1933 Act File No. 2-10822
1940 Act File No. 811-515
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. 51 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 52
(Check appropriate box or boxes)
THE WALL STREET FUND, INC.
(Exact name of registrant as specified in charter)
230 Park Avenue, New York, New York 10169
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (212) 856-8250
Robert P. Morse, President
The Wall Street Fund, Inc.
230 Park Avenue
New York, New York 10169
(Name and address of Agent for Service)
Approximate Date of Proposed Public Offering ..................... May 1, 1997
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on May 1, 1997 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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This Registrant has registered an indefinite number of shares of common stock
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. On February 27, 1997 Registrant filed a Rule 24f-2 Notice
for Registrant's most recent fiscal year which ended December 31, 1996.
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<PAGE>
FORM N-IA
CROSS REFERENCE SHEET
(as required by rule 495)
FORM N-1A PART A ITEM NO. PROSPECTUS LOCATION
Item 1. Cover Page ............................ Cover Page
Item 2. Synopsis .............................. Summary Statement; Fee Table
Item 3. Condensed Financial Information ....... Financial Highlights
Item 4. General Description of Registrant ..... Summary Statement; Investment
Objectives; Investment Policy;
Investment Restrictions
Item 5. Management of the Fund ............... Investment Advisory and Other
Services; General Information
Item 6. Capital Stock and other Securities ... Dividends and Distributions;
Taxation; Share Ownership
Information; General
Information
Item 7. Purchase of Securities being Offered . How to Buy Shares
Item 8. Redemption or Repurchase ............. Redemption and Repurchase
of Shares
Item 9. Pending Legal Proceedings ............ *
LOCATION IN STATEMENT OF
FORM N-1A PART B ITEM NO. ADDITIONAL INFORMATION
Item 10. Cover Page ........................... Cover Page
Item 11. Table of Contents .................... Table of Contents
Item 12. General Information and History ...... Investment Objectives and
Policies; Management of
the Fund
Item 13. Investment Objectives and Policies ... Investment Objectives and
Policies
Item 14. Management of the Fund ............... Management of the Fund
Item 15. Control Persons and Principal
Holders of Securities ............. Principal Holders of
Securities
Item 16. Investment Advisory and
Other Services .................... Included in Prospectus under
"Investment Advisory and
Other Services"
Item 17. Brokerage Allocation and
Other Services .................... Brokerage Allocations
* Answer negative or inapplicable
-i-
<PAGE>
LOCATION IN STATEMENT OF
FORM N-1A PART B ITEM NO. ADDITIONAL INFORMATION
Item 18. Capital Stock and other Securities ... Included in Prospectus Under
"Dividends and Distributions";
"Taxation"; "Share Ownership
Information"; "General
Information"
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered ....... Included in Prospectus Under
"How to Buy Shares";
"Redemption and Repurchase of
Shares"; "Determination of Net
Asset Value"
Item 20. Tax Status ........................... Tax Status
Item 21. Underwriters ......................... Underwriter
Item 22. Calculation of Performance Data ...... Calculation of Performance
Data
Item 23. Financial Statements ................. Financial Statements
FORM N-1A PART C ITEM NO. LOCATION IN PART C
Item 24. Financial Statements and Exhibits .... Financial Statements and
Exhibits
Item 25. Persons Controlled by or Under
Common Control with Registrant .... *
Item 26. Number of Holders of Securities ...... Number of Holders of
Securities
Item 27. Indemnification ...................... Indemnification
Item 28. Business and Other Connections
of Investment Advisor ............. Business and Other Connections
of Investment Advisor
Item 29. Principal Underwriters ............... Principal Underwriters
Item 30. Location of Accounts and Records ..... Location of Accounts and
Records
Item 31. Management Services .................. *
Item 32. Undertakings ......................... *
* Answer negative or inapplicable
-ii-
<PAGE>
DIRECTORS
Clifton H.W. Maloney
Robert P. Morse, Chairman
Sharon A. Queeney
Harlan K. Ullman
OFFICERS
Robert P. Morse, President
Michael R. Linburn, Vice President
Allen C. Post, Vice President
Michael Miola, Secretary and Treasurer
INVESTMENT ADVISER
Wall Street Management Corporation
230 Park Avenue
New York, New York 10169
CUSTODIAN
The Bank of New York
110 Washington Street
New York, New York 10286
TRANSFER AGENT
American Data Services, Inc.
24 West Carver Street, 2nd Floor
Huntington, New York 11743
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
1301 Avenue of the Americas
New York, New York 10019
PROSPECTUS
May 1, 1997
<PAGE>
PROSPECTUS
THE WALL STREET FUND, INC.
230 Park Avenue, New York, New York 10169
Telephone: (212) 856-8250
The Wall Street Fund, Inc. (the "Fund") is an open-end, diversified, management
investment company. The primary investment objective of the Fund is growth of
capital. The Fund's portfolio will emphasize equity-type securities which, in
the opinion of the Fund's investment adviser and officers, offer prospects of
sustained growth in value. In addition, convertible stocks and bonds, U.S.
government bonds and corporate bonds may be used.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. A Statement of Additional
Information about the Fund, which is incorporated herein by reference, has been
filed with the Securities and Exchange Commission and is available upon request
without charge. Such a request should be made to the address shown at the top of
this page.
Investors should read and retain this Prospectus for future reference.
The date of this Prospectus and of the Statement of Additional Information is
May 1, 1997.
<PAGE>
TABLE OF CONTENTS
Summary Statement..........................................................3
Fee Table..................................................................4
Financial Highlights.......................................................5
Investment Objectives......................................................6
Investment Policy..........................................................6
Investment Restrictions....................................................8
Portfolio Turnover.........................................................9
Determination of Net Asset Value..........................................10
How to Buy Shares.........................................................10
Redemption and Repurchase of Shares.......................................14
Dividends and Distributions...............................................15
Taxation..................................................................16
Investment Advisory and Other Services....................................16
General Information.......................................................20
No dealer, salesman or any other person has been authorized to give information
or to make any representations other than those contained in this Prospectus,
and if given or made, such information and representations must not be relied
upon as having been authorized by the Fund or the Underwriter. This Prospectus
does not constitute an offering in any jurisdiction in which such offering may
not lawfully be made.
- 2 -
<PAGE>
SUMMARY STATEMENT
This Prospectus provides information with respect to the continuous offering of
shares of the Capital Stock, par value $1 per share ("Share(s)"), of The Wall
Street Fund, Inc., a Maryland corporation (the "Fund").
The Fund's primary investment objective is to produce growth of capital with
current income a secondary objective. See "Investment Objectives", "Investment
Policy", "Investment Restrictions".
Wall Street Management Corporation ("WSMC") provides research, statistical,
advisory and managerial services to the Fund for an advisory fee paid monthly.
See "Investment Advisory and Other Services".
WSMC also serves as principal underwriter of the Shares, which may be acquired
in minimum initial purchases of $2,000 (except the initial investment may be
$500 or more under a payroll deduction arrangement), and minimum subsequent
purchases of $100, at net asset value, plus a sales charge ranging from 4.0% to
0% of the offering price (or 4.17% to 0% of the net amount invested), depending
upon the total amount of Shares purchased. See "How to Buy Shares" and
"Determination of Net Asset Value".
Shares may be redeemed by Stockholders (presently without a fee) at net asset
value. See "Redemption and Repurchase of Shares". The value of the Shares
fluctuates as the values of the securities in which the Fund invests fluctuate.
Similarly, when the Fund sells those securities, it realizes profits or losses,
depending upon the relationship between the cost and the selling price of those
securities. The Fund also earns dividend or interest income to the extent that
any securities in its portfolio produce such income. Stockholders may
automatically reinvest any dividends and distributions at net asset value
without paying a sales charge. See "Dividends and Distributions" and "Taxation".
- 3 -
<PAGE>
SUMMARY OF FUND EXPENSES
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchase
(as a percentage of offering price).................................. 4.00%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price) ................................. None
Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds as
applicable........................................................... None
Redemption Fees (as a percentage of amount
redeemed, if applicable)............................................. None
Exchange Fee........................................................... None
Annual Fund Operating Expenses (as a percentage of net assets):
Management Fees................................................... .75%
12b-1 Fees........................................................ None
Other Expenses (after expense reimbursements)..................... 1.07%
Transfer Agent and Custodian Fees...................................... 0.28%
Professional Fees (includes legal and accounting)...................... 0.49%
Miscellaneous.......................................................... 0.30%
TOTAL FUND OPERATING EXPENSES.......................................... 1.82%
<TABLE>
<S> <C> <C> <C> <C>
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: $58 $95 $135 $245
</TABLE>
The purpose of this Table is to assist you in understanding the various costs
and expenses that an investor in the Fund will bear directly or indirectly. The
amount of expenses actually incurred in the year ended December 31, 1996 was
$283,072, after reimbursement by WSMC of expenses of $2,547 or 0.02% (see
"Investment Advisory and Other Services - Expense Limitation"). The above
example should not be considered a representation of past or future expenses;
actual expenses incurred may be greater or less than those shown in the example.
- 4 -
<PAGE>
FINANCIAL HIGHLIGHTS
(For one Share outstanding throughout the years ended December 31)
The figures below for the 5 years ended December 31, 1996 have been audited by
Coopers & Lybrand L.L.P., the Fund's independent accountants, as indicated in
their report on page B-15 of the Statement of Additional Information. The
remaining figures, which have also been audited, are not covered by the
accountant's current report. Further information about the Fund's performance is
contained in the Fund's annual report to shareholders which may be obtained
without charge from the Fund.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- ------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of year $8.19 $7.42 $8.03 $7.60 $7.27 $5.54 $7.09 $6.57 $5.53 $6.95
Income from investment
operations:
Net investment income
(loss) (.06) (.03) (0.02) (0.02) 0.01 0.03 0.00 0.06 0.02 0.01
Net realized and unrealized
gain (loss) on
investments 0.98 2.60 (0.38) 1.00 0.54 2.95 (1.44) 1.35 1.02 0.27
-------------------------------------------------------------------------------
Total from investment
operations 0.92 2.57 (0.40) 0.98 0.55 2.98 (1.44) 1.41 1.04 0.28
-------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income 0.00 0.00 0.00 0.00 (0.01) (0.03) (0.02) (0.07) 0.00 (0.01)
Distribution from realized
gains from security
transactions (1.15) (1.80) (0.21) (0.55) (0.21) (1.21) (0.09) (0.82) 0.00 (1.57)
Return of capital
distribution 0.00 0.00 0.00 0.00 0.00 (0.01) 0.00 0.00 0.00 (0.12)
-------------------------------------------------------------------------------
Total distributions (1.15) (1.80) (0.21) (0.55) (0.22) (1.25) (0.11 (0.89) 0.00 (1.70)
--------------------------------------------------------------------------------
Net asset value,
end of year $7.96 $8.19 $7.42 $8.03 $7.60 $7.27 $5.54 $7.09 $6.57 $5.53
--------------------------------------------------------------------------------
Total return* 11.45% 36.50% (4.86%) 13.17% 7.61% 54.36% (20.36%) 22.19% 18.74% (2.50%)
Ratios/supplemental data
Net assets, end of year
(in $000's) 15,939 14,383 11,080 11,561 11,202 11,032 8,825 13,500 12,101 9,764
Ratio of expenses to
average net assets 1.84% 2.02% 2.12% 2.04% 2.15% 2.10% 2.04% 1.79% 1.97% 2.00%
Ratio of expenses to
average net assets, net
of expense reimbursement 1.82% 1.90% 1.96% 1.96% 1.97% 1.98% 2.00% 1.79% 1.95% 1.93%
Ratio of investment income
(loss) to average net
assets (0.70%) (0.50%) (0.47%) (0.31%) (0.08%) 0.30% 0.03% 0.85% 0.31% 0.04%
Ratio of net investment
income (loss) to
average net assets, net
of reimbursement (0.68%) (0.38%) (0.31%) (0.23%) 0.09% 0.43% 0.07% 0.85% 0.33% 0.11%
Portfolio turnover rate 142.11% 143.27% 89.01% 107.22% 112.47% 159.52% 142.06% 132.98% 203.78% 212.16%
Average commission rate paid 0.0666 - - - - - - - - -
- -----------------------
<FN>
* Excluding sales charge.
</FN>
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES
The primary objective of the Fund is growth of capital. To achieve that
objective the Fund's portfolio will normally emphasize common stocks which, in
the opinion of the Fund's investment adviser, offer prospects of sustained
growth in value. In addition, convertible stocks and bonds, U.S. government
bonds and corporate bonds may be used.
Realization of current income through the receipt of interest or dividends from
investments is a secondary objective, although receipt of income may accompany
capital appreciation.
There can be no assurance that the Fund's investment objectives will be
achieved. The risks inherent in investing are applicable to the Fund as well as
to an individual investor.
INVESTMENT POLICY
It is the policy of the Fund, which policy may not be changed without the vote
of a majority of the Fund's outstanding voting securities,* to invest in common
stocks, convertible securities, preferred stocks, corporate bonds and securities
of the United States Government or its agencies without restrictions as to the
proportions of its assets invested in any type of security, subject to its
investment restrictions and diversification status. However, the Fund may invest
more or less broadly than as stated above, including acquisition of debt
securities, i.e. corporate bonds, convertible bonds and convertible preferreds.
The Fund will purchase corporate bonds rated no lower than investment grade, BBB
by Standard & Poor's Corporation and Baa by Moody's Investment Services, Inc..
Investment grade bonds possess some speculative characteristics. The Fund may
also purchase unrated bonds when in the opinion of the investment adviser such
investments are of comparable quality. Investments in general will be made in
securities of companies which have been in business for at least three years,
but without regard to the period of time the securities may have been publicly
traded. Common stock investments may be traded on listed securities exchanges or
over the counter without restriction. There is no restriction as to the size of
businesses invested in, but the investment adviser intends to maintain an
investment portfolio mixture of large, medium and small size companies, subject
to the Fund's investment restrictions and diversification status.
Analytical emphasis is focused on financial ratios such as pre-tax margins,
return on equity and cash flow which are actually or expected to be superior to
those of the average company. While price earnings ratios are important
valuation criteria, there is no limitation or emphasis on high or low P/E
stocks. In the opinion of the investment adviser, P/E ratios are important in
relationship to the aforementioned financial ratios.
- ------------
* The phrase "vote of a majority of the Fund's outstanding voting securities,"
as used herein, is defined in Section 2(a)(42) of the Investment Company Act of
1940 to mean the vote, at the annual or a special meeting of Stockholders duly
called, of the lesser of (i) 67% or more of the Shares present at such meeting,
if holders of more than 50% of the outstanding Shares are present or represented
by proxy; or (ii) more than 50% of the outstanding Shares.
<PAGE>
At December 31, 1996, the net assets of the Fund were invested approximately
90.61% in common stocks, 8.78% in convertible debt securities and 0.61% in cash,
receivables, and other assets less liabilities. See "Schedule of Investments" in
the financial statements in the Statement of Additional Information. The various
investment restrictions which have been adopted by the Fund as matters of
fundamental policy are summarized under "Investment Restrictions" on page 8. In
practical application, the Fund attempts to attain its investment objectives by
relying on three fundamental practices:
Careful selection of securities - based on the performance and position
of individual companies and their industries relative to alternative
investments.
Broad diversification among industries and their companies -
fundamental to spreading the risk that is inherent in any single
investment while recognizing that such risk cannot be eliminated.
Continuous scrutiny of investments - realization of security values
depends upon many factors, including timing, trends of the market, and
the economy.
<PAGE>
RISK CONSIDERATIONS
The Fund may purchase securities issued by companies organized in foreign
countries, including Canada and Australia, provided that, as a result of any
such purchase, not more than 20% of the value of the Fund's total assets will be
represented by such securities. Although the Fund intends to invest in foreign
companies located in nations which it considers to have relatively stable
governments, there is the possibility of expropriation, nationalization or
confiscatory taxation, taxation of income earned in a foreign country and other
foreign taxes, foreign exchange controls (which may include suspension of the
ability to transfer currency from a country), default in foreign government
securities, political or social instability or diplomatic developments which
could adversely affect investments in securities of foreign issuers. In
addition, in many countries there is less publicly available information about
issuers than is generally available with respect to domestic companies.
Furthermore, foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards, and auditing practices and
requirements may not be comparable to those applicable to domestic companies. In
many foreign countries there is less government supervision and regulation of
business and industry practices, stock exchanges, brokers and listed companies
than in the United States. Foreign securities transactions may be subject to
higher brokerage costs than domestic securities transactions. In addition, the
foreign securities markets of the countries in which the Fund may invest may
also be smaller, less liquid, and subject to greater price volatility than those
in the United States. Transactions in foreign securities may involve greater
time from the trade date until settlement than for domestic securities
transactions and involve the risk of possible losses through holding of
securities by custodian and securities depositories in foreign countries.
Changes in foreign exchange rates will affect the value of those securities
which are denominated or quoted in currencies other than the U.S. dollar.
The Fund may purchase and sell American Depository Receipts ("ADRs"). ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. Generally,
ADRs in registered form are designed for use in the U.S. securities markets. The
Fund may invest in ADRs through "sponsored" or "unsponsored" facilities. A
sponsored facility is established jointly by the issuer of the underlying
security and a depository, whereas a depository may establish an unsponsored
facility without participation of the issuer of the deposited security. The Fund
does not consider any ADRs purchased to be foreign securities. Holders of
unsponsored ADRs generally bear all the costs of such facilities and the
depository of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts in
respect of the security and the market value of an unsponsored ADR.
The investment adviser, in order to help achieve diversification of risk, rarely
makes investments of more than 3% of the Fund's net asset value at cost in any
one security.
INVESTMENT RESTRICTIONS
The Fund has adopted the following investment restrictions as fundamental
policies which may not be changed without the vote of a majority of the Fund's
outstanding voting securities. Pursuant to such policies, the Fund may not:
1. Invest more than 5% of its total assets (at the time of purchase) in any
issuer (other than the U.S. Government, its agencies and instrumentalities).
2. Invest in the securities of any single issuer, if immediately after and as a
result of such investment, the Fund owns more than 10% of the outstanding
securities, or more than 10% of the outstanding voting securities of any such
issuer.
3. Concentrate more than 25% of the value of its assets in any one industry
or any small group of related industries.
4. Invest in other companies for the purpose of exercising control or
management.
5. Purchase or sell real estate or real estate mortgage loans; provided that
the Fund may invest in securities issued by companies which invest in real
estate or interests therein.
6. Purchase or sell commodities or commodity contracts.
7. Make loans to other persons; provided that the acquisition of bonds,
debentures or other corporate debt securities and investment in government
obligations, short-term commercial paper, certificates of deposit and bankers'
acceptances shall not be deemed to be the making of a loan.
8. Underwrite the securities of other issuers except insofar as the Fund may
technically be deemed an "underwriter" under the Securities Act of 1933, as
amended, in selling portfolio securities.
9. Invest in securities which cannot be readily resold to the public because of
legal or contractual restrictions on resale or for which no readily available
market exists or in the securities of any company which has, together with any
predecessor, a record of less than three years' continuing operation.
10. Purchase securities on margin (except for short-term credit necessary for
clearance of portfolio transactions) or sell securities short or write, sell or
buy puts or calls, or any combination thereof.
11. Purchase the securities of other investment companies except as an incident
of a merger or consolidation or by purchase on the open market without sales
commissions other than customary brokers' commissions.
12. Purchase or hold securities of any issuer any of whose officers, directors,
trustees or security holders is an officer or director of the Fund or its
investment adviser, if after such purchase one or more of such persons owns
beneficially more than .5 of 1% of such securities and all of them own
beneficially more than 5% of the securities of such company.
13. Borrow money except as a temporary measure for extraordinary or emergency
purposes and then only to an amount not exceeding 5% of the cost value of all
its assets and for a period not exceeding 60 days.
14. Pledge, mortgage or hypothecate its assets taken at market to an extent
greater than 15% of its gross assets taken at cost.
<PAGE>
15. Permit its officers or directors or the officers or directors of its
investment adviser to take long or short trading positions in Shares.
16. Issue senior securities.
PORTFOLIO TURNOVER
Portfolio changes will be made promptly in the event that the Fund's investment
adviser shall consider such action appropriate, without regard to the length of
time any security involved was held or the impact of such changes on turnover
consistent with the Fund's objectives.
During the years 1996 and 1995, the rates of turnover of the Fund's portfolio
were 142.11 and 143.27%, respectively. The portfolio turnover ratio for 1996
reflected both an increase in the assets under management and, the Adviser's
restructuring of a portion of the portfolio. The portfolio turnover rate is
calculated by dividing the lesser of the annual sales or purchases of portfolio
securities by the monthly average value of the portfolio securities held by the
Fund during the year (excluding all securities whose maturities or expiration
dates at the time of acquisition were one year or less). If portfolio turnover
is high, it may result in higher brokerage costs and additional capital gains
taxes.
When considering prospective investments, the Fund anticipates retaining
securities purchased over a period of time. However, surveillance of the
portfolio relative to alternative investments may lead to disposition of a
security in a short period of time.
DETERMINATION OF NET ASSET VALUE
Shares are sold (with a sales charge), and the Fund redeems Shares, at current
"net asset value", which is the net asset value of Shares next determined after
receipt of an order to purchase Shares or a receipt of an order to redeem
Shares, as the case may be. The Fund's net asset value per Share is determined
on each day during which the New York Stock Exchange (the "NYSE") is open for
trading as of the time of the close of regular trading on the Exchange, which is
currently 4:00 p.m. (EST). The NYSE is closed for trading on the following dates
in 1997: January 1, February 17, March 28, May 30, July 4, September 1, November
27, and December 25. For purposes of the foregoing determinations, every
security in the portfolio which is listed on the NYSE is valued at the last
reported sale price on the NYSE or, if there was no such sale, at the mean of
the most recent bid and asked prices. The same method is also used for all other
listed exchange securities. Over-the-counter securities are valued at the mean
between the closing bid and asked prices. When market quotations are not readily
available, securities and other assets will be valued at fair value as
determined in good faith by the Board.
<PAGE>
Trading in foreign securities markets is generally completed each day at various
times prior to the close of the NYSE. The values of foreign securities held by
the Fund will be determined as of such times for purposes of determining the net
asset value of the Fund. If events which materially affect the value of foreign
securities occur subsequent to the close of the securities market on which such
securities are primarily traded, the investments affected thereby will be valued
at "fair value" as described above.
Cash and other assets are added to the value of the securities to arrive at
total assets. Liabilities, which may include the investment advisory fees,
custodian and transfer agent fees, fees for auditing and legal services, and
accrued taxes, are deducted from the total value of securities, cash and other
assets in order to determine the total net asset value of the Fund. The net
asset value is then divided by the number of outstanding Shares in order to
determine the net asset value per Share.
HOW TO BUY SHARES
Shares are continually offered to investors at a public offering price, which is
the net asset value per share next determined following receipt of the purchase
order, plus a sales charge which will vary as shown below under "Purchase of
Shares".
Purchase of Shares
Shares may be purchased, with a minimum initial investment of $2,000 (except the
initial investment may be $500 or more under a payroll deduction arrangement)
and a minimum subsequent investment of $100 through securities dealers with whom
WSMC has sales agreements ("Dealers"). Upon purchase, the proper number of full
and fractional Shares are credited to the Stockholder's account and confirmed by
the Fund's Transfer Agent, American Data Services, Inc.. In the event an
investor fails to make a payment for Shares purchased, WSMC will complete the
transaction so as to avoid a reduction in the Fund's net asset value. The Fund
does not issue Share certificates unless requested to do so, and in no event
does it issue certificates for fractional Shares. There is no charge for
issuance of Share certificates. Any order may be rejected by the Fund or its
investment advisor.
You can purchase Shares of the Fund by sending an application form with your
check payable to The Wall Street Fund, Inc., c/o American Data Services, Inc.,
24 West Carver Street, 2nd Floor, Huntington, NY 11743. To make additional
purchases, enclose a check with the form attached to your account statement or
mail a check with your account number clearly indicated on the check.
Shares are sold at the public offering price, which is the net asset value per
Share next determined following receipt of the purchase order as set forth above
(purchase orders received through Dealers by WSMC or directly by American Data
Services, Inc. after 4:00 P.M. (EST), will be deemed received on the next
business day), plus a sales charge which varies with the amount being purchased
as follows:
<PAGE>
<TABLE>
<S> <C> <C> <C>
Allowance to
Sales Charge Selected
Sales Charge as Percentage* Dealers as
as Percentage of of the Net Percentage of the
Amount of Purchase the Offering Price Amount Invested Offering Price
Less than $100,000............................ 4.00% 4.17% 3.75%
$100,000 or more but less than $175,000....... 3.00 3.09 2.75
$175,000 or more, but less than $250,000...... 2.00 2.04 1.75
$250,000 or more, but less than $500,000...... 1.00 1.01 0.75
$500,000 and over............................. 0.00 0.00 0.00
<FN>
*Rounded to the nearest one-hundredth percent.
</FN>
</TABLE>
<PAGE>
Shares of the Fund may be purchased at the net asset value next determined and
without a sales charge by:
1. Officers, directors, partners and employees of the Fund, WSMC, Morse,
Williams & Co., Inc., Morse Williams Holding Co., Inc., broker-dealers who have
currently effective sales agreements with WSMC and affiliates of such companies
including their spouses and children; and
2. Any trust, pension or profit-sharing or other benefit plan for the persons
described in item 1, above.
3. Any investment advisory client of Morse, Williams & Co., Inc.
All such net asset value purchases are made upon the written assurance that the
purchase is made for investment purposes and the shares purchased may not be
resold except through redemption by the Fund. The term "purchase", as used in
the first column above, refers to (i) a single purchase by an individual, or
concurrent purchases, which in the aggregate are at least equal to the
prescribed amounts, by an individual, his or her spouse and their children under
the age of 21, purchasing Shares for his, her or their own account; (ii) single
purchases by a trustee or other fiduciary purchasing Shares for a single trust
estate or single fiduciary account (including pension, profit-sharing, or other
employee benefit trust created pursuant to a plan qualified under Section 401 of
the Internal Revenue Code of 1986, as amended (the "Code")) although more than
one beneficiary is involved; (iii) purchases by tax-exempt organizations
enumerated in Sections 501(c)(3) or (13) of the Code; (iv) purchases by any
"company", as that term is defined in Section 2(a)(8) of the Investment Company
Act of 1940 ("the 1940 Act"), but not including purchases by any such company
which has not been in existence for at least six months or which has no purpose
other than the purchases of Shares or shares of other registered investment
companies at a discount; and (v) purchases by employee benefit plans not
qualified under Section 401 of the Code, including plans or arrangements which
provide a means for employees, or an employer ("employer" being defined as a
single employer or two or more employers, each of which is an affiliated person
of the other under Section 2(a)(3)(C) of the 1940 Act), on behalf of employees,
to purchase shares of a registered open-end investment company or companies by
means of a payroll deduction plan or otherwise. The term "purchase" shall not
include purchases by (A) any group of individuals whose funds are combined,
directly or indirectly, for the purchase of redeemable securities of a
registered investment company jointly or through a trustee, agent, custodian, or
other representative; (B) a trustee, agent, custodian, or other representative
of such a group of individuals; or (C) any group of individuals whose sole
organizational nexus is that the participants therein are credit-card holders of
a company, policyholders of an insurance company, customers of either a bank or
broker-dealer, or clients of any investment adviser. Purchases by a company or a
non-qualified employee benefit plan, as described in clauses (iv) and (v) above,
will qualify for the above quantity discounts only if the Fund and WSMC are able
to realize economies of scale in the sales effort and sale-related expense by
means of the companies, employers, or plans making the Fund's Prospectus
available to individual investors or employees and forwarding investments by
such persons to the Fund and by any such employers or plans bearing the expense
of any payroll deduction plan.
Cumulative Quantity Discounts
Any investor who first acquired Shares on or after June 1, 1976 may accumulate
"purchases" (as defined above) of Shares to take advantage of the reduced sales
charges listed above. Such cumulative quantity discounts are based upon the
aggregate public offering price of Shares previously purchased or acquired and
then owned by such person plus the aggregate public offering price of the Shares
being purchased. Thus, for example, if any investor purchased Shares in any year
or years since June 1, 1976 at an aggregate public offering price of $25,000, a
purchase of $75,000 worth of additional Shares in 1997 or any subsequent year
will be subject to the 3.00% sales charge applicable to transactions of more
than $100,000 but less than $175,000. WSMC must be notified when a sale takes
place which would qualify for the reduced charges on the basis of previous
purchases and reduction will be granted when the aggregate holdings are
confirmed through a check of the records of the Fund.
Letters of Intent
The method of achieving reduced sales charges described in the preceding
paragraph also applies to all "purchases" of Shares based upon the aggregate
public offering price of Shares purchased within a 13-month period pursuant to a
written statement of intention (a "Letter of Intent"), which form may be
obtained from WSMC at 230 Park Avenue, New York, NY 10169. Upon completion of a
Letter of Intent, it must be returned to the Fund c/o American Data Services,
Inc., 24 West Carver Street, 2nd Floor, Huntington, NY 11743.
The form Letter of Intent provides that out of the initial purchase, or
subsequent purchases if necessary, 5% of the dollar amount specified for
purchase over the 13-month period shall be held in escrow by The Bank of New
York in the form of unissued Shares in an account in the investor's name. All
dividends and any capital gains distributions on the escrowed shares will be
paid directly to the investor's account. When the total minimum investment
specified under the Letter of Intent is completed by the investor within the
13-month period, the escrowed Shares will be released from escrow. If the
intended investment is not completed, the investor will be asked to pay the Fund
an amount equal to the difference between the sales charge he has paid pursuant
to the Letter of Intent and sales charge applicable to the Shares he has
actually purchased, in accordance with the table set forth above. If the
investor does not pay the difference in sales charge within 20 days after
written request therefore by the Fund or his investment dealer, the Fund will
cause to be redeemed an appropriate number of the escrowed Shares in order to
realize the difference.
Retirement Plans
For individuals who are under the age of 70 1/2 with earned income who wish to
purchase shares, there is available a Custody Agreement, accepted by the
Internal Revenue Service ("IRS") as a prototype, for Individual Retirement
Accounts ("IRAs"). These individuals may make contributions up to a maximum of
$2,000 per year into their IRA's. A married investor may contribute up to $4,000
yearly to his own and his spouse's IRA. Contributions in excess of allowable
limits, certain premature distributions before age 59 1/2 or insufficient
distributions after age 70 1/2 may result in substantial adverse tax
consequences. Star Bank, N.A. serves as fiduciary and custodian of IRA's
pursuant to the Custody Agreement and currently charges the following fees:
annual maintenance fee per account of $12.00; a $12.00 fee on an incoming
transfer from a previous IRA trustee or custodian; a $15.00 fee on a
distribution which is not an automatic periodic distribution; a $15.00 fee on
refunds of excess contributions; a $15.00 fee on transfers to a successor IRA
trustee or custodian; and a $15.00 fee per year for automatic periodic
distributions. These fees may be revised from time to time. An individual
establishing an IRA should obtain from his or her securities dealer an IRS
disclosure statement indicating, among other things, certain rights of
revocation.
Automatic Withdrawal Plan
Investors owning or purchasing a total of $15,000 or more of Shares, valued at
the current public offering price, may establish an Automatic Withdrawal Plan
account. Under an Automatic Withdrawal Plan account, an investor requests a
check either monthly, as of the twenty-fifth or nearest business day, or
quarterly for a fixed amount, specified by the investor (minimum amount of
$200). The minimum amount of $200 per withdrawal is, of course, not a
recommended amount and may not be suitable in all instances.
The payments specified by an investor will be made out of the proceeds of
redemption of Shares credited to his account. Accordingly, since the withdrawal
payments represent the proceeds for Share redemptions, an investor's invested
capital will be reduced to the extent that withdrawal payments exceed the income
dividends and capital gains distributions paid and reinvested on his Shares.
Continued withdrawals in excess of current income risk the exhaustion of
invested capital.
All dividends and distributions of Shares are reinvested in additional Shares at
net asset value per Share, that is, without sales charge.
REDEMPTION AND REPURCHASE OF SHARES
The Fund redeems all full and fractional Shares upon receipt of a written
request in proper form from the Stockholder or a repurchase order from a
Stockholder's securities dealer. Redemption or repurchase orders are accepted on
any day the NYSE is open for business. The net asset value per Share used for
purposes of redemption and repurchase is the net asset value per Share next
determined after a tender for redemption or repurchase is received. Tenders for
redemption and orders for repurchase received after 4:00 P.M. (EST), will be
deemed received on the next business day. No redemption or repurchase charge is
imposed by the Fund, although the Board has the power to impose a charge not to
exceed 1% of the net asset value per Share. However, the Fund has no present
intention of imposing any such charge.
Payment for Shares redeemed or repurchased is made as soon as reasonably
practicable and, in any event, must be made within seven days after proper
tender of the Shares to the Fund's Transfer Agent (see "Procedure for Direct
Redemption" below), except that the right of redemption and repurchase may be
suspended or the payment date postponed (a) for any period during which the NYSE
is closed (other than customary weekend and holiday closings) or during which
trading on the NYSE is restricted; (b) for any period during which an emergency
exists as a result of which (i) disposal by the Fund of securities owned by it
is not reasonably practicable or (ii) is not reasonably practicable for the Fund
to determine fairly the value of its net assets; or (c) for such other periods
as the Securities and Exchange Commission (the "SEC") may by order permit for
the protection of Stockholders.
If the Fund is requested to redeem or repurchase Shares for which it has not yet
received good payment, the Fund may delay or cause to be delayed the mailing of
a redemption or repurchase check until such time as it has assured itself that
good payment (e.g., cash or certified check drawn on a United States bank) has
been collected for the purchase of such Shares. This procedure may take up to
fifteen days or more.
All redemption and repurchase payments will be made by check, except that if the
Board determines that it is in the best interest of the remaining Stockholders,
redemptions and repurchases may be made in kind from the portfolio of the Fund,
in lieu of cash, taking such securities at their value employed in determining
net asset value, and selecting the securities in such manner as the Board may
deem fair and equitable. In such event, the Fund may comply with Rule 18f-1
promulgated by the SEC under Section 18(f) of the 1940 Act, pursuant to which
the Fund, upon filing a notification of election with the SEC, would redeem and
repurchase Shares solely in cash during any 90-day period for any one
Stockholder up to the lesser of $250,000 or 1% of the net asset value of the
Fund at the beginning of such 90-day period. In the event of redemptions or
repurchases in kind, a stockholder may incur brokerage commissions in realizing
cash thereon.
Because the net asset value of a Share fluctuates as a result of changes in the
value of securities owned by the Fund, the amount received upon redemption may
be more or less than the amount paid for such Shares.
Procedure for Direct Redemption
A Stockholder wishing to redeem Shares may do so by tendering certificates
evidencing ownership of such Shares (endorsing the stock power on the reverse
side) to the Fund's Transfer Agent, American Data Services, Inc., 24 West Carver
St., 2nd Floor, Huntington, NY 11743, as agent for the Fund. If Share
certificates are not held, a letter to the Fund's Transfer Agent requesting
redemption is all that is required. In either case, however, the Stockholder's
signature must be guaranteed by an "eligible guarantor institution". An eligible
guarantor institution is defined as an institution that is a member of a
Medallion Program, located in or having a correspondent in New York City. Such
institutions generally include national or state banks, savings associations,
savings and loan associations, trust companies, savings banks, credit unions and
members of a recognized stock exchange. In certain instances, the Transfer Agent
may require additional documents such as, but not limited to, trust instruments,
death certificates, appointments as executor or administrator, or certificates
of corporate authority. Payment for Shares redeemed will be made by the Fund to
the Stockholder within the time period described above.
Procedure For Repurchase From Securities Dealers
A Stockholder may request his or her securities dealer to place an order with
the Fund to repurchase such Stockholder's Shares; such orders may be placed with
the Fund by telephone, telegraph or letter. These repurchase arrangements are
for the convenience of Stockholders and, as mentioned above, the Fund does not
presently impose a charge on such orders. However, a securities dealer may
impose a charge on the Stockholder for transmitting the repurchase order to the
Fund. For a Stockholder requesting repurchase through his or her securities
dealer, payment will be made by the Fund to such securities dealer within the
time period described above after proper tender of the certificates for the
Shares, if any, and stock power with signatures guaranteed, to the Fund's
Transfer Agent in the manner described under "Procedure for Direct Redemption"
above.
DIVIDENDS AND DISTRIBUTIONS
In addition to any increase in the value of your Shares as a result of increases
in the value of the Fund's investments, the Fund may earn income in the form of
dividends and interest on its investments. It is the Fund's policy to distribute
substantially all of this income, less expenses, to its shareholders. Capital
gains or losses are the result of the Fund's sale of its portfolio securities at
prices that are higher or lower than the prices paid by the Fund to buy such
securities. Total profits from such sales, less losses, represent net realized
capital gains. The Fund distributes net realized capital gains, if any, to
shareholders annually.
Under present policy, Stockholders who so elect may automatically reinvest any
dividends and distributions in additional full and fractional Shares at net
asset value per Share (calculated as of the date of payment), that is, without
imposition of a sales charge. Other Stockholders will receive dividends, if any,
from net investment income in cash, with a separate opportunity to reinvest each
such dividend at net asset value, and receive distributions from net capital
gains realized by the Fund on the sale of securities in Shares, unless they have
previously elected, or elect in each instance, to receive cash. Fractional
increments may be paid in Shares or cash, depending upon the circumstances.
Under the Fund's cumulative investment and Automatic Withdrawal Plans,
reinvestment of both dividends and distributions in full and fractional Shares
is automatic.
Dividends and distributions are payable when, as and if declared by the Board.
TAXATION
The Fund intends to qualify each year as a regulated investment company under
Subchapter M of the Code to the extent that its net investment income and net
realized capital gains are distributed. Whether paid in cash or in additional
Shares and regardless of the length of time the Fund's Shares have been owned by
Stockholders who are subject to federal income taxes, distributions from
long-term capital gains are taxable as such. Dividends from net investment
income or net short-term capital gains will be taxable as ordinary income,
whether received in cash or in additional Shares. For those investors subject to
tax, if purchases of Shares of the Fund are made shortly before the record date
for a dividend or capital gain distribution, a portion of the investment will be
returned as a taxable distribution. Shareholders are notified annually by the
Fund as to the federal tax status of dividends and distributions paid by the
Fund.
Dividends which are declared in October, November or December to shareholders of
record in such a month by which, for operational reasons, may not be paid to the
shareholder until the following January, will be treated for tax purposes as if
paid by the Fund and received by the shareholder on December 31 of the calendar
year in which they are declared.
The sale of Shares of the Fund is a taxable event and may result in a capital
gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or a withdrawal under the
Automatic Withdrawal Plan. Any loss incurred on sale or exchange of the Fund's
Shares, held for six months or less, will be treated as long-term capital loss
to the extent of capital gain dividends received with respect to such Shares.
Ordinary income distributions may be eligible for the 70% dividends received
deduction for corporate shareholders. The amount qualifying for the deduction is
generally limited to such shareholders' proportionate share of the aggregate
dividends received from domestic corporations by the Fund. Distributions and the
proceeds of redemptions may, in certain limited circumstances, be subject to
back up withholding at the rate of 31%.
In addition to federal taxes, shareholders may be subject to state and local
taxes on distributions of interest income and capital gains. Distributions from
certain types of U.S. government securities may be exempt from state personal
income taxes.
The tax discussion set forth above is included for general information only.
Prospective investors should consult their own tax advisers concerning the
federal, state, local or foreign tax consequences of an investment in the Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
Information About WSMC
Wall Street Management Corporation ("WSMC"), the Fund's investment adviser (and
principal underwriter), with principal offices at 230 Park Avenue, New York, NY
10169 is a Massachusetts corporation organized on September 15, 1954. It has
served as the Fund's investment adviser since its organization.
WSMC has 6,520 shares of capital stock outstanding. 100% of which are owned by
Morse, Williams & Co., Inc. ("MWC"). Morse Williams Holding Co., Inc.
("Holding"), a Delaware corporation, owns all of the issued and outstanding
shares of capital stock of MWC. Robert P. Morse is the sole director of Holding
and owns 100% of the outstanding Common Stock of Holding and 100% of the
Preferred A Voting Stock of Holding. Such ownership of the Preferred A Voting
Stock gives Mr. Morse sole management control of Holding. The principal business
address of Holding and Robert P. Morse is 230 Park Ave., New York, NY 10169. Mr.
Morse is the President and sole Director of WSMC and Holding and also is
President and a Director of MWC and the Fund. Mr. Morse has been responsible for
the day-to-day management of the Fund's portfolio since 1984.
The Advisory Agreement
WSMC furnishes investment advisory research, statistical and managerial services
and provides the Fund with a continuous investment program pursuant to an
Investment Advisory Contract with the Fund dated April 26, 1990 and continued by
the Board on February 20, 1997 (the "Advisory Agreement").
Under the Advisory Agreement the Fund pays its own expenses including interest
charges; taxes; costs of purchasing and selling securities for its portfolio;
rent; expenses of redemption of shares; auditing and legal expenses; expenses
attributable to setting the type for and printing only such copies of
prospectuses as are filed with any federal or state agency, regulatory authority
or governmental department; directors' fees and expenses necessarily incurred by
directors in attendance at directors' meetings; expenses of administrative
personnel and administrative services; custodian fees; fees of the transfer
agent, the registrar and the dividend disbursing agent; cost of stock
certificates and corporate reports; all other printing expenses not specifically
allocated to WSMC under the Agreement; costs in connection with Board meetings
and meetings of Stockholders, including proxy material preparation and
distribution, filing fees, dues, insurance premiums, miscellaneous management
and operating expenses and expenses of an extraordinary and nonrecurring nature.
The Advisory Agreement provides that it shall continue in effect for a period of
two years from its effective date and that it may be continued from year to year
thereafter only if specifically approved at least annually by a vote of a
majority of the Board, or by the vote of a majority of the Fund's outstanding
voting securities. In either case, each continuance must be approved by a
majority vote of the directors who are not parties to such contract or
"interested persons" of any such party to such contract (other than as directors
of the Fund) cast in person at a meeting called for that purpose. The Advisory
Agreement will be effective through April 26, 1998.
The Advisory Agreement may be amended or modified only by the vote of a majority
of the Fund's outstanding voting securities and a majority of the Board,
including a majority of such directors who are not parties of the Agreement or
"interested persons" of any such party (other than as directors of the Fund).
The Advisory Agreement may be terminated, without penalty, on 60 days' written
notice to WSMC, by the Board or by the vote of a majority of the Fund's
outstanding voting securities. It automatically terminates upon its "assignment"
within the meaning of Section 2(a)(4) of the 1940 Act.
Description of the Advisory Fee
The Advisory Agreement provides for an advisory fee based upon a fixed
percentage of the Fund's net asset value. Such advisory fee is calculated and
paid monthly by applying the following monthly rates to the average daily net
asset value of the Fund during the preceding month:
<TABLE>
<S> <C> <C>
Equivalent Average Daily
Monthly Rate Annual Rate Net Asset Value
-------------------------------------------------------------------
1/16 of 1% 3/4 of 1% On the first $125 million
5/96 of 1% 5/8 of 1% On the next $75 million
1/24 of 1% 1/2 of 1% On amounts over $200 million
</TABLE>
The advisory fees paid for 1996 as a percentage of the Fund's average net assets
was 0.73% after expenses reimbursed by WSMC. See the following sub-caption as to
the expense limitation and reimbursement features of the Advisory Agreement.
Expense Limitation
The Advisory Agreement provides an overall limitation of the total expenses of
the Fund as follows: if the normal operating expenses of the Fund for any year,
including the advisory fee computed above (but excluding taxes, interest,
brokerage fees, and extraordinary legal , auditing or other expenses incurred in
connection with or as a result of any matter not in the ordinary course of
business of the Fund), exceed 2% of the first $10,000,000, 1.5% of the next
$20,000,000 and 1% of the balance, of the average daily net asset value, then
the excess of the expenses will be refunded by WSMC to the Fund. WSMC will waive
collection of any or all of its advisory fee to reflect any required expense
reimbursement.
The expenses of the Fund for 1996 as a percentage of net assets was 1.82% after
reimbursement.
The Underwriting Agreement
WSMC also acts as the principal underwriter for the Fund pursuant to an
Underwriting Agreement with the Fund most recently approved by the Board on
February 20, 1997 (the "Underwriting Agreement"), which Agreement provides that
WSMC shall use its best efforts to find purchasers for authorized but unissued
Shares, with WSMC paying all expenses in connection therewith.
The Underwriting Agreement provides that it shall continue in effect for a
period of more than two years from the date thereof only so long as such
continuance is specifically approved at least annually by the Board including
the vote of a majority of the directors who are not parties to such contract or
"interested persons" of any such party to the contract (other than as directors
of the Fund) cast in person at a meeting called for that purpose.
Either the Fund or WSMC may terminate the Underwriting Agreement on any date by
giving the other party at least six months' prior written notice of such
termination and the Fund may terminate the Underwriting Agreement at any time
upon any failure by WSMC to fulfill its obligations as underwriter under such
agreement. The Underwriting Agreement also provides that it shall automatically
terminate in the event of its assignment within the meaning of Section 2(a)(4)
of the Investment Company Act.
During the years 1996, 1995, and 1994, the total amount of underwriting
commissions paid or accrued to WSMC under the Underwriting Agreement were $4957,
$538, and $313, respectively, after deducting dealer allowances withheld of $0,
$0, and $2,285, respectively. WSMC received net remuneration (i.e. net advisory
fees paid under the Advisory Agreement plus net underwriting commissions) from
the Fund in 1996, 1995, and 1994, of $118,755, $80,227, and $65,237,
respectively.
Administrator
Pursuant to an Administrative Services Agreement with the Fund, American Data
Services, Inc. ("ADS") provides the Fund with the necessary office space,
communication facilities and personnel to perform certain services to the Fund,
including; monitoring services provided to the Fund by other service providers;
furnishing financial data and management reports; preparing all shareholder
financial statements; preparing the Fund's federal state and local tax returns;
preparing periodic reports to the SEC on Form N-SAR and amendments to the Fund's
registration statement; monitoring all regulatory restrictions for compliance;
and answering inquiries from Fund shareholders and broker-dealers. A principal
of ADS is the Secretary and Treasurer of the Fund.
For services rendered pursuant to the Administrative Services Agreement, the
Fund pays ADS, Inc. a monthly fee equal to the greater of (i) $2,083 or (ii)
1/12th of 0.1% of the first $75 million of average monthly net assets, plus
1/12th of 0.05% of the next $50 million of average monthly net assets, plus
1/12th of 0.04% of average monthly net assets in excess of $125 million.
Custodian, Transfer and Dividend Disbursing Agent
The Bank of New York, 110 Washington Street, New York, NY 10286 is custodian for
the Fund and it holds in safekeeping all of the portfolio securities and cash of
the Fund pursuant to the terms of a Custodian Agreement. The Custodian performs
no managerial or policy-making functions with or for the Fund. The services of
the custodian do not provide protection to Stockholders against possible
depreciation of assets. ADS serves as the Fund's Transfer Agent and Dividend
Disbursing Agent.
The Board of Directors
The property, business and affairs of the Fund are managed by a Board of
Directors that currently consists of four members.
Independent Accountants
Coopers & Lybrand L.L.P., independent accountants, 1301 Avenue of the Americas,
New York, NY 10019, is the auditor for the Fund and audits its financial
statements yearly.
GENERAL INFORMATION
Description of Shares
The Fund was organized on December 26, 1945 and has an authorized capital of
5,000,000 Shares. Each Share has equal voting, dividend, redemption and
liquidation rights. There is no limitation on transferability, and no Share is
subject to further call by the Fund. The Shares have non-cumulative voting
rights, which means that the holders of more than 50 percent of the Shares
voting for the election of directors can elect 100 percent of the directors if
they choose to do so, and, in such event, the holders of the remaining Shares
voting for the election of directors will not be able to elect any person or
persons to the Board. In addition, directors of the Fund elected by the
shareholders serve until a successor is elected and assumes office. The Fund,
under applicable Maryland law, does not hold an annual meeting of shareholders
in any year in which such a meeting is not required under state law or the 1940
Act. The fiscal year of the Fund ends on December 31 of each year.
Additional Information
The Fund may disseminate reports of its investment performance from time to
time. Investment performance is calculated on a total return basis; that is by
including all net investment income and any realized and unrealized net capital
gains or losses during the period for which investment performance is reported.
If dividends or capital gains distributions have been paid during the relevant
period the calculation of investment performance will include such dividends and
capital gains distributions as though reinvested in shares of the Fund. Standard
quotations of total return are computed in accordance with SEC Guidelines to
provide comparability to other investment companies. Performance data is based
on historical earnings and is not intended to indicate future performance. Rates
of return expressed on an annual basis will usually not equal the sum of returns
expressed for consecutive interim periods due to the compounding of the interim
yields. The Fund's annual report to shareholders for the fiscal year ended
December 31, 1996 contains performance information about the Fund. A copy of the
annual report is available upon request without charge and may be obtained by
calling the Fund at (800) 443-4693.
Shareholder Information and Reports
All shareholder inquiries regarding account information of transactions should
be directed to American Data Services, Inc., 24 West Carver St., 2nd Floor,
Huntington, NY 11743 or by telephone to (800) 443-4693. Shareholder inquiries
about general Fund information should be directed to the Fund's office at (212)
856-8250. Shareholders will be provided semi-annual unaudited and annual audited
reports, including a listing of portfolio securities held.
<PAGE>
THE WALL STREET FUND, INC
STATEMENT OF ADDITIONAL INFORMATION
230 Park Avenue, New York, New York 10169
Telephone: (212) 856-8250
This Statement of Additional Information is not a prospectus, but should be read
in conjunction with the Prospectus of The Wall Street Fund, Inc. (the "Fund"),
dated May 1, 1997. The Prospectus may be obtained by writing to the above
address or by calling the above phone number.
The date of this Statement of Additional Information is May 1, 1997.
B-1
<PAGE>
TABLE OF CONTENTS
Investment Objectives and Policies...................................... B-2
Management of the Fund.................................................. B-3
Principal Holders of Securities......................................... B-5
Brokerage Allocation.................................................... B-5
Tax Status.............................................................. B-6
Underwriter............................................................. B-7
Calculation of Performance Data......................................... B-8
Financial Statements.................................................... B-10
INVESTMENT OBJECTIVES AND POLICIES
In order to achieve the "growth of capital" stated as the primary investment
objective in the Prospectus (under the heading "Investment Objectives"), the
management of the Fund looks for undervalued investments in economic areas
experiencing lasting growth, i.e., those that are inefficiently priced and have
outstanding characteristics relative to alternative investments. Further, the
companies whose stocks are purchased must, whether large or small, be quality
companies run by able and motivated management teams, have sustainable earnings
growth, appropriate dividend policies, minimal or moderate debt, and valuable
products or services. Also, such financial ratios as superior profit margins,
return on equity, and cash flow are essential criteria. Growth characteristics
of the Fund's portfolio of investments are vital to meet the Fund's primary
investment objective. So is the ability to control risk. Accordingly, prudent
portfolio diversification is stressed. Seldom is more than 3% of the Fund's net
asset value invested at cost in any one security.
B-2
<PAGE>
MANAGEMENT OF THE FUND
The Fund is managed by its directors and officers. Their names, ages, addresses
and information as to their principal business occupations during the last five
years is set forth below in alphabetical order.
<PAGE>
Principal Occupations
Positions for Last Five Years
Name and Address (Age) Held With Fund and Other Directorships
- -------------------------------------------------------------------------------
Michael R. Linburn (63) Vice President Director of Marketing, Morse,
230 Park Avenue Williams & Co., Inc.
New York, NY 10169 since 1992.
Clifton H.W. Maloney (58) Director President, C.H.W. Maloney &
245 Park Avenue Co., Inc., an investment
New York, NY 10169 banking firm, since 1981.
Director, Chromium Industries,
Inc., and Liberty Business
Forms and Systems, Inc.
Michael Miola (44) Secretary/ President, American Data
24 West Carver Street Treasurer Services, Inc., a mutual fund
Huntington, NY 11743 administration and computer
software development firm,
since 1984.
Robert P. Morse* (51) Chairman, President and a Director, Morse
230 Park Avenue President and Williams & Co., Inc., investment
New York, NY 10169 Director counselors, since 1981;
President and sole Director of
Wall Street Management
Corporation ("WSMC") since 1984
and Morse Williams Holding Co.,
Inc. since 1986.
Allen C. Post (53) Vice President Portfolio Manager, Morse,
230 Park Avenue Williams, & Co., Inc.
New York, NY 10169 since 1991.
B-3
<PAGE>
Principal Occupations
Positions for Last Five Years
Name and Address (Age) Held With Fund and Other Directorships
- -------------------------------------------------------------------------------
Sharon A. Queeney (54) Director President, Queeney Enterprises
64 East 91st Street since 1988, a marketing/media
New York, NY 10128 production company.
Harlan K. Ullman, (56) Director Chairman, Killoven Group, a
Ph.D consulting firm; Senior
Fellow, 1245 29th Street, N.W. The Center for Naval Analyses;
Washington, D.C. 20007 Senior Associate, of Center for
Strategic and International
Studies, since 1987.
* Denotes a director who is an "interested person" as that term is defined in
Section 2(a)(19) of the Investment Company Act of 1940 (the "Investment
Company Act").
Set forth below is a Compensation Table listing, for each director, the
aggregate compensation received from the Fund for the calendar year ended
December 31, 1996. The Fund has no bonus, profit sharing, or retirement plans.
COMPENSATION TABLE
Total
Compensation
Received From
Director Fund
- ----------------------------------------------------------------
Clifton H.W. Maloney .............................. $4,000
Robert P. Morse ................................... $4,000
Sharon A. Queeney ................................. $4,000
Harlan K. Ullman .................................. $4,000
In addition, the Fund's Directors were reimbursed for expenses of $2,673 in
connection with the four Board Meetings held during the year. The Fund makes no
payments of salary to any officer in such capacity.
B-4
<PAGE>
As of April 2, 1997, all officers and directors of the Fund as a group owned
(according to information supplied by them) of record or beneficially a total of
574,781.369 Shares (or 29.19%) of the Fund.
PRINCIPAL HOLDERS OF SECURITIES
The following is the only person known to the Fund who, on April 2, 1997, owned
of record or beneficially more than five percent of the outstanding Shares:
Robert P. Morse as one of three trustees for seven trust accounts, as sole
trustee for one trust account and as custodian for three separate Uniform Gifts
to Minors Act accounts and personally, holding in the aggregate 571,029.447
Shares (29.00%) of record. WSMC, which is owned indirectly by Mr. Morse,
beneficially owns 3,119.361 Shares (or 0.16%) of the Fund.
BROKERAGE ALLOCATION
It is the policy of the Fund to select brokers on the basis of their ability to
effect transactions in portfolio securities in such a manner as to obtain the
best execution of orders at the most favorable prices. Brokerage business is
also allocated in order to obtain investment information and research, so that
WSMC may supplement its own analysis and research activities and may make
available to the Fund the recommendations, views and information of individuals
and research staffs of many different securities firms. Such investment
information and research is presently provided to WSMC at no cost to it, and to
the extent that such investment information and research is used by WSMC in
rendering investment advice to the Fund, it tends to reduce the expenses of
WSMC. Subject to the foregoing policies, brokers are chosen by the officers of
WSMC in accordance with their best judgment and the allocation of brokerage is
not made in accordance with any formula. In following the foregoing policies,
however, a broker may be paid a brokerage commission in excess of that which
another broker might have charged for effecting the same transaction, in
recognition of the value of such broker's ability to promptly execute the order
and/or provide research services. In allocating brokerage, the Fund does not
favor or disfavor any broker on the basis of sales of Shares made or expected to
be made by such broker.
B-5
<PAGE>
During the years 1996, 1995 and 1994, the Fund paid brokerage commissions of
$72,469, $60,653 and $39,932, respectively, to brokerage firms in connection
with its purchases and sales of portfolio securities. The variance between the
commissions paid during 1996 and the commissions paid during 1995 reflected both
an increase in the assets under management, and the Adviser's restructuring of a
portion of the portfolio. The Fund uses the Instinet network to execute
transactions in securities traded over-the-counter ("OTC") on a commission
basis.
During the year 1996, the Fund paid commissions for securities transactions to
brokers that provided investment information and research services to WSMC of
$1,850 with respect to securities transactions valued at $501,350. Research
services furnished by brokers through whom securities transactions are effected
may be used by WSMC in servicing all of its accounts and not all such services
may be used by WSMC in connection with the Fund.
During the years 1996, 1995, and 1994 none of the brokers employed by the Fund
(i) was an "affiliated person" (as defined in Section 2(a)(3) of the Investment
Company Act) of the Fund; (ii) was an affiliated person of such an affiliated
person; or (iii) had an affiliated person who was also an affiliated person of
the Fund or WSMC.
WSMC may act as one of the Fund's brokers in the purchase and sale of portfolio
securities. It is the Fund's intention to use WSMC as a broker where, in the
judgment of Fund management, such firm would be able to obtain a price and
execution at least as favorable as other qualified brokers. In 1996 WSMC did not
act as an executing broker for any portfolio transactions of the Fund.
TAX STATUS
The following information supplements the information set forth in the
Prospectus under the heading "TAXATION".
The Fund intends to comply with the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended, (the "Code") applicable to regulated
investment companies. The Fund intends to pay dividends representing its
investment company taxable income within certain time periods specified by the
B-6
<PAGE>
Code. By doing so and by meeting certain diversification and other requirements,
the Fund intends to qualify as a regulated investment company under the Code.
Since the Fund will distribute its investment company taxable income, net
capital gains, and capital gain net income, it will not be subject to income or
excise taxes otherwise applicable to undistributed income of a regulated
investment company. If the Fund were to fail to distribute all of its income and
gains, it would be subject to income tax and, in certain circumstances, a 4%
excise tax.
Taxation of Shareholders. Distributions reflecting the Fund's own dividend
income will qualify for the 70% dividends received deduction available to
corporate shareholders if the Fund does not sell the underlying stock before
satisfying a 46-day holding period requirement (91 days for certain preferred
stock).
Individuals and other non-exempt payees will be subject to a 31% backup Federal
withholding tax on dividends and other distributions from the Fund, as well as
the proceeds of redemptions of Fund shares, if the Fund is not provided with the
shareholder's correct taxpayer identification number and certification that the
shareholder is not subject to such backup withholding. For most individuals, the
taxpayer identification number is the taxpayer's social security number.
UNDERWRITER
The following information supplements the information set forth in the
Prospectus under the subheading, "The Underwriting Agreement."
WSMC, the Fund's principal underwriter, offers Shares of the Fund on a
continuous basis, has entered into dealer agreements with various broker/dealer
firms located in jurisdictions where the Fund has registered its Shares for
public sale. The dealer agreements require dealers to act as agent for WSMC for
consideration, which is set forth in the Prospectus under the subheading,
"Purchase of Shares" in the column captioned "Allowance to Selected Dealers as
Percentage of the Offering Price." The dealer agreements also require that the
dealers be registered as brokers and dealers pursuant to Section 15 of the
B-7
<PAGE>
Securities Exchange Act of 1934 and that they be members in good standing of the
National Association of Securities Dealers, Inc.
Set forth below is a Table listing all commissions and other aggregate
compensation received by WSMC from the Fund for the calendar year ended
December 31, 1996.
<TABLE>
<S> <C> <C> <C> <C>
Net Underwriting Compensation on
Name of Principal Discounts and Redemptions and Brokerage Other
Underwriter Commissions Repurchases Commissions Compensation
- ----------------------------------------------------------------------------------------------
Wall Street
Management Corp. $4,957 None None $113,798 (1)
<FN>
(1) Other compensation is comprised of advisory fees earned by WSMC during the
calendar year ended December 31, 1996 in the amount of $116,345 less excess
operating expenses reimbursed by WSMC in the amount of $2,547.
</FN>
</TABLE>
CALCULATION OF PERFORMANCE DATA
Following are quotations of the Fund's average annual total return for the
indicated periods using the standardized method of calculation required by the
Securities and Exchange Commission ("SEC"):
for the one-year period ended December 31, 1996: 6.99%
for the five-year period ended December 31, 1996: 11.09%
for the ten-year period ended December 31, 1996: 11.23%
Average annual total return is calculated according to the following SEC
formula:
n
P(1+T) = ERV
where P= a hypothetical initial payment of $1,000; T= average annual total
return; n= number of years; and ERV= ending redeemable value of the hypothetical
initial payment of $1,000 made at the beginning of the 1,5, and 10-year periods
at the end of the 1,5 and 10-year periods. The maximum sales load was deducted
from the initial $1,000 investment and all dividends and distributions were
assumed to have been reinvested at the appropriate net asset value per share.
B-8
<PAGE>
<TABLE>
<CAPTION>
THE WALL STREET FUND, INC.
SCHEDULE OF INVESTMENTS
December 31, 1996
COMMON STOCKS AND WARRANTS - 90.61%
<C> <S> <C>
Market
Shares Value
------ -----
BASIC MATERIALS - 7.71%
8,000+ Barrick Gold Corp................... $ 230,000
180,000+ Federation Resources................ 15,732
10,000+ ICC Technologies Inc................ 53,125
3,149+ IMC Global Inc...................... 123,205
100,000+ International Precious Metals Corp.. 442,182
12,000+ Jilin Chemical Ind.................. 175,500
3,000+ Nucor Corp.......................... 153,000
1,000+ Zoltek Companies Inc................ 36,313
---------
1,229,057
---------
CAPITAL GOODS- 6.94%
80,000+ Flow Intl. Corp.................... 740,000
2,500+ Hewlett Packard Co................. 125,625
10,000+ Nematron Corp...................... 53,125
40,000+ Stevens Graphics Series A.......... 60,000
2,500+ Zygo Corp.......................... 128,125
----------
1,106,875
----------
CONSUMER - CYCLICAL - 8.49%
6,000+ CompUSA Inc........................ 123,750
2,500+ Delia*s, Inc....................... 49,219
4,000+ Gap Inc............................ 120,500
3,000+ Home Depot Inc..................... 150,375
10,000+ Metromedia International Group Inc. 98,750
3,000+ North Face Inc..................... 57,375
8,000+ Pixar.............................. 104,500
3,500+ Saks Holdings Inc.................. 94,500
20,000+ Sport-Haley Inc.................... 252,500
6,000+ Tiffany & Co....................... 219,750
15,000+ Zomax Optical Media................ 81,563
----------
1,352,782
----------
CONSUMER NON-CYCLICAL - 19.41%
25,000+ Alpha-Beta Technology Inc.......... 265,625
10,000+ Alza Corp.......................... 258,750
2,000+ Amgen Inc.......................... 108,875
6,000+ Amway Japan Ltd. ADR............... 99,750
2,000+ Biochem Pharm. Inc................. 100,125
5,000+ Cellpro Inc........................ 61,250
10,000+ Centocor Inc....................... 358,125
4,000+ Chiron Corp........................ 74,250
3,500+ Genzyme Corp....................... 76,344
4,500+ Healthcare Compare Corp............ 191,250
5,000+ Idexx Laboratories Inc............. 180,625
12,000+ Isis Pharmaceuticals............... 214,500
15,000+ Liposome Co. Inc................... 287,813
5,000+ Martek Biosciences Corp............ 98,125
3,000+ Merck & Co......................... 237,750
2,000+ Pfizer Inc......................... 165,750
10,000+ Retirement Care Associates Inc..... 82,500
4,000+ Transkaryotic Therapies Inc........ 73,750
5,000+ Vencor Inc......................... 158,125
----------
3,093,282
----------
COMMON STOCKS AND WARRANTS (continued)
Market
Shares Value
------ ------
DIVERSIFIED - 1.81%
598,000+ International UNP Holdings Ltd..... $ 122,171
2,000+ Minnesota Mining & Manufacturing Co. 165,750
----------
287,921
----------
ENERGY - 2.62%
4,000+ Anadarko Petroleum Corporation..... 259,000
5,000+ Gulf Canada Resources.............. 36,875
3,000+ Unocal Corp........................ 121,875
----------
417,750
----------
FINANCIAL 2.38%
8,000+ Allmerica Financial Corp........... 268,000
3,000+ Federal National Mortgage
Association...................... 111,750
----------
379,750
----------
SERVICES - 8.77%
2,000+ APAC Teleservices Inc.............. 76,750
2,000+ Cintas Corp........................ 118,000
49,500+ Executive Telecard Ltd............. 300,094
6,000+ First Data Corp.................... 219,000
5,000+ Ogden Corp......................... 93,750
15,000+ Premis Corporation................. 81,563
28,000+ Qualmark Corporation............... 80,500
4,000+ Renaissance Solutions Inc.......... 181,500
15,750+ Strategic Distribution Inc......... 126,000
37,000+ U-Ship Inc......................... 120,250
----------
1,397,407
----------
TECHNOLOGY - 31.41%
7,500+ Adobe Systems Inc.................. 280,781
1,500+ Altera Corp........................ 109,031
5,000+ Ascend Communications Inc.......... 310,625
20,000+ Astea International Inc............ 115,625
5,191+ Avant Corporation.................. 164,165
15,000+ Celeritek Inc...................... 161,250
1,000+ Cisco Systems Inc.................. 63,688
2,000+ Digital Equipment Corp............. 72,750
1,000+ Electronics for Imaging Inc........ 81,875
3,000+ ESS Technology .................... 84,375
20,000+ Excite Inc......................... 207,500
100,000+ Executone Info. Systems............ 240,625
3,000+ Fusion Systems Corp................ 64,500
7,000+ Harbinger Corp..................... 182,000
2,000+ Intel Corp......................... 261,875
25,000+ Kasten Chase Applied Research...... 72,958
7,000+ Metatools, Inc..................... 81,813
4,000+ MFS Communications Inc............. 217,500
2,510+ Millicom Int'l. Cellular S.A....... 80,477
1,000+ Motorola Inc....................... 61,375
2,000+ Netscape Communications Corp....... 113,750
5,000+ Octel Communications Corp.......... 86,875
30,000+ On Technology Corporation ......... 163,125
3,000+ Oracle Systems Corporation......... 125,063
5,000+ Paging Network Inc................. 76,563
4,000+ Parametric Technologies............ 205,750
See notes to financial statements
<PAGE>
THE WALL STREET FUND, INC.
SCHEDULE OF INVESTMENTS
December 31, 1996
COMMON STOCKS AND WARRANTS (continued)
Market
Shares Value
------ -----
3,000+ Raptor Systems Inc................ $ 60,188
6,502+ Rational Software Corp............ 257,235
2,500+ Rogue Wave Software Inc........... 40,000
2,000+ Sawtek Inc........................ 78,625
4,000+ Seagate Technology ............... 158,000
11,000+ Select Software Tools Ltd.
Sponsored Adr.................. 195,938
3,000+ Synopsys Inc...................... 138,000
7,000+ Vitesse Semi-Conductor Corp....... 318,938
2,000+ Xilinx Inc........................ 73,625
----------
5,006,463
----------
TRANSPORTATION 0.50%
2,000+ Wisconsin Central Transportation.. 79,250
----------
UTILITIES 0.57%
2,000+ GTE Corp.......................... 91,000
----------
WARRANTS - 0.00%
875+ American Satellite Network Inc.
Warrants....................... 0
580+ Stevens International Inc. Cl A
Warrants....................... 0
----------
0
----------
TOTAL COMMON STOCKS AND WARRANTS
(Cost $11,993,036)................ 14,441,537
----------
BONDS - 8.78%
Principal Market
Value Value
--------- ------
CONVERTIBLE BONDS - 8.78%
$200,000+ Air & Water Technologies 8.00%
05/15/2015..................... $ 176,000
200,000+ Alza Corp. 5.00%
05/01/2006..................... 196,000
220,000+^ Bonneville Pacific Corp. 7.75%
08/15/2009..................... 286,000
500,000+ Executone Information Systems 7.50%
03/15/2011..................... 443,750
300,000+ VLSI Technology Inc. 8.25%
10/01/2005..................... 298,500
----------
TOTAL BONDS
(Cost $841,353)................... 1,400,250
----------
TOTAL INVESTMENTS
(Cost $12,834,389) 99.39%.... 15,841,787
OTHER ASSETS LESS
LIABILITIES 0.61%.... 97,526
----------
TOTAL NET ASSETS 100.00%....$ 15,939,313
====== ==========
(1) Federal Tax Information: At December 31, 1996 the net unrealized
appreciation based on cost for Federal Income tax purposes of $12,887,404
was as follows:
Aggregate gross unrealized for all investments in
which there was an excess of value over cost....$ 3,894,385
Aggregate gross unrealized depreciation for all
investments in which there was an excess of
cost over value................................. (940,002)
---------
Net unrealized appreciation ....................$ 2,954,383
=========
<FN>
+ Non-income producing security.
^ Priced at fair value as determined by the Board of Directors.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE WALL STREET FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $12,834,389) (Note 1)............. $ 15,841,787
Cash ....................................... 58,243
Receivables:
Investment securities sold.......... $67,598
Fund shares sold.................... 68,033
Interest and dividends.............. 29,544
-------
165,175
Other assets................................ 1,535
Total Assets....................... 16,066,740
LIABILITIES:
Payables:
Investment securities purchased.... 111,405
Investment adviser fee............. 10,000
Other payables and accrued
expenses.................. 6,022
-------
Total Liabilities......... 127,427
----------
Net Assets....... $ 15,939,313
==========
Net Assets Consist of:
Capital stock at par value......... $ 2,003,045
Additional paid in capital......... 10,976,343
Unrealized appreciation on
investments............... 3,007,398
Accumulated net realized loss
on investments............ (47,473)
---------
Net Assets....... $ 15,939,313
==========
Net asset value and
redemption price per share
($15,939,313/2,003,045 shares
of capital stock outstanding)
(Note 4).......................... $7.96
=========
Maximum offering price per share
(100/96 of $7.96)................. $8.29
=========
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE WALL STREET FUND, INC.
STATEMENT OF OPERATIONS
December 31, 1996
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends.................... $ 52,028
Interest..................... 125,624
-------
Total income.......................... 177,652
Expenses:
Investment adviser fees
(Note 3)................... $116,345
Transfer agent fees and
dividend paying expenses.. 26,099
Custodian fees............... 17,126
Accounting services.......... 49,000
Reports to shareholders...... 11,645
Professional fees............ 27,759
Directors fees and expenses.. 18,673
Registration fees............ 7,119
Miscellaneous................ 11,853
-------
Total Expenses................... 285,619
Less:
Reimbursed expenses
(Note 3).................. (2,547)
-------
Net expenses.............. 283,072
-------
Net investment loss ...... (105,420)
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
(Note 1)
Net realized gains from
investment transactions..... 2,067,893
Net decrease in unrealized appreciation
of investments.............. (333,671)
---------
Net realized and unrealized gains
on investments.............. 1,734,222
---------
Net increase in net assets
resulting from operations... $1,628,802
=========
</TABLE>
<TABLE>
<CAPTION>
THE WALL STREET FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the For the
year ended year ended
December 31, December 31,
1996 1995
----------- -----------
<S> <C> <C>
Net investment loss $ (105,420) $ (48,766)
Net realized gains from
investment transactions 2,067,893 2,612,789
Net increase (decrease) in unrealized
appreciation of investments (333,671) 1,347,456
--------- ---------
Net increase in net assets
resulting from operations 1,628,802 3,911,479
Distributions to shareholders
from:
Net realized gains from
investment transactions
($1.15 and $1.80 per share,
respectively) (2,009,946) (2,567,131)
Net capital share transactions
(Note 4) 1,937,669 1,958,367
--------- ---------
Total increase in net assets 1,556,525 3,302,715
NET ASSETS:
Beginning of year 14,382,788 11,080,073
---------- ----------
End of year $15,939,313 $14,382,788
========== ==========
</TABLE>
<PAGE>
THE WALL STREET FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(1) Summary of significant accounting policies:
The Fund is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The following
is a summary of significant accounting policies consistently followed by the
Fund in the preparation of its financial statements. These policies are in
conformity with generally accepted accounting principles for investment
companies. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
(A) Securities Valuations - The value of investments is based on the published
last sale prices on national securities exchanges, or, in the absence of
recorded sales, at the mean between the closing bid and asked prices on such
exchanges or over-the-counter. At December 31, 1996, the Fund held a security
for which a market quotation was not readily available and which was valued in
good faith by the Board of Directors. This security had a value of $286,000
representing 1.79% of the Fund's net assets.
(B) Federal Income Taxes - No provision for federal income taxes has been made
in the accompanying financial statements, since the Fund intends to continue to
comply with the provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute to its shareholders substantially all of
its net investment income and net realized gains on investments.
(C) Other - Security transactions are accounted for on the date securities are
purchased or sold. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. The net realized gains and losses are
determined on the identified cost basis. The Fund may periodically make
reclassifications among certain of its capital accounts as a result of the
timing and characterization of certain income and capital gains distributions
determined annually in accordance with federal tax regulations which may differ
from generally accepted accounting principles. During the year ended December
31, 1996, the Fund increased additional paid-in-capital by $39,676, decreased
accumulated net realized loss by $105,420 and decreased accumulated net realized
gain on investments by $145,096.
(2) Purchases and sales of securities:
Purchases and sales of investment securities, during the year ended
December 31, 1996 aggregated $21,321,470 and $21,322,565, respectively.
(3) Investment advisory fees and other:
The advisory agreement provides for advisory fees of 1/16 of 1% monthly
(equivalent to 3/4 of 1% per annum) of the first $125,000,000 of average net
assets of the Fund. The present advisory agreement also provides for the adviser
to reimburse the Fund for any expenses (including the advisory fee but excluding
taxes, interest and brokerage fees and extraordinary expenses incurred in
connection with any matter not in the ordinary course of business of the Fund)
over 2% of the first $10,00,000, 1 1/2% of the next $20,000,000 and 1% of any
balance of the average daily net asset value.
For the year ended December 31, 1996, Wall Street Management Corporation
(WSMC) earned investment advisory fees of $116,345 and reimbursed the Fund
$2,547 for expenses.
The adviser also serves as the Fund's principal underwriter. For the year
ended December 31, 1996, WSMC received $4,957 as its portion of the sales charge
on sales of shares of the Fund. Certain of the officers and directors of the
Fund are officers and directors of WSMC.
The Fund has arranged for American Data Services, Inc., of which the Fund's
Secretary and Treasurer is a principal, to prepare the accounting records and
perform administrative and transfer agent services for the Fund. Costs incurred
totalled $75,099 for the year ended December 31, 1996.
Morse, Williams & Co., Inc. (MWC), 100% owner of WSMC, performs
administrative services for the Fund. This includes costs of shared office
expenses, rent, telephone charges and supply expenses. For the year ended
December 31, 1996, no remuneration was paid by the Fund to MWC.
(4) Capital stock:
At December 31, 1996 there were 5,000,000 shares of $1 par value capital
stock authorized. Transactions in capital stock during the year ended December
31, 1996 and the year ended December 31, 1995 were as follows:
<TABLE>
<S> <C> <C> <C> <C>
1996 1995
---- ----
Shares Amount Shares Amount
------ ------ ------ ------
Shares sold.................. 78,951 698,614 40,412 $ 347,329
Shares issued for
reinvestment of
distribution from
realized gains.......... 243,015 1,905,236 320,091 2,432,692
Shares redeemed.............. (76,029) (666,181) (95,787) (821,654)
------- --------- ------- ---------
Net increase................. 245,937 $1,937,669 264,716 $1,958,367
======= ========= ======= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout each year)
Year Ended December 31,
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
Net asset value, beginning of year........ $ 8.19 $ 7.42 $ 8.03 $ 7.60 $ 7.27
Income from investment operations
Net investment income (loss).............. (0.06) (0.03) (0.02) (0.02) 0.01
Net realized and unrealized
gains (losses) on investments.... 0.98 2.60 (0.38) 1.00 0.54
Total from investment operations.......... 0.92 2.57 (0.40) 0.98 0.55
Less distributions
Dividends from net investment income...... 0.00 0.00 0.00 0.00 (0.01)
Distribution from realized gains
from security transactions....... (1.15) (1.80) (0.21) (0.55) (0.21)
Total distributions....................... (1.15) (1.80) (0.21) (0.55) (0.22)
Net asset value, end of year ............. $ 7.96 $ 8.19 $ 7.42 $ 8.03 $ 7.60
Total return**............................ 11.45% 36.50% (4.86%) 13.17% 7.61%
Ratios/supplemental data
Net assets, end of year (in 000's)........ 15,939 14,383 11,080 11,561 11,202
Ratio of expenses to average net assets... 1.84% 2.02% 2.12% 2.04% 2.15%
Ratio of expenses to average net assets,
net of reimbursement................. 1.82% 1.90% 1.96% 1.96% 1.97%
Ratio of net investment income (loss)
to average net assets............... (0.70%) (0.50%) (0.47%) (0.31%) (0.08%)
Ratio of net investment income (loss)
to average net assets,
net of reimbursement................. (0.68%) (0.38%) (0.31%) (0.23%) 0.09%
Portfolio turnover rate................... 142.11% 143.27% 89.01% 107.22% 112.47%
Average commission rate paid+............. .0666 - - - -
<FN>
**Excluding sales charge.
+ For fiscal years beginning on or after September 1, 1996, a fund is required
to disclose its average commission rate per share for trades on which a
commission is charged.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To The Shareholders and Board of Directors of
The Wall Street Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of The
Wall Street Fund, Inc., including the schedule of investments, as of December
31, 1996, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Wall Street Fund, Inc. as of December 31, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
New York, New York
February 24, 1997
<PAGE>
PRINCIPAL INVESTMENT CHANGES
For the year ended December 31, 1996
NEW POSITIONS
Alpha-Beta Technology, Adtran Inc., Allmerica Financial Corp., Apac
Teleservices, Anadarko Petroleum Corporation, Ascend Communications, Astea
International Inc., Avant Corporation, Celeritek Inc., Cellpro Inc., Cisco
Systems Inc., Delia*s, Inc., Electronics For Imaging Inc., ESS Technology,
Federal Nat. Mtg. Assn., Fusion Systems Corp., Gulf Canada Resources, Gap Inc.,
Idexx Laboratories Inc., IMC Global Inc., Kasten Chase Applied Research, MFS
Communications Inc., Metromedia International Group, Minnesota Mining &
Manufacturing, Metatools, Inc., Nematron Corp., Netscape Communications, Ogden
Corp., On Technology Corp., Paging Network Inc., Pixar, Premis Corporation,
Qualmark Corporation, Raptor Systems Inc., Retirement Care Associates Inc.,
Rogue Wave Software, Sawtek Inc., Seagate Technology, Stevens International Cl A
Warrants, Saks Holdings Inc., Select Software Tools Ltd. Spon. ADR, Sport-Haley
Inc., Transkaryotic Therapies Inc., North Face Inc., U-Ship Inc., Wisconsin
Central Trans, Excite Inc., Zoltek Companies Inc., Zomax Optical Media.
CONVERTIBLE BONDS: Alza Corp. 5.00%, 05/01/2006.
ELIMINATIONS
Apple Computer Inc., Abbott Labs, Analog Devices Inc., Adaptec Inc., ADT
Limited, Adtran Inc., Acclaim Entertainment Inc., Aura Systems Inc, Boeing Co.,
BAB Holdings, Inc., Basic Petroleum Intl. Ltd., Brio Industries Inc., Boston
Scientific Corp., Bio Technology General Corp., CAI Wireless Systems Inc., CCH
Inc. Cl B, Cephalon Inc., Cerner Corp., Columbia Healthcare Corp., Dresser
Industries, Datalogix International, Data Works, Fluor Corp., Groupo Mexicano
Desarollo ADR, Heart Technology Inc., Immulogic Pharm. Corp., Inference Corp.
"A", Intersolv Inc., Liposome Convertible Preferred Stock, McDonalds Corp.,
Micro Component Technology, Medimmune Inc., Mariner Health Co., Microsoft Corp.,
Mobile Telecom Tech. Corp., Mattson Technology, Inc., Measurex Corp., New Plan
Realty Trust, Netstar Inc., Novadigm Inc., Northwest Pipe Co., Office Depot
Inc., Orphan Med. Inc., Picturetel Corp., Parker & Parsley Petroleum Co., PDT
Inc., Pete Geo Service ADR, Paget Mining Ltd., Pall Corp., Platinum Software,
Read-Rite Corp., Radius Inc., Ribi Immunechem Res. Inc., Repap Enterprises Inc.
Common, Singer Co., Sheldahl Inc., Shuffle Master Inc., Shiva Corp., Solectron
Corp., Sun Micro Systems, Tipperary Corp., United Meridian, Uunet Technologies
Inc., Ventritex Inc., Video Sentry Corp., Wal-Mart Stores Inc., Youth Services
Intl. Inc. Convertible Bonds: Browning Ferris Industries 6.25%, 08/15/2012,
Centocor 7.25%, 02/01/2001, IMC Global 6.25%, 12/01/2001, Seagate 6.75%,
05/01/2012.
This report is not to be construed as an offering for the sale of
The Wall Street Fund, Inc., or as a solicitation of an offer to buy any such
shares, unless accompanied by an effective prospectus setting forth details of
the Fund including the sales charge and other material information.
AVERAGE ANNUAL TOTAL RETURN++
[GRAPH SHOWN HERE]
AVERAGE ANNUAL TOTAL RETURN
After Sales Charge at the Beginning of each period
Including Reinvestment of Dividends.
1 YEAR: 6.99% 5 YEAR: 11.09% 10 YEAR: 11.23%
The maximum initial sales charge payable on an investment in the Fund was 5.50%
at December 31, 1986. At public offering price of $10,000, the net investment
in the Fund would be $9,450, assuming no waiver or reduction of sales charges.
Currently, the maximum sales charge is 4.0%. The performance information shown
represents past performance and should not be interpreted as indicative of the
Fund's future performance. Return and share price will fluctuate so that
shares, when redeemed, may be worth more or less than their original cost.
++ Not covered by report of independent accountants.
MANAGEMENTS DISCUSSION OF
FUND PERFORMANCE
The Fund's broad diversification policy combined with Fund Management's
stock selection were significant factors contributing to Fund performance in
1996. Management's strategy of investing in companies selected from a variety of
broad industry groups and investing in a large number of different companies
with strong fundamental growth characteristics provides protection from long
term fundamental portfolio risk. Fund Management's analytical emphasis on a
company's future sustainable earnings growth and the quality of corporate
management are also important to Fund performance.
Throughout most of 1996 interest rates were higher than the previous years
lower levels which affected the prices of the Fund's equity investments and
convertible bond investments. Market prices for your Fund's investments
generally increased due to strong corporate earnings. The very high inflow of
new funds into the US market increased the prices of large capitalization
businesses as investors bought these names and ignored many excellent smaller
and medium capitalization issues. Your fund includes small, medium as well as
large capitalization issues but is weighted in the faster growing smaller
companies.
<PAGE>
Dear Fellow Shareholders:
As the performance numbers indicate, 1996 was a positive year for your
Fund. We enjoyed a total return of +11.5% for the year as reported by
CDA/Weisenberger Mutual Fund reports. Since December 31, 1990, we have had an
average annual total return of better than 17% through December 31, 1996.
The year 1996 was good for U.S. investors in large stocks as indicated by
the S&P 500 total return of +22.8%. The smaller capitalization index, the
Russell 2000, was +14.8% and intermediate Lehman Government/Corporate bond index
was +2.8%.
The extraordinary strength in large capitalization equities in 1996 and
especially 4Q96, is likely to be matched or exceeded in 1997 by medium to
smaller capitalization securities as well as convertibles. The 1996 returns on
convertibles and the Russell 2000 was a little more than half as much as the
larger capitalization weighted S&P 500. It was difficult for an equity portfolio
blended with medium size companies and convertible securities to equal or exceed
the S&P 500 capitalization weighted index last year due to the vast quantity
of new investment dollars flowing to the larger company names.
As we progress into the new year we expect to see investment funds flow to
the areas of greater value, higher earnings per share growth investments. This
should prove beneficial to the Fund's portfolio along with lower interest rates.
The jury is still out on the economy; a number of people believe the
Federal Reserve will have to raise interest rates while others think the next
move will be down. We see the economy continuing real growth at a modest,
non-inflationary rate in the 2 1/2% range for the foreseeable future. We frankly
expect interest rates to resume their secular decline in 1997 once the markets
come to accept the paradigm that non-inflationary full employment is closer to a
4% than a 5 1/2% unemployment rate.
A modest slowing in the growth rate of earnings for the S&P 500 in 1997 and
beyond may be in the cards due to the cyclical nature of many of the companies
in the index. In this environment, the high sustainable growth names which we
favor for the Fund should perform well, especially the well managed smaller
capitalization stocks with innovative technologies and large market potentials.
We note with particular interest the expansion of market price earnings
multiples in progress. While this has been driven in part by the supply and
demand considerations of large inflows of money in the past several years (and
is therefore suspect as to its sustainability), we expect that gradually
declining interest rates will provide further (and perhaps more sustainable)
momentum to this expansion. In January 1995 and January 1996, the market P/E was
about 15X those years' estimated earnings; in January 1997 the P/E is 18 on this
year's earnings. For the owners of companies with superior growth prospects, as
the earnings come through, the stock prices should rise. Price earnings multiple
expansion merely adds more fuel to this very powerful engine.
We constantly ask ourselves whether the market has the ability to continue
to go upward. History tells us that we shouldn't expect another booming market
and to expect a price correction when money flows lessen, which may happen in
time. The magnitude of funds available for investment remains the largest
unknown, but it appears that the members of the massive "baby boom" generation
will continue to aggressively invest toward their retirement goals over the next
5 to 8 years and this savings pool should provide sufficient liquidity to limit
market corrections. For the foreseeable future, we continue to believe that good
quality growth equity investments will deliver the best long term returns. It is
our intention to remain fairly fully invested and to take advantage of any
correction to add to already solid positions.
If there is a cause for concern it comes from outside the U.S. where
economics are not solid, Europe and Japan especially come to mind. Given the
relative strength of the US, the dollar and dollar based investments are likely
to continue to shine, especially smaller capitalization growth companies in the
U.S.
Should you have any questions, please don't hesitate to call me directly or
send e-mail to [email protected].
Sincerely,
/s/ Robert P. Morse
Robert P. Morse
President
January 31, 1997
<PAGE>
DIRECTORS
John F. Carr, Emeritus
Clifton H.W. Maloney
Robert P. Morse, Chairman
Sharon A. Queeney
Harlan K. Ullman
OFFICERS
Robert P. Morse, President
Michael R. Linburn, Vice President
Allen C. Post, Vice President
Michael Miola, Secretary, Treasurer
INVESTMENT ADVISER
WALL STREET MANAGEMENT CORPORATION
230 Park Avenue
New York, New York 10169
CUSTODIAN
THE BANK OF NEW YORK
90 Washington Street, 11th Floor
New York, New York 10286
TRANSFER AGENT
AMERICAN DATA SERVICES
24 West Carver Street
Huntington, New York 11743
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
1301 Avenue of the Americas
New York, New York 10019
THE WALL STREET FUND INC.
ANNUAL REPORT
December 31, 1996
<PAGE>
PART C. OTHER INFORMATION
Item 24: Financial Statements and Exhibits
(a) Financial Statements:
Included in Part B of the Registration Statement:
Report of Independent Accountants dated February 24, 1997
Statement of Assets and Liabilities at December 31, 1996
Statement of Operations of the Year Ended December 31, 1996
Statement of changes in Net Assets for the years ended
December 31, 1996 and 1995
Investments, December 31, 1996
Notes to Financial Statements.
(b) Exhibits:
(1) The Articles of Incorporation of Registrant and all
amendments thereto to date, filed as Exhibits to
Post-Effective Amendment No. 37 to Registrant's
Registration Statement filed with Commission
April 23, 1980.
(1)(a) Articles of Amendment and Restatement of Articles
of Incorporation of Registrant, as filed with the
State Department of Assessments and Taxation of
Maryland on March 29, 1966, which was filed as Ex-
hibit (1)(f) to Post-Effective Amendment No. 37.
(1)(b) Articles of Amendment of Articles of Incorporation
of Registrant, as filed on May 23, 1969, which was
filed as Exhibit (1)(g) to Post-Effective Amendment
No. 37.
(1)(c) Articles of Amendment of Articles of Incorporation
of Registration, as filed on October 1, 1969, which
was filed as Exhibit (1)(h) to Post-Effective
Amendment No. 37.
(1)(d) Articles of Amendment of Articles of Incorporation
of Registrant, as filed on April 19, 1971, which
was filed as Exhibit (10(i) to Post-Effective
Amendment No. 37.
(1)(e) Articles of Amendment of Articles of Incorporation
of Registrant, as filed on May 26, 1978, which was
filed as Exhibit (1)(j) to Post-Effective Amendment
No. 37.
C-1
<PAGE>
(2) By-Laws of Registrant and all amendments thereto date,
as amended February 22, 1996.
(3) Not Applicable.
(4) Specimen Certificate of Capital Stock of Registrant
filed as Exhibit to Post-Effective Amendment No. 45
to Registrant's Registration Statement filed
March 1, 1988.
(5) Investment Advisory Contract voted upon and
ratified by the shareholders April 26, 1990 between
Registrant and Wall Street Management Corporation,
filed as Exhibit 5 to Post-Effective Amendment 47
to Registrant's Registration Statement filed
March 3, 1992.
(6) Underwriting Agreement and Form of Dealer Agree-
ment, effective April 23, 1987, filed as Exhibit
to a Post-Effective Amendment filed on approximately
May 1, 1987.
(7) Not Applicable.
(8) The below listed Custodian Agreement and letter
setting forth schedule of remuneration, filed as
Exhibits numbered and lettered same as below
to Post-Effective Amendment No. 37 to Registrant's
Registration Statement, filed with the Commission
May 1, 1980.
(8)(a) Custodian Agreement dated April 22, 1966, be-
tween Registrant and The Bank of New York.
(8)(b) Letter dated September 14, 1978, from The Bank of
New York to Registrant setting forth fee schedule
for the period after January 1, 1979.
(8)(c) Fee schedule from the Bank of New York setting
forth fees for global custody filed as Exhibit to Post-
Effective Amendment No. 48 to Registrant's Registration
Statement filed April 25, 1994.
(9)(a) Administration Agreement with American Data Services,
Inc. dated June 21, 1993 filed as Exhibit to Post-
Effective Amendment No. 48 to Registrant's Registration
Statement filed April 25, 1994.
(9)(b) Fund Accounting Service Agreement with American Data
Services, Inc. dated June 21, 1993 filed as Exhibit to
Post-Effective Amendment No. 48 to Registrant's
Registration Statement filed April 25, 1994.
C-2
<PAGE>
(9)(c) Shareholder Servicing Agent Agreement with American Data
Services, Inc. dated June 21, 1993 filed as Exhibit to
Post-Effective Amendment No. 48 to Registrant's
Registration Statement filed April 25, 1994.
(10) Opinion and consent of counsel filed with Rule 24f-2
notice on February 27, 1997.
(11) Consent of Independent Certified Public Accountants
dated April 17, 1997.
(12) Not Applicable.
(13) Not Applicable.
(14) The below listed Individual Retirement Account Ap-
plication, disclosure statement, custodial account
form, and simplified employee pension-individual
retirement accounts contribution agreement, filed
as Exhibits numbered and lettered same as below in
Post-Effective Amendment No. 39 to Registrant's
Registration Statement, filed with the Commission
November 3, 1982.
(15) Not Applicable.
(16) Schedule of computation of average annual total return
for the 1, 5 and 10 year periods ended December 31, 1996.
(17) Financial Data Schedule.
(18) Not Applicable.
Item 25: Persons Controlled by or Under Common Control with Registrant
Not Applicable.
Item 26: Number of Holders of Securities.
As of April 2, 1997:
(1) (2)
Title of Number of Record
Class Holders
Capital Stock 1,497
(Par Value $1/share)
C-3
<PAGE>
Item 27: Indemnification
Item 4 of Part II of Post-Effective Amendment No. 37 to Registrant's
Registration Statement, filed with the Commission on May 28,
1981, is hereby incorporated by reference.
Item 28: Business and other Connections of Investment Adviser.
See captions "Information About WSMC" in the Prospectus and
"Management of the Fund" in the Statement of Additional Information.
Item 29: Principal Underwriters
(a) None
<TABLE>
<S> <C> <C>
(b) Name & Principal Positions & Offices Positions & Offices
Business Address with Underwriter with Registrant
Robert P. Morse President; Director President; Director
230 Park Avenue
New York, New York 10169
Michael R. Linburn Vice President
230 Park Avenue
New York, New York 10169
Allen C. Post Vice President
230 Park Avenue
New York, New York 10169
Michael Miola Secretary/Treasurer
24 West Carver Street
Huntington, New York 11743
</TABLE>
(c) Not applicable.
Item 30: Location of Accounts and Records
With the exception of the items required by Rule 31a-1(b)(2)(i)(a)-(c),
which are maintained by The Bank of New York, 90 Washington
Street, New York, New York 10015, all other current records
presently required to be maintained by the Registrant are located
in its offices at 230 Park Avenue, New York, New York 10169 and
at American Data Services, Inc., 24 West Carver Street, Huntington,
New York 11743. Non-current records are located at 96 Cove Road,
Oyster Bay, New York 11771.
Item 31: Management services.
Not applicable.
C-4
<PAGE>
Item 32: Undertakings.
(a) Not applicable.
(b) Not applicable.
(c) The Registrant hereby undertakes to furnish each person to whom
a prospectus is delivered with a copy of the latest annual report
to shareholders, upon request and without charge.
C-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1993 and the
Investment Company Act of 1940, the Registrant certifies that it meets all 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, thereto
duly authorized, in the City of New York, and State of New York, on the 17th day
of April, 1997.
THE WALL STREET FUND, INC.
Registrant
BY: ______________________________
Robert P. Morse
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 date indicated.
____________________________________________ _______________
Robert P. Morse, President & Director
____________________________________________ _______________
Michael Miola, Secretary/Treasurer
____________________________________________ _______________
Clifton H.W. Maloney, Director
____________________________________________ _______________
Sharon A. Queeney, Director
____________________________________________ _______________
Harlan K. Ullman, Director
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT PAGE NO.
( 2) By-Laws as amended February 22, 1996.
(11) Consent of Coopers & Lybrand L.L.P.
(16) Schedule of computation of average annual
total return for the 1, 5 and 10 year
periods ended December 31, 1996.
(27) Financial Data Schedule.
As last amended
February 22, 1996
THE WALL STREET FUND, INC.
BY-LAWS
ARTICLE I
OFFICE
Section 1. The principal office of the corporation in the State of
Maryland shall be located at No. 10 Light Street, in the City of Baltimore,
State of Maryland. The resident agent in charge of such principal office is The
Corporation Trust Incorporated.
Section 2. The corporation may also have offices outside the State of
Maryland and within or without the United States of America, at such places as
shall be determined from time to time by resolution of the Board of Directors.
Its principal office for the transaction of business outside the State of
Maryland shall be located at 641 Lexington Avenue, New York.
ARTICLE II
SEAL
Section 1. The corporate seal shall be circular in form and shall have
inscribed thereon the name of the corporation, the year of its organization, and
the words "Corporate Seal, Maryland".
ARTICLE III
MEETING OF STOCKHOLDERS
Section 1. Annual Meeting. The corporation shall hold an annual meeting
of stockholders when required to do so by the Maryland General Corporation Law.
Any business of the Corporation may be transacted at an annual meeting without
being specially designated in the notice, except such business as is
specifically required by statute or by the Articles of Incorporation to be
stated in the notice. (As amended February 22, 1996.)
- 1 -
<PAGE>
Section 2. Special Meetings. Special meetings of the stockholders for
any purpose or purposes, unless otherwise prescribed by statute, may be held on
the call of the Board of Directors of the President or the Secretary, and as may
be stated in the call. such special meetings shall be called by the President of
the Secretary at the request in writing of a majority of the directors or of
stockholders owning at least twenty-five percent (25%) of the outstanding
capital stock of the corporation entitled to vote at such meeting. Any such
request shall state the purpose of purposes of the proposed meeting. Business
transacted at all such meetings shall be confined to the objects stated in the
call and matters germane thereto.
Section 3. Notice of Meetings. The notice of each meeting of the
stockholders shall be in writing and signed by the President or the Secretary.
Such notice shall state the purpose or purposes for which the meeting is called
and the time when and the place where it is to be held, and a copy thereof shall
be delivered personally or mailed at least ten (10) days previous thereto to
each stockholder of record. If mailed, such notice shall be directed to a
stockholder at his address as it appears on the stockbook unless he shall have
filed with the Secretary of the cooperation a written request that notices
intended for him be mailed to the address, in which case it shall be mailed to
the address designated in such request.
Section 4. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall be requisite for and shall constitute a quorum at all meetings of
the stockholders for the transaction of business, except as otherwise provided
by law or by the Certificate of Incorporation or by these By-Laws. If, however;
such majority shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or by
proxy, shall have power to adjourn the meeting from time to time without notice
other than announcement at the meeting, until the requisite amount of voting
stock shall be present or represented, any business may be transacted which
might have been transacted at the original meeting.
Section 5. Number of Votes. At all stockholders' meetings each
stockholder entitled to vote thereat shall be entitled to one vote for every
full share of voting stock standing in his name on the books of the corporation
on the date for the determination of stockholders entitled to vote at such
meeting, if such a determination shall have been made, or on the date of the
meeting if no determination shall have been made.
Section 6. Required Number of Votes. The vote for directors, and on the
demand of any stockholder the vote upon any question before the meeting, shall
be by ballot. An affirmative vote of the holders of two-thirds of the
outstanding stock shall be required to authorize any amendments of the
Certificate of Incorporation. All elections shall be had and all questions other
than amendment of the Certificate of Incorporation shall be decided by a
plurality of the votes cast at a duly called meeting at which a quorum is
present in person or by proxy. (As amended March 28, 1966.)
- 2 -
<PAGE>
ARTICLE IV
DIRECTORS
Section 1. Board of Directors. The property, business and affairs of
the cooperation shall be managed by a Board of Directors consisting of not fewer
than five (5) nor more than fifteen (15) directors who need not be stockholders
nor residents of the State of Maryland. the actual number of directors who shall
constitute the Board at any time shall be determined from time-to-time as
provided in Section 2 below. (As amended March 30, 1972.)
Section 2. Classification, Term of Office, Election. The directors
shall be classified with respect to the year of expiration of their respective
terms of office into five (5) classes, each class consisting of not fewer than
on (1) nor more than three (3) directors. Directors of each class shall hold
office for a term of five (5) years, with the term of one class expiring each
year. Upon the adoption of this provision, the classes and the initial
expiration years of their respective terms shall be a follows and shall carry
forward at 5 year intervals thereafter;
Expiration Year
Class I 1977
Class II 1973
Class III 1974
Class IV 1975
Class V 1976
At each meeting of stockholders at which any class of directors is to be
elected, the stockholders may determine by resolution the actual number of
directors of that class to be elected, subject to the limits above provided. If
no such resolution is passed, the number of directors to be elected shall be the
same as the number then serving within that class. Every director shall hold
office until the expiration of his term of office or until his successor shall
be elected and shall qualify, unless he resigns, dies or is removed earlier in
accordion with the provisions of these By-Laws. (As amended March 30, 1972.)
Section 3. Annual Organization Meeting. In each year, immediately after
the adjournment of the annual meeting of stockholders, the newly elected Board
of Directors shall meet at such place as may be designated by the Board, or, in
the absence of any such designation, at the place where the stockholders'
meeting was held for the purpose of organization, election of officers and the
transaction of such other business any may properly come before the meeting.
Notice thereof shall be given to each director in writing or by telegraph and
shall state the time and place of the meeting. (As amended September 25, 1067.)
Section 4. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such places and times as shall from time-to-time be determined
by resolution of the Board of Directors. No notice of any such regular meeting
- 3 -
<PAGE>
need be given to the members of the board, unless the board shall otherwise
determine by resolution duly adopted. any and all business of the corporation
may be transacted at any such regular meeting.
Section 5. Special Meetings. Special meetings of the Board of Directors
may be called by the President or by any two directors, unless otherwise
determined by the Board, may be held at the time and place designated in the
notice of meeting. Notice thereof shall be given to each director in writing or
by telegraph and shall state the time and place of the meeting. (As amended
September 25, 1967.)
Section 6. Notice of Board Meetings. Unless otherwise determined by the
Board of Directors, notice of meetings of the Board need not include a statement
of the business to be transacted at or the purpose of the meeting, and any and
all business of the corporation is given when deposited in the United States
mail not later than three days defore the date of such meeting, with postage
thereon prepaid, suitable addressed. If telegraphed, notice is given when
delivered not later than two days before the date of such meeting to the
telegraph company for transmission, suitably addressed to the director's last
known place of business, dwelling house or usual place of abode, and, in the
case of mailing, shall be suitable addressed if addressed to the director's last
known post office address. If delivered, notice is given when delivered to the
director personally or when delivered to a person of suitable age and discretion
at his place of business, dwelling house or unusual place of abode. (As amended
September 25, 1967.)
Section 7. Quorum and Vote. At all meetings of the Board of Directors,
a majority of the number of directors serving at the time of such meeting shall
be necessary and sufficient to constitute a quorum for the transaction of
business, and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors. A majority
of the directors present at any meeting, even though there shall not be a quorum
present, may adjourn such meeting from time-to-time without notice other than by
announcement at the meeting, until the number requisite to constitute a quorum
or to take any particular action shall be present, and at each adjourned meeting
any business which might properly come before the original meeting may be
considered and acted upon, provided a quorum then be in attendance. (As amended
March 30, 1972.)
Section 8. Vacancies. In case of any vacancy in the Board of Directors,
caused by death, resignation, removal, increase of the number of directors, or
otherwise, the vacancy may be filled by the remaining directors, though less
than a quorum, providing that after such election at least two-thirds of the
directors then holding office shall have been elected to such office by
stockholders at any annual meeting or special meeting called for that purpose. A
director elected to fill any vacancy shall hold office for the remainder of the
term of the class in which the vacancy occurred or until his successor has been
duly elected and shall qualify. (Renumbered September 25, 1967.)
Section 9. Removal. Any director may at any time be removed, either
with or without cause, by resolution duly adopted by the affirmative vote of the
holders of two-thirds of the issued and outstanding shares having voting power,
- 4 -
<PAGE>
given at a special meeting of said stockholders, duly called and held for that
purpose; and the vacancy in the board thereby created may be filled in the same
manner by the stockholders at said meeting; provided, however, that in case the
stockholders do not fill such vacancy at such meeting, the remaining directors,
though less than a quorum, may fill such vacancy in accordance with Section 7
hereof. (Renumbered September 25, 1967.)
Section 10. Resignation. Any director of the corporation may resign at
any time by giving written notice to the President or Secretary of the
corporation. Such resignation shall take effect on the date of the receipt of
such notice or at any later date specified therein, and unless otherwise
specified therein, the acceptance of said resignation shall not be necessary to
make it effective. (Renumbered September 25, 1967.)
Section 11. Compensation. Directors as such shall not receive any
salary for their services, but by resolution of the Board of Directors a fixed
sum and expenses of attendance, if any, may be allowed for attendance at any
meeting. Nothing therein contained shall be construed to preclude any director
from serving the corporation in any other capacity and receiving compensation
therefor. (Renumbered September 25, 1967.)
Section 12. Place of Meetings. Except as otherwise provided by law,
directors may hold their Annual Organization Meeting and regular and special
meetings at any place within or without the State of Maryland, as from time-to
time may be determined in accordance with the provisions of theses By-Laws. (As
renumbered and amended September 25, 1967.)
Section 13. The Chairman of the Board of Directors. The Board of
Directors may designate from among its members a Chairman who shall hold office
for such term as shall be determined from time-to time by the Board. The
Chairman shall preside at all meetings of the stockholders and the Board of
Directors at which he is present. Designation as Chairman and functioning in
that capacity shall not constitute the Chairman an officer of the corporation.
(As adopted September 25, 1967.)
Section 14. Conduct of Meetings. At all meetings of the Board of
Directors, the Chairman of the Board if there be one, or, if there be no
Chairman, the President, shall preside, and the Secretary, or in his absence any
person appointed by the presiding officer, shall act as Secretary of the meeting
and shall keep the record of proceedings. (As renumbered and amended September
25, 1967.)
ARTICLE V
OFFICERS
Section 1. Officers and Terms of Office. The officers of the
corporation shall be a President, one of more vice-presidents, a Treasurer, one
or more Assistant Treasurers, a Secretary and one or more Assistant Secretaries,
all of whom shall be elected by the Board of Directors and shall hold office for
- 5 -
<PAGE>
one year and until their respective successors are elected and shall qualify in
their stead. Any two offices, but not more than two, may be held by the same
person. (As amended April 10, 1984.)
Section 2. Election of Officers. The Board of Directors, at its first
meeting after each annual meeting of the stockholders, shall elect a President,
one or more vice-presidents, a Treasurer, one or more Assistant Treasurers, a
Secretary and one or more Assistant Secretaries, who need not be members of the
Board of Directors.
(As amended April 10, 1984.)
Section 3. Other Officers. The Board of Directors may appoint such
other officers and agents as it may deem necessary, who shall hold their offices
for such terms and shall excerise such powers and perform such duties as shall
be determined from time-to-time by the Board.
Section 4. Salaries. Except as otherwise provided by these By-Laws,
the salaries of all officers and agents of the corporation chosen by the Board
of Directors shall be fixed by the Board of Directors.
Section 5. Removal. Any officer elected or appointed by the Board of
Directors may be removed at any time, with or without cause, by the affirmative
vote of a majority of the whole Board of Directors.
Section 6. Powers and Duties of Officers.
(a) The President. The President shall be the chief executive officer
of the corporation. In the absence of the Chairman of the Board, or if there be
no Chairman, he shall preside at all meetings of the stockholders and the Board
of Directors, at which he shall be present, and, in general, except as otherwise
by these By-Laws provided, shall perform all duties incident to the office of
President and such other duties as from time-to-time may be assigned to him by
the Board of Directors. (As amended September 25, 1967.)
(b) The Vice-President. The vice-president shall have such powers and
perform such duties as may from time-to-time be assigned to him by the Board of
Directors. At the request of the President, or, in his absence or his
disability, the vice-president shall perform all of the duties of the President.
(c) The Treasurer. The Treasurer shall have the custody of all the
corporate funds and securities, except those which the Board of Directors shall
place in the custody of a bank or trust company under a written agreement
designating such bank or trust company as Custodian of property of the
corporation, and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositaries as may be designated by the Board of Directors. He shall
disburse the funds of the corporation as may be ordered by the Board, taking
proper vouchers for such disbursements and shall render to the President and
directors, at the regular meetings of the Board, or Whenever they may require
- 6 -
<PAGE>
it, an account of all his transactions as Treasurer and of the financial
condition of the corporation.
He shall, if required by the Board, give the corporation a bond in a
sum and with one or more sureties satisfactory to the Board, conditioned upon
the faithful performance of his duties and for the restoration to the
corporation in case of his death, resignation, retirement or removal from office
of all books, papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the corporation.
(d) The Secretary. The Secretary shall attend all sessions of the Board
of Directors and all meetings of stockholders and record all votes and the
minutes of all proceedings in a book to be kept for that purpose, and shall
perform like duties for any committee of the Board when required. He shall give
or cause to be given notice of all meetings of the stockholders and of the Board
of Directors, He shall keep in safe custody the seal of the corporation and when
authorized by the Board of Directors or any committee affix the same to any
instrument requiring it and when so affixed it shall be attested by the
signature of the Secretary or such other officer or agent as may be designated
by the Board of Directors. He shall keep or cause to be kept a stock book
containing the names alphabetically arranged of all persons who are stockholders
of the corporation, showing their places of residence, the number of shares of
stock held by them, respectively, the time when they, respectively, became the
owners thereof and the amount paid therefor. He shall perform such other duties
as may be prescribed by the Board of Directors or President.
(c) The Assistant Secretary. The Assistant Secretary shall, at the
request of the Secretary, or in his absence or disability, perform all of the
duties of the Secretary. He shall have such other powers and perform such other
duties as may from time-to-time be assigned to him by the Board of Directors.
(Added by amendment March 4, 1946.)
(f) The Assistant Treasurer. The Assistant Treasurer shall, at the
request of the Treasurer, or in his absence, or disability perform all of the
duties of the Treasurer. He shall have such other powers and perform such other
duties as may from time-to-time be assigned to him by the Board of Directors.
(Added by amendment March 27, 1950.)
Section 7. Vacancies. If the office of President, Vice-President,
Treasurer, or Secretary, or other office or offices becomes vacant for any
reason, the directors, by a majority vote, may choose a successor or successors,
who shall hold office for the unexpired term or terms.
ARTICLE VI
ADVISORY BOARD
The Board of Directors may appoint an Advisory Board consisting of two
to five members. Members of the Advisory Board shall not be directors or
officers of the corporation but may be stockholders. The Board of Directors may
- 7 -
<PAGE>
remove any member and may appoint new or additional members of the Advisory
Board. Any member of the Advisory Board may resign at any time by giving written
notice of his resignation to the Board of Directors. It shall be the function of
the Advisory Board to advise the Board of Directors as to the investment of the
assets of the corporation. The Advisory Board shall have no power or authority
to make any action binding upon the corporation, the officers, the Board of
Directors or the stockholders. The provisions of Article VII relative to
indemnification of Directors and officers of the corporation shall be extended
to and shall apply in all respects to members of the Advisory Board. (As amended
March 4, 1946.)
ARTICLE VII
INDEMNIFICATION
Section 1. Non-Derivation Action. The corporation shall indemnify any
director or officer of the corporation who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suite or
proceeding, whether civil, criminal, administrative or investigative (other than
action by or in the right of the corporation) by reason of the fact that he is
or was such director or officer or an employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonable incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
reasonable believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful. (As amended April 5,
1973.)
Section 2. Derivative Actions. The corporation shall indemnify any
director or officer of the corporation who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was such director or officer or an employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which such action or
suit was brought, or a court of equity in the county in which the corporation
has its principal office, shall determine upon application that, despite the
- 8 -
<PAGE>
adjudication of liability but in view of all circumstances of the case, such
person is fairly and reasonable entitled to indemnity for such expenses which
such court shall deem proper. (As added April 5, 1973.)
Section 3. No Determination as to Standard of Conduct. To the extent
that a director or officer of the corporation has been successful on the merits
or otherwise in defense of any action, suit, or proceeding referred to in
Section 1 and 2 of the Article VII or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonable incurred by him in connection therewith, without the
necessity for the determination as to the standard of conduct as provided in
Section 4 of this Article VII. (As amended April 5, 1973.)
Section 4. Determination as to Standard of Conduct. Any indemnification
under Sections 1 and 2 of this Article VII (unless ordered by a court) shall be
made by the corporation only as authorized in the specific case upon
determination that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Sections 1 or 2 or this Article VII. Such determination shall be made (i) by the
Board of Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (ii) if such a quorum is
not obtainable, or, even if obtainable, such a quorum disinterested directors so
directs, by independent legal counsel (who may be regular counsel for the
corporation) in a written opinion; and any determination so made shall be
conclusive. (As amended April 5, 1973.)
Section 5. Advances on Expenses. Expenses (including attorneys' fees)
incurred in defending a civil or criminal action, suit or proceeding may be paid
by the corporation in advance of the final disposition of such action, suit or
proceeding, as authorized in the particular case after a preliminary
determination following one of the procedures set forth in the second sentence
of Section 4 of this Article VII that there is a reasonable basis for a belief
that such director or officer met the applicable standard of conduct set forth
in Sections 1 or 2 of this Article VII, upon receipt of an undertaking by or on
behalf of the director or officer reasonable assuring that such amount will be
repaid unless it shall ultimately be determined that he is entitled to be
indemnified by the corporation as authorized in this Article VII. (As amended
April 5, 1973.)
Section 6. Non-Exclusivity of Article. Any indemnification pursuant to
this Article VII shall not be deemed exclusive of any other rights to which
those indemnified may be entitled and shall continue as to a person who has
ceased to be a director of officer and shall insure to the benefit of the heirs,
executors and administrators of such a person. (As amended April 5, 1973.)
- 9 -
<PAGE>
ARTICLE VIII
CERTIFICATES OF STOCK
Section 1. Issue and Registration. The certificates of stock of the
corporation shall be numbered and shall be registered as they are issued in the
books of the corporation. They shall exhibit the holder's name and the number of
shares, and shall be signed by either the President or Vice-President and by
either the Treasurer, the Assistant Treasurer, the Secretary or the Assistant
Secretary. In case any such officers who have signed or whose facsimile
signatures have been placed upon such certificate is issued, it may be issued by
the corporation with the same effect as if such officer had not ceased to be
such at the date of its issue. All certificates shall bear the corporate seal or
a facsimile thereof, engraved or printed. (As amended March 27, 1950.)
Section 2. Closing Transfer Books and Fixing Record Date. The Board of
Directors may prescribe a period, not exceeding twenty days prior to meetings of
the stockholders, during which no transfer or stock on the books of the
corporation may be make; or in lieu of prohibiting the transfer of stock may fix
a day and hour, not more than sixty days prior to the day of holding any meeting
of stockholders as the time as of which stockholders entitled to notice of and
to vote at such meeting shall be determined, and all persons who were holders of
record of voting stock at such time, and no others, shall be entitled to notice
of and to vote at such meeting.
The Board of Directors may also fix a day and hour, not exceeding sixty
days preceding the date fixed for the payment of any dividend or the allotment
of rights or the change or conversion or exchange of capital stock, and in such
case only stockholders of record at the time so fixed shall be entitled to
receive such dividend, rights or change, conversion or exchange of capital
stock. The Board of Directors, at its option, may also prescribe a period not
exceeding twenty days prior to the payment of such dividend, allotment or
change, conversion or exchange of capital stock, during which no transfer of
stock on the books of the corporation may be made. (As amended February 17,
1977.)
Section 3. Lost or Destroyed Certificate. If any certificate of stock
of the corporation shall be lost or destroyed or mutilated the holder thereof
shall immediately notify the corporation of the fact and the Board of Directors
may, in its discretion, then cause a new certificate with or without a mark
distinguishing the same as a duplicate, to be issued to said stockholder,
subject to the deposit, as security and indemnity to the corporation for any
loss or claim arising therefrom, of a bond in such amount, form and with such
sureties as the Board of Directors may require.
Section 4. Stock Ledger. The stock ledger of the corporation shall be
maintained at an office of the transfer agent for the stock of the corporation.
(As adopted September 25, 1967.)
- 10 -
<PAGE>
ARTICLE IX
INSPECTION OF BOOKS
Section 1. The directors shall determine from time-to-time whether, and
if allowed, when and under what conditions and regulations the accounts and
books of the corporation (except such as may be statute be specifically open to
inspection) or any of them, shall be open to the inspection of the stockholders,
and the stockholders' rights in this respect are and shall be restricted and
limited accordingly.
ARTICLE X
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, when
earned, shall, in the discretion of the Board of Directors, from time-to-time be
declared by the Board out of funds available after setting aside all proper
reserves.
ARTICLE XI
FISCAL YEAR
Section 1. The fiscal year of the corporation shall end on the 31st day
of December in each year.
ARTICLE XII
WAIVER OF NOTICE
Section 1. Whenever any notice whatever is required to be given under
the laws of the State of Maryland or under the provisions of the Certificate of
Incorporation or of these By-Laws, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to such notice.
ARTICLE XIII
CHECKS AND NOTES
Section 1. All checks and drafts on the bank accounts of the
corporation, also all bills of exchange and promissory notes of the corporation
and all acceptances, obligations and other instruments for the payment of money,
drawn, signed or accepted by the corporation, shall be signed or accepted, as
the case may be by such officer or officers, agent or agents as shall be
thereunto authorized from time-to-time by the Board of Directors.
- 11 -
<PAGE>
ARTICLE XIV
AMENDMENTS
Section 1. By-Laws of and for the corporation may be adopted, amended
and repealed either by the Board of Directors or by stockholders, except that
the Board shall not amend or repeal any by-law which the stockholders have
caused to provide shall not be so amenable or repealable. Any by-law adopted by
the Board may be amended or repealed by stockholders. (As amended March 29,
1966.)
- 12 -
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Post-Effective Amendment No. 51 to the
Registration Statement of Wall Street Fund, Inc. on Form N-1A (File No. 2-10822)
of our report dated February 24, 1997, on our audit of the financial statements
and financial highlights of Wall Street Fund, Inc.
We also consent to the reference to our firm under the caption "Financial
Highlights" in the Statement of Additional Information.
Coopers & Lybrand L.L.P.
New York, New York
April 17, 1997
<TABLE>
<CAPTION>
WALL STREET FUND, INC.
12/31/96
PERFORMANCE DATA
ENDING REDEEMABLE VALUE (ERV)
DATE OF INVESTMENT 12/31/95
INITIAL INVESTMENT (P) 10,000.00
SALES LOAD PERCENTAGE 4.00
NAV@ PURCHASE DATE 8.19
SHARES PURCHASED 1,172.161
<S> <C> <C> <C> <C> <C> <C>
DOLLAR REINVESTMENT ADDITIONAL TOTAL SHARES
DIVIDENDS DATE RATE VALUE PRICE SHARES OWNED
12/16/96 1.15 1,347.99 7.84 171.937 1,344.098
</TABLE>
ENDING DATE 12/31/96
ENDING SHARES OWNED 1,344.098
ENDING NAV 7.96
ENDING ERV 10,699.02
AVERAGE ANNUAL TOTAL RETURN PURSUANT TO SEC RULES
ACTIVE DATES:
BEGINNING= 31-Dec-95 P= 10,000.00
ENDING= 31-Dec-96 ERV= 10,699.02
N= 1.0000
TOTAL RETURN= 6.9902%
ERV PROOF= 10,699.02
<PAGE>
<TABLE>
<CAPTION>
WALL STREET FUND,INC.
12/31/96
PERFORMANCE DATA
ENDING REDEEMABLE VALUE (ERV)
DATE OF INVESTMENT 12/31/91
INITIAL INVESTMENT (P) 10,000.00
SALES LOAD PERCENTAGE 4.00
NAV@ PURCHASE DATE 7.27
SHARES PURCHASED 1,320.495
<S> <C> <C> <C> <C> <C> <C>
DOLLAR REINVESTMENT ADDITIONAL TOTAL SHARES
DIVIDENDS DATE RATE VALUE PRICE SHARES OWNED
12/92 0.22 290.51 7.50 38.735 1,359.230
12/93 0.55 747.58 7.74 96.586 1,455.816
12/94 0.21 305.72 7.09 43.120 1,498.936
12/95 1.80 2,698.08 7.60 355.011 1,853.947
12/96 1.15 2,132.04 7.84 271.944 2,125.891
</TABLE>
ENDING DATE 12/31/96
ENDING SHARES OWNED 2,125.891
ENDING NAV 7.96
ENDING ERV 16,922.09
AVERAGE ANNUAL TOTAL RETURN PURSUANT TO SEC RULES
ACTIVE DATES:
BEGINNING= 31-Dec-91 P= 10,000.00
ENDING= 31-Dec-96 ERV= 16,922.09
N= 5.00
TOTAL RETURN= 11.0941%
ERV PROOF= 16,922.09
<PAGE>
<TABLE>
<CAPTION>
WALL STREET FUND,INC. PERFORMANCE DATA
12/31/96 ENDING REDEEMABLE VALUE (ERV)
DATE OF INVESTMENT 12/31/86
INITIAL INVESTMENT (P) 10,000.00
SALES LOAD PERCENTAGE 5.50
NAV@ PURCHASE DATE 6.95
SHARES PURCHASED 1,359.712
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DOLLAR REINVESTMENT ADDITIONAL TOTAL SHARES YEAR END DOLLAR
DIVIDENDS DATE RATE VALUE PRICE SHARES OWNED N.A.V. AMOUNT
12/87 1.70 2,311.51 7.54 306.566 1,666.279 5.53 9,214.52
12/88 0.00 0.00 6.73 0.000 1,666.279 6.57 10,947.45
12/89 0.89 1,482.99 6.73 220.355 1,886.633 7.09 13,376.23
12/90 0.11 207.53 5.73 36.218 1,922.852 5.54 10,652.60
12/91 1.25 2,403.56 7.09 339.008 2,261.859 7.27 16,443.72
12/92 0.22 497.61 7.50 66.348 2,328.207 7.60 17,694.37
12/93 0.55 1,280.51 7.74 165.441 2,493.648 8.03 20,024.00
12/94 0.21 523.67 7.09 73.860 2,567.508 7.42 19,050.91
12/95 1.80 4,621.51 7.60 608.094 3,175.602 8.19 26,008.18
12/96 1.15 3,651.94 7.84 465.809 3,641.411 7.96 28,985.63
</TABLE>
ENDING DATE 12/31/96
ENDING SHARES OWNED 3,641.411
ENDING NAV 7.96
ENDING ERV 28,985.63
AVERAGE ANNUAL TOTAL RETURN PURSUANT TO SEC RULES
ACTIVE DATES:
BEGINNING= 31-Dec-86 P= 10,000.00
ENDING= 31-Dec-96 ERV= 28,985.63
N= 10.00
TOTAL RETURN= 11.2291%
ERV PROOF= 28,985.63
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 12,834,389
<INVESTMENTS-AT-VALUE> 15,841,787
<RECEIVABLES> 165,175
<ASSETS-OTHER> 1,535
<OTHER-ITEMS-ASSETS> 58,243
<TOTAL-ASSETS> 16,066,740
<PAYABLE-FOR-SECURITIES> 111,405
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16,022
<TOTAL-LIABILITIES> 127,427
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10,976,343
<SHARES-COMMON-STOCK> 2,003,045
<SHARES-COMMON-PRIOR> 1,757,108
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (47,473)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,007,398
<NET-ASSETS> 15,939,313
<DIVIDEND-INCOME> 52,028
<INTEREST-INCOME> 125,624
<OTHER-INCOME> 0
<EXPENSES-NET> 283,072
<NET-INVESTMENT-INCOME> (105,420)
<REALIZED-GAINS-CURRENT> 2,067,893
<APPREC-INCREASE-CURRENT> (333,671)
<NET-CHANGE-FROM-OPS> 1,628,802
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 2,009,946
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 78,951
<NUMBER-OF-SHARES-REDEEMED> 76,029
<SHARES-REINVESTED> 243,015
<NET-CHANGE-IN-ASSETS> 1,556,525
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 39,676
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 116,345
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 285,619
<AVERAGE-NET-ASSETS> 15,526,373
<PER-SHARE-NAV-BEGIN> 8.19
<PER-SHARE-NII> (0.06)
<PER-SHARE-GAIN-APPREC> 0.98
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.15
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.96
<EXPENSE-RATIO> 1.82
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
