PROSPECTUS
November 1, 1995
THE 44 WALL STREET EQUITY FUND, INC.
26 Broadway, New York, New York 10004
(In New York City - (212) 248-8080)
(Toll Free - 1-800-543-2620)
(Fax - (212) 248-8578)
Price Quote Information
(212) 248-9085 (In New York City)
1-800-543-2875 (Outside New York State)
A NO-LOAD FUND
The 44 Wall Street Equity Fund, Inc. ("Fund") seeks
long-term capital appreciation for shareholders through investment
in the securities, principally common stocks, of a relatively few
companies.
The Fund's expense ratio for the previous fiscal year is
higher than that realized by most investment companies.
Shareholders should carefully consider the effects of the Fund's
expense ratio on an investment in Fund shares (see "Summary of
Expenses," page 2).
This Prospectus sets forth concisely the information
about the Fund that a prospective investor ought to know prior to
investing. Investors are advised to read this Prospectus and
retain it for future reference. Additional information about the
Fund has been filed with the Securities and Exchange Commission in
a Statement of Additional Information dated November 1, 1995 and
is available without charge upon request to the Fund at the
address or telephone numbers shown above. The Statement of
Additional Information is hereby incorporated by reference into
this Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SUMMARY OF EXPENSES*
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of the offering price) None
Maximum Sales Load Imposed on Reinvested Dividends None
(as a percentage of the offering price)
Deferred Sales Load None
Redemption Fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees 1.00%
12b-1 Fees None
Other Expenses:
Interest expense .56%
Other expenses (exclusive of
management fees and interest expense) 3.62% 4.18%
Total Fund Operating Expenses 5.18%
Example
1 year 3 years 5 years 10 years
You would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return
and (2) redemption at the
end of each time period, or
alternatively, no redemption: $ 52 $ 155 $ 258 $ 513
This table is provided to assist the investor in understanding the
various costs and expenses that an investor in the Fund would
bear, directly or indirectly. The example given above should not
be considered as a representation of past or future expenses.
Actual expenses may be greater or less than those shown above.
Similarly, the annual rate of return assumed in the example is not
an estimate or guarantee of future investment performance.
* For the fiscal year ended June 30, 1995.
FINANCIAL STATEMENTS
The Fund's financial statements for the fiscal year ended
June 30, 1995, including the condensed financial information for
the fiscal years 1986 - 1995, are incorporated herein by reference
to the Fund's Annual Report to Shareholders accompanying this
prospectus.
THE 44 WALL STREET EQUITY FUND, INC.
The Fund is an open-end, non-diversified, managed
investment company, incorporated on May 2, 1980 in the State of
Maryland, with offices at 26 Broadway, New York, New York 10004.
As an investment company, the Fund invests the monies
received from the sale of its stock in other securities. As an
open-end investment company, the Fund will pay any investor net
asset value for the investor's shares upon demand for redemption
of such shares (see "REDEMPTION OF SHARES," page ).
The Fund may engage in transactions in exchange listed
securities options, may obtain leverage by borrowing from banks,
and may invest up to 10% of its assets in the securities of
issuers domiciled in foreign countries.
INVESTMENT OBJECTIVES AND POLICIES
The sole objective of the Fund is to achieve capital
appreciation through investment in the securities of relatively
few companies, which will be selected for potential long-term
performance. The generation of current income is not a primary
criterion for selecting portfolio investments. While the Fund
will seek to invest in the securities of companies undervalued by
the marketplace, the Fund nevertheless intends to invest in
companies with assets which the Fund deems sufficiently valuable
to support the Fund's investment.
The Fund intends to be fully invested in common stocks
and other securities having investment characteristics similar to
common stocks (i.e., warrants and convertible debentures). The
Fund may for defensive purposes from time to time, when the
investment adviser determines that market conditions warrant,
temporarily invest an unlimited portion of its assets in U.S.
Government securities, repurchase agreements collateralized by
U.S. Government securities, or high grade commercial paper (rated
either A-1 by Standard & Poor's or Prime-1 by Moody's). At such
times as the Fund assumes a defensive posture which prompts the
Fund to invest a substantial portion of its assets in the interest
bearing instruments described above, the Fund will not then be
pursuing its primary method for seeking its investment objective
of capital appreciation.
RISK FACTORS
The Fund has certain features involving greater risk,
which may be viewed as being more speculative than features found
in other investment companies.
Except when described herein as a "fundamental policy",
the policies so described are not fundamental policies and may be
changed at any time without shareholder vote.
Non-Diversified Status
The Fund is a non-diversified investment company. This
means that the Fund is not restricted by the provisions of the
Investment Company Act of 1940 with respect to the diversification
of its investments. As a matter of fundamental policy, however,
as to 50% of the Fund's total assets the Fund will not invest in
individual companies in which the Fund has invested 5% in value of
its assets or has acquired more than 10% of the outstanding voting
securities of such company, measured at the time of each such
investment. In addition, it generally will be the Fund's
intention to adhere to the diversification requirements of the
Internal Revenue Code applicable to regulated investment companies
(see "Dividends, Distributions and Taxes," page ). This means
that the limitations described in this paragraph would be
applicable and calculated at the close of each fiscal quarter.
Moreover, no more than 25% of the Fund's total assets may be
invested in the securities of any one issuer, or two or more
issuers which are engaged in similar or related trades or
businesses.
As a matter of investment strategy, the Fund will not
purchase the securities of any issuer as to which the Fund has
invested 10% in value of its assets or has acquired more than 10%
of the outstanding voting securities of such company, measured at
the time of each such investment.
Because the Fund's "non-diversified status" permits the
investment of a greater portion of the Fund's assets in the
securities of individual companies than would be permissible under
a "diversified status", the Fund's "non-diversified status" is
considered to subject the Fund to a greater degree of risk. The
Fund reserves the right to operate as a diversified investment
company if such a course appears desirable in the opinion of
management, in which event 75% in value of the Fund's total assets
would have to be invested in companies in which the Fund had not
invested 5% or more in value of its assets and in which the Fund
did not own 10% or more of the company's outstanding voting
securities. Once diversified as a result of a change in policy,
the Fund may not thereafter resume non-diversified operations
without approval by the holders of a majority of its shares.
Leverage
The Fund intends to borrow from banks from time to time
and invest the borrowed funds. To the extent that borrowed money
is utilized, the Fund's net asset value per share will tend to
appreciate or depreciate more rapidly than would otherwise be the
case.
Pursuant to the provisions of the Investment Company Act
of 1940, the Fund may borrow only from banks, and only if
immediately after such borrowing the value of the assets of the
Fund (including the amount borrowed), less its liabilities (not
including any borrowings), is at least three times the amount of
its borrowing. The amount of any borrowing would also be limited
by the applicable regulations of the Federal Reserve Board. If,
due to market fluctuations or other reasons, the value of the
Fund's assets, computed as provided above, becomes at any time less
than three times the amount of its outstanding bank debt, the
Fund, within three days (not including Sundays and holidays),
would be required to reduce its bank debt to the extent necessary
to meet the required 300% net asset coverage.
The Fund has a revolving credit agreement with its
custodian bank under which the Fund can make borrowings. The
maximum month-end and the average borrowings outstanding during
the fiscal year were approximately $1,152,000 and $456,000,
respectively. The Fund will not pledge more than 75% of its
assets as security for money borrowed.
Foreign Securities
Investments will be made primarily in securities of
companies domiciled in the United States, but the Fund has
authority to make investments in securities of issuers domiciled
in any foreign country. Such securities involve risks that are
different from those of domestic issuers, including possibly
different or adverse political and economic developments and
consequences, and also involve such other considerations as the
then current exchange rate if such issuer pays interest or
dividends in a foreign currency. Not more than 10% in value of
the Fund's investments may be made in the securities of issuers
domiciled in foreign countries, and such investments only will
consist of foreign securities either listed on a U.S. securities
exchange or traded in the U.S. over-the-counter market.
Warrants
The Fund may invest in over-the-counter securities, as
well as in securities listed on a national securities exchange.
The Fund also may invest up to 5% of its assets in warrants.
However, not more than 2% of the Fund's net assets may be invested
in warrants not listed on a national securities exchange.
"Restricted Securities" and Non-Liquid Assets
The Fund has authority to invest up to 5% of its net
assets in non-liquid assets. Non-liquid assets consist of assets
which are not readily marketable, and may include (i) repurchase
agreements, the maturity of which exceeds seven days, (ii) secu-
rities as to which no "bid" has been made or as to which trading
has been suspended, (iii) securities which may require registra-
tion under the Securities Act of 1933 prior to sale to the public
(i.e., "restricted securities") and (iv) securities of unseasoned
issuers (for this purpose, an unseasoned issuer shall be deemed to
be an entity which has been in operation for less than three
years, including all predecessors). Non-liquid assets, if
acquired, will be valued at fair value as determined in good faith
by the Board of Directors of the Fund. (For further information
on "restricted securities", see the Fund's Statement of Additional
Information under the caption "Investment Objectives and
Policies.")
Options
The Fund may engage in transactions in exchange listed
securities options. A stock option is a right to buy or sell a
particular stock at a certain price for a limited period of time.
Options consist of puts, calls or combinations thereof. A call
option gives the purchaser the right, but not the obligation, to
buy from the seller (or "writer") during the term of the option a
designated security at an agreed upon price. Conversely, a put
gives the purchaser a right, but not the obligation, to sell the
designated security to the seller of the option at an agreed upon
("exercise") price. The Fund may purchase or write calls, limited
to the writing of "covered calls." This means that the Fund must
own the underlying security in order for the Fund to write the
applicable options contract.
Some of the strategies employed with options may be
considered to be speculative. One type of transaction which is
inherently speculative is the purchase of calls. With the
purchase of a call, the Fund could lose, and would be "at risk"
for, the amount of the premium paid for the call if the underlying
security does not rise above the "exercise" price during the life
of the call. Accordingly, the Fund will follow the practice of
limiting the net "at risk" amounts with respect to the purchase of
puts or calls to 10% of the Fund's net assets, determined on the
date of purchase.
The use of certain strategies involving options may tend
to limit any potential gain which might result from an increase in
the value of any such position. The ability of the Fund to
utilize this strategy successfully will depend upon the ability of
the Fund's investment adviser to forecast pertinent market
movements, which cannot be assured.
MANAGEMENT OF THE FUND
Investment Adviser
Pursuant to an investment advisory agreement dated June
14, 1991, which was last approved by the Fund's Board of Directors
on October 5, 1995, MDB Asset Management Corporation ("Asset
Management") renders investment advice to and provides supervisory
management services for the Fund, subject to the control and
overall supervisory authority of the Fund's Board of Directors.
Asset Management is a New York corporation, formed on March 22,
1988, and is wholly owned by Mark D. Beckerman ("Beckerman"), the
President and Portfolio Manager of the Fund. Asset Management is
a registered investment adviser.
As of the date of this prospectus, Beckerman was
negotiating, and expects to enter into an agreement, with Sheldon
E. Goldberg and Gregory Church for the sale of all of the
outstanding shares of Asset Management. In exchange, Beckerman
will receive a five-year employment contract with Asset Management
as Portfolio Manager of the Fund. The sale of Asset Management to
Messrs. Goldberg and Church is subject to various conditions,
including the approval of Fund shareholders to a new investment
advisory agreement with Asset Management under its new ownership.
All of the foregoing is expected to the subject of a proxy
solicitation during 1996.
Asset Management currently provides the Fund with advice
and recommendations with respect to investments, investment
policies, the purchase and sale of portfolio securities and
management of the cash balances of and credit extended to the
Fund. For its services, Asset Management is compensated at the
annual rate of 1% of the value of the Fund's average daily net
assets, payable monthly. The rate of compensation remains
constant whether or not there are fluctuations in the Fund's net
assets. Such annual rate is higher than the rate paid by most
registered investment companies, but is similar to the rate
contracted for by other mutual funds with comparable investment
policies and is the same as the rate paid by all other equity
funds advised by Asset Management since its inception.
The Fund will pay all of its other expenses, including
commissions, interest, taxes, legal and accounting fees, fees of
custodians, transfer agents, registrars and dividend disbursing
agents, registration and filing fees, the cost of stock
certificates, costs in connection with annual or special meetings
of shareholders, including the preparation and distribution of
proxy soliciting materials, fees and expenses of Fund directors
who are not "interested persons" (as defined in the Investment
Company Act of 1940) of Asset Management, office space, office
furnishings, office supplies and office equipment, including
telephone service, insurance premiums, printing costs (this will
not include printed material sent to persons who are not
shareholders), travel expenses, salaries and related compensation
of all non-officer employees, postage, association dues and
extraordinary and non-recurring expenses.
For the fiscal year ended June 30, 1995, Fund expenses
(including interest expense and the 1% management fee) were 5.18%
of the Fund's average daily net assets.
Beckerman and Company, Inc. ("BecCo"), the principal
underwriter of shares of the Fund (see "Principal Underwriter",
page ), and Asset Management have agreed to reimburse the Fund
if Fund expenses exceed those set forth in any statutory or
regulatory formula prescribed by any state in which Fund shares
are registered at such time. Fund shares currently are not
registered in any state which requires the Fund to be reimbursed
for such excess expenses. The net effect is that Fund expenses
will not be subject to any limitation, except those limitations
imposed by good business judgment, and neither Asset Management
nor BecCo will be required to reimburse the Fund for any such
expenses.
Principal Underwriter
BecCo is a New York corporation, formed on March 31,
1988, to succeed to a brokerage business previously conducted by
a partnership consisting of Beckerman, his father, George
Beckerman, and his brother, Elliot Beckerman, under the name
Preferred Investors Planning. BecCo is registered with the
Securities and Exchange Commission as a broker-dealer under the
Securities Exchange Act of 1934. Beckerman beneficially owns 50%
of the outstanding stock of BecCo, and his father and brother
beneficially own 26% and 24% of such stock, respectively.
BecCo acts as the distributor for shares of the Fund
pursuant to a Distribution Agreement dated June 14, 1991, which
was last approved by Fund's Board of Directors on October 5, 1995.
Fund shares are sold to the public at net asset value, without any
sales charge or commission. BecCo pays the cost of sales
material, including the cost of printing prospectuses other than
those used to register Fund shares or otherwise comply with
Federal or state law or sent to existing shareholders.
PURCHASE OF SHARES
By Mail
Shares of the Fund initially may be purchased by sending
a check ($1,000 minimum) together with the completed application
form to the Fund, c/o DST Systems, Inc., P.O. Box 419953, Kansas
City, Missouri 64141-6953. Subsequent investments may be made by
mailing a check ($100 or more) together with the detachable stub
from the Transaction Advice (see "General," page ).
Mail orders without payment enclosed will not be
accepted. Third-party checks will not be accepted for payment of
purchase orders.
By Telephone
Initial and subsequent investments may be made by tele-
phone ($1,000 minimum purchase order) by calling 1-800-637-3901.
On an initial purchase, telephone orders are limited to $2,500 or
less. For existing shareholders, telephone purchase orders may be
placed in an amount ($1,000 minimum) not exceeding $10,000 or ten
times the shareholder's then current account balance, whichever is
less. Investors desiring to purchase Fund shares in excess of the
allowable limits for telephone purchase orders or to make initial
purchases otherwise than by mail may transmit payment for Fund
shares by bank wire (see "By Bank Wire," below). Telephone orders
will be taken in dollar amounts only, with full and fractional
shares being issued. Each telephone purchase order will be
assigned a control number (see "General," page ). Payment for
shares purchased must be received by the fourth day. No bill will
be sent to the investor, and it will be the responsibility of the
investor to make payment within the time limitation described
herein.
In order for shareholders to participate in the telephone
purchase and redemption service, they must elect to do so in
writing. The election may be made on the initial application form
or by writing to DST Systems, Inc. with the shareholder's
signature guaranteed. A shareholder who wants to change any
telephone service option previously elected may do so by filing
with DST Systems, Inc. an amended application form with the
shareholder's signature guaranteed. Telephone purchase orders
will not be processed unless the shareholder gives the full name
and account number at the time of placing the purchase order.
Control numbers are assigned to telephone purchase orders
so as to distinguish payment for those purchase orders from mail
purchase orders. If an investor who utilizes the telephone
purchase order service fails to include the control number on
payment for the purchase order, the investor should be aware that
DST Systems, Inc., acting as agent, may treat this as a separate
and additional subscription order. If such an event occurs,
resulting from the investor's failure to include the control
number assigned to the purchase order, the investor's account will
be charged for any loss incurred from the cancellation of the
purchase order. In the event the shareholder's account balance is
insufficient to cover the loss, BecCo will reimburse the Fund for
the difference; conversely, if the cancellation results in a gain,
BecCo shall be entitled thereto.
By Bank Wire
Shares of the Fund may be purchased by bank wire.
Investors establishing new accounts, prior to sending the bank
wire, should telephone DST Systems, Inc. at 1-800-637-3901 in
order to obtain an account number. The wire order must contain
registration instructions (i.e., full names of all investors,
address, social security number or other taxpayer identification
number and account number for new accounts, or only the account
number for existing accounts). The name of the Fund must appear
on the wire for proper credit. The investor must have the bank
wire order transmitted to United Missouri Bank of Kansas City,
N.A., 10th & Grand, Kansas City, Missouri 64106, Routing #
1010-0069-5, Purchase Account No. 987037-104-9. Wire orders
received by DST Systems, Inc. will be executed at the Fund's net
asset value per share as next determined after receipt of the
wired funds.
Through Broker-Dealers
Investors may, if they so desire, purchase Fund shares
through registered broker-dealers. Such broker-dealers may make
a reasonable charge to the investor for their services. Such fees
and services may vary among broker-dealers, and such
broker-dealers may impose higher initial or subsequent investment
requirements than those established by the Fund. Services
provided by broker-dealers may include the ability to establish a
margin account and to borrow on the value of the Fund shares in
that account.
General
Purchase orders received, either by the Fund's transfer
agent or the investor's broker-dealer, prior to the close of
trading business on the New York Stock Exchange (currently 4:00
P.M., Eastern time) on a given day will be executed at the net
asset value per share computed as of the close of business on that
day.
Conditional purchase orders will not be accepted. All
checks should be made payable to the Fund and should be drawn on
a U.S. bank. Checks drawn on a foreign bank will not be accepted
unless provision is made for payment through a U.S. bank in U.S.
dollars. If payment for any purchase order is not received as
specified herein, or if the investor's check is not honored upon
presentment, the order is subject to cancellation, and the
purchaser's existing account with the Fund immediately will be
charged for any loss incurred. In the event the shareholder's
account balance is insufficient to cover the loss, BecCo will
reimburse the Fund for the difference; conversely, if the
cancellation results in a gain, BecCo will be entitled thereto.
BecCo reserves the right to accept orders at its office, to waive
the minimum and maximum limitations for purchase orders, to reject
any order in whole or in part, or to change or discontinue without
prior notice the procedures for or availability of telephone
service for purchase orders. Although telephone service is
provided, investors should be aware that telephone lines are not
available at all times, and usually are busy shortly prior to 4:00
P.M., Eastern time. Therefore, investors are urged to place
telephone orders as early in the day as possible.
Each investor will be sent a Transaction Advice by the
Fund's transfer agent in lieu of a certificate, reflecting full
and fractional shares, unless a certificate is specifically
requested in writing by all registered owners. It is recommended
to all shareholders that a certificate not be requested unless
needed for a specific purpose. This eliminates the trouble and
expense of safeguarding the stock certificate and the cost of a
lost instrument bond in the event of loss or destruction and is a
condition to the election of telephone service.
REDEMPTION OF SHARES
Redemptions by Mail
Shares of the Fund may be redeemed by an investor by mail
by writing directly to the transfer agent, DST Systems, Inc., P.O.
Box 419953, Kansas City, Missouri 64141-6953, and enclosing a duly
endorsed share certificate, if issued. There are no special forms
for redemption. However, a written request for redemption must be
signed by all owners, with all such signatures guaranteed, as
described below. In the case of shares held by a corporation, the
redemption request must be signed in the name of the corporation
by an officer whose title must be stated, and a by-law provision
or resolution of the Board of Directors, recently certified,
authorizing the officer to so act must be furnished. In the case
of a trust or partnership, the signature must be that of a trustee
or partner in whose name the account is registered, and must
include the title of the person signing. If the trustee's or
partner's name is not registered on the account, a recently
certified copy of the trust instrument or partnership agreement
must be furnished to the Fund's transfer agent. Investors can
obtain a signature guarantee from most banks, credit unions or
savings associations, or from broker-dealers, national securities
exchanges, registered securities associations or clearing agencies
deemed to be eligible guarantor institutions. A notary public is
not acceptable. Shareholders residing abroad may obtain a
signature verification from any U.S. Consulate under official
seal.
Redemptions by Telephone, Telegram or Overseas Cable
Shares of the Fund may be redeemed by an investor by
calling DST Systems, Inc., the Fund's transfer agent, at
1-800-637-3901, or by sending a telegram or overseas cable to DST
Systems, Inc., 1004 Baltimore Avenue, Kansas City, Missouri
64105-2005. In order to utilize the procedure for redemption by
telephone, telegram or overseas cable, a shareholder previously
must have elected this option in writing, the shareholder account
previously must have been opened by and be reflected as such in
the computer records of the Fund's transfer agent, the shares
being redeemed must be held by the transfer agent and the
redemption proceeds must be transmitted directly to the
shareholder's predesignated account at a domestic bank (see
"General," page ). The Fund's transfer agent will not be liable
for acting upon any instruction it reasonably believes to be
genuine and in accordance with the procedures described herein.
Nevertheless, the Fund and/or the transfer agent may be liable for
losses resulting from unauthorized or fraudulent telephone
transactions in the event these procedures are not followed.
A shareholder may elect at any time to use the telephone
redemption service, which includes redemptions by telegram or
overseas cable. Such election may be made on the initial
application form or on other forms prescribed by the Fund. Any
changes or exceptions to the original election must be made in
writing, with signatures guaranteed, and will be effective upon
receipt by the transfer agent. When utilizing the telephone
redemption service, the shareholder must give the full name,
number of shares to be redeemed (if less than all remaining
shares) and account number, or the redemption request will not be
processed. For a redemption by overseas cable, you must also
include the Fund name. Redemptions by telegram or overseas cable
will not become effective until the writing constituting the
telegram or overseas cable is received by the Fund's transfer
agent.
General
The redemption price for shares upon written request,
telegram, overseas cable or telephone redemption will be the net
asset value per share as next determined after receipt of such
request in good order by the Fund's transfer agent (see "Net Asset
Value," page ). The proceeds of all redemptions will be mailed
or wired, as elected by the shareholder, on the next business day
after redemption if being transmitted to the investor's account at
the broker-dealer through which the Fund shares were purchased, or
on the third business day after the redemption if being
transmitted otherwise. However, redemption proceeds will not be
transmitted until the investor's check for the purchase of Fund
shares has cleared. Where a shareholder simultaneously redeems
shares for which payment has been made and shares for which the
shareholder's check has not cleared, the shareholder authorizes
the Fund to delay transmittal of that portion of the redemption
proceeds equal to the amount of the check which has not then
cleared until the shareholder's check has cleared, but such
portion of the redemption proceeds will be transmitted promptly
after such clearance. Where a shareholder has elected to have the
redemption proceeds transmitted directly to the shareholder's
predesignated account at a domestic bank, the proceeds will be
wired if the account is at a commercial bank and will be sent by
mail if the account is at a savings bank or if the proceeds are
less than $1,000. The Fund's transfer agent will not honor any
redemption request that contains a restriction as to the time,
date or share price at which the redemption is to be effective.
The Fund reserves the right to change or discontinue without prior
notice the procedures for or availability of telephone service for
redemption requests. Although telephone service is provided,
investors should be aware that telephone lines are not available
at all times, and usually are busy shortly prior to 4:00 P.M.,
Eastern time. Therefore, investors are urged to place telephone
orders as early in the day as possible.
The right of redemption may be suspended or the payment
date postponed during any period when: (a) the New York Stock
Exchange is closed for other than customary weekend and holiday
closings; (b) trading on the New York Stock Exchange is
restricted, as determined by the Securities and Exchange
Commission; (c) an emergency as defined by rules of the Securities
and Exchange Commission exists; or (d) the Commission has, by
order, permitted such suspension. In case of suspension of the
right of redemption, the shareholder may withdraw the request for
redemption or the shareholder will receive payment of the net
asset value next determined after the suspension has been
terminated.
The Fund has the right to involuntarily redeem after
written notice the shares of an investor, the aggregate value of
whose shares is less than $500, if such investor has not purchased
at least $100 of shares (other than shares acquired through
reinvestment of dividends or distributions) within the twelve
month period immediately preceding the date fixed for such
redemption. Notice of redemption will be given by first class
mail to the investor at the address on the Fund's records. The
notice will fix a date of not less than 30 days in advance of the
date on which it was mailed, and the shares will be redeemed at
net asset value as of the close of business on that date, unless
before then the investor purchases at least $100 of additional
shares (apart from reinvestment of dividends or distributions).
A check for the proceeds of redemption, which may be less or more
than the purchase price of the shares, will be mailed to the
investor at the address of record.
During the year, the Fund exercised its right to
involuntarily redeem certain shareholder accounts within the
parameters outlined above.
TRANSFER OF SHARES
To transfer Fund shares from an existing account, the
following items must be sent directly to the Fund's transfer
agent, DST Systems, Inc., P.O. Box 419953, Kansas City, Missouri
64141-6953.
A letter requesting the transfer signed by each
registered owner must be sent. The letter should give the full
name, address and social security number (or taxpayer
identification number) of the transferee. A stock power which
should be signed by each registered owner, with signatures
guaranteed, must accompany the letter. A notary public is not an
acceptable guarantor. A new application completed in its entirety
and signed by the new owner also is required. Application forms
may be obtained by calling the Fund at (212) 248-8080 (in New York
City) and 1-800-543-2620 (toll-free).
OPERATION OF THE FUND
Net Asset Value
The net asset value of the Fund's shares will be
determined as of the close of trading on the New York Stock
Exchange (which currently is 4:00 P.M., Eastern time) on each day
on which the New York Stock Exchange is open for trading and on
which there is a sufficient degree of trading in the Fund's
portfolio of investments that such net asset value might be
materially affected by the changes in the underlying values of
such portfolio securities, and will be computed by dividing the
market value of all securities and other assets, less liabilities,
by the number of the Fund's outstanding shares. Such
determination is made by valuing portfolio securities listed or
traded on a national securities exchange on which the security is
primarily traded at the last sale price, or if there has been no
sale that day, at the mean between the last bid and asked prices.
Securities traded in the over-the-counter market are valued at
their last bid price, and all other portfolio securities and
assets, including restricted securities, will be valued at fair
value as determined in good faith by the Board of Directors.
Dividends, Distributions and Taxes
It will be the policy of the Fund to distribute at least
annually substantially all of its net ordinary income and net
realized capital gains, if any. In so doing, the Fund intends to
comply with Subchapter M of the Internal Revenue Code, which
relieves complying investment companies which distribute
substantially all of their net income from Federal income tax on
the amount distributed. The Fund qualified as a regulated
investment company during fiscal 1995, and it intends to so
qualify in future years if it is in the best interests of Fund
shareholders to do so.
It is the present policy of the Fund to declare and pay
annually net ordinary income as dividends and to declare and
distribute annually all net capital gains realized in excess of
all then available capital loss carryforwards. These dividends
and distributions are payable in Fund shares, although
shareholders may elect to receive such dividends and distributions
in cash upon written request to the Fund, which request must be
received by the Fund prior to the close of business on or before
the record date for payment of the particular dividend or
distribution. Checks issued pursuant to a shareholder's request
for payment in cash of a dividend or distribution are sent by
first class mail to the shareholder's address as reflected in the
transfer agent's records. If any such check is returned to the
Fund, it automatically will be deemed to be a request by the
shareholder to reinvest those proceeds and all future dividends
and distributions in Fund shares unless and until the shareholder
subsequently elects in writing to be paid in cash. All dividends
and distributions are taxable to the shareholder whether received
in cash or in Fund shares. Reinvestment in Fund shares of the
dividend or distribution will be made on the payable date.
Distributions of dividends and short-term capital gains
are taxable to a shareholder as ordinary income. The dividends
(but not the capital gains) qualify for the 70% dividends-received
deduction for corporations, unless they are derived from interest
or other non-dividend income or dividends from foreign
corporations.
In January of the year after the distribution, the Fund
will send shareholders a Form 1099, notifying shareholders of the
status of each distribution for Federal income tax purposes.
In the event a shareholder fails to furnish a taxpayer
identification number and to certify to the accuracy thereof, or
the Internal Revenue Service notifies the Fund that a
shareholder's taxpayer identification number is incorrect or that
withholding is otherwise required, the Fund will commence
withholding on such shareholder's account. Once withholding is
established, all withheld amounts will be paid to the Internal
Revenue Service, from whom such shareholder should seek any
refund. If withholding is commenced with respect to any
shareholder account, the shareholder should consult with the
shareholder's attorney or tax adviser or contact the Internal
Revenue Service directly. In addition, the IRS levies a fine for
each incorrect or uncertified taxpayer identification number. Any
such fine levied against the Fund will be assessed against the
shareholder account responsible therefor.
Brokerage
Decisions to buy and sell securities are made by the Fund
based upon investment advice received from Asset Management.
The commission rate on all exchange orders is subject to
negotiation, and Asset Management will be responsible for
negotiating such commission rates on behalf of the Fund. In
selecting brokers or dealers to execute portfolio transactions for
the Fund, an attempt will be made to negotiate the best commission
rate among those dealers who in the opinion of Asset Management
can obtain best price and execution for the Fund. Subject to the
foregoing, in the allocation of portfolio brokerage business,
Asset Management also may consider research and brokerage services
provided by dealers, and is authorized to cause the Fund to pay to
a dealer a commission rate or amount in excess of the rate or
amount another dealer would have charged for effecting that
transaction if Asset Management determines in good faith that such
rate or amount of commission is reasonable in relation to the
value of the research and brokerage services provided. Research
services include investment recommendations, statistical research
and other services, including economic and market information.
Such research and brokerage services are considered to be in
addition to and not in lieu of the services required to be
performed by Asset Management under its contract with the Fund.
Research services furnished by brokers through whom the Fund
effects securities transactions may be used by Asset Management in
servicing all of the accounts of Asset Management, just as any
research services provided by such brokers with respect to
securities transactions for such other accounts may be used by
Asset Management in servicing the Fund.
The Investment Advisory Agreement between the Fund and
Asset Management, as authorized by Section 28(e) of the Securities
Exchange Act of 1934, permits Asset Management to cause the Fund
to pay a broker-dealer (including BecCo) which furnishes brokerage
or research services a higher commission than that which might be
charged by a broker-dealer which does not furnish brokerage or
research services or which furnishes brokerage or research
services deemed to be of a lesser value, if such commission is
deemed reasonable in relation to the brokerage or research
services provided by the broker-dealer, viewed in terms of either
that particular transaction or Asset Management's overall
responsibilities. In addition, Section 17(e) of the 1940 Act
limits to "the usual and customary broker's commission" the amount
which can be paid by the Fund to affiliated persons acting as
broker in connection with transactions effected on a securities
exchange. Rule 17e-1 under the 1940 Act provides that a
commission, fee or other remuneration does not exceed the usual
and customary broker's commission if it is "reasonable and fair
compared to the commission, fee or other remuneration received by
other brokers in connection with comparable transactions involving
similar securities being purchased or sold on a securities
exchange during a comparable period of time...." Rule 17e-1 also
requires the Board of Directors of the Fund, including a majority
of the directors who are not "interested persons" (as defined in
the 1940 Act) of the Fund, of Asset Management or of BecCo, to
adopt procedures reasonably designed to provide that the
commissions paid are consistent with the above standard, to assure
that the procedures continue to be appropriate, and to determine
at least quarterly that the transactions have been effected in
compliance with those procedures. During the fiscal year, gross
commissions aggregating $5,617 were paid to BecCo by the Fund.
Transactions in a security traded over-the-counter
normally will be made through a principal market maker for such
security unless, taking into consideration all factors, including
the size of the transaction, a more favorable result is obtainable
elsewhere. The Fund will not engage in any transaction in which
either Asset Management or BecCo would be a principal. BecCo has
advised that it will not receive reciprocal brokerage business as
a result of brokerage business placed or principal transactions
made by the Fund with others.
ADDITIONAL INFORMATION
Transfer and Shareholder Service Agent. DST Systems, Inc., P.O.
Box 419953, Kansas City, Missouri 64141-6953 acts as shareholder
servicing and transfer agent for the Fund. Questions concerning
shareholder accounts should be directed to The 44 Wall Street
Equity Fund, Inc., c/o DST Systems, Inc., P.O. Box 419953, Kansas
City, Missouri 64141-6953, or call 1-800-637-3901. Telephone
requests for information of a confidential nature will be answered
by letter to the shareholder's address of record. Procedural type
inquiries will be answered immediately.
Custodian. The Bank of New York, 48 Wall Street, New York, New
York 10015 serves as custodian of the Fund's cash and securities.
Accountants. McGladrey & Pullen, LLP will serve as the independent
certified public accountants for the Fund and will examine and
report on the Fund's financial condition.
Reports. Each shareholder will receive semi-annual and annual
financial reports of the Fund. Annual financial reports will be
audited.
Retirement Plans. The Fund has available for investors a prototype
retirement plan, a prototype Individual Retirement Account ("IRA")
and a tax sheltered retirement plan in accordance with Section
403(b) of the Internal Revenue Code for employees of public school
systems and certain other charitable organizations. For further
information or application forms for these retirement plans,
please write or call the Fund at the address or telephone numbers
shown on the cover page.
Investment Plans. The Fund also sponsors an Automatic Accumulation
Plan and an Automatic Withdrawal Plan. For further information or
application forms for these plans, please write or call the Fund.
Voting Rights. All Fund shares are of the same class with equal
voting rights. New directors will be elected by the holders of a
majority of the shares at an annual or a special meeting duly
called for that purpose, except that vacancies between such
meetings may be filled by a majority of the remaining directors,
provided that thereafter two-thirds of the directors then holding
office have been duly elected by the shareholders.
INVESTMENT ADVISER PRINCIPAL UNDERWRITER
MDB Asset Management Corporation Beckerman and Company, Inc.
P.O. Box 605 26 Broadway
Nanuet, New York 10954-0605 New York, New York 10004
TRANSFER AGENT
DST Systems, Inc.
P.O. Box 419953
Kansas City, Mo. 64141-6953
1-800-637-3901
CUSTODIAN AUDITORS
The Bank of New York McGladrey & Pullen, LLP
48 Wall Street 555 Fifth Avenue
New York New York 10015 New York, New York 10017
_________________________________________________________________
TABLE OF CONTENTS
Page
SUMMARY OF EXPENSES........................................... 2
FINANCIAL STATEMENTS..........................................
THE 44 WALL STREET EQUITY FUND, INC...........................
INVESTMENT OBJECTIVES AND POLICIES............................
RISK FACTORS..................................................
Non-Diversified Status.....................................
Leverage...................................................
Foreign Securities.........................................
Warrants...................................................
"Restricted Securities" and Non-Liquid Assets..............
Options....................................................
MANAGEMENT OF THE FUND........................................
Investment Adviser.........................................
Principal Underwriter.....................................
Page
PURCHASE OF SHARES............................................
By Mail....................................................
By Telephone...............................................
By Bank Wire...............................................
Through Broker-Dealers.....................................
General....................................................
REDEMPTION OF SHARES..........................................
Redemptions by Mail........................................
Redemptions by Telephone, Telegram or Overseas Cable.......
General....................................................
TRANSFER OF SHARES............................................
OPERATION OF THE FUND.........................................
Net Asset Value............................................
Dividends, Distributions and Taxes.........................
Brokerage..................................................
ADDITIONAL INFORMATION........................................
Transfer and Shareholder Service Agent.....................
Custodian..................................................
Accountants................................................
Reports....................................................
Retirement Plans...........................................
Investment Plans...........................................
Voting Rights..............................................
_________________________________________________________________
No dealer, salesman, or other person has been authorized
to give any information or to make any representations other than
those contained in this Prospectus in connection with the offer
contained in this Prospectus, and, if given or made, such other
information or representations must not be relied upon as having
been authorized by the Fund. This Prospectus does not constitute
an offering in any state or jurisdiction in which such offering
may not lawfully be made.
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