1933 Act File No. 2-10822
1940 Act File No. 811-00515
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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. 54 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 55
(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) 856-8200
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, 1999
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on May 1, 1999 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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Prospectus
May 1, 1999 TABLE OF CONTENTS
Page
THE
WALL Investment Objective and Policies........................2
STREET
FUND, INC.
Risk Factors.............................................3
Past Performance.........................................5
INVESTMENT ADVISER:
Wall Street Management Corporation Fees & Expenses..........................................6
New York, New York
DISTRIBUTED BY: How to Purchase Shares...................................6
Wall Street Management Corporation
New York, New York
How to Redeem Shares.....................................8
Conducting Business With the Fund........................8
Additional Policies About Transactions...................8
Shareholder Services....................................10
How Share Price is Determined...........................11
Management of the Fund..................................11
Dividends, Distributions and Their Taxation.............12
Dealer Compensation.....................................13
Additional Policies.....................................14
Financial Highlights....................................14
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These securities have not been approved or disapproved by the Securities and
Exchange Commission nor has the Commission passed upon the adequacy of this
Prospectus. Any representation to the contrary is a criminal offense.
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INVESTMENT OBJECTIVE AND POLICIES
The Wall Street Fund, Inc.'s (the "Fund") primary investment objective is to
produce growth of capital by investing principally in a diversified portfolio of
common stocks considered by Wall Street Management Corporation (the "Adviser" or
"WSMC") to offer prospects of sustained growth in value. The Fund may also hold
foreign securities, convertible securities, preferred stocks, U.S. government
securities and corporate bonds as deemed by the Adviser. 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. The Fund seeks to achieve its secondary objective of income
generation through selection of dividend-paying and convertible securities.
There can be no assurance that the Fund's investment objectives will be
achieved.
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 a growth-oriented style of investing in a
portfolio mixture of small, medium and large 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. In addition, the Fund
selects convertible securities based on future growth potential and high current
income at the time of purchase.
In practical application, the Fund attempts to attain its investment objectives
by relying on three fundamental practices:
o Careful selection of securities - based on the performance and
position of individual companies and their industries relative to
alternative investments.
o 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.
o Continuous scrutiny of investments - realization of security values
depends upon many factors, including timing, trends of the market, and
the economy.
TEMPORARY INVESTMENTS. The manager may take a temporary defensive position when
the securities trading markets or the economy are experiencing excessive
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volatility or a prolonged general decline, or other adverse conditions exist.
Under these circumstances, the Fund may be unable to pursue its investment goal
because it may not invest or may invest less in securities of companies that the
manager believes are undervalued in the marketplace relative to underlying asset
values.
RISK FACTORS
The Fund is not designed to offer a complete or balanced investment program and
is not suitable for all investors. Common stocks fluctuate in price. This means
that the value of your investment in the Fund will go up and down and you could
lose money over short or extended periods of time. The 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.
STOCKS. While stocks have historically outperformed other asset classes over the
long term, they tend to go up and down more dramatically over the shorter term.
These price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
SMALLER COMPANIES. Historically, smaller company securities have been more
volatile in price than larger company securities, especially over the
short-term. Among the reasons for the greater price volatility are the less
certain growth prospects of smaller companies, the lower degree of liquidity in
the markets for such securities, and the greater sensitivity of smaller
companies to changing economic conditions. In addition, small companies may lack
depth of management, they may be unable to generate funds necessary for growth
or development, or they may be developing or marketing new products or services
for which markets are not yet established and may never become established.
Therefore, while smaller companies may offer greater opportunities for capital
growth than larger, more established companies, they also involve greater risks
and should be considered speculative.
FOREIGN SECURITIES. Securities of companies located outside the U.S. may offer
significant opportunities for gain, but they also involve additional risks that
can increase the potential for losses in the fund. Investments in American
Depositary Receipts or "ADRs" also involve some or all of the following risks.
Country. General securities market movements in any country where the fund has
investments are likely to affect the value of the securities the fund owns which
trade in that country. These movements will affect the fund's share price and
fund performance.
The political, economic and social structures of some countries the Fund invests
in may be less stable and more volatile than those in the U.S. The risks of
investing in these countries include the possibility of the imposition of
exchange controls, currency devaluations, foreign ownership limitations,
expropriation, restrictions on removal of currency or other assets,
nationalization of assets, punitive taxes and certain custody and settlement
risks.
The Fund's investments in developing or emerging markets are subject to all of
the risks of foreign investing generally, and have additional heightened risks
due to a lack of established legal, business and social frameworks to support
securities markets. Foreign securities markets, including emerging markets, may
have substantially lower trading volumes than U.S. markets, resulting in less
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liquidity and more volatility than experienced in the U.S. While short-term
volatility in these markets can be disconcerting, declines in excess of 50% are
not unusual.
Company. Foreign companies are not subject to the same disclosure, accounting,
auditing and financial reporting standards and practices as U.S. companies and
their securities may not be as liquid as securities of similar U.S. companies.
Foreign stock exchanges, trading systems, brokers and companies generally have
less government supervision and regulation than in the U.S. The Fund may have
greater difficulty voting proxies, exercising shareholder rights, pursuing legal
remedies and obtaining judgments with respect to foreign investments in foreign
courts than with respect to U.S. companies in U.S. courts.
Currency. Many of the Fund's investments are denominated in foreign currencies.
Changes in foreign currency exchange rates will affect the value of what the
fund owns and the Fund's share price. Generally, when the U.S. dollar rises in
value against a foreign currency, an investment in that country loses value
because that currency is worth fewer U.S. dollars.
Euro. On January 1, 1999, the European Monetary Union (EMU) introduced a new
single currency, the euro, which will replace the national currency for
participating member countries. If the Fund holds investments in countries with
currencies replaced by the euro, the investment process, including trading,
foreign exchange, payments, settlements, cash accounts, custody and accounting
will be impacted.
Because this change to a single currency is new and untested, the establishment
of the euro may result in market volatility. For the same reason, it is not
possible to predict the impact of the euro on the business or financial
condition of European issuers which the Fund may hold in its portfolio, and
their impact on the value of fund shares. To the extent the fund holds non-U.S.
dollar (euro or other) denominated securities, it will still be exposed to
currency risk due to fluctuations in those currencies versus the U.S. dollar.
Year 2000. When evaluating current and potential portfolio positions, Year 2000
is one of the factors the Fund's Adviser considers. The Fund's business
operations depend on a worldwide network of computer systems that contain date
fields, including securities trading systems, securities transfer agent
operations and stock market links. Many of the systems currently use a two digit
date field to represent the date, and unless these systems are changed or
modified, they may not be able to distinguish the Year 1900 from the Year 2000
(commonly referred to as the Year 2000 problem). In addition, the fact that the
Year 2000 is a leap year may create difficulties for some systems.
When the Year 2000 arrives, the Fund's operations could be adversely affected if
the computer systems used by the Adviser, its service providers and other third
parties it does business with are not Year 2000 ready. For example, the Fund's
portfolio and operational areas could be impacted, including securities trade
processing, interest and dividend payments, securities pricing, shareholder
account services, reporting, custody functions and others. The Fund could
experience difficulties in effecting transactions if any of its foreign
subcustodians, or if foreign broker-dealers or foreign markets are not ready for
Year 2000.
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The Adviser will rely upon public filings and other statements made by companies
about their Year 2000 readiness. Issuers in countries outside the U.S.,
particularly in emerging markets, may not be required to make the same level of
disclosure about Year 2000 readiness as is required in the U.S. The Adviser, of
course, cannot audit each company and its major suppliers to verify their Year
2000 readiness.
If a company in which the Fund is invested is adversely affected by Year 2000
problems, it is likely that the price of its security will also be adversely
affected. A decrease in the value of one or more of the Fund's portfolio
holdings will have a similar impact on the price of the Fund's shares and the
Fund's performance.
The Fund's Adviser and its affiliated service providers are making a concerted
effort to take steps they believe are reasonably designed to address their Year
2000 problems. Of course, the Fund's ability to reduce the effects of the Year
2000 problem is also very much dependent upon the efforts of third parties over
which the Fund and its Adviser may have no control.
More detailed information about the Fund, its policies and risks can be found in
the Fund's Statement of Additional Information (SAI).
PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The bar chart shows how the Fund's return has changed from year to
year. The second table shows how the Fund's average annual returns for certain
periods compare with those of the Russell 2000 Index, a widely recognized index
of small stock performance. The bar chart does not reflect sales charges. If it
did, returns would be lower. Both tables assume that all dividends and capital
gain distributions have been reinvested in new shares of the Fund. Past
performance is not necessarily an indication of how the Fund will perform in the
future.
[OBJECT OMITTED]
Best Quarter Q4 `98 = 36.07%
Worst Quarter Q3 `90= (28.23)%
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Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years Life of Fund+
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Fund 26.14% 12.26% 12.55% 8.93%
Russell 2000 Index* (2.25)% 10.28% 11.08% N/A
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+ The Fund was launched on December 23, 1945.
* Source: Frank Russell Company. The Russell 2000 Index measures the
performances of the 2,000 smallest companies in the Russell 3000 Index, which
represents approximately 11% of the total market capitalization of the Russell
3000 Index. The Russell 3000 Index itself measures the performance of the 3,000
largest U.S. companies or 98% of the U.S. equity market.
FEES & EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
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Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases 4.00%
Annual Fund Operation Expenses (expenses that are deducted from Fund assets)
Management Fees 0.75%
Distribution [and/or Service] (12b-1) Fees None
Other Expenses 1.14%
Total Annual Fund Operating Expenses 1.89%
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The Example below is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$584 $970 $1,380 $2,523
HOW TO PURCHASE SHARES
There are no redemption or Rule 12b-1 distribution charges. You do pay a sales
commission when you buy shares of the Fund. If you use the services of any other
broker to purchase or redeem shares of the Fund, that broker may also charge you
a fee.
Minimum Initial Investment
You may open a Fund account in the following amounts:
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o $2,000 or more for most accounts
o $500 or more for payroll deduction arrangements
Minimum Additional Investment
You may add to your Fund account at any time in the following amounts:
o $100 or more for purchases by mail
Sales Charges
A sales charge will be imposed on the purchase of your shares of the Fund as
follows:
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Sales Charge as Percentage Sales Charge as Percentage
Amount of Purchase of the Offering Price of the Net Amount Invested
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Less than $100,000 4.00% 4.17%
$100,000 or more but less than $175,000 3.00 3.09
$175,000 or more, but less than $250,000 2.00 2.04
$250,000 or more, but less than $500,000 1.00 1.01
$500,000 and over 0.00 0.00
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Sales Charge Reductions and Waivers
If you qualify for any of the sales charge reductions or waivers below, please
let us know at the time you make your investment to help ensure you receive the
lower sales charge.
Quantity Discounts. We offer several ways for you to combine your purchases in
the Fund to take advantage of the lower sales charges for large purchases.
o Cumulative Quantity Discount - lets you combine all of your share
purchases in the Fund for purposes of calculating the sales charge.
Certain company and retirement plan accounts may also be included.
o Letter of Intent - expresses your intent to buy a stated dollar amount
of shares over a 13-month period and lets you receive the same sales
charge as if all shares had been purchased at one time. We will
reserve a portion of your shares to cover any additional sales charge
that may apply if you do not buy the amount stated in your letter of
intent.
Waivers for Certain Investors. Shares also may be purchased without an initial
sales charge by the following individuals and institutions:
o employees and other associated persons or entities of the Adviser or
of certain dealers
o any trust, pension or profit-sharing or other benefit plan for
employees and other associated persons or entities of the Adviser or
of certain brokers or dealers
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o investment advisory clients of Morse, Williams & Co., Inc.
HOW TO REDEEM SHARES
You may withdraw from your Fund account at any time in the following amounts:
o any amount for redemptions requested by mail
o $200 or more for redemptions by Automatic Withdrawal Plan
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CONDUCTING BUSINESS WITH THE FUND
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- ------------------------------- ---------------------------- ---------------------------- ----------------------------
How to How to How to Redeem or Sell
By Mail Open an Account Add to an Account Shares
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The Wall Street Fund, Inc., Complete and sign the Make your check ($100 In a letter, include the
c/o American Data Services, application which minimum) payable to The genuine signature of each
Inc., 150 Motor Parkway, accompanies this Wall Street Fund, Inc., registered owner (exactly
Suite 109, Hauppauge, NY Prospectus. Your initial c/o American Data as registered), the name
11788 investment must meet the Services, Inc., 150 Motor of each account owner, the
minimum amount. Make your Parkway, Suite 109, account number and the
check payable to The Wall Hauppauge, NY 11788. number of shares or the
Street Fund, Inc., c/o Always identify your dollar amount to be
American Data Services, account number or include redeemed. A proper
Inc., 150 Motor Parkway, the detachable reminder signature guarantee from a
Suite 109, Hauppauge, NY stub (from your financial institution is
11788. confirmation statement). also required. We will
send funds only to the
address of record.
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ADDITIONAL POLICIES ABOUT TRANSACTIONS
We will not be responsible for the consequences of delays, including delays in
the banking or Federal Reserve systems. We cannot process transaction requests
that are not complete and in good order. Call us if you have any questions about
these procedures.
Purchases - We may reject purchase orders when not accompanied by payment or
when we believe such rejection is in the best interest of the Fund and its
shareholders. At any time, we may waive or increase the minimum investment
requirements with respect to any person or class of persons, which include
shareholders of the Fund's special investment programs. At our discretion, we
may accept individual stocks as payment for Fund shares, if the Fund's Adviser
believes such stocks are appropriate for the Fund's portfolio.
Redemptions - We will try to send redemption proceeds, as instructed, as soon as
practicable after we have received your redemption request directly or through
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your securities dealer. For a repurchase through your securities dealer, we will
make payment to such securities dealer. In any event, we will send proceeds by
the seventh calendar day after we receive your request in good order. We must
receive an endorsed share certificate where a certificate has been issued. We
cannot accept requests that contain special conditions or an effective date
other than as described in this prospectus.
For your protection, your direct redemption request must be in writing. The
request must be signed by each owner listed on the account, and all signatures
must be guaranteed (see "Signature Guarantees" below). For redemption through a
securities dealer, a stock power with signatures guarantee is required.
If you request a redemption within 15 days of the date of purchase, we will
delay sending your proceeds until we are certain that we have collected
unconditional payment in federal funds for the purchase of the shares being
redeemed, or until 15 days from the date of purchase.
When the New York Stock Exchange is closed or under emergency circumstances as
determined by the Securities and Exchange Commission, we may suspend your right
to redeem shares or postpone the date of payment beyond the normal seven-day
period. Also, under certain circumstances, we reserve the right to pay
redemption proceeds with portfolio securities owned by the Fund. If you receive
securities instead of cash, you may incur brokerage costs when converting into
cash.
We reserve the right to request additional documentation which we believe is
necessary to insure that a redemption is genuine. For your protection,
redemption instructions can only be changed by filing with us new instructions
on a form obtainable from us. The form must be properly signed with signature(s)
guaranteed.
Signature Guarantees - For your protection, we require a guaranteed signature
for direct redemptions or those made by securities dealers on your behalf.
You can have your signature guaranteed at a:
o bank
o savings association
o trust company
o broker/dealer
o credit union (if authorized under state law)
o securities exchange/association
o clearing agency
Please note that a notary public cannot provide a signature guarantee.
We may waive these requirements in certain instances where it appears reasonable
to do so and will not unduly affect the interests of other shareholders.
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Corporations, Trusts and Other Entities - Additional documentation is normally
required in the case of corporations, fiduciaries and others who hold shares in
a representative or nominee capacity. Such documentation may include certified
copies of corporate resolutions, or certificates of incumbency, or such other
documentation as may be required under the Uniform Commercial Code or other
applicable laws or regulations. For authorization of redemptions by a
corporation, it will also be necessary to have an appropriate certified copy of
resolutions on file with the Fund. Your redemption will not become effective
until we have received all documents in the form required. It is your
responsibility as the shareholder to maintain such documentation on file and in
a current status. If you have questions concerning redemption requirements,
please write or telephone us well ahead of an anticipated redemption in order to
avoid any possible delay.
All Telephone Services - During periods of increased market activity, you may
have difficulty reaching us by telephone. If this happens you should contact us
by mail or telegraph.
Automatic Withdrawal Plan - To participate in this service, you must own a total
of $15,000 or more of shares of the Fund and your dividends and capital gains
distributions must be reinvested in additional shares of the Fund without a
sales charge. Under the automatic withdrawal plan, you will receive a fixed
amount on either a monthly, quarterly or other designated time period from
redemptions of the Fund. A minimal withdrawal amount of $200 has been
established by the Fund. Under all withdrawal programs, if your shares are
liquidated in excess of dividends and distributions reinvested in your account,
your account will decrease and may be exhausted, particularly during a period of
declining share values.
You may revoke or change your automatic withdrawal plan or redeem all of your
remaining shares at any time. We will continue withdrawal payments until your
shares are gone or until the Fund or you cancel the plan by written notice to
the other.
SHAREHOLDER SERVICES
The following services are also available to shareholders through the Fund's
Adviser:
o Uniform Transfers (Gifts) to Minors accounts
o Accounts for corporations or partnerships
o Sub-Accounting Services for Keogh and corporate tax qualified
retirement plans, as well as certain other investors who must maintain
separate participant accounting records.
o Prototype Retirement Plans suitable for the self-employed, including
sole proprietors, partnerships and corporations.
o Traditional IRA
o Roth IRA
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o Educational IRA
o Simplified Employee Pensions (SEPs)
HOW SHARE PRICE IS DETERMINED
Shares of the Fund are purchased or redeemed at the net asset value per share
next calculated after your purchase order and payment or redemption order is
received in good order.
The net asset value per share is computed once daily, Monday through Friday, at
4:00 p.m. (Eastern Time) except:
o days on which the New York Stock Exchange, Inc. is closed for trading;
o days on which changes in the value of portfolio securities will not
materially affect the net asset value; and
o days during which no purchase or redemption order is received by the
Fund;.
The per share calculation is made by subtracting from the Fund's total assets
any liabilities and then dividing into this amount the total outstanding shares
as of the date of the calculation.
Each security owned by the Fund that is listed on an Exchange is valued at its
last sale price on that Exchange on the date as of which assets are valued.
Where the security is listed on more than one Exchange, the Fund will use the
price of that Exchange which it generally considers to be the principal Exchange
on which the stock is traded. Lacking sales, the security is valued at the mean
between the last current closing bid and asked prices. An unlisted security for
which over-the-counter market quotations are readily available is valued at the
mean between the last current bid and asked prices. When market quotations are
not readily available, any security or other asset is valued at its fair value
as determined in good faith by the Board of Directors.
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.
MANAGEMENT OF THE FUND
The Fund's investment adviser and principal underwriter, WSMC located at 230
Park Avenue, New York, NY 10169, was founded in 1954. Together the Adviser and
its affiliates manage over $500 million assets consisting of approximately $300
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million in institutional accounts and approximately $200 million for high net
worth individuals. The Adviser provides research, statistical, advisory and
managerial services to the Fund in return for an advisory fee paid monthly.
The person responsible for the Fund's management is Robert P. Morse, President
and Sole Director of the Adviser. Mr. Morse has been responsible for the day to
day management of the Fund since 1984 and has more than thirty (30) years
experience in the investment business with an extensive background in both
domestic and international equity and fixed-income markets. Mr. Morse is a
co-founder of Morse, Williams & Company, a broker-dealer established in 1981. In
addition to his responsibilities as President and portfolio management, Mr.
Morse serves as the Firm's chief investment strategist. Prior to founding Morse,
Williams & Company and managing the Fund, Mr. Morse was a divisional
vice-president at American Express and a partner at William G. Campbell & Co.
As compensation for all the foregoing services, the Fund pays the Adviser a fee
at the annual rate of 3/4 of one percent (0.75%) of the first $125 million, 5/8
of one percent (6.25%) of the next $75 million and 1/2 of 1% (.50%) for amounts
in excess over $200 million of its average daily net assets. The advisory fee
paid for 1998 as a percentage of average net assets was 0.75%.
DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION
The Fund pays its shareholders distributions from its net investment income and
from any net capital gains that it has realized on the sale of securities. Each
of these distributions will be declared annually on or before December 31. Your
distributions will be reinvested automatically in additional shares of the Fund,
unless you have elected on your original application, or by written instructions
filed with the Fund, to have them paid in cash. There are no fees or sales
charges on reinvestments.
Dividends from net investment income or net short-term gains will be taxable to
those investors who are subject to income taxes as ordinary income, whether
received in cash or in additional shares. Whether paid in cash or additional
shares of the Fund, and regardless of the length of time Fund shares have been
owned by the shareholder, distributions from long-term capital gains are taxable
to shareholders as such, but are not eligible for the dividends-received
deduction for corporations. Fund distributions will generally also be subject to
state and municipal tax. Also, for those investors subject to tax, if purchases
of shares in a Fund are made shortly before a record date for a dividend or
capital gains distribution, a portion of the investment will be returned as a
taxable distribution. If the Fund invests more than 50% of its assets in foreign
securities, any foreign taxes paid by the Fund may be passed through to you as a
foreign tax credit.
Distributions declared in October, November or December and made payable to
shareholders of record in such a month are deemed to have been received by
shareholders on December 31 of such year, so long as the distributions are
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actually paid before February 1 of the following year. You will be notified each
January as to the federal tax status of distributions paid by the Fund. Such
distributions may also be subject to state and local taxes.
Taxes on Transactions - A redemption of Fund shares is a taxable event for
federal income tax purposes. When you sell your shares of the Fund, you may have
a capital gain or loss. The individual tax rate on any gain from a sale of your
shares depends on how long you have held your shares. Any loss incurred on a
sale of the Fund's shares held for six months or less will be treated as a
long-term capital loss to the extent of capital gains received with respect to
such shares. Starting January 1, 2001, you may be eligible for special lower
capital gain rates on sales of securities held for more than five years. You may
also be subject to state and municipal taxes on such exchanges and redemptions.
Non-U.S. investors may be subject to U.S. withholding and estate tax.
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
Dividends-Received Deduction for Corporations - If you are a corporate
shareholder, you should note that some portion of the dividends paid by the Fund
may qualify for the dividends-received deduction. The Fund will send to
shareholders a statement each year advising the amount of the dividend income
which qualifies for such treatment.
Withholding - In order to avoid backup withholding, you must certify on your
application, or on a separate form supplied by the Fund, that your Social
Security or Taxpayer Identification Number provided is correct and that you are
not currently subject to backup withholding, or that you are exempt from backup
withholding. Otherwise, the Fund is required by federal law to withhold 31% of
reportable payments (which may include income dividends, capital gains
distributions and redemptions) paid to you.
DEALER COMPENSATION
Qualifying dealers who sell fund shares may receive sales commissions and other
payments. These are paid by WSMC, the Distributor, from sales charges and its
other resources.
Commission (%)
Investment under $100,000 3.75
$100,000 but under $175,000 2.75
$175,000 but under $250,000 1.75
$250,000 but under $500,000 0.75
$500,000 and over 0.00
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Additional policies
Please note that the Fund maintains additional policies and reserves certain
rights, including:
o The Fund may refuse any order to purchase shares.
o At any time, the Fund may change its investment minimums or waive or
lower its minimums for certain purchases.
o You may only buy shares eligible for sale in your state or
jurisdiction.
o In unusual circumstances, we may temporarily suspend redemptions, or
postpone the payment of proceeds, as allowed by federal securities
laws.
o For redemptions over a certain amount, the Fund reserves the right to
make payments in securities or other assets of the Fund, in the case of
an emergency or if payment by check would be harmful to existing
shareholders.
o To permit investors to obtain the current price, brokers or dealers are
responsible for transmitting all orders to the Fund promptly.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past five years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned on an investment in the
Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by McGladrey & Pullen LLP, whose report, along with
the Fund's financial statements, are included in the annual report, which is
available upon request.
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended December 31,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $7.34 $7.96 $8.19 $7.42 $8.03
Income from investment operations
Net investment income (loss) (0.11) (0.08) (0.06) (0.03) (0.02)
Net realized and unrealized gains
(losses) on investments 2.39 (0.13) 0.98 2.60 (0.38)
Total from investment operations 2.28 (0.21) 0.92 2.57 (0.40)
Less distributions
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00
Distribution from realized gains
from security transactions (0.23) (0.41) (1.15) (1.80) (0.21)
Return of capital distribution 0.00 0.00 0.00 0.00 0.00
Total distributions (0.23) (0.41) (1.15) (1.80) (0.21)
Net asset value, end of period $9.39 $7.34 $7.96 $8.19 $7.42
Total return** 31.40% (2.37%) 11.45% 36.50% (4.86%)
Ratios/supplemental data
Net assets, end of period (in 000's) 18,319 15,577 15,939 14,383 11,080
Ratio of expenses to average net assets 1.89% 1.82% 1.84% 2.02% 2.12%
Ratio of expenses to average net assets,
net of reimbursement 1.89% 1.82% 1.82% 1.90% 1.96%
Ratio of net investment income (loss)
to average net assets (1.33%) (0.96%) (0.70%) (0.50%) (0.47%)
Ratio of net investment income (loss) to
average net assets, net of reimbursement (1.33%) (0.96%) (0.68%) (0.38%) (0.31%)
Portfolio turnover rate 165.84% 121.12% 142.11% 143.27% 89.01%
</TABLE>
**Excluding Sales Charge
<PAGE>
THE WALL
STREET
FUND, INC.
ADDITIONAL INFORMATION
Prospectus
May 1, 1999
-------------------------
The Statement of Additional Information (SAI) A diversified mutual fund
contains additional information that invests in common
about the Fund and is incorporated by stocks of growth-oriented
reference into this Prospectus. The Fund's companies.
annual and semi-annual reports to
shareholders contain additional information
about the Fund's investments. In the Fund's
annual report, you will find a discussion of
the market conditions and investment
strategies that significantly affected the
Fund's performance during its last fiscal
year.
You may obtain a free copy of these documents
by calling, writing or e-mailing the Fund as
shown below. You also may call the toll free
number given below to request other
information about the Fund and to make
shareholder inquiries.
You may review and copy the SAI and other
information about the Fund by visiting the
Securities and Exchange Commission's Public
Reference Room in Washington, DC
(1-800-SEC-0330) or by visiting the
Commission's Internet site at
http://www.sec.gov. Copies of this
information also may be obtained, upon
payment of a duplicating fee, by writing to
the Public Reference Section of the
Commission, Washington, DC 20549-6009.
THE WALL STREET FUND, INC.
230 Park Avenue
New York, NY 10169
(212) 856-8250
1-800-443-4693
http://www.thewallstreetfund.com
e-mail: mrl@thewallstreet fund.com
811-515
<PAGE>
THE WALL STREET FUND, INC
STATEMENT OF ADDITIONAL INFORMATION
230 Park Avenue, New York, New York 10169
Telephone: (212) 856-8250
(800) 443-4693
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, 1999. 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, 1999.
TABLE OF CONTENTS
Page
INVESTMENT OBJECTIVES AND POLICIES..........................................2
RISKS.......................................................................5
INVESTMENT RESTRICTIONS.....................................................7
MANAGEMENT OF THE FUND......................................................9
PRINCIPAL HOLDERS OF SECURITIES.............................................11
portfolio transactions......................................................11
TAX STATUS..................................................................13
UNDERWRITER.................................................................15
PURCHASE AND REDEMPTION SERVICES............................................16
SHARE PURCHASES.............................................................16
REDEMPTION OF SHARES........................................................19
PERFORMANCE MEASURES........................................................21
CALCULATION OF TOTAL RETURN.................................................22
HOLIDAYS....................................................................22
Investment AdvisorY and other services......................................23
GENERAL INFORMATION.........................................................26
FINANCIAL STATEMENTS........................................................26
B-1
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The Fund is a diversified open-end, management investment company. In order to
achieve the "growth of capital" stated as the primary investment objective in
the section of the Prospectus entitled "Investment Objective and Policies," 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 small or large, 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.
Investment Policies. It is the investment policy of the Fund 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 small, medium and large size companies, subject
to the Fund's investment restrictions and diversification status.
Equity securities. Generally entitle the holder to participate in a company's
general operating results. The purchaser of an equity security typically
receives an ownership interest in the company as well as certain voting rights.
The owner of an equity security may participate in a company's success through
the receipt of dividends which are distributions of earnings by the company to
its owners. Equity security owners may also participate in a company's success
or lack of success through increases or decreases in the value of the company's
shares as traded in the public trading market for such shares. Equity securities
generally take the form of common stock or preferred stock, as well as
securities convertible into common stocks. Preferred stockholders typically
receive greater dividends but may receive less appreciation than common
stockholders and may have greater voting rights as well.
B-2
<PAGE>
Corporate Bonds. Represent an obligation of the corporate issuer to repay a loan
of money to it, and generally, provides for the payment of interest. A corporate
bond or debt security typically has a fixed payment schedule that obligates the
issuer to pay interest to the lender and to return the lender's money over a
certain time period. A company typically meets its payment obligations
associated with its outstanding bonds before it declares and pays any dividend
to holders of its equity securities. Bonds and other debt securities, such as
notes, debentures, and commercial paper differ in the length of the issuer's
payment schedule, with bonds carrying the longest repayment schedule and
commercial paper the shortest.
The market value of corporate bonds and other debt securities generally varies
in response to changes in interest rates and the financial condition of each
issuer. During periods of declining interest rates, the value of a bond
generally increases. Conversely, during periods of rising interest rates, the
value of such securities generally declines. These changes in market value will
be reflected in the Fund's net asset value per share.
Convertible securities. The Fund may invest in convertible securities. A
convertible security is generally a debt obligation or preferred stock that may
be converted within a specified period of time into a certain amount of common
stock of the same or a different issuer. A convertible security provides a
fixed-income stream and the opportunity, through its conversion feature, to
participate in the capital appreciation resulting from a market price advance in
its underlying common stock. As with a straight fixed-income security, a
convertible security tends to increase in market value when interest rates
decline and decrease in value when interest rates rise. Like a common stock, the
value of a convertible security also tends to increase as the market value of
the underlying stock rises, and it tends to decrease as the market value of the
underlying stock declines. Because its value can be influenced by both interest
rate and market movements, a convertible security is not as sensitive to
interest rates as a similar fixed-income security, nor is it as sensitive to
changes in share price as its underlying stock.
A convertible security is usually issued either by an operating company or by an
investment bank. When issued by an operating company, a convertible security
tends to be senior to common stock, but subordinate to other types of
fixed-income securities issued by that company. When a convertible security
issued by an operating company is "converted," the operating company often
issues new stock to the holder of the convertible security but, if the parity
price of the convertible security is less than the call price, the operating
company may pay out cash instead of common stock. If the convertible security is
issued by an investment bank, the security is an obligation of and is
convertible through the issuing investment bank.
The issuer of a convertible security may be important in determining the
security's true value. This is because the holder of a convertible security will
have recourse only to the issuer. In addition, a convertible security may be
subject to redemption by the issuer, but only after a specified date and under
circumstances established at the time the security is issued.
While the Fund uses the same criteria to rate a convertible debt security that
it uses to rate a more conventional debt security, a convertible preferred stock
is treated like a preferred stock for the fund's financial reporting, credit
B-3
<PAGE>
rating, and investment limitation purposes. A preferred stock is subordinated to
all debt obligations in the event of insolvency, and an issuer's failure to make
a dividend payment is generally not an event of default entitling the preferred
shareholder to take action. A preferred stock generally has no maturity date, so
that its market value is dependent on the issuer's business prospects for an
indefinite period of time. In addition, distributions from preferred stock are
dividends, rather than interest payments, and are usually treated as such for
corporate tax purposes.
Foreign securities. The Fund may invest in foreign securities if these
investments are consistent with the Fund's investment goal. The Fund may buy
sponsored or unsponsored American Depositary Receipts (ADRs). ADRs are
certificates issued by U.S. banks representing the right to receive securities
of a foreign issuer deposited with that bank or a correspondent bank. The Fund
may also buy the securities of foreign issuers directly in foreign markets, and
may buy the securities of issuers in developing nations. Please see "Risks -
Foreign securities risk" for more information.
American Depositary Receipts (ADRs). Many securities of foreign issuers are
represented by ADRs. ADRs evidence ownership of, and represent the right to
receive, securities of foreign issuers deposited in a domestic bank or trust
company or a foreign correspondent bank. Generally, ADRs in registered form are
designed for use in the U.S. securities market and ADRs in bearer form are
designed for use in securities markets outside the U.S. Please see "Risks -
American Depositary Receipts risk" for more information.
Prices of ADRs are quoted in U.S. dollars, and ADRs are traded in the U.S. on
exchanges or over-the-counter. While ADRs do not eliminate all the risk
associated with foreign investments, by investing in ADRs rather than directly
in the stock of foreign issuers, the Fund will avoid currency risks during the
settlement period for either purchases or sales. In general, there is a large,
liquid market in the U.S. for ADRs quoted on a national securities exchange or
on NASDAQ. The information available for ADRs is subject to the accounting,
auditing and financial reporting standards of the U.S. market or exchange on
which they are traded, which standards are more uniform and more exacting than
those to which many foreign issuers may be subject.
ADRs may be issued under sponsored or unsponsored programs. In sponsored
programs, an issuer has made arrangements to have its securities traded in the
form of an ADR. In unsponsored programs, the issuer may not be directly involved
in the creation of the program. Although regulatory requirements with respect to
sponsored and unsponsored programs are generally similar, in some cases it may
be easier to obtain financial information from an issuer that has participated
in the creation of a sponsored program. Accordingly, there may be less
information available regarding issuers of securities underlying unsponsored
programs and there may not be a correlation between this information and the
market value of the ADR.
Temporary investments. In anticipation of and during temporary defensive periods
or when investments of the type in which the Fund intends to invest are not
available at prices that the manager believes are attractive, the Fund may
invest up to 100% of its total assets in: (1) securities of the U.S. government
B-4
<PAGE>
and certain of its agencies and instrumentalities that mature in one year or
less from the date of purchase, including U.S. Treasury bills, notes and bonds,
and securities of the Government National Mortgage Association, the Federal
Housing Administration and other agency or instrumentality issues or guarantees
that are supported by the full faith and credit of the U.S. government; (2)
obligations issued or guaranteed by other U.S. government agencies or
instrumentalities, some of which are supported by the right of the issuer to
borrow from the U.S. government (e.g., obligations of the Federal Home Loan
Banks) and some of which are backed by the credit of the issuer itself (e.g.,
obligations of the Student Loan Marketing Association); (3) bank obligations,
including negotiable or non-negotiable CDs (subject to the 10% aggregate limit
on the fund's investment in illiquid securities), letters of credit and bankers'
acceptances, or instruments secured by these types of obligations, issued by
banks and savings institutions that are subject to regulation by the U.S.
government, its agencies or instrumentalities and that have assets of over $1
billion, unless these types of obligations are guaranteed by a parent bank that
has total assets in excess of $5 billion; (4) commercial paper considered by the
manager to be of high quality, which must be rated within the two highest rating
categories by S&P or Moody's or, if unrated, issued by a company having an
outstanding debt issue rated at least AA by S&P or Aa by Moody's; (5) corporate
obligations including, but not limited to, corporate notes, bonds and debentures
considered by the manager to be high grade or that are rated within the two
highest rating categories by S&P or Moody's; and (6) money market funds.
RISKS
There is no assurance that the Fund will meet its investment objectives.
Investments in securities that have potential to increase in value may be
subject to a greater degree of risk and may be more volatile than other types of
investments.
The value of your shares will increase as the value of the securities owned by
the Fund increases and will decrease as the value of the Fund's investments
decrease. In this way, you participate in any change in the value of the
securities owned by the Fund. In addition to the factors that affect the value
of any particular security that the Fund owns, the value of Fund shares may also
change with movements in the stock market as a whole.
Foreign securities risk. The value of foreign (and U.S.) securities is affected
by general economic conditions and individual company and industry earnings
prospects. While foreign securities may offer significant opportunities for
gain, they also involve additional risks that can increase the potential for
losses in the Fund. These risks can be significantly greater for investments in
emerging markets. Investments in ADRs also involve some or all of the risks
described below.
There is the possibility of cessation of trading on national exchanges,
expropriation, nationalization of assets, confiscatory or punitive taxation,
withholding and other foreign taxes on income or other amounts, foreign exchange
controls (which may include suspension of the ability to transfer currency from
a given country), restrictions on removal of assets, political or social
instability, or diplomatic developments that could affect investments in
securities of issuers in foreign nations.
There may be less publicly available information about foreign companies
comparable to the reports and ratings published about companies in the U.S.
Foreign companies are not generally subject to uniform accounting or financial
reporting standards, and auditing practices and requirements may not be
comparable to those applicable to U.S. companies. The Fund, therefore, may
B-5
<PAGE>
encounter difficulty in obtaining market quotations for purposes of valuing its
portfolio and calculating its net asset value.
Certain countries' financial markets and services are less developed than those
in the U.S. or other major economies. In many foreign countries there is less
government supervision and regulation of stock exchanges, brokers, and listed
companies than in the U.S. Foreign markets have substantially less volume than
the New York Stock Exchange and securities of some foreign companies are less
liquid and more volatile than securities of comparable U.S. companies.
Commission rates in foreign countries, which are generally fixed rather than
subject to negotiation as in the U.S., are likely to be higher. Settlement
practices may be cumbersome and result in delays that may affect portfolio
liquidity. The Fund may have greater difficulty voting proxies, exercising
shareholder rights, pursuing legal remedies, and obtaining judgments with
respect to foreign investments in foreign courts than with respect to domestic
issuers in U.S. courts.
The Fund's investments in foreign securities may increase the risks with respect
to the liquidity of the fund's portfolio. This could inhibit the Fund's ability
to meet a large number of shareholder redemption requests in the event of
economic or political turmoil in a country in which the Fund has a substantial
portion of its assets invested or deterioration in relations between the U.S.
and the foreign country.
Investments in companies domiciled in developing countries may be subject to
potentially higher risks than investments in developed countries. These risks
include (i) less economic stability; (ii) political and social uncertainty (for
example, regional conflicts and risk of war); (iii) pervasiveness of corruption
and crime; (iv) the small current size of the markets for such securities and
the currently low or nonexistent volume of trading, which result in a lack of
liquidity and in greater price volatility; (v) delays in settling portfolio
transactions; (vi) risk of loss arising out of the system of share registration
and custody; (vii) certain national policies that may restrict the fund's
investment opportunities, including restrictions on investment in issuers or
industries deemed sensitive to national interests; (viii) foreign taxation; (ix)
the absence of developed legal structures governing private or foreign
investment or allowing for judicial redress for injury to private property; (x)
the absence of a capital market structure or market-oriented economy; and (xi)
the possibility that recent favorable economic developments may be slowed or
reversed by unanticipated political or social events.
In addition, many countries in which the Fund may invest have experienced
substantial, and in some periods extremely high, rates of inflation for many
years. Inflation and rapid fluctuations in inflation rates have had and may
continue to have negative effects on the economies and securities markets of
B-6
<PAGE>
certain countries. Moreover, the economies of some developing countries may
differ favorably or unfavorably from the U.S. economy in such respects as growth
of gross domestic product, rate of inflation, currency depreciation, capital
reinvestment, resource self-sufficiency, and balance of payments position.
Currency risk. Some of the Fund's investments may be denominated in foreign
currencies. Changes in foreign currency exchange rates will affect the value of
what the Fund owns and the Fund's share price. Generally, when the U.S. dollar
rises in value against a foreign currency, an investment in that country loses
value because that currency is worth fewer U.S. dollars.
Euro risk. On January 1, 1999, the European Monetary Union (EMU) introduced a
new single currency, the euro, which will replace the national currency for
participating member countries. The transition and the elimination of currency
risk among EMU countries may change the economic environment and behavior of
investors, particularly in European markets.
While the implementation of the euro could have a negative effect on the Fund,
the Fund's Adviser and its other services providers are taking steps they
believe are reasonably designed to address the euro issue.
American Depositary Receipts (ADR) risk. ADRs reduce but do not eliminate all
the risk inherent in investing in the securities of foreign issuers. To the
extent that the Fund acquires ADRs through banks that do not have a contractual
relationship with the foreign issuer of the security underlying the ADR to issue
and service such ADRs, there may be an increased possibility that the Fund would
not become aware of and be able to respond to corporate actions such as stock
splits or rights offerings involving the foreign issuer in a timely manner.
Interest rate risk. To the extent the Fund invests in bonds or other debt
securities, changes in interest rates will affect the value of the Fund's
portfolio and its share price. Rising interest rates, which often occur during
times of inflation or a growing economy, are likely to have a negative effect on
the value of the Fund's shares. Of course, interest rates have increased and
decreased, sometimes very dramatically, in the past. These changes are likely to
occur again in the future at unpredictable times.
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).
B-7
<PAGE>
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.
B-8
<PAGE>
14. Pledge, mortgage or hypothecate its assets taken at market to an extent
greater than 15% of its gross assets taken at cost.
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.
MANAGEMENT OF THE FUND
The property, business and affairs of the Fund are managed by a Board of
Directors that currently consists of four (4) members. In addition, the
day-to-day operation of the Fund is directed by the Fund's officers with
oversight by the Board. The names, ages, addresses and information as to their
principal business occupations during the last five years for each director and
officer is set forth below in alphabetical order.
<TABLE>
<CAPTION>
Principal Occupations
Positions Held for Last Five Years
Name and Address (Age) With Fund and Other Directorships
- ------------------------------------------- -------------------------- -----------------------------------------------
<S> <C> <C>
Michael R. Linburn (65) Vice President Director of Marketing, Morse, Williams & Co.,
230 Park Avenue Inc., a broker-dealer affiliate of the Fund,
New York, NY 10169 since 1992.
Clifton H.W. Maloney (61) Director President, C.H.W. Maloney & Co., Inc., an
Suite 2010 investment banking firm, since 1981;
708 Third Avenue Director, Chromium Industries, Inc., and
New York, NY 10017 Liberty Pittsburgh Systems, Inc.
Michael Miola (46) Secretary/Treasurer President, American Data Services, Inc., a
150 Motor Parkway mutual fund administrator since 1984;
Hauppauge, NY 11788 Chairman, ADS Distributors, Inc., a brokerage
firm since 1997.
B-9
<PAGE>
Principal Occupations
Positions Held for Last Five Years
Name and Address (Age) With Fund and Other Directorships
- ------------------------------------------- -------------------------- -----------------------------------------------
Robert P. Morse* (53) Chairman, President and President and a Director, Morse Williams &
230 Park Avenue Director Co., Inc., investment counselors, a
New York, NY 10169 broker-dealer affliate of the Fund, since
1981; President and sole Director of Wall
Street Management Corporation ("WSMC")
since 1984 and Morse Williams Holding Co.,
Inc. since 1986.
Jian H. Wang (35) Vice President Senior Trader, Morse, Williams & Co., Inc., a
230 Park Avenue broker-dealer affiliate of the Fund, since
New York, NY 10169 1998.
Sharon A. Queeney (56) Director President, Queeney Enterprises since 1988, a
2175 Ibis Isle marketing/media production company.
Palm Beach, FL 33480
Harlan K. Ullman, Ph.D. (58) Director Chairman, Killoven Group, a consulting firm;
1245 29th Street, N.W. Senior Fellow, The Center for Naval Analyses;
Washington, DC 20007 Senior Associate, of Center for Strategic and
International Studies, since 1987.
Edward F. McCann* (54) Director President, Enterprise Resolution, Inc. since
293 Boston Post Road 1998; Managing Director, Advest Investment
Weston, MA 02493 Banking 1997-1998; Principal, Investment
Banking, Hambrecht and Quist 1989-1997.
</TABLE>
*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, as amended (the "1940
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, 1998. The Fund has no bonus, profit sharing, or retirement plans.
COMPENSATION TABLE
<TABLE>
<CAPTION>
Total Compensation Received
Director From Fund
- --------------------------------------------------------------------------------- ----------------------------------
<S> <C>
Clifton H.W. Maloney............................................................ $6,000
Robert P. Morse................................................................. $6,000
B-10
<PAGE>
Sharon A. Queeney............................................................... $6,000
Harlan K. Ullman................................................................ $6,000
</TABLE>
In addition, the Fund's Directors were reimbursed for expenses of $4,220 in
connection with the four Board Meetings held during the year. The Fund makes no
payments of salary to any officer in such capacity.
As of February 8, 1999, all officers and directors of the Fund as a group owned
(according to information supplied by them) of record or beneficially a total of
$367,175 shares or 20.40% of the Fund.
PRINCIPAL HOLDERS OF SECURITIES
The following is the only person(s) known to the Fund who, on February 8, 1999,
owned of record or beneficially more than five percent of the outstanding
Shares:
<TABLE>
<CAPTION>
Beneficial
Name Shares Record Ownership Ownership
<S> <C> <C>
Robert P. Morse 364,436 20.25%
230 Park Avenue
New York, NY 10169
NAIDOT & Co. 135,703 7.54%
c/o Bessenger Trust Company
100 Woodbridge Center Drive
Woodbridge, NJ 07095
</TABLE>
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the Fund are made by Wall Street
Management Corporation ("Adviser" or "WSMC"). Officers of the Fund are generally
responsible for implementing or supervising these decisions, including
allocation of portfolio brokerage and principal business as well as the
negotiation of commissions and/or the price of the securities. Portfolio
turnover will be no more than is necessary to meet the Fund's investment
objectives. Under normal circumstances, it is anticipated that the Fund's
portfolio turnover will exceed 100%.
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.
B-11
<PAGE>
During the years 1998 and 1997, the rates of turnover of the Fund's portfolio
were 166.12% and 121.12%, respectively. The portfolio turnover ratio for 1998
reflected the volitality of securities markets during the year. 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). A high portfolio turnover 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.
In instances where securities are purchased on a commission basis, the Fund will
seek competitive and reasonable commission rates based on circumstances of the
trade involved and to the extent that they do not detract from the quality of
the execution. The Fund, in purchasing and selling portfolio securities, will
seek the best available combination of execution and overall price (which shall
include the cost of the transaction) consistent with the circumstances which
exist at the time. The Fund does not intend to solicit competitive bids on each
transaction.
The Fund believes it is in its best interest and that of its shareholders to
have a stable and continuous relationship with a diverse group of financially
strong and technically qualified broker-dealers who will provide quality
executions at competitive rates. Broker-dealers meeting these qualifications
also will be selected for their demonstrated loyalty to the Fund, when acting on
its behalf, as well as for any research or other services provided to the Fund.
Substantially all of the portfolio transactions are through brokerage firms
which are members of the New York Stock Exchange which is typically the most
active market in the size of the Fund's transactions and for the types of
securities predominant in the Fund's portfolio. When buying securities in the
over-the-counter market, the Fund will select a broker who maintains a primary
market for the security unless it appears that a better combination of price and
execution may be obtained elsewhere. The Fund normally will not pay a higher
commission rate to broker-dealers providing benefits or services to it than it
would pay to broker-dealers who do not provide it such benefits or services.
However, the Fund reserves the right to do so within the principles set out in
Section 28(e) of the Securities Exchange Act of 1934, as amended, when it
appears that this would be in the best interests of the shareholders.
No commitment is made to any broker or dealer with regard to placing of orders
for the purchase or sale of Fund portfolio securities, and no specific formula
is used in placing such business. Brokerage allocation is reviewed regularly by
both the Board of Directors of the Fund and the Adviser.
It is not the Fund's practice to allocate brokerage or principal business on the
basis of sales of its shares which may be made through various brokers or
dealers. However, the Fund may place portfolio orders with qualified
broker-dealers who recommend the Fund to other clients, or who act as agents in
the purchase of the Fund's shares for their clients.
B-12
<PAGE>
Research services furnished by broker-dealers may be useful to the Adviser in
serving other clients, as well as the Fund. Conversely, the Fund may benefit
from research services obtained by the Adviser from the placement of portfolio
brokerage of other clients.
When it appears to be in the best interests of its shareholders, the Fund may
join with other clients of the Adviser in acquiring or disposing of a portfolio
holding. Securities acquired or proceeds obtained will be equitably distributed
between the Fund and other clients participating in the transaction. In some
instances, this investment procedure may affect the price paid or received by
the Fund or the size of the position obtained by the Fund.
During the years 1998, 1997 and 1996, the Fund paid brokerage commissions of
$70,209, $51,851, and $72,469, respectively, to brokerage firms in connection
with its purchases and sales of portfolio securities.
During the year 1998, the Fund paid commissions for securities transactions to
brokers that provided investment information and research services to the
Adviser of $14,680 with respect to securities transactions valued at $9,476,202.
Research services furnished by brokers through whom securities transactions are
effected may be used by the Adviser in servicing all of its accounts and not all
such services may be used by the Adviser in connection with the Fund.
During the years 1998, 1997, and 1996 none of the brokers employed by the Fund
(i) was an "affiliated person" (as defined in Section 2(a)(3) of the 1940 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
the Adviser.
The Adviser may act as one of the Fund's brokers in the purchase and sale of
portfolio securities. The Adviser may be used 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 1998, the Adviser 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 receives income generally in the form of dividends and interest on its
investments. This income, less expenses incurred in the operation of the Fund,
constitutes the Fund's net investment income from which dividends may be paid to
you. Any distributions by the Fund from such income will be taxable to you as
ordinary income, whether you take them in cash or in additional shares.
The Fund may derive capital gains and losses in connection with sales or other
dispositions of its portfolio securities. Distributions from net short-term
capital gains will be taxable to you as ordinary income. Distributions from net
B-13
<PAGE>
long-term capital gains will be taxable to you as long-term capital gain,
regardless of how long you have held your shares in the Fund. Any net capital
gains realized by the Fund generally will be distributed once each year, and may
be distributed more frequently, if necessary, in order to reduce or eliminate
excise or income taxes on the Fund.
Most foreign exchange gains realized on the sale of debt securities are treated
as ordinary income by the Fund. Similarly, foreign exchange losses realized by
the Fund on the sale of debt securities are generally treated as ordinary losses
by the Fund. These gains when distributed will be taxable to you as ordinary
dividends, and any losses will reduce the Fund's ordinary income otherwise
available for distribution to you. This treatment could increase or reduce the
Fund's ordinary income distributions to you, and may cause some or all of the
Fund's previously distributed income to be classified as a return of capital.
The Fund may be subject to foreign withholding taxes on income from certain of
its foreign securities. If more than 50% of the Fund's total assets at the end
of the fiscal year are invested in securities of foreign corporations, the Fund
may elect to pass-through to you your pro rata share of foreign taxes paid by
the Fund. If this election is made, the year-end statement you receive from the
Fund will show more taxable income than was actually distributed to you.
However, you will be entitled to either deduct your share of such taxes in
computing your taxable income or (subject to limitations) claim a foreign tax
credit for such taxes against your U.S. federal income tax. The Fund will
provide you with the information necessary to complete your individual income
tax return if it makes this election.
The Fund will inform you of the amount of your ordinary income dividends and
capital gains distributions at the time they are paid, and will advise you of
their tax status for federal income tax purposes shortly after the close of each
calendar year. If you have not held Fund shares for a full year, the Fund may
designate and distribute to you, as ordinary income or capital gain, a
percentage of income that is not equal to the actual amount of such income
earned during the period of your investment in the Fund.
The Fund has elected to be treated as a regulated investment company under
Subchapter M of the Internal Revenue Code, has qualified as such for its most
recent fiscal year, and intends to so qualify during the current fiscal year. As
a regulated investment company, the Fund generally pays no federal income tax on
the income and gains it distributes to you. The Board reserves the right not to
maintain the qualification of the Fund as a regulated investment company if it
determines such course of action to be beneficial to shareholders. In such case,
the Fund will be subject to federal, and possibly state, corporate taxes on its
taxable income and gains, and distributions to you will be taxed as ordinary
dividend income to the extent of the Fund's earnings and profits.
To avoid federal excise taxes, the Internal Revenue Code requires the Fund to
distribute to you by December 31 of each year, at a minimum, the following
amounts: 98% of its taxable ordinary income earned during the calendar year; 98%
of its capital gain net income earned during the twelve month period ending
October 31; and 100% of any undistributed amounts from the prior year. The Fund
intends to declare and pay these amounts in December (or in January that are
B-14
<PAGE>
treated by you as received in December) to avoid these excise taxes, but can
give no assurances that its distributions will be sufficient to eliminate all
taxes.
Redemptions and exchanges of Fund shares are taxable transactions for federal
and state income tax purposes. If you redeem your Fund shares the IRS will
require that you report a gain or loss on your redemption. If you hold your
shares as a capital asset, the gain or loss that you realize will be capital
gain or loss and will be long-term or short-term, generally depending on how
long you hold your shares. Any loss incurred on the redemption or exchange of
shares held for six months or less will be treated as a long-term capital loss
to the extent of any long-term capital gains distributed to you by the Fund on
those shares.
All or a portion of any loss that you realize upon the redemption of your Fund
shares will be disallowed to the extent that you buy other shares in the Fund
(through reinvestment of dividends or otherwise) within 30 days before or after
your share redemption. Any loss disallowed under these rules will be added to
your tax basis in the new shares you buy.
Many states grant tax-free status to dividends paid to you from interest earned
on direct obligations of the U.S. government, subject in some states to minimum
investment requirements that must be met by the Fund. Investments in Government
National Mortgage Association or Federal National Mortgage Association
securities, bankers' acceptances, commercial paper and repurchase agreements
collateralized by U.S. government securities do not generally qualify for
tax-free treatment. The rules on exclusion of this income are different for
corporations.
If you are a corporate shareholder, you should note that some percentage of the
dividends paid by the Fund might qualify for the dividends-received deduction.
In some circumstances, you will be allowed to deduct these qualified dividends,
thereby reducing the tax that you would otherwise be required to pay on these
dividends. The dividends-received deduction will be available only with respect
to dividends designated by the Fund as eligible for such treatment. All
dividends (including the deducted portion) must be included in your alternative
minimum taxable income calculation.
UNDERWRITER
WSMC, the Fund's principal underwriter or distributor, 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 Securities Exchange Act of 1934 and that they be members in good standing of
the National Association of Securities Dealers, Inc.
B-15
<PAGE>
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, 1998.
<TABLE>
<CAPTION>
Net Underwriting Compensation on
Discounts and Redemptions and Brokerage
Name of Principal Underwriter Commissions Repurchases Commissions Other Compensation
- ----------------------------------- -------------------- ------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Wall Street Management Corp. $5,358 None None $126,063 (1)
</TABLE>
- ------------------------------
(1) Other compensation is comprised of advisory fees earned by WSMC during the
calendar year ended December 31, 1998.
PURCHASE AND REDEMPTION SERVICES
The Fund reserves the right in certain circumstances to:
o Waive or increase the minimum investment requirements with respect to
any person or class of persons, which include shareholders of the
Fund's special investment programs.
o Begin charging a fee for certain redemption services and to change the
service upon 60 days written notice to you.
o Begin charging a fee for the automatic withdrawal plan upon 30 days
written notice to you.
o Waive signature guarantee requirements in certain instances where it
appears reasonable to do so and will not unduly affect the interests
of other shareholders.
SHARE PURCHASES
The Fund will not be responsible for the consequences of delays, including
delays in the banking or Federal Reserve wire systems. We cannot process
transaction requests that are not complete and in good order. If you use the
services of any other broker to purchase or redeem shares of the Fund, that
broker may charge you a fee. Each order accepted will be fully invested in whole
and fractional shares, unless the purchase of a certain number of whole shares
is specified, at the net asset value per share next effective after the order is
received by the Fund.
Each investment is confirmed by a year-to-date statement which provides the
details of the immediate transaction, plus all prior transactions in your
account during the current year. This includes the dollar amount invested, the
number of shares purchased or redeemed, the price per share, and the aggregate
shares owned. A transcript of all activity in your account during the previous
year will be furnished each January. By retaining each annual summary and the
last year-to-date statement, you have a complete detailed history of your
account which provides necessary tax information.
B-16
<PAGE>
Upon purchase, the proper number of full and fractional shares are credited to
your account and confirmed by the Fund's transfer agent, American Data Services,
Inc. ("ADS"). In the event you fail to make payment for shares purchased, the
Adviser will complete the transaction as to avoid a reduction in the Fund's net
asset value. Normally, the shares which you purchase are held by the Fund in
open account, thereby relieving you of the responsibility of providing for the
safekeeping of a negotiable share certificate. Should you have a special need
for a certificate, one will be issued on request for all or a portion of the
whole shares in your account. There is no charge for the first certificate
issued. In order to protect the interests of the other shareholders, share
certificates will be sent to those shareholders who request them only after the
Fund has determined that unconditional payment for the shares represented by the
certificate has been received by The Bank of New York.
All such net asset value purchases are made upon the written assurance that the
purchase is made for investment purposes and will not be resold except through
redemption by the Fund. The term "purchase" as used 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 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" does 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 quantity discounts
described in the Prospectus and below 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.
B-17
<PAGE>
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.,150 Motor Parkway, Suite 109, Hauppauge, New York 11788.
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. Shares may be purchased by virtually all types of tax deferred
retirement plans. Please contact the Fund at 1-800-443-4693 to obtain plan forms
and/or custody agreements for the following:
o Individual Retirement Accounts
o Roth IRA Accounts
o Educational IRA Accounts
o Simplified Employee Pension Plans
B-18
<PAGE>
Star Bank, N.A. serves as fiduciary and custodian of the above-mentioned
retirement plans. Dividends and distributions will be automatically reinvested
without a sales charge. For further details, including rights of revocation,
fees charged, tax consequences and redemption information, see the specific plan
documents which can be obtained from the Fund. Investors should consult with
their tax advisor before establishing any of the tax-deferred retirement plans
listed above.
The Fund reserves the right in its sole discretion to withdraw all or any part
of the offering made by the prospectus or to reject purchase orders when, in the
judgment of management, such withdrawal or rejection is in the best interest of
the Fund and its shareholders.
The Fund may accept investments in kind of stocks based on judgments as to
whether, in each case, acceptance of stock will allow the Fund to acquire the
stock at no more than the net cost of acquiring it through normal channels, and
whether the stock has restrictions on its sale by the Fund under the Securities
Act of 1933. Fund shares purchased in exchange for stocks are issued at net
asset value.
The Fund reserves the right to refuse to accept orders for Fund shares unless
accompanied by payment. In the event that the Fund sustains a loss as the result
of failure by a purchaser to make payment, the Fund's Distributor will cover the
loss.
REDEMPTION OF SHARES
We will not be responsible for the consequences of delays, including delays in
the banking or Federal Reserve wire systems. We cannot process transaction
requests that are not complete and in good order. We must receive an endorsed
share certificate with a signature guarantee, where a certificate has been
issued.
To participate in the Automatic Withdrawal Plan your dividends and capital gains
distributions must be reinvested in additional shares of the Fund.
The right of redemption may be suspended, or the date of payment postponed
beyond the normal seven-day period by the Fund's Board of Directors under the
following conditions authorized by the 1940 Act: (1) for any period (a) during
which the New York Stock Exchange is closed, other than customary weekend and
holiday closing, or (b) during which trading on the New York Stock Exchange is
restricted; (2) for any period during which an emergency exists as a result of
which (a) disposal by the Fund of securities owned by it is not reasonably
practicable or (b) it is not reasonably practicable for the Fund to determine
the fair value of its net assets; or (3) for such other periods as the
Securities and Exchange Commission may by order permit for the protection of the
Fund's shareholders.
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,
B-19
<PAGE>
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. Redemptions made in kind are taxable transactions. 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., 150 Motor Parkway, Suite 109, Hauppauge, New York 11788, 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.
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
B-20
<PAGE>
(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.
PERFORMANCE MEASURES
The Fund may advertise "average annual total return" over various periods of
time. Such total return figures show the average percentage change in value of
an investment in the Fund from the beginning date of the measuring period to the
end of the measuring period. These figures reflect changes in the price of the
Fund's shares and assume that any income dividends and/or capital gains
distributions made by the Fund during the period were reinvested in shares of
the Fund. Figures will be given for recent one-, five- and ten-year periods (if
applicable), and may be given for other periods as well (such as from
commencement of the Fund's operations, or on a year-by-year basis). When
considering "average" total return figures for periods longer than one year, it
is important to note that a Fund's annual total return for any one year in the
period might have been greater or less than the average for the entire period.
Performance Comparisons. In advertisements or in reports to shareholders, the
Fund may compare its performance to that of other mutual funds with similar
investment objectives and to stock or other relevant indices. For example, it
may compare its performance to rankings prepared by Lipper Analytical Services,
Inc. (Lipper), a widely recognized independent service which monitors the
performance of mutual funds. The Fund may compare its performance to the Russell
2000 Index, an index of the 2,000 smallest companies in the Russell 3000 Index,
a measure of small company performance; Standard & Poor's 500 Stock Index (S&P
500), an index of unmanaged groups of common stocks; the Dow Jones Industrial
Average, a recognized unmanaged index of common stocks of 30 industrial
companies listed on the NYSE; or the Consumer Price Index. Performance
information, rankings, ratings, published editorial comments and listings as
reported in national financial publications such as Kiplinger's Personal Finance
Magazine, Business Week, Morningstar Mutual Funds, Investor's Business Daily,
Institutional Investor, The Wall Street Journal, Mutual Fund Forecaster, Money,
Forbes, Fortune and Barron's may also be used in comparing performance of the
Fund. Performance comparisons should not be considered as representative of the
future performance of any Fund.
B-21
<PAGE>
Performance rankings, recommendations, published editorial comments and listings
reported in Money, Barron's, Kiplinger's Personal Finance Magazine, Financial
World, Forbes, U.S. News & World Report, Business Week, The Wall Street Journal,
Investors Business Daily, USA Today, Fortune and Stanger's may also be cited (if
the Fund is listed in any such publication) or used for comparison, as well as
performance listings and rankings from Morningstar Mutual Funds, Personal
Finance, Income and Safety, The Mutual Fund Letter, United Mutual Fund Selector,
Louis Rukeyser's Wall Street newsletter, Donoghue's Money Letter, CDA,
Wiesenberger Investment Companies Service and Donoghue's Mutual Fund Almanac.
CALCULATION OF TOTAL RETURN
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, 1998: 26.14%
for the five-year period ended December 31, 1998: 12.26%
for the ten-year period ended December 31, 1998: 12.55%
Average annual total return is calculated according to the following SEC
formula:
P(1+T)n =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.
HOLIDAYS
The net asset value per share is computed once daily, Monday through Friday, at
4:00 p.m. (Eastern Time) except: days on which the New York Stock Exchange, Inc.
is closed for trading; days on which changes in the value of portfolio
securities will not materially affect the net asset value; and days during which
no purchase or redemption order is received by the Fund.
The Fund does not compute its net asset value on the following customary
holidays:
New Year's Day January 1
Martin Luther King, Jr. Day Third Monday in January
Presidents' Holiday Third Monday in February
Good Friday Friday before Easter
B-22
<PAGE>
Memorial Day Last Monday in May
Independence Day July 4
Labor Day First Monday in September
Thanksgiving Day Fourth Thursday in November
Christmas Day December 25
Investment AdvisorY and other services
Information About Adviser. 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 Avenue, 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 23, 1999 (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.
B-23
<PAGE>
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, 2001.
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>
<CAPTION>
Equivalent Average Daily
Monthly Rate Annual Rate Net Asset Value
<S> <C> <C>
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 aggregate management fees paid to the Adviser during the three most recent
fiscal years ended December 31, 1998, 1997 and 1996 were $126,063, $118,476 and
$116,345, respectively. The advisory fees paid for 1998 as a percentage of the
Fund's average net assets was 0.75%.
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 1998 as a percentage of net assets was 1.89%.
B-24
<PAGE>
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 26, 1998 (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 1940 Act.
During the years 1998, 1997, and 1996, the total amount of underwriting
commissions paid or accrued to WSMC under the Underwriting Agreement were
$5,358, $4,849, and $4,957, respectively, after deducting dealer allowances
withheld of $98, $49,806, and $0, respectively. WSMC received net remuneration
(i.e. net advisory fees paid under the Advisory Agreement plus net underwriting
commissions) from the Fund in 1998, 1997, and 1996, of $131,421, $123,325, and
$118,755, 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
B-25
<PAGE>
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.
Independent Accountants. McGladrey & Pullen LLP, 555 Fifth Avenue, New York, NY
10017, is the Fund's independent accountant. The Fund's financial statements are
audited annually by McGladrey & Pullen LLP and approved by the Board of
Directors each year, and in years in which a shareholder meeting is held the
Directors may submit their selection of independent accountants to shareholders
for notification.
GENERAL INFORMATION
Description of Shares. The Fund was organized as a Maryland corporation 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, consistent with 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.
FINANCIAL STATEMENTS
The financial statements and financial highlights of the Fund for the fiscal
year ended Decemer 31, 1998 which appear in the Fund's Annual Report to
Shareholders and the report thereon by McGladrey & Pullen LLP, the fund's
independent auditors, also appearing therein, are incorporated by reference into
this Statement of Additional Information. The Annual Report may be obtained,
without charge, by writing or calling the Fund at the address or number listed
on the cover page of this Statement of Additional Information.
B-26
<PAGE>
PART C. OTHER INFORMATION
Item 23: Exhibits:
(a)(1) The Articles of Incorporation of Registrant dated December
21, 1945*
(a)(2) Articles of Amendment to Registrant's Articles of
Incorporation as filed with the State Department of
Assessments and Taxation of Maryland, dated March 19, 1946.*
(a)(3) Articles of Amendment to Registrant's Articles of
Incorporation as filed with the State Department of
Assessments and Taxation of Mayland, dated September 29,
1969.*
(b) By-Laws of Registrant and all amendments thereto date, as
amended February 22, 1996 filed as exhibit 2 to Post
Effective Amendment No. 51 to Registrant's Registration
Statement, electronically filed with the Commission by EDGAR
on April 30, 1997.
(c) Not Applicable.
(d) Investment Advisory Contract voted upon and ratified by the
shareholders April 26, 1990 between Registrant and Wall
Street Management Corporation, previously filed as Exhibit 5
to Post-Effective Amendment 47 to Registrant's Registration
Statement filed March 3, 1992.*
(e) Underwriting Agreement and Form of Dealer Agreement,
effective April 23, 1987, previously filed as Exhibit 6 to a
Post-Effective Amendment filed on approximately May 1,
1987.*
(f) Not Applicable.
C-1
<PAGE>
(g)(1) Custodian Agreement dated April 22, 1966, between Registrant
and The Bank of New York, previously filed as Exhibit (8)(a)
to Post-Effective Amendment No. 32 to Registrant's
Registration Statement, filed with the Commission on May 1,
1980.*
(g)(2) Fee schedule dated March 4, 1997 from the Bank of New York
setting forth fees for global custody.*
(h)(1) Administration Agreement with American Data Services, Inc.
dated June 21, 1993, filed as Exhibit (9)(1) to
Post-Effective Amendment No. 52 to Registrant's Registration
Statement, electronically filed with the Commission by EDGAR
on April 30, 1998.
(h)(2) Fund Accounting Service Agreement with American Data
Services, Inc. dated June 21, 1993, filed as Exhibit (9)(b)
to Post-Effective Amendment No. 52 to Registrant's
Registration Statement, electronically filed with the
Commission by EDGAR on April 30, 1998.
(h)(3) Shareholder Servicing Agent Agreement with American Data
Services, Inc. dated June 21, 1993, filed as Exhibit (9)(c)
to Post-Effective Amendment No. 52 to Registrant's
Registration Statement, filed with the Commission on April
30, 1998.
(i) Opinion and Consent of Counsel filed as Exhibit (10) to
Post-Effective Amendment No. 52 to Registrant's Registration
Statement, filed with the Commission on April 30, 1998.
(j) Consent of Independent Certified Public Accountants dated
April 28, 1999.*
(k) Not Applicable.
(l) Not Applicable.
(m) Not Applicable.
(n) Financial Data Schedule.*
(o) Not Applicable.
- --------------------------
* Filed herewith.
Item 24: Persons Controlled by or Under Common Control with Registrant
Not Applicable.
C-2
<PAGE>
Item 25: 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 26: Business and other Connections of Investment Adviser.
The principal business of Wall Street Management Corporation
is the management of the Wall Street Fund, Inc. See captions
"Management of the Fund" in the Prospectus and "Investment
Advisory and Other Services" in the Statement of Additional
Information.
Item 27: Principal Underwriters
(a) Wall Street Management Corporation.
(b) The table below sets forth certain information as to
the Underwriter's Directors, Officers, Partners and
Control
Persons:
<TABLE>
<CAPTION>
Name & Principal Positions & Offices Positions & Offices
Business Address with Underwriter with Registrant
<S> <C> <C>
Robert P. Morse President; Director President; Director
230 Park Avenue
New York, NY 10169
Michael R. Linbum Vice President
230 Park Avenue
New York, NY 10169
Jian H. Wang Vice President
230 Park Avenue
New York, NY 10169
Michael Miola Secretary/Treasurer
150 Motor Parkway
Hauppauge, NY 11788
</TABLE>
(c) Not applicable.
Item 28: 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.,
150 Motor Parkway, Hauppauge, New York 11788. Non-current
records are located at 96 Cove Road, Oyster Bay, New York
11771.
C-3
<PAGE>
Item 29: Management services.
Not applicable.
Item 30: Undertakings.
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-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1993 and the
Investment Company Act of 1940, the Registrant 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 27th day of
April, 1999.
THE WALL STREET FUND, INC.
Registrant
BY: /s/ Robert P. Morse
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.
/s/ Robert P. Morse
Robert P. Morse, President & Director Dated: April 27, 1999
/s/ Michael Miola
Michael Miola, Secretary/Treasurer Dated: April 27, 1999
/s/ Clifton H.W. Maloney
Clifton H.W. Maloney, Director Dated: April 27, 1999
/s/ Sharon A. Queeney
Sharon A. Queeney, Director Dated: April 27, 1999
/s/ Harlan K. Ullman
Harlan K. Ullman, Director Dated: April 27, 1999
/s/ Edward F. McCann
Edward F. McCann, Director Dated: April 27, 1999
C-5
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT PAGE NO.
1.1 Original Articles of Incorporation
1.2 Articles of Amendment dated March 19, 1946
1.3 Articles of Amendment dated September 29, 1969
4 Investment Advisory Agreement
5 Underwriting Agreement
7.1 Custodian Agreement
7.2 Bank of New York Fee Schedule
10 Consent of Independent Certified Public Accountants
14 Financial Data Schedule
C-6
WALL STREET INVESTING CORPORATION
CERTIFICATE OF INCORPORATION
THIS IS TO CERTIFY:
FIRST: We, the subscribers, James L. Watson
Betty M. Hinds and Gideon H. Steffey, the post-office
address of all of whom is No. 10 Light Street, Baltimore,
Maryland, all being of full legal age, do, under and by
virtue of the General Laws of the State of Maryland,
authorizing the formation of corporations, associate
ourselves with the intention of
forming a corporation.
SECOND: The name of the corporation is
WALL STREET INVESTING CORPORATION.
THIRD: The nature of the business or objects
or purposes to be transacted, promoted or carried on by
the corporation are as follows:
To underwrite, purchase, acquire, hold, pledge, hypothecate, exchange,
sell, deal in and dispose of, alone or in syndicates or otherwise in conjunction
with others, stocks, bonds and other evidences of indebtedness and obligations
of any corporation, association, partnership, trustee, syndicate, entity, person
or governmental, municipal or public authority, domestic or foreign, and
evidences of any interest in respect of any such stocks, bonds and other
evidences of indebtedness and obligations; and to issue in exchange therefor its
own stocks, bonds or other obligations.
To purchase, acquire, hold, mortgage, pledge, hypothecate, exchange,
sell, deal in and dispose of, alone or in syndicates or otherwise in '
<PAGE>
conjunction with others, commodities and other personal property and real
property of every kind, character and description whatsoever and wheresoever
situated, and any interest therein.
To engage in any mercantile, manufacturing or trading business of any
kind or character whatsoever, within or without the State of Maryland, and to do
all things incidental to any such business; to cause to be formed, merged or
reorganized or liquidated, and to promote, take charge of and aid in any way
permitted by law the formation, merger, reorganization or liquida tion of, any
corporation, association or entity in the United States of America or abroad.
To enter into any lawful arrangements for sharing profits, union of
interest, reciprocal concession or cooperation, with any corporation,
association, partnership, syndicate, entity, person or governmental, municipal
or public authority, domestic or foreign, in the carrying on of any business
which the corporation is authorized to carry on or any business or transaction
deemed necessary, convenient or incidental to carrying out any of the purposes
of the corporation.
To act in any and all parts of the world in any capacity whatsoever as
financial, commercial or business agent or representative, general or special.,
for domestic and foreign corporations, associations, partnerships, syndicates,
entities, persons, governments, municipalities and other public bodies.
To make, enter into and carry out any arrangements with any domestic
or foreign governmental, municipal or public authority or with any corporation,
association, partnership, syndicate, entity, or person, domestic or foreign, to
obtain therefrom or otherwise to acquire by purchase, lease, assignment or
otherwise any powers, rights, privileges, immunities, franchises, guarantees,
grants and concessions; to acquire, hold, own, exercise, exploit, dispose of and
realize upon the same, and to undertake and prosecute any business dependent
thereon; and to promote, cause to be formed and aid in any way any corporation,
association, partnership, syndicate or entity for any such purposes.
To acquire, hold, use, sell, assign, lease and grant licenses or
sub-licenses in respect of, pledge or otherwise dispose of, letters patent of
the United States of America or any foreign country, patent rights, licenses,
privileges, inventions, improvements, processes, copyrights, trade-marks and
trade names relating to or useful in connection with any business of the
corporation.
To enter into, make, perform and carry out or cancel and rescind
<PAGE>
contracts for any lawful pur poses pertaining to its business with any person,
entity, syndicate, partnership, association, corporation or governmental,
municipal or public authority, domestic or foreign.
To acquire all or any part of the good will, rights property and
business of any person, entity, partnership, association or corporation
heretofore or hereafter engaged in any business similar to any business which
the corporation has power to conduct, to pay for the same in cash or in stock,
bonds or other obligations of the corporation or otherwise, to hold, utilize and
in any manner disposes of the whole or any part of the rights and property so
acquired, and to assume in connection therewith any liabilities of any such
person, entity, partnership, association or corporation and conduct in any
lawful manner the whole or any part of the business thus acquired.
To make any guaranty respecting stocks, dividends, securities,
indebtedness interest, contracts or other obligations so far as the same may be
permitted to be done by a corporation organized under the laws of Maryland.
To aid in any manner any corporation or association, domestic or
foreign, any shares of stock of which or any bonds or evidences of indebtedness
of which are held by or for this corporation, directly or indirectly, or in the
welfare of which this corporation shall have any interest, and to do any acts
designed to protect, preserve, improve or enhance the value of any property at
any time held or controlled by this corporation or in which it may at any time
be interested, directly or indirectly, and to organize or promote or facilitate
the organization of subsidiary companies.
To borrow or raise moneys for any of the purposes of the corporation
and from time to time, without limit as to amount, to draw, make, accept,
endorse, execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable instruments
and evidences of indebtedness, and to secure the payment thereof and of the
interest thereon, to the extent permitted by law, by mortgage on, or pledge,
conveyance or assignment in trust of, the whole or any part of the assets of the
corporation, real, personal or mixed, including contract rights, whether at the
time owned or thereafter acquired, and to sell, pledge or otherwise dispose of
such securities or other obligations of the corporation for its corporate
purposes.
To purchase, hold, sell, transfer, reissue or cancel the shares of its
own capital stock or any securities or other obligations of the corporation in
the manner and to the extent now or hereafter permitted by the laws of Maryland;
provided that the corporation shall not use its funds or other assets for the
purchase of its own shares of stock when such use would cause any impairment of
the capital of the corporation, and provided further that shares of its own
<PAGE>
capital stock belonging to the corporation shall not be voted upon directly or
indirectly.
In general, to carry on any business not contrary to the laws of
Maryland and to have and exercise all of the powers conferred by the laws of
Maryland upon corporations formed thereunder; and to do any and all of the acts
and things herein set forth to the same extent as natural persons could do, and
in any part of the world, as principal, factor, agent, contractor, trustee or
otherwise, either alone or in company with any person, entity, syndicate,
partnership, association or corporation; to establish and maintain offices and
agencies within, and anywhere outside of, the State of Maryland; and to exercise
all or any of its corporate powers and rights in the State of Maryland and in
any and all other states, territories, districts, colonies, possessions or
dependencies of the United States of America and in any foreign countries.
To do everything necessary, proper, advisable or convenient
for the accomplishment of any of the purposes or the attainment of any
of the objects or the furtherance of any of the powers herein set forth
and to do every other act and thing incidental thereto or connected
therewith, provided the same be not forbidden by the laws of Maryland.
The foregoing clauses shall be construed as powers as well as
objects and purposes, and the matters expressed in each clause shall, except if
otherwise expressly provided, be in nowise limited by reference to or inference
from the terms of any other clause, but shall be regarded as independent
objects, purposes and powers; and the enumeration of specific objects, purposes
and powers shall not be construed to limit or restrict in any manner the meaning
of general terms or the general powers of the corporation; nor shall the
expression of one thing be deemed to exclude another not expressed, although it
be of like nature.
The corporation shall be authorized to exercise and enjoy all
other powers, rights and privileges granted by the laws of the State of Maryland
to corporations of this character, and the enumeration of certain powers as
herein specified is not intended as exclusive of, or as a waiver of, any of the
powers, rights or privileges granted or conferred by said laws now or hereafter
in force; provided, however, that the corporation shall not in any state,
territory, district, possession or country carry on any business, or exercise
any powers, which a corporation organized under the laws thereof could not carry
on or exercise.
FOURITH: The post-office address of the place at which the
principal office of the corporation in this state shall be located is No. 10
Light Street, City of Baltimore, State of Maryland. The resident agent of the
corporation is The Corporation Trust Incorporated, the post-office address of
which is No. 10 Light Street, City of Baltimore, State of Maryland. Said
resident agent is corporation of the State of Maryland.
<PAGE>
The principal place of business of the corporation without the
State of Maryland shall be at No. 1 Wall Street, New York, N.Y., or at such
other place without the State of Maryland as may from time to time be determined
by the Boar d of Directors, and the corporation may have additional offices and
places of business and may engage in business in any and all states,
territories, districts, or possessions of the United States, or any foreign
countries.
FIFTH: The corporation shall have four directors, which number
may be changed from time to time in such lawful manner as the by-laws of the
corporation shall provide and John H. G. Pell, Robert Winthrop, Baldwin Maull
and R. Keith Kane shall act as directors until the first annual meeting of the
stockholders, or until their successors are duly chosen and qualified.
SIXTH: The total amount of the authorized capital stock of the
corporation is two million dollars($2,000,000) par value, dividend into two
million (2,000,000) shares of the par value of One Dollar ($1.00) each.(Amended
5/10/52)
No holder of shares of the capital stock of the corporation
shall be entitled as such, as a matter of right, to purchase or subscribe for
any part of any new or additional issue of stock or securities of the
corporation.
All persons who shall acquire stock in the corporation shall
acquire the same subject to the provisions of this Certificate of Incorporation.
All shares of the capital stock of the corporation now or
hereafter authorized shall be "subject to redemption" and "redeemable", in the
sense used in the General Laws of the State of Maryland authorizing the
formation of corporations, at the redemption or purchase price for any such
shares, determined in the manner set out in this Certificate of Incorporation or
in and amendment thereto. In the absence of any specification as to the purpose
for which shares of the capital stock of the corporation are repurchased by it,
all shares so repurchased shall be deemed to be "purchased for retirement" in
the sense contemplated by the laws of the State of Maryland and the number of
the authorized shares of the capital stock of the corporation shall not be
reduced by the number of any shares repurchased by it.
SEVENTH: The corporation is to have perpetual
(3/26/56)
EIGHTH: The registered holder of any share of the capital
stock of the corporation may at any time require the corporation to redeem the
<PAGE>
same by depositing his stock certificate or certificates duly endorsed in blank
or accompanied by an instrument of transfer executed in blank, at the office of
a Custodian designated by the Board of Directors (which will be a bank or trust
company, either in or outside the State of Maryland which is a member the
Federal Reserve System), or at the office of any other bank or trust company,
either in or outside of Maryland, which is a member of the Federal Reserve
System and which said Custodian has designated in writing for that purpose,
together with an irrevocable offer in writing in a form acceptable to the Board
of Directors of the corporation to sell the stock represented thereby to the
corporation at a price which is not less than ninety-nine percent. (99%) nor
more than one hundred per cent. (100%) (as fixed by resolution of the Board of
Directors of the corporation from time to time) of the net asset value thereof
as hereinafter defined. In the event that such deposit and such offer to sell to
the corporation is made, the corporation shall pay or cause to be paid to said
registered certificate holder the redemption price, as hereinafter defined, or,
at its option, shall deposit the redemption price with a bank or trust company
in New York, N Y. for the account of such holder, giving him notice forthwith of
such deposit and the place thereof; provided, however, that the Board of
Directors or any duly authorized committee of the corporation, or an officer or
officers of the corporation thereunder duly authorized by such Board or
committee, may defer such payment or deposit of the redemption price for a
period not exceeding five (5) business days on which the New York Stock Exchange
is open for trading in securities.
The total net assets of the corporation shall be deemed to be the difference
between the total gross assets of the corporation, valued as defined
hereinafter, and the total outstanding liabilities of the corporation, including
therein any estimated taxes on unrealized book profits, estimated accrued
expenses and management charges, and such reserves and other items in the nature
of liabilities as the Board of Directors in its discretion shall determine. The
net asset value of a share of the corporation shall be deemed to be the
proportionate interest represented by one outstanding share of capital stock in
the total net assets of the corporation, computed as the quotient of such total
net assets divided by the total number of shares outstanding, excluding shares
held in the treasury of the corporation.
In determining the value of the assets of the corporation for the purposes of
obtaining the net asset value for redemption, each security listed on the New
York Stock Exchange shall be valued on the basis of the closing sale thereof on
the New York Stock Exchange on each business day. If there be no sale on such
<PAGE>
day, then the security shall be valued on the basis of the mean between the
closing bid price and the closing asked price on such day.
If no bid or asked prices are quoted for such day, then the value shall be on
the basis of the last sale prior to said date on the New York Stock Exchange.
Securities listed on other exchanges shall be valued in the same manner. If
there be no available valuation method as aforesaid, then and only in such
event, such securities shall be valued by such method as the Board of Directors
deems to reflect their fair market value, and all other assets of the
corporation, including cash, prepaid and accrued items and dividends receivable
shall be valued by such method as the Board shall deem to reflect their fair
market value.
The redemption price on any business day shall be the net
asset value per share computed as aforesaid at the close of business o n the
business day previous to the day on which a request for redemption has been
properly made. The Board of Directors may provide for appropriate adjustments in
the redemption price at such time or times as it may determine during any
business day to reflect changes in the market value of securities held in the
portfolio of the corporation.
In addition, the Board of Directors may, from time to time in
its discretion, authorize the repurchase by the corporation, either directly or
through an agent, of shares of its capital stock, surrendered to and accepted by
it for the purpose. The price to be paid by the corporation on any such
repurchase shall not exceed the net asset value per share.
As used herein, the terms "business day" shall mean a day on
which the New York Stock Exchange is open for trading in securities and each
business day will end at the hour and minute when said Exchange closes for
trading in securities for the day.
Payment of the redemption or repurchase price as provided herein shall
be in cash; provided however, that any such payment may be made in whole or in
part in assets of the corporation if the Board of Directors in its discretion
shall determine that by reason of the closing of the New York Stock Exchange or
otherwise, the orderly liquidation of securities owned by the corporation is
impracticable, or payment entirely in cash would be prejudicial to the best
interests of the remaining stockholders of the corporation and further provided
that in making any such payment in whole or in part in assets of the
corporation, the corporation shall, as nearly as may be practicable, deliver
such assets taken at their market or fair value, as herein above set forth,
substantially proportionate to the interests in such assets of the corporation
represented by the shares so be paid for; whenever delivery of assets is so to
be made, such delivery shall be made as promptly as practicable after the
surrender of the certificates for shares of stock of the corporation.
No stockholder is entitled to redemption of his stock in kind. Amended
12/15/52)
<PAGE>
NINTH: The following provisions are hereby adopted for the
purpose of defining, limiting and regulating the powers of the corporation and
of the directors and stockholders:
1) All corporate powers of the corporation shall be exercised
by the Board of Directors except as otherwise provided by law. The Board of
Directors may, by resolution or resolutions, passed by a majority of the whole
Board, designate one or more committees, each committee to consist of two or
more of the directors of the corporation, which, to the extent provided in said
resolution or resolutions or in the by-laws of the corporation, shall have and
may exercise the powers of the Board of Directors in the management of the
business and affairs of the corporation, and may have power to authorize the
seal of the corporation to be affixed to all papers which may require it.
(Amended 5/10/55)
The Board of Directors shall have the power to determine the time or times at
which all securities and other assets may be valued for the purpose of computing
the offering price of the shares of any class. Notwithstanding any other
provision of these Articles, the corporation shall be empowered
to issue fractional shares of its stock of any class and such fractional shares
shall have pro rata all rights of full shares, except that the corporation shall
not be required to issue certificates or scrip representing any such fractional
shares.
3) The stockholders and directors' may hold their meetings and
have an office or offices outside the State of Maryland if the by-laws so
provide, and the books of the corporation may be kept (subject to any provision
contained in the statutes) outside of the State of Maryland at such place or
places as may be from time to time designated by the Board of Directors.
4) Subject to any limitations that may be imposed by the
stockholders, the Board of Directors may make by-laws and from time to time may
alter, amend or repeal any by-laws if there are no shares of stock outstanding
and entitled to vote thereon, but any by-laws thus made by the Board of
Directors or made by the stockholders may be altered, amended or repealed by the
stockholders at any annual meeting or at any special meeting by the affirmative
vote of the holders of two-thirds of the entire outstanding stock, present and
voting at such meeting, provided that notice of such proposed alteration,
amendment or repeal is included in the notice of such meeting.
5) The Board of Directors shall have power from time to time
to set apart out of any funds of the corporation available for dividends a
reserve or reserves for any proper purposes, and to abolish any such reserve in
the manner in which it was created.
<PAGE>
6) The Board of Directors from time to time shall determine whether and
to what extent and at what times and places and under what conditions and
regulations the accounts and books of the corporation, or any of them, shall be
open to the inspection of the stockholders, and no stockholder shall have any
right to inspect any account, book or document of the corporation except as
conferred by statute or as authorized by resolution of the Board of Directors.
7) The corporation may enter into contracts or transact
business with one or more of its directors, or with any firm of which one or
more of its directors are members, or with any corporation or association in
which any one of its directors is a stockholder, director or officer, and such
contract or transaction shall not be invalidated or in anywise affected by the
fact that such director or directors have or may have interests therein which
are or might be adverse to the interests of the corporation, even though the
vote of the director or directors having such adverse interest shall have been
necessary to obligate the corporation upon such contract or transaction- and no
director or directors having such adverse interest shall be liable to the
corporation or to any stockholder or creditor thereof, or to any other person,
for any loss incurred by it under or by reason of any such contract or
transaction; nor shall any such director or directors be accountable for any
gains or profits realized thereon: Always provided, however, that such contract
or transaction shall at the time at which it was entered into have been a
reasonable one to have been entered into and shall have been upon terms that at
the time were fair.
8) Any contract, transaction or act of the corporation or of
the Board of Directors or of any committee which shall be ratified by a majority
in interest of a quorum of the stockholders of the corporation having voting
power at any annual meeting or any special meeting called for such purpose shall
be as valid and as binding as though ratified by every stockholder of the
corporation, provided, however, that any failure to submit any such contract,
transaction or act to the stockholders for approval or ratification or any
failure of the stockholders to approve or ratify such contract, transaction or
act, when submitted, shall not be deemed in any way to invalidate the same or to
deprive the corporation, its directors or officers, of their right to proceed
with such contract, transaction or action.
TENTH: The corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate in the manner now
or hereafter prescribed by statute, except that the affirmative vote of the
holders of two-thirds of all stock outstanding, in person or by proxy, at a
meeting duly called for this specific purpose shall be required to authorize any
amendment of this certificate, and all rights herein conferred upon the
stockholders except as otherwise herein expressly provided are granted subject
to this reservation.
<PAGE>
IN WITNESS WHEREOF, we have signed this Certificate
ofIncorporation on December 21, 1945.
JAMES L. WATSON
- -------------------
James L. Watson
BETTY M. HINDS
- -------------------
Betty M, Hinds
GIDEON H. STEFFEY
- -------------------
Gideon H. Steffey
STATE OF MARYLAND,
CITY OF BALTIMORE,
SS:
I HEREBY CERTIFY, that on December 21, 19459 before me, the
subscriber, a notary public of the State of Maryland, in and for the City of
Baltimore, personally appeared James L. Watson, Betty M. Hinds and Gideon H.
Steffey and severally acknowledged the foregoing certificate of incorporation to
be their act.
WITNESS my hand and notarial seal, the day and year last above
written.
(SEAL)
MARGARET P. TUGWELL
Margaret P. Tugwell
Notary Public
My Commission expires May
1947
WALL STREET INVESTING CORPORATION
Articles of Amendment
This is to Certify:
FIRST: That the charter of WALL STREET INVESTING CORPORATION,
a Maryland corporation having its principal office in Maryland in Baltimore,
Maryland, (hereinafter called the "Corporation"), is hereby amended by striking
out the first sentence of paragraph SIXTH of the certificate of incorporation
and inserting in lieu thereof the following:
"The total amount of the authorized capital stock of the Corporation is
One million dollars ($1,000,000) par value, divided into one million (1,000 000)
shares of the par value of One dollar ($1.00) each."
SECOND: That the Board of Directors of the Corporation at a
meeting duly convened and held on February 20, 1946, duly advised the amendment
of the charter of the Corporation hereinabove set forth by passing a resolution
declaring that said amendment is advisable and calling a meeting of stockholders
to take action thereon.
THIRD: That the meeting of stockholders of the Corporation,
called by the Board of Directors of the Corporation as aforesaid and duly warned
in the manner provided by law was held at the office of the Corporation, One
Wall Street New York, N. Y., in accordance with the By-Laws and Article 23,
Section 20 of the Public General Laws of Maryland, all stockholders appearing by
their addresses on the books of the Corporation to be non-residents of Maryland,
on March 4, 1946, and at said meeting of the stockholders, by the affirmative
vote of the holders of two-thirds of the shares of the stock of the Corporation
outstanding and entitled to vote, duly adopted the amendment of the charter of
the Corporation hereinabove set forth.
FOURTH: (a) That the total number and par value of the shares
of the capital stock heretofore authorized and the number and par value of the
shares of each class are as follows: 75,000 shares of the par value of $1.00
each, all shares being of the same class.
(b) That the total number and par value of the shares of the
authorized capital stock as increased and the number and par value of each class
are set forth in Article FIRST hereof.
(c) That the preferences, voting powers, restrictions and
qualifications of each class of the authorized capital stock as increased are as
set forth in the charter.
<PAGE>
IN WITNESS WHEREOF, WALL STREET INVESTING CORPORATION has caused these presents
to be signed in its name and on its behalf by its President and its corporate
seal to be hereto attached and attested by its Assistant
Secretary on March 19, 1946.
WALL STREET INVESTING CORPORATION
By:
John Pell
- -------------------
President
(Corporate
Seal)
Attest:
Malcolm I. Ruddock
- -------------------
Assistant Secretary
STATE OF NEW YORK,
COUNTY OF NEW YORK,
ss:
I HEREBY CERTIFY, that on March 19, 19469 before me, the subscriber, a notary
public of the State of New York, in and for the County of New York, personally
appeared JOHN PELL, President of Wall Street Investing Corporation, a Maryland
corporation, and in the name and on behalf of said corporation acknowledged the
foregoing Articles of Amendment to be the corporate act of said corporation, and
at the same time personally appeared MALCOLM I. RUDDOCK and made oath in due
form of law that he was secretary of the meeting of stockholders of the
corporation at -which the amendment of the charter of the corporation set forth
in said Articles of Amendment was adopted, and that the matters and facts set
forth in said Articles of Amendment are true to the best of his knowledge,
information and belief.
WITNESS my hand and notarial seal, the day and year last above
written.
Frederick R. Koppen
Notary Public
Frederick R. Koppen
Notary Public, Nassau Count
Nassau County Clerk's No.94K
N.Y.Co.Clk's No.731 Reg. No.120K7
Commission Expires March 30, 1947
(Notarial Seal)
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
WALL STREET INVESTCORPORATION
Pursuant to Section 12 of the General Corporation Law of the State-of Maryland
Wall Street Investing Corporation (the "Corporation"), a corporation organized
and existing under and by virtue of the General Corporation Law of the State of
Maryland,
DOES HEREBY CERTIFY THAT
1. The Articles of Incorporation of the Corporation are hereby amended so that
the number of directors of the Corporation is increased from five to eleven.
2. The manner of effecting the foregoing amendment is as follows, to wit:
a. .Delete Article FIFTH of the Articles of Incorporation reading as follows:
FIFTH: The corporation shall have five directors, which number may be changed
from time to time in such lawful manner as the by-laws of the corporation shall
provide and H. Irving Pratt, John H. G. Pell, Paul Hammond, Nathaniel T.
Winthrop and Lloyd P. Griscom shall act as directors until the annual meeting of
the stockholders in 1967, or until their successors are duly chosen and
qualified.
b. .Insert in lieu thereof a new Article FIFTH reading as follows:
FIFTH: The corporation shall have eleven directors, which number may be changed
from time to time in such lawful manner as the by-laws of the corporation shall
provide, the following persons being those at the present time in office as
directors: H. Irving Pratt, John H. G. Pell, Paul Hammond, Nathaniel T.
Winthrop, Lloyd P. Griscom, John M. Drake, Thomas A. Holt, Martin J. Joyce, E.
Kirk McKinney, Jr., Arthur DeMoss and Herbert Nelson.
3.The Board of Directors of the Corporation, at a special meeting duly convened
and held on July 21,1969, acting by the vote of at least a majority of the
entire Board, adopted resolutions (a) declaring that the proposed amendment to
the Articles of Incorporation of the Corporation as set forth in the resolutions
is advisable and directing that the proposed amendment be submitted for action
thereon at the Special Meeting of Stockholders to be held on August 27, 1969,
and(b) authorizing the officers of the Corporation to prepare, execute,
acknowledge and file articles of amendment in accordance with the General
Corporation Law of the State of Maryland. Notice setting forth the proposed
amendment and stating that a purpose of said Special Meeting would be to take
action thereon was given, as provided by law, to all stockholders entitled to
notice of said Special Meeting and to vote on the proposed amendment, namely,
all stockholders of record at the close of business on July 21, 1969.
<PAGE>
4. The proposed amendment, set forth above, was approved by the stockholders of
the Corporation on August 27, 1969 at said Special Meeting of Stockholders by
the affirmative vote of at least two-thirds of all the votes entitled to be cast
thereon.
5. The aforesaid amendment to the Articles of Incorporation of the Corporation
has been duly adopted in accordance with the provisions of Section 11 of the
General Corporation Law of the State of Maryland and shall become a part of the
Articles of Incorporation upon acceptance for record of these Articles of
Amendment by the State Department of Assessments and Taxation of Maryland.
IN WITNESS WHEREOF, Wall Street Investing Corporation has caused these presents
to be signed and acknowledged in its name and on its behalf by its President and
its corporate seal to be affixed hereto and attested by its Secretary on
September 29, 1969.
WALL STREET INVESTING CORPORATION
By_______________________________
John H. G. Pell, President
[Corporate Seal]
Attest:
Lloyd P. Griscom, Secretary
STATE OF NEW YORK
COUNTY OF NEW YORK
I, HEREBY CERTIFY that on September 29, 1969, before me, the subscriber, a
notary public of the State of New York, in and for the County of New York,
personally appeared JOHN H. G. PELL, President of WALL STREET INVESTING
CORPORATION, a Maryland corporation, and in the name and on behalf of said
Corporation acknowledged the foregoing Articles of Amendment to be the corporate
act of said Corporation; and at the same time personally appeared LLOYD P.
GRISCOM and made oath in due form of law that he was secretary of the meeting of
the stockholders of said Corporation at which the amendment set forth in the
foregoing Articles of Amendment was approved; and at the saw time personally
appeared NATHANIEL T. WINTHROP and made oath in due form of law that he was
secretary of the meeting of the Board of Directors at which the foregoing
amendment to the Articles Of Incorporation was authorized and advised and the
said GRISCOM and WINTHROP made oath in due form of law that the matters and
facts set forth in said Articles of Amendment are true to the best of their
knowledge, information and belief .
<PAGE>
WITNESS my hand and notarial seal or stamp, the day and year last above written.
Notary Public
INVESTMENT ADVISOR CONTRACT
THIS AGREEMENT by and between WALL STREET MANAGEMENT CORPORATION, a
Massachusetts corporation, (hereinafter referred to as the "Adviser"), and THE
WALL STREET FUND, INC., a Maryland corporation (hereinafter referred to as the
"FUND"), was approved by the Fund's shareholders at the annual meeting thereof
on April 26, 1990, a continuation is approved at each annual shareholders
meeting.
WHEREAS, the Fund is an open-end management investment company as that term is
defined in the Investment Company Act of 1940, as amended, and is registered as
such with the Securities and Exchange Commission; and
WHEREAS, the Adviser is in the business of rendering investment advisory,
statistical and research services, and is registered as an Investment Adviser
with the Securities and Exchange Commission under the Investment Adviser's Act
of 1940; and
WHEREAS, the parties desire to provide for continuing services by the Adviser to
the Fund pursuant to the terms and conditions hereinafter set forth,
NOW THEREFORE, in consideration of the premises, the party hereto agree as
follows:
1. The Fund hereby retains and appoints the Adviser as its investment adviser
and manager to render research, statistical, advisory and managerial services to
the Fund, and to supervise the investments of the Fund for the period and upon
the terms herein set forth, subject to the direction and control of the Board of
Directors of the Fund. The Adviser accepts such employment and agrees during
such period to render the services and to assume the obligation herein set forth
for the compensation herein provided.
2. The adviser in its supervision of the investments of Fund will be guided by
the Fund's fundamental investment policies and the provisions and restrictions
contained in the Charter and By-Laws of the Fund as set forth in the Fund's
registration statement, and exhibits thereto, as may be filed with the
Securities and Exchange Commission, all subject to the applicable provisions of
the Investment Company Act of 1940, as amended.
3. The Fund will pay its own expenses including, without limitation, 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 prospectuses
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 transfer agents, registrar and
dividend disbursing agents; the cost of stock certificates and corporate
reports; all other printing expenses not otherwise allocated to the Adviser
hereunder; costs in connection with Board of Directors' meetings and the annual
or special meetings of shareholders, including proxy material preparation and
distribution, filing fees, dues, insurance premiums, miscellaneous management
<PAGE>
and operating expenses and expenses of an extraordinary and nonrecurring nature;
provided, however, that if, during any fiscal year of the Fund, the normal
operating expenses borne by the Fund (not including taxes, interest and cost of
purchasing and selling securities for its portfolio) 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 of the Fund, the Adviser will reimburse the Fund for such
excess as provided in Paragraph 4 hereof. Normal operating expenses of the Fund
for this purchase shall include, without limitation, the management fees payable
hereunder and normal legal and auditing fees and expenses incurred in the
ordinary course of business, but shall not include extraordinary legal, auditing
or other expenses incurred in connection with or as result of any matter not in
the ordinary course of business of the Fund. (As Amended June 30, 1984 and
ratified by the shareholders April 25, 1985.)
4. Subject to the provision of Paragraph 7 hereof, the Fund agrees to pay to the
Adviser for itservices rendered during the preceding month hereunder on the
first business day each month during the term of the Agreement a cash fee in an
amount determined by applying the following monthly rates to the average daily
net assets value of the Fund during the preceding month, determined in the
manner used for the determination of the offering price of the Fund's shares:
Equivalent Average Daily
Monthly Rate Annual Rate Net Asset Values
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
subject, however, to the following limitation: if for any month the normal
operating expenses of the Fund including the Adviser's management fee computed
as above provided, but not including taxes, interest and cost of purchasing and
selling securities for the portfolio (the "Expenses"), shall exceed 1/6 of 1% of
the first $10,000,000 1/8 of 1% of the next $20,000,000, and 1/2 of 1% of the
balance, of said average daily net asset values, (the "Base"), the payment to
the Adviser for that month shall be reduced. The Board of Directors will be
informed on a monthly basis of any unusual or extraordinary expenses which
affect the monthly expenses. If necessary, the Adviser shall make a refund
payment to the Fund so that the total of the expenses will not exceed the Base.
Notwithstanding the foregoing, no refund payment shall be made of any such
excess until after the end of the Fund's fiscal year (which refund payment, if
necessary, shall be made promptly after the amount, if any, is calculated), and
until a final adjustment is made for the fiscal year so that the aggregate of
the Adviser's compensation for the year is equal to the percentages herein
before set forth under the column "Equivalent Annual Rate" of the average of the
daily net asset value as determined as of the close of business on each business
day throughout the fiscal year, reduced to the extent necessary do that the
total of the Expenses shall not exceed 2% of the first $10,000,000 1.5% of the
next $20,000,000 and 1% of the balance, of said average daily net asset values.
(As amended February 23, 1990 and ratified by the Shareholders April 26, 1990.)
The aggregate of repayments, if any, by the Adviser to the Fund for the year
<PAGE>
shall be the amount necessary to limit the Expenses of the Fund for such year as
provided in the preceding sentence. For the portion of the first month and of
the first year in which this fee structure is in effect, or in the event of the
termination of the Agreement effective prior to the last day of a month, there
shall be an appropriate pro-ration of all computations and payments on the basis
of the number of days that the Agreement is in effect during the preceding month
and year respectively. If pursuant to Article EIGHT of the Articles of
Incorporation of the Fund the net asset value is not required to be determined
on any particular business day, then for the purpose of the foregoing
computations, the net asset value as last determined shall be deemed to be the
net asset value as of the close of business on that day.
5. This agreement shall not become effective until it is approved by the vote of
the majority of the outstanding voting securities of the Fund, cast at a meeting
called for that purpose.
6. The term of this Agreement shall begin on the date first above stated subject
to the provisions of Paragraph 5 and shall continue in effect for two years from
that date and from year-to-year thereafter, subject to the provisions for
termination and all of the other terms and conditions hereof, if: (a) such
continuation shall be specifically approved at least annually by the vote of a
majority 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, or by a vote of the
majority of the outstanding voting securities of the Fund, and (b) the Adviser
shall not have notified the Fund in writing at least sixty (60) days prior to
the anniversary date of this Agreement in any year hereafter that it does not
desire such continuation.
7.Nothwithstanding anything to the contrary herein, this Agreement may be
terminated at any time, without the payment of any penalty, by the directors of
the Fund or by a vote of the majority of the outstanding voting securities of
the Fund on sixty (60) days' written notice to the Adviser.
8. This Agreement shall automatically terminate in the event of its assignment,
the term "assignment" for this purpose having the meaning defined in Section
2(a) (4) of the Investment Company Act of 1940, as amended.
9. The Adviser may employ or contract with such other person or persons,
corporation or corporations at its own cost and expense as it shall determine in
order to assist it in carrying out this Agreement; provided, however, that to
the extent that any such employment or contract constitutes such other person or
persons, corporation or corporations an investment adviser to the Fund within
the meaning of the Investment Company Act of 1940, as amended, such employment
or contracts shall be subject to the approval of the Fund's shareholders in the
manner provided by such Act, prior to its effectiveness.
10. The adviser shall not be liable to the Fund for anything done or omitted by
it, except acts or omissions involving willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties imposed on it by this Agreement.
11. The services of the Adviser herein provided are not to be deemed exclusive
and, so long as its services hereunder- shall not be impaired thereby, should
<PAGE>
the Adviser so desire, it may sponsor, promote and provide investment advisory
and management services to one or more investment companies other than the Fund.
12. This Agreement may be amended at any time by agreement of the parties,
provided that the amendment shall be approved both by the vote of a majority of
directors of the Fund, including a majority of directors who are not parties to
this Agreement or interested persons of any such party to this Agreement (other
than as directors of the Fund) cast in person at a meeting called for that
purpose and by the holders of a majority of the outstanding voting securities of
the Fund.
IN WITNESS WHEREOF, the parties have caused this Amended Investment Advisory
Contract to be executed on their behalf by their duly authorized officers and
their corporate seals to be affixed hereto on April 26, 1990.
WALL STREET MANAGEMENT CORPORATION
BY:
Robert P. Morse, President
THE WALL STREET FUND, INC.
Katherine 0. Quinn, Secretary
UNDERWRITING AGREEMENT
AGREEMENT made as of the 23rd day of April, 1987 between THE WALL STREET FUND,
INC., a Maryland corporation (hereinafter called the "Corporation"), and WALL
STREET MANAGEMENT CORPORATION, a Massachusetts corporation (hereinafter called
the "Underwriter"):
1. The Underwriter will, use its best efforts to find purchasers for, and the
Corporation will sell, issue and deliver from time to time to such
purchasers such part of the authorized shares of capital stock of the
Corporation remaining unissued as from time to time shall be effectively
registered under the Securities Act of 1933, as amended, at prices
determined as hereinafter provided and on the terms hereinafter set forth,
all subject to applicable Federal and state laws and regulations and to the
charter of the Corporation
2. The Underwriter shall present all orders received by it for shares of
capital stock of the Corporation to the Corporation by telegraphic or
written purchase orders and each such order shall be subject to acceptance
or rejection by the Corporation in its sole discretion.
Notwithstanding any other provision hereof, whenever in the judgement of the
President or a Vice President and the Treasurer or Secretary of the Corporation
such action is warranted by market, economic or political conditions or by
abnormal circumstances of any kind, the Corporation may suspend the offer of
shares in effect and may, without any liability under the provisions of this
Agreement, decline to accept or confirm any orders or make any sales of shares
of capital stock under this Agreement until such time as the Corporation shall
deem it advisable to resume the offering of such shares, provided that as soon
as practicable after the taking of any such action a special meeting of the
Board of Directors shall be called to be held as soon as practicable thereafter
to determine whether or not such action shall then continue to be effective, and
the period during, or the circumstances under, which such action shall continue
or cease to be effective. During any period during which the offer of shares
shall be suspended or the Corporation shall decline to accept or confirm any
such orders or make any such sales, the Corporation shall be under no obligation
to confirm or accept any such orders or make any such sales at any price.
The Corporation will use its best efforts to keep effectively registered under
the Securities Act of 1933, as amended, for sale as herein contemplated such
shares of its capital stock as the Underwriter shall reasonably request and as
the Securities and Exchange Commission shall permit to be so registered.
3. Sales by the Underwriter shall be made as agent for the Corporation and all
such sales shall be made to or through qualified dealers or others in such
manner, not inconsistent with the provisions hereof and the then effective
registration statement of the Corporation under the Securities Act of 1933, as
amended, (and related prospectus), as the Underwriter may determine from time to
time.
The Underwriter may form a group of underwriters to participate with it in
performing under this Agreement, and the composition of such group may be
changed from time to time. If such group shall be formed, the Underwriter shall
remain the principal underwriter, and be the representative of any other
underwriters with the terms and conditions of this Agreement. It is understood
<PAGE>
and agreed that the Underwriter as principal underwriters will be primarily
responsible for the preparation and supply of sales literature to all
underwriters, be paid a fee by the other underwriters for managing the
underwriting group and providing sales literature, payable out of the premium
above net asset value at which underwriters are permitted to sell shares of
capital stock of the Corporation. The Corporation reserves the right to engage
and contact with other principal underwriters for the sale and distribution of
its shares.
The Underwriters will not make, or authorize and dealers or others to make, (a)
any short sales of shares or (b) any sales of such shares to any officers,
directors or partners of the Corporation or of the Underwriter of any
corporation or firm furnishing investment advisory, managerial, or supervisory
services to the Corporation unless such sales are at the price then available to
the public and unless the Underwriter shall be advised that the purchases are
for investment and that such purchasers will advise the Underwriter of any sales
of shares so purchased made less than two months after the date of purchase and
the Underwriter will promptly advise the Corporation of all such sales of
shares, made less than two months after the purchase, of which it is advised.
The Underwriter shall order shares of capital stock of the Corporation from the
Corporation only to the extent that it shall have received purchase orders
therefor. 4. All shares of capital stock offered for sale or sold by the
Underwriter shall be so offered or sold at a price per share (hereinafter
referred to as the "Offering Price") equal to the asset value per share
(determined as authorized from time to time by the Board of Directors of the
Corporation pursuant to its charter, plus a premium of not more than 5.5% of the
offering price thereof. If the offering price per share so determined is not an
exact multiple of one cent, it shall be adjusted to the nearer cent. In all
cases the offering price per share for the size of purchase shall be strictly in
accordance with the offering price described in the currently effective
prospectus of the Corporation.
For the purpose of determining the offering price, the asset value of any such
shares shall be so determined as of the close of the New York Stock Exchange on
the first business day on which such Exchange was open for trading next
preceding the sale of such shares, provided that the offering price of the
shares may be adjusted, in the discretion of the Corporation, based on the
actual market movements, so as to reflect on any day any change in asset value
of the shares, and the imes as of which such asset value shall be determined and
any such adjustments made and the periods during which offering prices so
determined or adjusted shall remain in effect shall be as set forth in the then
current offering prospectus. The Corporation will promptly furnish to the
Underwriter a statement of the offering price as often as such asset value is
determined and such statement shall at the request of the Underwriter show the
basis of computation of the offering price.
Orders presented by the Underwriters for shares, if accepted by the Corporation,
shall be accepted and confirmed by it or its duly authorized agent at the
offering price in effect at the time of its receipt of such order at its
principal office in New York City.
The underwriter will not in any event (a.) offer for sale or sell shares of
capital stock in excess of the number then effectively registered under the
Securities Act of 1933, as amended, and available for sale, or (b) offer for
sale or sell any shares in violation of any applicable Federal or state law,
rule or regulation.
<PAGE>
The public offering price may be reduced within the limits of the
above-mentioned premium in the case of single sales (as defined in the
prospectus forming part of such registration statement at the time when the same
becomes effective) in amounts equal to or exceeding $1,000 on such basis or
bases as may from time to time be satisfactory to the Corporation and set forth
in its then current offering prospectus.
Out of the above-mentioned premium, the Underwriter shall allow commissions or
concessions to dealers and may allow them to others in its discretion in such
amounts as the Underwriter shall determine from time to time; except as may be
otherwise determined by the Underwriter and the corporation from time to time,
such commissions or concessions shall be uniform to all dealers.
The Underwriter will require all dealers to conform to the provisions hereof and
the registration statement (and related prospectus) at the time in effect under
the Securities Act of 1933, as amended, with respect to the public offering
price of the shares, and no dealer shall in any event withhold the placing of
orders for the shares so that such dealers shall profit as a result of such
withholding by a change in the asset value of the shares from that used in
determining the price to the customer of such dealer or otherwise.
5. At or prior to delivery by the Corporation to or on the order of the
Underwriter of certificates for any share of capital stock, the Underwriter will
pay or cause to be paid to the Corporation or to its order an amount in New York
City funds equal to the offering price of such shares at which such order has
been confirmed, less the premium included therein as aforesaid which shall
constitute the entire sales load (including the entire compensation of the
Underwriter and of any dealer) other than incidental issuance or sale expenses
to be borne by the issuer. Delivery of certificates shall be made to or on the
order of the Underwriter as promptly as practicable after confirmation of its
order thereof. Certificates shall be registered in such names and amounts as the
underwriter may specify.
6. The Underwriter, except as hereinafter stated, will pay or cause to be paid
all expenses (other than expenses which one or more dealers may bear pursuant to
any agreement with the Underwriter) incident to the sale and distribution of the
shares issued or sold hereunder, including, without limiting the generality of
the foregoing, (i) all expenses of preparing, printing and distributing or
disseminating any sales literature, advertising and selling aids in connection
with the offering of the shares for sale (except that such expenses shall not
include expenses incurred by the Corporation in connection with the preparation
printing and distribution of prospectuses and of any report or other
communication to stockholders to the extent that such expenses are necessarily
incurred to effect compliance by the Corporation with any Federal or state law
or to comply with requirements of the Articles of Incorporation or By-Laws of
the Corporation and directors' fees and expenses necessarily incurred by
directors in attendance at directors' meetings), (ii) expenses of advertising in
connection with such offering, and (iii) expenses (other than the Corporation's
auditing expense) of qualifying or continuing the qualification of the shares
for sale, and of qualifying or continuing the qualification of the Corporation
as a dealer or broker under the laws of such states as may be designated by the
Underwriter under the conditions herein specified. No transfer taxes, if any,
which may be payable in connection with the issue or delivery of shares sold as
herein shall be borne by the Corporation, and the Underwriter will indemnify and
hold the Corporation harmless against liability for all such transfer taxes.
<PAGE>
7. The Corporation will execute any and all documents and furnish any and all
information which may be reasonably necessary in connection with the
qualification of its shares of capital stock for sale in such states as the
Underwriter may reasonably request (it being understood that the Corporation
shall not be required without its consent to qualify to do business in any
jurisdiction or to comply with any requirement which in its opinion is unduly
burdensome). The Underwriter, at its own expense, will effect all qualifications
as dealer or broker or otherwise under all applicable state or Federal laws
required in order that the shares may be sold in as broad a territory as
practicable.
8. The Corporation will furnish to the Underwriter from time to time such
information with respect to it and its shares as the Underwriter may reasonably
request for use in connection with the sale of shares. The Underwriter will not
use or distribute or authorize the use, distribution or dissemination by its
dealers or others in connection with such sale of any literature, advertising or
selling aids in any form or through any medium, written or oral, without the
prior written specific approval thereof by the Corporation.
9. Nothing herein contained shall limit the right of the Corporation, in its
absolute discretion, to issue or sell shares of its capital stock for such other
considerations (whether in connection with the acquisition of assets or shares
or securities of another corporation or entity or with the merger or
consolidation of any other corporation into or with the Corporation, or
otherwise) as and to the extent permitted by its charter and any applicable
laws, or to issue or sell any such shares directly to the shareholders of the
Corporation, upon such terms and conditions and for such consideration, if any,
as may be determined by the Board of Directors, whether pursuant to the
distribution of subscription or purchase rights to such holders or by way of
dividends or otherwise.
10. At the request of the Corporation, the Underwriter agrees to act as agent
for the Corporation for the repurchase or redemption of such prices as the
Corporation from time to time shall prescribe.
11. In selling or reacquiring shares, the Underwriter agrees to conform to the
requirements of all state and Federal laws relating to such sale or
reacquisition, as the case may be, and will indemnify and save the Corporation
harmless from any damage or expense on account of any wrongful act by the
Underwriter or any employee, representative or agent of the Underwriter. The
Underwriter will observe and be bound by all the provisions of the charter of
the Corporation and any fundamental policies adopted by the corporation pursuant
to the Investment Company Act of 1940, as amended, notice of which has been
given to the Underwriter.
Neither the Underwriter, any dealer nor any other person is authorized by the
Corporation to give any information or to make any representations other than
those contained (a) in the latest effective registration statement (and related
prospectus) filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, as such registration statement (and
prospectus) may be amended from time to time, or (b) in any statement expressly
authorized by the Corporation for use in connection with any reacquisition of
capital stock for the amount of the Corporation.
12. The Underwriter will:
<PAGE>
(a) not, directly or indirectly ( i ) declare or pay any dividends or
distributions (other than dividends payable in its capital stock) on any shares
of its capital stock, or (ii) use ay part of its assets or property for the
purchase, redemption or other retirement of shares of its capital stock, or (
iii) make any other distribution or transfer of assets to its stockholders,
unless, in any such case, after giving effect to such action, the excess of its
assets over its liabilities shall be at least $5,000:
(b) at all times keep its assets (other than those, such as office furniture and
fixtures, equipment, records and the like required for the operation of the
business herein contemplated) in cash or invested in readily marketable
securities:
(c) not incur any indebtedness on account of borrowing or any other indebtedness
except in the ordinary course of business in the performance of its obligations
under this Agreement.
Determination required hereunder shall be made by the independent public
accountants of the Corporation or of the Underwriters in accordance with sound
accounting practice at such reasonable intervals as the Corporation may from
time to time require.
13. This Agreement shall continue in effect until such time as there shall
remain no unsold balance of shares of capital stock effectively registered under
the Securities Act of 1933, as amended; provided, however, that (a) this
Agreement shall continue in effect for a period more than two years from the
date hereof only so long as such continuance is specifically approved at least
annually by the Board of Directors or a majority of the outstanding voting
securities of the Corporation, and (b) either party hereto may terminate this
Agreement on any date by giving the other party at least six months' prior
written notice of such termination specifying the date fixed therefor, and (c)
without prejudice to any other remedies, the Corporation may terminate this
Agreement at any time immediately upon any failure of fulfillment of any of the
obligations of the Underwriter hereunder or any of the conditions set forth in
paragraph 12 hereof.
This Agreement shall automatically terminate in the event of its assignment by
the Underwriter, the term "assignment" having the meaning defined in section
2(a)(4) of the Investment Company Act of 1940, as amended.
14. Any notice under this Agreement shall be in writing addressed and delivered
by mail, postage prepaid, to the party to whom addressed at the address given
below, or at such other address as such party shall theretofore have designated
(by notice given to the other party as herein provided) in writing for the
receipt of such notice:
To the Corporation:
The Wall Street Fund, Inc.
One Wall Street
New York, New York 10005
To the Underwriter:
Wall Street Management Corporation
One Wall Street
New York, New York 10005
<PAGE>
IN WITNESS WHEREOF, The Corporation and the Underwriter have each caused this
Agreement to be executed on its behalf by an officer thereunto duly authorized
and its corporate seal to the thereto affixed on the day and year first above
written.
THE WALL STREET FUND, INC.
BY___________________________
Vice President
WALL STREET MANAGEMENT CORPORATION
BY:_______________________________
President
CUSTODIANSHIP AGREEMENT
CUSTODIANSHIP AGREEMENT made as of the 22d day of April, 1966, by and
between WALL STREET INVESTING CORPORATION, a corporation organized and existing
under the laws of the State of Maryland, having its principal office and place
of business at One Wall Street, New York, New York, (hereinafter called the
Fund), and THE BANK OF NEW YORK, a corporation organized and existing under the
laws of the State of New York, having its principal office and place of business
at 48 Wall Street, New York, New York (hereinafter called the Custodian);
W I T N E S S E T H:
that for and in consideration of the Mutual promises hereinafter set forth, the
parties hereto covenant and agree as follows:
I
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custodian as
custodian of all of' the securities and moneys at any time owned by the Fund
during the period of this agreement.
2. The Custodian hereby accepts appointment, as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
II
CUSTODY OF CASH AND SECURITIES
1. The Fund will deliver or cause to be delivered to the Custodian
all securities and all moneys owned by it at any time during the period of this
agreement.
2. The Custodian shall credit to the account of the Fund all money
received by it for the account of the Fund, and shall disburse the same only:
(a) In payment for securities purchased, as provided in Article III
hereof; or
(b) In payment of dividends, as provided in Article IV hereof; or
(c) In payment of original issue or other taxes, as provided in
Article V hereof; or
(d) In payment for capital stock of the Fund redeemed by it, as
provided In Article V hereof; or
(e) Pursuant to certificates or written instructions of the Fund
(signed in its name by two officers, specifying the person to
whom payment is to be made, the amount to be paid and the purpose
for which such payment is to be made), in payment of investment
advisory and management fees, transfer agent fees and
<PAGE>
reimbursements, insurance premiums, fees for auditing,
accounting, bookkeeping and related services, legal fees and
disbursements, taxes, printing and stationery expenses, fees and
expenses in connection with Board and stockholder meetings
(including the expenses of proxy solicitation), and other
expenses of an operational nature or non-material in amount;
(f) Upon receipt by the Custodian of a certified copy of a resolution of
the Board of Directors of the Fund, signed by two officers of the Fund,
specifying the person to whom payment is to be made, the amount to be paid and
the purpose for, which such payment is to be made; or upon receipt by the
Custodian of a certified copy of a resolution of the Board of Directors of the
Fund, signed by two officers of the Fund, directing, authorizing, approving or
ratifying action taken or to be taken by or on behalf of the Fund, which
certificate (or an accompanying written instruction signed in the name of the
Fund by two officers thereof) shall state the person to whom payment is to be
made, the amount to be paid, the purpose for which such payment is to be made
and that it was necessary or appropriate to incur the expense for which payment
is to be made in order to take or implement the action directed, authorized,
approved or ratified by the aforesaid resolution; or
(g) In payment of such compensation and in reimbursement for such
expenses of the Custodian as are provided for in Article V1, Paragraph 6 hereof,
or as may be agreed upon from time to time pursuant thereto.
3. The Custodian shall notify the Fund each day of the amounts of money received
or paid, of the portfolio securities received or delivered for the account of
the Fund and of the share of capital stock of the Fund issued or redeemed during
the preceding day; and it shall, from time to time, upon receipt of a request
signed in the name of the Fund by an officer thereof, render a detailed
statement of the securities and moneys held for the Fund under this agreement.
Upon receipt of a like request, the Custodian shall cooperate fully with respect
to any audit of the Fund or any examination or investigation of its properties,
records or affairs.
4. All bonds and other obligations held for the Fund which are issued or
issuable in bearer form shall be held by the Custodian in that form; all other
securities held for the Fund shall be registered in the name of a duly appointed
and registered nominee of the Custodian.
5. Unless otherwise instructed to the contrary by an order signed in the name of
the Fund by two officers, the Custodian shall, with respect to all securities
held for the Fund:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount payable upon all securities which
may mature or be called, redeemed, or retired, or otherwise be come payable;
(c) Surrender interim receipts and securities in temporary form for definitive
securities;
<PAGE>
(d) Execute, as custodian, any necessary declarations or certificates of
ownership under the federal income tax laws or the regulations of any other
taxing authority now or hereafter in effect.
In addition the Custodian shall sell, if there shall be a market therefor, all
warrants, rights, options and similar securities issued with respect to
securities held by the Fund with respect to which it shall not have received
from the Fund an appropriate written instruction within a reasonable time prior
to the expiration thereof.
6. Upon an order signed in the name of the Fund by two officers, and not
otherwise, the Custodian shall:
(a) Execute and deliver to such persons as may be designated in such order,
proxies, consents, authorizations, and any other instruments whereby the
authority of the Fund as owner, of any securities may be exercised;
(b) Deliver any securities held for the Fund in exchange for other securities
and/or cash issued or paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of any corporation,or in
the exercise of any conversion privilege;
(c) Surrender warrants, rights, options or similar securities in the exercise
thereof;
(d) Deliver any securities held for the Fund to any protective committee,
reorganization committee or other person designated in, such order, in
connection with the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and receive and hold
under the terms of this agreement such certificates of deposit, interim receipts
or other instruments or documents as may be issued to it to evidence such
delivery;
(e) Make such transfers or exchanges of the assets or of the capital stock
of the Fund, and take such other steps as shall be stated in said
order to be for the purpose of effectuating any duly authorized plan
of liquidation, reorganization, merger, consolidation or
recapitalization of the Fund.
III
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
1. The Fund will cause to be delivered to the Custodian by any broker or dealer
acting for or selling to the Fund, copies of broker's or dealer's confirmations
in the form currently employed by any such broker or dealer. with respect to
every purchase of securities by or for the account of the Fund. The Fund shall,
during each business day on which a purchase of securities shall have been made,
deliver or mail to the Custodian a certificate signed in the name of the Fund by
two officers, specifying with respect to each such purchase: (a) the name of the
issuer and the title of the securities, (b) the number of shares or the
principal amount purchased, and accrued interest, f any, (c) the date of
purchase, (d) the purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with such purchase, (e) the total
<PAGE>
amount payable upon such purchase, and (f) the name of the person from whom or
the broker through whom the purchase was made. The Custodian shall receive all
securities purchased by or for the Fund from the persons through or from whom
the same were purchased, and upon receipt thereof shall pay, out of the moneys
held for the account of the Fund, the total payable upon such purchase as et
forth in such officers' certificate, provided that the same conforms to the
total amount payable shown on such broker's confirmation with respect to such
purchase.
2. If the Fund wishes to exercise any warrant, right, option or similar
security, it shall instruct the Custodian over the signature of two
officers of the Fund to exercise such security and shall specify in such
instruction the particulars of such exercise and the amount to be paid upon
exercise for the underlying securities.
3. The Fund will cause to be delivered to the Custodian by any broker or
dealer acting for or purchasing from the Fund, copies of broker's or
dealer's confirmations in the form currently employed by such broker or
dealer, with respect to every sale of securities by or for the account of
the Fund. The Fund shall, during each business day on which a sale of
securities shall have been made, deliver or mail to the Custodian a
certificate signed in the name of the Fund by two officers, specifying with
respect to each such sale (a) the name of the issuer and the title of the
security, (b) the number of shares or principal amount sold, and accrued
interest, if any, (c) the date of sale, (d) the sale price per unit and the
brokerage commission, taxes and other expenses payable in connection with
such sale, (e) the total amount payable to the Fund upon such sale, and (f)
the name of the broker through whom or the person to whom the sale was
made. The Custodian shall deliver the securities thus designated to the
broker or other person named in such officers' certificate upon receipt of
the total amount payable to the Fund upon such sale as set forth in such
officers' certificate, provided that the same conforms to the total amount
payable as shown by the confirmation of the broker through whom or the
person to whom the sale was made. The Custodian may deliver securities and
accept payment in accordance with the customs prevailing among dealers in
securities.
IV
PAYMENT OF CASH DIVIDENDS
1. Upon the declaration of any cash dividend by the Board of Directors of the
Fund, the Fund shall furnish to the Custodian a copy of a resolution of its
Board of Directors, certified by the Secretary or any Assistant Secretary,
setting forth the date fixed for payment of such dividend, the record date
as of which stockholders entitled to payment shall be determined, and the
amount payable per share to the stockholders of record as of that date.
2. Upon the payment date specified in such resolution, the Custodian, as
dividend disbursing agent, shall pay out of the moneys held for the account
of the Fund the amount per share payable as set forth in such resolution to
each stockholder of record on the record date therein set forth, as the
same appear upon the books of the Fund maintained by THE BANK OF NEW YORK,
as Transfer Agent, except that no dividend shall be paid upon stock
redeemed by the Fund prior to the record date. Payment shall be made by
check of the Custodian, as dividend disbursing agent, mailed to each
stockholder of record at his address as it appears upon such books
<PAGE>
maintained by the Transfer Agent, or pursuant to any written order of a
stockholder on file with the Custodian or Transfer Agent.
V
SALE AND REDEMPTION OF CAPITAL STOCK OF THE FUND
1. Whenever the Fund shall sell any shares of its capital stock, the principal
underwriter of the Fund, as its agent, shall deliver or mail to the
Custodian a copy of the principal underwriter's confirmation of sale,
specifying;
a. The name and address of the investor to whom or the dealer through whom such
shares have been sold;
b. The number of shares to be issued; and
c. The amount of money to be received by the Custodian upon the sale of such
shares.
2. Upon receipt of such confirmation, and upon receipt of information from the
principal underwriter or the specified dealer as to the names and addresses
of the person or persons in whose names such shares are to be registered,
the Custodian shall forthwith direct the Transfer Agent to issue and
register on the stock transfer books of the Fund, the name of the person or
persons designed as aforesaid, the number of shares purchased, as specified
in such confirmation. The Custodian shall thereupon mail an appropriate
confirmation to such person or persons, but only upon receipt of the amount
of money specified in such confirmation.
3. Whenever the Board of Directors of the Fund shall declare a dividend
payable in whole or in part in shares of its capital stock, the Fund shall
furnish to the Custodian a copy of a resolution of its Board of Directors,
certified by the Secretary or any Assistant Secretary, specifying the
amount of stock to be distributed for each share of stock outstanding, the
amount, if any, payable per share in cash in lieu of stock a description of
which stockholders are to receive stock and which, if any, are to receive
cash, the date of distribution or payment, and the record date as of which
stockholders entitled to such distribution or payment are to be determined.
The Custodian shall thereupon, in accordance with the provisions of Article
IV, and the Board's resolution, pay out the moneys, if any, payable to
stockholders who are to receive cash and direct the Transfer Agent to issue
and register in the names of stockholders who are to receive shares the
proper number of full and fractional shares. The Custodian shall thereupon
mail an appropriate confirmation of such transactions to stockholders
receiving shares. However, no dividend stock shall be issued or confirmed
nor dividend payment made upon stock redeemed prior to the record date.
4. Upon the issuance of any of the capital stock of the Fund in accordance
with the foregoing provisions of this article, the Custodian shall pay, out
of the money held for the account of the Fund, all original issue or other
taxes required to be paid by the Fund in connection with such issuance.
5. Whenever the Fund shall hereafter redeem any shares of its capital stock, it
shall furnish to the Custodian a certificate, signed in the name of the Fund by
an officer, specying:
(a) The number of shares of capital stock redeemed;
(b) The amount to be paid for the shares redeemed;
<PAGE>
(c) The name of the firm or individual from whom redeemed.
5. Upon receipt by the Custodian of stock certificates representing the number
of shares redeemed, and upon the advice of the Transfer Agent that such
stock certificates are valid and properly endorsed, the Custodian shall
make payment out of the moneys held for the account of the Fund of the
amount specified in the certificate described in the foregoing Paragraph 5,
to or upon the order of the person from whom redeemed.
The Custodian shall thereupon direct the Transfer Agent to cancel the
certificates representing the shares thus redeemed. If stock certificates have
not been issued to evidence all or any part of the shares redeemed, the
Custodian shall require a writing duly executed by the stockholder of record
requesting such redemption, and upon the advice of the Transfer Agent that the
signature or signatures on such writing are valid and proper, the Custodian
shall make payment as aforesaid. The Custodian shall thereupon direct the
Transfer Agent to reduce the number of shares in such stockholder's account by
the number of shares thus redeemed.
6. Notwithstanding any provision of this Article V, if the Custodian receives
from any stockholder or subscriber to the capital stock of the Fund a
request for a share certificate or certificates to evidence shares held of
record by such stockholder or subscriber for which a share certificate or
certificates have not been issued, the Custodian shall forthwith direct the
Transfer Agent to issue and deliver stock certificates evidencing such
shares to the stockholder or subscriber so requesting, or in lieu of
delivery may direct the Transfer Agent to mail such certificates by
registered mail, or by first class mail issued by such company or companies
as may be approved in writing by two officers of the Fund; provided, that
in no case shall the Custodian authorize the issuance of certificates to
evidence fractional shares.
VI
CONCERNING THE CUSTODIAN
1. The Custodian shall not be liable for any loss or damage, resulting from
its action or omission to act or otherwise, except for any such loss or
damage arising out of its own negligence or willful misconduct. The
Custodian may apply for and obtain the advice and opinion of counsel of the
Fund or of its own counsel, at the expense of the Fund, with respect to
questions of law, and shall be fully protected with respect to anything
done or omitted by it in good faith, in conformity with such advice or
opinion.
2. Without limiting the generality of the foregoing, the Custodian shall be
under no duty or obligation to inquire into, and shall not be liable for:
a. The validity of the issue of any investment securities purchased by or for
the Fund, the legality of the purchase thereof, or (except as provided in
Article III) the propriety of the amount paid therefor.
b. The legality of the sale of any investment securities by or for the Fund,
or (except as provided in Article III) the propriety of the amount for
which the same are sold.
c. The legality of the issue or sale of any shares of the capital stock of the
Fund, or (except as provided in Article V) the sufficiency of the amount to
be received therefor.
d. The legality of the redemption of any shares of capital stock of the Fund,
or (except as provided in Article V) the propriety of the amount to be paid
therefor.
e. The Legality of the declaration of any dividend by the Fund, or the
legality of the issue of any shares of the Fund's capital stock in payment
of any stock dividend.
<PAGE>
3. The Custodian shall not be liable for, or considered to be the custodian
of, any money represented by any check, draft, or other instrument for the
payment of money received by it on behalf of the Fund, until the Custodian
actually collects such money.
4. The Custodian shall not be under any duty or obligation to take action to
effect collection of any amount, if the securities upon which such amount
is payable are in default, or if payment is refused after due demand or
presentation, unless and until ( i ) it shall be directed to take such
action by written instructions signed in the name of the Fund by two
officers, and ( ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any such action.
5. The Custodian shall not be under any duty or obligation to ascertain
whether any securities at any time delivered to or held by it for the
account of the Fund are such as may properly be held by the Fund under the
provisions of its Articles of Incorporation.
6. Initially the Custodian shall be entitled to receive for its custodial
services, and the Fund agrees to pay to the Custodian for such services,
such compensation and reimbursement for expenses as are set forth in
apendix No. 1 hereto. Thereafter the Custodian shall receive and the Fund
shall pay for such services such compensation and reimbursement for
expenses as may be agreed upon from time to time between the Custodian and
the Fund. The Custodian may charge such compensation and reimbursement for
expenses against any money held by it for the account of the Fund upon
rendering a statement therefor.
VII
TERMINATION
1. Either of the parties hereto may terminate this agreement by giving to the
other party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) after the date of the giving of
such notice. In case such notice by given by the fund, it shall be
accompanied by a copy of a resolution of the Board of Directors of the
Fund, certified by the Secretary or any Assistant Secretary, electing to
terminate this agreement and designating a successor custodian, which shall
be a bank or trust company having not less than $2,000,000 aggregate
capital, surplus, and undivided profits. In case such notice be given by
the Custodian, the Fund shall, on or before the termination date, deliver
to the Custodian a copy of a resolution of its Board of Directors,
certified by the Secretary or any Assistant Secretary, designating such
successor custodian.
2. Upon the date set forth in such notice, this agreement shall terminate, and
the Custodian shall on that date deliver directly to the successor
custodian all securities and money then owned by the Fund and held by it as
custodian, after deducting all fees, expenses, and other amounts to the
payment or reimbursement of which it shall then be entitled.
VIII
MISCELLANEOUS
1. The term "officers" shall be deemed to include the President, the Vice
President or Vice President, the Secretary, the Treasurer, any Assistant
Secretary and any Assistant Treasurer of the Fund. Any certificates,
instruction, order, request, notice or other instrument required by this
agreement to be signed by two officers shall be signed by any two of the
following officers of the Fund, who shall not be the same person: the
<PAGE>
President, any Vice President, the Secretary or the Treasurer, or by any
one of the foregoing and by any Assistant Secretary or any Assistant
Treasurer.
2. Annexed hereto as Appendix No. 2 is a certificate signed by two of the
present officers of the Fund under its corporate seal, setting forth the
names and the signatures of the present officers of the Fund. The Fund
agrees to furnish to the Custodian a new certificate in similar form in the
event any such present officer ceases to be an officer of the Fund, or in
the event that other or additional officers are elected or appointed. Until
such new certificate shall be furnished, the Custodian shall be fully
protected in acting under the provisions of this agreement upon the
signatures of the present officers as set forth in said annexed
certificate.
3. The principal underwriter of the Fund is Wall Street Management
Corporation, a Massachusetts corporation, with offices currently at One
Wall Street, New York, New York 100005. The Fund agrees to advise the
Custodian in writing when and if there is any change in its principal
underwriter.
4. Any notice or other instrument in writing, authorized or required by this
agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its office at
No. 48 Wall Street, New York, N. Y. 10005, or at such other place as the
Custodian may from time to time designate in writing.
5. Any notice or other instrument in writing, authorized or required by this
agreement to be given to the Fund, shall e sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at One Wall Street,
New York, New York, 10005 or at such other place as the Fund may from time
to time designate in writing.
6. This agreement may not be amended or modified in any manner except by a
written agreement executed by both parties hereto.
7. This agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however,
that this agreement shall not be assignable by the Fund without the written
consent of the Custodian, or by the Custodian without the written consent
of the Fund, authorized or approved by a resolution of its Board of
Directors.
8. This agreement shall be governed by the law of the State of New York
(excluding the law of the State of New York with regard to conflicts of
law) as to all matters including but not limited to matters of validity,
construction, effect and performance.
9. This agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute but one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their respective corporate officers thereunto duly authorized
and their respective corporate seals to be hereunto affixed, as of the day
and year first above written.
<PAGE>
WALL STREET INVESTING CORPORATION
By____________________________________
John H. G. Pell, President
Attest:____________________________
Lloyd P. Griscom, Secretary
THE BANK OF NEW YORK
By_______________________________________
Nicko J. Mextorf, Vice President
Attest:______________________________
L. LaLLa
APPENDIX NO. 1
The Custodian Fee
For custodial services in connection with the Fund's cash and portfolio
securities, including but not limited to receiving the Fund's portfolio
securities and holding the same in safe-keeping, handling deliveries,
receipts, calls, redemptions and collection of income with respect thereto
and making cash payments as required by specific direction, a monthly fee
at the rate of 1/240th of 1% on the first $10,000,000 and 1/480th of 1%
thereafter on the market value of the Fund's portfolio securities. The Fund
will advise the Custodian of such market value as at the end of each
calendar month, and based on such figures the Custodian will prepare and
render a monthly statement.
The minimum charges for performing the custodian services will be $500 per
annum.
<PAGE>
Minor additional costs for such items as postage and insurance will be in
addition to the above charges.
APPENDIX NO. 2
Names and signatures of the present officers of Wall Street Investing
Corporation:
NAME OFFICE SIGNATURE
John H. G. Pell President
John Drake Vice President (not available)
Lloyd P. Griscom Vice President
and Secretary
Frederick R. Koppen Treasurer
William W. Pickslay Assistant
Treasurer
Evelyn ScheerAssistant Secretary
By______________________________________
John H. G. Pell, President
Attest:__________________________________
Lloyd P. Griscom, Secretary
THE BANK OF NEW YORK
Custodian Fee Schedule for
THE WALL STREET FUND
10 Basis Points on the First $500,000 of Market Value
8 Basis Points on the Next $500,000 of Market Value
4 Basis Point on Balance
$20 Security Activity Fee
Account Minimum $500
Additional Fees
IRA Accounts for which The Bank of New York is acting
as Trustee, will be subject to an additional
Administrative Fee of:
S1000 per annum.
4 March, 1997
[McGLADREY & PULLEN, LLP LETTERHEAD]
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated February 19, 1999 on the financial
statements of the Wall Street Fund, Inc. referred to therein which appears in
the Annual Report to Shareholders and which is incorporated herein by reference
in Post-Effective Amendment No. 54 to the Registration Statement on Form N-1A,
File No, 2-10822 as filed with the Securities and Exchange Commission.
We also consent to the reference to our fim in the prospectus under the caption
"Financial Highlights" and in the Statement of Additional Information under the
caption "Independent Accountants."
/s/ McGLADREY & PULLEN, LLP
New York, New York
April 28, 1999
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