 50.979% Special Custody Account for Bene. of Cust. Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104 - ------------------------------------------------------------------------------------------------ BOSTON PARTNERS BOND FUND Boston Partners Asset Mgmt. L. P. 26.541% INSTITUTIONAL SHARES Attn: Jan Penney 28 State St. Boston, MA 02109 - ------------------------------------------------------------------------------------------------ Chiles Foundation 8.524% 111 S.W. Fifth Ave. Ste. 4050 Portland, OR 97204 - ------------------------------------------------------------------------------------------------ The Roman Catholic Diocese of 53.537% Raleigh, NC General Endowment 715 Nazareth St. Raleigh, NC 27606 - ------------------------------------------------------------------------------------------------ The Roman Catholic Diocese of 11.355% Raleigh, NC Clergy Trust 715 Nazareth St. Raleigh, NC 27606 - ------------------------------------------------------------------------------------------------ BOSTON PARTNERS BOND FUND Charles Schwab & Co. Inc 81.125% INVESTOR SHARES Special Custody Account for Bene. of Cust. Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104 - ------------------------------------------------------------------------------------------------ Stephen W. Hamilton 16.094% 17 Lakeside Ln. N. Barrington, IL 60010 - ------------------------------------------------------------------------------------------------ BOSTON PARTNERS Desmond J. Heathwood 8.330% MICRO CAP VALUE 41 Chestnut St. FUND- INSTITUTIONAL Boston, MA 02108 SHARES - ------------------------------------------------------------------------------------------------ Boston Partners Asset Mgmt. L. P. 65.899% Attn: Jan Penney 28 State St. Boston, MA 02109 - ------------------------------------------------------------------------------------------------ Wayne Archambo 6.623% 42 DeLopa Circle Westwood, MA 02090 - ------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------- FUND NAME SHAREHOLDER NAME AND PERCENTAGE OF ADDRESS FUND HELD - --------------------------------------------------------------------------------------------------- David M. Dabora 6.623% 11 White Plains Ct. San Anselmo, CA 94960 - ------------------------------------------------------------------------------------------------ BOSTON PARTNERS National Financial Services Corp. 30.999% MICRO CAP VALUE For the Exclusive Bene. of our Customers FUND- INVESTOR Attn: Mutual Funds 5/th/ Floor SHARES 200 Liberty St. 1 World Financial Center New York, NY 10281 - ------------------------------------------------------------------------------------------------ Charles Schwab & Co., Inc. 26.623% Special Custody Account for Bene. of Cust. Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104 - ------------------------------------------------------------------------------------------------ Scott J. Harrington 30.382% 54 Torino Ct. Danville, CA 94526 - ------------------------------------------------------------------------------------------------ BOSTON PARTNERS MARKET Boston Partners Asset Mgmt. L. P. 100.000% NEUTRAL FUND- Attn: Jan Penney INSTITUTIONAL SHARES 28 State St. Boston, MA 02109 - ------------------------------------------------------------------------------------------------ BOSTON PARTNERS MARKET Glenn P. Verrette and Laurie Jo Verrette 6.703% NEUTRAL FUND- INVESTOR Jt. Ten. Wros. SHARES 156 Osgood St. Andover, MA 01810 - ------------------------------------------------------------------------------------------------ Thomas Lannan and Kathleen Lannan 89.967% Jt. Ten. Wros. P. O. Box 312 Osterville, MA 02655 - ------------------------------------------------------------------------------------------------ SCHNEIDER SMALL CAP VALUE Arnold C. Schneider III 13.768% FUND SEP IRA 826 Turnbridge Rd. Wayne, PA 19087 - ------------------------------------------------------------------------------------------------ SCM Retirement Plan 5.276% Profit Sharing Plan 460 E. Swedesford Rd. Ste. 1080 Wayne, PA 19087 - ------------------------------------------------------------------------------------------------ Ronald L. Gault 5.451% IRA 439 W. Nelson St. Lexington VA 24450 - ------------------------------------------------------------------------------------------------ John Frederick Lyness 13.089% 81 Hillcrest Ave. Summit, NJ 07901 - ------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------- FUND NAME SHAREHOLDER NAME AND PERCENTAGE OF ADDRESS FUND HELD - ------------------------------------------------------------------------------------------------- Mark Shevitz 7.276% Rollover IRA 65 Wardell St. Rumson, NJ 07760 - ------------------------------------------------------------------------------------------------
As of September 7, 1999, the directors and officers as a group owned less than 1% of RBB's Shares. 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 Larger Cap Value Fund, which is dated December 1, 1997, and the Small Cap Value Fund, which is dated November 30, 1998. Under the Advisory Agreements, Numeric is entitled to receive a fee from each Fund calculated at an annual rate of 0.75% of a Fund's average daily net assets. Until December 31, 2000, Numeric has agreed to waive its fees to the extent necessary to maintain an annualized expense ratio for each Fund of 1.00%. There can be no assurance that Numeric will continue such waivers thereafter. [Until January 1, 2001, Numeric is entitled to a management fee of 0.75% of the Fund's average daily net assets. Thereafter, 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. The current fee of 0.75% would only increase if performance exceeds benchmark by more than 4% in a given 12-month period and would be less than the current fee if performance does not exceed benchmark by 3% in a given 12-month period.] [Under this arrangement, the investment advisory fee would never be greater than 1.35% nor less than 0.35% of a Fund's average daily net assets for the preceding month. The table below details the performance based fee arrangements.]
[Percentage Difference Between Fund Performance (Net of Expenses Including Advisory Performance Fees) and Percentage Change in Basic Adjustment Total Benchmark Index Fee Rate Advisory Fee --------------- --- ---- ------------ +9% or more...................... .85% .50% 1.35% +8% or more but less than +9%.... .85% .40% 1.25% +7% or more but less than +8%.... .85% .30% 1.15%
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+6% or more but less than +7%.... .85% .20% 1.05% +5% or more but less than +6%.... .85% .10% 0.95% +4% or more but less than +5%.... .85% None 0.85% +3% or more but less than +4%.... .85% -.10% 0.75% +2% or more but less than +3%.... .85% -.20% 0.65% +1% or more but less than +2%.... .85% -.30% 0.55% +0% or more but less than +1%.... .85% -.40% 0.45% Less than 0%..................... .85% -.50% 0.35%]
For the fiscal years ended August 31, 1997, 1998 and 1999, the Funds paid Numeric advisory fees and Numeric waived advisory fees as follows:
Advisory Fees Paid (after waivers and Fund reimbursements) Waivers Reimbursements - ------------------------------------------------------------------------------------------------------------------ Fiscal year ended August 31, 1999 Micro Cap $ $ $ Growth $ $ $ Mid Cap $ $ $ Larger Cap Value $ $ $ Small Cap Value* $ $ $ Fiscal year ended August 31, 1998 Micro Cap $912,750 $140,740 $ 0 Growth $782,298 $121,746 $ 0 Mid Cap $675,595 $136,503 $ 0 Larger Cap Value** $ 35,168 $ 46,328 $30,869 Fiscal year ended August 31, 1997 Micro Cap $248,284 $120,320 $ 0 Growth $355,843 $153,302 $ 0 Mid Cap $ 90,762 $ 92,307 $21,893
* The Small Cap Value Fund commenced operations on November 30, 1998. ** The Larger Cap Value Fund commenced operations on December 9, 1997. 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 -28- 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 Micro Cap, Growth and Mid Cap Funds were approved on April 24, 1996 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 Larger Cap Value Fund was similarly approved on October 15, 1997. The Advisory Agreement for the Small Cap Value Fund was similarly approved on October 28, 1998. 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 Micro Cap, 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 Micro Cap, Growth and Mid Cap Funds on May 28, 1996. The Advisory Agreement for the Larger Cap Value Fund became effective on December 1, 1997 and was approved by written consent of the sole shareholder of the Fund on December 1, 1997. 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. The Advisory Agreements terminate automatically in the event of assignment thereof. 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. -29- Custodian Agreements Custodial Trust Company ("CTC") 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 .03% of each Fund's average daily net assets. Transfer Agency Agreements PFPC Inc. ("PFPC"), an affiliate of PNC Bank, 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, 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") 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 .05% of the first $150 million of each Fund's average daily net assets and .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 -30- 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 .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 .115% of each Fund's average daily net assets. -31- For the fiscal years ended August 31, 1997, 1998 and 1999, the Funds paid administration fees to PFPC and BSFM, and PFPC waived administration fees as follows:
Co-Administration Fees Fund Paid (After Waivers) Waivers Reimbursements - ------------------------------------------------------------------------------------------------------------------- For the fiscal year ended August 31, 1999. (PFPC) - ----- Micro Cap $ $ $ Growth $ $ $ Mid Cap $ $ $ Larger Cap Value $ $ $ Small Cap Value* $ $ $ (BSFM) - ----- Micro Cap $ $ $ Growth $ $ $ Mid Cap $ $ $ Larger Cap Value $ $ $ Small Cap Value* $ $ $ For the fiscal year ended August 31, 1998 (PFPC) - ----- Micro Cap $161,535 $14,047 $0 Growth $138,620 $12,054 $0 Mid Cap $124,522 $11,179 $0 Larger Cap Value** $ 27,114 $27,119 $0 (BSFM) - ----- Micro Cap $ 70,233 $ 0 $0 Growth $ 60,270 $ 0 $0 Mid Cap $ 54,025 $ 0 $0 Larger Cap Value** $ 5,433 $ 0 $0 For the fiscal year ended August 31, 1997. (PFPC) - ----- Micro Cap $ 61,461 $26,117 $0 Growth $ 73,540 $20,169 $0 Mid Cap $ 39,724 $35,276 $0 (BSFM) - ----- Micro Cap $ 24,574 $ 0 $0 Growth $ 33,943 $ 0 $0 Mid Cap $ 12,203 $ 0 $0
* The Small Cap Value Fund commenced operations on November 30, 1998. ** The Larger Cap Value Fund commenced operations on December 9, 1997. Administrative Services Agent Provident Distributors, Inc. ("PDI") 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, PDI is entitled to a monthly fee calculated at the annual rate of .15% of each Fund's average daily net assets. PDI is currently waiving fees in excess of .03% of each fund's average daily net assets for open funds and .02% of each closed -32- fund's average daily net assets. Prior to May 29, 1998, Counsellors Funds Service, Inc. ("Counsellors Service"), a wholly-owned subsidiary of Warburg Pincus Asset Management, Inc. ("Warburg"), acted as Administrative Services Agent pursuant to the same compensation arrangement as for PDI. For the fiscal years ended August 31, 1997, 1998 and 1999, the Funds paid administrative services fees to PDI and Counsellors Service, and PDI and Counsellors Service waived administrative services fees as follows:
Administrative Services Fund Fees Paid (After Waivers) Waivers Reimbursements - ------------------------------------------------------------------------------------------------------------------- For the fiscal year ended August 31, 1999 (PDI) - ---- Micro Cap $ $ $ Growth $ $ $ Mid Cap $ $ $ Larger Cap Value $ $ $ Small Cap Value* $ $ $ For the period from May 29, 1998 through August 31, 1998 (PDI) - ---- Micro Cap $ 6,924 $ 44,172 $0 Growth $ 5,888 $ 37,315 $0 Mid Cap $11,064 $ 44,256 $0 Larger Cap Value** $ 1,919 $ 7,678 $0 For the period from September 1, 1997 through May 29, 1998 (Counsellors Service) - -------------------- Micro Cap $31,920 $127,682 $0 Growth $27,521 $110,085 $0 Mid Cap $21,420 $ 85,680 $0 Larger Cap Value** $ 1,341 $ 5,361 $0 For the fiscal year ended August 31, 1997 (Counsellors Service) - -------------------- Micro Cap $14,744 $ 58,977 $0 Growth $20,366 $ 81,463 $0 Mid Cap $ 7,323 $ 29,291 $0
* The Small Cap Value Fund commenced operations on November 30, 1998. ** The Larger Cap Value Fund commenced operations on December 9, 1997. Distributor PDI serves as distributor of the Shares pursuant to the terms of a distribution agreement dated as of June 25, 1999 (the "Distribution Agreement") entered into by PDI and RBB. No compensation is payable by RBB to PDI for distribution services with respect to the Funds. Counsellors Securities Inc. ("Counsellors") served as distributor of the Shares prior to May 29, 1998. -33- 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, 1999, the Funds paid aggregate commissions to brokers on account of research services as follows:
Fund Brokerage Commissions --------------------------------------------- Micro Cap $___ Growth $___ Mid Cap $___ Larger Cap Value $___ Small Cap Value $___
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 -34- 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 PDI, 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, 1997, 1998 and 1999, the Funds paid brokerage commissions on behalf of the Funds as follows:
Aggregate Commissions Fund 1997 1998 1999 ---------------------------------------------------------- Micro Cap $___ $___ $___ Growth $___ $___ $___ Mid Cap $___ $___ $___ Larger Cap Value $___ $___ $___ Small Cap Value $___ $___ $___
The Funds are required to identify any securities of RBB's regular broker dealers (as defined in Rule 10b-1 under the 1940 Act) or their parents held by the Funds as of the end of the most recent fiscal year. As of August 31, 1999, the following Funds held the following securities:
Fund Security Value - ------------------------------------------------------------------------------- Mid Cap ______ $___ Larger Cap Value ______ $___
-35- ADDITIONAL INFORMATION CONCERNING RBB SHARES RBB has authorized capital of 30 billion shares of Common Stock at a par value of $0.001 per share. Currently, 20.026 billion shares have been classified into 99 classes as shown in the table below. Shares of the Classes FF, GG, HH, XX and MMM Common Stock constitute the Micro Cap, Growth, Mid Cap, Larger Cap Value and Small Cap Value Funds, respectively. 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 Authorized Class of Common Stock Shares (millions) Class of Common Stock Shares (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 Micro Cap) 100 G (Money) 500 EEE (Boston Partners Investors Micro Cap) 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 Market Neutral) 100 L (Bedford Money) 1500 JJJ (Boston Partners Investors Market Neutral) 100 M (Bedford Municipal Money) 500 KKK (Boston Partners Institutional Long-Short Equity) 100 N (Bedford Government Money) 500 LLL (Boston Partners Investors Long-Short Equity) 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 R (Municipal Money) 500 Janney (Money) 3000 S (Government Money) 500 Janney (Municipal Money) 200 T 500 Janney (Government Money) 700 U 500 Janney (N.Y. Money) 100 V 500 Select (Money) 700 W 100 Beta 2 (Municipal Money) 1 X 50 Beta 3 (Government Money) 1 Y 50 Beta 4 (N.Y. Money) 1 Z 50 Principal Class (Money) 700 AA 50 Gamma 2 (Municipal Money) 1 BB 50 Gamma 3 (Government Money) 1 CC 50 Gamma 4 (N.Y. Money) 1 DD 100 Delta 1 (Money) 1 EE 100 Delta 2 (Municipal Money) 1 FF (n/i numeric Micro Cap) 50 Delta 3 (Government Money) 1
-36-
Number of Number of Authorized Authorized Class of Common Stock Shares (millions) Class of Common Stock Shares (millions) - ------------------------------------------------------------ -------------------------------------------------------------- GG (n/i numeric Growth) 50 Delta 4 (N.Y. Money) 1 HH (n/i numeric Mid Cap) Epsilon 1 (Money) 1 50 II 100 Epsilon 2 (Municipal Money) 1 JJ 100 Epsilon 3 (Government Money) 1 KK 100 Epsilon 4 (N.Y. Money) 1 LL 100 Zeta 1 (Money) 1 MM 100 Zeta 2 (Municipal Money) 1 NN 100 Zeta 3 (Government Money) 1 OO 100 Zeta 4 (N.Y. Money) 1 PP 100 Eta 1 (Money) 1 QQ (Boston Partners Institutional Eta 2 (Municipal Money) 1 Large Cap) 100 RR (Boston Partners Investors Large Eta 3 (Government Money) 1 Cap) 100 SS (Boston Partners Advisor Large Eta 4 (N.Y. Money) 1 Cap) 100 TT (Boston Partners Investors Mid Theta 1 (Money) 1 Cap) 100 UU (Boston Partners Institutional Theta 2 (Municipal Money) 1 Mid Cap) 100 VV (Boston Partners Institutional Theta 3 (Government Money) 1 Bond) 100 WW (Boston Partners Investors Bond) 100 Theta 4 (N.Y. Money) 1 XX (n/i numeric Larger Cap) 50
The classes of Common Stock have been grouped into 16 separate "families": the RBB Family, the Cash Preservation Family, the Sansom Street Family, the Bedford Family, the Principal (Gamma) Family, the Janney Montgomery Scott Family, the Select (Beta) Family, the Schneider Capital Management Family, the n/i numeric family of funds, the Boston Partners Family, the Bogle Family, the Delta Family, the Epsilon Family, the Zeta Family, the Eta Family, and the Theta Family. The RBB Family represents interests in the Government Securities Portfolio; the Cash Preservation Family represents interests in the Money Market and Municipal Money Market Portfolios; the Sansom Street Family represents interests in the Money Market, Municipal Money Market and Government Obligations Money Market Portfolios; the Bedford Family represents interests in the Money Market, Municipal Money Market, Government Obligations Money Market and New York Municipal Money Market Portfolios; the n/i numeric investors family of funds represents interests in five non-money market portfolios; the Boston Partners Family represents interests in six non-money market portfolios; the Bogle Family represents interests in one non-money market portfolio; the Schneider Capital Management Family represents interests in one non-money market portfolio; the Janney Montgomery Scott Family, the Select (Beta) Family, the Principal (Gamma) Family and the Delta, Epsilon, Zeta, Eta and Theta Families represent interests in the Money Market, Municipal Money Market, Government Obligations Money Market and New York Municipal Money Market Portfolios. 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 -37- 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 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. Under the 1940 Act, a Fund may suspend the right to redemption or postpone the date of payment upon redemption for any period during which the New York Stock Exchange (the "NYSE") is closed (other than customary weekend and holiday closings), or during which -38- trading on the NYSE is restricted, or during which (as determined by the SEC by rule or regulation) an emergency exists as a result of which disposal or valuation of 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.) In addition to the situations described in the Prospectus, a Fund may redeem shares involuntarily to reimburse such 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. 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, 1999, is as follows:
Larger Cap Small Cap Micro Cap Growth Mid Cap Value Value - --------------------------------------------------------------------------------------------------------------------- Net assets $___ $___ $___ $___ $___ Outstanding shares $___ $___ $___ $___ $___ Net asset value per share $___ $___ $___ $___ $___ Maximum sales charge -- -- -- -- -- Maximum Offering Price to Public $___ $___ $___ $___ $___
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 -39- 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. 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 -40- 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. Performance. From time to time, the Funds may advertise their average annual total return over various periods of time. These total return figures show the average percentage change in value of an investment in a Fund from the beginning of the measuring period to the end of the measuring period. The figures reflect changes in the price of a Fund's shares assuming that any income dividends and/or capital gain distributions made by a Fund during the period were reinvested in shares of the Fund. 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 a 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 a Fund's 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 a Fund's 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 a Fund for the specific period (again reflecting changes in a Fund's 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) and would be quoted separately for each class of a Fund's shares. Calculated according to the SEC Rules, the average annual total return for the Funds was as follows:
Fund Average Return -------------------------------------------------------------------- For August 31, 1999. Micro Cap % Growth % Mid Cap % Larger Cap Value % Small Cap Value* % For August 31, 1998. Micro Cap 9.29% Growth (1.62)% Mid Cap 12.68% Larger Cap Value** N/A For August 31, 1997. Micro Cap 41.43%
-41-
Fund Average Return ------------------------------------------------------------------------- Growth 27.86% Mid Cap 33.71% For the period June 3, 1996 (initial public offering) to August 31, 1996. Micro Cap N/A Growth N/A Mid Cap N/A
* The Small Cap Value Fund commenced operations on November 30, 1998. ** The Larger Cap Value Fund commenced operations on December 9, 1997. Calculated according to the above formula, the aggregate total return for the Funds was as follows:
Fund Average Return ------------------------------------------------------------------------ For August 31, 1999. Micro Cap % Growth % Mid Cap % Larger Cap Value % Small Cap Value* % For August 31, 1998. Micro Cap 22.10% Growth (3.59)% Mid Cap 30.76% Larger Cap Value** (9.67)% For August 31, 1997. Micro Cap 58.41% Growth 37.69% Mid Cap 49.11% For the period June 3, 1996 (initial public offering) to August 31, 1996. Micro Cap 54.05% Growth 35.85% Mid Cap 43.64%
* The Small Cap Value Fund commenced operations on November 30, 1998. ** The Larger Cap Value Fund commenced operations on December 9, 1997. 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, the Funds may describe general economic and market conditions affecting the Funds and may compare their 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 their benchmark indices, as well as the S&P 500 or (3) other appropriate indices of investment securities or with data developed by Numeric derived from such indices. Performance information may also include evaluation of the Funds 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 -42- publications. In reports or other communications to investors or in advertising, the Funds may also describe the general biography or work experience of the portfolio managers of the Funds and may include quotations attributable to the portfolio managers describing approaches taken in managing the Funds' investments, research methodology, underlying stock selection or the Funds' investment objective. The Funds 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, the Funds may from time to time compare their expense ratios to those of investment companies with similar objective and policies, as advertised by Lipper Analytical Services, Inc. or similar investment services that monitor mutual funds. TAXES The 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 the 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. 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. ______________________________________, serves as RBB's independent accountants. Banking Laws. Banking laws and regulations currently prohibit a bank holding company registered under the Federal Bank Holding Company Act of 1956 or any bank or non-bank affiliate thereof from sponsoring, organizing, controlling or distributing the shares of a registered, open-end investment company continuously engaged in the issuance of its shares, and prohibit banks generally from underwriting securities, but such banking laws and regulations do not prohibit such a holding company or affiliate or banks generally from acting as investment adviser, administrator, transfer agent or custodian to such an investment company, or from purchasing shares of such a company as agent for and upon the order of customers. Blackrock Investment Management Company ("BIMC"), PNC Bank and other institutions that are banks or bank affiliates are subject to such banking laws and regulations. BIMC and PNC Bank believe they may perform the services for RBB contemplated by their respective agreements with RBB without violation of applicable banking laws or regulations. It should be noted, however, that there have been no cases deciding whether bank -43- and non-bank subsidiaries of a registered bank holding company may perform services comparable to those that are to be performed by these companies, and future changes in either federal or state statutes and regulations relating to permissible activities of banks and their subsidiaries or affiliates, as well as further judicial or administrative decisions or interpretations of present and future statutes and regulations, could prevent these companies from continuing to perform such services for RBB. If such were to occur, it is expected that the Board of Directors would recommend that RBB enter into new agreements or would consider the possible termination of RBB. Any new advisory or sub-advisory agreement would normally be subject to shareholder approval. It is not anticipated that any change in RBB's method of operations as a result of these occurrences would affect its net asset value per share or result in a financial loss to any shareholder. FINANCIAL STATEMENTS The audited financial statements and notes thereto in the Funds' __________________ (the "1999 ______________") for the fiscal year ended August 31, 1999 (the "Financial Statements") are incorporated by reference into this Statement of Additional Information. No other parts of the 1999 __________ are incorporated by reference herein. The financial statements included in the 1999 _________ have been audited by RBB's independent accountants, _________. The reports of ____________________________ are incorporated herein by reference, and 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 1999 _______________ may be obtained free of charge by telephoning PFPC at (800) 348-5031. -44- APPENDIX A ---------- Commercial Paper Ratings - ------------------------ "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 for repayment of 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. 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. The three rating categories of Duff & Phelps for investment grade commercial paper and short-term debt are "D-1," "D-2" and "D-3." Duff & Phelps employs three designations, "D-1+," "D-1" and "D-1-," within the highest rating category. The following summarizes the rating categories used by Duff & Phelps for commercial paper: "D-1+" - Debt possesses the highest certainty of timely payment. Short-term liquidity, including internal operating factors and/or access to alternative sources of funds, is outstanding, and safety is just below risk-free U.S. Treasury short-term obligations. "D-1" - Debt possesses very high certainty of timely payment. Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. "D-1-" - Debt possesses high certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. "D-2" - Debt possesses good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. A-1 "D-3" - Debt possesses satisfactory liquidity and other protection factors qualify issues as to investment grade. Risk factors are larger and subject to more variation. Nevertheless, timely payment is expected. "D-4" - Debt possesses speculative investment characteristics. Liquidity is not sufficient to insure against disruption in debt service. Operating factors and market access may be subject to a high degree of variation. "D-5" - Issuer failed to meet scheduled principal and/or interest payments. Fitch IBCA short-term ratings apply to debt obligations that have time horizons of less than 12 months for most obligations, or up to three years for U.S. public finance securities. The following summarizes the rating categories used by Fitch IBCA 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. This designation indicates that default is a real possibility and that the capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment. "D" - Securities are in actual or imminent payment default. Thomson Financial BankWatch short-term ratings assess the likelihood of an untimely payment of principal and interest of debt instruments with original maturities of one year or less. The following summarizes the ratings used by Thomson Financial BankWatch: "TBW-1" - This designation represents Thomson Financial BankWatch's highest category and indicates a very high likelihood that principal and interest will be paid on a timely basis. A-2 "TBW-2" - This designation represents Thomson Financial BankWatch's second- highest category and indicates that while the degree of safety regarding timely repayment of principal and interest is strong, the relative degree of safety is not as high as for issues rated "TBW-1." "TBW-3" - This designation represents Thomson Financial BankWatch's lowest investment-grade category and indicates that while the obligation is more susceptible to adverse developments (both internal and external) than those with higher ratings, the capacity to service principal and interest in a timely fashion is considered adequate. "TBW-4" - This designation represents Thomson Financial BankWatch's lowest rating category and indicates that the obligation is regarded as non-investment grade and therefore speculative. Corporate and Municipal Long-Term Debt Ratings - ---------------------------------------------- The following summarizes the ratings used by Standard & Poor's for corporate and municipal debt: "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 A-3 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" - 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 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. 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. "r" - This symbol is attached to the ratings of instruments with significant noncredit risks. It highlights risks to principal or volatility of expected returns which are not addressed in the credit rating. Examples include: obligations linked or indexed to equities, currencies, or commodities; obligations exposed to severe prepayment risk - such as interest-only or principal-only mortgage securities; and obligations with unusually risky interest terms, such as inverse floaters. The following summarizes the ratings used by Moody's for corporate and municipal 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 A-4 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," "B," "Caa," "Ca," and "C" - Bonds that possess one of these ratings provide questionable protection of interest and principal ("Ba" indicates speculative elements; "B" indicates a general lack of characteristics of desirable investment; "Caa" are of poor standing; "Ca" represents obligations which are speculative in a high degree; and "C" represents the lowest rated class of bonds). "Caa," "Ca" and "C" bonds may be in default. Con. (---) - Bonds for which the security depends upon the completion of some act or the fulfillment of some condition are rated conditionally. These are bonds secured by (a) earnings of projects under construction, (b) earnings of projects unseasoned in operating experience, (c) rentals which begin when facilities are completed, or (d) payments to which some other limiting condition attaches. Parenthetical rating denotes probable credit stature upon completion of construction or elimination of basis of condition. 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 the long-term debt ratings used by Duff & Phelps for corporate and municipal long-term debt: "AAA" - Debt is considered to be of the highest credit quality. The risk factors are negligible, being only slightly more than for risk-free U.S. Treasury debt. "AA" - Debt is considered to be of high credit quality. Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. "A" - Debt possesses protection factors which are average but adequate. However, risk factors are more variable in periods of greater economic stress. "BBB" - Debt possesses below-average protection factors but such protection factors are still considered sufficient for prudent investment. Considerable variability in risk is present during economic cycles. "BB," "B," "CCC," "DD," and "DP" - Debt that possesses one of these ratings is considered to be below investment grade. Although below investment grade, debt rated "BB" is A-5 deemed likely to meet obligations when due. Debt rated "B" possesses the risk that obligations will not be met when due. Debt rated "CCC" is well below investment grade and has considerable uncertainty as to timely payment of principal, interest or preferred dividends. Debt rated "DD" is a defaulted debt obligation, and the rating "DP" represents preferred stock with dividend arrearages. To provide more detailed indications of credit quality, the "AA," "A," "BBB," "BB" and "B" ratings may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within these major categories. The following summarizes the ratings used by Fitch IBCA for corporate and municipal bonds: "AAA" - Bonds 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" - Bonds 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" - Bonds considered to be investment grade and of high credit quality. These ratings denote a low expectation of credit risk and indicate strong capacity for timely payment of financial commitments. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings. "BBB" - Bonds 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. "BB" - Bonds 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" - Bonds are considered 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", "C" - Bonds 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, A-6 and "C" ratings signal imminent default. "DDD," "DD" and "D" - Bonds are in default. The ratings of obligations in this category 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. To provide more detailed indications of credit quality, the Fitch IBCA ratings from and including "AA" to "CCC" may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within these major rating categories. Thomson Financial BankWatch assesses the likelihood of an untimely repayment of principal or interest over the term to maturity of long term debt and preferred stock which are issued by United States commercial banks, thrifts and non-bank banks; non-United States banks; and broker-dealers. The following summarizes the rating categories used by Thomson BankWatch for long-term debt ratings: "AAA" - This designation indicates that the ability to repay principal and interest on a timely basis is extremely high. "AA" - This designation indicates a very strong ability to repay principal and interest on a timely basis, with limited incremental risk compared to issues rated in the highest category. "A" - This designation indicates that the ability to repay principal and interest is strong. Issues rated "A" could be more vulnerable to adverse developments (both internal and external) than obligations with higher ratings. "BBB" - This designation represents the lowest investment-grade category and indicates an acceptable capacity to repay principal and interest. Issues rated "BBB" are more vulnerable to adverse developments (both internal and external) than obligations with higher ratings. "BB," "B," "CCC," and "CC," - These designations are assigned by Thomson Financial BankWatch to non-investment grade long-term debt. Such issues are regarded as having speculative characteristics regarding the likelihood of timely payment of principal and interest. "BB" indicates the lowest degree of speculation and "CC" the highest degree of speculation. A-7 "D" - This designation indicates that the long-term debt is in default. PLUS (+) OR MINUS (-) - The ratings from "AAA" through "CC" may include a plus or minus sign designation which indicates where within the respective category the issue is placed. Municipal Note Ratings - ---------------------- A Standard and Poor's 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 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. Moody's ratings for state and municipal notes and other short-term loans are designated Moody's Investment Grade ("MIG") and variable rate demand obligations are designated Variable Moody's Investment Grade ("VMIG"). Such ratings recognize the differences between short-term credit risk and long-term risk. The following summarizes the ratings by Moody's Investors Service, Inc. for short-term notes: "MIG-1"/ "VMIG-1" - This designation denotes best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broad-based access to the market for refinancing. "MIG-2"/ "VMIG-2" - This designation denotes high quality, with margins of protection that are ample although not so large as in the preceding group. "MIG-3"/ "VMIG-3" - This designation denotes favorable quality, with all security elements accounted for but lacking the undeniable strength of the preceding grades. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established. "MIG-4"/ "VMIG-4" - This designation denotes adequate quality. Protection commonly regarded as required of an investment security is present and although not distinctly or predominantly speculative, there is specific risk. A-8 "SG" - This designation denotes speculative quality. Debt instruments in this category lack of margins of protection. Fitch IBCA and Duff & Phelps use the short-term ratings described under Commercial Paper Ratings for municipal notes. A-9 PART C OTHER INFORMATION Item 23. EXHIBITS
SEE NOTE # ---------- (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 (b) (1) By-Laws, as amended. 22 (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 amended 17 through April 26, 1996. (d) (1) Investment Advisory Agreement (Money Market) between Registrant and Provident 3 Institutional Management Corporation, dated as of August 16, 1988. (2) Sub-Advisory Agreement (Money Market) between Provident Institutional Management 3 Corporation and Provident National Bank, dated as of August 16, 1988. (3) Assumption Agreement (Money Market Fund) between PNC Bank, N.A. and BlackRock 34 Institutional Management Corporation (formerly PNC Institutional Management Corporation) dated April 29, 1998. (4) Investment Advisory Agreement (Tax-Free Money Market) between Registrant and Provident 3 Institutional Management Corporation, dated as of August 16, 1988. (5) Sub-Advisory Agreement (Tax-Free Money Market) between Provident Institutional 3 Management Corporation and Provident National Bank, dated as of August 16, 1988.
SEE NOTE # ---------- (6) Assumption Agreement (Municipal Money Market Fund) between PNC Bank, N.A. and BlackRock 34 Institutional Management Corporation (formerly PNC Institutional Management Corporation) dated April 29, 1998. (7) Investment Advisory Agreement (Government Obligations Money Market) between Registrant 3 and Provident Institutional Management Corporation, dated as of August 16, 1988. (8) Sub-Advisory Agreement (Government Obligations Money Market) between Provident 3 Institutional Management Corporation and Provident National Bank, dated as of August 16, 1988. (9) Assumption Agreement (Government Obligations Money Market Fund) between PNC 34 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 and 8 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 and 10 Provident Institutional Management Corporation dated April 21, 1992. (13) Investment Advisory Agreement (n/i Micro Cap Fund) between Registrant and 17 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 Growth & Value Fund) between Registrant 17 and Numeric Investors, L.P. (16) Investment Advisory Agreement (Boston Partners Large Cap Value Fund) between 20 Registrant and Boston Partners Asset Management, L.P. (17) Investment Advisory Agreement (Boston Partners Mid Cap Value Fund) between 22 Registrant and Boston Partners Asset Management, L.P. (18) Investment Advisory Agreement (n/i Larger Cap Value Fund) between Registrant 24 and Numeric Investors, L.P. dated December 1, 1997. (19) Investment Advisory Agreement (Boston Partners Bond Fund) between Registrant 24 and Boston Partners Asset Management, L.P. dated December 1, 1997. (20) Investment Advisory Agreement (Schneider Small Cap Value Fund) between 29 Registrant and Schneider Capital Management Company. (21) Investment Advisory Agreement (Boston Partners Micro Cap Value Fund) between 29 Registrant and Boston Partners Asset Management, L.P. (22) Investment Advisory Agreement (Boston Partners Market Neutral Fund) between 31 Registrant and Boston Partners Asset Management, L.P. (23) Investment Advisory Agreement (n/i Small Cap Value Fund) between Registrant 31 and Numeric Investors, L.P.
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SEE NOTE # ---------- (24) Form of Investment Advisory Agreement (Boston Partners Long- Short 32 Equity Fund) between Registrant and Boston Partners Asset Management, L.P. (25) Investment Advisory Agreement (Bogle Small Cap Growth Fund) between Registrant and 34 Bogle Investment Management, L. P. (e) (1) Distribution Agreement between Registrant and Provident Distributors, Inc. 34 dated as of June 25, 1999. (2) Distribution Agreement Supplement between Registrant and Provident Distributors, Inc. 34 (Bogle Small Cap Growth Fund- Institutional Class and Investor Class) (f) Fund Office Retirement Profit-Sharing and Trust Agreement, dated as of October 24, 23 1990, as amended. (g) (1) Custodian Agreement between Registrant and Provident National Bank dated as of 3 August 16, 1988. (2) Sub-Custodian Agreement among The Chase Manhattan Bank, N.A., the Registrant 10 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 Company. 12 (5) Custody Agreement between Registrant and Custodial Trust Company on behalf of 17 n/i Micro Cap Fund, n/i Growth Fund and n/i Growth & Value Fund Portfolios of the Registrant. (6) Custodian Agreement Supplement Between Registrant and PNC Bank, National 20 Association dated October 16, 1996. (7) Custodian Agreement Supplement between Registrant and PNC Bank, National 22 Association, on behalf of the Boston Partners Mid Cap Value Fund. (8) Custody Agreement between Registrant and Custodial Trust Company on behalf of 24 the n/i Larger Cap Value Fund. (9) Custodian Agreement Supplement between Registrant and PNC Bank, N.A. on behalf 24 of the Boston Partners Bond Fund. (10) Custodian Agreement Supplement between Registrant and PNC Bank, N.A. on 29 behalf of the Schneider Small Cap Value Fund. (11) Custodian Agreement Supplement between Registrant and PNC Bank, N.A. on 29 behalf of the Boston Partners Micro Cap Value Fund. (12) Custodian Agreement Supplement between Registrant and PNC Bank, N.A. on 31 behalf of Boston Partners Market Neutral Fund. (13) Custodian Agreement Supplement between Registrant and Custodial Trust Company 31 on behalf of n/i Small Cap Value Fund. (14) Form of Custodian Agreement Supplement between Registrant and PFPC Trust Company 32 (Boston Partners Long Short Equity Fund) (15) Custodian Agreement Supplement between Registrant and PFPC Trust Company (Bogle Small 34 Cap Growth Fund) (h) (1) Transfer Agency Agreement (Sansom Street) between Registrant and Provident 3 Financial Processing Corporation, dated as of August 16, 1988. (2) Transfer Agency Agreement (Cash Preservation) between Registrant and Provident 3 Financial Processing Corporation, dated as of August 16, 1988. (3) Shareholder Servicing Agreement (Sansom Street Money Market). 3
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SEE NOTE # ---------- (4) Shareholder Servicing Agreement (Sansom Street Tax-Free Money Market). 3 (5) Shareholder Servicing Agreement (Sansom Street Government Obligations Money 3 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 Market). 3 (9) Transfer Agency Agreement (Bedford) between Registrant and Provident Financial 3 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. (12) Transfer Agency Agreement and Supplements (Bradford, Alpha (now known as 9 Janney), Beta, Gamma, 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 Street 15 Bank and Trust Company and PFPC, Inc. dated February 1, 1995. (15) Supplement to Transfer Agency and Service Agreement between Registrant, State 15 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 Fund and 17 n/i Growth & Value Fund) between Registrant and PFPC, Inc. dated April 14, 1996. (18) Administration and Accounting Services Agreement between Registrant and PFPC, 17 Inc. (n/i Micro Cap Fund) dated April 24, 1996. (19) Administration and Accounting Services Agreement between Registrant and PFPC, 17 Inc. (n/i Growth Fund) dated April 24, 1996. (20) Administration and Accounting Services Agreement between Registrant and PFPC, 17 Inc. (n/i Growth & Value Fund) dated April 24, 1996. (21) Transfer Agreement and Service Agreement between Registrant and State Street 18 Bank and Trust Company. (22) Administration and Accounting Services Agreement between the Registrant and 21 PFPC Inc. dated October 16, 1996 (Boston Partners Large Cap Value Fund). (23) Transfer Agency Agreement Supplement between Registrant and PFPC Inc. (Boston 20 Partners Large Cap Value Fund, Institutional Class). (24) Transfer Agency Agreement Supplement between Registrant and PFPC Inc. (Boston 20 Partners Large Cap Value Fund, Investor Class).
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SEE NOTE # ---------- (25) Transfer Agency Agreement Supplement between Registrant and PFPC Inc. (Boston 20 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 PFPC 22 Inc. dated, May 30, 1997 (Boston Partners Mid Cap Value Fund). (29) Transfer Agency Agreement Supplement (n/i Larger Cap Value Fund) between 24 Registrant and PFPC, Inc. dated December 1, 1997. (30) Administration and Accounting Services Agreement between Registrant and PFPC, 24 Inc. dated December 1, 1997 (n/i Larger Cap Value Fund). (31) Co-Administration Agreement between Registrant and Bear Stearns Funds 24 Management, Inc. dated December 1, 1997 (n/i Larger Cap Value Fund). (32) Transfer Agency Agreement Supplement between Registrant and PFPC, Inc. dated 24 December 1, 1997 (Boston Partners Bond Fund, Institutional Class). (33) Transfer Agency Agreement Supplement between Registrant and PFPC, Inc. dated 24 December 1, 1997 (Boston Partners Bond Fund, Investor Class). (34) Administration and Accounting Services Agreement between Registrant and PFPC, 24 Inc. dated December 1, 1997 (Boston Partners Bond Fund). (35) Administration and Accounting Services Agreement between Registrant and PFPC 29 Inc. (Schneider Small Cap Value Fund). (36) Transfer Agency Agreement Supplement between Registrant and PFPC Inc. 29 (Schneider Small Cap Value Fund). (37) Transfer Agency Agreement Supplement between Registrant and PFPC, Inc. 29 (Boston Partners Micro Cap Value Fund, Institutional Class). (38) Transfer Agency Agreement Supplement between Registrant and PFPC, Inc. 29 (Boston Partners Micro Cap Value Fund, Investor Class). (39) Administration and Accounting Services Agreement between Registrant and PFPC, 29 Inc. (Boston Partners Micro Cap Value Fund). (40) Administrative Services Agreement between Registrant 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. (41) Administrative Services Agreement Supplement between Registrant and Provident 31 Distributors, Inc. relating to the Boston Partners Market Neutral Fund (Institutional Class). (42) Administrative and Accounting Services Agreement between Registrant and PFPC, 31 Inc. (Boston Partners Market Neutral Fund - Institutional and Investor Classes). (43) Transfer Agency Agreement Supplement between Registrant and PFPC, Inc. 31 (Boston Partners Market Neutral Fund - Institutional and Investor Classes). (44) Transfer Agency Agreement Supplement between Registrant and PFPC, Inc. (n/i 31 Small Cap Value Fund).
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SEE NOTE # ---------- (45) Administration and Accounting Services Agreement between Registrant and PFPC, 31 Inc. (n/i Small Cap Value Fund). (46) Co-Administration Agreement between Registrant and Bear Stearns Funds 31 Management, Inc. (n/i Small Cap Value Fund). (47) Administrative Services Agreement between Registrant and Provident 31 Distributors, Inc. (n/i Small Cap Value Fund). (48) Form of Transfer Agency Agreement Supplement between Registrant and PFPC, Inc. (Boston 32 Partners Long-Short Equity Fund). (49) Form of Administrative Services Agreement Supplement between Registrant and Provident 32 Distributors, Inc. (Boston Partners Long- Short Equity Fund- Institutional Shares). (50) Form of Administration and Accounting Services Agreement between Registrant and PFPC, 32 Inc. (Boston Partners Long-Short Equity Fund). (51) Transfer Agency Agreement Supplement between Registrant and PFPC, Inc. (Bogle Small Cap 34 Growth Fund) (52) Administrative Services Agreement between Registrant and Provident Distributors, Inc. 34 (Bogle Small Cap Growth Fund) (53) Non 12b-1 Shareholder Services Plan and Agreement for Bogle Small Cap Growth Investor 34 Shares (54) Form of agreement between E*TRADE Group, Inc., 34 Registrant and Registrant's principal underwriter. (i) Opinion of Drinker Biddle & Reath LLP 34 (j) (1) Consent of Drinker Biddle & Reath LLP. 34 (2) Consent of Independent Auditors. * (k) None. (l) (1) Subscription Agreement (relating to Classes A through N). 2 (2) Subscription Agreement between Registrant and Planco Financial Services, Inc., 7 relating to Classes O and P. (3) Subscription Agreement between Registrant and Planco Financial Services, Inc., 7 relating to Class Q. (4) Subscription Agreement between Registrant and Counsellors Securities Inc. 9 relating to Classes R, S, and Alpha 1 through Theta 4. (5) Purchase Agreement between Registrant and Numeric Investors, L.P. relating to 17 Class FF (n/i Micro Cap Fund). (6) Purchase Agreement between Registrant and Numeric Investors, L.P. relating to 17 Class GG (n/i Growth Fund). (7) Purchase Agreement between Registrant and Numeric Investors, L.P. relating to 17 Class HH (n/i Growth & Value Fund). (8) Purchase Agreement between Registrant and Boston Partners Asset Management, 21 L.P. relating to Classes QQ, RR and SS (Boston Partners Large Cap Value Fund). (9) Purchase Agreement between Registrant and Boston Partners Asset Management, 22 L.P. relating to Classes TT and UU (Boston Partners Mid Cap Value Fund). (10) Purchase Agreement between Registrant and Boston Partners Asset Management 24 L.P. relating to Classes VV and WW (Boston Partners Bond Fund). (11) Purchase Agreement between Registrant and Numeric Investors, L.P. relating to 24 Class XX (n/i Larger Cap Value Fund).
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SEE NOTE # ---------- (12) Purchase Agreement between Registrant and Schneider Capital Management 29 Company relating to Class YY (Schneider Small Cap Value Fund). (13) Purchase Agreement between Registrant and Boston Partners Asset Management, 29 L.P. relating to Classes DDD and EEE (Boston Partners Micro Cap Value Fund). (14) Purchase Agreement between Registrant and Boston Partners Asset Management 31 relating to Classes III and JJJ (Boston Partners Market Neutral Fund). (15) Purchase Agreement between Registrant and Provident Distributors, Inc. 31 relating to Class MMM (n/i Small Cap Value Fund). (16) Form of Purchase Agreement between Registrant and Boston Partners Asset Management, L. 32 P. relating to Classes KKK and LLL (Boston Partners Long-Short Equity Fund). (17) Purchase Agreement between Registrant and Bogle Investment Management, L. P. (Bogle 34 Small Cap Growth Fund) (m) (1) Plan of Distribution (Sansom Street Money Market). 3 (2) Plan of Distribution (Sansom Street Tax-Free Money Market). 3 (3) Plan of Distribution (Sansom Street Government Obligations Money Market). 3 (4) Plan of Distribution (Cash Preservation Money). 3 (5) Plan of Distribution (Cash Preservation Tax-Free Money Market). 3 (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 Money Market). 3 (9) Plan of Distribution (Income Opportunities High Yield). 7 (10) Amendment No. 1 to Plans of Distribution (Classes A through Q). 8 (11) Plan of Distribution (Alpha (now known as Janney) Money Market). 9 (12) Plan of Distribution (Alpha (now known as Janney) Tax-Free Money Market (now 9 known as the Municipal Money Market)). (13) Plan of Distribution (Alpha (now known as Janney) Government Obligations 9 Money Market). (14) Plan of Distribution (Alpha (now known as Janney) New York Municipal Money 9 Market). (15) Plan of Distribution (Beta Tax-Free Money Market). 9 (16) Plan of Distribution (Beta Government Obligations Money Market). 9 (17) Plan of Distribution (Beta New York Money Market). 9 (18) Plan of Distribution (Gamma Tax-Free Money Market). 9 (19) Plan of Distribution (Gamma Government Obligations Money Market). 9 (20) Plan of Distribution (Gamma New York Municipal Money Market). 9 (21) Plan of Distribution (Delta Money Market). 9 (22) Plan of Distribution (Delta Tax-Free Money Market). 9 (23) Plan of Distribution (Delta Government Obligations Money Market). 9 (24) Plan of Distribution (Delta New York Municipal Money Market). 9 (25) Plan of Distribution (Epsilon Money Market). 9 (26) Plan of Distribution (Epsilon Tax-Free Money Market). 9 (27) Plan of Distribution (Epsilon Government Obligations Money Market). 9 (28) Plan of Distribution (Epsilon New York Municipal Money Market). 9 (29) Plan of Distribution (Zeta Money Market). 9
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SEE NOTE # ---------- (30) Plan of Distribution (Zeta Tax-Free Money Market). 9 (31) Plan of Distribution (Zeta Government Obligations Money Market). 9 (32) Plan of Distribution (Zeta New York Municipal Money Market). 9 (33) Plan of Distribution (Eta Money Market). 9 (34) Plan of Distribution (Eta Tax-Free Money Market). 9 (35) Plan of Distribution (Eta Government Obligations Money Market). 9 (36) Plan of Distribution (Eta New York Municipal Money Market). 9 (37) Plan of Distribution (Theta Money Market). 9 (38) Plan of Distribution (Theta Tax-Free Money Market). 9 (39) Plan of Distribution (Theta Government Obligations Money Market). 9 (40) Plan of Distribution (Theta New York Municipal Money Market). 9 (41) Plan of Distribution (Boston Partners Large Cap Value Fund Investor Class). 21 (42) Plan of Distribution (Boston Partners Large Cap Value Fund Advisor Class). 21 (43) Plan of Distribution (Boston Partners Mid Cap Value Fund Investor Class). 21 (44) Plan of Distribution (Boston Partners Bond Fund Investor Class). 24 (45) Plan of Distribution (Boston Partners Micro Cap Value Fund Investor Class). 25 (46) Amendment to Plans of Distribution pursuant to Rule 12b-1. 31 (47) Plan of Distribution (Boston Partners Market Neutral Fund - Investor Class). 30 (48) Plan of Distribution (Principal Money Market). 29 (49) Form of Plan of Distribution (Boston Partners Long-Short Equity Fund- Investor Class). 32 (n) Not applicable. (o) Amended 18f-3 Plan. 33
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. 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. -8- 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. -9- 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 A copy of such exhibit is filed electronically herewith. * To be filed by Amendment. -10- 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. -11- Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER Information as to any other business, profession, vocation or employment of substantial nature in which any directors and officers of BIMC, Numeric, Boston Partners, and Schneider Capital Management Company are, or at any time during the past two (2) years have been, engaged for their own accounts or in the capacity of director, officer, employee, partner or trustee is incorporated herein by reference to Schedules A and D of BIMC's FORM ADV (File No. 801-13304) filed on March 29, 1999 (amended August 31, 1999), Schedules B and D of Numeric's FORM ADV (File No. 801-35649) filed on March 11, 1999, Schedules B and D of Boston Partners' FORM ADV (File No. 801-49059) filed on March 30, 1999, Schedules B and D of Schneider Capital Management Company's FORM ADV (File No. 801-55439) filed on March 30, 1999. Set forth below are the names and principal businesses of the directors and certain of the senior executive officers of Bogle Investment Management, L. P. who are or have been engaged in any other business, profession, vocation or employment of a substantial nature
Name Position with Bogle Other Business Type of Business ---- Investment Management, Connections ---------------- L. P. ----------- ----- John Bogle, Jr. President Managing Director, Investment Management Numeric Investors, L. P.
There is set forth below information as to any other business, profession, vocation or employment of a substantial nature in which each director or officer of PNC Bank, National Association (successor by merger to Provident National Bank) ("PNC Bank"), is, or at any time during the past two years has been, engaged for his own account or in the capacity of director, officer, employee, partner or trustee. PNC Bank, National Association Directors
Position with Name Other Business Connections Type of Business PNC Bank ---- -------------------------- ---------------- - --------- Director Paul W. Chellgren Chairman and Chief Executive Officer Energy Company Ashland Inc. P.O. 391 Covington, KY 41012-0391 Director Robert N. Clay President and Chief Executive Officer Investments Clay Holding Company Three Chimneys Farm P. O. Box 114 Midway. KY 40347 Director George A. Davidson, Jr. Chairman and Chief Executive Officer Public Utility Holding Company Consolidated Natural Gas Company CNG Tower, 625 Liberty Avenue Pittsburgh, PA 15222-3199 Director David F. Girard-diCarlo Managing Partner Law Firm Blank Rome Comisky & McCauley LLP One Logan Square Philadelphia, PA 19103-6998
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Position with Name Other Business Connections Type of Business PNC Bank ---- -------------------------- ---------------- - -------- Director Walter E. Gregg, Jr. Vice Chairman Diversified Financial Services PNC Bank Corp. One PNC Plaza 249 Fifth Street Pittsburgh, PA 15222-2707 Director William R. Johnson President and Chief Executive Officer Food Products Company H.J. Heinz Company 600 Grant Street Pittsburgh, PA 15219-2857 Director Bruce C. Lindsay Chairman and Managing Director Advisory Company Brind-Lindsay & Co., Inc. 1926 Arch Street Philadelphia, PA 19103-1444 Director W. Craig McClelland Retired Chairman and Chief Executive Paper Manufacturing and Land Officer Resources Union Camp Corporation 50 Tice Boulevard Woodcliff Lake, NJ 07675 Director Thomas H. O'Brien Chairman and Chief Executive Officer Diversified Financial Services PNC Bank Corp. One PNC Plaza 249 Fifth Avenue Pittsburgh, PA 15222-2707 Director Jane G. Pepper President Nonprofit Horticultural Pennsylvania Horticultural Society Membership Organization 100 N. 20th Street -5th Floor Philadelphia, PA 19103-1495 Director Jackson H. Randolph Chairman Public Utility Holding Company Cinergy Corp. 221 East Fourth Street, Suite 3004 Cincinnati, OH 45202 Director James E. Rohr President & Chief Operating Officer Diversified Financial Services PNC Bank Corp. One PNC Plaza 249 Fifth Street Pittsburgh PA 15222-2707 Director Roderic H. Ross Vice Chairman and Chief Executive Officer Insurance Company Keystone State Life Insurance Co. Suite 325 501 Office Center Drive Fort Washington, PA 19034-3299
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Position with Name Other Business Connections Type of Business PNC Bank ---- -------------------------- ---------------- - -------- Director Richard P. Simmons Chairman, President & CEO Specialty Metals and Allegheny Teledyne Incorporated Diversified Business 1000 Six PPG Place Pittsburgh, PA 15222-5479 Director Thomas J. Usher Chairman and Chief Executive Officer Energy, Steel and Diversified USX Corporation Business 61st Floor 600 Grant Street Pittsburgh, PA 15219-4776 Director Milton A. Washington President and Chief Executive Officer Housing Rehabilitation and AHRCO Construction 5604 Baum Boulevard Pittsburgh, PA 15206 Director Helge H. Wehmeier President and Chief Executive Officer Healthcare, Life Sciences and Bayer Corporation Chemicals 100 Bayer Road, Building 4 Pittsburgh, PA 15205-9741
PNC Bank Corp. / PNC Bank, National Association Officers
Name Position Address Thomas H. O'Brien Chairman and Chief Executive Officer PNC Bank Corp. P1-POPP-30-1 One PNC Plaza 249 Fifth Avenue Pittsburgh, PA 15222-2707 James E. Rohr President and Chief Operating Officer PNC Bank Corp. P1-POPP-30-1 One PNC Plaza 249 Fifth Avenue Pittsburgh, PA 15222-2707 Walter E. Gregg, Jr. Vice Chairman PNC Bank Corp. P1-POPP-30-1 One PNC Plaza 249 Fifth Avenue Pittsburgh, PA 15222-2707 Ralph S. Michael, III Executive Vice President, Corporate Banking One PNC Plaza P1-POPP-30-1 249 Fifth Avenue Pittsburgh, PA 15222-2707 Bruce E. Robbins Executive Vice President, Secured Lending One PNC Plaza P1-POPP-30-1 249 Fifth Avenue Pittsburgh, PA 15222-2707
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Name Position Address Joseph C. Guyaux Executive Vice President, Regional Community One PNC Plaza P1-POPP-29-1 Bank 249 Fifth Avenue Pittsburgh, PA 15222-2707 Thomas K. Whitford Executive Vice President, Private Bank One PNC Plaza P1-POPP-29-1 249 Fifth Avenue Pittsburgh, PA 15222-2707 Robert L. Haunschild Senior Vive President and Chief Financial One PNC Plaza P1-POPP-30-1 Officer 249 Fifth Avenue Pittsburgh, PA 15222-2707 Thomas E. Paisley, III Senior Vice President, Corporate Credit One PNC Plaza P1-POPP-30-1 Policy 249 Fifth Avenue Pittsburgh, PA 15222-2707 Helen P. Pudlin Senior Vice President and General Counsel One PNC Plaza P1-POPP-21-1 249 Fifth Avenue Pittsburgh, PA 15222-2707 Samuel R. Patterson Controller One PNC Plaza P1-POPP-30-1 249 Fifth Avenue Pittsburgh, PA 15222-2707
Item 27. PRINCIPAL UNDERWRITER (a) Provident Distributors, Inc. (the "Distributor") acts as principal underwriter for the following investment companies: Time Horizon Funds Pacific Innovations Trust International Dollar Reserve Fund I, Ltd. Provident Institutional Funds Trust 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. WT Funds Kalmar Pooled Investment Trust The RBB Fund, Inc. Robertson Stephens Investment Trust -15- HT Insight Funds, Inc. Harris Insight Funds Trust Hilliard-Lyons Government Fund, Inc Hilliard-Lyons Growth Fund, Inc. The Rodney Square Fund, Inc. The Rodney Square Tax-Exempt Fund, Inc. The Rodney Square Strategic Equity Fund, Inc. The Rodney Square Strategic Fixed-Income Fund, Inc. The BlackRock Funds, Inc. (Distributed by BlackRock Distributors, Inc. a wholly owned subsidiary of Provident Distributors, Inc.) The OffitBank Investment Fund, Inc. (Distributed by Offit Funds Distributor, Inc. a wholly owned subsidiary of Provident Distributors, Inc.) The OffitBank Variable Insurance Fund, Inc. (Distributed by Offit Funds Distributor, Inc. a wholly owned subsidiary of Provident Distributors, Inc.) CVO Greater China Fund, Inc. (Distributed by Offit Funds Distributor, Inc. a wholly owned subsidiary of Provident Distributors, Inc.) (b) The information required by this item 29(b) is incorporated by reference to Form BD (SEC File No. 8-46564) filed by the Distributor with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. Item 28. LOCATION OF ACCOUNTS AND RECORDS (1) PFPC Trust Company (assignee under custodian agreement), 400 Bellevue Parkway, Wilmington, Delaware 19809 (records relating to its functions as sub-adviser and custodian). (2) Provident Distributors, Inc., Four Falls Corporate Center, 6th Floor, West Conshohocken, PA 19428 (records relating to its functions as distributor). (3) BlackRock Institutional Management Corporation, Bellevue Corporate Center, 103 Bellevue Parkway, Wilmington, Delaware 19809 (records relating to its functions as investment adviser, sub-adviser and administrator). (4) PFPC Inc., 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, 18th and Cherry Streets, 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) Custodial Trust Company, 101 Carnegie Center, Princeton, New Jersey 08540 (records relating to its functions as custodian). (10) Bogle Investment Management, L.P., 57 River Street, Suite 206, Wellesley, Massachusetts 02481 (records relating to its function as investment adviser) -16- 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. -17- 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. 67 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wilmington, and State of Delaware, on the 30th day of September, 1999. THE RBB FUND, INC. By: /s/ Edward J. Roach ------------------- Edward J. Roach President and Treasurer Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment to Registrant's Registration Statement has been signed below by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE --------- ------ ---- /s/ Edward J. Roach President (Principal Executive September 30, 1999 ----------------------------------- Officer) and Treasurer (Principal Edward J. Roach Financial and Accounting Officer) *Donald van Roden Director September 30, 1999 ----------------------------------- Donald van Roden *Francis J. McKay Director September 30, 1999 ----------------------------------- Francis J. McKay *Marvin E. Sternberg Director September 30, 1999 ----------------------------------- Marvin E. Sternberg *Julian A. Brodsky Director September 30, 1999 ----------------------------------- Julian A. Brodsky *Arnold M. Reichman Director September 30, 1999 ----------------------------------- Arnold M. Reichman *Robert Sablowsky Director September 30, 1999 ----------------------------------- Robert Sablowsky *By: /s/ Edward J. Roach September 30, 1999 ------------------- Edward J. Roach Attorney-in-Fact
-18- THE RBB FUND, INC. (the "Company") POWER OF ATTORNEY ----------------- Know All Men by These Presents, that the undersigned, Donald van Roden, 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: April 23, 1997 /s/ Donald van Roden - ---------------------------- Donald van Roden 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: April 23, 1997 /s/ Marvin E. Sternberg - --------------------------- Marvin E. Sternberg 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: April 23, 1997 /s/ Arnold Reichman - --------------------------- Arnold Reichman 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: April 23, 1997 /s/ Francis J. McKay - --------------------------- Francis J. McKay 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: April 23, 1997 /s/ Julian Brodsky - ------------------------- Julian Brodsky 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: April 23, 1997 /s/ Robert Sablowsky - --------------------------- Robert Sablowsky THE RBB FUND, INC. EXHIBIT INDEX ------------- Exhibits - -------- (a) (25) Articles Supplementary. (d) (3) Assumption Agreement (Money Market Fund) between PNC Bank, N.A. and BlackRock Institutional Management Corporation dated April 29, 1998. (d) (6) Assumption Agreement (Municipal Money Market Fund) between PNC Bank, N.A. and BlackRock Institutional Management Corporation dated April 29, 1998. (d) (9) Assumption Agreement (Government Obligations Money Market Fund) between PNC Bank, N.A. and BlackRock Institutional Management Corporation dated April 29, 1998. (d) (25) Investment Advisory Agreement between Registrant and Bogle Investment Management, L.P. (Bogle Small Cap Growth Fund). (e) (1) Distribution Agreement between Registrant and Provident Distributors, Inc. dated as of June 25, 1999. (e) (2) Distribution Agreement Supplement between Registrant and Provident Distributors, Inc. (Bogle Small Cap Growth Fund- Institutional Class and Investor Class). (g) (15) Custodian Agreement Supplement between Registrant and PFPC Trust Company (Bogle Small Cap Growth Fund). (h) (51) Transfer Agency Agreement Supplement between Registrant and PFPC, Inc. (Bogle Small Cap Growth Fund). (h) (52) Administrative Services Agreement between Registrant and Provident Distributors, Inc. (Bogle Small Cap Growth Fund). (h) (53) Non 12b-1 Shareholder Services Plan and Servicing Agreement for Bogle Small Cap Growth Investor Shares. (h) (54) Form of agreement between E-TRADE Group, Inc., Registrant and Registrant's principal underwriter. (i) Opinion of Drinker Biddle & Reath LLP. (j) (1) Consent of Drinker Biddle & Reath LLP. (l) (17) Purchase Agreement between Registrant and Bogle Investment Management, L.P. (Bogle Small Cap Growth Fund). EX-99.A25 2 ARTICLES SUPPLEMENTARY THE RBB FUND, INC. ARTICLES SUPPLEMENTARY TO THE CHARTER THE RBB FUND, INC., a Maryland corporation having its principal office in Baltimore, Maryland (hereinafter called the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: FIRST: The Board of Directors of the Corporation, an open-end investment company registered under the Investment Company Act of 1940, as amended, and having authorized capital of thirty billion (30,000,000,000) shares of common stock, par value $.001 per share, has adopted a unanimous resolution increasing the number of shares of common stock that are classified (but not increasing the aggregate number of authorized shares) into separate classes by: (1) classifying an additional one hundred million (100,000,000) of the previously authorized, unissued and unclassified shares of the common stock, par value $.001 per share, with an aggregate par value of one hundred thousand dollars ($100,000), as Class NNN Common Stock (Institutional Class of the Bogle Investment Management Small Cap Growth Fund); and (2) classifying an additional one hundred million (100,000,000) of the previously authorized, unissued and unclassified shares of the common stock, par value $.001 per share, with an aggregate par value of one hundred thousand dollars ($100,000), as Class OOO Common Stock (Investor Class of the Bogle Investment Management Small Cap Growth Fund); SECOND: A description of the shares so classified with the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption as set or changed by the Board of Directors of the Corporation is as follows: A description of the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption of each class of common stock of the Corporation is set forth in Article VI, Section (6) of the Corporation's Charter, and has not been changed by the Board of Directors of the Corporation. The shares of Class NNN Common Stock and Class OOO Common Stock will be issued without stock certificates. The shares of Class NNN Common Stock and Class OOO Common Stock shall be invested in a common investment portfolio, with shares of Class NNN Common Stock representing the Institutional Shares of the Bogle Investment Management Small Cap Growth Fund investment portfolio and shares of Class OOO Common Stock representing Investor Shares of the Bogle Investment Management Small Cap Growth Fund investment portfolio. THIRD: The shares aforesaid have been duly classified by the Board of Directors of the Corporation pursuant to authority and power contained in the charter of the Corporation. FOURTH: Immediately before the increase in the number of shares of common stock that have been classified into separate classes: (a) the Corporation had authority to issue thirty billion (30,000,000,000) shares of its common stock and the aggregate par value of all the shares of all classes was thirty million dollars ($30,000,000); (b) the number of shares of each authorized class of common stock was as follows: -2- Class A - one hundred million (100,000,000), par value $.001 per share; Class B - one hundred million (100,000,000), par value $.001 per share; Class C - one hundred million (100,000,000), par value $.001 per share; Class D - one hundred million (100,000,000), par value $.001 per share; Class E - five hundred million (500,000,000), par value $.001 per share; Class F - five hundred million (500,000,000), par value $.001 per share; Class G - five hundred million (500,000,000), par value $.001 per share; Class H - five hundred million (500,000,000), par value $.001 per share; Class I - one billion five hundred million (1,500,000,000), par value $.001 per share; Class J - five hundred million (500,000,000), par value $.001 per share; Class K - five hundred million (500,000,000), par value $.001 per share; Class L - one billion five hundred million (1,500,000,000), par value $.001 per share; Class M - five hundred million (500,000,000), par value $.001 per share; Class N - five hundred million (500,000,000), par value $.001 per share; Class O - five hundred million (500,000,000), par value $.001 per share; Class P - one hundred million (100,000,000), par value $.001 per share; Class Q - one hundred million (100,000,000), par value $.001 per share; Class R - five hundred million (500,000,000), par value $.001 per share; Class S - five hundred million (500,000,000), par value $.001 per share; Class T - five hundred million (500,000,000), par value $.001 per share; Class U - five hundred million (500,000,000), par value $.001 per share; Class V - five hundred million (500,000,000), par value $.001 per share; -3- Class W - one hundred million (100,000,000), par value $.001 per share; Class X - fifty million (50,000,000), par value $.001 per share; Class Y - fifty million (50,000,000), par value $.001 per share; Class Z - fifty million (50,000,000), par value $.001 per share; Class AA - fifty million (50,000,000), par value $.001 per share; Class BB - fifty million (50,000,000), par value $.001 per share; Class CC - fifty million (50,000,000), par value $.001 per share; Class DD - one hundred million (100,000,000), par value $.001 per share; Class EE - one hundred million (100,000,000), par value $.001 per share; Class FF - fifty million (50,000,000), par value $.001 per share; Class GG - fifty million (50,000,000), par value $.001 per share; Class HH - fifty million (50,000,000), par value $.001 per share; Class II - one hundred million (100,000,000), par value $.001 per share; Class JJ - one hundred million (100,000,000), par value $.001 per share; Class KK - one hundred million (100,000,000), par value $.001 per share; Class LL - one hundred million (100,000,000), par value $.001 per share; Class MM - one hundred million (100,000,000), par value $.001 per share; Class NN - one hundred million (100,000,000), par value $.001 per share; Class OO - one hundred million (100,000,000), par value $.001 per share; Class PP - one hundred million (100,000,000), par value $.001 per share; Class QQ - one hundred million (100,000,000), par value $.001 per share; Class RR - one hundred million (100,000,000), par value $.001 per share; Class SS - one hundred million (100,000,000), par value $.001 per share; -4- Class TT - one hundred million (100,000,000), par value $.001 per share; Class UU - one hundred million (100,000,000), par value $.001 per share; Class VV - one hundred million (100,000,000), par value $.001 per share; Class WW - one hundred million (100,000,000), par value $.001 per share; Class XX - fifty million (50,000,0000), par value $.001 per share; Class YY - one hundred million (100,000,000), par value $.001; Class ZZ - one hundred million (100,000,000), par value $.001; Class AAA - one hundred million (100,000,000), par value $.001; Class BBB - one hundred million (100,000,000), par value $.001; Class CCC - one hundred million (100,000,000), par value $.001; Class DDD - one hundred million (100,000,000), par value $.001; Class EEE - one hundred million (100,000,000), par value $.001; Class FFF - one hundred million (100,000,000), par value $.001; Class GGG - one hundred million (100,000,000), par value $.001; Class HHH - one hundred million (100,000,000), par value $.001; Class III - one hundred million (100,000,000), par value $.001; Class JJJ - one hundred million (100,000,000), par value $.001; Class KKK - one hundred million (100,000,000), par value $.001; Class LLL - one hundred million (100,000,000), par value $.001; Class MMM - one hundred million (100,000,000), par value $.001; Class Janney Money - three billion (3,000,000,000), par value $.001 per share; Class Janney - two hundred million (200,000,000), par Municipal Money value $.001 per share; -5- Class Janney - seven hundred million (700,000,000), par Government Money value $.001 per share; Class Janney N.Y. - one hundred million (100,000,000), par Municipal Money value $.001 per share; Class Select - seven hundred million (700,000,000), par value $.001 per share; Class Beta 2 - one million (1,000,000), par value $.001 per share; Class Beta 3 - one million (1,000,000), par value $.001 per share; Class Beta 4 - one million (1,000,000), par value $.001 per share; Class Principal Money - seven hundred million (700,000,000), par value $.001 per share; Class Gamma 2 - one million (1,000,000), par value $.001 per share; Class Gamma 3 - one million (1,000,000), par value $.001 per share; Class Gamma 4 - one million (1,000,000), par value $.001 per share; Class Delta 1 - one million (1,000,000), par value $.001 per share; Class Delta 2 - one million (1,000,000), par value $.001 per share; Class Delta 3 - one million (1,000,000), par value $.001 per share; Class Delta 4 - one million (1,000,000), par value $.001 per share; Class Epsilon 1 - one million (1,000,000), par value $.001 per share; Class Epsilon 2 - one million (1,000,000), par value $.001 per share; Class Epsilon 3 - one million (1,000,000), par value $.001 per share; Class Epsilon 4 - one million (1,000,000), par value $.001 per share; Class Zeta 1 - one million (1,000,000), par value $.001 per share; Class Zeta 2 - one million (1,000,000), par value $.001 per share; Class Zeta 3 - one million (1,000,000), par value $.001 per share; Class Zeta 4 - one million (1,000,000), par value $.001 per share; -6- Class Eta 1 - one million (1,000,000), par value $.001 per share; Class Eta 2 - one million (1,000,000), par value $.001 per share; Class Eta 3 - one million (1,000,000), par value $.001 per share; Class Eta 4 - one million (1,000,000), par value $.001 per share; Class Theta 1 - one million (1,000,000), par value $.001 per share; Class Theta 2 - one million (1,000,000), par value $.001 per share; Class Theta 3 - one million (1,000,000), par value $.001 per share; and Class Theta 4 - one million (1,000,000), par value $.001 per share; for a total of nineteen billion eight hundred twenty-six million (19,826,000,000) shares classified into separate classes of common stock. After the increase in the number of shares of common stock that have been classified into separate classes: (c) the Corporation has the authority to issue thirty billion (30,000,000,000) shares of its common stock and the aggregate par value of all the shares of all classes is now thirty million dollars ($30,000,000); and (d) the number of authorized shares of each class is now as follows: Class A - one hundred million (100,000,000), par value $.001 per share; Class B - one hundred million (100,000,000), par value $.001 per share; Class C - one hundred million (100,000,000), par value $.001 per share; Class D - one hundred million (100,000,000), par value $.001 per share; Class E - five hundred million (500,000,000), par value $.001 per share; Class F - five hundred million (500,000,000), par value $.001 per share; Class G - five hundred million (500,000,000), par value $.001 per share; Class H - five hundred million (500,000,000), par value $.001 per share; Class I - one billion five hundred million (1,500,000,000), par value $.001 -7- per share; Class J - five hundred million (500,000,000), par value $.001 per share; Class K - five hundred million (500,000,000), par value $.001 per share; Class L - one billion five hundred million (1,500,000,000), par value $.001 per share; Class M - five hundred million (500,000,000), par value $.001 per share; Class N - five hundred million (500,000,000), par value $.001 per share; Class O - five hundred million (500,000,000), par value $.001 per share; Class P - one hundred million (100,000,000), par value $.001 per share; Class Q - one hundred million (100,000,000), par value $.001 per share; Class R - five hundred million (500,000,000), par value $.001 per share; Class S - five hundred million (500,000,000), par value $.001 per share; Class T - five hundred million (500,000,000), par value $.001 per share; Class U - five hundred million (500,000,000), par value $.001 per share; Class V - five hundred million (500,000,000), par value $.001 per share; Class W - one hundred million (100,000,000), par value $.001 per share; Class X - fifty million (50,000,000), par value $.001 per share; Class Y - fifty million (50,000,000), par value $.001 per share; Class Z - fifty million (50,000,000), par value $.001 per share; Class AA - fifty million (50,000,000), par value $.001 per share; Class BB - fifty million (50,000,000), par value $.001 per share; Class CC - fifty million (50,000,000), par value $.001 per share; Class DD - one hundred million (100,000,000), par value $.001 per share; Class EE - one hundred million (100,000,000), par value $.001 per share; -8- Class FF - fifty million (50,000,000), par value $.001 per share; Class GG - fifty million (50,000,000), par value $.001 per share; Class HH - fifty million (50,000,000), par value $.001 per share; Class II - one hundred million (100,000,000), par value $.001 per share; Class JJ - one hundred million (100,000,000), par value $.001 per share; Class KK - one hundred million (100,000,000), par value $.001 per share; Class LL - one hundred million (100,000,000), par value $.001 per share; Class MM - one hundred million (100,000,000), par value $.001 per share; Class NN - one hundred million (100,000,000), par value $.001 per share; Class OO - one hundred million (100,000,000), par value $.001 per share; Class PP - one hundred million (100,000,000), par value $.001 per share; Class QQ - one hundred million (100,000,000), par value $.001 per share; Class RR - one hundred million (100,000,000), par value $.001 per share; Class SS - one hundred million (100,000,000), par value $.001 per share; Class TT - one hundred million (100,000,000), par value $.001 per share; Class UU - one hundred million (100,000,000), par value $.001 per share; Class VV - one hundred million (100,000,000), par value $.001 per share; Class WW - one hundred million (100,000,000), par value $.001 per share; Class XX - fifty million (50,000,000), par value $.001 per share; Class YY - one hundred million (100,000,000), par value $.001; Class ZZ - one hundred million (100,000,000), par value $.001; Class AAA - one hundred million (100,000,000), par value $.001; Class BBB - one hundred million (100,000,000), par value $.001; -9- Class CCC - one hundred million (100,000,000), par value $.001; Class DDD - one hundred million (100,000,000), par value $.001; Class EEE - one hundred million (100,000,000), par value $.001; Class FFF - one hundred million (100,000,000), par value $.001; Class GGG - one hundred million (100,000,000), par value $.001; Class HHH - one hundred million (100,000,000), par value $.001; Class III - one hundred million (100,000,000), par value $.001; Class JJJ - one hundred million (100,000,000), par value $.001; Class KKK - one hundred million (100,000,000), par value $.001; Class LLL - one hundred million (100,000,000), par value $.001; Class MMM - one hundred million (100,000,000), par value $.001; Class NNN - one hundred million (100,000,000), par value $.001; Class OOO - one hundred million (100,000,000), par value $.001; Class Janney Money - three billion (3,000,000,000), par value $.001 per share; Class Janney - two hundred million (200,000,000), par Municipal Money value $.001 per share; Class Janney - seven hundred million (700,000,000), par Government Money value $.001 per share; Class Janney - one hundred million (100,000,000), par N.Y. Municipal value $.001 per share; Money Class Select - seven hundred million (700,000,000), par value $.001 per share; Class Beta 2 - one million (1,000,000), par value $.001 per share; Class Beta 3 - one million (1,000,000), par value $.001 per share; Class Beta 4 - one million (1,000,000), par value $.001 per share; -10- Class Principal Money seven hundred million (700,000,000), par value $.001 per share; Class Gamma 2 - one million (1,000,000), par value $.001 per share; Class Gamma 3 - one million (1,000,000), par value $.001 per share; Class Gamma 4 - one million (1,000,000), par value $.001 per share; Class Delta 1 - one million (1,000,000), par value $.001 per share; Class Delta 2 - one million (1,000,000), par value $.001 per share; Class Delta 3 - one million (1,000,000), par value $.001 per share; Class Delta 4 - one million (1,000,000), par value $.001 per share; Class Epsilon 1 - one million (1,000,000), par value $.001 per share; Class Epsilon 2 - one million (1,000,000), par value $.001 per share; Class Epsilon 3 - one million (1,000,000), par value $.001 per share; Class Epsilon 4 - one million (1,000,000), par value $.001 per share; Class Zeta 1 - one million (1,000,000), par value $.001 per share; Class Zeta 2 - one million (1,000,000), par value $.001 per share; Class Zeta 3 - one million (1,000,000), par value $.001 per share; Class Zeta 4 - one million (1,000,000), par value $.001 per share; Class Eta 1 - one million (1,000,000), par value $.001 per share; Class Eta 2 - one million (1,000,000), par value $.001 per share; Class Eta 3 - one million (1,000,000), par value $.001 per share; Class Eta 4 - one million (1,000,000), par value $.001 per share; Class Theta 1 - one million (1,000,000), par value $.001 per share; Class Theta 2 - one million (1,000,000), par value $.001 per share; Class Theta 3 - one million (1,000,000), par value $.001 per share; -11- Class Theta 4 - one million (1,000,000), par value $.001 per share; for a total of twenty billion twenty six million (20,026,000,000) shares classified into separate classes of common stock. IN WITNESS WHEREOF, The RBB Fund, Inc. has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Secretary on September 15, 1999. THE RBB FUND, INC. WITNESS: /s/ Morgan R. Jones /s/ Edward J. Roach ---------------- --------------- Morgan R. Jones Edward J. Roach Secretary President -12- THE UNDERSIGNED, President of The RBB Fund, Inc., who executed on behalf of said corporation the foregoing Articles Supplementary to the Charter, of which this certificate is made a part, hereby acknowledges that the foregoing Articles Supplementary are the act of the said Corporation and further certifies that, to the best of his knowledge, information and belief, the matters and facts set forth therein with respect to the approval thereof are true in all material respects, under the penalties of perjury. /s/ Edward J. Roach --------------- Edward J. Roach President -13- EX-99.D3 3 ASSUMPTION AGREEMENT ASSUMPTION AGREEMENT made as of April 29, 1998 between PNC Bank, N.A., a national banking association ("PNC Bank"), and BlackRock Institutional Management Corporation, a Delaware corporation ("BIMC"), formerly PNC Institutional Management Corporation ("PIMC"). WHEREAS, The RBB Fund, Inc. (the "Company") is registered as an open-end management investment company under the Investment Company Act of 1940; WHEREAS, BIMC is investment adviser to the Money Market Portfolio pursuant to an Advisory Agreement dated August 16, 1988 between PIMC and the Company and PNC Bank is sub-adviser to the Company pursuant to a Sub-Advisory Agreement dated August 16, 1988 between PIMC and PNC Bank; WHEREAS, PNC Bank is transferring to BIMC the personnel engaged in, and the computer and other facilities used in performing, PNC Bank's obligations under the Sub-Advisory Agreement; WHEREAS, BIMC and PNC Bank desire to have BIMC assume the obligations of PNC Bank under the Sub-Advisory Agreement and to eliminate BIMC's obligation to pay for such sub-advisory services; NOW THEREFORE, the parties hereto, intending to be legally bound, agree as follows: 1. BIMC hereby assumes all obligations of PNC Bank under the Sub-Advisory Agreement, and PNC Bank acknowledges that compensation by BIMC to it provided of in Section 9 of the Sub-Advisory Agreement shall terminate as of the date hereof. 2. BIMC shall indemnify, defend and hold PNC Bank harmless from and against any loss, damages or expense (including legal fees and expenses), relating to the performance or nonperformance by BIMC of the obligations of PNC Bank under the Sub-Advisory Agreement that are being assumed by BIMC pursuant to this Assumption Agreement, that pertain to the period beginning with the date of this Assumption Agreement. 3. PNC Bank shall indemnify, defend and hold BIMC harmless from and against any loss, damages, expense or interest (including legal fees and expenses) relating to the performance or nonperformance by PNC Bank of the obligations of PNC Bank contained in the Sub-Advisory Agreement that pertain to the period ending on the date immediately preceding the date of this Assumption Agreement. IN WITNESS WHEREOF, intending to be legally bound hereby, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. BLACKROCK INSTITUTIONAL MANAGEMENT CORPORATION By: --------------------------- (Authorized Officer) PNC BANK, N.A. By: --------------------------- (Authorized Officer) -2- EX-99.D6 4 ASSUMPTION AGREEMENT ASSUMPTION AGREEMENT made as of April 29, 1998 between PNC Bank, N.A., a national banking association ("PNC Bank"), and BlackRock Institutional Management Corporation, a Delaware corporation ("BIMC"), formerly PNC Institutional Management Corporation ("PIMC"). WHEREAS, The RBB Fund, Inc. (the "Company") is registered as an open-end management investment company under the Investment Company Act of 1940; WHEREAS, BIMC is investment adviser to the Municipal Money Market Portfolio pursuant to an Advisory Agreement dated August 16, 1988 between PIMC and the Company and PNC Bank is sub-adviser to the Company pursuant to a Sub-Advisory Agreement dated August 16, 1988 between PIMC and PNC Bank; WHEREAS, PNC Bank is transferring to BIMC the personnel engaged in, and the computer and other facilities used in performing, PNC Bank's obligations under the Sub-Advisory Agreement; WHEREAS, BIMC and PNC Bank desire to have BIMC assume the obligations of PNC Bank under the Sub-Advisory Agreement and to eliminate BIMC's obligation to pay for such sub-advisory services; NOW THEREFORE, the parties hereto, intending to be legally bound, agree as follows: 1. BIMC hereby assumes all obligations of PNC Bank under the Sub-Advisory Agreement, and PNC Bank acknowledges that compensation by BIMC to it provided of in Section 9 of the Sub-Advisory Agreement shall terminate as of the date hereof. 2. BIMC shall indemnify, defend and hold PNC Bank harmless from and against any loss, damages or expense (including legal fees and expenses), relating to the performance or nonperformance by BIMC of the obligations of PNC Bank under the Sub-Advisory Agreement that are being assumed by BIMC pursuant to this Assumption Agreement, that pertain to the period beginning with the date of this Assumption Agreement. 3. PNC Bank shall indemnify, defend and hold BIMC harmless from and against any loss, damages, expense or interest (including legal fees and expenses) relating to the performance or nonperformance by PNC Bank of the obligations of PNC Bank contained in the Sub-Advisory Agreement that pertain to the period ending on the date immediately preceding the date of this Assumption Agreement. IN WITNESS WHEREOF, intending to be legally bound hereby, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. BLACKROCK INSTITUTIONAL MANAGEMENT CORPORATION By: ---------------------------- (Authorized Officer) PNC BANK, N.A. By: ---------------------------- (Authorized Officer) -2- EX-99.D9 5 ASSUMPTION AGREEMENT ASSUMPTION AGREEMENT made as of April 29, 1998 between PNC Bank, N.A., a national banking association ("PNC Bank"), and BlackRock Institutional Management Corporation, a Delaware corporation ("BIMC"), formerly PNC Institutional Management Corporation ("PIMC"). WHEREAS, The RBB Fund, Inc. (the "Company") is registered as an open-end management investment company under the Investment Company Act of 1940; WHEREAS, BIMC is investment adviser to the Government Obligations Money Market Portfolio pursuant to an Advisory Agreement dated August 16, 1988 between PIMC and the Company and PNC Bank is sub-adviser to the Company pursuant to a Sub-Advisory Agreement dated August 16, 1988 between PIMC and PNC Bank; WHEREAS, PNC Bank is transferring to BIMC the personnel engaged in, and the computer and other facilities used in performing, PNC Bank's obligations under the Sub-Advisory Agreement; WHEREAS, BIMC and PNC Bank desire to have BIMC assume the obligations of PNC Bank under the Sub-Advisory Agreement and to eliminate BIMC's obligation to pay for such sub-advisory services; NOW THEREFORE, the parties hereto, intending to be legally bound, agree as follows: 1. BIMC hereby assumes all obligations of PNC Bank under the Sub-Advisory Agreement, and PNC Bank acknowledges that compensation by BIMC to it provided of in Section 9 of the Sub-Advisory Agreement shall terminate as of the date hereof. 2. BIMC shall indemnify, defend and hold PNC Bank harmless from and against any loss, damages or expense (including legal fees and expenses), relating to the performance or nonperformance by BIMC of the obligations of PNC Bank under the Sub-Advisory Agreement that are being assumed by BIMC pursuant to this Assumption Agreement, that pertain to the period beginning with the date of this Assumption Agreement. 3. PNC Bank shall indemnify, defend and hold BIMC harmless from and against any loss, damages, expense or interest (including legal fees and expenses) relating to the performance or nonperformance by PNC Bank of the obligations of PNC Bank contained in the Sub-Advisory Agreement that pertain to the period ending on the date immediately preceding the date of this Assumption Agreement. IN WITNESS WHEREOF, intending to be legally bound hereby, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. BLACKROCK INSTITUTIONAL MANAGEMENT CORPORATION By: ----------------------------- (Authorized Officer) PNC BANK, N.A. By: ----------------------------- (Authorized Officer) -2- EX-99.D25 6 INVESTMENT ADVISORY AGREEMENT INVESTMENT ADVISORY AGREEMENT ----------------------------- Bogle Investment Management Small Cap Growth Fund AGREEMENT made as of September 15, 1999 between THE RBB FUND, INC., a Maryland corporation (herein called the "Fund"), and Bogle Investment 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 Bogle Investment Management Small Cap Growth 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 Securities Act of 1933 (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 Advisor 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 -2- 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 -3- 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 -4- 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 of 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. If the expenses borne by the Portfolio in any fiscal year exceed the most restrictive applicable expense limitations imposed by the securities regulations of any state in which the Shares of the Portfolio are registered or qualified for sale to the public, the Investment Advisor shall reimburse the Portfolio for any excess up to the amount of the fees payable by the Portfolio to it during such fiscal year pursuant to Paragraph 9 hereof in the same proportion that its fees bear to the total fees paid by the Fund for investment advisory services in respect of the Portfolio; provided, however, that notwithstanding the foregoing, -------- ------- the Investment Advisor shall reimburse the Portfolio for such excess expenses regardless of the amount of such fees payable to it during such fiscal year to the extent that the securities regulations of any state in which the Shares are registered or qualified for sale so require. -5- 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 the 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. No public reference to, or description of the Investment Advisor or its methodology or work shall be made by the Fund, whether in the Prospectus, Statement of Additional Information or otherwise, without the prior written consent of the Investment Advisor, which consent shall not be unreasonably withheld. In each case, the Fund shall provide the Investment Advisor a reasonable opportunity to review any such reference or description before being asked for such consent. 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 -6- 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 "Bogle Investment Management" 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, 2001. 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 -7- 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. -8- 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 -------------------- Edward J. Roach President & Treasurer BOGLE INVESTMENT MANAGEMENT, L. P. By: /s/ John Bogle, Jr. --------------------- John Bogle, Jr. -9- EX-99.E1 7 DISTRIBUTION AGREEMENT DISTRIBUTION AGREEMENT AGREEMENT, made as of June 25, 1999 by and between THE RBB FUND, INC., a Maryland corporation (the "Fund"), and PROVIDENT DISTRIBUTORS, INC., a Delaware corporation (the "Distributor") Background ---------- The Fund is registered as an open-end management investment company under the Investment company Act of 1940, as amended (the "1940 Act"). The Fund's shares of Common Stock, par value $.001 per share, have been classified into 97 classes, and represent interests in 16 investment portfolios of the Fund. The Fund desires to appoint the Distributor as the distributor of the Fund's shares of Common Stock, and the Distributor wishes to become the distributor of shares of the Fund's Common Stock. NOW, THEREFORE, in consideration of the premises above and of other good and valuable consideration by each of the parties hereto to the other party paid and of the agreements, covenants and obligations herein contained, the parties hereto, intending to be legally bound, agree as follows: 1. Appointment. The Fund appoints the Distributor as the ----------- distributor of each existing class of Common Stock, as designated on Exhibit A attached herewith, as well as any future class of Common Stock, as to which the Fund and the Distributor have entered into a Distribution Agreement Supplement (individually, a "Class," and collectively, the "Classes") for the period and on the terms set forth in this Agreement. The Distributor accepts such appointment and agrees to render the services herein set forth for the compensation herein provided. Each investment portfolio in which the shares of one or more Classes ("Class Shares") represent interests is herein called a "Portfolio." The Distributor shall for all purposes herein be deemed to be an independent contractor and shall, unless otherwise expressly provided herein or authorized by the Fund's Board of Directors from time to time, have no authority to act for or represent the Fund in any way or otherwise be deemed its agent. The services furnished by the Distributor hereunder are not deemed exclusive, and the Distributor shall be free to furnish similar services to others so long as its services under this Agreement are not impaired thereby. 2. Duties of the Fund. The Fund shall use its best efforts in ------------------ maintaining registration of itself and its securities under the 1940 Act and the Securities Act of 1933, as amended (the "1933 Act") and shall bear all expenses in connection therewith. The Fund shall cooperate in the qualification by the investment adviser of the Fund of Class Shares under the laws of such states and other jurisdictions of the United States as it shall determine and shall execute and deliver such documents as may reasonably be required for such purpose, but the Fund shall not be required to qualify as a foreign business entity in any jurisdiction, nor effect any modification of its policies or practices without prior approval of the Fund's Directors. The Fund's officers, subject to the direction of the Board of Directors of the Fund and with the advice of the Distributor, shall determine whether it is desirable to qualify or continue to offer Class Shares in any jurisdiction. The Distributor shall have no obligation to assist in the qualification of Class Shares in any jurisdiction or in the maintenance of any qualification other than its obligation to serve as registered agent to the Fund and execute required filings. The Fund shall provide to the Distributor copies of the Fund's Articles of Incorporation and all amendments thereto ("Charter") on file with the Department of Assessments and Taxation of the State of Maryland, the Fund's then current By-laws and all amendments thereto ("By-laws"), the Fund's current prospectus and statement of additional information (including supplements thereto) which relate to the Class Shares (the "Prospectus" and "SAI"), and the Fund's current Registration Statement on Form N-1A as filed under the 1940 Act, as such shall be amended from time to time (the "Registration Statement"). The Fund shall provide to the Distributor such additional copies of the current Prospectus and SAI and annual, semi-annual and other reports and communications to shareholders which relate to the Class Shares as the Distributor may reasonably require for sales purposes. The Fund shall also furnish the Distributor, with respect to a Class: (a) annual audit reports of the Fund's books and accounts made by independent public accountants regularly retained by the Fund, (b) semi-annual unaudited financial statements pertaining to the Fund, or one or more of the Portfolios, (c) quarterly earnings statements prepared by the Fund, (d) a monthly itemized list of the securities held by the Portfolios, (e) monthly balance sheets as soon as practicable after the end of each month, (f) a survey indicating the states and jurisdictions in which each Class is qualified for sale or exempt from the requirements of the securities laws of such state or jurisdiction and the amounts of shares that may be sold in such states and jurisdictions, as such may be amended from time to time ("Blue Sky Report"), and (g) from time to time such additional information regarding the Fund's or the Portfolios' financial condition as the Distributor may reasonably request. 3. Duties as Distributor. The Distributor agrees to use --------------------- appropriate efforts to solicit orders for the sale of Class Shares, and will undertake such advertising and promotion as it believes is reasonable in connection with such solicitation. The Distributor agrees that all solicitations for subscriptions to Class Shares shall be made in accordance with the Charter, the Registration Statement and the By-Laws, to the extent such documents have been provided to the Distributor, and in accordance with the Prospectus and the SAI, and shall not at any time or in any manner violate any provisions of the laws of the United States or of any state or other jurisdiction in which solicitations are then being made, or of any rules and regulations made or adopted by duly authorized agencies thereunder, including without limitation those promulgated by the Securities and Exchange Commission (the "SEC"); provided that the Distributor shall not be deemed to have violated any state securities laws if it has acted in good faith and in accordance with the Blue Sky Report. In carrying out its obligations hereunder, the Distributor shall: -2- (a) provide to the Fund's Board of Directors, at least quarterly, a written report of the amounts expended in connection with all distribution services rendered pursuant to this Agreement, including an explanation of the purposes (such as commissions, advertising, printing, interest, carrying charges and any allocated overhead expenses) for which such expenditures were made; (b) monitor the arrangements pertaining to the Fund's Shareholder Servicing Agreements ("Servicing Agreements") with shareholders of record, other than broker/dealers, that are banks that are affiliated with PNC Financial Corp ("Service Organizations"), including among other things, reviewing the qualifications of Service Organizations wishing to enter into Servicing Agreements with the Fund to ensure that such entities are banks affiliated with PNC Financial Corp and that they are capable of performing their duties as set forth in the Servicing Agreements, assisting in the execution and delivery of Servicing Agreements, reporting to the Board of Directors with respect to the amounts paid or payable by the Fund from time to time under its Servicing Agreements and the nature of the services provided by Service Organizations, and maintaining appropriate records in connection with its monitoring duties; and (c) take, on behalf of the Fund, all actions which appear to the Fund necessary to carry into effect the distribution of the Class Shares. 4. Distribution of Class Shares. The price at which Class Shares ---------------------------- may be sold shall be the net asset value per share, plus any applicable sales commission, computed in the manner set forth in the Fund's Prospectus and SAI in effect at the time of sale of such Class Shares. It is mutually understood and agreed that the Distributor does not undertake to sell all or any specific portion of the Class Shares. The Fund shall not sell any Class Shares except through the Distributor, except that: (a) the Fund may issue Class Shares at their net asset value to any shareholder of the Fund purchasing Class Shares with dividends or other distributions received from the Fund pursuant to an offer made to all shareholders; (b) the Distributor may, and when requested by the Fund shall, suspend its efforts to effectuate sales of Class Shares at any time when in the opinion of the Distributor or of the Fund no sales should be made because of market or other economic considerations or abnormal circumstances of any kind; and (c) the Fund may withdraw the offering of its Class Shares (i) at any time with the consent of the Distributor, or (ii) without such consent when so required by the -3- provisions of any statute or of any order, rule or regulation of any governmental body having jurisdiction. Whenever in the judgment of the Fund's officers such action is warranted by unusual market, economic or political conditions, or by abnormal circumstances of any kind, the Fund's officers may, after notice to the Distributor, decline to accept any orders for, or make any sales of the Class Shares until such time as those officers deem it advisable to accept such orders and to make such sales. In the event of such suspension of sales and until the Distributor receives written notification from the Fund that the Distributor may resume accepting orders for and making sales of the Class Shares, the Distributor's duty to distribute Class Shares shall be suspended but the Fund shall continue to remain obligated to compensate the Distributor under the terms of paragraph 7 hereof. 5. Effectiveness of Registration. None of the Class Shares shall be offered by either the Distributor or the Fund under any of the provisions of this Agreement and no orders for the purchase or sale of the Class Shares shall be accepted by the Fund if and so long as the effectiveness of the Registration Statement then in effect or any necessary amendments thereto shall be suspended under any of the provisions of the 1933 Act or if and so long as a current prospectus as required by Section 5(b)(2) of the 1933 Act is not on file with the SEC; provided, however, that nothing contained in this paragraph 5 shall in any way restrict or have an application to or bearing upon the Fund's obligation to repurchase its Class Shares from any shareholder in accordance with the provisions of the Prospectus, SAI or Charter. The Fund agrees to advise the Distributor immediately in writing: (a) of any request by the SEC for amendments to the Registration Statement, Prospectus or SAI then in effect or for additional information; (b) in the event of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement, Prospectus or SAI then in effect or the initiation of any proceeding for that purpose; (c) of the happening of any event that makes untrue any statement of a material fact made in the Registration Statement, Prospectus or SAI then in effect or that requires the making of a change in such Registration Statement, Prospectus or SAI in order to make the statements therein not misleading; and (d) of all actions of the SEC with respect to any amendment to any Registration Statement, Prospectus or SAI which may from time to time be filed with the SEC. For the purposes of this paragraph 5, informal requests by, or acts of the staff of the SEC shall not be deemed actions of or requests by the SEC. -4- 6. Dealer Agreements. The Distributor may enter into dealer ----------------- agreements ("Dealer Agreements") with any securities dealer who is registered under the Securities Exchange Act of 1934 (the "1934 Act") and who is a member in good standing of the National Association of Securities Dealers, Inc., who may wish to assist in the distribution of the Class Shares. All such Dealer Agreements shall be either in substantially the form of the agreement attached hereto as Exhibit B or in a form that has been reviewed by counsel to the Fund. The Distributor may negotiate the compensation to be paid pursuant to Dealer Agreements. Such payments shall be borne by the Distributor and may not exceed the sums paid to the Distributor under paragraph 7 of this Agreement. The actual payments made by the Distributor and the basis for calculating such payments shall be reported quarterly to the Board of Directors of the Fund. 7. Compensation. ------------ (a) As compensation for its services, the Distributor will be paid fees with respect to a Class as set forth in Exhibit A opposite the name of such Class or as set forth in any applicable Distribution Agreement Supplement. (b) The Distributor shall waive its fee with respect to each Class representing interests in Portfolios of the Fund that declare a daily dividend on any day (and, with respect only to a Class that has adopted a Shareholder Services Plan, on a pro rata basis with Servicing Organizations under their Servicing Agreements) to the extent necessary to ensure that the fee required to be accrued does not exceed the income accrued by the Class Shares on such day. (c) If this Agreement becomes effective with respect to a Class subsequent to the first day of a month or shall terminate before the last day of a month, the compensation of the Distributor with respect to such Class under this Paragraph 7 for that part of the month this Agreement is in effect shall be prorated in a manner consistent with the calculations of the fees as set forth in the applicable Distribution Agreement Supplement. Payment of the Distributor's compensation for the preceding month shall be made as promptly as possible after completion of the computations contemplated in this paragraph. 8. Expenses. The expenses connected with the Fund shall be -------- allocable between the Fund and the Distributor as follows: (a) The Distributor shall furnish, at its expense and without cost to the Fund, the services of personnel to the extent that such services are required to carry out its obligations under this Agreement. (b) The Distributor shall bear the expenses of any promotional or sales literature used by the Distributor or furnished by the Distributor in connection with the public -5- offering of the Fund's Class Shares, the expenses of printing (exclusive of typesetting) and distributing Prospectuses and SAIs to prospective shareholders, the expenses of advertising in connection with the public offering of the Fund's Class Shares and all legal expenses in connection with the foregoing. (c) The Fund assumes and shall pay or cause to be paid all other expenses of the Fund, including, without limitation: the fees of the Fund's investment adviser and Distributor; the charges and expenses of any registrar, any custodian or depository appointed by the Fund for the safekeeping of its cash, portfolio securities and other property, and any stock transfer, dividend or accounting agent or agents appointed by the Fund; brokers' commissions chargeable to the Fund in connection with portfolio securities transactions to which the Fund is a party; all taxes, including securities issuance and transfer taxes, and corporate fees payable by the Fund to federal, state or other governmental agencies; the cost and expense of engraving or printing of stock certificates representing shares of the Fund; all costs and expenses in connection with the organization of the Fund and the registration of shares of the Fund with the SEC and under state securities laws and in connection with maintenance of registration of the Fund and its shares with the SEC and various states and other jurisdictions (including filing fees and legal fees and disbursements of counsel); except as provided in subparagraph (b) above, the expenses of printing, including typesetting, and distributing prospectuses of the Fund and supplements thereto to the Fund's shareholders; all expenses of shareholders' and Directors' meetings and of preparing, printing and mailing of proxy statements and reports to shareholders; fees and travel expenses of directors who are not interested persons (as such term is defined in the 1940 Act) of the Fund ("Non-Interested Directors") or members of any advisory board or committee established by the Non-Interested Directors; all expenses incident to the payment of any dividend, distribution, withdrawal or redemption, whether in shares or in cash; charges and expenses of any outside service used for pricing of the Fund's stares; charges and expenses of legal counsel, including counsel to the Non-Interested Directors, and of independent accountants, in connection with any matter relating to the Fund; membership dues of industry associations; interest payable on Fund borrowings; postage; insurance premiums on property or personnel (including officers and directors) of the Fund which inure to its benefit; extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto); and all other charges and costs of the Fund's operation unless otherwise explicitly provided herein. 9. Standard of Care; Indemnity by Fund. The Distributor shall not ----------------------------------- be liable for any error of judgment or mistake of law or for any act or omission for any loss suffered by the Fund or any Class or Portfolio thereof in connection with the matters to which this Agreement relates, provided that nothing herein shall be deemed to protect or purport to protect the Distributor against any liability to the Fund or its shareholders to which the Distributor would otherwise be subject by reason of breach of this Agreement, willful misfeasance, bad faith or negligence on its part in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement ("Disabling Conduct"). The Fund agrees to indemnify and hold the Distributor, its officers and directors -6- and each person (if any) who controls the Distributor within the meaning of Section 15 of the 1933 Act harmless from and against any and all losses, claims, damages and liabilities including but not limited to attorney fees and investigative expenses) which the Distributor, its officers and directors or any such controlling person may incur under the 1940 Act, or under common law or otherwise, caused by or alleged to exist, including amounts paid in satisfaction of judgments, in compromise or as fines or penalties arising out of or based upon the Distributor's acting as such under this Agreement that do not result from Disabling Conduct, error of judgment, mistake of law or any negligent act or omission by the Distributor. 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 Distributor was not liable by reason of Disabling Conduct, error of judgment, mistake of law or any negligent act or omission or (ii) in the absence of such a decision, a reasonable determination, based upon a review of the facts, that the Distributor was not liable by reason of Disability Conduct, error of judgment, mistake of law or any negligent act or omission by (a) the vote of a majority of a quorum of directors of the Fund who are neither "interested persons" of the Fund nor parties to the proceeding ("disinterested non-party directors") or (b) an independent legal counsel in a written opinion. The Distributor, its officers, directors and control persons shall be entitled to advances from the Fund for payment of the reasonable expenses incurred by it or them in connection with the matter as to which it or they are seeking indemnification in the manner and to the fullest extent permissible under the Maryland General Corporation law. The Distributor shall provide to the Fund a written affirmation of its good faith belief that the standard of conduct necessary for indemnification by the Fund 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 Distributor shall provide a security in form and amount acceptable to the Fund for its undertaking; (b) the Fund 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 selected by the disinterested directors, in a written opinion, shall have determined, based on a review of facts readily available to the Fund at the time the advance is proposed to be made, that there is reason to believe that the Distributor will ultimately be found to be entitled to indemnification. The Distributor agrees that, promptly upon its receipt of notice of the commencement of any action against the Distributor, its officers and/or directors or against any person so controlling the Distributor, in respect of which indemnity or reimbursement may be sought from the Fund on account of its agreement in the preceding paragraph, notice in writing will be given to the Fund within 10 days after the summons or other first legal process shall have been served. The failure to notify the Fund of any such action shall not relieve the Fund from any liability which the Fund may have to the person against whom such action is brought by reason of any such alleged untrue statement or any such liability that arises other than by reason of the indemnity agreement contained in this paragraph. Thereupon, the Fund shall be entitled to participate, to the extent that it shall wish (including the selection of counsel with Distributor's reasonable approval), in the defense thereof. In the event the Fund elects to assume the defense of any such suit and retain counsel of good standing reasonably approved by the Distributor, the defendant or defendants in such suit shall bear the expense of any additional counsel retained by any of them; but in the case the Fund does not elect to assume the defense of any such suit or in the case the Distributor does not reasonably approve of counsel chosen by the Fund, the Fund -7- will reimburse the Distributor, its officers and directors or the controlling person or persons named as defendant or defendants in such suit for the fees and expenses of only one counsel or firm which may be retained on behalf of the Distributor, its officers and directors and such controlling persons. In the event that any such claim for indemnification is made by any director or person in control of the Distributor within the meaning of Section 15 of the 1933 Act who is also an officer or director of the Fund, the Fund, at its expense to the extent permitted by law, will submit to a court of appropriate jurisdiction the question of whether or not indemnification by it is against public policy as expressed in the 1933 Act, the 1934 Act, and the 1940 Act, and the Fund and the Distributor will be governed by the final adjudication of such question. The Fund's indemnification agreement contained in this paragraph and the Fund's representations and warranties in this agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Distributor, its offices and directors or any controlling person and shall survive the sale of any of the Class Shares made pursuant to this Agreement. This agreement of indemnity will inure exclusively to the benefit of the Distributor, its officers, directors and control persons, and to the extent permitted by the 1940 Act or any other applicable law consistent with the 1940 Act to the benefit of any of their successors and assigns. The Fund agrees promptly to notify the Distributor of the commencement of any litigation or proceeding against the Fund in connection with the issue and sale of any Class Shares. 10. Indemnity by the Distributor. The Distributor agrees to ---------------------------- indemnify and hold harmless the Fund, its officers and directors and persons who control the Fund within the meaning of Section 15 of the 1933 Act to the same extent as in the foregoing indemnity from the Fund to the Distributor, but only with respect to any untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the Fund by the Distributor or by any person on behalf of or at the request of the Distributor, excluding the Fund, expressly for use in the Registration Statement, Prospectus or SAI. The Distributor also agrees to indemnify and hold harmless the Fund, its officers and directors and persons who control the Fund within the meaning of Section 15 of the 1933 Act from and against any and all losses, claims, damages and liabilities arising by reason of any person acquiring any Class Shares, which may be based upon the 1933 Act or any other statute or at common law, on account of any wrongful sales activities of the Distributor or any of its registered representatives, as defined under the By-Laws of the National Association of Securities Dealers, Inc., including any failure to conform with any requirement of any state and federal law relating to the sale of such Class Shares. Notwithstanding anything contained herein to the contrary, the Distributor shall not be responsible to the Fund for and shall not indemnify and hold harmless the Fund, its officers and directors and persons who control the Fund within the meaning of Section 15 of the 1933 Act from and against any such losses, claims, damages or liabilities arising solely as a result of actions taken or omitted by the Distributor in good faith reliance on, and in conformity with, the Blue Sky Report. The Distributor shall also indemnify and hold harmless the Fund, its officers and -8- directors and persons who control the Fund within the meaning of Section 15 of the 1933 Act for any liability to the Fund or to the holders of Class Shares by reason of the Distributor's willful misfeasance, bad faith or negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement. The Fund, its officers, directors and control persons shall be entitled to advances from the Distributor for payment of the reasonable expenses incurred by it or them in connection with the matters as to which it or they are seeking indemnification in the manner and to the fullest extent permissible under Maryland General Corporation law. The Fund shall provide to the Distributor a written confirmation of its good faith belief that the standard of conduct necessary for indemnification by the Distributor has been met and a written undertaking to repay any such advance if it should be determined that the standard of conduct has not been met. In case any action shall be brought against the Fund, its officers and directors and persons who control the Fund within the meaning of Section 15 of the 1933 Act in respect of which it may seek indemnity or reimbursement from the Distributor on account of the agreement of the Distributor contained in this paragraph 10, the Distributor shall have the rights and duties given to the Fund, and the Fund, its officers and directors and persons who control the Fund within the meaning of Section 15 of the 1933 Act shall have the rights and duties given to the Distributor, in the third and fourth paragraphs of paragraph 9. 11. Term. This Agreement shall become effective at the close of ---- regular trading on the New York Stock Exchange on the date hereof and shall continue in full force and effect, subject to paragraph 14 hereof, until August 16, 1999. 12. Renewal. Following the expiration of its initial term, this ------- Agreement shall continue in full force and effect from year to year with respect to a Class, provided that such continuance is specifically approved at least annually: (a) (i) by the Fund's Board of Directors or (ii) by the vote of a majority of the outstanding voting securities (as defined in section 2(a)(42) of the 1940 Act) that constitute Class Shares, and (a) by the affirmative vote of a majority of the Non-Interested Directors of the Fund by votes cast in person at a meeting specifically called for the purpose of voting on such approval. 13. Amendment. This Agreement may be amended by the parties hereto --------- with respect to a Class only if such amendment is specifically approved (i) by the Board of Directors of the Fund or by the vote of a majority of outstanding Class Shares, and (ii) by a majority of the Non-Interested Directors of the Fund, which vote must be cast in person at a meeting called for the purpose of voting on such approval. 14. Termination. This Agreement may be terminated at any time, ----------- without the payment of any penalty, by vote of the Fund's Board of Directors, by a vote of a majority of the members of the Non-Interested Directors of the Fund or by vote of a majority of outstanding Class Shares (as defined in section 2(a)(42) of the 1940 Act), or by the Distributor, on sixty (60) days' written notice to the other party. The notice provided for herein may be waived by either -9- party. This Agreement shall automatically terminate in the event of its assignment, the term "assignment" for this purpose having the meaning defined in Section 2(a)(4) of the 1940 Act. 15. Miscellaneous. ------------- (a) The Distributor agrees on behalf of itself and its employees to treat confidentially and as proprietary information of the Fund all records and other information relative to the Fund and its prior, present or potential shareholders, and not to use such records and information for any purpose other than performance of its responsibilities and duties hereunder, except after prior notification to and approval in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where the Distributor 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. (b) Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the SEC issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is revised by rule, regulation or order of the SEC, such provision shall be deemed to incorporate the effect of such rule, regulation or order. Otherwise, the provisions of this Agreement shall be governed by the laws of the State of Maryland. (c) All notices and other communications hereunder shall be in writing or by confirming telegram, cable, telex or facsimile sending device. Notices shall be addressed (a) if to the Distributor, at Provident Distributors, Inc., Four Falls Corporate Center, 6th Floor, West Conshohocken, Pennsylvania 19428, Attention: Phil Rinnander and (b) if to the Fund, at the address of the Fund, Attention: Treasurer. If notice is sent by first-class mail, it shall be deemed to have been given three days after it is sent. If notice is sent by messenger, it shall be deemed to have been given on the day it is delivered, or if sent by confirming telegram, cable, telex or facsimile sending device, it shall be deemed to have been given immediately. -10- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective officers as of the day and year first above written. THE RBB FUND, INC. BY:/S/ Edward J. Roach ------------------- PROVIDENT DISTRIBUTORS, INC. BY:/S/ Philip Rinnander -------------------- -11- Exhibit A RBB SHARE CLASSES TO WHICH DISTRIBUTION AGREEMENT RELATES COMPENSATION (Basis Points) Class A CLASS A COMMON STOCK -- Class B CLASS B COMMON STOCK -- Class C CLASS C COMMON STOCK -- Class D CLASS D COMMON STOCK -- Class E RBB Money Market -- Class F RBB Municipal Money Market -- Class G Cash Preservation Money Market 65 Class H Cash Preservation Municipal Money Market 65 Class I Sansom Street Municipal Money Market -- Class J Sansom Street Money Market 20 Class K Sansom Street Government Obligations -- Money Market Class L Bedford Money Market 65 Class M Bedford Municipal Money Market 65 Class N Bedford Government Obligations Money Market 65 Class O Bedford New York Municipal Money Market 65 Class P RBB Government Securities 65 Class Q CLASS Q COMMON STOCK -- Class R Bradford Municipal Money Market -- Class S Bradford Government Obligations Money Market -- Class T -- Class U -- Class V -- Class W CLASS W COMMON STOCK -- Class X -- Class Y -- Class Z -- Class AA -- Class BB -- Class CC -- Class DD CLASS DD COMMON STOCK -- Class EE CLASS EE COMMON STOCK -- Class FF n/i Micro Cap -- Class GG n/i Growth -- Class HH n/i Growth and Value -- Class II -- Class JJ -- Class KK -- Class LL -- Class MM -- Class NN -- Class OO -- Class PP -- Class QQ Boston Partners Institutional Large Cap Value 15 Class RR Boston Partners Investor Large Cap Value 25 Class SS Boston Partners Advisor Large Cap Value 75 Class TT Boston Partners Investor Mid Cap Value 25 -2- Class UU Boston Partners Institutional Mid Cap Value 15 Class VV Boston Partners Institutional Bond 15 Class WW Boston Partners Investor Bond 25 Class XX n/i Larger Cap Value -- Class YY Schneider Capital Management Value Fund -- Class ZZ -- Class AAA -- Class BBB -- Class CCC -- Class DDD Boston Partners Institutional Micro Cap Value -- Class EEE Boston Partners Investor Micro Cap Value 25 Class FFF -- Class GGG -- Class HHH -- Class III Boston Partners Institutional Market Neutral -- Class JJJ Boston Partners Investor Market Neutral 25 Class KKK Boston Partners Institutional Long-Short Equity -- Class LLL Boston Partners Investor Long-Short Equity 25 Class MMM n/i Small Cap Value -- Class JANNEY Janney Montgomery Scott Money Market 65 MONTGOMERY MONEY Class JANNEY Janney Montgomery Scott Municipal Money Market 65 MONTGOMERY MUNICIPAL Class JANNEY Janney Montgomery Scott Government Obligations 65 MONTGOMERY GOVERNMENT Money Market OBLIGATIONS MONEY Class JANNEY Janney Montgomery Scott Municipal NY Money Market 65 MONTGOMERY N.Y. MUNICIPAL MONEY -3- Class SELECT 1 Money Market 65 Class BETA 2 Municipal Money Market -- Class BETA 3 Government Obligations Money Market -- Class BETA 4 New York Municipal Money Market -- Class PRINCIPAL 1 Money Market 65 Class GAMMA 2 Municipal Money Market -- Class GAMMA 3 Government Obligations Money Market -- Class GAMMA 4 New York Municipal Money Market -- Class DELTA 1 Money Market -- Class DELTA 2 Municipal Money Market -- Class DELTA 3 Government Obligations Money Market -- Class DELTA 4 New York Municipal Money Market -- Class EPSILON 1 Money Market -- Class EPSILON 2 Municipal Money Market -- Class EPSILON 3 Government Obligations Money Market -- Class EPSILON 4 New York Municipal Money Market -- Class ZETA 1 Money Market -- Class ZETA 2 Municipal Money Market -- Class ZETA 3 Government Obligations Money Market -- Class ZETA 4 New York Municipal Money Market -- Class ETA 1 Money Market -- Class ETA 2 Municipal Money Market -- Class ETA 3 Government Obligations Money Market -- Class ETA 4 New York Municipal Money Market -- Class THETA 1 Money Market -- -4- Class THETA 2 Municipal Money Market -- Class THETA 3 Government Obligations Money Market -- Class THETA 4 New York Municipal Money Market -- -5- Exhibit B PROVIDENT DISTRIBUTORS, INC. Four Falls Corporate Center, 6th Floor West Conshohocken, Pennsylvania 19428 _______, 1999 [Insert Name of Dealer] Ladies and Gentlemen: We serve as distributor of the classes (individually, a "Class" and, collectively, "Classes" of shares ("Shares") of the investment portfolios of The RBB Fund, Inc. (the "Fund") listed on Schedule A attached to this Agreement. The Fund offers Shares to the public in accordance with the terms and conditions contained in the Prospectuses (and Statements of Additional Information ("SAIs") incorporated by reference thereto) relating to those Classes of Shares. In connection with the offering of Shares to the public, you agree to assist in the distribution of Shares on the following terms and conditions: 1. You are hereby authorized to use your best efforts to offer and sell the Classes of Shares appearing on Schedule A hereto as such Schedule shall be amended from time to time consistent with the provisions of this Agreement. In connection with those activities, you are also hereby authorized to distribute the promotional and sales materials, Prospectuses, SAIs (upon request by a purchaser), shareholder reports and other materials relevant to a particular Class and to perform, if any, the shareholder services which you have agreed to provide in respect of any such Class. All such activities shall be performed in compliance with the conditions and procedures set forth in the relevant Prospectuses and SAIs, including, without limitation, the public offering price then in effect. If the services you agree to provide pursuant to this Paragraph 1 are in respect of any _____ Class Shares, you hereby agree to pay all direct and indirect expenses or costs we may incur under the Distribution Agreement between us and the Fund arising in connection with any promotional or sales literature (including Prospectuses and SAIs) furnished to you in any offering of the _______ Class Shares, as well as expenses of advertising and all legal expenses in connection with the matters covered by this sentence. 2. No person is authorized to make any representation concerning the Fund or the Shares of any Class except those contained in the Prospectuses and related SAIs and in such printed information as we may subsequently prepare. No person is authorized to distribute any sales literature or advertisements as those terms are defined under Section 2210 of the Conduct Rules of the National Association of Securities Dealers Regulation, Inc. ("NASD") relating to the Fund without our prior written approval. 3. Applicable selling commissions, concessions or other fees (including, without limitation, fees paid to us under a Plan of Distribution with respect to a Class pursuant to Rule 12b-1 under the 1940 Act and reallocated to you) to which you are entitled for the provision of the services to be rendered under this Agreement are those specified on attached Schedule A to this Agreement and in the current Prospectus of the Fund, as such Schedule and Prospectuses shall be amended from time to time. These amounts are subject to change without notice by us and comply with any changes in regulatory requirements. 4. You agree that in performing the services under this Agreement, you at all times will comply with the Conduct Rules of the NASD, including, without limitation, the provisions of Section 2830 of such Rules. You agree that you will not combine customer orders to reach breakpoints in commissions for any purposes whatsoever unless authorized by the then current Prospectus in respect of Shares of a particular Class or by us in writing. You also agree that you will place orders immediately upon their receipt and will not withhold any order so as to profit therefrom. In determining the amount payable to you hereunder, we reserve the right to exclude any sales which we reasonably determine are not made in accordance with the terms of the relevant Prospectus and provisions of this Agreement. 5. You agree to comply with the provisions contained in the Securities Act of 1933 governing the distribution of Prospectuses to persons to whom you offer Shares under this Agreement. You further agree to deliver, upon our request, copies of any amended Prospectus to purchasers, if any, whose Shares you are holding as record owner and to deliver to such customers copies of the annual and interim reports and proxy solicitation materials of the Fund. We agree to furnish to you as many copies of the Prospectuses and related SAIs, annual and interim financial reports and proxy solicitation materials as you may reasonably request. 6. You represent that you are a properly registered or licensed broker or dealer under applicable federal and state law and a member in good standing of the NASD). Your expulsion or suspension from the NASD will automatically terminate this Agreement on the effective date of such expulsion or suspension. 7. 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 the Fund in any manner or in any respect. You agree to and do release, indemnify and hold us, the Fund and its transfer agent and our and their respective officers, directors, agents, employees and affiliates harmless from and against any and all direct or indirect liabilities, losses, claims, demands and expenses (including, without limitation, reasonable attorneys' fees) resulting from requests directions, actions, or inactions of or by you or your officers, employees, or agents regarding your responsibilities under this Agreement or the purchase, redemption, transfer or registration of Shares by or on behalf of customers. This indemnification shall survive the termination of this Agreement. 8. You shall not make offers or sales of Shares in any state or jurisdiction where the particular Shares are not qualified for sale under or exempt from the requirements of the securities laws of the state or other jurisdictions where the proposed offer or sale is to be -2- made. You also agree that you will not offer or sell any Shares to persons in any jurisdiction in which you are not properly licensed and authorized to make such offers or sales. 9. The Fund shall have full authority to take such action as it deems advisable in respect of all matters pertaining to the offering of the Shares, including the right, in its discretion, to reject an order for Shares and, without notice, to suspend sales or withdraw the offering of Shares of any and all Classes entirely. 10. You will (i) maintain all records required by law (including records detailing the services you provide in return for the fees to which you are entitled under this Agreement) and, upon request by the Fund or us, promptly make such of these records available to the Fund or us, as the case may be, as the Fund or we may reasonably request in connection with its operations; and (ii) promptly notice the Fund and us if you experience any difficulty in maintaining the records described in the foregoing clauses in an accurate and complete manner. 11. We and the Fund shall be under no liability to you except for lack of good faith and for obligations expressly assumed by us hereunder. In carrying out your obligations, you agree to act in good faith and without negligence. Nothing contained in this Agreement is intended to operate as a waiver by us or you of compliance with any provision of the NASD Conduct Rules, or any federal or state securities laws or the rules and regulations adopted thereunder. 12. This Agreement shall become effective only when accepted and signed by you and may be amended only by a written instrument signed by you and us. This Agreement may be terminated as provided above and by either party, without penalty, upon notice to the other party. 13. All communications to us should be sent to: Provident Distributors, Inc. Four Falls Corporate Center, 6th Floor West Conshohocken, Pennsylvania 19428 Any notice to you shall be duly given if mailed or telegraphed to you at the address specified by you below. 14. You hereby represent and warrant that you are duly authorized by all necessary action, approval or authorization to enter into this Agreement and that, if a corporation, partnership or other entity, you are duly organized, validly existing and in good standing under the laws of the jurisdiction in which you are organized. 15. This Agreement constitutes the entire agreement between the parties hereto relating to the subject matter hereof and supersedes any and all agreements between the -3- parties relating to said subject matter. This Agreement and all the rights and obligations of the parties hereunder shall be governed by and construed under the laws of the State of New York. PROVIDENT DISTRIBUTORS, INC. Date:_______________ By:_______________________________ -4- Accepted and Agreed to: Name of Broker Dealer____________________________________________ Address__________________________________________________________ City__________________________ State____________ Zip___________ Telephone Number_________________________________________________ Name of Authorized Officer___________________ Title_____________ Date:_______________ Authorized Officer Signature_______________ -5- Schedule A to Broker/Dealer Agreement You will assist in the distribution of the Classes of Shares of Common Stock, par value $.001 of The RBB Fund, Inc. and, in addition to other fees to which you may be entitled, shall receive fees at an annual rate set forth below in respect of the following Shares payable pursuant to Rule 12b-1 under the Investment Company Act of 1940.* __________________________ * Rule 12b-1 fees will be paid quarterly within one month following the end of each calendar quarter after you supply services to your customers who purchase Shares. These fees are based on the average daily net asset value of the Shares during the period covered by the payment. You will not receive payment of any fees for any quarterly period if you are entitled to less than $1,000. To the extent that we are required to waive any portion of the Rule 12b-1 fees payable to us by The RBB Fund, Inc., you shall waive a proportionate share of the Rule 12b-1 fees payable to you hereunder. A-1 EX-99.E2 8 DISTRIBUTION AGREEMENT SUPPLEMENT DISTRIBUTION AGREEMENT SUPPLEMENT (Bogle Investment Management Small Cap Growth Fund - Classes NNN and OOO) This supplemental agreement is entered into this 15th day of September, 1999, by and between THE RBB FUND, INC. (the "Fund") and PROVIDENT 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 June 25, 1999 (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 Bogle Investment Management Small Cap Growth Fund (Class NNN and Class OOO) of the Fund. Each of these classes shall constitute a "Class" as referred to in the Distribution Agreement and each of its shares shall be "Class Shares" as referred to therein. 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. PROVIDENT DISTRIBUTORS, INC. By: /s/ Edward J. Roach By: /s/ Phil Rinnander ------------------------- ------------------ Edward J. Roach Phil Rinnander President and Treasurer Title: Chief Executive Officer EX-99.G15 9 CUSTODIAN AGREEMENT SUPPLEMENT CUSTODIAN AGREEMENT SUPPLEMENT (Bogle Investment Management Small Cap Growth Fund) This supplemental agreement is entered into this 15th day of September, 1999 by and between THE RBB FUND, INC. (the "Company") and PFPC Trust Company, (the "Custodian Agent"). 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 the Custodian 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 the Custodian has undertaken to act as custodian for the Company 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 Bogle Investment Management Small Cap Growth Fund. 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 Bogle Investment Management Small Cap Growth Fund, monthly fees as shall be agreed to from time to time by the Fund and the Custodian. 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 TRUST COMPANY By: /s/ Edward J. Roach By: /s/ Joseph Gramlich -------------------- --------------------- Edward J. Roach Joseph Gramlich EX-99.H51 10 TRANSFER AGENCY AGREEMENT SUPPLEMENT TRANSFER AGENCY AGREEMENT SUPPLEMENT (Bogle Investment Management Small Cap Growth Fund) (Institutional and Investor Classes) This supplemental agreement is entered into this 15th day of September, 1999 by and between THE RBB FUND, INC. (the "Company") and PFPC, Inc., a Delaware corporation (the "Transfer Agent"), which is an indirect, wholly-owned subsidiary of PFPC Worldwide, Inc. 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 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 Company with respect to the Shares of the Company, 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 Bogle Investment Management Small Cap Growth Fund (the "Fund") Institutional Class of Common Stock (Class NNN) and Investor Class of Common Stock (Class OOO)of the Fund. 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 each Class of the Fund, monthly fees that shall be agreed to from time to time by the Company 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. 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/ Steve Turowski -------------------- ------------------- Edward J. Roach Steve Turowski President & Treasurer EX-99.H52 11 ADMINISTRATIVE SERVICES AGREEMENT ADMINISTRATIVE SERVICES AGREEMENT --------------------------------- This Agreement is made as of the 15th day of September, 1999, by and between THE RBB FUND, INC., a Maryland corporation (the "Fund"), on behalf of its Bogle Investment Management Small Cap Growth Fund (the "Portfolio") and PROVIDENT DISTRIBUTORS, INC. ("Provident"), a Delaware corporation. W I T N E S S E T H WHEREAS, the Fund is registered as an open-end, diversified management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund wishes to retain Provident to provide certain administrative services to the Portfolio, and Provident is willing to furnish such services; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties hereto as follows: 1. Appointment. The Fund hereby appoints Provident to provide certain ----------- administrative services to the Portfolio for the period and on the terms set forth in this Agreement. Provident accepts such appointment and agrees to furnish the services herein set forth in return for the compensation as provided in Paragraph 6 of this Agreement. Provident agrees to comply with all relevant provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and 1940 Act and applicable rules and regulations thereunder. 2. Services on a Continuing Basis. Subject to the supervision and ------------------------------ direction of the Board of Directors of the Fund, Provident undertakes to perform the following administrative services for the Portfolio: (a) Making available office facilities, as requested by the Fund, (which may be in the offices of Provident or a corporate affiliate); (b) Furnishing data processing services, clerical services and certain internal quasi-legal, executive and administrative services; (c) Furnish an 800 telephone line for shareholder inquiries and otherwise assist in the preparation of shareholder communications and notices as requested by the Fund or the investment adviser to the Portfolio (the "Investment Adviser"). (d) Assisting in coordinating the preparation of reports to the Portfolio's shareholders of record and the Securities and Exchange Commission (the "SEC") including, but not limited to, proxy statements; annual, semi-annual and quarterly reports to Shareholders; annual and semi-annual reports on Form N- SAR; and post-effective amendments to the Fund's Registration Statement on Form N-1A (the "Registration Statement"); (e) Assisting the Investment Adviser, at the Investment Adviser's request, in monitoring and developing compliance procedures which will include, among other matters, procedures to assist the Investment Adviser in monitoring compliance with the Portfolio's investment objective, policies, restrictions, tax matters and applicable laws and regulations; and (f) Acting as liaison between the Fund and the Fund's independent public accountants, counsel, custodian or custodians, transfer agent and administrator and taking all reasonable action in the performance of its obligations under this Agreement to assure that all necessary information is made available to each of them. In performing all services under this Agreement, Provident shall act in conformity with applicable law, the Fund's Articles of Incorporation and By- Laws, and all amendments thereto, and the Portfolio's investment objective, investment policies and other practices and policies set forth in the Fund's Registration Statement, as such Registration Statement and practices and policies may be amended from time to time. 3. Books and Records. In connection with the services provided under this ----------------- Agreement, Provident shall maintain such books and records, as required by the Fund, of the Fund's reports or filings with the Portfolio's shareholders, the SEC authorities and other required reports and documents prepared, filed or distributed on behalf of the Fund. The books and records pertaining to the Fund or any Portfolio that are in the possession of Provident shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the 1940 Act and other applicable securities laws and rules and regulations. The Fund, or the Fund's authorized representatives, shall have access to such books and records at all times during Provident's normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by Provident to the Fund or the Fund's authorized representative at the Fund's expense. 4. Confidentiality. Provident agrees on behalf of itself and its --------------- employees to treat confidentially all records and other information relative to the Fund or any Portfolio and its prior, present or potential shareholders and relative to the Investment Adviser and its prior, present or potential customers, 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 Provident 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. 5. Right to Receive Advice. ----------------------- (a) Advice of Fund. If Provident is in doubt as to any action to be -------------- taken or omitted by it, it may request, and shall receive, directions or advice from the Fund. (b) Advice of Counsel. If Provident is in doubt as to any question of ----------------- law involved in any action to be taken or omitted by Provident, it may request advice at its own cost from counsel of its own choosing (who may be counsel for the Investment Adviser, the Fund or Provident, at the option of Provident). (c) Conflicting Advice. In case of conflict between directions or ------------------ advice received by Provident pursuant to subsection (a) of this paragraph and advice received by Provident pursuant to subsection (b) of this paragraph, Provident shall be entitled to rely on and follow the advice received pursuant to the latter provision alone. (d) Protection of Provident. Provident shall be protected in any ----------------------- action or inaction which it takes in reliance on any directions or advice received pursuant to subsections (a) or (b) of this paragraph which Provident, after receipt of any such directions or advice in good faith believes to be consistent with such directions or advice. However, nothing in this paragraph shall be construed as imposing upon Provident any obligation (i) to seek such directions or advice or (ii) to act in accordance with such directions or advice when received. Nothing in this subsection shall excuse Provident when an action or omission on the part of Provident constitutes willful misfeasance, bad faith, negligence or reckless disregard by Provident of its duties under this Agreement. 6. Compensation. In consideration of services rendered pursuant to this ------------ Agreement, the Fund will pay Provident on the first business day of each month a fee for the previous month, calculated daily. The Fund will also reimburse Provident for its out-of-pocket expenses incurred on behalf of the Fund, including but not limited to, postage, telephone, telex and Federal Express charges. The annual fee shall be .15% of the Portfolio's average daily net assets exclusive of out-of-pocket expenses. Upon any termination of this Agreement before the end of any month, the fee for such part of a month shall be prorated according to the proportion which such period bears to the full monthly period and shall be payable upon the date of termination of this Agreement. For the purpose of determining fees payable to Provident, the value of the Portfolio's net assets shall be computed at the times and in the manner specified in the Fund's Prospectus and Statement of Additional Information as from time to time in effect. The annual fee paid to Provident hereunder may be amended upon terms as may be specifically agreed to in writing from time to time by the Fund and Provident. 7. Indemnification. The Fund agrees to indemnify and hold harmless --------------- Provident and its nominees from all taxes, charges, expenses, assessments, claims and liabilities (including, without limitation, liabilities arising under federal securities and commodities laws and any state and foreign securities and Blue Sky laws, all as or to be amended from time to time) and expenses, including (without limitation) attorneys' fees and disbursements, arising directly or indirectly from any action or thing which Provident takes or does or omits to take or do pursuant to the terms of this Agreement or otherwise at the request or on the direction of or in reliance on the advice of the Fund, provided, that neither Provident nor any of its nominees shall be indemnified against any liability to the Fund or to its Shareholders (or any expenses incident to such liability) arising out of Provident's own willful misfeasance, bad faith, negligence or reckless disregard of its duties and obligations under this Agreement. 8. Responsibility of Provident. Provident shall be under no duty to take --------------------------- any action on behalf of the Fund, except as specifically set forth herein or as may be specifically agreed to by Provident in writing. In the performance of its duties hereunder, Provident shall be obligated to exercise care and diligence and to act in good faith and to use its best efforts within reasonable limits in performing services provided for under this Agreement. Provident shall be responsible for its own negligent failure to perform its duties under this Agreement. Without limiting the generality of the foregoing or of any other provision of this Agreement, Provident in connection with its duties under this Agreement shall not be under any duty or obligation to inquire into and shall not be liable for or in respect of (a) the validity or invalidity or authority or lack thereof of any notice or other instrument which conforms to the applicable requirements of this Agreement, and which Provident reasonably believes to be genuine; or (b) delays or errors or loss of data occurring by reason of circumstances beyond Provident's control, including acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdown, flood or catastrophe, acts of God, insurrection, war, riots or failure of the mails, transportation, communication or power supply. 9. Duration and Termination. This Agreement shall continue until ------------------------ terminated by the Fund or Provident on 60 days' written notice. 10. Notices. All notices and other communications hereunder (collectively ------- referred to as "Notice" or "Notices" in this Paragraph), shall be in writing or by confirming telegram, Cable, telex or facsimile sending device. Notices shall be addressed (a) if to Provident at Provident's address, Four Falls Corporate Center, 6/th/ Floor, West Conshohocken, PA 19428; (b) if to the Fund, at 400 Bellevue Parkway, Wilmington, DE 19809; or (c) if to neither of the foregoing, at such other address as shall have been notified to the sender of any such Notice or other communication. If the location of the sender of a Notice or other communication and the address of the addressee thereof are, at the time of sending more than 100 miles apart, the Notice may be mailed, in which case it shall be deemed to have been given three days after it is sent, or if sent by confirming telegram, cable, telex, or facsimile sending device charges arising from the sending of a Notice hereunder shall be paid by the sender. 11. Further Actions. Each party agrees to perform such further acts and --------------- execute such further documents as are necessary to effectuate the purposes hereof. 12. Amendments. This Agreement or any part hereof may be changed or waived ---------- only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought. 13. 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. 14. Miscellaneous. This Agreement embodies the entire agreement and ------------- understanding between the parties thereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement shall be deemed to be a contract made in New York and governed by New York law. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective successors. IN WITNESS WHEREOF, the parties hereto have caused this Agreement 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 ------------------- Edward J. Roach Title: President and Treasurer PROVIDENT DISTRIBUTORS, INC. By: /s/ Phil Rinnander ------------------- Phil Rinnander EX-99.H53 12 NON 12B-1 SHAREHOLDER SERVICES PLAN AND AGREEMENT NON-12b-1 SHAREHOLDER SERVICES PLAN OF THE RBB FUND, INC. Section 1. Upon the recommendation of the Fund's distributor --------- ("Distributor") of shares of Class OOO Common Stock of The RBB Fund, Inc., par value $.001 per share (the "Class OOO Share"), any officer of The RBB Fund, Inc. (the "Fund") is authorized to execute and deliver, in the name and on behalf of the Fund, written agreements, in substantially the form attached hereto or in any other form duly approved by the Fund's Board of Directors ("Servicing Agreements"), with shareholders of record, ("Service Organizations") of the Fund's Class OOO Shares. Such Servicing Agreements shall require the Service Organizations to provide certain support services on behalf of the Fund as set forth therein to their clients who beneficially own Class OOO Shares in consideration of a fee, computed daily and paid monthly in the manner set forth in the Servicing Agreements, at the annual rate not to exceed .25% of the average daily net asset value of Class OOO Shares held by the Service Organizations on behalf of their clients. All expenses incurred by the Fund in connection with the Servicing Agreements and the implementation of this Non-12b- 1 Shareholder Services Plan ("Plan") shall be borne entirely by the holders of Class OOO Shares. Section 2. The Distributor shall monitor the arrangements pertaining to --------- the Fund's Servicing Agreements with Service Organizations in accordance with the terms of the Distributor's distribution agreement with the Fund pertaining to Class OOO Shares. The Distributor shall not, however, be obligated by this Plan to recommend, and the Fund shall not be obligated to execute, any Servicing Agreement with any Service Organization. Section 3. So long as this Plan is in effect, the Distributor shall --------- provide to the Fund's Board of Directors, and the 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. Section 4. This Plan shall become effective as of September 15, 1999 upon --------- the approval of the Plan (and the form of Servicing Agreement attached hereto) by a majority of the Fund's Directors who are not "interested persons" as defined in the Investment Company Act of 1940 (the "Act") of the Fund and have no direct or indirect financial interest in the operation of this Plan or in any Servicing Agreements or other agreements related to this Plan (the "Disinterested Directors"), pursuant to a vote cast in person at a meeting called for the purpose of voting on the approval of this Plan (and form of Servicing Agreement.) Section 5. Unless sooner terminated, this Plan shall continue until August --------- 16, 2000, and thereafter shall continue automatically for successive annual periods ending on August 16, provided such continuance is approved at least annually in the manner set forth in Section 4. Section 6. This Plan may be amended at any time by the Fund's Board of --------- Directors, provided that any material amendments of the terms of this Plan shall become effective only upon the approvals set forth in Section 4. Section 7. This Plan is terminable at any time by vote of a majority of --------- the Disinterested Directors. Section 8. While this Plan is in effect, the selection and nomination of --------- those Directors who are not "interested persons" (as defined in the Act) of the Fund shall be committed to the discretion of such Directors who are not "interested persons" (as defined in the Act) of the Fund. Section 9. The Fund has adopted this Non-12b-1 Shareholder Services Plan --------- as of July 28, 1999. -2- 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 request 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' and (ix) 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) you will provide to your Clients a schedule of any fees charged by you to your Clients in connection with the investment of their assets in Class OOO Shares; (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 PDI 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 fully payment therefor, a fee at the annual rate of .25% of the average daily net asset value of the Class OOO Shares held of record by you from time to time on behalf of Clients (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), -2- 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 by primarily intended to result in the sale of any shares issued by us. Section 10. This Agreement will become effective on the date a fully executed copy of this Agreement is received by us or our designee. Unless sooner terminated, this Agreement will continue until August 16, 2000 and thereafter will continue automatically for successive annual periods ending on August 16, 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 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. -3- 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 Provident Distributors, Inc., Four Falls Corporate Center, 6th Floor, West Conshohocken, Pennsylvania 19428. Very truly yours, THE RBB FUND, INC. Date: By: _____________________ Edward J. Roach Authorized Officer Accepted and Agreed to: _____________________________________ Name of Entity (Please Print or Type) Address:______________________________ ______________________________ ______________________________ Date: By: __________________________________ Authorized Officer -4- EX-99.H54 13 FORM OF AGREEMENT E*TRADE Group, Inc. No Transaction Fee Mutual Fund Offering RETAIL SHAREHOLDER SERVICES AGREEMENT This Agreement is made as of _______, 19__, among E*TRADE Group, Inc. ("E*TRADE"), a Delaware corporation, The RBB Fund, Inc. on behalf of its portfolios advised by Boston Partners Asset Management, L.P. ("Fund"), a Maryland corporation registered under the Investment Company Act of 1940, as amended (the "1940 Act") as an open-end management investment company, and Provident Distributors, Inc., a Delaware corporation registered as a broker- dealer under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and which serves as principal underwriter to Fund pursuant to an agreement dated June 25, 1999 and Boston Partners Asset Management, L.P., a Delaware limited partnership (together with Provident Distributors, Inc., "Fund Affiliates") (Fund and Fund Affiliates are collectively referred to as "Fund Parties"). WHEREAS, Fund Parties wish to engage E*TRADE to perform certain record-keeping, shareholder communication, and other shareholder administrative services for Fund's shareholders; and WHEREAS, E*TRADE agrees to perform such services on the terms and conditions set forth in this Agreement; Now, therefore, in consideration of the foregoing and the mutual promises set forth below, E*TRADE and Fund Parties agree, intending to be legally bound hereby, as follows: 1 SERVICES E*TRADE shall perform such services for Fund Parties as are designated in Schedule A to this Agreement ("Services"), as such Schedule A may from time to time be amended, such amendments to be evidenced by the signature thereto by a duly authorized representative of each of the Parties. 2 COMPENSATION In consideration for the Services rendered by E*TRADE pursuant to this Agreement, the Fund Parties shall pay a fee to E*TRADE as shall be calculated pursuant to Schedule B to this Agreement. Both Fund and Fund Affiliate shall be severally liable for such compensation in the proportions designated on Schedule D. 3 TRANSACTION CHARGES E*TRADE shall not assess against any of its customers any fee for executing any purchase or sale order where such order involves the securities of Fund. Notwithstanding this provision, E*TRADE shall have the right to assess against customers a fee for executing a purchase or sale order where the customer has held such position for less than ninety (90) days, or where E*TRADE provides the customer with a service that is not contemplated by this Agreement. 4 INDEMNIFICATION (a) Fund Parties agree to indemnify, defend and hold E*TRADE, its officers, directors, employees, agents, and affiliates free and harmless from and against (i) any and all claims, demands, liabilities and expenses, including legal expenses, which E*TRADE, its officers, directors, employees, agents, and affiliates may incur arising out of or based upon any untrue statement, or alleged untrue statement, of material fact contained in any registration statement, prospectus, statement of additional information, sales material, or other information provided by Fund, or based upon any omission, or alleged omission, to state a material fact required to be stated to make the statements contained therein not misleading, except to the extent that E*TRADE has itself produced such materials; (ii) any breach by either Fund or Fund Affiliate of any representation, warranty or provision contained herein, or (iii) any willful misconduct or gross negligence by Fund or Fund Affiliate in the performance of, or failure to perform, its respective obligations under this Agreement, except to the extent that such claims, liabilities or expenses are caused by E*TRADE's breach of this Agreement or willful misconduct or gross negligence in the performance, or failure to perform, their respective obligations under this Agreement. This section 4(a) shall survive termination of this Agreement. (b) E*TRADE agrees to indemnify, defend and hold harmless Fund Parties, their officers, directors, employees, agents, and affiliates free and harmless from and against any and all claims, demands, liabilities and expenses, including legal expenses, which Fund Parties, their officers, directors, employees, agents, and affiliates may incur arising out of or based upon (i) any untrue statement, or alleged untrue statement, of material fact contained in any advertising or sales literature prepared by E*TRADE without reliance upon information provided by either Fund Parties or an unaffiliated mutual fund rating or statistical information agency; (ii) any breach by E*TRADE of any representation, warranty or provision contained herein, or (iii) any willful misconduct or gross negligence by E*TRADE in the performance of, or failure to perform, its obligations under this Agreement, except to the extent that such claims, liabilities or expenses are caused by Fund Parties' breach of this Agreement or willful misconduct or gross negligence in the performance, or failure to perform, their respective obligations under this Agreement. This section 4(b) shall survive termination of this Agreement. No party hereto shall be liable for any special, consequential or incidental damages. -2- 5 ROLE OF E*TRADE The parties acknowledge and agree that the Services performed by E*TRADE pursuant to this Agreement are not the services of an underwriter or principal underwriter of Fund within the meaning of the 1940 Act or the Securities Act of 1933, as amended. This Agreement does not grant E*TRADE any right to purchase shares from Fund; neither does it preclude E*TRADE's ability to purchase shares from Fund. E*TRADE shall not be deemed to be an agent of Fund Parties or of Fund for the purposes of selling Fund's shares to any dealer or the public. To the extent that E*TRADE is involved in the purchase of shares of any Fund by E*TRADE's customers, such involvement will be as agent of such customer only. 6 INFORMATION TO BE PROVIDED Fund parties shall provide to E*TRADE prior to the effectiveness of this Agreement or as soon thereafter as is reasonably practicable: (a) Certified resolutions of the board of directors or board of trustees, as applicable, of Fund Parties authorizing the execution of this Agreement and the performance by the Fund Party pursuant to this Agreement; and (b) Two (2) written copies of each current prospectus and statement of additional information relating to any of Fund's shares which may be purchased by customers of E*TRADE. Fund Parties agree to submit to E*TRADE two (2) written copies of any amendment or supplement to or any updated version of such prospectus(es) and statement(s) of additional information no later than the effective date of such amendment, supplement or updated version. 7 TERMINATION OF AGREEMENT This Agreement is terminable, without penalty, at any time upon ninety (90) days' notice by E*TRADE to Fund and Fund Affiliate or by Fund and Fund Affiliate to E*TRADE. Termination of this Agreement shall terminate E*TRADE's obligations to perform the Services, as of the effective date of the termination, and shall terminate Fund Parties' obligations to pay any compensation hereunder, as of the effective date of the termination. Notwithstanding any provision herein to the contrary, Fund Parties' obligations pursuant to this Agreement shall not be terminated with respect to any transactions in Fund's shares commenced prior to the effective date of the termination of this Agreement. -3- 8 NOTICES All notices and other communications will be duly given if mailed, telegraphed, telexed, or transmitted by similar telecommunications device to the addresses designated on Schedule C hereto. 9 NON-EXCLUSIVITY Each Party to this Agreement may enter into agreements similar to this Agreement with other parties for the performance of services similar to those to be provided under this Agreement, unless otherwise agreed to in writing by the Parties. 10 JURISDICTION AND NON-ASSIGNABILITY This Agreement will be construed in accordance with the laws of the State of California and is non-assignable by the parties hereto. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and assigns. 11 FUND PORTFOLIOS AND CLASSES The portfolios, series and classes of shares of Fund to which this Agreement shall apply are designated in Schedule C hereto. 12 EXHIBITS AND SCHEDULES Schedules A, B, C and D, which are attached hereto, are each a part of and is incorporated by reference into this Agreement. This Agreement shall not be deemed to be complete absent such Schedules A, B, C or D 13 ENTIRE AGREEMENT; SEVERABILITY Each Party recognizes the existence of a Dealer Agreement between Fund and E*TRADE, dated ____, or a Fund/SERV Agreement between Fund Affiliate and E*TRADE, dated ____, as supplemented by a Supplemental Agreement Regarding Networking, dated _____ ("Other Agreements"). To the extent of any inconsistency or conflict between the provisions of this Agreement and any provision of the Other Agreements, such provision of the Other Agreements shall govern, and the provision of this Agreement shall be null and void. Except as specified in this Section 13, however, this Agreement shall supersede any existing agreements between the parties containing general terms and conditions for retail shareholder services. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement. -4- 14 REPRESENTATIONS OF THE PARTIES Each Party represents and warrants to each other Party that (i) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) the person signing this Agreement on its behalf is duly authorized to do so, (iii) it has obtained all authorizations of any governmental body required in connection with this Agreement and such authorizations are in full force and effect and (iv) the execution, delivery and performance of this Agreement will not violate any law, ordinance, charter, by- law or rule applicable to it or any agreement by which it is bound or by which any of its assets are affected. 15 COUNTERPARTS This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original, but all of which together shall constitute one and the same instrument. -5- In witness whereof, each Party has executed this Agreement by a duly authorized representative of such Party. THE RBB FUND, INC. PROVIDENT DISTRIBUTORS, INC. - ---------------------------------- ---------------------------------- (Name of Fund Company) (Name of Fund Affiliate) By: ___________________________ By: ___________________________ Name: ___________________________ Name: ___________________________ Title: ___________________________ Title: ___________________________ Date: ___________________________ Date: ___________________________ BOSTON PARTNERS By: ___________________________ ASSET MANAGEMENT, L.P. E*TRADE Group, Inc. By: BOSTON PARTNERS, INC. its General Partner By: ___________________________ Title: -6- SCHEDULE A Services 1. RECORD MAINTENANCE E*TRADE shall maintain the following records with respect to a Fund for each customer who holds Fund shares in an E*TRADE brokerage account: a. Number and class of shares; b. Date, price and amount of purchases and redemptions (including dividend reinvestments) and dates and amounts of dividends paid for at least the current year to date; c. Name and address of the customer, including zip codes and social security numbers or taxpayer identification numbers; and information regarding withholdings d. Records of distributions and dividend payments; e. Any transfers of shares; and f. Overall control records. 2 SHAREHOLDER COMMUNICATIONS E*TRADE shall: a. Provide to an approved shareholder mailing agent for the purpose of providing certain Fund-related materials the names and addresses of all E*TRADE customers who hold shares of such Fund in their E*TRADE brokerage accounts. The shareholder mailing agent shall be a person or entity with whom the Fund has arranged for the distribution of certain Fund-related material in accordance with the Fund/SERV Agreement. The Fund-related materials shall consist of updated prospectuses and any supplements and amendments thereto, annual and other periodic reports, proxy or information statements and other appropriate shareholder communications. In the alternative, in accordance with the Fund/SERV Agreement, E*TRADE may distribute the Fund-related materials to its customers. b. Deliver current Fund prospectuses and statements of additional information and annual and other periodic reports upon customer request and, as applicable, with confirmation statements; c. Deliver statements to customers on a monthly basis (or, as to accounts in which there has been no activity in a particular month, no less frequently than quarterly) showing, among other things, the number of shares of each Fund owned by such customer and the net asset value of such Fund as of a recent date; d. Produce and provide to customers confirmation statements reflecting purchases and redemptions of shares of each Fund in E*TRADE brokerage accounts; e. Respond to customer inquiries regarding, among other things, share prices, account balances, dividend amounts and dividend payment dates; and 3. TRANSACTIONAL SERVICES E*TRADE shall communicate, as to shares of each Fund, purchase, redemption and exchange orders reflecting the orders it receives from its customers. E*TRADE shall also communicate, as to shares of each Fund, mergers, splits and other reorganization activities. 4. TAX INFORMATION RETURNS AND REPORTS E*TRADE shall prepare and file with the appropriate governmental agencies, such information, returns and reports as are required to be so filed for reporting (i) dividends and other distributions made, (ii) amounts withheld on dividends and other distributions and payments under applicable federal and state laws, rules and regulations, and (iii) gross proceeds of sales transactions as required. 5. FUND COMMUNICATIONS E*TRADE shall, on a monthly basis and for each Fund, report the number of shares on which the Fee is to be paid pursuant to this Agreement. Such summaries shall be expressed in both shares and dollar amounts. -2- SCHEDULE B Calculation of Fee The Fee shall be calculated by multiplying the Daily Value of Qualifying Shares by the appropriate Fee Rate (indicated below). The Fee shall be paid monthly in arrears. The Daily Value of Qualifying Shares is the aggregate daily value of all shares of the Fund held in E*TRADE brokerage accounts, subject to the following exclusions. There shall be excluded from the shares: (i) shares as to which a brokerage customer paid E*TRADE a transaction fee upon the purchase of such shares; (ii) shares held in an E*TRADE brokerage account prior to the effective date of this Agreement as to the Fund; and, (iii) shares first held in an E*TRADE brokerage account after the termination of this Agreement as to the Fund. The Fee Rate is determined based on the aggregate value of the Qualifying Shares of all Funds listed on Schedule C, as amended from time to time, as of the prior review date. The review dates are December 31, and June 30. The Fee Rate is effective from the next business day following the review date up to and including the next review date. The Fee Rates are as follows: Up to and including $750 million 35 basis points Over $750 million and up to And including $1.5 billion 30 basis points Over $1.5 billion 25 basis points Note: The rate scale is not intended to produce a "blended rate." Rather, once a threshold is reached, the rate applicable to the total amount of assets will be used for all assets. For purposes of this exhibit, the daily value of the shares of each Fund will be the net asset value reported by such Fund to the National Association of Securities Dealers, Inc. Automated Quotation System. No adjustments will be made to the net asset values to correct errors in the net asset values so reported for any day unless such error is corrected and the corrected net asset value per share is reported to E*TRADE before 5 o'clock p.m., Palo Alto time, on the first business day after the day to which the error relates. As soon as is possible after the end of the month, E*TRADE shall provide to the Fund Parties an invoice for the amount of the Fee due for each Fund. In the calculation of such Fee, E*TRADE's records shall govern unless an error can be shown in the number of shares used in such calculation. Fund Parties shall pay E*TRADE the Fee within thirty (30) days after the Fund Parties receipt of such statement. Such payment shall be by wire transfer, unless the amount thereof is less than $250.00. Such wire transfers shall be separate from wire transfers of redemption proceeds or other distributions. Amounts less than $250.00 may be paid, at Fund Parties' discretion, by check. Schedule C Fund Portfolios and Classes Fund Name/Class: Cusip/Ticker Symbol: - ---------------- -------------------- Boston Partners Bond Fund _____________________________________ - -------------------------------------- Boston Partners Market Neutral Fund _____________________________________ - -------------------------------------- Boston Partners Long-Short Equity Fund _____________________________________ - -------------------------------------- Boston Partners Large Cap Value Fund _____________________________________ - -------------------------------------- Boston Partners Mid Cap Value Fund _____________________________________ - -------------------------------------- Boston Partners Micro Cap Value Fund _____________________________________ - -------------------------------------- Asterisk indicates that Fund is a "No-Load" or "No-Sales Charge" Fund as defined in Section 26 of the NASD's Rules of Fair Practice. The RBB Fund, Inc. Provident Distributors, Inc. - ------------------ ------------------------------------- (Name of Fund Company) (Name of Fund Affiliate) 400 Bellevue Parkway Four Falls Corporate Center - -------------------------------------- ------------------------------------- (Address) (Address) Wilmington, DE 19809 West Conshohocken, PA 19428 - -------------------------------------- ------------------------------------- By: _______________________________ By: _____________________________ Name: _______________________________ Name: _____________________________ Title: _______________________________ Title: _____________________________ Date: _______________________________ Date: _____________________________ BOSTON PARTNERS By: _____________________________ ASSET MANAGEMENT, L.P. E*TRADE Group, Inc. By: BOSTON PARTNERS, INC. Date: _____________________________ its General Partner 288 State Street Boston, MA 02109 By: _______________________________ Name: _______________________________ Title: _______________________________ Date: _______________________________ Schedule D Payment of Fee
Over Up to and $750MM Including and under Over $750 MM $1.5 BB $1.5BB Adviser: .14% .9% .4% --------- --------- ------ Fund Company: 12b-1/Provident Distributors, Inc. .21% .21% .21% --------- --------- ------ Fee Rate Percentage Per Annum of Average Daily Value of Fund Shares 0.35% 0.30% 0.25%
The RBB Fund, Inc. Provident Distributors, Inc. - ------------------ ---------------------------- (Name of Fund Company) (Name of Fund Affiliate) By: _______________________________ By: _____________________________ Name: _______________________________ Name: _____________________________ Title: _______________________________ Title: _____________________________ Date: _______________________________ Date: _____________________________ BOSTON PARTNERS ASSET MANAGEMENT, L.P. By: BOSTON PARTNERS, INC. its General Partner By: _______________________________ Title: EX-99.I 14 OPINION OF DRINKER BIDDLE & REATH LLP Law Offices DRINKER BIDDLE & REATH LLP One Logan Square 18/th/ and Cherry Streets Philadelphia, PA 19103-6996 Telephone: (215) 988-2700 Fax: (215) 988-2757 September 15, 1999 The RBB Fund, Inc. Bellevue Park Corporate Center 400 Bellevue Parkway, Suite 100 Wilmington, Delaware 19809 Re: Shares Registered by Post-Effective Amendment No. 66 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 on July 2, 1999 of Post-Effective Amendment No. 66 (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: (i) 100 million shares of Class NNN common stock, $.001 par value per share, representing interests in the Institutional Class of the Bogle Investment Management Small Cap Growth Fund, and (ii) 100 million shares of Class OOO common stock, $.001 par value per share, representing interests in the Investor Class of the Bogle Investment Management Small Cap Growth Fund (collectively, the "Shares"). The Amendment registered 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 (including Articles Supplementary thereto filed with the Maryland Department of Assessments and Taxation to authorize, classify and establish the Shares) 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 a Post- Effective Amendment to the Company's Registration Statement. Very truly yours, /s/ Drinker Biddle & Reath LLP ------------------------------ DRINKER BIDDLE & REATH LLP EX-99.J1 15 CONSENT OF DRINKER BIDDLE & REATH LLP 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. 67 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 September 30, 1999 EX-99.L17 16 PURCHASE AGREEMENT PURCHASE AGREEMENT ------------------ The RBB Fund, Inc. (the "Fund"), a Maryland corporation, and Bogle Investment Management, L.P. ("BIM") intending to be legally bound, hereby agree with each other as follows: 1. The Fund hereby offers BIM and BIM hereby purchases $1,000 worth of shares of each of Classes NNN and OOO Common Stock of the Fund (par value $.001 per share) (such shares hereinafter sometimes collectively known as "Shares") at a price per Share equivalent to the net asset value per share of the Shares of the Fund as determined on September 15, 1999. 2 The Fund hereby acknowledges receipt from BIM of funds in the amount of $2,000 in full payment for the Shares. 3. BIM 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 15/th/ day of September, 1999. THE RBB FUND, INC. By: /s/ Edward J. Roach ------------------------ Edward J. Roach President & Treasurer BOGLE INVESTMENT MANAGEMENT, L.P. By: /s/ John Bogle, Jr. ----------------------- John Bogle, Jr. -----END PRIVACY-ENHANCED MESSAGE-----