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
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, 1999
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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)
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X on 4/30/99 pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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on pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on pursuant to paragraph (a) (2) of rule 485
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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-1 A
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PAGE
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Facing Sheet . . . . . . . . . . . . . . . . . . . . . . 1
Table of Contents of Form N-1 A. . . . . . . . . . . . . 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
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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, 1999
Date of Statement of Additional
Information April 30, 1999
* 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.
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TABLE OF CONTENTS
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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 Structure . . . . . . . . . . . . . . . . . 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 and 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
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NUMEROUS INVESTMENT COMPANIES CONTINUOUSLY OFFER THEIR SHARES TO INVESTORS.
INVESTMENT COMPANIES HAVE DIFFERENT INVESTMENT OBJECTIVES AND INVOLVE VARYING
DEGREES 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 APPOXIMATELY .75% OF AVERAGE ANNUAL NET ASSETS. THE COMPANY'S OPERATING
EXPENSES INCLUDING THE MANAGEMENT FEE WERE APPROXIMATELY 2.71% OF THE AVERAGE
ANNUAL NET ASSETS AND 97.66% OF THE INVESTMENT INCOME IN THE LAST FISCAL YEAR.
<PAGE>
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 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, 1998, a total of 18,659
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
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(as a percent of average net assets)
Management Fees 0.75%
Other Expenses 1.96%
Total Fund Operating Expenses 2.71%
1 year 3 years 5 years 10 years
Example:
You would pay the following expenses
on a $1,000 investment $ 27 $ 84 $ 143 $ 304
assuming (1) 5% annual return and
(2) redemption at the end of each time period:
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.
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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)
1989 1990 1991 1992 1993 1994 1995 1996*
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Net Asset Value, Beginning
of Period .. . . . . . . . . . . $ 31.95 $ 34.70 $ 30.22 $ 31.24 $ 30.65 $ 30.73 $ 29.64 $ 33.60
Income From Investment Operations:
Net Investment Income. . . . . . $ 0.76 $ 0.72 $ 0.41 $ 0.21 $ (0.08) $ 0.08 $ 0.12 $ 0.09
Net Realized and Unrealized
Gains (Losses) on Securities. . $ 7.63 $ (2.09) $ 4.10 $ 2.14 $ 2.93 $ (0.50) $ 6.07 $ 4.26
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Total From Investment Operations . $ 8.39 $ (1.37) $ 4.51 $ 2.35 $ 2.85 $ (0.42) $ 6.19 $ 4.35
Less Distributions:
Dividends from Net Income .. . . $ 0.89 $ 0.80 $ 0.49 $ 0.19 $ - $ 0.06 $ 0.15 $ 0.10
Distributions from Realized
Gains on Securities. . . . . . $ 4.75 $ 2.31 $ 3.00 $ 2.75 $ 2.77 $ 0.61 $ 2.08 $ 3.04
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Net Asset Value, End
of Period .. . . . . . . . . . . $ 34.70 $ 30.22 $ 31.24 $ 30.65 $ 30.73 $ 29.64 $ 33.60 $ 34.81
========= ========= ========= ========= ========= ========= ========= =========
Total Return . . . . . . . . . . . 26.23% -3.79% 15.70% 7.57% 9.28% -1.31% 20.83% 12.96%
Ratios/Supplemental Data:
Net Assets, End of Period. . . . $539,546 $493,638 $526,300 $536,846 $532,330 $506,200 $584,347 $628,809
Ratio of Expenses to
Average Net Assets .. . . . . . 2.55% 2.61% 2.60% 2.61% 2.64% 2.82% 2.76% 2.86%
Ratio of Net Income to
Average Net Assets .. . . . . . 2.18% 2.30% 1.43% 0.59% -0.26% 0.20% 0.39% 0.30%
Portfolio Turnover Rate .. . . . 5.77% 0.00% 0.00% 6.13% 17.68% 0.00% 0.00% 0.00%
Number of Shares Outstanding,
End of Period . . . . . . . . . 15,550 16,337 16,848 17,518 17,332 17,080 17,391 18,066
1997* 1998*
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Net Asset Value, Beginning
of Period .. . . . . . . . . . . $ 34.81 $ 38.88
Income From Investment Operations:
Net Investment Income. . . . . . $ 0.05 $ 0.03
Net Realized and Unrealized
Gains (Losses) on Securities. . $ 6.98 $ 1.90
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Total From Investment Operations . $ 7.03 $ 1.93
Less Distributions:
Dividends from Net Income .. . . $ 0.05 $ 0.03
Distributions from Realized
Gains on Securities. . . . . . $ 2.91 $ 1.67
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Net Asset Value, End
of Period .. . . . . . . . . . . $ 38.88 $ 39.11
========= =========
Total Return . . . . . . . . . . . 20.25% 5.16%
Ratios/Supplemental Data:
Net Assets, End of Period. . . . $705,332 $729,828
Ratio of Expenses to
Average Net Assets .. . . . . . 2.72% 2.71%
Ratio of Net Income to
Average Net Assets .. . . . . . 0.12% 0.06%
Portfolio Turnover Rate .. . . . 4.43% 0.00%
Number of Shares Outstanding,
End of Period . . . . . . . . . 18,142 18,659
<FN>
*See accompanying notes and independent auditor's report.
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Performance
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The graph and tables below cover the ten year period from December 31, 1988 through December 31, 1998.
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.)
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
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WADE FUND
%CHANGE 26.23% -3.79% 15.70% 7.57% 9.28% -1.31% 20.83% 12.96% 20.25% 5.16%
VALUE $10,000 $12,623 $12,145 $14,051 $15,115 $16,518 $16,301 $19,697 $22,250 $26,755 $28,136
S&P
%CHANGE 31.63% -3.11% 30.40% 7.61% 10.06% 1.31% 37.53% 22.95% 33.40% 28.72%
VALUE $10,000 $13,163 $12,754 $16,631 $17,896 $19,697 $19,955 $27,444 $33,742 $45,012 $57,939
CPI
%CHANGE 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 2.08% 1.61%
VALUE $10,000 $10,465 $11,104 $11,444 $11,776 $12,100 $12,423 $12,739 $13,161 $13,435 $13,652
</TABLE>
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<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
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WADE FUND 5.16% 11.24% 10.90% WADE FUND 5.16% 70.32% 181.36%
S&P 500 28.72% 24.08% 19.21% S&P 500 28.72% 194.15% 479.39%
CPI 1.61% 2.44% 3.16% CPI 1.61% 12.81% 36.51%
</TABLE>
7
<PAGE>
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 31,1996, 1997
and 1998 were 0.00%, 4.43% AND 0.00% 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.
<PAGE>
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 investment shall
be invested in as many industries as possible and in no event to exceed the
limit stated.
3. The Corporation may not invest in the securities of other investment
companies, other than money market funds.
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.
<PAGE>
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, 1998, 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,
1998, Mr. Delbrocco owned 261 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, 1998, Mr. Harwood owned 900 of the Fund's shares.
Charles Grant Wade. 285 Shadow Grove Cove, Memphis, Tennessee, 38018.
--------------------
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, 1998, Mr. Wade owned 1476 of the
Fund's shares. Said shares were owned directly by Mr. Wade and represented
7.91% 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, 1998, Mr. Wade, Jr. owned 1527 of the Fund's
shares. Said shares were owned directly by Mr. Wade and represented 8.18% of
the total outstanding.
<PAGE>
Investment Adviser
- -------------------
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 form 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 $4,613.15 for the year ended December 31, 1996, $5,300.47 for the
year ended December 31, 1997, and $5,300.13 for the year ended December 31,
1998.
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, 1999, 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.
<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 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.
<PAGE>
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 theses 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 situations set
forth in The Investment Company Act of 1940.
<PAGE>
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 52.66% of net asset value on December 31, 1998 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.
<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.
<PAGE>
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, 1998, 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, 1998, 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, 1998, 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,
1998, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/S/ RHEA & IVY, P.L.C.
Memphis, Tennessee
January 7, 1999
<PAGE>
CONSENT OF EXPERTS
------------------
We hereby consent to the inclusion of our opinion dated January 7, 1999,
in this prospectus.
RHEA & IVY, P.L.C.
Memphis, Tennessee
April 30, 1999
<PAGE>
<TABLE>
<CAPTION>
WADE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
================================================================================
Assets
------
<S> <C>
Investments at closing market quotations: Common Stocks
(cost $135,840.93) (note 1). . . . . . . . . . . . . . . . . . . $ 520,137.50
Cash on demand deposit . . . . . . . . . . . . . . . . . . . . . 5,206.82
Money Market Mutual Fund (Cost $202,170.95). . . . . . . . . . . 202,170.95
Dividends receivable . . . . . . . . . . . . . . . . . . . . . . 1,025.50
Interest receivable. . . . . . . . . . . . . . . . . . . . . . . 832.90
Subscription receivable. . . . . . . . . . . . . . . . . . . . . 5,824.58
Prepaid bond premium . . . . . . . . . . . . . . . . . . . . . . 370.11
-------------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . 735,568.36
-------------
Liabilities
-----------
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . 4,915.25
State franchise taxes payable (note 1) . . . . . . . . . . . . . 825.08
Federal and state income taxes payable (note 1). . . . . . . . . 0.00
-------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . 5,740.33
-------------
Net assets applicable to 18,659 shares of
outstanding capital stock. . . . . . . . . . . . . . . . . . . . $ 729,828.03
=============
Net asset value per share of outstanding capital stock . . . . . $ 39.11
=============
Offering and redemption price per share. . . . . . . . . . . . . $ 39.11
=============
STATEMENT OF SOURCES OF NET ASSETS
DECEMBER 31, 1998
Capital
Excess amounts received from sale of capital shares
over amounts paid out in redeeming shares:
Authorized 100,000 shares, no par value,
outstanding 18,659 shares (note 2) . . . . . . . . . . . . $ 333,811.55
Accumulated net realized gain on investments
(computed on identified cost basis). . . . $1,563,900.44
Accumulated distributions on net realized gain . $1,557,931.77. 5,968.67
--------------
Unrealized appreciation on investments (note 1). . . . . . . . . 384,296.57
-------------
Total capital. . . . . . . . . . . . . . . . . . . . . . . . . 724,076.79
Undistributed net income . . . . . . . . . . . . . . . . . . . . 5,751.29
-------------
Net assets applicable to 18,659 shares of
outstanding capital stock. . . . . . . . . . . . . . . . . . . . $ 729,828.03
=============
</TABLE>
See accompanying notes and independent auditor's report.
<PAGE>
<TABLE>
<CAPTION>
WADE FUND, INC.
STATEMENT OF OPERATIONS
Years Ended December 31
--------------------------
1996 1997 1998
<S> <C> <C> <C>
INCOME:
Dividends . . . . . . . . . . . . . . . $11,553.75 $10,367.50 $10,153.50
Interest. . . . . . . . . . . . . . . . 7,837.92 9,523.39 9,401.42
----------- ----------- -----------
TOTAL . . . . . . . . . . . . . . . . . . $19,391.67 $19,890.89 $19,554.92
----------- ----------- -----------
EXPENSES:
Advisory fee (Note3). . . . . . . . . . $ 4,613.15 $ 5,300.47 $ 5,300.13
Legal fee . . . . . . . . . . . . . . . 4,596.25 4,795.72 4,800.00
Accounting fee. . . . . . . . . . . . . 3,650.00 3,804.48 3,819.87
Custodial fees. . . . . . . . . . . . . 1,725.00 1,800.00 1,980.00
Taxes (federal, state, local) . . . . . 744.00 874.97 840.00
Other expenses. . . . . . . . . . . . . 2,246.85 2,508.83 2,358.00
----------- ----------- -----------
TOTAL EXPENSES. . . . . . . . . . . . . $17,575.25 $19,084.47 $19,098.00
----------- ----------- -----------
NET INCOME (LOSS) . . . . . . . . . . . $ 1,816.42 $ 806.42 $ 456.92
=========== =========== ===========
Ratio of total expenses to
total income. . . . . . . . . . . . . . . 90.63% 95.95% 97.66%
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF REALIZED GAIN ON INVESTMENTS
Years Ended December 31
---------------------------------------
1996 1997 1998
<S> <C> <C> <C>
REALIZED GAIN FROM
SECURITY TRANSACTIONS - Proceeds from
sale (Note 4). . . . . . . . . . . . . $ 65,734.87 $61,308.23 $35,305.81
Cost of securities sold
(identified cost basis). . . . . . . . 13,708.11 11,016.29 5,149.68
--------------- ---------- ----------
NET GAIN FROM SALES OF SECURITIES
BEFORE TAXES (Note 5). . . . . . . . . . $52,026.76 $50,291.94 $30,156.13
Deduct federal income and
state excise taxes (Note 1). . . . . . 0.00 0.00 0.00
--------------- ---------- ----------
NET GAIN ON INVESTMENTS (Note 5) . . . $ 52,026.76 $ 50,291.9 $30,156.13
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF UNREALIZED APPRECIATION ON INVESTMENTS
Years Ended December 31
-------------------------------------
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
BALANCE AT JANUARY 1. . . $284,676.99 $305,353.85 $379,406.89
BALANCE AT DECEMBER 31. . 305,353.85 379,406.89 384,296.57
----------- ----------- -----------
INCREASE (OR DECREASE) IN $ 20,676.86 $ 74,053.04 $ 4,889.68
UNREALIZED APPRECIATION
</TABLE>
See accompanying notes and independent auditor's report.
<PAGE>
<TABLE>
<CAPTION>
WADE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Years Ended December 31
----------------------------------------
NET ASSETS - BEGINNING OF PERIOD 1996 1997 1998
<S> <C> <C> <C>
(Includes undistributed
net income as follows:
1996 $5,814.89; 1997 $5,895.55;
1998 $5,832.40) . . . . . . . . . . $584,346.86 $628,808.87 $705,332.01
INCOME:
Net income (loss) per statement
of income and expenses. . . . . . . . . . . . $ 1,816.42 $ 806.42 $ 456.92
Net equalization (debits credits
included in price of shares
sold and repurchased (note 2) . . . . . . . . (23.46) (3.72) 1.65
Distribution to shareholders:
1996 - $.10; 1997 - $.05; 1998 -
$.03 (See Note 6) . . . . . . . . . . . . . . $ (1,712.30) $ (865.85) $ (539.73)
------------ ------------ ------------
Increase (decrease) in prior
balance of undistributed
net income . . . . . . . . . . . . . . . . . $ 80.66 $ (63.15) $ (81.16)
------------ ------------ ------------
REALIZED GAIN OR LOSS ON
INVESTMENTS
Net gain form sale of investments . . . . . . $ 52,026.76 $ 50,291.91 $ 30,156.13
Distribution to shareholders
1996 - $3.04; 1997 - $2.91;
1998 - $1.67 (note 6) . . . . . . . . . . . . $(52,053.92) $(50,392.47) $(30,044.97)
------------ ------------ ------------
Increase (decrease) in undis-
tributed net gain realized. . . . . . . . . . $ (27.16) $ (100.53) $ 111.16
INCREASE (DECREASE IN UNREALIZED
APPRECIATION ON INVESTMENTS . . . . . . . . . $ 20,676.86 $ 74,053.04 $ 4,889.68
------------ ------------ ------------
CAPITAL STOCK ISSUED AND REPURCHASED
(Exclusive of equalization debits and credits)
Amounts received for shares sold:
1996 - 299 shares; 1997 - 0 shares;
1998 - 155 shares . . . . . . . . . . . . . . $ 10,366.50 $ 0.00 $ 6,022.15
Net asset value of shares issued
to shareholders in reinvestment
of net investment income and
realized gain from security
transactions: 1996 - 943 shares;
1997 - 825 shares; 1998 - 518 shares . . . . . $ 32,788.11 $ 31,866.25 $ 19,402.63
------------ ------------ ------------
$ 43,154.61 $ 31,866.25 $ 25,424.78
Less amounts paid for shares of
capital stock repurchased:
1996 - 567 shares; 1997 - 749 shares;
1998 - 156 shares . . . . . . . . $(19,422.96) $(29,252.47) $ (5,848.44)
------------ ------------ ------------
Net increase (decrease) in capital stock
issued 1996 - 675 shares; 1997 - 76 shares;
1998 - 517 shares . . . . . . . . . . . . . . $ 23,731.65 $ 2,633.78 $ 19,576.34
------------ ------------ ------------
NET ASSETS - END OF PERIOD
(Includes undistributed net income
as follows: 1996 - $5,895.55;
1997 - $5,832.40; 1998 - $5,751.24) . . . . . $628,808.87 $705,332.01 $729,828.03
=========== =========== ============
</TABLE>
See accompanying notes and independent auditor's report.
<PAGE>
<TABLE>
<CAPTION>
WADE FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
Number of Market
Shares Cost Value
------ -------------- -----------
<S> <C> <C> <C>
Common Stocks - 71.27%
Aluminum - 7.15%
Aluminum Co. of America. . . . . . 700 $ 6,456.75 $ 52,193.75
-------------- -----------
Automobile - 3.61%
Autozone (B). . . . . . . . . . . 800 23,132.0 26,350.00
-------------- -----------
Banks and Finance - 18.67%
J.P. Morgan & Company, Inc. . . . 500 1,833.19 52,531.25
First Tennessee National Corp.. . 2,200 20,881.67 83,737.50
-------------- -----------
22,714.86 136,268.75
-------------- -----------
Electronics - 9.39%
Texas Instruments, Inc. . . . . . 800 1,072.95 68,500.00
-------------- -----------
Insurance - 5.29%
Safeco Corporation. . . . . . . . 900 1,080.71 38,643.75
-------------- -----------
Metals - 3.49%
Phelps Dodge Corp.. . . . . . . . 500 23,634.00 25,437.50
-------------- -----------
Paper Products - 6.14%
International Paper, Inc. . . . . 1,000 24,828.25 44,812.50
-------------- -----------
Petroleum Services - 3.81%
Schlumberger, Ltd . . . . . . . . 600 11,084.10 27,825.00
-------------- -----------
Pharmaceutical - 9.17%
Bristol-Myers Squibb. . . . . . . 500 14,928.13 66,906.25
-------------- -----------
Railroads - 4.55%
CSX Corporation . . . . . . . . . 800 6,909.18 33,200.00
-------------- -----------
TOTAL COMMON STOCK - 71.27% $ 135,840.93 520,137.50
============== ==========
MONEY MARKET MUTUAL FUNDS - 27.70%
First Funds U.S. Government Portfolio 202,170.95 202,170.95
-------------- -----------
Total Money Market Funds 202,170.95 202,170.95
-------------- -----------
Total Investments $338,011.88(A) 722,308.45
============== -----------
Other assets less liabilities - 1.03% 7,519.58
-----------
NET ASSETS - 100% $729,828.03
===========
<FN>
(A) Represents the aggregate cost of investments for federal income tax
purposes.
(B) Non-income producing.
</TABLE>
See accompanying notes and independent auditor's report.
<PAGE>
WADE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
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 it s 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 naffected 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, 1998, proceeds of securities sold
were $35,305.81.
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 1, 1998, the Board of Directors declared a dividend
distribution from net realized gains from security transactions of $1.67 per
share and from net income of $.03 per share. The dividends were paid December
18, 1998, to stockholders of record December 10, 1998.
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.
<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, 1999, and Wade Fund, Inc., is the registrant.
The date of the Statement of Additional Information is: April 30, 1999.
<PAGE>
TABLE OF CONTENTS
PART B. STATEMENT OF ADDITIONAL INFORMATION Page
--------------
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
Prospectus Underwriters 7
Calculation of Yield Quotations of Money Market Funds
Not Applicable Financial Statements See Prospectus
<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, 1996,
1997 and 1998 was 0.00%, 4.43% and 0.00% 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.
<PAGE>
Management of the Fund
- -------------------------
<TABLE>
<CAPTION>
The following represents the manage of the Fund:
Position(s) Held Principal Occupation(s)
Name and Address With Registrant During Past 5 Years
- ----------------------------- --------------- -------------------------
<S> <C> <C>
Maury Wade, Jr Director Investment Adviser
Suite 2224 5100 Poplar Avenu President
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 Air Force
285 Shadow Grove Cove Secretary Retired
Memphis, Tennessee 38018 Treasurer
</TABLE>
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 31,1998,
the officers and directors of the Fund as a group owned 4,503 shares of its only
class of stock, or 24.13% of the total number of shares outstanding on that
date. All of the foregoing shares were owned both beneficially and of record
(Excludes 261 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 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.
<PAGE>
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, 1999, no person controls more than 25% of the 18,659 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 ownership 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:
<TABLE>
<CAPTION>
Percentage of Outstanding
Name Address Stock Owned of Record
- ----------------------- -------------------------------- --------------------------
<S> <C> <C>
Jeannene T. Cathey 46 South Perkins Road 6.88%
Memphis, Tennessee 38117
Richard D. Harwood 4056 Barrone Way 4.82%
Memphis, Tennessee 38117
Axson Brown Morgan P.O. Box 11514 24.99%
Memphis, Tennessee 38111
Charles Grant Wade 285 Shadow Grove Cove 7.91%
Memphis, Tennessee 38018
The Estate of Kate Wade 22 North Front Street Suite 1100 5.97%
Memphis, Tennessee 38103
Maury Wade, Jr. * 5488 Pecan Grove Lane 8.18%
Memphis, Tennessee 38120
<FN>
* Denotes an "interested person" of the Fund as defined in the Investment Company
Act of 1940.
</TABLE>
<PAGE>
Brokerage Allocation and Other Practices
- --------------------------------------------
During the fiscal years ended December 31, 1996, 1997 and 1998, the Fund
paid brokerage fees aggregating $415.13, $511.27 and $19.19 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 firms used were Robinson Humphrey and Merrill Lynch. Other
than brokerage services, no other services were furnished to the Fund or its
adviser by the brokerage firms 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.
<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, 1998:
<TABLE>
<CAPTION>
<S> <C>
Market Value of Portfolio Securities $520,137.50
Cash on Deposit 207,377.77
Receivables from Dividends and Interest 1,858.40
Other Assets 6,194.69
----------------
Total Assets $ 735,568.36
Less Liabilities:
Accrued Expenses and Taxes 5,740.33
================
Value of Net Assets $ 729,828.03
Number of Shares Outstanding 18,659
Net Asset Value Per Share ($729,828.03 divided by 18,659 adjusted to nearest cent) $39.11
Offering Price December 31, 1998 $39.11
Redemption Price December 31, 1998 $ 39.11
</TABLE>
Sales and redemption 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.
<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) Statement of Assets and Liabilities
(3) Statement of Sources of Net Assets
(4) Statement of Income and Expenses
(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-Lays
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
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.
<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>
CONSENT OF EXPERTS
------------------
We hereby consent to the inclusion of our opinion dated January 7, 1999,
in this prospectus.
/S/ RHEA & IVY, P.L.C.
Memphis, Tennessee
April 30, 1999
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant: None
Item 26. Number of Holders of Securities at March 31, 1999:
(1) (2)
Title of Class Number of Record Holders
-------------- ------------------------
Common Capital Stock, NPV 56
Item 27. Indemnification:
No provision exists for indemnification of officers, directors,
underwriters or affiliated person 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 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 of Adviser.
Maury Wade, Jr., is engaged in the business of Maury Wade & Company,
an investment advisor 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 securities of corporations and of federal, state and local
governmental entities.
<PAGE>
Item 29. Principal Underwriters - Not Applicable.
Item 30. Location of Accounts and Records.
All securities and all funds (except an operation 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 anew
registration statement relating to the shares offered thereunder.
<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, 1999
---- ------------
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
--------- ----- ----
/S/ Maury Wade, Jr. President April 27, 1999
- ---------------------- ---------------------------- -------------------
Maury Wade, Jr.
/S/ Charles Grant Wade Treasurer Financial Officer April 27, 1999
- ---------------------- ---------------------------- -------------------
Charles Grant Wade
/S/ Charles Grant Wade Treasurer Accounting Officer April 27, 1999
- ---------------------- ---------------------------- -------------------
Charles Grant Wade
/S/ Maury Wade, Jr. Director April 27, 1999
- ---------------------- ---------------------------- -------------------
Maury Wade, Jr.
/S/ Charles Grant Wade Director April 27, 1999
- ---------------------- ---------------------------- -------------------
Charles Grant Wade
/S/ David L. DelBrocco Director April 27, 1999
- ---------------------- ---------------------------- -------------------
David L. DelBrocco
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF WADE FUND, INC. AS OF DECEMBER 31,
1998, AND THE NOTES RELATED THERETO AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<MULTIPLIER> 1
<PERIOD-START> JAN-01-1998
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 135,841
<INVESTMENTS-AT-VALUE> 520,138
<RECEIVABLES> 7,683
<ASSETS-OTHER> 207,748
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 735,568
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,740
<TOTAL-LIABILITIES> 5,740
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 333,812
<SHARES-COMMON-STOCK> 18,659
<SHARES-COMMON-PRIOR> 18,142
<ACCUMULATED-NII-CURRENT> 5,969
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5,751
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 384,297
<NET-ASSETS> 729,828
<DIVIDEND-INCOME> 10,154
<INTEREST-INCOME> 9,401
<OTHER-INCOME> 0
<EXPENSES-NET> 19,098
<NET-INVESTMENT-INCOME> 457
<REALIZED-GAINS-CURRENT> 30,156
<APPREC-INCREASE-CURRENT> 4,890
<NET-CHANGE-FROM-OPS> 457
<EQUALIZATION> 2
<DISTRIBUTIONS-OF-INCOME> 540
<DISTRIBUTIONS-OF-GAINS> 30,040
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 156
<SHARES-REINVESTED> 673
<NET-CHANGE-IN-ASSETS> 24,496
<ACCUMULATED-NII-PRIOR> 5,832
<ACCUMULATED-GAINS-PRIOR> 5,969
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,300
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 19,098
<AVERAGE-NET-ASSETS> 704,484
<PER-SHARE-NAV-BEGIN> 38.88
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 1.90
<PER-SHARE-DIVIDEND> .03
<PER-SHARE-DISTRIBUTIONS> 1.67
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 39.11
<EXPENSE-RATIO> 2.71
</TABLE>
