SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. _____ [ ]
Post-Effective Amendment No. 61 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 61
(Check appropriate box or boxes.)
WADE FUND, INC.
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(Exact Name of Registrant as Specified in Charter)
Suite 2224, 5100 Poplar Avenue
Memphis, Tennessee 38137
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (901) 682-4613
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MAURY WADE, JR
Suite 2224, 5100 Poplar Avenue
Memphis, Tennessee 38137
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(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering April 30,1998
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FILE NO. 2-7988
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to paragraph (b)
X on 4/30/98 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(1)
on pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on 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.
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TABLE OF CONTENTS
OF
FORM N-1A
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Page
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Facing Sheet 1
Table of Contents of Form N-1A 2
Part A. Prospectus
Cover Page 3
Table of Contents 4
Synopsis 5
Financial Highlights 6
Discussion of Fund Performance 7
Body of Prospectus Narrative 8-15
Financial Statements 16-22
Part B. Statement of Additional Information
Cover Page 1
Table of Contents 2
Body 3-7
Part C. Other Information 1-5
Signatures 6
2
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P R O S P E C T U S
WADE FUND, INC.
Suite 2224, 5100 Poplar Avenue
Memphis, Tennessee 38137
Telephone: 901-682-4613
COVERING SHARES
OF
CAPITAL STOCK
Investment Adviser: Maury Wade, Jr.
Subscription Price: Net Asset Value
Sales Load or Underwriting Commissions: None
Percentage of Subscription Price Received by Wade Fund, Inc.: 100%
Redemption Price: Net Asset Value *
Annual Investment Adviser Fee: 3/4 of 1% Of Net Value
of Investment Assets
Minimum Initial Investment: $500.00
Date of This Prospectus: April 30, 1998
Date of Statement of Additional Information April 30, 1998
* At the discretion of the Board of Directors a redemption charge not to
exceed two percent (2%) of the redemption price may be placed in effect at
any time. No such charge has ever been imposed and none is contemplated at
present. For a further explanation, see page 13.
The primary objective of Wade Fund, Inc. is long term appreciation of
capital, the obtaining of ordinary income being secondary. It is proposed
that these objectives may be met by investing in publicly traded securities
which are believed to have appreciation potential. There is no assurance
that the Fund's objectives will be realized.
The prospectus sets forth concisely the information about the Registrant
that a prospective investor ought to know before investing.
INVESTORS SHOULD READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE.
Additional information about the Registrant has been filed with the
Securities and Exchange Commission and is available upon request and
without charge at the address shown above. It is incorporated herein by
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
3
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TABLE OF CONTENTS Page
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Synopsis.......................................................... 5
Financial Highlights.............................................. 6
Discussion of Fund Performance.................................... 7
General Description of Registrant................................. 8
Investment Objectives and Policy............................. 8
Fundamental Policies......................................... 9
Management of the Fund............................................ 10
Officers and Directors....................................... 10
Stockholdings of Officers and Directors...................... 10
Investment Adviser........................................... 11
Terms of Contract.......................................... 11
Remuneration............................................... 11
Capital St ructure.................................................11
Description of Capital Stock................................. 11
Amount Authorized............................................ 11
Offering Price of Shares.......................................... 12
Sales Load................................................... 12
Calculation of Net Asset Value............................... 12
Frequency of Calculation..................................... 12
Valuation of Securities...................................... 12
Accruals..................................................... 12
Dividend Reinvestment............................................. 12
Redemption of Shares.............................................. 13
Redemption Privilege......................................... 13
Redemption Price..............................................13
Tax Status........................................................ 14
Legal Proceedings................................................. 15
Audits and Reports................................................ 16
Report of Independent Accountants................................. 16
Consent of Independent Accountants................................ 17
Statement of Assets and Liabilities............................... 18
Statement of Sources of Net Assets................................ 18
Statement of Operations........................................... 19
Statement of Realized Gain on Investments......................... 19
Statement on Unrealized Appreciation on Investments............... 19
Statement of Changes in Net Assets................................ 20
Schedule of Investments........................................... 21
Notes to Financial Statements..................................... 22
NUMEROUS INVESTMENT COMPANIES CONTINUOUSLY OFFER THEIR SHARES TO INVESTORS.
INVESTMENT COMPANIES HAVE DIFFERENT INVESTMENT OBJECTIVES AND INVOLVE
VARYING DECREES OF RISK. SALES COMMISSIONS WHICH ARE PAID BY SOME
COMPANIES TO COMPENSATE PERSONS WHO SELL THEIR SHARES VARY AS DO MANAGEMENT
CHARGES AND EXPENSE RATIOS. WADE FUND, INC. PAYS NO SALES COMMISSIONS ON
THE SALE OF ITS SHARES. THE MANAGEMENT CHARGES PAID BY WADE FUND, INC. FOR
THE LAST FISCAL YEAR WERE APPROXIMATELY .75% OF AVERAGE ANNUAL NET ASSETS.
THE COMPANY'S OPERATING EXPENSES INCLUDING THE MANAGEMENT FEE WERE
APPROXIMATELY 2.72% OF THE AVERAGE ANNUAL NET ASSETS AND 95.95% OF THE
INVESTMENT INCOME IN THE LAST FISCAL YEAR.
4
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Synopsis
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Wade Fund, Inc. operates as an open-end non-diversified investment
company and is also qualified as a "regulated investment company" under the
Internal Revenue Code. (See "General Description of Registrant",
"Fundamental Policies", and "Tax Status"). The primary objective of the
Fund is the making of investments which may produce long term appreciation
of capital (See "Investment Objectives and Policy" and "Fundamental
Policies").
Wade Fund, Inc., is authorized to issue a maximum of One Hundred
Thousand (100,000) shares of common capital stock without par value,
pursuant to charter amendment dated February 28, 1983. At December 31,
1997, a total of 18,142 shares were issued and outstanding. No other class
of stock is authorized or outstanding. (See "Capital Structure" and
"Condensed Financial Information").
The investment adviser to the Fund is Maury Wade, Jr., doing business
as Maury Wade & Company, an investment advisory service. As such, the firm
customarily provides advice to investors, both individual and
institutional, as to the making of investment decisions concerning publicly
traded equity securities and debt securities of corporations and of
federal, state and local governmental entities. (See "Investment Adviser").
The investment advisory fee is at an annual rate of three-fourths of
one percent (3/4 of 1%) of the net value of the investment assets,
calculated and payable quarterly. (See "Investment Adviser").
There is no sales load or any other transaction expense on the purchase
of shares in the Fund, or upon the redemption of shares in the Fund, except
that at the discretion of the Board of Directors a redemption charge of two
percent (2%) of the redemption price may be placed in effect at any time
(See "Redemption of Shares"). Normally, shares are purchased or redeemed
at net asset value (See "Calculation of Net Asset Value"). No secondary
market for the shares is known to exist. The following is a consolidated
disclosure of Fund expenses (For more complete information see "Statement
of Operations"):
Annual Fund Operating Expenses (as a percent of average net assets)
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Management Fees 0.75%
Other Expenses 1.97%
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Total Fund Operating Expenses 2.72%
Example: 1 year 3 years 5 years 10 years
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You would pay the following expenses
on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption
at the end of each time period: $ 28 $ 85 $144 $306
The purpose of this table is to assist the investor in understanding the
indirect expenses that an investor will bear. The example should not be
considered a representation of past or future expenses. Actual expenses
may be greater or less than those shown.
5
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<TABLE>
<CAPTION>
WADE FUND, INC. FINANCIAL HIGHLIGHTS
Complete financial statements will be found elsewhere in this prospectus. The following is a
condensation of certain pertinent information. (It has been audited by the Fund's independent
accountant, whose report appears elsewhere in this prospectus.)
PER SHARE INCOME AND CAPITAL CHANGES - (for a share outstanding throughout the year ending
December 31st)
1988 1989 1990 1991 1992 1993 1994 1995* 1996* 1997*
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</CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value/Beginning of
Period $37.72 $31.95 $34.70 $30.22 $31.24 $30.65 $30.73 $29.64 $33.60 $34.81
Income from Investment Operations:
Net Investment Income $ 0.59 $ 0.76 $ 0.72 $ 0.41 $ 0.21 ($0.08) $0.08 $ 0.12 $ 0.09 $ 0.05
Net Realized and Unrealized
Gains (Losses) on Securities ($ 4.43) $ 7.63( $ 2.09) $ 4.10 $ 2.14 $ 2.93 ($0.50) $ 6.07 $ 4.26 $ 6.98
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Total from Investment Operations:($ 3.84) $ 8.39( $ 1.37) $ 4.51 $ 2.35 $ 2.85 ( 0.42) $ 6.19 $ 4.35 $ 7.03
Less Distributions:
Dividends from Net Income: $ 0.61 $ 0.89 $ 0.80 $ 0.49 $ 0.19 $ 0.00 $ 0.06 $ 0.15 $ 0.10 $ 0.05
Distributions from Realized
Gains on Securities: $ 1.32 $ 4.75 $ 2.31 $ 3.00 $ 2.75 $ 2.77 $ 0.61 $ 2.08 $ 3.04 $ 2.91
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Net Asset Value, End of Period: $31.95 $34.70 $30.22 $31.24 $30.65 $30.73 $29.64 $33.60 $34.81 $38.88
===============================================================================
Total Return: 10.19% 26.23% -3.79% 15.70% 7.57% 9.28% -1.31% 20.83% 12.96% 20.25%
.......................................................................................................
Ratios/Supplemental Data:
Net Assets,
End of Period: 487,728 539,546 493,638 526,300 536,846 532,330 506,200 584,347 628,809 705,332
Ratio of Expenses to
Average Net Assets 2.66% 2.55% 2.61% 2.60% 2.61% 2.64% 2.82% 2.76% 2.86% 2.72%
Ratio of Net Income to
Average Net Assets 1.68% 2.18% 2.30% 1.43% 0.59% -0.26% 0.20% 0.39% 0.30% 0.12%
Portfolio Turnover Rate 0.00% 5.77% 0.00% 0.00% 6.13% 17.68% 0.00% 0.00% 0.00% 4.43%
Number of Shares Outstanding,
End of Period 15,263 15,550 16,337 16,848 17,518 17,322 17,080 17,391 18,066 18,142
*See accompanying notes and independent auditor's report.
</TABLE>
6
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<TABLE>
<CAPTION>
Performance
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The graph and tables below cover the ten year period from December 31, 1987 through
December 31, 1997. The Standard & Poor's 500 Composite Index (S&P 500) is an
unmanaged index of common stock prices. The Consumer Price Index of All Urban
Consumers (CPI) is a widely recognized inflation measure compiled by the United
States Department of Labor. Total returns are based on past performance and are not
predictive of future performance.
(In the paper format of this N-1A form, a graph appears which plots the data which
appears in the following table. The graph is labeled "Assumed Investment of $10,000
with all Dividends Reinvested". Dollars (in thousands) are loaced along the Y-axis
and the year of investment are located along the X-axis.)
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WADE FUND
%CHANGE -10.19% 26.23% -3.79% 15.70% 7.57% 9.28% -1.31% 20.83% 12.96% 20.25%
VALUE $10,000 $ 8,981 $11,337 $10,907 $12,619 $13,575 $14,834 $14,640 $17,690 $19,982 $24,029
S&P
%CHANGE 16.56% 31.63% -3.11% 30.40% 7.61% 10.06% 1.31% 37.53% 22.95% 33.40%
VALUE $10,000 $11,656 $15,343 $14,866 $19,385 $20,860 $22,958 $23,259 $31,988 $39,330 $52,466
CPI
%CHANGE 4.41% 4.64% 6.25% 2.98% 2.96% 2.81% 2.60% 2.60% 3.31% 1.70%
VALUE $10,000 $10,441 $10,925 $11,608 $11,954 $12,308 $12,654 $12,983 $13,320 $13,761 $13,995
</TABLE>
<TABLE>
<CAPTION>
AVERAGE TOTAL RETURNS CUMULATIVE TOTAL RETURNS
PAST 1 PAST 5 PAST 10 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS YEAR YEARS YEARS
<S> <C> <C> <C> <S> <C> <C> <C>
WADE FUND 20.25% 12.10% 9.16% WADE FUND 20.25% 77.01% 140.29%
S&P 500 33.40% 20.26% 18.03% S&P 500 33.40% 151.51% 424.66%
CPI 1.70% 2.60% 3.42% CPI 1.70% 13.71% 39.95%
</TABLE>
7
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General Description of Registrant
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Wade Fund, Inc., sometimes referred to hereinafter as the Fund, is
a corporation organized under the laws of the State of Tennessee on April 12,
1949. It became qualified to commence business as an investment company on
April 25, 1949, the date on which it effectively filed notification of
registration as an open-end, non-diversified management type company under the
Investment Company Act of 1940. It should be noted that the regulation to
which the Fund is subject under the above mentioned Act does not involve
supervision of management or investment practices or policies. The Fund's
only place of business is at Suite 2224, 5100 Poplar Avenue, Memphis,
Tennessee 38137.
Investment Objectives and Policy
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The purpose of the Fund is to permit the combining of many
relatively small amounts of money into one larger fund to be utilized for
investment purposes. The individual stockholders of Wade Fund, Inc. are
thereby enabled to share the benefits derived from continuous investment
supervision based on long experience and constant research and study.
Subject to change by the Board of Directors, but only with the
vote of the holders of a majority of the Registrant's outstanding voting
securities, the primary objective of the Fund is long term appreciation of
capital. Its investment policy is directed only secondarily to obtaining
dividend and interest income. Accordingly, it is expected that the Fund
normally will be almost wholly committed to a selected group of common stocks
which might appreciate in value, although it may invest any portion of its
assets in convertible securities, bonds and preferred stocks which also might
appreciate in value. During periods which the management feels to be of
general economic decline, management, as a matter of temporary defensive
policy, may invest assets in U.S. Treasury or investment grade corporate debt
securities which provide price stability and income, or hold same in cash.
The Fund is under no restriction as to the amount or type of portfolio
securities which may be bought or sold, and, except for the prohibition
against investment for the purpose of exercising control, there is no limit on
the percentage of voting securities of any issuer which it may acquire.
Investments shall be confined to established companies which have been engaged
in business not less than three (3) years. Accordingly, the investment
techniques employed are not designed to result in short term trading or rapid
portfolio turnover to secure quick profits nor in disproportionate brokerage
or tax consequences to the Fund and its shareholders. The rate of portfolio
turnover for the fiscal years ended December 31, 1995, 1996 and 1997 were
0.00%, 0.00% and 4.43% respectively.
In connection with the foregoing it should be pointed out that any
investment in securities involves an inherent risk of loss through capital
depreciation resulting from a decline in market values in general or from a
decline in the market value of particular securities held. As a result, the
attainment of the Fund's objectives cannot be assured. However, it is the
management's belief that the continuous investment supervision based upon
experience which is furnished to the Fund serves to reduce such risk.
8
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Fundamental Policies
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In addition to the applicable laws pertaining to its activities,
the Fund is subject to certain self-imposed restrictions contained in the
by-laws. These are as follows:
1. No more than ten percent (10%) of its total assets
may be invested in the securities of any one issuer
other than the United States Government.
2. No more than twenty-five percent (25%) of its total assets
may be invested in any one industry. It is intended that the
Fund's investments shall be invested in as many industries as
possible and in no event to exceed the limit stated.
3. It may not invest in the securities of other investment
companies.
4. It may not invest in the securities of any issuer for the
purpose of securing or exercising control or management of
the issuer.
5. It may not borrow except for temporary purposes and then only
up to an amount not exceeding five percent (5%) of its total
assets and for a period not exceeding ninety (90) days. The
Fund's policy will be to borrow money under this provision
only in the event of an emergency. It is desired to retain
freedom to do so within these limits but the Fund has never
borrowed any money and no borrowing is contemplated or
intended within the foreseeable future.
6. It may not act as an underwriter of securities issued by any
person other than itself.
7. It may not purchase real estate for any purpose.
8. It may not engage in the purchase or sale of commodities or
commodity contracts.
9. It may not make loans to other persons.
All of the foregoing are stated in the by-laws to be matters of
fundamental policy of the Fund and as such may only be changed by vote of a
majority of the outstanding shares. In addition to the foregoing, the Fund
does not deal in restricted securities.
9
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Management
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The business affairs of Wade Fund, Inc. are administered under the
direction of its officers and directors, none of whom is paid any compensation
as such. The names of the officers and directors, and their business
affiliations for the past five years or more, are as follows:
L. Palmer Brown, III. 119 Racine Street, Memphis, Tennessee,
38111. Director. Mr. Brown is the sole proprietor of L.P. Brown Enterprises.
On December 31, 1997, Mr. Brown owned 600 of the Fund's shares.
David L. DelBrocco. 4735 Spottswood, Suite 204, Memphis,
Tennessee, 38117. Director. Mr. DelBrocco is with DelBrocco and Associates,
certified public accountants. He was elected to the Board on December 13,
1995. On December 31, 1997, Mr. DelBrocco owned 245 of the Fund's shares as
custodian for his daughter, the beneficial ownership of which is disclaimed by
Mr. DelBrocco.
Richard D. Harwood. 4056 Barrone Way, Memphis, Tennessee, 38117.
Director. Mr. Harwood, formerly Executive Vice-President and Director of
Conwood Corporation of Memphis, Tennessee, manufacturer of tobacco products,
is retired. On December 31, 1997, Mr. Harwood owned 900 of the Fund's shares.
Charles Grant Wade. 150 Canomero Cove, Oak Hill Downs, Moscow,
Tennessee, 38057. Secretary, Treasurer and Director. Mr. Wade retired as a
Lieutenant Colonel in 1982 after twenty years of service with the United
States Air Force. He is the brother of Maury Wade, Jr. On December 31, 1997,
Mr. Wade owned 1476 of the Fund's shares. Said shares were owned directly by
Mr. Wade and represented 8.14% of the total outstanding.
Maury Wade, Jr. Suite 2224, 5100 Poplar Avenue, Memphis,
Tennessee, 38137. President and Director. Mr. Wade, Jr. is the sole
proprietor of Maury Wade & Company under which name he has engaged in business
as an investment adviser since July 26, 1973, as the successor to the
investment advisory business previously conducted by his father, Maury Wade,
who was the Fund's investment adviser prior to his death. Mr. Wade, Jr. is
presently registered as an investment adviser under the Investment Advisers
Act of 1940 and for nine years prior to such succession he was engaged in the
investment and advisory field with his father. On December 31, 1997, Mr.
Wade, Jr. owned 1318 of the Fund's shares. Said shares were owned directly by
Mr. Wade and represented 7.26% of the total outstanding.
10
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Investment Adviser
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Wade Fund, Inc. has entered into a management contract with Maury
Wade, Jr. doing business as Maury Wade & Company, Suite 2224, 5100 Poplar
Avenue, Memphis, Tennessee, 38137. Mr. Wade, Jr. has acted as the Fund's sole
investment adviser since July 26, 1973, the date of said contract, which date
was shortly after the death of Maury Wade, Sr. who had acted as such since the
Fund commenced business. The terms of the contract provide that Mr. Wade, Jr.
will provide continuous investment supervision with respect to the Fund's
portfolio and will recommend investment changes from time to time as they
appear desirable in the light of the Fund's investment policy. In addition,
Mr. Wade, Jr. bears the cost of all office rent, executive salaries and
executive expenses and the cost of all sales and promotion expenses in
connection with the sale of the Fund's stock whereas the Fund pays all taxes
accruing against it, all legal fees and expenses, accounting and auditing fees
and the cost of compliance with Federal and State laws relating to the issue
and sale of securities. In return for his services, Mr. Wade, Jr. is paid an
annual fee equal to three-fourths of one percent (3/4 of 1%) of the net value
of the investment assets, payable quarterly at the rate of three-sixteenths of
one percent (3/16 of 1%) of the net value of such assets on the last day of
each quarter on which the New York Stock Exchange is open. The net value of
investment assets is the total value of all assets less the aggregate of net
income and capital gain realized but undistributed for the year in question
and all liabilities. Maury Wade, Jr. was paid fees aggregating $4,315.99 for
the year ended December 31, 1995, $4,613.15 for the year ended December 31,
1996, and $5,300.47 for the year ended December 31, 1997.
An assignment of the contract will automatically terminate it as
of the date of such assignment. In addition, the contract may be terminated
by the Board of Directors or by vote of the stockholders holding a majority of
the stock of the Fund provided sixty (60) days written notice is given. The
contract was initially approved by the stockholders at a meeting held on
September 17, 1973, and has since been approved annually by the Board of
Directors constituted as set forth below. At the present time, it is
effective through December 31, 1998, and in the absence of thirty (30) days
written notice of intention not to renew given the Fund by the Adviser prior
to expiration, it continues in effect from year to year provided such
continuance is approved at least annually either (a) by the Board of Directors
of the Fund, including a majority of the directors who are not parties to such
contract or agreement or interested persons of any such party, or (b) by a
vote of the majority of the outstanding shares of the Fund.
Capital Structure
- -----------------
Wade Fund, Inc. is authorized to issue One Hundred Thousand
(100,000) shares of common capital stock without par value, pursuant to
charter amendment dated February 28, 1983. This is the only class of stock
which the Fund has and each share thereof has equal rights as to voting,
liquidation, redemption and dividends. No share has any preemptive rights or
conversion rights, no share is liable to further call or assessment, and there
are no sinking fund provisions. All shares are transferable on the books of
the Fund by the holder thereof.
11
<PAGE>
Since the stock has no par value, the Board of Directors has
adopted a resolution providing that the first Thirteen and 33/100 ($13.33)
Dollars received as consideration for each share issued shall be allocated to
capital stock and the balance to paid-in surplus and equalization accounts.
Purchase of Securities Being Offered
- ------------------------------------
The Fund has no underwriter and its shares are sold only directly
by it at its principal office. Therefore, no sales load is added to the
offering price and no commission is paid by the purchaser. The offering price
per share is the net asset value of such share next computed after receipt of
the order to purchase, and the entire price goes to the Fund. Net asset value
is computed once daily on each day that the New York Stock Exchange is open,
and on any other day when there has been sufficient trading of the Fund's
portfolio securities that net asset value would be materially affected. It is
computed as of the time of the close of trading on such Exchange and,
therefore, will be effective as to all orders to purchase received by the Fund
prior to the time of the close of trading on the day of receipt. If said
Exchange is not open on the day of receipt of the order, or if the order is
received by the Fund after the close of trading, the effective price will be
that which is computed as of the close of trading on the next day on which
said Exchange is open.
Net asset value per share is computed by dividing the value of the
Fund's securities plus any cash and other assets (including dividends accrued
but not collected), less all liabilities (including accrued expenses but
excluding capital and surplus) by the number of shares outstanding. To
determine the market value of portfolio securities, a security listed or
traded on an exchange is valued at its last sale price on that exchange on the
date on which the assets are valued. If there were no sales, the closing bid
price is used. An unlisted security for which over-the-counter market
quotations are readily available is valued on the basis of the closing bid
price. The Fund has never invested in over-the-counter securities for which
market quotations are not readily available or in restricted securities. All
other assets are valued at fair value as determined in good faith by the Board
of Directors. Money market securities, such as Treasury Bills or certificates
of deposit, which have a maturity of less than one year but more than sixty
days are valued at market value. Those having a maturity of less than sixty
days are valued at amortized cost. Major items of ascertainable expense, such
as auditing fees, legal fees, advisory service fees and safekeeping fees are
accrued daily. Taxes when applicable (See Note 1 to Financial Statements) are
also accrued daily.
Dividend Reinvestment
- ---------------------
Any shareholder may elect to have dividends and capital gain
distributions automatically reinvested in additional shares of stock. If such
election is made all dividends and distributions will be reinvested in full
shares at the net asset value per share (ex-dividend price) as of the close of
business on the ex-dividend date. Stock certificates covering the additional
shares, and/or checks (amounts less than the value of one full share), will be
forwarded to the shareholder on the payment date. A shareholder may make the
election
12
<PAGE>
by written notice to the Fund at any time prior to any ex-dividend date, and
if made, will be effective as to all subsequent dividends and capital gain
distributions until terminated by either the shareholder or the Fund by
written notice given to the other prior to any ex-dividend date. The normal
payment date for capital gain and ordinary income dividends is during
December.
Reinvestments made under such election do not assure a profit, nor
do they protect against depreciation in declining markets.
Redemption of Shares
- --------------------
The Fund, which serves as its own transfer agent, will redeem any
of its shares upon demand of the holder thereof when accompanied by delivery
of the certificates covering them, endorsed by the registered holder or
holders of any such certificates in the manner registered, to Wade Fund, Inc.,
Suite 2224, 5100 Poplar Avenue, Memphis, Tennessee, 38137. Endorsement
signatures must be guaranteed by a national bank or brokerage firm which is a
member of the New York Stock Exchange. The redemption price per share is the
net asset value of such share next computed after receipt of the order to
redeem. The Fund's procedures as to frequency, time and method of such
computation are set forth under the heading Purchase of Securities Being
Offered. Under these procedures the net asset value computed once daily as of
the close of trading on the New York Stock Exchange on each day it is open
will be effective as to all orders to redeem received by the Fund prior to the
close of trading on such Exchange on such day. If said Exchange is not open
on the day of receipt of the order, or if the order is received by the Fund
after the close of trading, the effective price will be that which is computed
as of the close of trading on the next day on which said Exchange is open. An
order to redeem will not be deemed to have been received until delivery of the
properly endorsed certificates as set forth hereinabove.
The net asset value of the Fund's shares at the time of
redemption, and thereby the redemption price, may, therefore, be more or less
than the investor's cost, depending upon the market value of portfolio
securities at the time of redemption. The Fund is permitted to impose a
redemption charge not to exceed two percent (2%) of the redemption price.
However, the Board of Directors has adopted a resolution providing that no
redemption charge shall be imposed until the further action of the Board. No
such action is contemplated, but it should be understood that it will be taken
at any time the Board feels that such a charge is necessary, upon redemption,
in order to prevent the remaining stockholders from suffering a loss. Such a
loss would be involved in the event of a volume of redemptions which could not
be met out of the Fund's cash position thereby requiring it to liquidate part
of its holdings in order to meet the redemptions. This liquidation would
involve expenses which would be reflected in a reduction of the net asset
value of the remaining shares unless offset by the redemption charge.
Consequently, as indicated upon each certificate issued, all shares are
purchased subject to the right of the Fund to effect such a charge upon
redemption thereof, and such action may be taken by the Board without advance
notice to the shareholders. If taken, it will apply to all shares whether
then outstanding or purchased thereafter. Stockholders, will be paid for all
shares redeemed within seven (7) days after delivery of the certificates
covering them to Wade Fund, Inc. The right of redemption can be suspended and
payment postponed only under certain emergency
13
<PAGE>
situations set forth in The Investment Company Act of 1940.
Tax Status
- ----------
The Fund having elected and qualified for its last taxable year,
and it being contemplated that the Fund will elect and qualify for each
taxable year, to be taxed as a regulated investment company under the Internal
Revenue Code, is subject to all the pertinent provisions contained therein
with respect to the sources of its earnings, the disbursements of them as
dividends to its stockholders and the diversification of its investments.
In order to qualify as a regulated investment company under the
Internal Revenue Code, the Fund is required to distribute at least ninety
percent (90%) of its net income, as calculated for federal income tax purposes
and excluding long-term capital gains, for each taxable year. It is the
intent of management to comply with this requirement each year, and, to the
extent possible, to exceed it by distributing substantially all net income.
In addition, it is intended that substantially all capital gains realized
during each taxable year shall be distributed.
Under the pertinent provisions of the Internal Revenue Code, the
Fund's stockholders are subject to normal tax and surtax on all distributions
of ordinary income and short term capital gains. Distributions of long term
capital gains which are designated by the Fund as capital gain dividends,
however, are treated by the stockholders as long term capital gain realized by
them individually regardless of the length of time they have held their shares
of the Fund's stock. Reference is hereby made to the distributions from
realized capital gains shown in the Statement of Realized Gain on Investments,
which distributions reflect the per share amounts which were designated as
capital gain dividends for each year indicated. Federal income tax treatment
is the same whether distributions are received in cash or reinvested in
additional shares.
Approximately 53.79% of net asset value on December 31, 1997
represents unrealized appreciation on securities. Net gain on sale of
securities when realized and distributed (actually or constructively) is
taxable as capital gain. Prior to purchasing shares of the Fund, investors
should carefully consider the impact which dividends and capital gains
distributions may have. Any such dividends or capital gain distributions paid
shortly after a purchase of shares will have the effect of reducing the per
share net asset value by the amount of dividends or distributions. If the net
asset value of shares held should thereby be reduced below the investor's
cost, all or a portion of such dividends and distributions would be in effect
a return of capital although taxable as capital gain or at ordinary income tax
rates.
Since a regulated investment company is permitted, in calculating
its own normal tax and surtax, to deduct all dividends paid by it in
accordance with the applicable statutes and regulations, it is expected that
the Fund's federal income tax will ordinarily be reduced to a nominal amount.
14
<PAGE>
Pursuant to recently enacted legislation the Fund is required to
withhold 31% from dividends and/or redemptions that occur in certain
shareholder accounts if the shareholder has not properly furnished a certified
correct Taxpayer Identification Number and has not certified that withholding
does not apply. Amounts withheld reduce the shareholder's tax liability and a
refund may be obtained from the Internal Revenue Service if withholding
results in overpayment of taxes.
The Tax Reform Act of 1986 repeals the favorable treatment of long
term capital gains and generally taxes such gains as ordinary income.
Legal Proceedings
- -----------------
There are no pending legal proceedings affecting the Fund.
15
<PAGE>
RHEA & IVY, P.L.C.
Certified Public Accountants
Suite 250, 6000 Poplar Avenue, Memphis, TN 38119-3971
TEL: 901-761-3000 * FAX 901-761-9667
To the Shareholders and Board of Directors
Wade Fund, Inc.
Memphis, Tennessee
Independent Auditor's Report
----------------------------
We have audited the statements of assets and liabilities and sources of net
assets of Wade Fund, Inc., including the schedule of investments as of
December 31, 1997, and the related statements of operations, realized gain on
investments, unrealized appreciation on investments and changes in net assets
for the three years then ended, and the financial highlights on page 6 of the
prospectus for ten years then ended. These financial statements are the
responsibility of the fund's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion. Securities owned as investments at December
31, 1997, were held by the Trust Department of the First Tennessee Bank under
a custodial agreement, and were verified by direct confirmation.
In our opinion, the aforementioned financial statements and schedule referred
to above present fairly, in all material respects, the net assets of Wade
Fund, Inc. as of December 31, 1997, and the results of its operations and the
changes in its net assets for the three years then ended in conformity with
generally accepted accounting principles. Also in our opinion, the financial
highlights on page 6 of the prospectus for the ten years ended December 31,
1997, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
RHEA & IVY, P.L.C.
Memphis, Tennessee
January 8, 1998
16
CONSENT OF EXPERTS
------------------
We hereby consent to the inclusion of our opinion dated January 8, 1998,
in this prospectus.
RHEA & IVY, P.L.C.
Memphis, Tennessee
April 28, 1998
17
WADE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
=======================================================================
Assets
------
Investments at closing market quotations: Common Stocks (cost $140,993.11)
(note 1) $520,400.00
Cash on demand deposit 6,157.67
Cash on deposit - safekeeping account 182,698.65
Dividends receivable 1,298.00
Interest receivable 1,000.68
Prepaid bond premium 494.11
----------
Total assets 712,049.11
Liabilities
-----------
Accrued expenses 5,917.10
State franchise taxes payable (note 1) 800.00
Federal and state income taxes payable (note 1) 0.00
----------
Total liabilities 6,717.10
Net assets applicable to 18,142 shares of outstanding capital stock
$ 705,332.01
============
Net asset value per share of outstanding capital stock
$ 38.88
============
Offering and redemption price per share $ 38.88
============
STATEMENT OF SOURCES OF NET ASSETS
DECEMBER 31, 1997
Capital
Excess amounts received from sale of capital shares
over amounts paid out in redeeming shares:
Authorized 100,000 shares, no par value,
outstanding 18,142 shares (note 2) $ 314,235.21
Accumulated net realized gain on investments
(computed on identified cost basis) $1,533,744.31
Accumulated distributions on net realized gain 1,527,886.80
-------------
5,857.51
Unrealized appreciation on investments (note 1) 379,406.89
-------------
Total capital 699,499.61
Undistributed net income 5,832.40
-------------
Net assets applicable to 18,142 shares of outstanding capital stock
$ 705,322.01
==============
See accompanying notes and independent auditor's report.
18
WADE FUND, INC
STATEMENT OF OPERATIONS
Years Ended December 31
---------------------------------------
1995 1996 1997
INCOME
Dividends......................$ 10,204.00 $ 11,553.75 $ 10,367.50
Interest....................... 7,549.58 7,837.92 9,523.39
--------------------------------------
TOTAL..........................$ 17,753.58 $ 19,391.67 $ 19,890.89
EXPENSES Advisory fee (Note 3).$ 4,315.89 $ 4,613.15 $ 5,300.47
Legal fee...................... 1,988.71 4,596.25 4,795.72
Accounting fee................. 3,630.00 3,650.00 3,804.48
Custodial fees................. 2,013.38 1,725.00 1,800.00
Taxes(federal, state, local)... 733.09 744.00 874.97
Other expenses................. 2,891.92 2,246.85 2,508.83
---------------------------------------
TOTAL EXPENSES.................$ 15,572.99 $ 17,575.25 $ 19,084.47
NET INCOME (LOSS)..............$ 2,180.59 $ 1,816.42 $ 806.42
========= ========= =========
Ratio of total expenses to
total income................... 87.72% 90.63% 95.95%
STATEMENT OF REALIZED GAIN ON INVESTMENTS
Years Ended December 31
---------------------------------------
1995 1996 1997
REALIZED GAIN FROM SECURITY
TRANSACTIONS-Proceeds from
sale (Note 4)..................$ 38,613.30 $ 65,734.87 $ 61,308.23
Cost of securities sold
(identified cost basis)........ 3,840.11 13,708.11 11,016.29
--------------------------------------
NET GAIN FROM SALES OF SECURI-
TIES BEFORE TAXES (Note 5).....$ 34,773.19 $ 52,026.76 $ 50,291.94
Deduct federal income and
state excise taxes (Note 1). 5.01 0.00 0.00
---------------------------------------
NET GAIN ON INVESTMENTS(Note 5)$ 34,768.18 $ 52,026.76 $ 50,291.94
========= ========== ==========
STATEMENT OF UNREALIZED APPRECIATION ON INVESTMENTS
Years Ended December 31
--------------------------------------
1995 1996 1997
BALANCE AT JANUARY 1.......... $217,824.38 $284,676.99 $305,353.85
BALANCE AT DECEMBER 31......... 284,676.99 305,353.85 379,406.89
----------- ----------- -----------
INCREASE (OR DECREASE) IN
UNREALIZED APPRECIATION........$ 66,852.61 $ 20,676.86 $ 74,053.04
=========== =========== ===========
See accompanying notes and independent auditor's report.
19
WADE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Years Ended December 31
NET ASSETS - BEGINNING OF PERIOD 1995 1996 1997
(Includes undistributed
net income as follows:
1995 $6,165.50; 1996-$5,814.89;
1997-$5,895.55.............. $506,200.42 $584,346.86 $628,808.87
INCOME Net income (loss) per statement
of income and expenses....... $ 2,180.59 $ 1,816.42 $ 806.42
Net equalization (debits) credits
included in price of shares
sold and repurchased(Note 2) (24.55) (23.46) (3.72)
Distributions to shareholders:
1995-$.15; 1996-$.10, 1997-
$.05 (Note 6)................ $ (2,506.65) $ (1,712.30) $ (865.85)
----------------------------------------
Increase (decrease) in prior balance
of undistributed net income.... $ (350.61) $ 80.66 $ (63.15)
----------------------------------------
REALIZED GAIN OR LOSS ON INVESTMENTS
Net gain from sale of
investments.................... $ 34,768.18 $ 52,026.76 $50,291.94
Distribution to share-
holders 1995-$2.08; 1996-$3.04;
1997-$2.91 (Note 6).......... $(34,758.88) $(52,053.92) $(50,392.47)
----------------------------------------
Increase (decrease) in undis-
tributed net gain realized..... $ 9.30 $ (27.16) $ (100.53)
----------------------------------------
INCREASE (DECREASE) IN UNREALIZED
APPRECIATION ON INVESTMENTS.. $ 66,852.61 $ 20,676.86 $ 74,053.04
----------------------------------------
CAPITAL STOCK ISSUED AND REPURCHASED (Exclusive of equalization debits and
credits)
Amounts received for shares sold:
1995-12 shares; 1996-299 shares;
1997-0 shares................. $ 356.79 $ 10,366.50 $ 0.00
Net asset value of shares issued to
shareholders in reinvestmentof net
investment income and realized gain
from security transactions: 1995-680 shares;
1996-943 shares; 1997-825 shs.. $ 23,031.60 $ 32,788.11 $ 31,866.25
-----------------------------------------
$ 23,388.39 $ 43,154.61 $ 31,886.25
Less amounts paid for shares of capital stock repurchased:
1995-381 shares; 1996-567
shares; 1997-749 shares....... $(11,753.25) $(19,422.96) $(29,252.47)
----------------------------------------
Net increase (decrease) in capital stock issued 1995-311 sh.;
1996-675 sh.;1997-76 sh. $ 11,635.14 $ 23,731.65 $ 2,633.78
----------------------------------------
NET ASSETS -END OF PERIOD
(Includes undistributed net income
as follows: 1995-$5,814.89;1996-
$5,895.55; 1997-$5,832.40).... $584,346.86 $628,808.87 $705,332.01
See accompanying notes and independent auditor's report.
20
<PAGE>
WADE FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
========================================================================
Number of Market
Shares Cost Value
---------- -------- --------
(Note 7)
Common Stocks - 73.78% Aluminum - 6.98%
Aluminum Co. of America 700 $ 6,456.75 $ 49,262.50
Automobile - 3.29%
Autozone (B) 800 23,132.00 23,200.00
--------- ---------
Banks and Finance - 19.36%
J.P. Morgan & Company, Inc. 500 1,833.19 56,437.50
First Tennessee National Corp. 1200 22,780.00 80,100.00
--------- ---------
24,613.19 136,537.50
--------- ---------
Electronics - 6.38%
Texas Instruments, Inc. 1000 1,341.18 45,000.00
--------- ---------
Insurance -6.22%
Safeco Corporation 900 1,080.71 43,875.00
--------- ---------
Metals - 4.41%
Phelps Dodge Corp. 500 23,634.00 31,125.00
--------- ---------
Paper Products - 6.11%
International Paper, Inc. 1,000 24,828.25 43,125.00
--------- ---------
Petroleum Services - 6.85%
Schlumberger, Ltd. 600 11,084.10 48,300.00
--------- ---------
Pharmaceutical - 8.05%
Bristol-Myers Squibb 600 17,913.75 56,775.00
--------- ---------
Railroads - 6.13%
CSX Corporation 800 6,909.18 43,200.00
--------- ---------
TOTAL INVESTMENTS - 73.78% $140,993.11(A) 520,400.00
===========
OTHER ASSETS LESS LIABILITIES -
26.22% 184,932.01
---------
NET ASSETS - 100% $705,332.01
===========
(A) Represents the aggregate cost of investments for federal income
Tax purposes.
(B) Non-income producing.
See accompanying notes and independent auditor's report.
21
<PAGE>
WADE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
Note 1 Since it is the policy of the Fund to qualify each year as a
regulated investment company under Section 851 of the Internal
Revenue Code and to distribute all, or substantially all, of its
taxable income, including realized net gain on investments, it is
not expected that federal income tax will ordinarily constitute a
major item of expense. Therefore, no provision is made for such
tax on unrealized appreciation on investments. However, on the
accrual basis of accounting, provision for federal income tax and
state franchise and excise tax on net income and on net realized
gain on investments is made when applicable.
Note 2 The company follows the accounting practice known as equalization
by which a portion of the proceeds from sales and costs of
repurchases of capital shares equivalent, on a per share basis, to
the amount of distributable net investment income on the date of
the transaction is credited or charged to undistributed net income.
As a result, undistributed investment income per share is
unaffected by sales or redemptions of fund shares.
Note 3 Reference is hereby made to the heading Investment Adviser on Page
11 of the Prospectus for explanation.
Note 4 Investments in securities traded on a national securities exchange
are valued at the last reported sales price on the last business
day of the year; securities traded in the over-the-counter market
and listed securities for which no sale was reported on that date
are valued at the last reported bid price. During the year ended
December 31, 1997, proceeds of securities sold were $61,308.23.
Note 5 The figures shown represent net profit for federal income tax
purposes. Net profit before taxes computed on an average cost
basis would have been the same.
Note 6 On December 12, 1997, the Board of Directors declared a dividend
distribution from net realized gains from security transactions of
$2.91 per share and from net income of $.05 per share. The
dividends were paid December 19, 1997, to stockholders of record
December 12, 1997.
Note 7 Reference is hereby made to the heading Purchase of Securities
being Offered on Page 12 of the Prospectus for explanation of the
basis used in determination of market value.
22
<PAGE>
PART B. STATEMENT OF ADDITIONAL INFORMATION
FILE NO. 2-7988
The Statement of Additional Information is not a prospectus.
The Statement of Additional Information should be read in
conjunction with the prospectus.
A copy of the prospectus may be obtained from:
Wade Fund, Inc.
Suite 2224
5100 Poplar Avenue
Memphis, Tennessee 38137
Tel. No. 901-682-4613
The date of the prospectus to which the Statement of Additional
Information relates is April 30, 1998, and Wade Fund, Inc., is the
registrant.
The date of the Statement of Additional Information is: April 30, 1998.
1
TABLE OF CONTENTS
-----------------
Page
----
PART B. STATEMENT OF ADDITIONAL INFORMATION
General Information and History See Prospectus
Investment Objectives and Policies 3
Management of the Registrant 4
Custodian, Transfer Agent and
Dividend-Paying Agent 4
Control Persons and Principal
Holders of Securities 5
Investment Advisory and Other Services See Prospectus
Brokerage Allocation 6
Capital Stock and Other Securities See Prospectus
Purchase, Redemption and Pricing of
Securities Being Offered 7
Tax Status See Prospectus
Underwriters 7
Calculation of Yield Quotations of
Money Market Funds Not Applicable
Financial Statements See Prospectus
2
<PAGE>
Investment Objectives and Policies
- ----------------------------------
The purpose of the Fund is to permit the combining of many
relatively small amounts of money into one large fund to be utilized for
investment purposes. The individual stockholders of Wade Fund, Inc. are
thereby enabled to share the benefits derived from continuous investment
supervision based on long experience and constant research and study.
Subject to change by the Board of Directors, but only with the
vote of the holders of a majority of the Registrant's outstanding voting
securities, the primary objective of the Fund is long term appreciation of
capital. Its investment policy is directed only secondarily to obtaining
dividend and interest income. Accordingly, it is expected that the Fund
normally will be almost wholly committed to a selected group of common stocks
which might appreciate in value, although it may invest any portion of its
assets in convertible securities, bonds and preferred stocks which also might
appreciate in value. During periods which the management feels to be of
general economic decline, management, as a matter of temporary defensive
policy may invest assets in U. S. Treasury or investment grade corporate debt
securities which provide price stability and income, or hold same in cash.
The Fund is under no restriction as to the amount or type of portfolio
securities which may be bought or sold, and, except for the prohibition
against investment for the purpose of exercising control, there is no limit on
the percentage of voting securities of any issuer which it may acquire.
Investments shall be confined to established companies which have been engaged
in business not less than three (3) years. Accordingly, the investment
techniques employed are not designed to result in short term trading or rapid
portfolio turnover to secure quick profits nor in disproportionate brokerage
or tax consequences to the Fund and its shareholders. The rate of portfolio
turnover for the fiscal years ended December 31, 1995, 1996 and 1997
was 0.00%, 0.00% and 4.43% respectively.
In connection with the foregoing it should be pointed out that any
investment in securities involves an inherent risk of loss through capital
depreciation resulting from a decline in market values in general or from a
decline in the market value of particular securities held. As a result, the
attainment of the Fund's objectives cannot be assured. However, it is the
management's belief that the continuous investment supervision based upon
experience which is furnished to the Fund serves to reduce such risk.
3
Management of the Fund
- ----------------------
The following represent the management of the Fund:
Position(s) Held Principal Occupation(s)
Name and Address with Registrant During Past 5 years
- ---------------- ---------------- -----------------------
Maury Wade, Jr. Director Investment Adviser
Suite 2224 President
5100 Poplar Avenue
Memphis, Tennessee 38137
L. Palmer Brown, III Director L.P. Brown Enterprises
119 Racine Street Owner
Memphis, Tennessee 38111
David L. DelBrocco Director DelBrocco and Associates
4735 Spottswood
Suite 204
Memphis, Tennessee 38117
Richard D. Harwood Director Retired
4056 Barrone Way
Memphis, Tennessee 38117
Charles Grant Wade Director United States
150 Canomero Cove Secretary Air Force
Oak Hill Downs Treasurer Retired
Moscow, Tennessee 38057
No officer or director of the Fund received from the Fund as much as
$60,000 aggregated remuneration for services in all capacities. No such
person receives any pension or retirement benefits from the Fund. On December
31, 1997, the officers and directors of the Fund as a group owned 4,294
shares of its only class of stock, or 23.67% of the total number of shares
outstanding on that date. All of the foregoing shares were owned both
beneficially and of record (Excludes 245 shares owned by Mr. DelBrocco as
custodian for his daughter beneficial ownership of which is denied).
Custodian, Transfer Agent and Dividend-Paying Agent
- ---------------------------------------------------
Except as noted below, all securities and funds of Wade Fund, Inc., are
held in the safekeeping of the First Tennessee Bank N.A. Memphis, 165 Madison
Avenue, Memphis, Tennessee, 38103. The only exception to the foregoing is a
separate bank account against which officers of the Fund designated by the
Board of Directors are authorized to make withdrawals for the purpose of
paying management and operating expenses. Such account is maintained by said
Bank out of the funds held by it, and in accordance with a resolution of the
Board of Directors of the Fund, it may not exceed a maximum of $20,000.00 at
any time nor a total aggregate in excess of $20,000.00 during any fiscal
4
<PAGE>
year unless otherwise specifically directed by further resolution of the Board
of Directors.
The Fund serves as its own transfer agent and dividend paying agent.
No officer, director or employee of the Fund has any access to the
securities owned by it except that access may be had only for the purposes of
inspection by any two of five officers or directors designated by the Board of
Directors, which access may be had only in the company of duly authorized
official or employee of said Bank. All officers and directors having access
to funds or securities as aforesaid are required to be bonded by a reputable
company in an amount fixed by the Board of Directors.
Control Persons and Principal Holders of Securities
- ---------------------------------------------------
As of April 15, 1998, no person controls more than 25% of the
18,142 shares of voting securities of the Fund then outstanding. No person
controls or asserts control of the Fund. There has been no adjudication under
Section 2(a) of the 1940 Act [15 U.S.C. 80a- 2(a)(9)], which has become final
that control exists.
The name, address, and percentage of ownerships of each person who owns of
record or is known by the Registrant to own of record or beneficially 5% or
more of any class of the Registrant's outstanding equity securities is as
follows:
Percentage of Outstanding
Name Address Stock Owned of Record
- -------------------------------------------------------------------------
Jeannene T. Cathey 46 South Perkins Road 6.77%
Memphis, Tennessee 38117
Richard D. Harwood 4056 Barrone Way 4.96%
Memphis, Tennessee 38117
Axson Brown Morgan P. O. Box 11514 24.59%
Memphis, Tennessee 38111
Charles Grant Wade 150 Canomero Cove 8.14%
Oak Hill Downs
Moscow, Tennessee 38057
Kate Wade 1644 Goodbar Avenue 5.88%
Memphis, Tennessee 38104
Maury Wade, Jr. 5488 Pecan Grove Lane 7.26%
Memphis, Tennessee 38120
5
<PAGE>
Brokerage Allocation and Other Practices
- ----------------------------------------
During the fiscal years ended December 31, 1995, 1996, and 1997,
the Fund paid brokerage fees aggregating $235.40, $415.13, and $511.27
respectively, on the purchase and sale of portfolio securities. The selection
of brokerage firms with whom to place such transactions is not based on any
formula, method or criteria other than the intention to obtain the best price
and execution available and to pay only such commissions as are reasonable in
relation to the value of the brokerage services rendered. During the fiscal
year in question the only brokerage firm used was First Tennessee Brokerage,
Inc. Other than brokerage services, no other services were furnished to the
Fund or its adviser by the brokerage firm used. However, any additional
services received from any brokerage firm are those available to all their
customers in the normal course of business and these result in no expense to
the Fund nor to any reduction in the adviser's expenses, nor is there any
allocation of business on the basis of such services or on the basis of any
sales efforts of the Fund's shares on the part of any broker. No weight is
given any additional services rendered in arriving at the value of the
brokerage services rendered. It is the Fund's intention to get the best price
and execution and pay only such commissions as are reasonable in relation to
the value of the brokerage services rendered, and it believes it has always
done so in the past. Although there is no arrangement, understanding or
specific intention to confine the Fund's brokerage business to any particular
firm or firms, it is intended that the practice set forth hereinabove will be
continued and, so long as it is felt that the best prices and executions are
being obtained and that the commissions charged the Fund are reasonable in
relation to the value of the brokerage services rendered, that most, if not
all of such business will be placed with the firms with which the Fund has
done business in the past. The selection of brokers used for portfolio
transactions is made by the Fund's President who also acts as its investment
adviser. Over-the-counter transactions are placed with the primary market
maker unless it is believed that a better price or execution is obtainable
elsewhere.
6
<PAGE>
Purchase, Redemption and Pricing of Securities Being Offered.
- -------------------------------------------------------------
The following is an example of the calculation of net asset value
based on the Fund's situation at the close of business on December 31, 1997:
Market Value of Portfolio Securities.........$ 520,400.00
Cash on Deposit.............................. 188,856.32
Receivables from Dividends and Interest...... 2,298.68
Other Assets................................. 494.11
-----------
Total Assets.................................$ 712,049.11
Less:
Liabilities: Accrued Expenses and Taxes......$ 6,717.10
-----------
Value of Net Assets..........................$ 705,332.01
==========
Number of Shares Outstanding................. 18,142
Net Asset Value Per Share
($705,332.01 divided by 18,142 adjusted
to nearest cent)........................ $ 38.88
Offering Price December 31, 1997............. $ 38.88
Redemption Price December 31, 1997........... $ 38.88
Sales and redemptions of the Fund's stock may be suspended during
periods when determination of net asset value is suspended because (a) the New
York Stock Exchange is closed on days other than weekends or holidays, (b)
trading on said Exchange is restricted as determined by the rules and
regulations of the Securities and Exchange Commission, or (c) an emergency
exists in accordance with the rules and regulations of the Securities and
Exchange Commission which makes disposal of securities owned by the Fund not
reasonably practical. Other than the possibility of such a suspension, there
are no restrictions on the redemption of shares upon demand of the holder.
There has been no suspension of sales or redemptions since the Fund has been
in existence.
Underwriters
- ------------
There is no underwriter for the capital stock of the
Registrant other than the Registrant.
7
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
A. Financial Statements (all included in Part A):
(1) Report of Independent Accountants
(2) Statements of Assets and Liabilities
(3) Statement of Sources of Net Assets
(4) Statement of Income and Expense
(5) Statement of Realized Gain or Loss on Investments
(6) Statement of Unrealized Gain or Loss on Investments
(7) Statement of Changes in Net Assets
(8) Investments
(9) Notes to Financial Statements
B. Exhibits
(1) Charter-See Form N-8B-1, filed May 16, 1949, and
Post Effective Amendment No. 18, filed February 14,
1962 both of which are incorporated herein by
reference, and Charter Amendment dated February 28,
1983, which is incorporated herein by reference.
(2) By-Laws - See Form N-8B-1, filed May 26, 1949,
which is incorporated herein by reference, and see
Post Effective Amendment No. 42, filed March 12,
1980, which is incorporated herein by reference,
and Amendment to By-Laws adopted December 8, 1982,
which is incorporated herein by reference.
(3) Voting trust agreements - Not applicable.
(4) Specimen of security - See Post Effective Amendment
No. 42, filed March 12, 1980, which is incorporated
herein by reference.
(5) Investment advisory contracts - See Form N-8B-1,
filed May 16, 1949, which is incorporated herein
by reference, and see Post Effective Amendment No.
42, filed March 12, 1980, which is incorporated
herein by reference.
(6) Underwriting or distributions contracts - Not
applicable.
(7) Bonus, profit sharing, pension or other contracts -
Not applicable.
(8) Custodian agreements - See Post Effective Amendment
No. 22, filed March 15, 1965, which is incorporated
herein by reference.
(9) Other material contracts - Not applicable.
1
<PAGE>
(10) Opinions and Consents of Counsel - See Form N-8B-1,
filed May 16, 1949, and Post Effective Amendment
No. 18, filed February 14, 1962, both of which are
incorporated herein by reference. See Consent of
Counsel, Attachment B(10).
(11) Other opinions - See Consent of Accountants,
Attachment B(11).
(12) Omitted financial statements - Not applicable.
(13) Other agreements - Not applicable.
(14) Model Plan - Not applicable.
(15) Rule 12b-1 Plan - Not applicable.
(16) Performance quotation - Not applicable.
(17) Electronic Filers - Not applicable.
2
<PAGE>
ATTACHMENT B(11)
CONSENT OF EXPERTS
------------------
We hereby consent to the inclusion of our opinion dated January 8, 1998,
in this prospectus.
RHEA & IVY, P.L.C.
Memphis, Tennessee
April 28, 1998
3
<PAGE>
Item 25. Persons Controlled by or Under Common Control with
Registrant: None.
Item 26. Number of Holders of Securities at March 31, 1998:
(1) (2)
Title of Class Number of Record Holders
-------------- ------------------------
Common Capital Stock, NPV 60
Item 27. Indemnification: No provision exists for indemnification of
officers, directors, underwriters or affiliated persons of the
Registrant.
Tennessee Code Annotated Sections 48-18-501 through 48-18-509
authorize a corporation to provide for the indemnification of
officers, directors, employees and agents in terms sufficiently
broad to permit indemnification under certain circumstances for
liabilities (including reimbursement for expenses incurred)
arising under the Securities Act of 1933, as amended.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the 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 the registrant of expenses incurred or
paid by the director, officer or controlling person of the
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, the
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.
Item 28. Business and Other Connections of Investment Adviser.
Maury Wade, Jr., is engaged in the business of Maury Wade &
Company, an investment advisory service which customarily
provides advice to investors, both individual and
institutional, as to the making of investment decisions
concerning publicly traded equity securities and debt
4
<PAGE>
securities of corporations and of federal, state and local
governmental entities.
Item 29. Principal Underwriters - Not Applicable.
Item 30. Location of Accounts and Records.
All securities and all funds (except an operating bank
account limited to $20,000 per year) of Wade Fund, Inc.,
are held in the safekeeping of First Tennessee Bank, N.A.
Memphis, Tennessee, 38103.
The corporate charter, by-laws, minutes and all other records
and documents of the Fund are kept in the principal office of
Wade Fund, Inc., Suite 2224, 5100 Poplar Avenue, Memphis,
Tennessee 38137.
Item 31. Management Services - Not Applicable.
Item 32. Undertakings.
UNDERTAKING TO FILE REPORTS
---------------------------
Subject to the terms and conditions of Section 15(d) of the
Securities and Exchange Act of 1934, the undersigned registrant hereby
undertakes to file with the Securities and Exchange Commission such
supplementary and periodic information, documents and reports as may be
prescribed by any rule or regulation of the Commission heretofore or hereafter
duly adopted pursuant to authority conferred in that section.
The undersigned registrant hereby further undertakes the
following:
1. To file any prospectus necessary to comply with
the provisions of Section 10(a)(3) of the Securities
Act of 1933 as a post-effective amendment.
2. That for the purposes of determining liabilities under
Section 11 each such post-effective amendment shall
be deemed to be a new registration statement relating
to the shares offered thereunder.
5
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of the Securities Act of 1933
the Registrant certifies that it meets all of the requirements for
effectiveness of this Registration Statement pursuant to Rule 485 (b) under
the Securities Act of 1933 and has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in this
City of Memphis and State of Tennessee on the 27th day of April, 1998
---- ------ ----
WADE FUND, INC.
/s/Charles Grant Wade /s/Maury Wade, Jr.
- ------------------------------ -----------------------------
Secretary President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
President April 27, 1998
/s/Maury Wade, Jr.
________________________ ____________________ ________________
Maury Wade, Jr.
Treasurer
/s/Charles Grant Wade Financial Officer April 27, 1998
_________________________ ____________________ ________________
Charles Grant Wade
Treasurer
/s/Charles Grant Wade Accounting Officer April 27, 1998
_________________________ ____________________ ________________
Charles Grant Wade
/s/Maury Wade, Jr. Director April 27, 1998
_________________________ ____________________ ________________
Maury Wade, Jr.
/s/Charles Grant Wade Director April 27, 1998
_________________________ ____________________ ________________
Charles Grant Wade
/s/David L. DelBrocco Director April 27, 1998
________________________ ____________________ ________________
David L. DelBrocco
6
H:\ELINK\WADEFUND\N1A97.WP
/TEXT>
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<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF WADE FUND, INC. AS OF DECEMBER 31,
1997, AND THE NOTES RELATED THERETO AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
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<PERIOD-START> JAN-01-1997
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<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 140,993
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