-----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, AJq+bPONmw7zJc49iiwvgqTYH+zdKE7UOoP8wjT/NlZSfR8Q6811gO44WqKgEr3H 35q/OUUxoHMPTCeXljJA2w== 0000950132-99-000908.txt : 19991018 0000950132-99-000908.hdr.sgml : 19991018 ACCESSION NUMBER: 0000950132-99-000908 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991122 FILED AS OF DATE: 19991013 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RBB FUND INC CENTRAL INDEX KEY: 0000831114 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 811-05518 FILM NUMBER: 99727534 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 DEF 14A 1 DEFINITIVE PROXY STATEMENT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A INFORMATION (Rule 14a-101) Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [ ] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) [X] Definitive Proxy Statement [_] Definitive Additional Materials [_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 THE RBB FUND, INC. - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------------- [_] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------- (3) Filing Party: ------------------------------------------------------------------------- (4) Date Filed: ------------------------------------------------------------------------- n/i numeric investors family of funds of THE RBB FUND, INC. ---------------- NOTICE OF SPECIAL MEETING OF SHAREHOLDERS ---------------- October 13, 1999 A Special Meeting of Shareholders (the "Meeting") of n/i numeric investors Micro Cap Fund, n/i numeric investors Growth Fund, n/i numeric investors Growth & Value Fund, n/i numeric investors Larger Cap Value Fund and n/i numeric investors Small Cap Value Fund (each a "Fund," and collectively, the "Numeric Funds"), each a series of The RBB Fund, Inc. (the "RBB Fund" or the "Company"), will be held at the offices of the RBB Fund, Bellevue Park Corporate Center, 400 Bellevue Parkway, 3rd Floor, Wilmington, Delaware 19809 on November 22, 1999, at 10:00 a.m. for the following purposes: (1) The approval or disapproval of an amendment to the investment advisory agreement between the Company and Numeric Investors L.P.(R) with respect to each Fund pursuant to which Numeric Investors L.P.(R) would be compensated on a performance fee basis; and (2) The transaction of such other business as may properly come before the meeting or any adjournment thereof. The proposals referred to above are discussed in the Proxy Statement attached to this Notice. Each shareholder is invited to attend the Special Meeting of Shareholders in person. Shareholders of record at the close of business on September 30, 1999 have the right to vote at the Meeting. If you cannot be present at the Meeting, we urge you to fill in, sign and promptly return the enclosed proxy in order that the Meeting can be held and a maximum number of shares may be voted. THE BOARD OF DIRECTORS OF THE RBB FUND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF EACH NUMERIC FUND VOTE TO APPROVE THE AMENDMENT TO EACH RESPECTIVE ADVISORY AGREEMENT. IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE URGED TO SIGN AND RETURN WITHOUT DELAY THE ENCLOSED PROXY CARD(S) IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, SO THAT THEIR SHARES MAY BE REPRESENTED AT THE MEETING. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXY CARDS ARE SET FORTH AT END OF THE FOLLOWING PROXY STATEMENT. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY THE SUBSEQUENT EXECUTION AND SUBMISSION OF A REVISED PROXY, BY GIVING WRITTEN NOTICE OF REVOCATION TO THE RBB FUND AT ANY TIME BEFORE THE PROXY IS EXERCISED OR BY VOTING IN PERSON AT THE MEETING. THE COMPANY WILL FURNISH, WITHOUT CHARGE, COPIES OF THE COMPANY'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS DATED AUGUST 31, 1998 AND FEBRUARY 28, 1999, RESPECTIVELY, TO ANY SHAREHOLDER UPON REQUEST. THE COMPANY'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS MAY BE OBTAINED FROM THE COMPANY BY CALLING THE COMPANY AT (800) 686-3742. By Order of the Board of Directors Morgan R. Jones Secretary October 13, 1999 WE NEED YOUR PROXY VOTE IMMEDIATELY YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF FURTHER SOLICITATION. THE RBB FUND, INC. Bellevue Park Corporate Center 400 Bellevue Parkway, 3rd Floor Wilmington, Delaware 19809 ---------------- PROXY STATEMENT ---------------- This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of The RBB Fund, Inc. (the "Company") for use at a Special Meeting of Shareholders of each of the n/i numeric investors Micro Cap Fund ("Micro Cap Fund"), n/i numeric investors Growth Fund ("Growth Fund"), n/i numeric investors Growth & Value Fund ("Growth & Value Fund"), n/i numeric investors Larger Cap Value Fund ("Larger Cap Value Fund") and n/i numeric investors Small Cap Value Fund ("Small Cap Value Fund") to be held at the Company's offices located at Bellevue Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware 19809 on November 22, 1999, at 10:00 a.m. Eastern Time. As used in this Proxy Statement, the meeting and any adjournment thereof is referred to as the "Meeting;" the n/i numeric investors family of funds are referred to individually as a "Fund" and collectively as the "Funds;" and the Funds' shares are referred to as "Shares." Proxy solicitations will be made primarily by mail, but solicitations may also be made by personal interview conducted by officers or employees of the Company, Numeric Investors L.P.(R) ("Numeric"), Bear Stearns Funds Management Inc., the co-administrator to each Fund, or Shareholder Communications Corporation ("SCC"), a proxy solicitation firm that has been retained by the Company. All costs of the solicitation, including (a) printing and mailing of this Proxy Statement and accompanying materials, (b) the reimbursement of brokerage firms and others for their expenses in forwarding solicitation materials to the beneficial owners of the shares, (c) payment of SCC for its services in soliciting proxies and (d) supplementary solicitations to submit proxies, will be borne by each Fund. SCC has been retained to solicit proxies in connection with the Meeting for a fee of approximately $16,500. It is anticipated that SCC will request that shareholders of the Funds submit their proxies, and may do so by mail or personal interview. This Proxy Statement and the enclosed proxy are expected to be distributed to shareholders on or about October 13, 1999. The following table summarizes the proposal to be voted on at the Meeting and indicates those shareholders who are being solicited with respect to the proposal:
Proposal Shareholders solicited -------- ---------------------- The approval or disapproval of an Shareholders of each Fund voting amendment to the investment separately on a Fund-by-Fund basis. advisory agreement between the Company and Numeric with respect to each Fund pursuant to which Numeric would be compensated on a performance fee basis.
A proxy is enclosed with respect to the Shares you own in the Company. If the proxy is executed properly and returned, the Shares represented by it will be voted at the Meeting in accordance with the instructions thereon. Each full Share is entitled to one vote and each fractional Share to a proportionate fractional vote. If you do not expect to be present at the Meeting and wish your Shares to be voted, please complete the enclosed proxy and mail it in the enclosed reply envelope. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE PROPOSAL DESCRIBED IN THIS PROXY STATEMENT. 1 PROPOSAL Introduction. Under the Company's current investment advisory agreements (each a "Current Agreement" and collectively, the "Current Agreements"), Numeric is entitled to receive advisory fees at a rate of 0.75% of each Fund's average daily net assets. Following a review of each of the Company's Current Agreements with Numeric during its last board meeting, and based on Numeric's recommendation, the Board of Directors approved a new performance fee structure known as a "fulcrum fee" arrangement. A fulcrum fee arrangement compensates an investment adviser on the basis of a fund's performance relative to a benchmark. Before the proposed fulcrum fee arrangement can be implemented, however, the shareholders must approve an amendment to the Current Agreements permitting such an arrangement. At the Meeting, shareholders of each Fund will be asked to approve such an amendment to its Current Agreement (each an "Amended Agreement" and collectively, the "Amended Agreements") with Numeric. Numeric currently serves as investment adviser to the Company pursuant to five separate investment advisory agreements. Significant provisions of the Amended Agreements are summarized below. However, this summary is qualified in its entirety by reference to the Amended Agreements. A copy of one Amended Agreement is attached as Exhibit A to this Proxy Statement. The four other Amended Agreements are identical to Exhibit A, except for the Fund they cover and the Fund's benchmark index used in calculating the advisory fees paid to Numeric. Terms and Conditions of the Amended Agreements. The terms and conditions of the Amended Agreements are identical to those of the Current Agreements except for provisions relating to the method of calculating the compensation paid to Numeric. In the event that the Amended Agreements are not approved, the Current Agreements would remain in effect. In the Amended Agreements, Numeric agrees, subject to the supervision of the Company's Board of Directors, to continue to be responsible for the management of, and to provide a continuous investment program for, each Fund's portfolio in accordance with such Fund's investment objective, policies and limitations, and to make decisions with respect to and place orders for all purchases and sales of portfolio securities for the respective Funds. Numeric's responsibilities as investment adviser also will continue to include providing investment research and management with respect to all securities, investments, cash and cash equivalents in the Funds and maintaining books and records with respect to each Fund's securities transactions. Under the Amended Agreements, until January 1, 2001, Numeric would continue to be entitled to its current advisory fee of 0.75% of each Fund's average daily net assets before fee waivers and expense reimbursements, if any. Effective January 1, 2001, the fulcrum fee arrangement would apply. Under the fulcrum fee arrangement, Numeric's fee would be less than the current advisory fee of 0.75% if a Fund's performance did not exceed its benchmark by 3.00% in a given twelve month period, and would only be more than the current advisory fee if a Fund's performance exceeded its benchmark by more than 4.00% in a given twelve month period. The performance adjustment would be calculated at the end of each month using a basic fee of 0.85% of average daily net assets, and a performance adjustment based upon each Fund's performance during the last rolling twelve month period. Each Fund's net performance would be compared with the performance of its benchmark index during that same rolling twelve month period. When a Fund's performance was 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. If Numeric did not perform as well as a Fund's benchmark index plus 4.00%, Numeric would be paid less than 0.85%. Under the Amended Agreement, it is possible that, in certain circumstances, a Fund could pay Numeric more than the basic fee even though the performance of both the Fund and the Fund's benchmark is negative. This situation may occur when the decline in the performance of the benchmark is greater than the decline in the Fund's performance. The benchmark index for each of the Micro Cap, Growth, Growth & Value, Larger Cap Value and Small Cap Value Funds would be the Russell 2000 Growth Index, Russell 2500 Growth Index, S&P MidCap 400 Index, Russell 1000 Value Index and Russell 2000 Value Index, respectively. These benchmark indices are the same respective indices that each Fund has used as a benchmark to compare its performance in the past. The maximum annualized performance adjustment rate would be + or - 0.50% of average net assets which would be added to or deducted from the basic fee if a Fund outperformed its benchmark index over a rolling twelve month period by 9.00% or more or if it underperformed its benchmark index over a rolling twelve month period. Under the fulcrum fee arrangement, Numeric's fee would never be greater than 1.35% nor less than 2 0.35% of a Fund's average annualized daily net assets for the preceding month. The table below details the fulcrum fee arrangement:
Percentage difference between fund performance (net of expenses including management fees) and percentage change in Performance Total benchmark index Basic fee adjustment rate management fee --------------------- --------- --------------- -------------- +9% or more........................ 0.85% 0.50% 1.35% +8% or more but less than +9%...... 0.85% 0.40% 1.25% +7% or more but less than +8%...... 0.85% 0.30% 1.15% +6% or more but less than +7%...... 0.85% 0.20% 1.05% +5% or more but less than +6%...... 0.85% 0.10% 0.95% +4% or more but less than +5%...... 0.85% None 0.85% +3% or more but less than +4%...... 0.85% -0.10% 0.75% +2% or more but less than +3%...... 0.85% -0.20% 0.65% +1% or more but less than +2%...... 0.85% -0.30% 0.55% +0% or more but less than +1%...... 0.85% -0.40% 0.45% Less than 0%....................... 0.85% -0.50% 0.35%
Numeric has contractually agreed that assuming the Amended Agreements are approved, it will waive fees and/or reimburse expenses (other than brokerage commissions, extraordinary items, interest and taxes), from January 1, 2001 until December 31, 2001, to the extent necessary to prevent a Fund's expenses, other than management fees, from exceeding 0.50% of its average daily net assets. Numeric also has contractually agreed that assuming the Amended Agreements are approved, it will continue to waive fees and/or reimburse expenses (other than brokerage commissions, extraordinary items, interest and taxes) from the time of the effective date of the Amended Agreements until the fulcrum fee arrangement would become effective (that is, January 1, 2001) to the extent necessary to prevent a Fund's expenses from exceeding 1.00% of its average daily net assets. Currently, Numeric has contractually agreed to waive fees and/or reimburse expenses to the extent necessary to prevent a Fund's expenses from exceeding 1.00% of its average daily net assets. During the fiscal year or period ended August 31, 1999, the Micro Cap, Growth, Growth & Value, Larger Cap Value and Small Cap Value Funds each paid Numeric an investment advisory fee at the effective annual rate of 0.63%, 0.59%, 0.55%, 0.38% and 0.01%, respectively, of such Funds' average daily net assets after fee waivers. The table below compares the aggregate amount of management fees paid during the last fiscal year or period to the aggregate amount of management fees that would have been paid by each Fund had the proposed fulcrum fee been in effect:
Fiscal Year or Period Ended Percentage August 31, 1999 Fulcrum fee variation between Management fees* arrangement** fee arrangements ---------------- ------------- ----------------- Micro Cap................... $630,289 $1,350,887 114.32% Growth...................... 451,504 382,282 -15.33% Growth & Value.............. 488,857 237,853 -51.34% Larger Cap Value............ 77,347 0 -152.01% Small Cap Value***.......... 931 0 -4,312.76%
- -------- * These amounts reflect the fees after waivers and/or expense reimbursements. Numeric has contractually agreed until December 31, 2000 to waive fees and/or reimburse expenses (other than brokerage commissions, extraordinary items, interest and taxes) to the extent necessary to prevent a Fund's expenses from exceeding 1.00% of its average daily net assets. The management fees before these waivers were $756,094, $573,423, $660,704, $150,844 and $55,690 for the Micro Cap, Growth, Growth & Value, Larger Cap Value and Small Cap Value Funds, respectively. ** These amounts reflect fees after fee waivers and/or expense reimbursements. Numeric has contractually agreed that from when the fulcrum fee arrangement would become effective (that is, January 1, 2001) until December 31, 2001, it will waive fees and/or reimburse expenses (other than brokerage commissions, extraordinary items, interest and taxes) to the extent necessary to prevent a Fund's expenses, other than management fees, from exceeding 0.50% of its average daily net assets. The total management fees 3 reflecting the fulcrum fee arrangement before such waivers and/or reimbursements would have been $1,360,968, $420,510, $308,329, $70,394 and $95,538, for the Micro Cap, Growth, Growth & Value, Larger Cap Value and Small Cap Value Funds, respectively. Numeric would also have reimbursed expenses of the Larger Cap Value and Small Cap Value Funds in the amounts of $40,225 and $39,221, respectively, under its contractual fee waiver and expense reimbursement agreement with the Company. *** For the period December 1, 1998 through August 31, 1999. The following table shows the total operating expenses paid by the Funds based on the last fiscal year or period as a percentage of average net assets. Figures shown reflect expenses under the Current Agreements as well as pro forma expenses that would have been incurred if the fulcrum fee arrangement had been in effect during that period, and in each case are based on each Fund's asset levels as of August 31, 1999. Annual operating expenses (expenses that are deducted from Fund assets)
Total annual fund Fee waivers Management Rule 12b-1 Other operating and/or expense Net fees+ Fees expenses++ expenses reimbursements expenses ---------- ---------- ---------- ------------ -------------- -------- Micro Cap Current............... 0.75% None 0.51% 1.26% -0.26% 1.00%* Pro Forma............. 1.35% None 0.51% 1.86% -0.01% 1.85%** Growth Current............... 0.75% None 0.55% 1.30% -0.30% 1.00%* Pro Forma............. 0.55% None 0.55% 1.10% -0.05% 1.05%** Growth & Value Current............... 0.75% None 0.58% 1.33% -0.33% 1.00%* Pro Forma............. 0.35% None 0.58% 0.93% -0.08% 0.85%** Larger Cap Value Current............... 0.75% None 1.05% 1.80% -0.80% 1.00%* Pro Forma............. 0.35% None 1.05% 1.40% -0.55% 0.85%** Small Cap Value*** Current............... 0.75% None 1.84% 2.59% -1.59% 1.00%* Pro Forma............. 0.95% None 1.84% 2.79% -1.34% 1.45%**
- -------- * These amounts reflect fees after fee waivers and/or expense reimbursements. Numeric has contractually agreed until December 31, 2000 to waive fees and/or reimburse expenses (other than brokerage commissions, extraordinary items, interest and taxes) to the extent necessary to prevent a Fund's expenses from exceeding 1.00% of average daily net assets. **These amounts reflect fees after fee waivers and/or expense reimbursements. Numeric has contractually agreed that from when the fulcrum fee arrangement would become effective (that is, January 1, 2001) until December 31, 2001, it will waive fees and/or reimburse expenses (other than brokerage commissions, extraordinary items, interest and taxes), to the extent necessary to prevent a Fund's expenses other than management fees, from exceeding 0.50% of its average daily net assets. ***For the period December 1, 1998 through August 31, 1999; percentages are annualized. + The current and pro forma management fees (other than brokerage commissions, extraordinary items, interest and taxes) after fee waivers and/or expense reimbursements would have been 0.63% and 1.34% for the Micro Cap Fund; 0.59% and 0.50% for the Growth Fund; 0.55% and 0.27% for the Growth & Value Fund; 0.38% and 0.00% for the Larger Cap Value Fund; and 0.01% and 0.00% for the Small Cap Value Fund. Numeric would also have reimbursed expenses of the Larger Cap Value and Small Cap Value Funds by an additional 0.20% and 0.39%, respectively, under the contractual fee waiver and expense reimbursement agreement with the Company. ++ The current and pro forma other expenses after fee waivers and/or expense reimbursements would have been 0.37% and 0.51% for the Micro Cap Fund; 0.41% and 0.55% for the Growth Fund; 0.45% and 0.58% for the Growth & Value Fund; 0.62% and 0.85% for the Larger Cap Value Fund; and 0.99% and 1.45% for the Small Cap Value Fund. 4 EXAMPLE. This example is intended to help you compare the cost of investing in a Fund with the cost of investing in other mutual funds. We are assuming an initial investment of $10,000, a 5% total annual return each year with no changes in operating expenses (other than management fees for the pro forma expenses) 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 (current/pro (current/pro (current/pro (current/pro forma) forma) forma) forma) ------------ ------------ ------------ ------------ Micro Cap................ $102/188 $374/584 $667/1,005 $1,500/2,179 Growth................... 102/107 382/345 684/601 1,541/1,336 Growth & Value........... 102/87 389/288 697/507 1,573/1,136 Larger Cap Value......... 102/87 488/389 900/713 2,050/1,632 Small Cap Value.......... 102/148 654/738 1,232/1,355 2,806/3,021
UNDER THE FULCRUM FEE ARRANGEMENT, NUMERIC'S FEE WOULD BE LESS THAN THE CURRENT ADVISORY FEE OF 0.75% IF A FUND'S PERFORMANCE DID NOT EXCEED ITS BENCHMARK BY 3.00% IN A GIVEN TWELVE MONTH PERIOD, AND WOULD ONLY BE MORE THAN THE CURRENT ADVISORY FEE IF A FUND'S PERFORMANCE EXCEEDED ITS BENCHMARK BY MORE THAN 4.00% IN A GIVEN TWELVE MONTH PERIOD. The management fees payable by each Fund under its Amended Agreement are the separate obligation of that Fund and not the joint obligation of all Funds. The Amended Agreements provide that Numeric will continue to pay all expenses incurred by it in connection with its activities under the Amended Agreements other than the expenses to be borne by the Funds. Expenses to be borne by the Funds include, without limitation, brokerage fees, commissions and other transaction costs, outside auditing and legal expenses, Securities and Exchange Commission ("SEC") fees, costs of shareholders' reports and meetings, costs of proxy statements and prospectuses and extraordinary expenses. The Amended Agreements also provide that Numeric may continue to place orders for portfolio securities with any broker or dealer selected by Numeric. In executing portfolio transactions and selecting brokers or dealers, the Amended Agreements require Numeric to use its reasonable best efforts to seek the most favorable execution of orders. Consistent with this obligation, Numeric may purchase and sell portfolio securities from and to brokers and dealers who provide brokerage and research services to or for the benefit of the Funds directly or indirectly. Numeric is authorized to cause the Funds to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for any Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if Numeric determines in good faith that the amount of each such commission was reasonable in relation to the value of brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction to which the commission relates or Numeric's overall responsibilities with respect to accounts as to which it exercises investment discretion. In no instance will portfolio securities be purchased from or sold to Numeric or the Funds' principal underwriter, Provident Distributors, Inc., or any affiliated person of either of them, except as permitted by the SEC. The Amended Agreements also provide that Numeric shall not be liable for any error of judgment or mistake of law or for any loss suffered by a Fund, 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 by Numeric in the performance of its duties or from reckless disregard by it of its obligations and duties under the Amended Agreements ("disabling conduct"). Each Fund has agreed to indemnify and hold harmless Numeric against all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action or suit not resulting from disabling conduct by Numeric. 5 If approved by a majority of the outstanding Shares of each Fund (as defined below) and not sooner terminated, each Amended Agreement will continue in effect with respect to each such Fund until August 16, 2000 and thereafter from year to year, provided that such continuance is approved at least annually (i) by the vote of a majority of those members of the Board of Directors who are not parties to the Amended Agreements or "interested persons" (as defined in the Investment Company Act of 1940, as amended (the "1940 Act")) of any such party, and (ii) by the Board of Directors or by vote of a majority of the outstanding Shares of each such Fund. The Amended Agreements provide that each will terminate automatically in the event of its "assignment" (as defined in the 1940 Act), and that each is terminable by Numeric, by the Board of Directors of the Company, or by vote of a majority of the outstanding Shares of each Fund without penalty, on 60 days' written notice. Evaluation by the Board of Directors. The Company's Board of Directors has determined that approving the Amended Agreements with Numeric on behalf of the Funds would provide appropriate incentives for Numeric in making portfolio investments through the performance adjustment. In addition, the Board has limited the performance adjustment to a particular range. The Board believes that the Amended Agreements would enable the Funds to obtain high quality services at costs deemed appropriate, reasonable and in the best interests of the Funds and their shareholders. Among other things, the Board considered that (i) the selection of the benchmark indices under the Amended Agreements was appropriate; (ii) Numeric's investment performance would be measured with respect to twelve month periods and on a "rolling basis," thus making it less likely management fee payments would be affected by short-term or "random" fluctuations in a respective Fund's performance than might be the case if a shorter measuring period was used in the performance formula; (iii) Numeric has demonstrated its abilities as an investment adviser to the Funds; (iv) the terms of the Current Agreements and the Amended Agreements were identical except for the fees payable to Numeric; (v) the formula for determining the fulcrum fee arrangement would result in significant fee adjustments only in response to significant performance differences; and (vi) there would be no change in personnel at Numeric providing investment advisory services to the Funds as a result of the Amended Agreements. In reaching its determination, the Board gave approximately equal weight to the foregoing considerations. Based upon its review, the Board concluded that the Amended Agreements with Numeric are reasonable, fair and in the best interests of the Funds and their shareholders, and that the fees provided therein are fair and reasonable. In the Board's view, retaining Numeric to serve as the Funds' investment adviser, under the terms of the Amended Agreements, is desirable and in the best interests of the Funds and their shareholders. Accordingly, after consideration of the above factors, and such other facts and information as it deemed relevant, the Board, including a majority of those members of the Board who are not "interested persons" (as defined in the 1940 Act) of any party to the Amended Agreements, approved the Amended Agreements with Numeric on July 28, 1999 and voted to recommend their approval by the shareholders of the Funds. Information concerning the Current Agreements. The Current Agreements relating to each of the Funds are dated, and were approved by each Fund's sole shareholder prior to its initial public offering, as of April 24, 1996, except for the Larger Cap Value Fund which is dated, and was approved by the Fund's sole shareholder prior to its initial public offering, December 1, 1997, and the Small Cap Value Fund, which is dated, and was approved by the Fund's sole shareholder prior to its initial public offering, November 30, 1998. The Board of Directors last approved the Funds' Current Agreements on July 28, 1999. Pursuant to the Current Agreements, Numeric is entitled to receive advisory fees at a rate of 0.75% of each Fund's average daily net assets. Required Vote. The approval of the Amended Agreements requires the affirmative vote of the holders of a "majority of the outstanding shares" of each Fund (as defined in the 1940 Act), which means the lesser of (a) the holders of 67% or more of the Shares of the Fund present at the Meeting if the holders of more than 50% of the outstanding Shares of such Fund are present in person or by proxy, or (b) more than 50% of the outstanding Shares of the Fund. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE AMENDED AGREEMENTS. 6 VOTING INFORMATION General Information. This proxy is being furnished in connection with the solicitation of proxies for the Meeting. It is expected that the solicitation of proxies will be primarily by mail. Officers and service contractors of the Company may also solicit proxies by personal interview. In this connection, the Company has retained SCC to assist in the solicitation of proxies. Shareholders may vote by mail, by marking, signing, dating and returning the enclosed Proxy Card(s) in the enclosed postage-paid envelope. Any shareholder giving a proxy may revoke it at any time before it is exercised by submitting to the Company a written notice of revocation or a subsequently executed proxy or by attending the Meeting and voting in person. Record Date. Only shareholders of record at the close of business on September 30, 1999 will be entitled to vote at the Meeting. On that date, the outstanding Shares were as follows:
Number of Fund Shares Outstanding ---- ------------------ Micro Cap Fund............................................ 4,210,177.032 Growth Fund............................................... 4,091,049.578 Growth & Value Fund....................................... 2,848,549.138 Larger Cap Value Fund..................................... 611,518.190 Small Cap Value Fund...................................... 892,623.429
Quorum. A quorum is constituted with respect to the Company or a Fund by the presence in person or by proxy of the holders of at least one-third of the outstanding Shares of the Company or a Fund entitled to vote at the Meeting. For purposes of determining the presence of a quorum for transacting business at the Meeting, abstentions will be treated as Shares that are present at the Meeting but which have not been voted. Abstentions will have the effect of a "no" vote for purposes of obtaining the requisite approval of the proposal. Broker "non-votes" (that is, proxies from brokers or nominees indicating that such persons have not received instructions from the beneficial owners or other persons entitled to vote Shares on a particular matter with respect to which the brokers or nominees do not have discretionary power) will be treated the same as abstentions. In the event that a quorum is not present at the Meeting or at any adjournment thereof, or in the event that a quorum is present at the Meeting but sufficient votes to approve the proposal are not received by the Company or by one or more of the Funds, one or more adjournment(s) may be proposed to permit further solicitations of proxies. Any adjourned session or sessions may be held after the date set for the original Meeting without notice except announcement at the Meeting. Any such adjournment(s) will require the affirmative vote of a majority of those Shares affected by the adjournment(s) that are represented at the Meeting in person or by proxy. If a quorum is present, the persons named as proxies will vote those proxies which they are entitled to vote FOR the proposal in favor of such adjournment(s), and will vote those proxies required to be voted AGAINST the proposal against any such adjournment(s). A shareholder vote may be taken with respect to one or more of the Funds on some or all matters before any such adjournment(s) if a quorum is present and sufficient votes have been received for approval with respect to such Fund or Funds. Other Shareholder Information. The name, address and share ownership of each other person who may have possessed sole or shared voting or investment power with respect to more than 5% of the Company's outstanding Shares as of the record date were:
Percentage of Amount of Fund Fund Shares Name and Address Shares Owned Owned ------------------------------------------- -------------- ------------- Micro Cap Fund.......... Charles Schwab & Co., Inc. 563,252.627 13.4% Special Custody Account for the Exclusive Benefit of Customers Attn Mutual Funds A/C 3143-0251 101 Montgomery St. San Francisco, CA 94104
7
Percentage of Amount of Fund Fund Shares Name and Address Shares Owned Owned ------------------------------------------- -------------- ------------- Janis Claflin, Bruce Fetzer, Winston Franklin and Robert Lehman, Trustees The John E. Fetzer Institute, Inc. 453,512.828 10.8% U/A DTD 06-1992 Attn Christina Adams 9292 West KL Ave. Kalamazoo, MI 49009 Louisa Stude Sarofim Foundation 241,673.227 5.7% DTD 01/04/91 c/o Nancy Head 1001 Fannin 4700 Houston, TX 77002 Public Institute For Social Security 635,883.841 15.1% 1001 19th St. N, 16th Flr. Arlington, VA 22209 Growth Fund............. Charles Schwab & Co., Inc. 303,330.184 7.5% Special Custody Account for the Exclusive Benefit of Customers Attn Mutual Funds 101 Montgomery St. San Francisco, CA 94104 Citibank North America, Inc. 1,668,190.585 41.1% F/B/O Sargant & Lundy Retirement Trust Mutual Fund Unit Bld B Floor 1 Zone 7 3800 Citibank Center Tampa, FL 33610-9122 Louisa Stude Sarofim Foundation 242,293.476 5.9% DTD 01/04/91 c/o Nancy Head 1001 Fannin 4700 Houston, TX 77002 The John E. Fetzer Institute, Inc. 220,359.540 5.4% Attn Christina Adams 9292 West KL Ave. Kalamazoo, MI 49009 U.S. Equity Investment Portfolio L.P. 318,464.452 7.8% 1001 N. U.S. Hwy. One, Suite 800 Jupiter, FL 33477 Growth & Value Fund..... Charles Schwab & Co., Inc. 584,748.975 20.8% Special Custody Account for the Exclusive Benefit of Customers Attn Mutual Funds 101 Montgomery St. San Francisco, CA 94104
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Percentage of Amount of Fund Fund Shares Name and Address Shares Owned Owned ------------------------------------------- -------------- ------------- National Investor Services Corp. 203,862.874 7.3% for the Exclusive Benefit of our Customers S. 55 Water St., 32nd Flr. New York, NY 10041-3299 Larger Cap Value Fund... Charles Schwab & Co., Inc. 316,990.805 51% Special Custody Account for the Exclusive Benefit of Customers Attn Mutual Funds 101 Montgomery St. San Francisco, CA 94104 FTC & Co. 56,702.221 9.1% Attn Datalynx 241 Attn Datalynx 273 P.O. Box 173736 Denver, CO 80217-3736 NFSC FEBO 108-436631 61,534.010 9.9% FMT Co. Cust. IRA Rollover FBO Warren E. Shaw 84 Rye Rd. Rye, NY 10580 Small Cap Value Fund.... State Street Bank and Trust Co. 482,033.297 53.7% FBO Yale Univ. Ret. Plan for Staff Employees State Street Bank & Trust Co. Master Trust Attn Kevin Sutton Solomon Williard Bldg. One Enterprise Dr. North Quincy, MA 02171 Yale University Ret. Health Benefits Trust 239,762.079 26.7% Attn Seth Alexander 230 Prospect St. New Haven, CT 06511
ADDITIONAL INFORMATION Information About Numeric. Numeric is a limited partnership whose principal offices are located at One Memorial Drive, Cambridge, MA 02142. Numeric's general partner is WBE & Associates LLC, whose sole member is LJM Company. Both companies are located at One Memorial Drive, Cambridge, MA 02142. Langdon B. Wheeler serves as Numeric's President and is the majority shareowner of LJM Company. Mr. Wheeler's address is also One Memorial Drive, Cambridge, MA 02142. Numeric specializes in the active management of U.S. and international equity portfolios using internally developed quantitative stock selection and portfolio risk-control techniques, and currently has over $5 billion in assets under management for individual, limited partnership, mutual fund, offshore fund, pension plan and endowment accounts. Principal Underwriter and Administrators. Provident Distributors, Inc. which is located at Four Falls Corporate Center, 6th Floor, West Conshohocken, PA 19428 serves as the exclusive underwriter for shares of the Funds. The Company's co-administrators are: PFPC Inc., 400 Bellevue Parkway, Wilmington, DE 19809 and Bear Stearns Funds Management Inc., 575 Lexington Avenue, 9th Floor, New York, NY 10022. 9 OTHER MATTERS The Company does not intend to hold Annual Meetings of Shareholders except to the extent that such meetings may be required under the 1940 Act or state law. Shareholders who wish to submit proposals for inclusion in the Proxy Statement for a subsequent shareholder meeting should send their written proposals to the Company at its principal office within a reasonable time before such meeting. No business other than the matters described above is expected to come before the Meeting, but should any other matter requiring a vote of shareholders arise, including any question as to an adjournment of the Meeting, the persons named in the enclosed Proxy will vote thereon according to their best judgment. Dated: October 13, 1999 SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO COMPLETE THE ENCLOSED PROXY CARD(S) AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. THE COMPANY WILL FURNISH, WITHOUT CHARGE, COPIES OF THE COMPANY'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS DATED AUGUST 31, 1998 AND FEBRUARY 28, 1999, RESPECTIVELY, TO ANY SHAREHOLDER UPON REQUEST. THE COMPANY'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS MAY BE OBTAINED FROM THE COMPANY BY CALLING THE COMPANY AT (800) 686-3742. 10 INSTRUCTIONS FOR SIGNING PROXY CARDS The following general rules for signing proxy cards may be of assistance to you and avoid the time and expense involved in validating your vote if you fail to sign your proxy card properly. 1. Individual Accounts: Sign your name exactly as it appears in the registration on the proxy card. 2. Joint Accounts: Either party may sign, but the name of the party signing should conform exactly to the name shown in the registration on the proxy card. 3. All Other Accounts: The capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration. For example:
Registration Valid signatures ------------ ---------------- CORPORATE ACCOUNTS (1) ABC Corp.................................... ABC Corp. (2) ABC Corp.................................... John Doe, Treasurer (3) ABC Corp. c/o John Doe, Treasurer...................... John Doe (4) ABC Corp. Profit Sharing Plan............... John Doe, Treasurer TRUST ACCOUNTS (1) ABC Trust................................... Jane B. Doe, Trustee (2) Jane B. Doe, Trustee u/t/d 12/28/78....................... Jane B. Doe CUSTODIAL OR ESTATE ACCOUNTS (1) John B. Smith, Cust. f/b/o John B. Smith, Jr. UGMA.......... John B. Smith (2) John B. Smith............................... John B. Smith, Jr., Executor
11 EVERY SHAREHOLDER'S VOTE IS IMPORTANT PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY Please detach at perforation before mailing. PROXY CARD THE RBB FUND, INC. PROXY CARD n/i numeric investors MICRO CAP FUND NOTICE OF SPECIAL MEETING OF SHAREHOLDERS A Special Meeting of Shareholders (the "Meeting") of n/i numeric investors Micro Cap Fund ("Micro Cap Fund"), n/i numeric investors Growth Fund ("Growth Fund"), n/i numeric investors Growth & Value Fund ("Growth & Value Fund"), n/i numeric investors Larger Cap Value Fund ("Larger Cap Value Fund"), and n/i numeric investors Small Cap Value Fund ("Small Cap Value Fund") (each a "Fund," and collectively, the "Numeric Funds"), each a series of The RBB Fund, Inc. (the "RBB Fund" or the "Company"), will be held at the offices of the RBB Fund, Bellevue Park Corporate Center, 400 Bellevue Parkway, 3rd Floor, Wilmington, Delaware 19809 on November 22, 1999, at 10:00 a.m. This proxy when properly executed will be voted in the manner you directed. If no direction is given, with respect to the particular item, this proxy will be voted FOR item 1. NOTE: Please sign exactly as your name(s) appear on this card. Joint owners should each sign individually. Corporate proxies should be signed in full corporate name by an authorized officer. Fiduciaries should give full titles. --------------------------------------------- Signature --------------------------------------------- Signature of joint owner, if any , 1999 --------------------------------------------- Date IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY EVERY SHAREHOLDER'S VOTE IS IMPORTANT PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY Please detach at perforation before mailing. THE RBB FUND, INC. n/i numeric investors MICRO CAP FUND The Board of Directors of the RBB Fund unanimously recommends that shareholders of the Micro Cap Fund vote to approve the amendment to its advisory agreement. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [X] FOR AGAINST ABSTAIN 1. The approval of an amendment to the investment [_] [_] [_] advisory agreement between the Company and Numeric Investors L.P. with respect to the Micro Cap Fund pursuant to which Numeric Investors L.P. would be compensated on a performance fee basis. The transaction of such other business as may properly come before the meeting or any adjournment thereof. WE NEED YOUR PROXY VOTE IMMEDIATELY YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF FURTHER SOLICITATION PLEASE SIGN AND DATE ON THE REVERSE SIDE BEFORE MAILING EVERY SHAREHOLDER'S VOTE IS IMPORTANT PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY Please detach at perforation before mailing. PROXY CARD THE RBB FUND, INC. PROXY CARD n/i numeric investors GROWTH FUND NOTICE OF SPECIAL MEETING OF SHAREHOLDERS A Special Meeting of Shareholders (the "Meeting") of n/i numeric investors Micro Cap Fund ("Micro Cap Fund"), n/i numeric investors Growth Fund ("Growth Fund"), n/i numeric investors Growth & Value Fund ("Growth & Value Fund"), n/i numeric investors Larger Cap Value Fund ("Larger Cap Value Fund"), and n/i numeric investors Small Cap Value Fund ("Small Cap Value Fund") (each a "Fund," and collectively, the "Numeric Funds"), each a series of The RBB Fund, Inc. (the "RBB Fund" or the "Company"), will be held at the offices of the RBB Fund, Bellevue Park Corporate Center, 400 Bellevue Parkway, 3rd Floor, Wilmington, Delaware 19809 on November 22, 1999, at 10:00 a.m. This proxy when properly executed will be voted in the manner you directed. If no direction is given, with respect to the particular item, this proxy will be voted FOR item 1. NOTE: Please sign exactly as your name(s) appear on this card. Joint owners should each sign individually. Corporate proxies should be signed in full corporate name by an authorized officer. Fiduciaries should give full titles. --------------------------------------------- Signature --------------------------------------------- Signature of joint owner, if any , 1999 --------------------------------------------- Date IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY EVERY SHAREHOLDER'S VOTE IS IMPORTANT PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY Please detach at perforation before mailing. THE RBB FUND, INC. n/i numeric investors GROWTH FUND The Board of Directors of the RBB Fund unanimously recommends that shareholders of the Growth Fund vote to approve the amendment to its advisory agreement. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [X] FOR AGAINST ABSTAIN 1. The approval of an amendment to the investment [_] [_] [_] advisory agreement between the Company and Numeric Investors L.P. with respect to the Growth Fund pursuant to which Numeric Investors L.P. would be compensated on a performance fee basis. The transaction of such other business as may properly come before the meeting or any adjournment thereof. WE NEED YOUR PROXY VOTE IMMEDIATELY YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF FURTHER SOLICITATION PLEASE SIGN AND DATE ON THE REVERSE SIDE BEFORE MAILING EVERY SHAREHOLDER'S VOTE IS IMPORTANT PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY Please detach at perforation before mailing. PROXY CARD THE RBB FUND, INC. PROXY CARD n/i numeric investors GROWTH & VALUE FUND NOTICE OF SPECIAL MEETING OF SHAREHOLDERS A Special Meeting of Shareholders (the "Meeting") of n/i numeric investors Micro Cap Fund ("Micro Cap Fund"), n/i numeric investors Growth Fund ("Growth Fund"), n/i numeric investors Growth & Value Fund ("Growth & Value Fund"), n/i numeric investors Larger Cap Value Fund ("Larger Cap Value Fund"), and n/i numeric investors Small Cap Value Fund ("Small Cap Value Fund") (each a "Fund," and collectively, the "Numeric Funds"), each a series of The RBB Fund, Inc. (the "RBB Fund" or the "Company"), will be held at the offices of the RBB Fund, Bellevue Park Corporate Center, 400 Bellevue Parkway, 3rd Floor, Wilmington, Delaware 19809 on November 22, 1999, at 10:00 a.m. This proxy when properly executed will be voted in the manner you directed. If no direction is given, with respect to the particular item, this proxy will be voted FOR item 1. NOTE: Please sign exactly as your name(s) appear on this card. Joint owners should each sign individually. Corporate proxies should be signed in full corporate name by an authorized officer. Fiduciaries should give full titles. --------------------------------------------- Signature --------------------------------------------- Signature of joint owner, if any , 1999 --------------------------------------------- Date IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY EVERY SHAREHOLDER'S VOTE IS IMPORTANT PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY Please detach at perforation before mailing. THE RBB FUND, INC. n/i numeric investors GROWTH & VALUE FUND The Board of Directors of the RBB Fund unanimously recommends that shareholders of the Growth & Value Fund vote to approve the amendment to its advisory agreement. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [X] FOR AGAINST ABSTAIN 1. The approval of an amendment to the [_] [_] [_] investment advisory agreement between the Company and Numeric Investors L.P. with respect to the Growth & Value Fund pursuant to which Numeric Investors L.P. would be compensated on a performance fee basis. The transaction of such other business as may properly come before the meeting or any adjournment thereof. WE NEED YOUR PROXY VOTE IMMEDIATELY YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF FURTHER SOLICITATION PLEASE SIGN AND DATE ON THE REVERSE SIDE BEFORE MAILING EVERY SHAREHOLDER'S VOTE IS IMPORTANT PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY Please detach at perforation before mailing. PROXY CARD THE RBB FUND, INC. PROXY CARD n/i numeric investors LARGER CAP VALUE FUND NOTICE OF SPECIAL MEETING OF SHAREHOLDERS A Special Meeting of Shareholders (the "Meeting") of n/i numeric investors Micro Cap Fund ("Micro Cap Fund"), n/i numeric investors Growth Fund ("Growth Fund"), n/i numeric investors Growth & Value Fund ("Growth & Value Fund"), n/i numeric investors Larger Cap Value Fund ("Larger Cap Value Fund"), and n/i numeric investors Small Cap Value Fund ("Small Cap Value Fund") (each a "Fund," and collectively, the "Numeric Funds"), each a series of The RBB Fund, Inc. (the "RBB Fund" or the "Company"), will be held at the offices of the RBB Fund, Bellevue Park Corporate Center, 400 Bellevue Parkway, 3rd Floor, Wilmington, Delaware 19809 on November 22, 1999, at 10:00 a.m. This proxy when properly executed will be voted in the manner you directed. If no direction is given, with respect to the particular item, this proxy will be voted FOR item 1. NOTE: Please sign exactly as your name(s) appear on this card. Joint owners should each sign individually. Corporate proxies should be signed in full corporate name by an authorized officer. Fiduciaries should give full titles. --------------------------------------------- Signature --------------------------------------------- Signature of joint owner, if any , 1999 --------------------------------------------- Date IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY EVERY SHAREHOLDER'S VOTE IS IMPORTANT PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY Please detach at perforation before mailing. THE RBB FUND, INC. n/i numeric investors LARGER CAP VALUE FUND The Board of Directors of the RBB Fund unanimously recommends that shareholders of the Larger Cap Value Fund vote to approve the amendment to its advisory agreement. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [X] FOR AGAINST ABSTAIN 1. The approval of an amendment to the [_] [_] [_] investment advisory agreement between the Company and Numeric Investors L.P. with respect to the Larger Cap Value Fund pursuant to which Numeric Investors L.P. would be compensated on a performance fee basis. The transaction of such other business as may properly come before the meeting or any adjournment thereof. WE NEED YOUR PROXY VOTE IMMEDIATELY YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF FURTHER SOLICITATION PLEASE SIGN AND DATE ON THE REVERSE SIDE BEFORE MAILING EVERY SHAREHOLDER'S VOTE IS IMPORTANT PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY Please detach at perforation before mailing. PROXY CARD THE RBB FUND, INC. PROXY CARD n/i numeric investors SMALL CAP VALUE FUND NOTICE OF SPECIAL MEETING OF SHAREHOLDERS A Special Meeting of Shareholders (the "Meeting") of n/i numeric investors Micro Cap Fund ("Micro Cap Fund"), n/i numeric investors Growth Fund ("Growth Fund"), n/i numeric investors Growth & Value Fund ("Growth & Value Fund"), n/i numeric investors Larger Cap Value Fund ("Larger Cap Value Fund"), and n/i numeric investors Small Cap Value Fund ("Small Cap Value Fund") (each a "Fund," and collectively, the "Numeric Funds"), each a series of The RBB Fund, Inc. (the "RBB Fund" or the "Company"), will be held at the offices of the RBB Fund, Bellevue Park Corporate Center, 400 Bellevue Parkway, 3rd Floor, Wilmington, Delaware 19809 on November 22, 1999, at 10:00 a.m. This proxy when properly executed will be voted in the manner you directed. If no direction is given, with respect to the particular item, this proxy will be voted FOR item 1. NOTE: Please sign exactly as your name(s) appear on this card. Joint owners should each sign individually. Corporate proxies should be signed in full corporate name by an authorized officer. Fiduciaries should give full titles. --------------------------------------------- Signature --------------------------------------------- Signature of joint owner, if any , 1999 --------------------------------------------- Date IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY EVERY SHAREHOLDER'S VOTE IS IMPORTANT PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY Please detach at perforation before mailing. THE RBB FUND, INC. n/i numeric investors SMALL CAP VALUE FUND The Board of Directors of the RBB Fund unanimously recommends that shareholders of the Small Cap Value Fund vote to approve the amendment to its advisory agreement. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [X] FOR AGAINST ABSTAIN 1. The approval of an amendment to the [_] [_] [_] investment advisory agreement between the Company and Numeric Investors L.P. with respect to the Small Cap Value Fund pursuant to which Numeric Investors L.P. would be compensated on a performance fee basis. The transaction of such other business as may properly come before the meeting or any adjournment thereof. WE NEED YOUR PROXY VOTE IMMEDIATELY YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF FURTHER SOLICITATION PLEASE SIGN AND DATE ON THE REVERSE SIDE BEFORE MAILING EX-99.A 2 INVESTMENT ADVISORY AGREEMENT EXHIBIT A INVESTMENT ADVISORY AGREEMENT n/i Small Cap Value Fund AGREEMENT made as of November 30, 1998 between THE RBB FUND, INC., a Maryland corporation (herein called the "Fund"), and Numeric Investors L.P. (herein called the "Investment Adviser"). WHEREAS, the Fund is registered as an open-end, management investment company under the Investment Company Act of 1940 (the "1940 Act") and currently offers or proposes to offer shares representing interests in twenty- five separate investment portfolios; and WHEREAS, the Fund desires to retain the Investment Adviser to render certain investment advisory services to the Fund with respect to the Fund's n/i Small Cap Value Fund (the "Portfolio"), and the Investment Adviser 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 Adviser to act as investment adviser for the Portfolio for the period and on the terms set forth in this Agreement. The Investment Adviser accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided. 2. Delivery of Documents. The Fund has furnished the Investment Adviser with copies properly certified or authenticated of each of the following: (a) Resolutions of the Board of Directors of the Fund authorizing the appointment of the Investment Adviser and the execution and delivery of this Agreement; (b) Each prospectus and statement of additional information relating to any class of Shares representing interests in the Portfolio of the Fund in effect under the 1933 Act (such prospectus and statement of additional information, as presently in effect and as they shall from time to time be amended and supplemented, are herein collectively called the "Prospectus" and "Statement of Additional Information," respectively). The Fund will promptly furnish the Investment Adviser from time to time with copies, properly certified or authenticated, of all amendments of or supplements to the foregoing, if any. In addition to the foregoing, the Fund will also provide the Investment Adviser with copies of the Fund's Charter and By-laws, and any registration statement or service contracts related to the Portfolio, and will promptly furnish the Investment Adviser with any amendments of or supplements to such documents. 3. Management of the Portfolio. Subject to the supervision of the Board of Directors of the Fund, the Investment Adviser will provide for the overall management of the Portfolio including (i) the provision of a continuous investment program for the Portfolio, including investment research and management with respect to all securities, investments, cash and cash equivalents in the Portfolio, (ii) the determination from time to time of what securities and other investments will be purchased, retained, or sold by the Fund for the Portfolio, and (iii) the placement from time to time of orders for all purchases and sales made for the Portfolio. The Investment Adviser will provide the services rendered by it hereunder in accordance with the Portfolio's investment objectives, restrictions and policies as stated in the applicable Prospectus and the Statement of Additional Information, provided that the Investment Adviser has actual or constructive notice or knowledge of any changes by the Board of Directors to such investment objectives, restrictions or policies. The Investment Adviser further agrees that it will render to the Fund's Board of Directors such periodic and special reports regarding the performance of its duties under this Agreement as the Board may reasonably request. The Investment Adviser agrees to provide to the Fund (or its agents and service providers) prompt and accurate data with respect to the Portfolio's transactions and, where not otherwise available, the daily valuation of securities in the Portfolio. A-1 4. Brokerage. Subject to the Investment Adviser's obligation to obtain best price and execution, the Investment Adviser shall have full discretion to select brokers or dealers to effect the purchase and sale of securities. When the Investment Adviser places orders for the purchase or sale of securities for the Portfolio, in selecting brokers or dealers to execute such orders, the Investment Adviser is expressly authorized to consider the fact that a broker or dealer has furnished statistical, research or other information or services for the benefit of the Portfolio directly or indirectly. Without limiting the generality of the foregoing, the Investment Adviser is authorized to cause the Portfolio to pay brokerage commissions which may be in excess of the lowest rates available to brokers who execute transactions for the Portfolio or who otherwise provide brokerage and research services utilized by the Investment Adviser, provided that the Investment Adviser determines in good faith that the amount of each such commission paid to a broker is reasonable in relation to the value of the brokerage and research services provided by such broker viewed in terms of either the particular transaction to which the commission relates or the Investment Adviser's overall responsibilities with respect to accounts as to which the Investment Adviser exercises investment discretion. The Investment Adviser may aggregate securities orders so long as the Investment Adviser adheres to a policy of allocating investment opportunities to the Portfolio over a period of time on a fair and equitable basis relative to other clients. In no instance will the Portfolio's securities be purchased from or sold to the Fund's principal underwriter, the Investment Adviser, or any affiliated person thereof, except to the extent permitted by SEC exemptive order or by applicable law. The Investment Adviser shall report to the Board of Directors of the Fund at least quarterly with respect to brokerage transactions that were entered into by the Investment Adviser, pursuant to the foregoing paragraph, and shall certify to the Board that the commissions paid were reasonable in terms either of that transaction or the overall responsibilities of the Adviser to the Fund and the Investment Adviser's other clients, that the total commissions paid by the Fund were reasonable in relation to the benefits to the Fund over the long term, and that such commissions were paid in compliance with Section 28(e) of the Securities Exchange Act of 1934. 5. Conformity with Law; Confidentiality. The Investment Adviser further agrees that it will comply with all applicable rules and regulations of all federal regulatory agencies having jurisdiction over the Investment Adviser in the performance of its duties hereunder. The Investment Adviser will treat confidentially and as proprietary information of the Fund all records and other information relating to the Fund and prior, present or potential shareholders (except clients of the Investment Adviser and its affiliates), and will not use such records and information for any purpose other than performance of its responsibilities and duties hereunder, except after prior notification to and approval in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where the Investment Adviser may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund. 6. Services Not Exclusive. The Investment Adviser and its officers may act and continue to act as investment managers for others, and nothing in this Agreement shall in any way be deemed to restrict the right of the Investment Adviser to perform investment management or other services for any other person or entity, and the performance of such services for others shall not be deemed to violate or give rise to any duty or obligation to the Portfolio or the Fund. Nothing in this Agreement shall limit or restrict the Investment Adviser or any of its partners, officers, affiliates or employees from buying, selling or trading in any securities for its or their own account. The Fund acknowledges that the Investment Adviser 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 Adviser shall have no obligation to acquire for the Portfolio a position in any investment which the Investment Adviser, 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 Adviser 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. A-2 The Investment Adviser agrees that this Paragraph 6 does not constitute a waiver by the Fund of the obligations imposed upon the Investment Adviser 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 Adviser under Section 206 of the Investment Advisers Act of 1940 and the rules thereunder. Further, the Investment Adviser agrees that this Paragraph 6 does not constitute a waiver by the Fund of the fiduciary obligation of the Investment Adviser arising under federal or state law, including Section 36 of the 1940 Act. The Investment Adviser 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 Adviser hereby agrees that all records which it maintains for the Portfolio are the property of the Fund and further agrees to surrender promptly to the Fund any of such records upon the Fund's request. The Investment Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act. 8. Expenses. During the term of this Agreement, the Investment Adviser will pay all expenses incurred by it in connection with its activities under this Agreement. The Portfolio shall bear all of its own expenses not specifically assumed by the Investment Adviser. General expenses of the Fund not readily identifiable as belonging to a portfolio of the Fund shall be allocated among all investment portfolios by or under the direction of the Fund's Board of Directors in such manner as the Board determines to be fair and equitable. Expenses borne by the Portfolio shall include, but are not limited to, the following (or the portfolio's share of the following): (a) the cost (including brokerage commissions) of securities purchased or sold by the Portfolio and any losses incurred in connection therewith; (b) fees payable to and expenses incurred on behalf of the Portfolio by the Investment Adviser; (c) filing fees and expenses relating to the registration and qualification of the Fund and the Portfolio's shares under Federal and/or state securities laws and maintaining such registrations and qualifications; (d) fees and salaries payable to the Fund's directors and officers; (e) taxes (including any income or franchise taxes) and governmental fees; (f) costs of any liability and other insurance or fidelity bonds; (g) any costs, expenses or losses arising out a liability of or claim for damages or other relief asserted against the Fund or the Portfolio for violation of any law; (h) legal, accounting and auditing expenses, including legal fees of special counsel for the independent directors; (i) charges of custodians and other agents; (j) expenses of setting in type and printing prospectuses, statements of additional information and supplements thereto for existing shareholders, reports, statements, and confirmations to shareholders and proxy material that are not attributable to a class; (k) costs of mailing prospectuses, statements of additional information and supplements thereto to existing shareholders, as well as reports to shareholders and proxy material that are not attributable to a class; (1) any extraordinary expenses; (m) fees, voluntary assessments and other expenses incurred in connection with membership in investment company organizations; (n) costs of mailing and tabulating proxies and costs of shareholders' and directors' meetings; (o) costs of independent pricing services to value 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 Adviser 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 Adviser 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. A-3 9. Voting. The Investment Adviser shall have the authority to vote as agent for the Fund, either in person or by proxy, tender and take all actions incident to the ownership of all securities in which Portfolio's assets may be invested from time to time, subject to such policies and procedures as the Board of Directors of the Fund may adopt from time to time. 10. Reservation of Name. The Investment Adviser shall at all times have all rights in and to the Portfolio's name and all investment models used by or on behalf of the Portfolio. The Investment Adviser may use the Portfolio's name or any portion thereof in connection with any other mutual fund or business activity without the consent of any shareholder and the Fund shall execute and deliver any and all documents required to indicate the consent of the Fund to such use. No public reference to, or description of, the Investment Adviser 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 Adviser, which consent shall not be unreasonably withheld. In each case, the Fund shall provide the Investment Adviser a reasonable opportunity to review any such reference or description before being asked for such consent. 11. Discontinuation of Public Offering. Subject to the prior approval of the Fund's Board of Directors, the Investment Adviser may instruct the Fund's distributor to cease sales of shares of the Portfolio to new investors due to concerns that an increase in the size of the Portfolio may adversely effect the implementation of the Portfolio's investment strategy. Subject to prior Board approval, the Investment Adviser may subsequently instruct the Fund's distributor to recommence the sale of shares of the Portfolio. 12. Compensation. (a) For the services provided and the expenses assumed pursuant to this Agreement with respect to the Portfolio, the Fund will pay the Investment Adviser from the assets of the Portfolio and the Investment Adviser will accept as full compensation therefor a fee, computed daily and payable monthly, at the annual rate of .75% 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. 13. Limitation of Liability of the Investment Adviser. The Investment Adviser shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with the matters to which this Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services or a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Investment Adviser in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement ("disabling conduct"). The Portfolio will indemnify the Investment Adviser against and hold it harmless from any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action or suit not resulting from disabling conduct by the Investment Adviser. 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 Adviser 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 Adviser 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 Adviser 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 Adviser 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 Adviser shall provide a security in form and amount A-4 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 Adviser 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. 14. 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, 1999. Thereafter, if not terminated, this Agreement shall continue with respect to the Portfolio for successive annual periods ending on August 16, provided such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Directors of the Fund who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (b) by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Portfolio; provided, however, that this Agreement may be terminated with respect to the Portfolio by the Fund at any time, without the payment of any penalty, by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Portfolio, on 60 days' prior written notice to the Investment Adviser, or by the Investment Adviser at any time, without payment of any penalty, on 60 days' prior written notice to the Fund. This Agreement will immediately terminate in the event of its assignment. (As used in this Agreement, the terms "majority of the outstanding voting securities," "interested person" and "assignment" shall have the same meaning as such terms have in the 1940 Act). 15. 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. 16. 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. 17. Change in Membership. The Investment Adviser shall notify the Fund of any change in its membership within a reasonable time after such change. 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. 19. 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. A-5 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. /s/ Edward J. Roach By___________________________________ Numeric Investors /s/ Langdon B. Wheeler By___________________________________ Langdon B. Wheeler President, WBE & Associates, LLC General Partner of Numeric Investors L.P. A-6 THE RBB FUND, INC. AMENDMENT NO. 1 TO INVESTMENT ADVISORY AGREEMENT WHEREAS, The RBB Fund, Inc. (the "Fund") and Numeric Investors L.P. (the "Investment Adviser") desire to amend the Investment Advisory Agreement ("the Agreement") for the n/i numeric investors Small Cap Value Fund (the "Portfolio") dated November 30, 1998 by and among them under which the Investment Adviser renders investment advisory services to the Fund with respect to the Portfolio; and WHEREAS, the Investment Adviser continues to be willing to render such services to the Fund with respect to the Portfolio; The parties hereto, intending to be legally bound hereby, agree that the Agreement is amended by substituting the following for Section 12 of the Agreement as follows: 12. Compensation. (a) For the services provided and the expenses assumed pursuant to the Agreement with respect to the Portfolio, until January 1, 2001, the Fund will pay the Investment Adviser from the assets of the Portfolio and the Investment Adviser will accept as full compensation therefor a fee, computed daily and payable monthly, at the annual rate of 0.75% of the Portfolio's average daily net assets. (b) On and after January 1, 2001, the Portfolio will pay the Investment Adviser from the assets of the Portfolio and the Investment Adviser will accept as full compensation therefor fees calculated as follows: (i) There shall be a fee, computed daily and payable monthly, at the annual rate of 0.85% of the Portfolio's average daily net assets (the "Base Fee"), provided, however, that if subparagraph (ii) below is applicable, the fee shall be calculated pursuant to subparagraph (iii) below. (ii) After each calendar month, it shall be determined whether the investment performance of the Portfolio (calculated in accordance with subparagraph (v) below) has exceeded or lagged the Target (as hereinafter defined) within the parameters of one of subparagraphs (A) through (K) during the immediately preceding twelve months: (A) the investment performance of the Portfolio was equal to or lagged the Target; (B) the investment performance of the Portfolio exceeded the Target by more than 0 but not more than 100 basis points; (C) the investment performance of the Portfolio exceeded the Target by more than 100 but not more than 200 basis points; (D) the investment performance of the Portfolio exceeded the Target by more than 200 but not more than 300 basis points; (E) the investment performance of the Portfolio exceeded the Target by more than 300 but not more than 400 basis points; (F) the investment performance of the Portfolio exceeded the Target by more than 400 but not more than 500 basis points; (G) the investment performance of the Portfolio exceeded the Target by more than 500 but not more than 600 basis points; A-7 (H) the investment performance of the Portfolio exceeded the Target by more than 600 but not more than 700 basis points; (I) the investment performance of the Portfolio exceeded the Target by more than 700 but not more than 800 basis points; (J) the investment performance of the Portfolio exceeded the Target by more than 800 but not more than 900 basis points; or (K) the investment performance of the Portfolio exceeded the Target by 900 basis points or more; (iii) If subparagraph (ii) applies, the rate of the Base Fee for such calendar month should be adjusted as follows: (A) If subparagraph (ii)(A) applies, the annual rate of the Base Fee shall be 0.35%; (B) If subparagraph (ii)(B) applies, the annual rate of the Base Fee shall be 0.45%; (C) If subparagraph (ii)(C) applies, the annual rate of the Base Fee shall be 0.55%; (D) If subparagraph (ii)(D) applies, the annual rate of the Base Fee shall be 0.65%; (E) If subparagraph (ii)(E) applies, the annual rate of the Base Fee shall be 0.75%; (F) If subparagraph (ii)(F) applies, the annual rate of the Base Fee shall be 0.85%; (G) If subparagraph (ii)(G) applies, the annual rate of the Base Fee shall be 0.95%; (H) If subparagraph (ii)(H) applies, the annual rate of the Base Fee shall be 1.05%; (I) If subparagraph (ii)(I) applies, the annual rate of the Base Fee shall be 1.15%; (J) If subparagraph (ii)(J) applies, the annual rate of the Base Fee shall be 1.25%; or (K) If subparagraph (ii)(K) applies, the annual rate of the Base Fee shall be 1.35%. (iv) The "Target" means the investment record of the Russell 2000 Value Index. (v) The investment record of the Russell 2000 Value Index shall be calculated in accordance with Rule 205-1(b) under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), as such Rule shall be amended from time to time or any successor regulation. The investment performance of the Fund shall be calculated in accordance with Rule 205-1(a) under the Advisers Act as such Rule shall be amended from time to time or any successor regulation. (c) The fee attributable to the Fund shall be satisfied only against assets of the Portfolio and not against the assets of any other investment portfolio of the Company. A-8 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 , 1999. The RBB Fund, Inc. By:__________________________________ Its: Numeric Investors L.P. By:__________________________________ Its: A-9 -----END PRIVACY-ENHANCED MESSAGE-----