As filed with the Securities and Exchange Commission on October 27, 1995.
Registration No. 33-48606
(The 59 Wall Street Tax Free Short/Intermediate Fixed Income
Fund)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 3
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 31
THE 59 WALL STREET TRUST
(Exact name of Registrant as specified in charter)
6 St. James Avenue
Boston, Massachusetts 02116
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (617)
423-0800
PHILIP W. COOLIDGE
6 St. James Avenue, Boston, Massachusetts 02116
(Name and Address of Agent for Service)
Copy to:
JOHN E. BAUMGARDNER, JR., ESQ.
Sullivan & Cromwell
125 Broad Street, New York, New York 10004
It is proposed that this filing will become effective (check
appropriate box)
[ ] immediately upon filing pursuant to pursuant to paragraph (b)
[X] on October 27, 1995 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a) (i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) 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.
Registrant has registered an indefinite number of its shares of common
stock pursuant to Rule 24f-2 under the Investment Company Act of 1940.
Registrant filed the Notice required by Rule 24f-2 on August 29, 1995, for
Registrant's fiscal year ending June 30, 1995.
<PAGE>
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 19331
<TABLE>
<S> <C> <C> <C>
Proposed Proposed
Title of Amount Being Maximum Maximum
Securities Registered Offering Aggregate Amount of
Being Under Rule Price Per Offering Registration
Registered 24e-2 Unit2 Price3 Fee
The 59 Wall Street
Tax Free Short/
Intermediate Fixed
Income Fund
Shares of
Beneficial
Interest
(par value
$0.01 per share) $16,880,899 $10.30 $290,000 $100.00
<FN>
1The shares being registered as set forth in this table are in addition to
the indefinite number of shares of beneficial interest which Registrant has
registered under the Securities Act of 1933, as amended (the "1933 Act"),
pursuant to Rule 24f-2 under the 1940 Act. Registrant filed the Notice required
by Rule 24f-2 on August 29, 1995 for its fiscal year ended June 30, 1995.
2Based on Registrant's closing price of $10.30 on October 11, 1995 pursuant
to Rule 457(d) under the 1933 Act and Rule 24e-2(a) under the 1940 Act.
3In response to Rule 24e-2(b) under the 1940 Act: (1) the calculation of the
maximum aggregate offering price is made pursuant to Rule 24e-2; (2) $38,082,365
shares of beneficial interest were redeemed by the Registrant during the fiscal
year ended June 30, 1995; (3) $21,229,621 shares are being used for reductions
pursuant to Rule 24f-2 during the current fiscal year; and (4) $16,852,744
shares are being used for reduction in this amendment pursuant to Rule 24e-2(a).
</FN>
</TABLE>
<PAGE>
EXPLANATORY NOTE
This Amendment (the "Amendment") to the Registrant's Registration Statement
includes a prospectus (the "Tax Free Short/Intermediate Fixed Income Fund
Prospectus") relating only to The 59 Wall Street Tax Free Short/Intermediate
Fixed Income Fund (the "Fund"), a series of shares of the Registrant. Another
series of shares of the Registrant is being offered by the prospectus (the
"Money Market Fund Prospectus") which was included in Part A of Amendment No. 29
("Amendment No. 29") to the Registrant's Registration Statement. A third series
of the Registrant is being offered by the prospectus (the "U.S. Treasury Money
Fund Prospectus") which was included in Part A of Amendment No. 31 ("Amendment
30") to the Registrant's Registration Statement. The Amendment does not relate
to, amend or otherwise affect the Money Market Fund Prospectus or the U.S.
Treasury Money Fund Prospectus, which are hereby incorporated by reference from
Amendments No. 29 and 30, respectively.
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 404(c))
PART A ITEM NO.: Prospectus Headings.
1. COVER PAGE: Cover Page.
2. SYNOPSIS: Expense Table.
3. CONDENSED FINANCIAL INFORMATION: Financial Highlights.
4. GENERAL DESCRIPTION OF REGISTRANT: Investment Objective and
Policies; Description of Shares; Investment Restrictions.
5. MANAGEMENT OF THE FUND: Management of the Trust; Expense Table.
5a. MANAGEMENT'S DESCRIPTION OF FUND PERFORMANCE: Not applicable.
6. CAPITAL STOCK AND OTHER SECURITIES: Description of Shares;
Purchase of Shares; Dividends and Distributions; Taxes.
7. PURCHASE OF SECURITIES BEING OFFERED: Management of the Trust;
Purchase of Shares; Net Asset Value; Dividends and Distributions.
8. REDEMPTION OR REPURCHASE: Redemption of Shares.
9. PENDING LEGAL PROCEEDINGS: Not Applicable.
PART B ITEM NO.: Statement of Additional Information Heading.
10. COVER PAGE: Cover Page.
11. TABLE OF CONTENTS: Table of Contents.
12. GENERAL INFORMATION AND HISTORY: Not Applicable.
13. INVESTMENT OBJECTIVES AND POLICIES: Investment Objective and
Policies; Investment Restrictions.
14. MANAGEMENT OF THE FUND: Trustees and Officers.
15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES: Trustees and
Officers.
16. INVESTMENT ADVISORY AND OTHER SERVICES: Administrator; Distributor;
Investment Adviser.
17. BROKERAGE ALLOCATION AND OTHER PRACTICES: Portfolio Transactions.
18. CAPITAL STOCK AND OTHER SECURITIES: Description of Shares (in
the Prospectus); Massachusetts Trust.
19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED: Net
Asset Value.
20. TAX STATUS: Federal Taxes.
21. UNDERWRITERS: Administrator; Distributor.
22. CALCULATION OF PERFORMANCE DATA: Not Applicable.
23. FINANCIAL STATEMENTS: Financial Statements.
PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered in Part C of this Registration Statement.
<PAGE>
Tax Free Short/Intermediate
Fixed Income Fund
PROSPECTUS
November 1, 1995
[LOGO] PHOTO
<PAGE>
================================================================================
PROSPECTUS
The 59 Wall Street Tax Free
Short/Intermediate Fixed Income Fund
6 St. James Avenue, Boston, Massachusetts 02116
================================================================================
The 59 Wall Street Tax Free Short/Intermediate Fixed Income Fund is an
open-end investment company which is a separate diversified portfolio of The 59
Wall Street Trust. Shares of the Fund are offered by this Prospectus.
The investment objective of the Fund is to provide investors with as high a
level of income exempt from federal income tax as is consistent with minimizing
price fluctuations in net asset value and maintaining liquidity. The Fund
invests primarily in high quality municipal securities and the dollar weighted
average maturity of the Fund's portfolio does not exceed three years. The Fund
is an appropriate investment for those investors seeking tax-free income returns
greater than those provided by tax-free money market funds and who are able to
accept fluctuations in the net asset value of their investment. The Fund is
designed to have lesser price fluctuations than long term bond funds. There can
be no assurance that the investment objective of the Fund will be achieved.
Investments in the Fund are neither insured nor guaranteed by the U.S.
Government. Shares of the Fund are not deposits or obligations of, or guaranteed
by, Brown Brothers Harriman & Co., and the shares are not insured by the Federal
Deposit Insurance Corporation or any other federal, state or other governmental
agency.
Brown Brothers Harriman & Co. is the investment adviser to, the
administrator of and an eligible institution of the Fund. Shares of the Fund are
offered at net asset value without a sales charge to customers of Brown Brothers
Harriman & Co.
This Prospectus, which investors are advised to read and retain for future
reference, sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. Additional information
about the Fund has been filed with the Securities and Exchange Commission in a
Statement of Additional Information, dated November 1, 1995. This information is
incorporated herein by reference and is available without charge upon request
from the Fund's distributor, 59 Wall Street Distributors, Inc., 6 St. James
Avenue, Boston, Massachusetts 02116.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this Prospectus is November 1, 1995.
<PAGE>
TABLE OF CONTENTS
Page
----
Expense Table ............................................................. 3
Financial Highlights ...................................................... 4
Investment Objective and Policies ......................................... 4
Investment Restrictions ................................................... 7
Purchase of Shares ........................................................ 8
Redemption of Shares ...................................................... 8
Management of the Trust ................................................... 9
Net Asset Value ........................................................... 13
Dividends and Distributions ............................................... 13
Taxes ..................................................................... 13
Description of Shares ..................................................... 15
Additional Information .................................................... 16
Appendix A ................................................................ 18
Appendix B ................................................................ 20
TERMS USED IN THIS PROSPECTUS
<TABLE>
<CAPTION>
<S> <C>
Trust ............................................... The 59 Wall Street Trust
Fund ................................................ The 59 Wall Street Tax Free Short/Immediate
Fixed Income Fund
Investment Adviser and Administrator................. Brown Brothers Harriman & Co.
Subadministrator..................................... 59 Wall Street Administrators, Inc.
("59 Wall Street Administrators")
Distributor.......................................... 59 Wall Street Distributors, Inc.
("59 Wall Street Distributors")
1940 Act............................................. The Investment Company Act of 1940,
as amended.
</TABLE>
2
<PAGE>
EXPENSE TABLE
================================================================================
The following table provides (i) a summary of estimated expenses relating
to purchases and sales of shares of the Fund, and the aggregate annual operating
expenses of the Fund, as a percentage of average net assets of the Fund, and
(ii) an example illustrating the dollar cost of such estimated expenses on a
$1,000 investment in the Fund.
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases........................................ None
Sales Load Imposed on Reinvested Dividends............................. None
Deferred Sales Load.................................................... None
Redemption Fee......................................................... None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee...................................... 0.35%
12b-1 Fee.................................................... None
Other Expenses
Administration Fee ........................................ 0.15%
Expense Payment Fee........................................ 0.20 0.35
---- ----
Total Fund Operating Expenses................................ 0.70%
====
<TABLE>
<CAPTION>
Example
------- 1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
A shareholder of the Fund 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:........................... $ 7 $22 $39 $87
--- --- --- ---
</TABLE>
The Example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. In connection
with the Example, please note that $1,000 is currently less than the Fund's
minimum purchase requirement. The purpose of this table is to assist investors
in understanding the various costs and expenses that shareholders of the Fund
bear directly or indirectly.
Under an agreement dated February 22, 1995, 59 Wall Street Administrators
pays the Fund's expenses, other than fees paid to Brown Brothers Harriman & Co.
under the Trust's Administration Agreement and other than expenses relating to
the organization of the Fund. Had this expense payment agreement not been in
place, the total Fund operating expenses would have been 0.99% of the Fund's
average annual net assets and the shareholder expenses reflected in the example
above would have been $10, $32, $55, and $121, respectively. After this expense
payment agreement terminates on July 1, 1997, the Trustees of the Trust estimate
that, at the Fund's current asset level, the total Fund operating expenses may
increase to approximately 1.00% of the Fund's average annual net assets. (See
"Expense Payment Agreement".)
For more information with respect to the expenses of the Fund, see
"Management of the Trust" herein.
3
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
The following information for the fiscal years ended June 30, 1995 and 1994
and the period July 23, 1992 (commencement of operations) to June 30, 1993 has
been audited by Deloitte & Touche LLP, independent auditors. This information
should be read in conjunction with the financial statements and notes thereto,
which appear in the Statement of Additional Information. The ratios of expenses
and net investment income to average net assets are not indicative of future
ratios.
<TABLE>
<CAPTION>
For the period
For the years July 23, 1992
ended June 30, (commencement of
---------------------- operations) to
1995 1994 June 30, 1993
------- ------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of period.......................... $ 10.11 $ 10.29 $ 10.00
Income from investment operations:
Net investment income ...................................... 0.37 0.34 0.32
Net realized and unrealized gain (loss) on investments...... 0.17 (0.18) 0.29
Less dividends and distributions:
Dividends to shareholders from net investment income........ (0.37) (0.34) (0.32)
Distributions to shareholders from net realized gains
on investments........................................... -- (0.00)** --
------- ------- ---------
Net asset value, end of period................................ $ 10.28 $ 10.11 $ 10.29
======= ======= =========
Total return* ................................................ 5.42% 1.59% 6.16%***
Ratios/supplemental data:
Net assets, end of period (000's omitted)................... $51,828 $67,253 $33,202
Ratio of expenses to average net assets*.................... 0.70% 0.70% 0.70%***
Ratio of net investment income to average net assets ....... 3.67% 3.32% 3.42%***
Portfolio turnover rate .................................... 38.70% 26.75% 12.68%
</TABLE>
- ---------
* Had the expense payment agreement not been in place, the ratio of expenses
to average net assets, for the years ended June 30, 1995 and June 30, 1994
and for the period ended June 30, 1993, would have been 0.99%, 1.01%, and
1.25%, respectively. For the same periods, the total return of the Fund
would have been 5.13%, 1.28% and 5.61%, respectively.
** Distributions to shareholders from net realized gains was less than
$0.01 per share.
*** Annualized.
Further information about the performance of the Fund is contained in the
Fund's annual report to shareholders which may be obtained without charge.
INVESTMENT OBJECTIVE AND POLICIES
================================================================================
The investment objective of the Fund is to provide investors with as high a
level of income exempt from federal income tax as is consistent with minimizing
price fluctuations in net asset value and maintaining liquidity.
The investment objective of the Fund is a fundamental policy and may be
changed only with the approval of the holders of a "majority of the Fund's
outstanding voting securities as defined in the 1940 Act". (See "Additional
Information" in this Prospectus.) However, the investment policies of the Fund
as described below are not fundamental and may be changed without such approval.
The Fund is an appropriate investment for those investors seeking tax-free
income returns greater than those provided by tax-free money market funds and
4
<PAGE>
who are able to accept fluctuations in the net asset value of their investments.
The Fund is designed to have lesser price fluctuations than long-term tax-free
bond funds.
The assets of the Fund under normal circumstances are fully invested in a
broad range of high quality municipal securities issued by or on behalf of
states, territories and possessions of the United States, the District of
Columbia and their subdivisions, agencies and instrumentalities. These
securities include municipal bonds, notes, commercial paper, variable and
floating rate instruments and when-issued and delayed delivery securities. (See
Appendix A for more detail.)
While the Fund intends to continue to be fully invested in tax-exempt
municipal obligations in order to provide investors with tax-free income, a
portion of the assets may temporarily be held in cash or invested in short-term
taxable securities if market conditions warrant. These would include obligations
issued by the U.S. Government, its agencies or instrumentalities, commercial
paper issued by corporations, bank obligations (such as certificates of deposit
and bankers' acceptances) and repurchase agreements. (See Appendix B for more
detail.)
The Fund invests in high quality municipal securities. At the time of
purchase, municipal bond investments either are rated in one of the three
highest quality categories of the Standard & Poor's Corporation (meaning AAA, AA
or A), Moody's Investors Service, Inc. (meaning Aaa, Aa or A) or Fitch Investors
Service, Inc. (meaning AAA, AA or A) or, if unrated, are of comparable quality
as judged by the Investment Adviser. The Investment Adviser may at any time
purchase municipal bonds it believes to be defeased. Defeased municipal bonds
are either general obligation or revenue bonds that have been fully secured or
collateralized by an escrow account consisting of U.S. Government obligations
that can adequately meet interest and principal payments. As such, the original
issuer's credit obligation has been replaced by the escrowed securities. In
determining whether a municipal bond has been defeased, the Investment Adviser
relies upon brokers and dealers and upon various information reporting services
it believes to be reliable. At the time of purchase, tax-exempt note and
variable interest rate investments either are rated in one of the highest
quality categories of the Standard & Poor's Corporation (meaning SP-1 or SP-2),
Moody's Investors Service, Inc. (meaning MIG 1 or MIG 2), or Fitch Investors
Service, Inc. (meaning F-1+, F-1 or F-2) or, if unrated, are of comparable
quality as judged by the Investment Adviser. At the time of purchase, municipal
commercial paper investments either are rated in the highest quality category of
the Standard & Poor's Corporation (meaning A-1), Moody's Investors Service, Inc.
(meaning Prime-1) or Fitch Investors Service, Inc. (meaning F-1+ or F-1) or, if
unrated, are of comparable quality as judged by the Investment Adviser. Taxable
money market instruments purchased for the Fund are of high quality and meet the
credit standards established by the Trust's Board of Trustees.
The dollar-weighted average maturity of the Fund's portfolio is not to
exceed three years, and the maximum maturity of an issue at the time of purchase
is limited to five years. Since bonds with shorter maturities are less sensitive
to interest rate movements than those with longer maturities, the three-year
restriction on the Fund's dollar-weighted average maturity is designed to lessen
the price fluctuation of the Fund. For example, the following table illustrates
the effect a 2 percentage point change in interest rates would have on the price
of bonds of varying maturities. The 10- and 20-year bonds have more exposure to
interest rate movements and are subject to greater price volatility than the
shorter term bonds.
5
<PAGE>
Change in the Price of a Municipal Bond at Par
Yielding 5%
- --------------------------------------------------------------------------------
2 Percentage Point 2 Percentage Point
Stated Increase In Decrease in
Maturity Interest Rates Interest Rates
================================================================================
Eligible 1 Year -2% +2%
for 3 Years -5% +6%
Investment 5 Years -8% +9%
- --------------------------------------------------------------------------------
Not Eligible 10 Years -14% +17%
for Investment 20 Years -21% +30%
- --------------------------------------------------------------------------------
The Fund is actively managed by a team of investment professionals. (See
"Investment Adviser".) The Investment Adviser analyzes and monitors economic
trends, monetary policy, and bond credit ratings on a continuous basis. The
holdings in the portfolio are regularly reviewed in an effort to enhance
returns.
The Investment Adviser does not intend to invest the Fund's assets in
securities the interest on which would be taxable for investors subject to the
federal alternative minimum tax. Depending on the investor's tax bracket, the
Fund may provide higher after-tax income than is normally provided by comparable
taxable investments. The chart below illustrates the return a taxable investment
would have to yield in order to equal various tax-free returns.
<TABLE>
<CAPTION>
============================================================================================================
A TAXABLE INVESTMENT WOULD HAVE TO YEILD:
TO EQUAL A TAX- 15% 28% 31% 36% 39.6%
FREE YIELD OF: Tax Bracket* Tax Bracket* Tax Bracket* Tax Bracket Tax Bracket
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2% 2.4% 2.8% 2.9% 3.1% 3.3%
3% 3.5% 4.2% 4.3% 4.7% 5.0%
4% 4.7% 5.6% 5.8% 6.3% 6.6%
5% 5.9% 6.9% 7.2% 7.8% 8.3%
6% 7.1% 8.3% 8.7% 9.4% 9.9%
============================================================================================================
* Joint Return Below $39,000 $39,001-$94,250 $94,251-$143,600 $143,601-$256,500 Above $256,500
* Single Return Below $23,350 $23,351-$56,550 $56,551-$117,950 $117,951-$256,500 Above $256,500
============================================================================================================
</TABLE>
The Trust may, in the future, seek to achieve the Fund's investment
objective by investing all of the Fund's assets in a no-load, diversified,
open-end management investment company having substantially the same investment
objective as the Fund. Shareholders will receive 30 days prior written notice
with respect to any such investment.
Risk Factors
Although the assets of the Fund are invested in high quality municipal
securities, the portfolio is subject to interest rate risk and credit risk.
Interest rate risk refers to the price fluctuation of a bond in response to
changes in interest rates. In general, bonds with shorter maturities are less
6
<PAGE>
sensitive to interest rate movements than those with longer maturities. Given
that the average weighted maturity of the portfolio's holdings is limited to
three years, the Fund normally has less exposure to interest rate risk than
longer-term bond funds.
Credit risk refers to the likelihood that an issuer will default on
interest or principal payments. The Fund is investing in high quality bonds with
a rating of A or better, which limits the portfolio's exposure to credit risk.
Portfolio Brokerage
The securities in which the Fund invests are traded primarily in the
over-the-counter market on a net basis and do not normally involve either
brokerage commissions or transfer taxes. Where possible transactions on behalf
of the Fund are entered directly with the issuer or from an underwriter or
market maker for the securities involved. Purchases from underwriters of
securities may include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers serving as market makers may include a
spread between bid and asked price. The policy of the Fund regarding purchases
and sales of securities is that primary consideration is given to obtaining the
most favorable prices and efficient executions of transactions. In seeking to
implement the Fund's policies, the Investment Adviser effects transactions with
those brokers and dealers who the Investment Adviser believes provide the most
favorable prices and are capable of providing efficient executions. While
reasonably competitive spreads or commissions are sought for the Fund, it will
not necessarily be paying the lowest spread or commission available. If the
Investment Adviser believes such prices and executions are obtainable from more
than one broker or dealer, it may give consideration to placing portfolio
transactions with those brokers and dealers who also furnish research and other
services to the Fund or the Investment Adviser. Such services may include, but
are not limited to, any one or more of the following: information as to the
availability of securities for purchase or sale; statistical or factual
information or opinions pertaining to investment; and appraisals or evaluations
of portfolio securities. For the fiscal years ended June 30, 1994 and 1995, the
portfolio turnover rates for the Fund were 26.75% and 38.70%, respectively. (See
"Portfolio Transactions" in the Statement of Additional Information.)
INVESTMENT RESTRICTIONS
================================================================================
The Statement of Additional Information for the Fund includes a listing of
the specific investment restrictions which govern the Fund's investment
policies. Certain of these investment restrictions are deemed fundamental
policies and may be changed only with the approval of the holders of a "majority
of the Fund's outstanding voting securities as defined in the 1940 Act". (See
"Additional Information" in this Prospectus.)
As a non-fundamental policy, money is not borrowed in an amount in excess
of 10% of the assets of the Fund. It is intended that money will be borrowed
only from banks and only either to accommodate requests for the redemption of
shares while effecting an orderly liquidation of portfolio securities or to
maintain liquidity in the event of an unanticipated failure to complete a
portfolio security transaction or other similar situations. Securities are not
purchased for the Fund at any time at which the amount of its borrowings exceed
5% of its assets.
Also as a non-fundamental policy, at least 80% of the Fund's assets is
invested in securities the interest on which is exempt from federal income
taxation.
As a fundamental policy, the Fund does not purchase more than 10% of all
outstanding debt securities of any one issuer.
The Fund is classified as "diversified" under the 1940 Act, which means
that at least 75% of its total assets is represented by cash; obligations issued
by the U.S. Government, its agencies or instrumentalities; and other securities
7
<PAGE>
limited in respect of any one issuer to an amount no greater in value than 5% of
the Fund's total assets (for the purpose of this restriction, the Fund regards
each state and each political subdivision, agency or instrumentality of such
state and each multi-state agency of which such state is a member and each
public authority which issues industrial development bonds on behalf of a
private entity as a separate issuer).
PURCHASE OF SHARES
================================================================================
An investor may open a Fund account only through 59 Wall Street
Distributors, the Fund's exclusive Distributor. Each Eligible Institution (see
page 11) may establish and amend from time to time a minimum initial and a
minimum subsequent purchase requirement for their respective customers. The
Trust reserves the right to determine the purchase orders for Fund shares that
it will accept.
Shares of the Fund are offered on a continuous basis at their net asset
value without a sales charge. Shares of the Fund may be purchased on any day the
New York Stock Exchange is open for regular trading and New York banks are open
for business if the Trust receives the purchase order and acceptable payment for
such order prior to 4:00 P.M., New York time. Purchases of Fund shares are then
executed at the net asset value per share next determined on that same day. All
purchases must be paid for in immediately available funds on the third business
day after the purchase order has been executed. Shares are entitled to
dividends, if any, declared starting as of the third business day following the
day a purchase order is executed.
An investor who has a custody account with Brown Brothers Harriman & Co.
may place purchase orders for Fund shares with the Trust through Brown Brothers
Harriman & Co., which as an Eligible Institution holds such shares in its name
on behalf of that customer. For such a customer, Brown Brothers Harriman & Co.
arranges for the payment of the purchase price of Fund shares. Brown Brothers
Harriman & Co. has established for its customers a minimum initial purchase
requirement of $10,000 and a minimum subsequent purchase requirement for the
Fund of $1,000.
REDEMPTION OF SHARES
================================================================================
Shares held by Brown Brothers Harriman & Co. on behalf of a shareholder may
be redeemed by submitting a redemption request in good order to Brown Brothers
Harriman & Co. Proceeds from the redemption of Fund shares are credited to the
shareholder's account with Brown Brothers Harriman & Co.
A redemption request in good order must be received by the Trust prior to
4:00 P.M., New York time on any day the New York Stock Exchange is open for
regular trading and New York banks are open for business. Such a redemption is
executed at the net asset value per share next determined on that same day.
Proceeds of a redemption are paid in "available" funds generally on the third
business day after the redemption request is executed, and in any event within
seven days.
If a redemption request is received by the Trust after 4:00 P.M., New York
time, the redemption request is executed on the next business day. Shares will
continue to earn dividends, if any, declared through the second business day
following the day a redemption request is executed.
Redemptions By the Trust
Each Eligible Institution (see page 11) may establish and amend from time
to time for their respective customers a minimum account size. If the value of a
shareholder's holdings in the Fund falls below that amount because of a
redemption of shares, the shareholder's remaining shares may be redeemed. If
such remaining shares are to be redeemed, the shareholder is so notified and is
allowed 60 days to make an additional investment to enable the shareholder to
8
<PAGE>
meet the minimum requirement before the redemption is processed. Brown Brothers
Harriman & Co., as an Eligible Institution, has established a minimum account
size of $10,000
Further Redemption Information
In the event a shareholder redeems all shares held in the Fund at any time
during the month, all accrued but unpaid dividends are included in the proceeds
of the redemption and future purchases of shares of the Fund by such shareholder
would be subject to the Fund's minimum initial purchase requirements. The value
of shares redeemed may be more or less than the shareholder's cost depending on
Fund performance during the period the shareholder owned such shares.
Redemptions of shares are taxable events on which a shareholder may realize a
gain or a loss.
An investor should be aware that redemptions from the Fund may not be
processed if a completed account application with a certified taxpayer
identification number has not been received.
A shareholder's right to receive payment with respect to any redemption may
be suspended or the payment of the redemption proceeds postponed for up to seven
days and for such other periods as the 1940 Act may permit. (See "Additional
Information" in the Statement of Additional Information.)
MANAGEMENT OF THE TRUST
================================================================================
Trustees and Officers
The Trustees, in addition to supervising the actions of the Administrator,
Investment Adviser and Distributor of the Fund, as set forth below, decide upon
matters of general policy. Because of the services rendered the Trust by the
Investment Adviser and the Administrator, the Trust itself requires no employees
other than its officers, none of whom, other than the Chairman, receive
compensation from the Fund and all of whom, other than the Chairman, are
employed by 59 Wall Street Administrators. (See "Trustees and Officers" in the
Statement of Additional Information.)
The Trustees of the Trust are:
J.V. Shields, Jr.
Chairman and Chief Executive Officer of Shields & Company
Eugene P. Beard
Executive Vice President - Finance and Operations of The Interpublic
Group of Companies
David P. Feldman
Corporate Vice President--Investment Alan G. Lowy
Private Investor
Arthur D. Miltenberger
Vice President and Chief Financial Officer of
Richard K. Mellon and Sons
Investment Adviser
The Investment Adviser to the Fund is Brown Brothers Harriman & Co.,
Private Bankers, a New York limited partnership established in 1818. The firm is
subject to examination and regulation by the Superintendent of Banks of the
State of New York and by the Department of Banking of the Commonwealth of
Pennsylvania. The firm is also subject to supervision and examination by the
Commissioner of Banks of the Commonwealth of Massachusetts.
Brown Brothers Harriman & Co. provides investment advice and portfolio
management services to the Fund. Subject to the general supervision of the
Trust's Trustees, Brown Brothers Harriman & Co. makes the day-to-day investment
decisions for the Fund, places the purchase and sale orders for the portfolio
transactions of the Fund, and generally manages the Fund's investments. Brown
Brothers Harriman & Co. provides a broad range of investment management services
for customers in the United States and abroad. At June 30, 1995, it managed
total assets of approximately $20 billion.
Mr. Eugene C. Rainis, Ms. Barbara Brinkley and Mr. Todd D. Jacobson of
Brown Brothers Harriman & Co. are primarily responsible for the day-to-day
management of the Fund. Mr. Rainis is the partner in charge of fixed income
9
<PAGE>
management and is directly responsible for setting fixed income investment
policy at Brown Brothers Harriman & Co. He joined Brown Brothers Harriman & Co.
in 1965 and his entire career has been in fixed income markets. Mr. Rainis is a
Director of the Jefferson Insurance Company of New York and the Monticello
Insurance Company, serves as a Trustee of Fordham University, and serves as
Trustee and Vice Chairman of the Board of St. Vincent's Hospital. Mr. Rainis
holds a B.S. from Fordham University, a M.B.A. from the Wharton School of the
University of Pennsylvania and is a Chartered Financial Analyst. Ms. Brinkley,
senior portfolio manager of the Fund since inception, joined Brown Brothers
Harriman & Co. in 1967. Throughout her career with Brown Brothers Harriman & Co.
Ms. Brinkley has specialized as a municipal bond credit analyst, trader and
portfolio manager. She is a member of Brown Brothers Harriman & Co.'s Fixed
Income Credit Committee, a member and former chairman of the Municipal Analysts
Group of New York and a member of the Fixed Income Analysts Society, Inc. Ms.
Brinkley holds a B.A. from Smith College. Mr. Jacobson, Assistant Portfolio
Manager of the Fund, joined Brown Brothers Harriman & Co. in 1993, following two
years experience at Value Line as an investment analyst. Mr. Jacobson holds a
B.A. from the State University of New York, Binghamton and a M.B.A. from The
Wharton School, University of Pennsylvania.
As compensation for the services rendered and related expenses such as
salaries of advisory personnel borne by Brown Brothers Harriman & Co. under the
Investment Advisory Agreement, Brown Brothers Harriman & Co. receives from the
Fund an annual fee, computed daily and payable monthly, equal to 0.35% of the
Fund's average daily net assets. Brown Brothers Harriman & Co. also receives an
annual administration fee and eligible institution fee from the Fund equal to
0.15% and 0.25%, respectively, of the average daily net assets of the Fund.
The investment advisory services of Brown Brothers Harriman & Co. to the
Fund are not exclusive under the terms of the Investment Advisory Agreement.
Brown Brothers Harriman & Co. is free to and does render investment advisory
services to others, including other registered investment companies.
Pursuant to a license agreement between the Trust and Brown Brothers
Harriman & Co. dated August 24, 1989, as amended as of December 15, 1993, the
Trust may continue to use in its name "59 Wall Street", the current and historic
address of Brown Brothers Harriman & Co. The agreement may be terminated by
Brown Brothers Harriman & Co. at any time upon written notice to the Trust upon
the expiration or earlier termination of any investment advisory agreement
between the Fund or any investment company in which a series of the Trust
invests all of its assets and Brown Brothers Harriman & Co. Termination of the
agreement would require the Trust to change its name and the name of the Fund to
eliminate all reference to "59 Wall Street".
Pursuant to license agreements between Brown Brothers Harriman & Co. and
each of 59 Wall Street Administrators and 59 Wall Street Distributors (each a
"Licensee"), dated June 22, 1993 and June 8, 1990, respectively, each Licensee
may continue to use in its name "59 Wall Street", the current and historic
address of Brown Brothers Harriman & Co., only if Brown Brothers Harriman & Co.
does not terminate the respective license agreement, which would require the
Licensee to change its name to eliminate all reference to "59 Wall Street".
Administrator
Brown Brothers Harriman & Co. acts as Administrator of the Trust. (See
"Administrator" in the Statement of Additional Information.)
In its capacity as Administrator, Brown Brothers Harriman & Co. administers
all aspects of the Trust's operations subject to the supervision of the Trust's
Trustees except as set forth below under "Distributor". In connection with its
responsibilities as Administrator and at its own expense, Brown Brothers
Harriman & Co. (i) provides the Trust with the services of persons competent to
perform such supervisory, administrative and clerical functions as are necessary
in order to provide effective administration of the Trust; (ii) oversees the
performance of administrative and professional services to the Trust by others,
10
<PAGE>
including the Fund's Custodian, Transfer and Dividend Disbursing Agent; (iii)
provides the Trust with adequate office space and communications and other
facilities; and (iv) prepares and/or arranges for the preparation, but does not
pay for, the periodic updating of the Trust's registration statement and the
Fund's prospectus, the printing of such documents for the purpose of filings
with the Securities and Exchange Commission and state securities administrators,
and the preparation of tax returns for the Trust and for the Fund and reports to
the Fund's shareholders and the Securities and Exchange Commission.
For the services rendered to the Trust and related expenses borne by Brown
Brothers Harriman & Co. as Administrator, Brown Brothers Harriman & Co. receives
from the Fund an annual fee, computed daily and payable monthly, equal to 0.15%
of the Fund's average daily net assets.
Pursuant to a Subadministrative Services Agreement with Brown Brothers
Harriman & Co., 59 Wall Street Administrators performs such subadministrative
duties for the Trust as are from time to time agreed upon by the parties. The
offices of 59 Wall Street Administrators are located at 6 St. James Avenue,
Boston, Massachusetts 02116. 59 Wall Street Administrators is a wholly-owned
subsidiary of Signature Financial Group, Inc. ("SFG"). SFG is not affiliated
with Brown Brothers Harriman & Co. 59 Wall Street Administrators'
subadministrative duties may include providing equipment and clerical personnel
necessary for maintaining the organization of the Trust, participation in the
preparation of documents required for compliance by the Trust with applicable
laws and regulations, preparation of certain documents in connection with
meetings of Trustees and shareholders of the Trust, and other functions that
would otherwise be performed by the Administrator as set forth above. For
performing such subadministrative services, 59 Wall Street Administrators
receives such compensation as is from time to time agreed upon but not in excess
of the amount paid to the Administrator from the Fund.
Eligible Institutions
The Trust has entered into an eligible institution agreement with Brown
Brothers Harriman & Co. pursuant to which Brown Brothers Harriman & Co., as
agent for the Trust with respect to shareholders of and prospective investors in
the Fund who have a custody account with Brown Brothers Harriman & Co., among
other things: provides necessary personnel and facilities to establish and
maintain certain shareholder accounts and records enabling it to hold, as agent,
its customers' shares in its name or its nominee name on the shareholder records
of the Trust; assists in processing purchase and redemption transactions;
arranges for the wiring of funds; transmits and receives funds in connection
with customer orders to purchase or redeem shares of the Fund; provides periodic
statements showing a customer's account balance and, to the extent practicable,
integrates such information with information concerning other customer
transactions otherwise effected with or through it; furnishes, either separately
or on an integrated basis with other reports sent to a customer, monthly and
annual statements and confirmations of all purchases and redemptions of Fund
shares in a customer's account; transmits proxy statements, annual reports,
updated prospectuses and other communications from the Trust to its customers;
and receives, tabulates and transmits to the Trust proxies executed by its
customers with respect to meetings of shareholders of the Fund. For these
services, Brown Brothers Harriman & Co. receives from the Fund an annual fee,
computed daily and payable monthly, equal to 0.25% of the average daily net
assets of the Fund represented by shares owned during the period for which
payment was being made by customers for whom Brown Brothers Harriman & Co. was
the holder or agent of record.
The eligible institution agreement with Brown Brothers Harriman & Co. is
non-exclusive and the Trust expects from time to time to enter into similar
agreements with other financial institutions. At such time as any such similar
agreement is entered into, references in this Prospectus to shareholders of and
prospective investors in the Fund who have a custody account with Brown Brothers
Harriman & Co. shall include such shareholders of and prospective investors in
11
<PAGE>
the Fund who have an account with the financial institution which entered into
such other agreement, except as expressly stated in this Prospectus.
Expense Payment Agreement
Under an agreement dated February 22, 1995, 59 Wall Street Administrators
pays the Fund's expenses (see "Expense Table") other than fees paid to Brown
Brothers Harriman & Co. under the Trust's Administration Agreement and other
than expenses relating to the organization of the Fund. In return, 59 Wall
Street Administrators receives a fee from the Fund such that after such payment
the aggregate expenses of the Fund do not exceed an agreed upon annual rate,
currently 0.70% of the average daily net assets of the Fund. Such fees are
computed daily and paid monthly. During the fiscal year ended June 30, 1995, 59
Wall Street Administrators incurred $498,700 in expenses on behalf of the Fund,
including investment advisory fees of $207,074 and eligible institution fees of
$147,910 and received fees of $317,562.
This expense payment agreement will terminate on July 1, 1997. After this
expense payment agreement terminates, the Trustees of the Trust estimate that,
at the Fund's current level, the total operating expenses of the Fund may
increase to approximately 1.00% of the Fund's average annual net assets.
The expenses of the Fund paid by 59 Wall Street Administrators under the
agreement include investment advisory fees, eligible institution fees, the
compensation of the Trustees of the Trust; governmental fees; interest charges;
taxes; membership dues in the Investment Company Institute; fees and expenses of
independent auditors, of legal counsel and of any transfer agent, custodian,
registrar or dividend disbursing agent of the Fund; insurance premiums; expenses
of calculating the net asset value of shares of the Fund; expenses of preparing,
printing and mailing prospectuses, reports, notices, proxy statements and
reports to shareholders and to governmental officers and commissions; expenses
of shareholder meetings; expenses relating to the issuance, registration and
qualification of shares of the Fund; and expenses connected with the execution,
recording and settlement of portfolio security transactions.
Distributor
59 Wall Street Distributors acts as exclusive Distributor of shares of the
Fund. Its office is located at 6 St. James Avenue, Boston, Massachusetts 02116.
59 Wall Street Distributors is a wholly-owned subsidiary of SFG. SFG and its
affiliates currently provide administration and distribution services for other
registered investment companies. The Trust pays for the preparation, printing
and filing of copies of the Trust's registration statement and the Fund's
prospectus as required under federal and state securities laws. (See
"Distributor" in the Statement of Additional Information.)
59 Wall Street Distributors holds itself available to receive purchase
orders for Fund shares.
Custodian, Transfer and
Dividend Disbursing Agent
State Street Bank and Trust Company, 225 Franklin Street, P.O. Box 351,
Boston, Massachusetts 02110, is the Fund's Custodian and Transfer and Dividend
Disbursing Agent. As Custodian, it is responsible for maintaining books and
records of the Fund's portfolio transactions and holding the Fund's portfolio
securities and cash pursuant to a custodian agreement with the Trust. Cash is
held for the Fund in demand deposit accounts at the Custodian. Subject to the
supervision of the Administrator, the Custodian maintains the Fund's accounting
and portfolio transaction records and for each day computes the Fund's net asset
value, net investment income and dividend payable. As Transfer and Dividend
Disbursing Agent it is responsible for maintaining the books and records
detailing the ownership of the Fund's shares.
Independent Auditors
Deloitte & Touche LLP are the independent auditors for the Fund.
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<PAGE>
NET ASSET VALUE
================================================================================
The Fund's net asset value per share is determined once daily at 4:00 P.M.,
New York time on each day the New York Stock Exchange is open for regular
trading and New York banks are open for business.
The determination of the Fund's net asset value per share is made by
subtracting from the value of the total assets of the Fund the amount of its
liabilities and dividing the difference by the number of shares of the Fund
outstanding at the time the determination is made.
Values of assets in the Fund's portfolio are determined on the basis of
their market or other fair value. (See "Net Asset Value" in the Statement of
Additional Information.)
DIVIDENDS AND DISTRIBUTIONS
================================================================================
Substantially all of the Fund's net investment income, together with a
discretionary portion of any net short-term capital gains, is declared as a
dividend daily and paid monthly. Dividends with respect to shares which were
redeemed during the month are paid at the end of the month. Dividends declared
with respect to a Saturday, Sunday or holiday are credited to shareholders of
record as of the close of business on the previous business day. Substantially
all of the Fund's realized net long-term capital gains, if any, are declared and
paid to shareholders on an annual basis as a capital gains distribution. An
additional dividend and/or capital gains distribution may be made to the extent
necessary to avoid the imposition of federal excise tax on the Fund. (See
"Taxes" below.) Dividends and capital gains distributions are payable to
shareholders of record on the record date.
Unless a shareholder otherwise elects, dividends and capital gains
distributions are automatically reinvested in additional Fund shares without
reference to the minimum subsequent purchase requirement. In the event a
shareholder redeems all shares held at any time during the month, all accrued
but unpaid dividends are included in the proceeds of the redemption and future
purchases of shares by such shareholder will be subject to the minimum initial
purchase requirements. The Trust reserves the right to discontinue, alter or
limit the automatic reinvestment privilege at any time, but will provide
shareholders prior written notice of any such discontinuance, alteration or
limitation.
A shareholder whose shares are held by Brown Brothers Harriman & Co. on
behalf of the shareholder and who elects to have dividends paid in cash has the
amount of such dividends automatically credited to the shareholder's account
with Brown Brothers Harriman & Co. Such a shareholder who elects to have
dividends reinvested is able to do so, in both whole and fractional shares.
TAXES
================================================================================
Each year, the Trust intends to continue to qualify the Fund and elect that
the Fund be treated as a separate "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, the Fund is
not subject to federal income taxes on its net income and realized net capital
gains that are distributed to its shareholders. A 4% non-deductible excise tax
is imposed on the Fund to the extent that certain distribution requirements for
the Fund for each calendar year are not met. The Trust intends to continue to
meet such requirements.
In accordance with the investment objective of the Fund, it is expected
that the Fund's net income is attributable to interest from municipal bonds and,
as a result, dividends to shareholders are designated by the Trust as "exempt
interest dividends" under Section 852(b)(5) of the Code, which may be treated as
items of interest excludible from a shareholder's gross income. Although it is
13
<PAGE>
not intended, it is possible that the Fund may realize short-term or long-term
capital gains or losses from securities transactions as well as taxable interest
income depending on market conditions.
In accordance with Section 852(b)(5) of the Code, in order for the Fund to
be entitled to pay exempt interest dividends to shareholders, at the close of
each quarter of its taxable year, at least 50% of the value of its total assets
must consist of obligations whose interest is exempt from federal income tax.
The non-exempt portion of dividends is taxable to shareholders of the Fund
as ordinary income, whether such dividends are paid in cash or reinvested in
additional shares. These dividends are not eligible for the dividends-received
deduction allowed to corporate shareholders. Capital gains distributions are
taxable to shareholders as long-term capital gains, whether paid in cash or
reinvested in additional shares and regardless of the length of time a
particular shareholder has held Fund shares.
Any dividend or capital gains distribution has the effect of reducing the
net asset value of Fund shares held by a shareholder by the same amount as the
dividend or capital gains distribution. If the net asset value of the shares is
reduced below a shareholder's cost as a result of such a dividend or capital
gains distribution, the dividend or capital gains distribution, although
constituting a return of invested capital, would be taxable as described above.
Any gain or loss realized on the redemption of Fund shares by a shareholder who
is not a dealer in securities is treated as long-term capital gain or loss if
the shares have been held for more than one year, and otherwise as short-term
capital gain or loss. However, any loss realized by a shareholder upon the
redemption of shares in the Fund held one year or less is treated as a long-term
capital loss to the extent of any long-term capital gains distributions received
by the shareholder with respect to such shares.
Any short-term capital loss realized upon the redemption of shares within
six months from the date of their purchase is disallowed to the extent of any
tax-exempt dividends received during such period.
The Code provides that interest on indebtedness incurred, or continued, to
purchase or carry shares of the Fund is not deductible. Further, entities or
persons who may be "substantial users" (or persons related to "substantial
users") of facilities financed by industrial development bonds should consult
with their own tax advisors before purchasing shares of the Fund.
State and Local Taxes
The exemption for federal income tax purposes of dividends derived from
interest on municipal bonds does not necessarily result in an exemption under
the income or other tax laws of any state or local taxing authority.
Shareholders of the Fund may be exempt from state and local taxes on
distributions of tax-exempt interest income derived from obligations of the
state and/or municipalities of the state in which they may reside but may be
subject to tax on income derived from obligations of other jurisdictions.
Shareholders are advised to consult with their own tax advisors about the status
of distributions from the Fund in their own states and localities.
Under U.S. Treasury regulations, the Trust and each Eligible Institution
are required to withhold and remit to the U.S. Treasury a portion (31%) of
dividends and capital gains distributions on the accounts of those shareholders
who fail to provide a correct taxpayer identification number (Social Security
Number for individuals) or to make required certifications, or who have been
notified by the Internal Revenue Service that they are subject to such
withholdings. Prospective investors should submit an IRS Form W-9 to avoid such
withholding.
Foreign Investors
The Fund is designed for investors who are either citizens of the United
States or aliens subject to United States income tax. Prospective investors
14
<PAGE>
who are not citizens of the United States and who are not aliens subject to
United States income tax are subject to United States withholding tax on the
entire amount of all dividends. Therefore, such investors should not invest in
the Fund since alternative investments are available which would not be subject
to United States withholding tax.
Other Information
Annual notification as to the tax status of capital gains distributions, if
any, is provided to shareholders shortly after June 30, the end of the Fund's
fiscal year. Additional tax information is mailed to shareholders in January.
This tax discussion is based on the tax laws and regulations in effect on
the date of this Prospectus, however such laws and regulations are subject to
change. Shareholders and prospective investors are urged to consult their tax
advisors regarding specific questions relevant to their particular
circumstances.
DESCRIPTION OF SHARES
================================================================================
The Trust is an open-end management investment company organized on June 7,
1983, as an unincorporated business trust under the laws of the Commonwealth of
Massachusetts. Its offices are located at 6 St. James Avenue, Boston,
Massachusetts 02116; its telephone number is (617) 423-0800. Pursuant to the
Trust's Declaration of Trust, the Trustees have authorized the issuance of an
unlimited number of full and fractional shares of each series of the Trust, one
of which is the Fund. The Trustees may divide or combine the shares into a
greater or lesser number of shares without thereby changing the proportionate
beneficial interest in the Trust and may authorize the creation of additional
series of shares, the proceeds of which would be invested in separate,
independently managed portfolios. Currently, there are two series in addition to
the Fund.
The Trustees themselves have the power to alter the number and the terms of
office of the Trustees, to lengthen their own terms, or to make their terms of
unlimited duration subject to certain removal procedures, and to appoint their
own successors; provided that at least two-thirds of the Trustees have been
elected by the shareholders.
Each share of the Fund represents an equal proportional interest in the
Fund with each other share. Upon liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
Shareholders of the Fund are entitled to a full vote for each full share
held and to a fractional vote for fractional shares. The voting rights of
shareholders are not cumulative. Shares have no preemptive or conversion rights.
The rights of redemption are described elsewhere herein. Shares when issued are
fully paid and nonassessable by the Trust, except as set forth below. It is the
intention of the Trust not to hold meetings of shareholders annually. The
Trustees may call meetings of shareholders for action by shareholder vote as may
be required by the 1940 Act or as may be permitted by the Declaration of Trust
or By-Laws. Shareholders have under certain circumstances (e.g., upon
application and submission of certain specified documents to the Trustees by a
specified number of shareholders) the right to communicate with other
shareholders in connection with requesting a meeting of shareholders for the
purpose of removing one or more Trustees. Shareholders also have the right to
remove one or more Trustees without a meeting by a declaration in writing by a
specified number of shareholders.
The By-Laws of the Trust provide that the presence in person or by proxy of
the holders of record of one half of the shares of the Fund outstanding and
entitled to vote thereat shall constitute a quorum at all meetings of Fund
shareholders, except as otherwise required by applicable law. The By-Laws
further provide that all questions shall be decided by a majority
15
<PAGE>
of the votes cast at any such meeting at which a quorum is present, except as
otherwise required by applicable law.
The Declaration of Trust provides that, at any meeting of shareholders of
the Fund, Brown Brothers Harriman & Co., as an Eligible Institution, may vote
any shares as to which Brown Brothers Harriman & Co. is the agent of record and
which are otherwise not represented in person or by proxy at the meeting,
proportionately in accordance with the votes cast by holders of all shares
otherwise represented at the meeting in person or by proxy as to which Brown
Brothers Harriman & Co. is the agent of record. Any shares so voted by Brown
Brothers Harriman & Co. are deemed represented at the meeting for purposes of
quorum requirements.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss because
of shareholder liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.
ADDITIONAL INFORMATION
================================================================================
As used in this Prospectus, the term "majority of the Fund's outstanding
voting securities as defined in the 1940 Act" currently means the vote of (i)
67% or more of the Fund's shares present at a meeting, if the holders of more
than 50% of the outstanding voting securities of the Fund are present in person
or represented by proxy; or (ii) more than 50% of the Fund's outstanding voting
securities, whichever is less.
Fund shareholders receive semi-annual reports containing unaudited
financial statements and annual reports containing financial statements audited
by independent auditors.
A confirmation of each purchase and redemption transaction is issued on
execution of that transaction.
The Fund's performance may be used from time to time in shareholder reports
or other communications to shareholders or prospective investors. Performance
figures are based on historical earnings and are not intended to indicate future
performance. Performance information may include the Fund's investment results
and/or comparisons of its investment results to various unmanaged indexes (such
as the Lehman 3-Year General Obligation Municipal Bond Index or the Merrill
Lynch 0-3 Year General Obligation Municipal Bond Index). To the extent that
unmanaged indexes are so included, the same indexes are used on a consistent
basis. The Fund's investment results as used in such communications are
calculated on a total rate of return basis in the manner set forth below. From
time to time, fund rankings from various sources, such as Micropal, may be
quoted.
Period and average annualized "total rates of return" may be provided in
such communications. The "total rate of return" refers to the change in the
value of an investment in the Fund over a stated period based on any change in
net asset value per share and including the value of any shares purchasable with
any dividends or capital gains distributions during such period. Period total
rates of return may be annualized. An annualized total rate of return is a
compounded total rate of return which assumes that the period total rate of
return is generated over a one year period, and that all dividends and capital
gains distributions are reinvested. An annualized total rate of return is
slightly higher than a period total rate of return if the period is shorter than
one year, because of the assumed reinvestment.
The Fund's "yield", "effective yield" and "tax equivalent yield" may be
used from time to time in shareholder reports or other communications to
shareholders or prospective investors. Such yield
16
<PAGE>
figures are based on historical earnings and are not intended to indicate future
performance. The "yield" of the Fund refers to the income generated by an
investment in the Fund over a 30-day or one-month period (which period is
stated). This income is then annualized. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" is slightly higher than the
"yield" because of the compounding effect of this assumed reinvestment. The "tax
equivalent yield" is the yield a fully taxable investment would have to return
to an investor subject to the highest marginal federal tax rate to provide a
comparable return.
This Prospectus omits certain of the information contained in the Statement
of Additional Information and the Registration Statement filed with the
Securities and Exchange Commission. The Statement of Additional Information may
be obtained from 59 Wall Street Distributors without charge and the Registration
Statement may be obtained from the Securities and Exchange Commission upon
payment of the fee prescribed by the Rules and Regulations of the Commission.
17
<PAGE>
APPENDIX A
================================================================================
This Appendix is intended to provide descriptions of the securities the
Fund may purchase, the interest on which is exempt from federal income tax other
than the alternative minimum tax. However, other such securities not mentioned
below may be purchased for the Fund if they meet the quality and maturity
guidelines set forth in the Fund's investment policies.
================================================================================
Municipal Bonds--debt obligations issued by states, local governments and
regional authorities which provide interest income that is exempt from regular
federal income tax, other than the alternative minimum tax. They generally meet
the longer-term capital needs of their issuers and have maturities of one year
or more. These securities include:
o General Obligation Bonds--bonds backed by the municipality's pledge
of full faith, credit and taxing power.
o Revenue Bonds--bonds backed by the revenue of a specific project,
facility or tax. These include municipal water, sewer and power
utilities; transportation projects; education or housing facilities;
industrial development and resource recovery bonds.
o Refunded Bonds--general obligation or revenue bonds that have been
fully secured or collateralized by an "escrow fund" consisting of U.S.
Government obligations that can adequately meet interest and principal
payments.
o Lease Obligation Bonds--bonds backed by lease obligations of a state or
local authority for the use of land, equipment and facilities. These
securities are not backed by the full faith and credit of the
municipality and may be riskier than general obligation bonds or
revenue bonds. Leases and installment purchase or conditional sale
contracts have been developed to allow for government issuers to
acquire property without meeting the statutory and constitutional
requirements generally required for the issuance of debt.
o Asset-Backed Bonds--bonds secured by interests in pools of municipal
purchase contracts, financing leases and sales agreements. These
obligations are collateralized by the assets purchased or leased by the
municipality.
o Zero Coupon Bonds--securities issued at a discount from their face
value that pay all interest and principal upon maturity. The difference
between the purchase price and par is a specific compounded interest
rate for the investor. In calculating the daily income of the Fund, a
portion of the difference between a zero coupon bond's purchase price
and its face value is taken into account as income.
Municipal Notes--debt obligations issued by states, local governments and
regional authorities which provide interest income that is exempt from regular
federal income taxes, other than the alternative minimum tax. They generally
meet the shorter-term capital needs of their issuers and have maturities of less
than one year. These securities include:
o Tax and Revenue Anticipation Notes--notes issued in expectation of
future taxes or revenues.
o Bond Anticipation Notes--notes issued in anticipation of the sale of
long-term bonds.
Municipal Commercial Paper--obligations issued to meet short-term working
capital or operating needs.
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<PAGE>
Variable and Floating Rate Instruments--securities whose interest rates are
reset daily, weekly or at another periodic date so that the security remains
close to par, minimizing changes in its market value. These securities often
have a demand feature which entitles the investor to repayment of principal plus
accrued interest on short notice. In calculating the maturity of a variable rate
or floating rate instrument for the Fund, the date of the next interest rate
reset is used.
When-issued and Delayed Delivery Securities--municipal securities may be
purchased for the Fund on a when-issued or delayed delivery basis. For example,
delivery and payment may take place a month or more after the date of the
transaction. The purchase price and the interest rate payable on the securities
are fixed on the transaction date. The securities so purchased are subject to
market fluctuation and no interest accrues to the Fund until delivery and
payment take place. At the time the commitment to purchase securities for the
Fund on a when-issued or delayed delivery basis is made, the transaction is
recorded and thereafter the value of such securities is reflected each day in
determining the Fund's net asset value. At the time of its acquisition, a
when-issued security may be valued at less than the purchase price. Commitments
for such when-issued securities are made only when there is an intention of
actually acquiring the securities. To facilitate such acquisitions, a segregated
account with the Custodian is maintained for the Fund with liquid assets in an
amount at least equal to such commitments. Such segregated account consists of
liquid assets marked to the market daily, with additional liquid assets added
when necessary to insure that at all times the value of such account is equal to
the commitments. On delivery dates for such transactions, such obligations are
met from maturities or sales of the securities held in the segregated account
and/or from cash flow. If the right to acquire a when-issued security is
disposed of prior to its acquisition, the Fund could, as with the disposition of
any other portfolio obligation, incur a gain or loss due to market fluctuation.
When-issued commitments for the Fund may not be entered into if such commitments
exceed in the aggregate 15% of the market value of the Fund's total assets, less
liabilities other than the obligations created by when-issued commitments.
19
<PAGE>
APPENDIX B
================================================================================
This Appendix is intended to provide descriptions of the short-term
securities the Fund may purchase, the interest on which is subject to federal
income tax. However, other such securities not mentioned below may be purchased
for the Fund if they meet the quality and maturity guidelines set forth in the
Fund's investment policies.
================================================================================
U.S. Government Obligations--Assets of the Fund may be invested in
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. These securities, including those which are guaranteed by
federal agencies or instrumentalities, may or may not be backed by the "full
faith and credit" of the United States. In the case of securities not backed by
the full faith and credit of the United States, it may not be possible to assert
a claim against the United States itself in the event the agency or
instrumentality issuing or guaranteeing the security for ultimate repayment does
not meet its commitments. Securities which are not backed by the full faith and
credit of the United States include, but are not limited to, securities of the
Tennessee Valley Authority, the Federal National Mortgage Association (FNMA) and
the U.S. Postal Service, each of which has a limited right to borrow from the
U.S. Treasury to meet its obligations, and securities of the Federal Farm Credit
System, the Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation
("FHLMC") and the Student Loan Marketing Association, the obligations of each of
which may be satisfied only by the individual credit of the issuing agency.
Securities which are backed by the full faith and credit of the United States
include Treasury bills, Treasury notes, Treasury bonds and pass through
obligations of the Government National Mortgage Association ("GNMA"), the
Farmers Home Administration and the Export-Import Bank. There is no percentage
limitation with respect to investments in U.S. Government securities.
Commercial Paper--Assets of the Fund may be invested in commercial paper
including variable rate demand master notes issued by U.S. corporations or by
non-U.S. corporations which are direct parents or subsidiaries of U.S.
corporations.
Master notes are demand obligations that permit the investment of
fluctuating amounts at varying market rates of interest pursuant to arrangements
between the issuer and a U.S. commercial bank acting as agent for the payees of
such notes. Master notes are callable on demand, but are not marketable to third
parties. Consequently, the right to redeem such notes depends on the borrower's
ability to pay on demand.
At the date of investment, commercial paper must be rated within the
highest rating category for short-term debt obligations by at least two (unless
only rated by one) nationally recognized statistical rating organizations (e.g.,
Moody's and S&P) or, if unrated, are of comparable quality as determined by or
under the direction of the Board of Trustees. Any commercial paper issued by a
non-U.S. corporation must be U.S. dollar-denominated and not subject to non-U.S.
withholding tax at the time of purchase. Aggregate investments in non-U.S.
commercial paper of non-U.S. issuers cannot exceed 10% of the Fund's net assets.
Bank Obligations--Assets of the Fund may be invested in U.S.
dollar-denominated negotiable certificates of deposit, fixed time deposits and
bankers' acceptances of banks, savings and loan associations and savings banks
organized under the laws of the United States or any state thereof, including
obligations of non-U.S. branches of such banks, or of non-U.S. banks or their
U.S. or non-U.S. branches, provided that in each case, such bank has more than
$500 million in total assets and has an outstanding short-term debt issue rated
within the highest rating category for short-term debt obligations by at least
two (unless only rated by one) nationally recognized statistical rating
organizations (e.g., Moody's and S&P) or, if unrated, are of comparable quality
as determined by or under the direction of the Board of Trustees. (See "Bond,
20
<PAGE>
Note and Commercial Paper Ratings" in the Statement of Additional Information.)
There is no percentage limitation with respect to investments in negotiable
certificates of deposit, fixed time deposits and bankers' acceptances of U.S.
branches of U.S. banks and U.S. branches of non-U.S. banks that are subject to
the same regulation as U.S. banks. While early withdrawals are not contemplated,
fixed time deposits are not readily marketable and may be subject to early
withdrawal penalties, which may vary. Assets of the Fund will not be invested in
obligations of Brown Brothers Harriman & Co. or the Distributor, or in the
obligations of the affiliates of any such organization or in fixed time deposits
with a maturity of over seven calendar days, or in fixed time deposits with a
maturity of from two business days to seven calendar days if more than 10% of
the Fund's total assets would be invested in such deposits.
Repurchase Agreements--Repurchase agreements may be entered into only with
a "primary dealer" (as designated by the Federal Reserve Bank of New York) in
U.S. Government securities. This is an agreement in which the seller (the
"Lender") of a security agrees to repurchase from the Fund the security sold at
a mutually agreed upon time and price. As such, it is viewed as the lending of
money to the Lender. The resale price normally is in excess of the purchase
price, reflecting an agreed upon interest rate. The rate is effective for the
period of time assets of the Fund are invested in the agreement and is not
related to the coupon rate on the underlying security. The period of these
repurchase agreements is usually short, from overnight to one week, and at no
time are assets of the Fund invested in a repurchase agreement with a maturity
of more than one year. The securities which are subject to repurchase
agreements, however, may have maturity dates in excess of one year from the
effective date of the repurchase agreement. The Fund always receives as
collateral securities which are issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. Collateral is marked to the market daily and has
a market value including accrued interest at least equal to 100% of the dollar
amount invested on behalf of the Fund in each agreement along with accrued
interest. Payment for such securities is made for the Fund only upon physical
delivery or evidence of book entry transfer to the account of State Street Bank
and Trust Company, the Fund's Custodian. If the Lender defaults, the Fund might
incur a loss if the value of the collateral securing the repurchase agreement
declines and might incur disposition costs in connection with liquidating the
collateral. In addition, if bankruptcy proceedings are commenced with respect to
the Lender, realization upon the collateral on behalf of the Fund may be delayed
or limited in certain circumstances. A repurchase agreement with more than seven
days to maturity may not be entered into for the Fund if, as a result, more than
10% of the market value of the Fund's total assets would be invested in such
repurchase agreements together with any other investment being held for the Fund
for which market quotations are not readily available.
21
<PAGE>
The 59 Wall Street Trust
Investment Adviser and
Administrator
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
Distributor
59 Wall Street Distributors, Inc.
6 St. James Avenue
Boston, Massachusetts 02116
No dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus and the Statement of Additional Information, 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
Trust or the Distributor. This Prospectus does not constitute an offer by the
Trust or by the Distributor to sell or the solicitation of any offer to buy any
of the securities offered hereby in any jurisdiction to any person to whom it is
unlawful for the Trust or the Distributor to make such offer in such
jurisdiction.
<PAGE>
===============================================================================
STATEMENT OF ADDITIONAL INFORMATION
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS 02116
===============================================================================
The 59 Wall Street Tax Free Short/Intermediate Fixed Income Fund (the
"Fund") is a separate portfolio of The 59 Wall Street Trust (the "Trust"), a
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The investment objective of the Fund is to
provide investors with as high a level of income exempt from federal income tax
as is consistent with minimizing price fluctuations in net asset value and
maintaining liquidity. The Fund invests primarily in high quality municipal
securities and the dollar-weighted average maturity of the Fund's portfolio does
not exceed three years. The Fund is an appropriate investment for investors
seeking tax free income returns greater than those provided by tax free money
market funds and who are able to accept fluctuations in the net asset value of
their investment. The Fund is designed to have lesser price fluctuations than
long term bond funds. There can be no assurance that the investment objective of
the Fund will be achieved.
Brown Brothers Harriman & Co. is the Fund's investment adviser (the
"Investment Adviser"). This Statement of Additional Information is not a
prospectus and should be read in conjunction with the Prospectus dated November
1, 1995, a copy of which may be obtained from the Trust at the address noted
above.
TABLE OF CONTENTS
CROSS-REFERENCE TO
PAGE PAGE IN PROSPECTUS
Investment Objective and Policies 2 4-6
Investment Restrictions 2 7-8
Trustees and Officers 5 9
Investment Adviser 8 9-10
Administrator 9 10-11
Distributor 9 12
Net Asset Value 9 13
Computation of Performance 10 16-17
Federal Taxes 11 13-15
Massachusetts Trust 12 15-16
Portfolio Transactions 14 7
Bond, Note and Commercial Paper Ratings 15 5
Additional Information 17 16-17
Financial Statements 19 4
THE DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION IS NOVEMBER 1, 1995.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
===============================================================================
The following supplements the information contained in the Prospectus
concerning the investment objective, policies and techniques of the Fund.
LOANS OF PORTFOLIO SECURITIES. Securities of the Fund may be loaned if
such loans are secured continuously by cash or equivalent collateral or by an
irrevocable letter of credit in favor of the Fund at least equal at all times to
100% of the market value of the securities loaned plus accrued income. While
such securities are on loan, the borrower pays the Fund any income accruing
thereon, and cash collateral may be invested for the Fund, thereby earning
additional income. All or any portion of interest earned on invested collateral
may be paid to the borrower. Loans are subject to termination by the Trust in
the normal settlement time, currently three business days after notice, or by
the borrower on one day's notice. Borrowed securities are returned when the loan
is terminated. Any appreciation or depreciation in the market price of the
borrowed securities which occurs during the term of the loan inures to the Fund
and its shareholders. Reasonable finders' and custodial fees may be paid in
connection with a loan. In addition, all facts and circumstances, including the
creditworthiness of the borrowing financial institution, are considered before a
loan is made and no loan is made in excess of one year. There is the risk that a
borrowed security may not be returned to the Fund. Securities of the Fund are
not loaned to Brown Brothers Harriman & Co. or to any affiliate of the Trust or
Brown Brothers Harriman & Co.
INVESTMENT RESTRICTIONS
===============================================================================
The Fund is operated under the following investment restrictions which
are deemed fundamental policies and may be changed only with the approval of the
holders of a "majority of the Fund's outstanding voting securities as defined in
the 1940 Act" (see "Additional Information").
Except that the Trust may invest all of the Fund's assets in an
open-end investment company with substantially the same investment objective,
policies and restrictions as the Fund, the Trust, with respect to the Fund, may
not:
(1) borrow money or mortgage or hypothecate its assets, except that in
an amount not to exceed 1/3 of the current value of its net assets, it may
borrow money as a temporary measure for extraordinary or emergency purposes and
enter into repurchase agreements, and except that it may pledge, mortgage or
hypothecate not more than 1/3 of such assets to secure such borrowings (it is
intended that money will be borrowed only from banks and only either to
accommodate requests for the redemption of Fund shares while effecting an
orderly liquidation of portfolio securities or to maintain liquidity in the
event of an unanticipated failure to complete a portfolio security transaction
or other similar situations), provided that collateral arrangements with respect
to options and futures, including deposits of initial deposit and variation
margin, are not considered a pledge of assets for purposes of this restriction
and except that assets may be pledged to secure letters of credit solely for the
purpose of
2
<PAGE>
participating in a captive insurance company sponsored by the Investment Company
Institute; for additional related restrictions, see clause (i) under the caption
"State and Federal Restrictions" hereafter;
(2) purchase any security or evidence of interest therein on margin,
except that such short-term credit as may be necessary for the clearance of
purchases and sales of securities may be obtained and except that deposits of
initial deposit and variation margin may be made in connection with the
purchase, ownership, holding or sale of futures or the purchase, ownership,
holding, sale or writing of options;
(3) underwrite securities issued by other persons except insofar as it
may technically be deemed an underwriter under the Securities Act of 1933 in
selling a portfolio security;
(4) make loans to other persons except (a) through the lending of its
portfolio securities and provided that any such loans not exceed 30% of its
total assets (taken at market value), (b) through the use of repurchase
agreements or the purchase of short-term obligations and provided that not more
than 10% of its total assets are invested in repurchase agreements maturing in
more than seven days, or (c) by purchasing, subject to the limitation in
paragraph 6 below, a portion of an issue of debt securities of types commonly
distributed privately to financial institutions, for which purposes the purchase
of a portion of an issue of debt securities which are part of an issue to the
public shall not be considered the making of a loan;
(5) knowingly invest in securities which are subject to legal or
contractual restrictions on resale (other than repurchase agreements maturing in
not more than seven days) if, as a result thereof, more than 10% of its total
assets (taken at market value) would be so invested (including repurchase
agreements maturing in more than seven days);
(6) purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests therein),
interests in oil, gas or mineral leases, commodities or commodity contracts
(except futures and options contracts) in the ordinary course of business (the
freedom of action to hold and to sell real estate acquired as a result of the
ownership of securities is reserved);
(7) make short sales of securities or maintain a short position, unless
at all times when a short position is open it owns an equal amount of such
securities or securities convertible into or exchangeable, without payment of
any further consideration, for securities of the same issue and equal in amount
to, the securities sold short, and unless not more than 10% of its net assets
(taken at market value) is represented by such securities, or securities
convertible into or exchangeable for such securities, at any one time (it is the
present intention of management to make such sales only for the purpose of
deferring realization of gain or loss for federal income tax purposes; such
sales would not be made of securities subject to outstanding options);
(8) concentrate its investments in securities of issuers in any
particular industry, but if it is deemed appropriate for the achievement of its
investment
3
<PAGE>
objective, up to 25% of its assets, at market value at the time of each
investment, may be invested in securities of issuers in any one industry, except
that positions in futures or option contracts shall not be subject to this
restriction (industrial development and pollution control bonds are grouped into
industries based upon the business in which the issuer of such obligations is
engaged);
(9) issue any senior security (as that term is defined in the 1940 Act)
if such issuance is specifically prohibited by the 1940 Act or the rules and
regulations promulgated thereunder, provided that collateral arrangements with
respect to options and futures, including deposits of initial deposit and
variation margin, are not considered to be the issuance of a senior security for
purposes of this restriction;
(10) invest more than 5% of its total assets in the securities or
obligations of any one issuer (other than obligations issued by the U.S.
Government, its agencies or instrumentalities); provided, however, that up to
25% of its total assets may be invested without regard to this restriction (for
the purpose of this restriction, it will regard each state and each political
subdivision, agency or instrumentality of such state and each multi-state agency
of which such state is a member and each public authority which issues
industrial development bonds on behalf of a private entity as a separate
issuer); or
(11) purchase more than 10% of all outstanding debt obligations of any
one issuer (other than obligations issued by the U.S. Government, its agencies
or instrumentalities).
As an operating policy, the Fund has no current intention to engage in
options or futures transactions or to lend portfolio securities.
STATE AND FEDERAL RESTRICTIONS. In order to comply with certain state
and federal statutes and policies the Fund may not as a matter of operating
policy (except that the Trust may invest all of the Fund's assets in an open-end
investment company with substantially the same investment objective, policies
and restrictions as the Fund): (i) borrow money for any purpose in excess of 10%
of its total assets (taken at cost) (moreover, securities are not purchased for
the Fund's portfolio at any time at which the amount of its borrowings exceed 5%
of the Fund's total assets (taken at market value)), (ii) pledge, mortgage or
hypothecate for any purpose in excess of 10% of its net assets (taken at market
value), provided that collateral arrangements with respect to options and
futures, including deposits of initial deposit and variation margin, are not
considered a pledge of assets for purposes of this restriction, (iii) sell any
security which it does not own unless by virtue of its ownership of other
securities it has at the time of sale a right to obtain securities, without
payment of further consideration, equivalent in kind and amount to the
securities sold and provided that if such right is conditional the sale is made
upon the same conditions, (iv) invest for the purpose of exercising control or
management, (v) purchase securities issued by any investment company except by
purchase in the open market where no commission or profit to a sponsor or dealer
results from such purchase other than the customary broker's commission, or
except when such purchase, though not made in the open market, is part of a plan
of merger or consolidation; provided, however, that securities of any investment
company are not purchased if such purchase at the time thereof would cause more
than 10% of
4
<PAGE>
its total assets (taken at the greater of cost or market value) to be invested
in the securities of such issuers or would cause more than 3% of the outstanding
voting securities of any such issuer to be held, (vi) invest more than 10% of
its net assets (taken at the greater of cost or market value) in securities that
are not readily marketable, (vii) purchase securities of any issuer if such
purchase at the time thereof would cause it to hold more than 10% of any class
of securities of such issuer, for which purposes all indebtedness of an issuer
shall be deemed a single class, except that futures and option contracts are not
subject to this restriction, (viii) invest more than 5% of its assets in taxable
securities of issuers which, including predecessors, have a record of less than
three years of continuous operation (this restriction shall not apply to any
obligations of the U.S. Government, its agencies or instrumentalities), or (ix)
purchase or retain in its portfolio any securities issued by an issuer any of
whose officers, directors, trustees or security holders is an officer or Trustee
of the Trust, or is an officer or partner of the Investment Adviser, if after
the purchase of the securities of such issuer, one or more of such persons owns
beneficially more than 1/2 of 1% of the shares or securities, or both, all taken
at market value, of such issuer, and such persons owning more than 1/2 of 1% of
such shares or securities together own beneficially more than 5% of such shares
or securities, or both, all taken at market value. These policies are not
fundamental and may be changed without shareholder approval in response to
changes in the various state and federal requirements.
PERCENTAGE AND RATING RESTRICTIONS. If a percentage or rating
restriction on investment or utilization of assets set forth above or referred
to in the Prospectus is adhered to at the time an investment is made or assets
are so utilized, a later change in percentage resulting from changes in the
value of the portfolio securities or a later change in the rating of a portfolio
security is not considered a violation of policy.
TRUSTEES AND OFFICERS
===============================================================================
The Trustees and executive officers of the Trust, their principal
occupation during the past five years (although their titles may have varied
during the period) and business addresses are:
TRUSTEES OF THE TRUST
J.V. SHIELDS, JR.* -- Chairman of the Board and Trustee; Director of
The 59 Wall Street Fund, Inc. (since September 1990); Managing Director,
Chairman and Chief Executive Officer of Shields & Company; Chairman and Chief
Executive Officer of Capital Management Associates, Inc.; and Director of
Flowers Industries, Inc.(1) His business address is Shields & Company, 71
Broadway, New York, NY 10006.
EUGENE P. BEARD** -- Trustee; Director of The 59 Wall Street Fund, Inc.
(since April 1993); and Executive Vice President -- Finance and Operations of
The Interpublic Group of Companies. His business address is The Interpublic
Group of Companies, Inc., 1271 Avenue of the Americas, New York, NY 10020.
5
<PAGE>
DAVID P. FELDMAN** -- Trustee; Director of The 59 Wall Street Fund,
Inc. (since September 1990); Corporate Vice President--Investment Management of
American Telephone and Telegraph Co., Inc.; Director of Dreyfus Mutual Funds,
Equity Fund of Latin America (since prior to April 1990), New World Balanced
Fund (since prior to May 1990), India Magnum Fund (since prior to September
1990), and U.S. Prime Properties Inc. (since February 1990); and Trustee of
Corporate Property Investors. His business address is American Telephone and
Telegraph Co., Inc., One Oak Way, Room 2EA 176, Berkeley Heights, NJ 07922.
ALAN G. LOWY** -- Trustee; Private investor; Director of The 59 Wall
Street Fund, Inc. (since April 1993); and Secretary of the Los Angeles County
Board of Investments (prior to March 1995). His business address is 4111 Clear
Valley Drive, Encino, CA 91436.
ARTHUR D. MILTENBERGER** -- Trustee; Director of The 59 Wall Street
Fund, Inc. (since February 1992); Vice President and Chief Financial Officer of
Richard K. Mellon and Sons; Treasurer of the Richard King Mellon Foundation;
Director of Enterprise Corporation (prior to 1992), Vought Aircraft Corporation
(prior to September 1994), Caterair International (prior to April 1994),
Computer Renaissance, Inc. (prior to March 1990), and I&M Orchards, Inc. (prior
to 1991); and Member of the Valuation Committee of T. Rowe Price Threshold Fund,
L.P. (prior to 1992), Advisory Committee of the Carlyle Group and Pittsburgh
Seed Fund and the Valuation Committee of Morgenthaler Venture Funds(2). His
business address is Richard K. Mellon and Sons, P.O. Box RKM, Ligonier, PA
15658.
OFFICERS OF THE TRUST
PHILIP W. COOLIDGE -- President; Chief Executive Officer and President
of Signature Financial Group, Inc. ("SFG"), 59 Wall Street Distributors, Inc.
("59 Wall Street Distributors") (since June 1990) and 59 Wall Street
Administrators, Inc. ("59 Wall Street Administrators") (since June 1993).
JAMES E. HOOLAHAN -- Vice President; Senior Vice President of SFG
(since prior to December 1990).
THOMAS M. LENZ -- Secretary; Vice President and Associate General
Counsel of SFG (since prior to November 1990); and Assistant Secretary of 59
Wall Street Distributors (since May 1991) and 59 Wall Street Administrators
(since June 1993).
MOLLY S. MUGLER -- Assistant Secretary; Legal Counsel and Assistant
Secretary of SFG; and Assistant Secretary of 59 Wall Street Distributors (since
June 1990) and 59 Wall Street Administrators (since June 1993).
BARBARA M. O'DETTE -- Assistant Treasurer; Assistant Treasurer of SFG,
59 Wall Street Distributors (since June 1990) and 59 Wall Street Administrators
(since June 1993).
DAVID G. DANIELSON -- Assistant Treasurer; Assistant Manager of SFG
(since May 1991); and Graduate Student, Northeastern University (prior to March
1991).
6
<PAGE>
BRIAN J. HALL -- Assistant Treasurer; Fund Administrator of SFG (since
November 1991); and Senior State Regulation Administrator of The Boston Company
(prior to November 1991).
- -------------------------
* Mr. Shields is an "interested person" of the Trust because of his
affiliation with a registered broker-dealer.
** These Trustees are members of the Audit Committee.
(1) Shields & Company, Capital Management Associates, Inc. and Flowers
Industries, Inc., with which Mr. Shields is associated, are a registered
broker-dealer and a member of the New York Stock Exchange, a registered
investment adviser, and a diversified food company, respectively.
(2) Richard K. Mellon and Sons, Richard King Mellon Foundation, Enterprise
Corporation, Vought Aircraft Corporation, Caterair International, The
Carlyle Group and Morgenthaler Venture Funds, with which Mr. Miltenberger
is or has been associated, are a private foundation, a private
foundation, a business development firm, an aircraft manufacturer, an
airline food services company, a merchant bank, and a venture capital
partnership, respectively.
Each Trustee and officer listed above holds the equivalent position
with The 59 Wall Street Fund, Inc. The address of each officer is 6 St. James
Avenue, Boston, Massachusetts 02116. Messrs. Coolidge, Hoolahan, Lenz, Danielson
and Hall and Mss. Mugler and O'Dette also hold similar positions with other
investment companies for which affiliates of 59 Wall Street Distributors serve
as the principal underwriter.
Except for Mr. Shields, no Trustee is an "interested person" of the
Trust as that term is defined in the 1940 Act.
The Trustees receive a base annual fee of $15,000 (except the Chairman who
receives a base annual fee of $20,000) which is paid jointly by all series of
the Trust and The 59 Wall Street Fund, Inc. and allocated among the series based
upon their respective net assets. In addition, each series which has commenced
operations pays an annual fee to each Trustee of $1,000. The aggregate
compensation to each Trustee from the Trust and the Fund Complex (the Fund
Complex consists of the Trust and The 59 Wall Street Fund, Inc. which currently
consists of six series) was less than $60,000.
By virtue of the responsibilities assumed by Brown Brothers Harriman & Co.
under the Investment Advisory Agreement and the Administration Agreement (see
"Investment Adviser" and "Administrator"), the Trust itself requires no
employees other than its officers, and none of its officers devote full time to
the affairs of the Trust or, other than the Chairman, receive any compensation
from the Fund.
As of September 30, 1995, the Trust's Trustees and officers as a group
beneficially owned less than 1% of the outstanding shares of the Trust. At the
close of business on that date, no person, to the knowledge of management, owned
beneficially more than 5% of the outstanding shares of the Fund. However, as of
7
<PAGE>
that date, Partners of Brown Brothers Harriman & Co. and their
immediate families owned 493,537 (10.64%) shares of the Fund. Brown Brothers
Harriman & Co. and its affiliates separately were able to direct the disposition
of an additional 797,412 (17.19%) shares of the Fund, as to which shares Brown
Brothers Harriman & Co. disclaims beneficial ownership.
INVESTMENT ADVISER
================================================================================
Under its Investment Advisory Agreement with the Trust, subject to the
general supervision of the Trust's Trustees and in conformance with the stated
policies of the Fund, Brown Brothers Harriman & Co. provides investment advice
and portfolio management services to the Fund. In this regard, it is the
responsibility of Brown Brothers Harriman & Co. to make the day-to-day
investment decisions for the Fund, to place the purchase and sale orders for
portfolio transactions of the Fund and to manage, generally, the Fund's
investments.
The Investment Advisory Agreement between Brown Brothers Harriman & Co.
and the Trust is dated June 9, 1992, as amended and restated November 1, 1993
and remains in effect for two years from such date and thereafter, but only as
long as the agreement is specifically approved at least annually (i) by a vote
of the holders of a "majority of the Fund's outstanding voting securities as
defined in the 1940 Act" or by the Trust's Trustees, and (ii) by a vote of a
majority of the Trustees of the Trust who are not parties to the Investment
Advisory Agreement or "interested persons" (as defined in the 1940 Act) of the
Trust ("Independent Trustees"), cast in person at a meeting called for the
purpose of voting on such approval. The Investment Advisory Agreement was
approved last by the Independent Trustees on August 22, 1995. The Investment
Advisory Agreement terminates automatically if assigned and is terminable at any
time without penalty by a vote of a majority of the Trustees of the Trust or by
a vote of the holders of a "majority of the Fund's outstanding voting securities
as defined in the 1940 Act" on 60 days' written notice to Brown Brothers
Harriman & Co. and by Brown Brothers Harriman & Co. on 90 days' written notice
to the Trust (see "Additional Information").
The investment advisory fee paid to the Investment Adviser is calculated
daily and paid monthly at an annual rate equal to 0.35% of the Fund's average
daily net assets. Prior to November 1, 1993, the investment advisory fee was an
annual rate equal to 0.50% of the Fund's average daily net assets. For the
fiscal years ended June 30, 1995 and 1994 and the period July 23, 1992
(commencement of operations) to June 30, 1993, the Investment Adviser received
$207,074, $239,217 and $68,856, respectively for advisory services.
The Glass-Steagall Act prohibits certain financial institutions from
engaging in the business of underwriting, selling or distributing securities and
from sponsoring, organizing or controlling a registered open-end investment
company continuously engaged in the issuance of its shares, such as the Fund.
There is presently no controlling precedent prohibiting financial institutions
such as Brown Brothers Harriman & Co. from performing investment advisory,
administrative or shareholder servicing/eligible institution functions. If Brown
Brothers Harriman & Co. were to terminate its Investment Advisory Agreement with
the Fund or were prohibited from acting in such capacity, it is expected that
the Trustees
8
<PAGE>
would recommend to the shareholders that they approve a new investment advisory
agreement for the Fund with another qualified adviser. If Brown Brothers
Harriman & Co. were to terminate its Eligible Institution Agreement or
Administration Agreement with the Trust or were prohibited from acting in any
such capacity, its customers would be permitted to remain shareholders of the
Trust and alternative means for providing shareholder services or administrative
services, as the case may be, would be sought. In such event, although the
operation of the Trust might change, it is not expected that any shareholders
would suffer any adverse financial consequences. However, an alternative means
of providing shareholder services might afford less convenience to shareholders.
ADMINISTRATOR
================================================================================
The Administration Agreement between the Trust and Brown Brothers Harriman
& Co. (dated November 1, 1993) will remain in effect for two years from such
date and thereafter, but only so long as such agreement is specifically approved
at least annually in the same manner as the Investment Advisory Agreement (see
"Investment Adviser"). The Independent Trustees last approved the Trust's
Administration Agreement on August 22, 1995. The agreement will terminate
automatically if assigned by either party thereto and is terminable at any time
without penalty by a vote of a majority of the Trustees of the Trust or by a
vote of the holders of a "majority of the Trust's outstanding voting securities
as defined in the 1940 Act" (see "Additional Information"). The Administration
Agreement is terminable by the Trust's Trustees or shareholders of the Trust on
60 days' written notice to Brown Brothers Harriman & Co. and by Brown Brothers
Harriman & Co. on 90 days' written notice to the Trust.
The administrative fee payable to Brown Brothers Harriman & Co. from the
Fund is calculated daily and payable monthly at an annual rate equal to 0.15% of
the Fund's average daily net assets. Prior to November 1, 1993, 59 Wall Street
Distributors served as administrator of the Trust and was paid at an annual rate
equal to 0.05% of the Fund's average daily net assets. During the fiscal year
ended June 30, 1995 and 1994 and the period July 23, 1992 (commencement of
operations) to June 30, 1993, the Fund paid administrative fees totalling
$88,746, $77,691 and $6,886, respectively.
DISTRIBUTOR
================================================================================
The Distribution Agreement (dated August 31, 1990) between the Trust and
59 Wall Street Distributors remains in effect indefinitely, but only so long as
such agreement is specifically approved at least annually in the same manner as
the Investment Advisory Agreement (see "Investment Adviser"). The Distribution
Agreement was most recently approved by the Independent Trustees of the Trust on
February 22, 1995. The agreement terminates automatically if assigned by either
party thereto and is terminable with respect to the Fund at any time without
penalty by a vote of a majority of the Trustees of the Trust or by a vote of the
holders of a "majority of the Fund's outstanding voting securities as defined in
the 1940 Act" (see "Additional Information"). The Distribution Agreement is
terminable with respect to the Fund by the Trust's Trustees or shareholders of
9
<PAGE>
the Fund on 60 days' written notice to 59 Wall Street Distributors. The
agreement is terminable by 59 Wall Street Distributors on 90 days' written
notice to the Trust.
NET ASSET VALUE
================================================================================
The net asset value of each of the Fund's shares is determined each day
the New York Stock Exchange is open for regular trading and New York banks are
open for business. (As of the date of this Statement of Additional Information,
such Exchange and banks are so open every weekday except for the following
holidays: New Year's Day, Martin Luther King Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day and
Christmas.) This determination of net asset value of each share of the Fund is
made once during each such day as of the close of regular trading on such
Exchange by subtracting from the value of the Fund's total assets the amount of
its liabilities, and dividing the difference by the number of shares of the Fund
outstanding at the time the determination is made.
Bonds and other fixed income securities (other than short-term obligations
but including listed issues) are valued on the basis of valuations furnished by
a pricing service, use of which has been approved by the Board of Trustees. In
making such valuations, the pricing service utilizes both dealer-supplied
valuations and electronic data processing techniques which take into account
appropriate factors such as institutional-size trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics and other market data, without exclusive reliance upon quoted
prices or exchange or over-the-counter prices, since such valuations are
believed to reflect more accurately the fair value of such securities.
Securities or other assets for which market quotations are not readily
available are valued at fair value in accordance with procedures established by
and under the general supervision and responsibility of the Trust's Trustees.
Such procedures include the use of indications as to values from dealers; and
general market conditions. Short-term investments which mature in 60 days or
less are valued at amortized cost if their original maturity was 60 days or
less, or by amortizing their value on the 61st day prior to maturity, if their
original maturity when acquired for the Fund was more than 60 days, unless this
is determined not to represent fair value by the Trustees.
COMPUTATION OF PERFORMANCE
================================================================================
The average annual total rate of return of the Fund is calculated for any
period by (a) dividing (i) the sum of the aggregate net asset value per share on
the last day of the period of shares purchased with a $1,000 payment on the
first day of the period and the aggregate net asset value per share on the last
day of the period of shares purchasable with dividends and capital gains
distributions declared during such period with respect to shares purchased on
the first day of such period and with respect to shares purchased with such
dividends and capital gains distributions, by (ii) $1,000, (b) raising the
quotient to a power equal
10
<PAGE>
to 1 divided by the number of years in the period, and (c) subtracting 1 from
the result.
The total rate of return of the Fund for any specified period is
calculated by (a) dividing (i) the sum of the aggregate net asset value per
share on the last day of the period of shares purchased with a $1,000 payment on
the first day of the period and the aggregate net asset value per share on the
last day of the period of shares purchasable with dividends and capital gains
distributions declared during such period with respect to shares purchased on
the first day of such period and with respect to shares purchased with such
dividends and capital gains distributions, by (ii) $1,000, and (b) subtracting 1
from the result.
The annualized total rate of return for the Fund for the fiscal year
ended June 30, 1995 and the period July 23, 1992 (commencement of operations) to
June 30, 1995 were 5.42% and 4.46%, respectively. The total rate of return
should not be considered a representation of the total rate of return of the
Fund in the future since the total rate of return is not fixed. Actual total
rates of return depend on changes in the market value of, and dividends and
interest received from, the investments held by the Fund and the Fund's expenses
during the period.
Total rate of return information may be useful for reviewing the
performance of the Fund and for providing a basis for comparison with other
investment alternatives. However, unlike bank deposits or other investments
which pay a fixed yield for a stated period of time, the Fund's total rate of
return fluctuates, and this should be considered when reviewing performance or
making comparisons.
Any "yield" quotation of the Fund consists of an annualized historical
yield, carried at least to the nearest hundredth of one percent, based on a
30-day or one-month period and is calculated by (a) raising to the sixth power
the sum of 1 plus the quotient obtained by dividing the Fund's net investment
income earned during the period by the product of the average daily number of
shares outstanding during the period that were entitled to receive dividends and
the maximum offering price per share on the last day of the period, (b)
subtracting 1 from the result, and (c) multiplying the result by 2.
Any tax equivalent yield quotation of the Fund is calculated as follows:
If the entire current yield quotation for such period is tax-exempt, the tax
equivalent yield is the current yield quotation divided by 1 minus a stated
income tax rate or rates. If a portion of the current yield quotation is not
tax-exempt, the tax equivalent yield is the sum of (a) that portion of the yield
which is tax-exempt divided by 1 minus a stated income tax rate or rates, and
(b) the portion of the yield which is not tax-exempt.
The 30-day yield and tax equivalent yield assuming a tax rate of 36% for
the period ended June 30, 1995 were 3.50% and 5.47%, respectively. The yield
should not be considered a representation of the yield of the Fund in the future
since the yield is not fixed. Actual yields depend on the type, quality and
maturities of the investments held for the Fund, changes in interest rates on
investments, and the Fund's expenses during the period.
Yield information may be useful for reviewing the performance of the Fund
and for providing a basis for comparison with other investment alternatives.
However, unlike bank deposits or other investments which pay a fixed yield for
11
<PAGE>
a stated period of time, the Fund's yield does fluctuate, and this should be
considered when reviewing performance or making comparisons.
FEDERAL TAXES
================================================================================
Each year, the Trust intends to continue to qualify the Fund and elect
that the Fund be treated as a separate "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").
Under Subchapter M of the Code the Fund is not subject to federal income taxes
on amounts distributed to shareholders.
Qualification as a regulated investment company under the Code requires,
among other things, that (a) at least 90% of the Fund's annual gross income,
without offset for losses from the sale or other disposition of securities, be
derived from interest, payments with respect to securities loans, dividends and
gains from the sale or other disposition of securities or other income derived
with respect to its business of investing in such securities; (b) less than 30%
of the Fund's annual gross income be derived from gains (without offset for
losses) from the sale or other disposition of securities held for less than
three months; and (c) the holdings of the Fund be diversified so that, at the
end of each quarter of its fiscal year, (i) at least 50% of the market value of
the Fund's assets be represented by cash, U.S. Government securities and other
securities limited in respect of any one issuer to an amount not greater than 5%
of the Fund's assets and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of the Fund's assets be invested
in the securities of any one issuer (other than U.S. Government securities). In
addition, in order not to be subject to federal income tax, at least 90% of the
Fund's net investment income and net short-term capital gains earned in each
year must be distributed to the Fund's shareholders.
RETURN OF CAPITAL. If the net asset value of shares is reduced below a
shareholder's cost as a result of a dividend or capital gains distribution from
the Fund, such dividend or capital gains distribution would be taxable even
though it represents a return of invested capital.
REDEMPTION OF SHARES. Any gain or loss realized on the redemption of Fund
shares by a shareholder who is not a dealer in securities is treated as
long-term capital gain or loss if the shares have been held for more than one
year, and otherwise as short-term capital gain or loss. However, any loss
realized by a shareholder upon the redemption of Fund shares held one year or
less is treated as a long-term capital loss to the extent of any long-term
capital gains distributions received by the shareholder with respect to such
shares. Additionally, any loss realized on a redemption or exchange of Fund
shares is disallowed to the extent the shares disposed of are replaced within a
period of 61 days beginning 30 days before such disposition, such as pursuant to
reinvestment of a dividend or capital gains distribution in Fund shares.
OTHER TAXES. The Fund may be subject to state or local taxes in
jurisdictions in which it is deemed to be doing business. In addition, the
treatment of the Fund and its shareholders in those states which have income tax
12
<PAGE>
laws might differ from treatment under the federal income tax laws. Shareholders
should consult their own tax advisors with respect to any state or local taxes.
MASSACHUSETTS TRUST
================================================================================
The Trust's Declaration of Trust permits the Trust's Board of Trustees to
issue an unlimited number of full and fractional shares of beneficial interest
and to divide or combine the shares into a greater or lesser number of shares
without thereby changing the proportionate beneficial interests in the Trust.
Each Fund share represents an equal proportionate interest in the Fund with each
other share. Upon liquidation or dissolution of the Fund, the Fund's
shareholders are entitled to share pro rata in the Fund's net assets available
for distribution to its shareholders. Shares of each series participate equally
in the earnings, dividends and assets of the particular series. Shares of each
series are entitled to vote separately to approve advisory agreements or changes
in investment policy, but shares of all series vote together in the election or
selection of Trustees, principal underwriters and auditors for the Trust. Upon
liquidation or dissolution of the Trust, the shareholders of each series are
entitled to share pro rata in the net assets of their respective series
available for distribution to shareholders. The Trust reserves the right to
create and issue additional series of shares. The Trust currently consists of
three series.
Shareholders are entitled to one vote for each share held on matters on
which they are entitled to vote. Shareholders in the Trust do not have
cumulative voting rights, and shareholders owning more than 50% of the
outstanding shares of the Trust may elect all of the Trustees of the Trust if
they choose to do so and in such event the other shareholders in the Trust would
not be able to elect any Trustee. The Trust is not required and has no current
intention to hold meetings of shareholders annually but the Trust will hold
special meetings of shareholders when in the judgment of the Trust's Trustees it
is necessary or desirable to submit matters for a shareholder vote. Shareholders
have under certain circumstances (E.G., upon application and submission of
certain specified documents to the Trustees by a specified number of
shareholders) the right to communicate with other shareholders in connection
with requesting a meeting of shareholders for the purpose of removing one or
more Trustees. Shareholders also have the right to remove one or more Trustees
without a meeting by a declaration in writing by a specified number of
shareholders. No material amendment may be made to the Trust's Declaration of
Trust without the affirmative vote of the holders of a majority of its
outstanding shares. Shares have no preference, pre-emptive, conversion or
similar rights. Shares, when issued, are fully paid and non-assessable, except
as set forth below. The Trust may enter into a merger or consolidation, or sell
all or substantially all of its assets, if approved by the vote of the holders
of two-thirds of its outstanding shares, except that if the Trustees of the
Trust recommend such sale of assets, the approval by vote of the holders of a
majority of the Trust's outstanding shares will be sufficient. The Trust may
also be terminated upon liquidation and distribution of its assets, if approved
by the vote of the holders of two-thirds of its outstanding shares.
Stock certificates are not issued by the Trust.
13
<PAGE>
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations and liabilities. However, the Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the Trust
and provides for indemnification and reimbursement of expenses out of Trust
property for any shareholder held personally liable for the obligations of the
Trust. The Declaration of Trust also provides that the Trust shall maintain
appropriate insurance (for example, fidelity bonding and errors and omissions
insurance) for the protection of the Trust, its shareholders, Trustees,
officers, employees and agents covering possible tort and other liabilities.
Thus, the risk of a shareholder's incurring financial loss because of
shareholder liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.
The Declaration of Trust further provides that obligations of the Trust
are not binding upon the Trustees individually but only upon the property of the
Trust and that the Trustees are not liable for any action or failure to act, but
nothing in the Declaration of Trust protects a Trustee against any liability to
which he would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office.
The Trust may, in the future, seek to achieve the Fund's investment
objective by investing all of the Fund's investable assets in a no-load,
diversified, open-end management investment company having substantially the
same investment objective as those applicable to the Fund. In such event, the
Fund would no longer directly require investment advisory services and therefore
would pay no investment advisory fees. Further, the administrative services fee
paid from the Fund would be reduced. At a shareholder's meeting held on
September 23, 1993, the Fund's shareholders approved changes to the investment
restrictions of the Fund to authorize such an investment. Such an investment
would be made only if the Trustees believe that the aggregate per share expenses
of the Fund and such other investment company would be less than or
approximately equal to the expenses which the Fund would incur if the Trust were
to continue to retain the services of an investment adviser for the Fund and the
assets of the Fund were to continue to be invested directly in portfolio
securities.
It is expected that the investment in another investment company will have
no preference, preemptive, conversion or similar rights, and will be fully paid
and non-assessable. It is expected that the investment company will not be
required to hold annual meetings of investors, but will hold special meetings of
investors when, in the judgment of its trustees, it is necessary or desirable to
submit matters for an investor vote. It is expected that each investor will be
entitled to a vote in proportion to the share of its investment in such
investment company. Except as described below, whenever the Trust is requested
to vote on matters pertaining to the investment company, the Trust would hold a
meeting of the Fund's shareholders and would cast its votes on each matter at a
meeting of investors in the investment company proportionately as instructed by
the Fund's shareholders.
However, subject to applicable statutory and regulatory requirements, the
Trust would not request a vote of the Fund's shareholders with respect to (a)
any proposal relating to the investment company in which the Fund's assets were
14
<PAGE>
invested, which proposal, if made with respect to the Fund, would not require
the vote of the shareholders of the Fund, or (b) any proposal with respect to
the investment company that is identical, in all material respects, to a
proposal that has previously been approved by shareholders of the Fund.
PORTFOLIO TRANSACTIONS
================================================================================
Fixed-income securities are generally traded at a net price with dealers
acting as principal for their own account without a stated commission. The price
of the security usually includes a profit to the dealer. In underwritten
offerings, securities are purchased at a fixed price which includes an amount of
compensation to the underwriter, generally referred to as the underwriter's
concession or discount. On occasion, certain money market instruments may be
purchased directly from an issuer, in which case no commissions or discounts are
paid. Purchases and sales of securities on a stock exchange, while infrequent,
are effected through brokers who charge a commission for their services. From
time to time certificates of deposit may be purchased through intermediaries who
may charge a commission for their services.
On those occasions when Brown Brothers Harriman & Co. deems the purchase
or sale of a security to be in the best interests of the Fund as well as other
customers, Brown Brothers Harriman & Co., to the extent permitted by applicable
laws and regulations, may, but is not obligated to, aggregate the securities to
be sold or purchased for the Fund with those to be sold or purchased for other
customers in order to obtain best execution, including lower brokerage
commissions, if appropriate. In such event, allocation of the securities so
purchased or sold as well as any expenses incurred in the transaction are made
by Brown Brothers Harriman & Co. in the manner it considers to be most equitable
and consistent with its fiduciary obligations to its customers, including the
Fund. In some instances, this procedure might adversely affect the Fund.
BOND, NOTE AND COMMERCIAL PAPER RATINGS
================================================================================
Bond Ratings
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")
Aaa, Aa and A - Tax-exempt bonds rated Aaa are judged to be of the "best
quality". The rating of Aa is assigned to bonds that are of "high quality by all
standards", but long-term risks appear somewhat larger than Aaa rated bonds. The
Aaa and Aa rated bonds are generally known as "high grade bonds". The foregoing
ratings for tax-exempt bonds are sometimes presented in parentheses preceded
with a "con" indicating that the bonds are rated conditionally. Issues rated Aaa
or Aa may be further modified by the numbers 1, 2 or 3 (3 being the highest) to
show relative strength within the rating category. Bonds for which the security
depends upon the completion of some act or upon the fulfillment of some
condition are rated conditionally. These are bonds secured by (a) earnings of
projects under construction, (b) earnings of projects unseasoned in operation
experience, (c) rentals that begin when facilities are completed, or (d)
payments to which
15
<PAGE>
some other limiting condition attaches. Such parenthetical rating denotes the
probable credit stature upon completion of construction or elimination of the
basis of the condition. Bonds rated A are considered as upper medium grade
obligations. Principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.
STANDARD & POOR'S CORPORATION ("S&P")
AAA, AA and A - The AAA rating is the highest rating assigned to debt
obligations and indicates an extremely strong capacity to pay principal and
interest. Bonds rated AA are considered "high grade", are only slightly less
marked than those of AAA ratings and have the second strongest capacity for
payment of debt service. Bonds rated A have a strong capacity to pay principal
and interest, although they are somewhat susceptible to adverse effects or
changes in circumstances and economic conditions. Bonds rated AA or A may be
modified with a plus (+) or a minus (-) sign to show relative strength within
the rating category. The foregoing ratings are sometimes followed by a "p"
indicating that the rating is provisional. A provisional rating assumes the
successful completion of the project financed by the bonds being rated and
indicates that payment of debt service requirements is largely or entirely
dependent upon the successful and timely completion of the project. Although a
provisional rating addresses credit quality subsequent to completion of the
project, it makes no comment on the likelihood of, or the risk of default upon
failure of, such completion.
FITCH INVESTORS SERVICE ("FITCH")
AAA, AA and A - Bonds rated AAA are considered to be investment grade and
of the highest quality. The obligor has an extraordinary ability to pay interest
and repay principal, which is unlikely to be affected by reasonably foreseeable
events. Bonds rated AA are considered to be investment grade and of high
quality. The obligor's ability to pay interest and repay principal, while very
strong, is somewhat less than for AAA rated securities or more subject to
possible change over the term of the issue. Bonds rated A are considered to be
investment grade and of good quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more vulnerable to
adverse changes in economic conditions and circumstances than bonds with higher
ratings.
Tax-Exempt Note and Variable Rate Investment Ratings
Moody's - MIG-1 and MIG-2. Notes rated MIG-1 are judged to be of the best
quality, enjoying strong protection from established cash flow of funds for
their services or from established and broad-based access to the market for
refinancing or both. Notes rated MIG-2 are judged to be of high quality with
ample margins of protection, through not as large as MIG-1.
S&P - SP-1 and SP-2. SP-1 denotes a very strong or strong capacity to pay
principal and interest. Issues determined to possess overwhelming safety
characteristics are given a plus (+) designation (SP-1+). SP-2 denotes a
satisfactory capacity to pay principal and interest.
Fitch - F-1+, F-1 and F-2. Notes assigned F-1+ are regarded as having the
strongest degree of assurance for timely payment. An F-1 rating reflects an
assurance of timely payment only slightly less in degree than an F-1+ rating.
16
<PAGE>
Notes assigned F-2 have a satisfactory degree of assurance for timely payment,
but margins of protection are not as great as for issues rated F-1+ and F-1. The
symbol LOC may follow a note rating which indicates that a letter of credit
issued by a commercial bank is attached to the note.
Tax-Exempt and Corporate Commercial Paper Ratings
Moody's - Commercial Paper ratings are opinions of the ability of issuers
to repay punctually promissory obligations not having an original maturity in
excess of nine months. Prime-1 indicates highest quality repayment capacity of
rated issue.
S&P - Commercial Paper ratings are a current assessment of the likelihood
of timely payment of debts having an original maturity of no more than 365 days.
Issues rated A-1 have the greatest capacity for timely payment. Issues rated
"A-1+" are those with an "overwhelming degree of credit protection."
Fitch - Commercial Paper ratings reflect current appraisal of the degree
of assurance of timely payment. F-1+ issues are regarded as having the strongest
degree of assurance for timely payment. An F-1 rating reflects an assurance of
timely payment only slightly less in degree than an F-1+ rating. The symbol LOC
may follow either category and indicates that a letter of credit issued by a
commercial bank is attached to the commercial paper.
Other Considerations
The ratings of S&P, Moody's and Fitch represent their respective opinions
of the quality of the municipal securities they undertake to rate. It should be
emphasized, however, that ratings are general and are not absolute standards of
quality. Consequently, municipal securities with the same maturity, coupon and
rating may have different yields and municipal securities of the same maturity
and coupon with different ratings may have the same yield.
Among the factors considered by Moody's in assigning bond, note and
commercial paper ratings are the following: (i) evaluation of the management of
the issuer; (ii) economic evaluation of the issuer's industry or industries and
an appraisal of speculative-type risks which may be inherent in certain areas;
(iii) evaluation of the issuer's products in relation to competition and
customer acceptance; (iv) liquidity; (v) amount and quality of long-term debt;
(vi) trend of earnings over a period of 10 years; (vii) financial strength of a
parent company and the relationships which exist with the issuer; and (viii)
recognition by management of obligations which may be present or may arise as a
result of public interest questions and preparations to meet such obligations.
Among the factors considered by S&P in assigning bond, note and commercial
paper ratings are the following: (i) trend of earnings and cash flow with
allowances made for unusual circumstances, (ii) stability of the issuer's
industry, (iii) the issuer's relative strength and position within the industry
and (iv) the reliability and quality of management.
17
<PAGE>
ADDITIONAL INFORMATION
================================================================================
As used in this Statement of Additional Information and the Prospectus,
the term "majority of the Fund's outstanding voting securities as defined in the
1940 Act" currently means the vote of (i) 67% or more of the Fund's shares
present at a meeting, if the holders of more than 50% of the outstanding voting
securities of the Fund are present in person or represented by proxy; or (ii)
more than 50% of the Fund's outstanding voting securities, whichever is less.
Fund shareholders receive semi-annual reports containing unaudited
financial statements and annual reports containing financial statements audited
by independent auditors.
A shareholder's right to receive payment with respect to any redemption
may be suspended or the payment of the redemption proceeds postponed: (i) during
periods when the New York Stock Exchange is closed for other than weekends and
holidays or when regular trading on such Exchange is restricted as determined by
the Securities and Exchange Commission by rule or regulation, (ii) during
periods in which an emergency exists which causes disposal of, or evaluation of
the net asset value of, the Fund's portfolio securities to be unreasonable or
impracticable, or (iii) for such other periods as the Securities and Exchange
Commission may permit.
With respect to the securities offered by the Prospectus, this Statement
of Additional Information and the Prospectus do not contain all the information
included in the Registration Statement filed with the Securities and Exchange
Commission under the Securities Act of 1933. Pursuant to the rules and
regulations of the Securities and Exchange Commission, certain portions have
been omitted. The Registration Statement including the exhibits filed therewith
may be examined at the office of the Securities and Exchange Commission in
Washington, D.C.
Statements contained in this Statement of Additional Information and the
Prospectus concerning the contents of any contract or other document are not
necessarily complete, and in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement. Each such statement is qualified in all respects by such reference.
A copy of the Declaration of Trust establishing the Trust is on file in
the office of the Secretary of the Commonwealth of Massachusetts.
FINANCIAL STATEMENTS
=============================================================================
The Fund's current annual report to shareholders as filed with the
Securities and Exchange Commission pursuant to Section 30(b) of the 1940 Act and
Rule 30b2-1 thereunder is hereby incorporated herein by reference. A copy of
such report will be provided without charge to each person receiving this
Statement of Additional Information.
WS5089G
18
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements:
Financial Statement included in the Prospectus constituting Part A of this
Registration Statement:
Financial Highlights for each of the years in the three year
periods ended June 30, 1995.
Financial Statements included in the Statement of Additional Information
constituting Part B of this Registration Statement:
Portfolio of Investments at June 30, 1995 Statement of Assets and
Liabilities at June 30, 1995 Statement of Operations for the year
ended June 30, 1995 Statement of Changes in Net Assets for the
years ended June 30, 1994 and 1995.
Financial Highlights for each year of the three year periods
ended June 30, 1995
Notes to Financial Statements.
Independent Auditors' Report.
Management's Discussion of Fund Performance
(b) Exhibits:
1(a) Amended and Restated Declaration of Trust of the Registrant (10)
(b) Designation of Series of The 59 Wall Street U.S. Treasury Money
Fund (10)
(c) Designation of Series of The 59 Wall Street Tax Free
Short/Intermediate Fixed Income Fund (10)
2 By-Laws of the Registrant (10)
3 Not Applicable
4 Not Applicable
5(a) Advisory Agreement with respect to The 59 Wall Street Tax Free
Short/Intermediate Fixed Income Fund (10)
6 Distribution Agreement (2)
7 Not Applicable
8(a) Custody Agreement (1)
(b) Transfer Agency Agreement (1)
9(a) Amended and Restated Administration Agreement (8)
(b) Subadministrative Services Agreement (8)
(c) License Agreement (2)
(e) Eligible Institution Agreement (8)
(f) Expense Reimbursement Agreement with respect to The 59 Wall
Street Money Market Fund (6)
(g) Expense Reimbursement Agreement with respect to The 59 Wall
Street U.S. Treasury Money Fund (7)
(h) Expense Reimbursement Agreement with respect to The 59 Wall
Street Tax Free Short/Intermediate Fixed Income Fund (8)
10 Opinion of Counsel (including consent) (10)
11 Consent of independent auditors (10)
12 Not Applicable
13 Purchase Agreement (1)
14 Not Applicable
15 Not Applicable
16(a) Schedule of Computation of Performance Quotations (8)
(1) Filed with Amendment No. 1 to this Registration Statement on
October 28, 1983.
(2) Filed with Amendment No. 10 to this Registration Statement on
August 31, 1990.
(3) Filed with Amendment No. 11 to this Registration Statement on
February 14, 1991.
(4) Filed with Amendment No. 14 to this Registration Statement on
June 15, 1992.
(5) Filed with Amendment No. 15 to this Registration Statement on
October 27, 1992.
(6) Filed with Amendment No. 16 to this Registration Statement on
October 27, 1992.
(7) Filed with Amendment No. 17 to this Registration Statement on
September 3, 1993.
(8) Filed with Amendment No. 18 to this Registration Statement on
September 3, 1993.
(9) Filed with Amendment No. 19 to this Registration Statement on
September 3, 1993.
(10) Filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
See "Trustees and Officers" in the Statement of Additional Information
filed as part of this Registration Statement.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES (September 30, 1995).
Title of Class Number of Record Holders
Shares of Beneficial Interest 3,477
(The 59 Wall Street Money Market Fund)
Shares of Beneficial Interest 590
(The 59 Wall Street U.S. Treasury Money Fund)
Shares of Beneficial Interest 307
(The 59 Wall Street Tax Free Short/Intermediate
Fixed Income Fund)
ITEM 27. INDEMNIFICATION.
As permitted by Section 17(h) of the Investment Company Act of 1940, as
amended (the "1940 Act"), and pursuant to Article VII of the Registrant's
By-Laws, officers, Trustees, employees and agents of the Registrant may be
indemnified against certain liabilities in connection with the Registrant. As
permitted by Section 17(i) of the 1940 Act, pursuant to Section 5 of the
Distribution Agreement, 59 Wall Street Distributors, Inc., as Distributor of
shares of each series of the Registrant, may be indemnified against certain
liabilities which it may incur. Such Article VII of the By-Laws and Section 5 of
the Distribution Agreement are hereby incorporated by reference in their
entirety.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act"), may be permitted to Trustees, officers and
controlling persons of the Registrant and the principal underwriter pursuant to
the foregoing provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a Trustee,
officer of controlling person of the Registrant or the principal underwriter in
connection with the successful defense of any action, suit or proceeding) is
asserted against the Registrant by such Trustee, officer or controlling person
or the principal underwriter in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
The investment adviser of the Registrant's Money Market Fund, Brown
Brothers Harriman & Co. ("BBH & Co."), is a New York limited partnership. BBH &
Co. conducts a general banking business and is a member of the New York Stock
Exchange, Inc.
To the knowledge of the Registrant, none of the general partners or
officers of BBH & Co. is engaged in any other business, profession, vocation or
employment of a substantial nature.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) 59 Wall Street Distributors, Inc. ("59 Wall Street
Distributors") and its affiliates also serve as administrator
and/or distributor to other registered investment companies.
(b) Set forth below are the names, principal business addresses and
positions of each Director and officer of 59 Wall Street
Distributors. The principal business address of these individuals
is c/o 59 Wall Street Distributors, Inc., 6 St. James Avenue,
Boston, MA 02116. Unless otherwise specified, no officer or
Director of 59 Wall Street Distributors serves as an officer or
Trustee of the Registrant.
PHILIP W. COOLIDGE: President, Chief Executive Officer and Director of 59
Wall Street Distributors. President of Registrant.
JOAN R. GULINELLO: Secretary of 59 Wall Street Distributors. Secretary and
Treasurer of Registrant.
LINDA T. GIBSON: Assistant Secretary of 59 Wall Street Distributors.
THOMAS M. LENZ: Assistant Secretary of 59 Wall Street Distributors. Assistant
Secretary of Registrant.
MOLLY S. MUGLER: Assistant Secretary of 59 Wall Street Distributors. Assistant
Secretary of Registrant.
ANDRES E. SALDANA: Assistant Secretary of 59 Wall Street Distributors.
SUSAN JAKUBOSKI: Assistant Treasurer of 59 Wall Street Distributors.
BARBARA M. O'DETTE: Assistant Treasurer of 59 Wall Street Distributors.
DAVID G. DANIELSON: Assistant Treasurer of Registrant.
BRAIN J. HALL: Assistant Treasurer of Registrant.
ROBERT G. DAVIDOFF: Director of 59 Wall Street Distributors; CMNY Capital, L.P.,
135 East 57th Street, New York, NY 10022.
DONALD S. CHADWICK: Director of 59 Wall Street Distributors; 4609 Bayard Street,
Apartment 411, Pittsburgh, PA 15213.
LEEDS HACKETT: Director of 59 Wall Street Distributors; Hackett Associates
Limited, 1260 Avenue of the Americas, 12th Floor, New York, NY 10020.
LAURENCE B. LEVINE: Director of 59 Wall Street Distributors; Blair Corporation,
250 Royal Palm Way, Palm Beach, FL 33480.
KATE B.M. BOLSOVER: Director of 59 Wall Street Distributors; Signature Financial
Group (Europe), Ltd., 49 St. James's Street, London SW1A 1JT.
(c) Not Applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules thereunder are maintained at the
offices of:
The 59 Wall Street Trust
59 Wall Street Distributors, Inc.
59 Wall Street Administrators, Inc.
6 St. James Avenue
Boston, MA 02116
Brown Brothers Harriman & Co.
59 Wall Street
New York, NY 10005
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, MA 02171
ITEM 31. MANAGEMENT SERVICES.
Other than as set forth under the caption "Management of the Trust" in the
Prospectus constituting Part A of this Registration Statement, Registrant is not
a party to any management-related service contract.
ITEM 32. UNDERTAKINGS.
(a) If the information called for by Item 5A of Form N-1A is
contained in the latest annual report to shareholders, the
Registrant shall furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Post-Effective Amendment to its
Registration Statement on Form N-1A ("Registration Statement") pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this amendment to
its 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
26th day of October, 1995.
THE 59 WALL STREET TRUST
By /s/PHILIP W. COOLIDGE
(Philip W. Coolidge, President)
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Trustee and
/S/ JOSEPH V. SHIELDS, JR. Chairman of the Board October 26, 1995
J.V. Shields, Jr.
/S/ PHILIP W. COOLIDGE President (Principal October 26, 1995
Philip W. Coolidge Executive Officer)
/S/ H.B. ALVORD Trustee October 26, 1995
H.B. Alvord
/S/ EUGENE P. BEARD Trustee October 26, 1995
(Eugene P. Beard)
/S/ DAVID P. FELDMAN Trustee October 26, 1995
David P. Feldman
/S/ ARTHUR D. MILTENBERGER Trustee October 26, 1995
Arthur D. Miltenberger
/S/ ALAN G. LOWY Trustee October 26, 1995
Alan G. Lowy
/S/ DAVID G. DANIELSON Acting Treasurer (Acting October 26, 1995
Principal Financial and
David G. Danielson Principal Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
1(a) Amended and Restated Declaration of Trust of the Registrant
(b) Designation of Series of The 59 Wall Street U.S. Treasury Money
Fund
(c) Designation of Series of The 59 Wall Street Tax Free
Short/Intermediate Fixed Income Fund
2 By-Laws of the Registrant
5(b) Advisory Agreement with respect to The 59 Wall Street
Tax Free Short/Intermediate Fixed Income Fund
11 Consent of independent auditors
17 Financial Data Schedule
THE 59 WALL STREET TRUST
(formerly "The 59 Wall Street Fund")
DECLARATION OF TRUST
Amended and Restated as of October 23, 1989
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I -- Name and Definitions....................................... 1
Section 1.1. Name............................................. 1
Section 1.2. Definitions...................................... 1
ARTICLE II -- Trustees.................................................. 4
Section 2.1. Number of Trustees............................... 4
Section 2.2. Election and Term................................ 4
Section 2.3. Resignation and Removal.......................... 5
Section 2.4. Vacancies........................................ 5
Section 2.5. Delegation of Power to Other Trustees............ 6
ARTICLE III -- Powers of Trustees....................................... 6
Section 3.1. General.......................................... 6
Section 3.2. Investments...................................... 7
Section 3.3. Legal Title...................................... 8
Section 3.4. Issuance and Repurchas of Shares................. 8
Section 3.5. Borrowing Money; Lending Trust Assets............ 9
Section 3.6. Delegation; Committees........................... 9
Section 3.7 Collection and Payment........................... 9
Section 3.8. Expenses......................................... 9
Section 3.9. Manner of Acting; By-Laws........................ 10
Section 3.10. Miscellaneous Powers............................. 10
Section 3.11. Principal Transactions........................... 10
ARTICLE IV -- Administrator, Adviser, Distributor,
Custodian and Transfer Agent..................... 11
Section 4.1. Administrator.................................... 11
Section 4.2. Adviser.......................................... 11
Section 4.3. Distributor...................................... 12
Section 4.4. Custodian........................................ 12
Section 4.5. Transfer Agent................................... 12
Section 4.6. Parties to Contract.............................. 12
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PAGE
ARTICLE V -- Limitations of Liability
of Shareholders, Trustees and others............... 13
Section 5.1. No Personal Liability of Shareholders,
Trustees, etc.................................. 13
Section 5.2. Non-Liability of Trustees, etc................... 13
Section 5.3. Indemnification.................................. 14
Section 5.4. No Bond Required of Trustees..................... 14
Section 5.5. No Duty of Investigation; Notice in Trust
Instruments, etc............................... 14
Section 5.6. Reliance on Experts, etc......................... 15
ARTICLE VI -- Shares of Beneficial Interest............................. 15
Section 6.1. Beneficial Interest.............................. 15
Section 6.2. Rights of Shareholders........................... 15
Section 6.3. Trust Only....................................... 16
Section 6.4. Issuance of Shares............................... 16
Section 6.5. Register of Shares............................... 17
Section 6.6. Transfer of Shares............................... 17
Section 6.7. Notices.......................................... 18
Section 6.8. Voting Powers.................................... 15
Section 6.9 Series or Classes of Shares...................... 18
ARTICLE VII -- Redemptions.............................................. 22
Section 7.1. Redemptions...................................... 22
Section 7.2. Redemptions of Shares;
Disclosure of Holdings......................... 23
Section 7.3. Redemptions of Shares of
Shareholders No Longer
Customers of the Administrator
or the Adviser................................. 23
Section 7.4. Redemptions of Accounts of
Less Than $1,000............................... 23
Section 7.5. Redemptions Pursuant to
Constant Not Asset Value
Provisions..................................... 24
ARTICLE VIII -- Determination of Net Asset Value,
Net Income and Distributions....................... 24
Section 8.1. Net Asset Value.................................. 24
Section 8.2. Distributions to
Shareholders................................... 24
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PAGE
Section 8.3. Determination of Net Income;
Constant Net Asset Value
of Shares of Certain
Series, Reduction of
Outstanding Shares............................. 25
Section 8.4. Power to Nodify Foregoing
Procedures..................................... 25
ARTICLE IX -- Duration; Termination of Trust
or any Series or Class;
Amendment; Mergers, etc............................. 26
Section 9.1. Duration......................................... 26
Section 9.2. Termination of Trust,
any Series or any Class........................ 26
Section 9.3. Amendment Procedure.............................. 27
Section 9.4. Merger, Consolidation and
Sale of Assets................................. 28
Section 9.5. Incorporation.................................... 29
ARTICLE X -- Reports to Shareholders.................................... 30
ARTICLE XI -- Miscellaneous............................................. 30
Section 11.1. Filing........................................... 30
Section 11.2. Resident Agent................................... 30
Section 11.3. Governing Law.................................... 30
Section 11.4. Counterparts..................................... 30
Section 11.5. Reliance by Third Parties........................ 31
Section 11.6. Provisions in Conflict with
Law or Regulations............................. 31
SIGNATURE PAGE.......................................................... 32
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<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
THE 59 WALL STREET TRUST
Dated October 23, 1989
AMENDED AND RESTATED DECLARATION OF TRUST made October 23, 1989, by the
undersigned Trustees;
WHEREAS, pursuant to a Declaration of Trust dated June 7, 1983, the
Trustees established a Massachusetts business trust for the investment and
reinvestment of funds contributed thereto;
WHEREAS, said Declaration of Trust has been amended from time to time;
WHEREAS, the Trustees desire to restate said Declaration of Trust in
its entirety;
NOW, THEREFORE, the Trustees restate the Declaration of Trust as
follows:
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is The 59 Wall
Street Trust.
Section 1.2. Definitions. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "Administrator" means the party, other than the Trust, to any
contract described in Section 4.1 hereof.
(b) "Adviser" means the party, other than the Trust, to any contract
described in Section 4.2 hereof.
(c) By-Laws" means the By-Laws referred to in Section 3.9 hereof, as
from time to time amended.
(d) The terms "Commission", "Affiliated Person" and "Interested Person"
have the meanings given them in the 1940 Act.
(e) "Custodian" means the party, other than the Trust, to any contract
described in Section 4.4 hereof.
(f) "Declaration" means this Declaration of Trust an amended from time
to time. Reference in this Declaration of Trust to "Declaration", "hereof",
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"herein" and "hereunder" shall be deemed to refer to this Declaration rather
than the article or section in which such words appear.
(g) "Distributor" means the party, other than the Trust, to any
contract described in Section 4.3 hereof.
(h) "Fundamental Policies" shall mean the investment restrictions as
applicable to Shares of any series or class thereof set forth in the Prospectus
and designated as fundamental policies therein.
(i) "Majority Shareholder Vote" means, unless otherwise determined by
the Trustees in accordance with Section 6.8 hereof in conjunction with the
establishment of any series or classes of Shares, the vote of the holders of a
majority of Shares, which shall consist of: (i) a majority of Shares
repre-sented in person or by Proxy and entitled to vote at a meeting of
Shareholders at which a quorum, as determined in accordance with the By-Laws, is
present; (ii) a majority of Shares issued and outstanding and entitled to vote
when action is taken by written consent of Shareholders; and (iii) a "majority
of the outstanding voting securities, as that phrase is defined in the 1940 Act,
when action is taken by Shareholders with respect to any matter as to which the
vote of "a majority of the outstanding voting securities" is required under the
1940 Act; provided that in cases required or permitted under the 1940 Act or
Section 6.9 hereof to be submitted to the holders of the Shares of one or more
but not all series or classes of Shares, a "Majority Shareholder Vote" means the
vote of "a majority of the outstanding voting securities," as that phrase is
defined in the 1940 Act, of the Shares of the particular series or class.
(j) "1940 Act" means the Investment Company Act of 1940 and the rules
and regulations thereunder as amended from time to time.
(k) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
(l) "Prospectus" means the prospectus, and any statement of additional
information and any information or document incorporated by reference therein,
constituting part of the Registration Statement of the Trust under the
Securities Act of 1933 as such prospectus, including any statement of additional
information and any information or document incorporated by reference therein,
as may be amended or supplemented and filed with the Commission from time to
time and, in the event that there is more than one Prospectus, each relating to
the Shares of any one or more series or classes of Shares, "Prospectus" means
the Prospectus relating to such series or classes of Shares.
(m) "Shareholder" means a record owner of outstanding Shares.
(n) "Shares" means the units of interest into which the beneficial
interest in the Trust shall be divided from time to time, including the shares
of any and all series or classes which may be established by the Trustees and
includes fractions of Shares as well as whole Shares. Shares have a designated
par value of $.01 per Share.
v
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(o) "Transfer Agent" means the party, other than the Trust, to any
contract described in Section 4.5 hereof.
(p) "Trust" means The 59 Wall Street Trust, consisting of any and all
series or classes which may be established by the Trustees.
(q) "Trust Property" or "Trust Estate" means any and all property, real
or personal, tangible or intangible, which in owned or held by or for the
account of the Trust (or any or all series or classes thereof which the Trustees
may from time to time establish) or the Trustees.
(r) "Trustees means the persons who have signed the Declaration, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who may from time to time be duly elected or appointed,
qualified and serving as Trustees in accordance with the provisions hereof, and
reference herein to a Trustee or the Trustees shall refer to such person or
persons in their capacity as trustees hereunder.
ARTICLE II
TRUSTEES
Section 2.1. Number of Trustees. The number of Trustees shall be such
number as shall be fixed from time to time by written instrument signed by a
majority of the Trustees then in office, provided, however, that the number of
Trustees shall in no event be less than two (2) nor more than fifteen (15).
Section 2.2. Election and Term. The Trustees shall be elected by a
Majority Shareholder Vote at the first meeting of Shareholders following the
initial public offering of Shares of the Trust. The Trustees shall have the
power to set and alter the terms of office of the Trustees, and they may at any
time lengthen or lessen their own terms or make their terms of unlimited
duration, subject to the resignation and removal provisions of Section 2.3
hereof. Subject to Section 16(a) of the 1940 Act, the Trustees may elect their
own successors and may, pursuant to Section 2.4 hereof, appoint Trustees to fill
vacancies. The Trustees shall adopt By-Laws not inconsistent with this
Declaration or any provision of law to provide for election of Trustees by
Shareholders at such time or times as the Trustees shall determine to be
necessary or advisable.
Section 2.3. Resignation and Removal. Any Trustee may resign his trust
(without need for prior or subsequent accounting) by an instrument in writing
signed by him and delivered to the other Trustees and such resignation shall be
effective upon such delivery, or at a later date according to the terms of the
instrument. Any of the Trustees may be removed (provided the aggregate number of
Trustees after such removal shall not be less than the number required by
Section 2.1 hereof) with cause, by the action of two-thirds of the remaining
Trustees. In addition, no Trustee shall continue to serve as such after the
holders of not less than two-thirds of the outstanding Shares have declared that
he be removed from that office either by declaration in writing filed with the
Custodian or by votes cast in person or by proxy at a meeting called for that
purpose. The Trustees shall promptly call a meeting of Shareholders for the
purpose of voting upon the question of removal of any
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such Trustee or Trustees when requested in writing so to do by the holders of
not less than 10 per centum of the outstanding Shares. Whenever ten or more
Shareholders who have been such for at least six months preceding the date of
application, and who hold in the aggregate either Shares having a net asset
value of at least $25,000 or at least 1 per centum of the outstanding Shares,
whichever is less, shall apply to the Trustees in writing, stating that they
wish to communicate with other Shareholders with a view to obtaining signatures
to a request for a meeting pursuant to the preceding sentence and accompanied by
a form of communication and request which they wish to transmit, the Trustees
shall then follow the procedures set forth in Section 16(c)(1) or 16(c)(2) of
the 1940 Act. Upon the resignation or removal of a Trustee, or his otherwise
ceasing to be a Trustee, he shall execute and deliver such documents as the
remaining Trustees shall require for the purpose of conveying to the Trust or
the remaining Trustees any Trust Property held in the name of the resigning or
removed Trustee. Upon the incapacity or death of any Trustee, his legal
representative shall execute and deliver on his behalf such documents as the
remaining Trustees shall require as provided in the preceding sentence.
Section 2.4. Vacancies. The term of office of a Trustee shall terminate
and a vacancy shall occur in the event of the death, resignation, removal,
bankruptcy, adjudicated incompetence or other incapacity to perform the duties
of the office of a Trustee. No such vacancy shall operate to annul the
Declaration or to revoke any existing agency created pursuant to the terms of
the Declaration. In the case of an existing vacancy, including a vacancy
existing by reason of an increase in the number of Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, the remaining Trustees or, prior to
the public offering of Shares of the Trust, if only one Trustee shall then
remain in office, the remaining Trustee, shall fill such vacancy by the
appointment of such other person as they or he, in their or his discretion shall
see fit, made by a written instrument signed by a majority of the remaining
Trustees or by the remaining Trustee, as the case may be. Any such appointment
shall not become effective, however, until the person named in the written
instrument of appointment shall have accepted in writing such appointment and
agreed in writing to be bound by the terms of the Declaration. An appointment of
a Trustee may be made in anticipation of a vacancy to occur at a later date by
reason of retirement, resignation or increase in the number of Trustees,
provided that such appointment shall not become effective prior to such
retirement, resignation or increase in the number of Trustees. Whenever a
vacancy in the number of Trustees shall occur, until such Vacancy is filled as
provided in this Section 2.4, the Trustees in office, regardless of their
number, shall have all the powers granted to the Trustees and shall discharge
all the duties imposed upon the Trustees by the Declaration. A written
instrument certifying the existence of such vacancy signed by a majority of the
Trustees shall be conclusive evidence of the existence of such vacancy.
Section 2.5. Delegation of Power to Other Trustees. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six (6) months
at any one time to any other Trustee or Trustees; provided that in no case shall
less than two (2) Trustees personally exercise the powers granted to the
Trustees under the Declaration except as herein otherwise expressly provided.
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ARTICLE III
POWERS OF TRUSTEES
Section 3.1. General. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of delegation as may be
permitted by the Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the Commonwealth of Massachusetts,
in any and all states of the United States of America, in the District of
Columbia, in foreign countries and in any and all commonwealths, territories,
dependencies, colonies, possessions, agencies or instrumentalities of the United
States of America and of foreign governments, and to do all such other things
and execute all such instruments as they deem necessary, proper or desirable in
order to promote the interests of the Trust although such things are not herein
specifically mentioned. Any determination as to what is in the interests of the
Trust made by the Trustees in good faith shall be conclusive. In construing the
provisions of the Declaration, the presumption shall, be in favor of a grant of
power to the Trustees.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.
Section 3.2. Investments. The Trustees shall have the power to:
(a) conduct, operate and carry on the business of an
investment company;
(b) subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange,
distribute, lend or otherwise deal in or dispose of securities,
negotiable or non-negotiable instruments, obligations, evidences of
indebtedness, certificates of deposit or indebtedness, commercial
paper, repurchase agreements, reverse repurchase agreements, options
and other securities of any kind, including, without limitation, those
issued, guaranteed or sponsored by any and all Persons including,
without limitation, states, territories and possessions of the United
States, the District of Columbia and any of the political subdivisions,
agencies or instrumentalities thereof, and by the United States
Government or its agencies or instrumentalities, or international
instrumentalities, or by any bank or savings institution, or by any
corporation or organization organized under the laws of the United
States or of any state, territory or possession thereof, and of
corporations or organizations organized under foreign laws, or in "when
issued" or "delayed delivery" contracts for any such securities, or
retain Trust assets in cash and from time to time change the
investments of the assets of the Trust; and to exercise any and all
rights, powers and privileges of ownership or interest in respect of
any and all such investments of every kind and description, including,
without limitation, the right to consent and otherwise act with respect
thereto, with power to designate one or more persons,
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firms, associations or corporations to exercise any of said rights,
powers and privileges in respect of any of said instruments; and the
Trustees shall be deemed to have the foregoing powers with respect to
any additional securities in which the Trust may invest should the
Fundamental Policies be amended.
The Trustees shall not be limited to investing in obligations maturing before
the possible termination of the Trust, nor shall the Trustees be limited by any
law limiting the investments which may be made by fiduciaries.
Section 3.3. Legal Title. Legal title to all the Trust Property shall
be vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust, or in the name of any
other Person as nominee, on such terms as the Trustees may determine, provided
that the interest of the Trust therein is appropriately protected. The right,
title and interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
resignation, removal or death of a Trustee he shall automatically cease to have
any right, title or interest in any of the Trust Property, and the right, title
and interest of such Trustee in the Trust Property shall vest automatically in
the remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
Section 3.4. Issuance and Repurchase of Shares. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares and, subject
to the provisions set forth in Articles VII, VIII and IX and Section 6.9 hereof,
to apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the particular series or class
with respect to which such Shares are issued, whether capital or surplus or
otherwise, to the full extent now or hereafter permitted by the laws of the
Commonwealth of Massachusetts governing business corporations.
Section 3.5. Borrowing Money; Lending Trust Assets. Subject to the
Fundamental Policies, the Trustees shall have power to borrow money or otherwise
obtain credit and to secure the same by mortgaging, pledging or otherwise
subjecting as security the assets of the Trust, to endorse, guarantee, or
undertake the performance of any obligation, contract or engagement of any other
Person and to lend Trust assets.
Section 3.6. Delegation; Committees. The Trustees shall have power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such of their
number or to officers, employees or agents of the Trust the doing of such things
and the execution of such instruments either in the name of the Trust or the
names of the Trustees or otherwise as the Trustees may deem expedient.
Section 3.7. Collection and Payment. The Trustees shall have power to
collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
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securing any obligations, by virtue of which any property is owed to the Trust;
and to enter into releases, agreements and other instruments.
Section 3.8. Expenses. The Trustees shall have the power to incur and
pay any expenses which in the opinion of the Trustees are necessary or
incidental to carry out any of the purposes of the Declaration, to enter into a
plan of distribution and any related agreements whereby the Trust, any series or
any class may finance directly or indirectly any activity which is primarily
intended to result in the sale of Shares, and to pay reasonable compensation
from the funds of the Trust to themselves as Trustees. The Trustees shall fix
the compensation of all officers, employees and Trustees.
Section 3.9. Manner of Acting; By-Laws. Except as otherwise provided
herein or in the By-Laws or by any provision of law, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
Trustees (a quorum being present), including any meeting held by means of a
conference telephone circuit or similar communications equipment by means of
which all persons participating in the meeting can hear each other, or by
written consents of all the Trustees. The Trustees may adopt By-Laws not
inconsistent with this Declaration to provide for the conduct of the business of
the Trust and may amend or repeal such By-Laws to the extent such power is not
reserved to the Shareholders.
Section 3.10. Miscellaneous Powers. The Trustees shall have the power
to: (a) employ or contract with such Persons as the Trustees may deem desirable
for the transaction of the business of the Trust; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) remove Trustees or
fill vacancies in or add to their number, elect and remove such officers and
appoint and terminate such agents or employees as they consider appropriate, and
appoint from their own number, and terminate, any one or more committees which
may exercise some or all of the power and authority of the Trustees as the
Trustees may determine; (d) purchase, and pay for out of Trust Property,
insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, administrators, managers, investment advisers, distributors or
independent contractors of the Trust against all claims arising by reason of
holding any such position or by reason of any action taken or omitted to be
taken by any such Person in such capacity, whether or not constituting
negligence, or whether or not the Trust would have the power to indemnify such
Person against such liability; (e) establish pension, profit-sharing, Share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust; (f) to the extent permitted by law,
indemnify any person with whom the Trust has dealings, including the
Administrator, Adviser, Custodian, Distributor and Transfer Agent, to such
extent as the Trustees shall determine; (g) guarantee indebtedness or
contractual obligations of others; (h) determine and change the fiscal year of
the Trust and the method by which its accounts shall be kept; and (i) adopt a
seal for the Trust, but the absence of such seal shall not impair the validity
of any instrument executed on behalf of the Trust.
Section 3.11. Principal Transactions. Except in transactions permitted
by the 1940 Act or any order of exemption issued by the Commission, or effected
to implement the provisions of any agreement to which the Trust is a party, the
Trustees shall not, on behalf of the Trust, buy any securities (other than
Shares) from or sell any securities (other than Shares) to, or
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lend any assets of the Trust to, any Trustee or officer of the Trust or any firm
of which any such Trustee or officer is a member acting as principal, or have
any such dealings with the Adviser or Distributor or with any Affiliated Person
of such Person; by the Trust may employ any such Person, or firm or company in
which such person is an Interested Person, as broker, legal counsel, registrar,
transfer agent, dividend disbursing agent or custodian upon customary terms.
ARTICLE IV
ADMINISTRATOR, ADVISER, DISTRIBUTOR,
CUSTODIAN AND TRANSFER AGENT
Section 4.1. Administrator. The Trustees may in their discretion from
time to time enter into an administration contract or contracts whereby the
other party to such contract shall under take to furnish the Trust such
administration, accounting and legal services and facilities and such other
services and facilities, if any, as the Trustees shall from time to time
consider desirable and all upon such terms and conditions as the Trustees may in
their discretion determine.
Section 4.2. Adviser. Subject to approval by a Majority Shareholder
Vote, the Trustees may in their discretion from time to time enter into an
investment advisory contract or contracts whereby the other party to such
contract shall undertake to furnish the Trust such investment advisory,
statistical and research facilities and services, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Adviser (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales, loans or
exchanges or portfolio securities of the Trust on behalf of the Trustees or may
authorize any officer, employee or Trustee to effect such purchases, sales,
loans or exchanges pursuant to recommendations of the Adviser (and all without
further action by the Trustees). Any such purchasing sales, loans and exchanges
shall be deemed to have been authorized by all of the Trustees. The Trustees
may, in their sole discretion, call a meeting of Shareholders in order to submit
to a vote of Shareholders at such meeting the approval of continuance of any
such investment advisory contract.
Section 4.3. Distributor. The Trustees may in their discretion from
time to time enter into a distribution contract or contracts providing for the
sale of Shares to net the Trust not less than the net asset value per share (as
described in Article VIII hereof) and pursuant to which the Trust may either
agree to sell the Shares to the other party to the contract or appoint such
other party its sales agent for such Shares. In either case, the contract shall
be on such terms and conditions as the Trustees may in their discretion
determine not inconsistent with the provisions of this Article IV.
Section 4.4. Custodian. The Trustees may in their discretion from time
to time enter into a custodian contract or contracts whereby the other party
to such contract shall undertake to furnish custodian services to the Trust,
including holding the Trust's portfolio securities and cash and maintaining
books and records with respect to the Trust's portfolio transactions. The
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contract shall have such terms and conditions as the Trustees may in their
discretion determine not inconsistent with the Declaration. The By-Laws may make
further provision as to the duties and appointment of the Custodian.
Section 4.5. Transfer Agent. The Trustees may in their discretion from
time to time enter into a transfer agency and shareholder service contract or
contracts whereby the other party to such contract shall undertake to furnish
transfer agency and shareholder services to the Trust. Any such contract shall
have such terms and conditions as the Trustees may in their discretion determine
not inconsistent with the Declaration. Such services may be provided by one or
more Persons.
Section 4.6. Parties to Contract. Any contract of the character
described in Section 4.1, 4.2, 4.3, 4.4 or 4.5 of this Article IV and any other
contract may be entered into with any Person, although one or more of the
Trustees or officers of the Trust may be such other party to the contract or an
officer, director, trustee, shareholder, or member of such other party to the
contract, and no such contract shall be invalidated or rendered voidable by
reason of the existence of any such relationship; nor shall any Person holding
such relationship be liable merely by reason of such relationship for any loss
or expense to the Trust under or by reason of said contract or accountable for
any profit realized directly or indirectly therefrom, provided that the contract
when entered into was not inconsistent with the provisions of this Article IV.
The same Person may be the other party to any contracts entered into pursuant to
Section 4.1, 4.2, 4.3, 4.4 or 4.5 above or otherwise, and any Trustee, officer,
employee or agent of the Trust may be financially interested or otherwise
affiliated with Persons who are parties to any or all of the contracts mentioned
in this Section 4.6.
ARTICLE V
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 5.1. No Personal Liability of Shareholders, Trustees. etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust. No Trustee, officer, employee or agent of the Trust shall be subject to
any personal liability whatsoever to any Persons other than the Trust or its
Shareholders, in connection with Trust Property or the affairs of the Trust,
save only that arising from bad faith, wilful misfeasance, gross negligence or
reckless disregard for his or its duty to such Person; and all such Persons
shall look solely to the Trust Property for satisfaction of claims of any nature
arising in connection with the affairs of the Trust. If any Shareholder,
Trustee, officer, employee or agent, as such, of the Trust is made a party to
any suit or proceeding to enforce any such liability, he or it shall not, on
account thereof, be held to any personal liability. The Trust shall indemnify
and hold each Shareholder harmless from and against all claims and liabilities
to which such Shareholder may become subject by reason of his being or having
been a Shareholder, and shall reimburse such Shareholder for all legal and other
expenses reasonably incurred by his in connection with any such claim or
liability. The rights accruing to a Shareholder under this
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Section 5.1 shall not exclude any other right to which such Shareholder may be
lawfully entitled, nor shall anything herein contained restrict the right of the
Trust to indemnify or reimburse such Shareholder in any appropriate situation
even though not specifically provided herein.
Section 5.2. Non-Liability of Trustees, etc. No Trustee, officer,
employee or agent of the Trust shall be liable to the Trust, its Shareholders,
or to any Shareholder, Trustee, officer, employee, or agent thereof for any
action or failure to act (including without limitation the failure to compel in
any way any former or acting Trustee to redress any breach of trust) except for
his or its own bad faith, wilful misfeasance, gross negligence or reckless
disregard of his or its duties.
Section 5.3. Indemnification.
(a) The Trustees shall provide for indemnification by the Trust of
every person who is, or has been, a Trustee or officer of the Trust against all
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in the settlement
thereof, in such manner not otherwise prohibited or limited by law as the
Trustees may provide from time to time in the By-Laws.
(b) The words "claims," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal, or other,
including appeals), actual or threatened; and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs, judgments,
amounts paid in settlement, fines, penalties and other liabilities.
Section 5.4. No Bond Required of Trustees. No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.
Section 5.5. No Duty of Investigation; Notice in Trust Instruments,
etc. No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust shall be bound to make
any inquiry concerning the validity of any transaction purporting to be made by
the Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or
undertaking, and every other act or thing whatsoever executed in connection with
the Trust shall be conclusively presumed to have been executed or done by the
executors thereof only in their capacity as Trustees under the Declaration or in
their capacity as officers, employees, or agents of the Trust. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or undertaking made or issued by the Trustees shall recite that the same
is executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of any such instrument are not binding
upon any of the Trustees or Shareholders, individually, but bind only the Trust
Estate, and may contain any further recital which they or he may deem
appropriate, but the omission of such recital shall not operate to bind the
Trustees or Shareholders individually. The Trustees shall at all times
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maintain insurance for the protection of the Trust Property, its Shareholders,
Trustees, officers, employees and agents in such amount as the Trustees shall
deem adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
Section 5.6. Reliance on Experts, etc. Each Trustee and officer or
employee of the Trust shall, in the performance of his duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or other records
of the Trust, upon an opinion of counsel, or upon reports made to the Trust by
any of its officers or employees or by the Administrator, the Adviser, the
Distributor, the Custodian, the Transfer Agent, accountants, appraisers or other
experts or consultants selected with reasonable care by the Trustees, officers
or employees of the Trust, regardless of whether such counsel or expert may also
be a Trustee.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 6.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest, par
value $.01 per share. The number of such Shares of beneficial interest
authorized hereunder is unlimited. The Trustees may initially issue whole and
fractional Shares of a single class, each of which Shares shall represent an
equal proportionate share in the Trust with each other Share. The Trustees may
divide or combine the Shares into a greater or lesser number of Shares without
thereby changing the proportionate beneficial interests in the Trust. Subject to
the provisions of Section 6.9 hereof, the Trustees may also authorize the
creation of additional series of Shares (the proceeds of which may be invested
in separate, independently managed portfolios) and additional classes of Shares
within any series. All Shares issued hereunder including, without limitation,
Shares issued in connection with a dividend in Shares or a split in Shares,
shall be fully paid and nonassessable.
Section 6.2. Rights of Shareholders. The ownership of the Trust
Property of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
Shares, and they shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust nor can they be called
upon to assume any losses of the Trust or suffer an assessment of any kind by
virtue of their ownership of Shares. The Shares shall be personal property
giving only the rights in the Declaration specifically set forth. The Shares
shall not entitle the holder to preference, preemptive, appraisal, conversion or
exchange rights, except as the Trustees may determine with respect to any series
or class of Shares. Upon liquidation of the Trust, holders of the Shares are
entitled to share pro rata in the net assets of the Trust available for
distribution to the holders, except as provided by Section 6.9(f) with respect
to the holders of different series or classes of Shares.
Section 6.3. Trust Only. It in the intention of the Trustees to create
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only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in the Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
Section 6.4. Issuance of Shares. The Trustees, in their discretion may,
from time to time without vote of the Shareholders, issue Shares, in addition to
the then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times (including, without limitation, each business
day in accordance with the maintenance of a constant net asset value per Share),
and on such terms as the Trustees may deem best, and may in such manner acquire
other assets (including the acquisition of assets subject to, and in connection
with the assumption of, liabilities) and businesses. In connection with any
issuance of Shares, the Trustees may from time to time divide or combine the
Shares into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust. Reductions in the number of
outstanding Shares may be made pursuant to the provisions of Section 8.3 in
order to maintain a constant net asset value per Share of any series attempting
to maintain such a constant not asset value. Contributions to the Trust may be
accepted for, and Shares shall be redeemed as, whole Shares and/or fractions of
a Share as described in the Prospectus.
Section 6.5. Register of Shares. A register shall be kept at the
principal office of the Trust or at an office of the Transfer Agent which shall
contain the names and addresses of the Shareholders and the number of Shares
hold by then respectively and a record of all transfers thereof. Such register
may be in written form or any other form capable of being converted into written
form within a reasonable time for visual inspection. Such register shall be
conclusive as to who are the holders of the Shares and who shall be entitled to
receive dividends or distributions or otherwise to exercise or enjoy the rights
of Shareholders. No Shareholder shall be entitled to receive payment of any
dividend or distribution, nor to have notice given to his as herein or in the
By-Laws provided, until he has given his address to the Transfer Agent or such
other officer or agent of the Trustees as shall keep the said register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of Share
certificates and promulgate appropriate rules and regulations as to their use.
Section 6.6. Transfer of Shares. Shares shall be transferable on the
records of the Trust only by the record holder thereof or by his agent thereunto
duly authorized in writing, upon delivery to the Trustees or the Transfer Agent
of a duly executed instrument of transfer, together with such evidence of the
genuineness of each such execution and authorization and of other matters as may
reasonably be required. Upon such delivery the transfer shall be recorded on the
register of the Trust. Until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor any Transfer Agent or registrar nor any officer,
employee or agent of the Trust shall be affected by any notice of the proposed
transfer.
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Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law, expect as may otherwise be provided by the laws of
the Commonwealth of Massachusetts.
Section 6.7. Notices. Any and all notices to which any Shareholder may
be entitled and any and all communications shall be deemed duly served or given
if mailed, postage prepaid, addressed to any Shareholder of record at his last
known address as recorded on the register of the Trust.
Section 6.8. Voting Powers. The Shareholders shall have power to vote
only (i) for the election of Trustees as provided in Section 2.2. hereof, (ii)
with respect to any investment advisory contract as provided in Section 4.21
(iii) with respect to termination of the Trust as provided in Section 9.2, (iv)
with respect to any amendment of the Declaration to the extent and as provided
in Section 9.3, (v) with respect to any merger, consolidation or sale of assets
as provided in Section 9.4. (vi) with respect to incorporation of the Trust to
the extent and as provided in Section 9.5, (vii) to the same extent as the
stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders,
and (viii) with respect to such additional matters relating to the Trust as may
be required by law, the Declaration, the By-Laws or any registration of the
Trust with the Commission (or any successor agency) or any state, or as and when
the Trustees may consider necessary or desirable. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote, except
the Shares held in the treasury of the Trust as of the record date, as
determined in accordance with the By-Laws, shall not be voted and except that
the Trustees may, in conjunction with the establishment of any series or classes
of Shares, establish conditions under which the several series or classes shall
have separate or no voting rights. There shall be no cumulative voting in the
election of Trustees. Until Shares are issued, the Trustees may exercise all
rights of Shareholders and may take any action required by law, the Declaration
or the By-Laws to be taken by Shareholders. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
Section 6.9. Series or Classes of Shares. If the Trustees shall divide
the Shares of the Trust into two or more series or two or more classes of any
series, as provided in Section 6.1 hereof, the following provisions shall be
applicable:
(a) All provisions herein relating to the Trust shall apply
equally to each series of the Trust except as the context otherwise
requires. (b) The number of authorized Shares and the number of Shares
of each series or of each class that may be issued shall be unlimited.
The
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Trustees may classify or reclassify any unissued Shares or any Shares
previously issued and reacquired of any series or class into one or
more series or one or more classes that may be established and
designated from time to time. The Trustees may hold as treasury shares
(of the same or some other series or class), reissue for such
consideration and on such terms as they may determine, or cancel any
Shares of any series or any class reacquired by the Trust at their
discretion from time to time.
(c) The power of the Trustees to invest and reinvest the Trust
Property shall be governed by Section 3.2 of this Declaration with
respect to any one or more series which represents the interests in the
assets of the Trust immediately prior to the establishment of two or
more series and the power of the Trustees to invest and reinvest assets
applicable to any other series shall be set forth in the instrument of
the Trustees establishing such series.
(d) All consideration received by the Trust for the issue or
sale of Shares of a particular series or class together with all assets
in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, shall irrevocably belong to that series or class
for all purposes, subject only to the rights of creditors of such
series, and shall be so recorded upon the books of account of the
Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular series or class, the
Trustees shall allocate them among any one or more of the series or
classes established and designated from time to time in such manner and
on such basis as they, in their sole discretion, deem fair and
equitable. Each such allocation by the Trustees shall be conclusive and
binding upon the Shareholders of all series or classes for all
purposes.
(e) The assets belonging to each particular series shall be
charged with the liabilities of the Trust in respect of that series and
all expenses, costs, charges and reserves attributable to that series,
and any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any
particular series shall be allocated and charged by the Trustees to and
among any one or more of the series established and designated from
time to time in such manner and on such basis as the Trustees in their
sole discretion deem fair and equitable. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the holders of all series for all
purposes. The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall be
treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon the
Shareholders. The assets of a particular series of the Trust shall
under no circumstances be charged with liabilities attributable to any
other series of the Trust. All persons extending credit to, or
contracting with or having any claim against a particular series of the
Trust shall look only to the assets
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of that particular series for payment of such credit, contract or
claim.
(f) Each Share of a series of the Trust shall represent a
beneficial interest in the net assets of such series. Each holder of
Shares of a series shall be entitled to receive his pro rata share of
distributions of income and capital gains made with respect to such
series. Upon redemption of his Shares or indemnification for
liabilities incurred by reason of his being or having been a
Shareholder of a series, such shareholder shall be paid solely out of
the funds and property of such series of the Trust. Upon liquidation or
termination of a series of the Trust, Shareholders of such series shall
be entitled to receive a pro rata share of the net assets of such
series. A Shareholder of a particular series of the Trust shall not be
entitled to participate in a derivative or class action on behalf of
any other series or the Shareholders or any other series of the Trust.
(g) Notwithstanding any other provision hereof, on any matter
submitted to a vote of Shareholders of the Trust, Shareholders of each
series or class shall vote separately on any matter to the extent
required by, and any matter shall be deemed to have been effectively
acted upon with respect to any series or class as provided in, Rule
18f-2, as from time to time in effect, under the 1940 Act, or any
successor rule.
(h) The power of the Trustees to pay dividends and make
distributions shall be governed by Section 8.2 of this Declaration with
respect to any one or more series or classes which represents the
interests in the assets of the Trust immediately prior to the
establishment of two or more series or classes. With respect to any
other series or class, dividends and distributions on Shares of a
particular series or class may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise, pursuant to a
standing resolution or resolutions adopted only once or with such
frequency as the Trustees may determine, to the holders of Shares of
that series or class, from such of the income and capital gains,
accrued or realized, from the assets belonging to that series or class,
as the Trustees may determine, after providing for actual and accrued
liabilities belonging to that series or class. All dividends and
distributions on Shares of a particular series or class shall be
distributed pro rata to the holders of that series or class in
proportion to the number of Shares of that series or class held by such
holders at the date and time of record established for the payment of
such dividends or distributions.
(i) The Trustees shall have the power to determine the
designations, preferences, privileges, limitations and rights,
including voting and dividend rights, of each class and series of
Shares.
(j) The establishment and designation of any series or class
of shares shall be effective upon the execution by a majority of the
then Trustees of an instrument setting forth such establishment and
designation and the relative rights and preferences of such series or
class, or as otherwise provided in such instrument. At any time that
there are no Shares outstanding of any particular series or class
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previously established and designated, the Trustees may by an
instrument executed by a majority of their number abolish that series
or class and the establishment and designation thereof. Each instrument
referred to in this paragraph shall have the status of an amendment to
this Declaration.
ARTICLE VII
REDEMPTIONS
Section 7.1. Redemptions. All outstanding Shares may be redeemed at the
option of the holders thereof, upon and subject to the terms and conditions
provided in this Article VII. The Trust shall, upon application of any
Shareholder or pursuant to authorization from any Shareholder, redeem or
repurchase from such Shareholder outstanding Shares for an amount per share
determined by the Trustees in accordance with any applicable laws and
regulations; provided that (a) such amount per share shall not exceed the cash
equivalent of the proportionate interest of each Share of any class or series of
Shares in the assets of the Trust attributable to such class or series at the
time of the redemption or repurchase and (b) if so authorized by the Trustees,
the Trust may, at any time and from time to time, charge fees for effecting such
redemption or repurchase, at such rates as the Trustees may establish, as and to
the extent permitted under the 1940 Act, and may, at any time and from time to
time, pursuant to the 1940 Act, suspend such right of redemption. The procedures
for and fees, if any, chargeable in connection with effecting and suspending
redemption shall be as set forth in the Prospectus from time to time. Payment
will be made in such manner as described in the Prospectus.
Section 7.2. Redemptions of Shares; Disclosure of Holdings. If the
Trustees shall, at any time and in good faith, be of the opinion that direct or
indirect ownership of Shares or other securities of the Trust has or may become
concentrated in any Person to an extent which would disqualify the Trust or any
series thereof as a regulated investment company under the Internal Revenue
Code, then the Trustees shall have the power by lot or other means deemed
equitable by them (i) to call for redemption by any such Person a number, or
principal amount, of Shares or other Securities of the Trust sufficient, in the
opinion of the Trustees, to maintain or bring the direct or indirect ownership
of Shares or other securities of the Trust into conformity with the requirements
for such qualification and (ii) to refuse to transfer or issue Shares or other
securities of the Trust to any Person whose acquisition of the Shares or other
securities of the Trust in question could in the opinion of the Trustees result
in such disqualification. The redemption shall be effected at a redemption price
determined in accordance with Section 7.1.
The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code, or to comply with the requirements of any other authority.
Section 7.3. Redemptions of Shares of Shareholders No Longer Customers
of the Administrator or the Adviser. The Trustees may in their sole
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discretion redeem the Shares of any Shareholder at a redemption price determined
in accordance with Section 7.1 if such Shareholder is no longer a customer
either the Administrator or the Adviser. If the Trustees redeem Shares in
accordance with this Section 7.3, a Shareholder will be notified that he is no
longer a customer of either the Administrator or the Adviser and be allowed
sixty (60) days to become a customer of either the Administrator or the Adviser
before redemption is processed.
Section 7.4. Redemptions of Accounts of Less Than $1,000. The Trustees
may redeem Shares of any Shareholder at a redemption price determined in
accordance with Section 7.1 if, immediately following a redemption of Shares of
a series for any reason, the aggregate net asset value of the Shares of such
series in such Shareholder's account is less than $1,000. If the Trustees redeem
Shares pursuant to this Section 7.4, a Shareholder will be notified that the
value of his account is less than $1,000 and be allowed sixty (60) days to make
an additional investment before redemption is processed.
Section 7.5. Redemptions Pursuant to Constant Net Asset Value
Provisions. The Trust may also reduce the number of outstanding Shares
pursuant to the provisions of Section 8.3.
ARTICLE VIII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 8.1. Net Asset Value. The net asset value of each outstanding
Share of the Trust shall be determined on such days and at such time or times as
the Trustees may determine. The method of determination of net asset value shall
be determined by the Trustees and shall be as set forth in the Prospectus. The
power and duty to make the daily calculations may be delegated by the Trustees
to the Administrator, the Adviser, the Custodian, the Transfer Agent or such
other person as the Trustees by resolution may determine. The Trustees may
suspend the daily determination of net asset value to the extent permitted by
the 1940 Act.
Section 8.2. Distributions to Shareholders. The Trustees shall from
time to time distribute ratably among the Shareholders such proportion of the
net profits, surplus (including paid-in surplus), capital, or assets held by the
Trustees as they may deem proper. Such distribution may be made in cash or
property (including without limitation any type of obligations of the Trust or
any assets thereof), and the Trustees may distribute ratably among the
Shareholders additional Shares issuable hereunder in such manner, at such times,
and on such terms as the Trustees may deem proper. Such distributions may be
among the Shareholders of record at the time of declaring a distribution or
among the Shareholders of record at such later date as the Trustees shall
determine. The Trustees may always retain from the net profits such amount as
they may deem necessary to pay the debts or expenses of the Trust or to meet
obligations of the Trust, or as they may deem desirable to use in the conduct of
its affairs or to retain for future requirements or extensions of the business.
The Trustees may adopt and offer to Shareholders such dividend reinvestment
plans, cash dividend payout plans or related plans
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as the Trustees shall deem appropriate.
Inasmuch as the computation of net income and gains for Federal income
tax purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust to avoid or reduce liability for taxes.
Section 8.3. Determination of Net Income; Constant Net Asset Value of
Shares of Certain Series; Reduction of Outstanding Shares. The Trustees shall
have the power to determine the net income of each series of the Trust one or
more times on each business day and at each such determination declare such net
income as dividends in additional Shares of such series. The determination of
net income and the resultant declaration of dividends shall be as set forth in
the Prospectus. With respect to any series or class that may have as one of its
investment policies the maintenance of a constant net asset value, if the net
income of such series or class is a negative amount, the Trustees shall have
authority to: (i) suspend the declaration of a dividend out of net income for
the purpose of causing the net asset value per share of any such series to be
increased to a constant amount; and (ii) reduce the number of outstanding Shares
of such series or class, such reduction to be effected by having each
Shareholder of the series or class proportionately contribute to the capital of
the series the necessary Shares that represent the amount of the excess upon
such determination. Each Shareholder will be deemed to have agreed to such
contribution in these circumstances by his investment in the Trust. The Trustees
shall have full discretion to determine whether any cash or property received
shall be treated as income or as principal and whether any item of expenses
shall be charged to the income or the principal account, and their determination
made in good faith shall be conclusive upon the Shareholders. In the case of
stock dividends received, the Trustees shall have full discretion to determine,
in the light of the particular circumstances, how such, if any, of the value
thereof shall be treated as income, the balance, if any, to be treated as
principal.
Section 8.4. Power to Modify Foregoing Procedures. Notwithstanding any
of the foregoing provisions of this Article VIII, the Trustees may prescribe, in
their absolute discretion, such other bases and times for determining the per
share net asset value of the Shares or net income, or the declaration and
payment of dividends and distributions, as they may deem necessary or desirable
to enable the Trust to comply with any provision of the 1940 Act, including any
rule or regulation adopted pursuant to Section 22 of the 1940 Act by the
Commission or any securities association registered under the Securities
Exchange Act of 1934, or any order of exemption issued by said Commission, all
as in effect now or hereafter amended or modified.
ARTICLE IX
DURATION;
TERMINATION OF TRUST
OR ANY SERIES OR CLASS;
AMENDMENT; MERGERS, ETC.
Section 9.1. Duration. The Trust shall continue without limitation of
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time but subject to the provisions of this Article IX.
Section 9.2. Termination of Trust, any Series or any Class. (a) The
Trust or any series or any class may be terminated (i) by the affirmative vote
of the holders of not less than two-thirds of the Shares of the Trust, the
series or the class, respectively, outstanding and entitled to vote at any
meeting of Shareholders, or (ii) by an instrument in writing, without a meeting,
signed by a majority of the Trustees and consented to by the holders of not less
than two-thirds of such Shares or by such other vote as may be established by
the Trustees with respect to any class or series of Shares, or (iii) by the
Trustees by written notice to the Shareholders. Upon the termination of the
Trust or any series or any class:
(i) The Trust, the series or the class, as the case may be,
shall carry on no business except for the purpose of winding up its
affairs.
(ii) The Trustees shall proceed to wind up the affairs of the
Trust, the series or the class, as the case may be, and all of the
powers of the Trustees under this Declaration shall continue until the
affairs of the Trust, the series or the class shall have been wound up,
including the power to fulfill or discharge the contracts of the Trust,
the series or the class, collect its assets, sell, convey, assign,
exchange, transfer or otherwise dispose of all or any part of the
remaining Trust property of the Trust, the series or the class, as the
case may be, to one or more persons at public or private sale for
consideration which may consist in whole or in part of cash, securities
or other property of any kind, discharge or pay its liabilities, and to
do all other acts appropriate to liquidate its business; provided that
any sale, conveyance, assignment, exchange, transfer or other
disposition of all or substantially all the Trust property of the
Trust, the series or the class, as the case may be, shall require
Shareholder approval in accordance with section 9.4 hereof.
(iii) After paying or adequately providing for the payment of
all liabilities, and upon receipt of such releases, indemnities and
refunding agreements, as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property of the Trust, the
series or the class, as the case may be, in cash or in kind or partly
each, among the Shareholders according to their respective rights.
(b) After termination of the Trust, any series or any class and
distribution to the Shareholders as herein provided, a majority of the Trustees
shall execute and lodge among the records of the Trust an instrument in writing
setting forth the fact of such termination, and the Trustees shall thereupon be
discharged from all further liabilities and duties hereunder with respect to the
Trust, the series or the class, as the case may be, and the rights and interests
of all Shareholders of the Trust, the series or the class shall thereupon cease.
Section 9.3. Amendment Procedure. (a) This Declaration may be amended
by a Majority Shareholder Vote. The Trustees may also amend this Declaration
without the vote or consent of Shareholders to designate series or classes in
accordance with Section 6.9 hereof, to change the name of the Trust, to supply
any omission, to cure, correct or supplement any ambiguous, defective or
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<PAGE>
inconsistent provision hereof, or if they deem it necessary to conform this
Declaration to the requirements of applicable federal or state laws or
regulations or the requirements of the regulated investment company provisions
of the Internal Revenue Code, or to reduce or eliminate the payment of taxes by
Shareholders, the Trust or any class or series thereof under applicable federal
or state laws or regulations, but the Trustees shall not be liable for failing
so to do.
(b) No amendment may be made under this Section 9.3 which would change
any rights with respect to any Shares of the Trust by reducing the amount
payable thereon upon liquidation of the Trust, a series or a class or by
diminishing or eliminating any voting rights pertaining thereto, except with the
vote or consent of the holders of two-thirds of the Shares of the Trust, the
series or the class outstanding and entitled to vote. Nothing contained in this
Declaration shall permit the amendment of this Declaration to impair the
exemption from personal liability of the Shareholders, Trustees, officers,
employees and agents of the Trust or to permit assessments upon Shareholders.
(c) A certificate signed by a majority of the Trustees or by the
Secretary or any Assistant Secretary of the Trust, setting forth an amendment
and reciting that it was duly adopted by the Shareholders or by the Trustees as
aforesaid or a copy of the Declaration, as amended, and executed by a majority
of the Trustees or certified by the Secretary or any Assistant Secretary of the
Trust, shall be conclusive evidence of such amendment when lodged among the
records of the Trust. Unless such amendment or certificate sets forth some later
time for the effectiveness of such amendment, it shall be effective on the
taking of the action.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.
Section 9.4. Merger, Consolidation and Sale of Assets. The Trust may
merge or consolidate with any other corporation, association, trust or other
organization, and a series of the Trust may merge or consolidate with another
series of the Trust and a class or classes may merge or consolidate with another
class or classes or with a series of the Trust, or the Trust may sell, lease or
exchange all or substantially all of the Trust Property or the Trust Property
allocated to a series or class, including its good will, upon such terms and
conditions and for such consideration when and an authorized, at any meeting of
Shareholders of the Trust or of the affected series or class, as the case may
be, called for the purpose, by the affirmative vote of the holders of not less
than two-thirds of the Shares outstanding and entitled to vote, or by an
instrument or instruments in writing without a meeting, consented to by the
holders of not less than two-thirds of such Shares, or by such other vote as may
be established by the Trustees with respect to any series or class of Shares;
provided, however, that, if such merger, consolidation, sale, lease or exchange
is recommended by the Trustees, a Majority Shareholder Vote shall be sufficient
authorization; and any such merger, consolidation, sale, lease or exchange shall
be deemed for all purposes to have been accomplished under and pursuant to the
statutes of the
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Commonwealth of Massachusetts. In respect of any such merger, consolidation,
sale or exchange of assets, any Shareholder shall be entitled to rights of
appraisal of his Shares to the same extent as a shareholder of a Massachusetts
business corporation in respect of a merger, consolidation, sale or exchange of
assets of a Massachusetts business corporation, and such rights shall be his
exclusive remedy in respect of his dissent from any such action.
Section 9.5. Incorporation. With approval of a Majority Shareholder
Vote, or by such other vote as may be established by the Trustees with respect
to any series or class of Shares, the Trustees may cause to be organized or
assist in organizing a corporation or corporations under the laws of any
jurisdiction or any other trust, partnership, association or other organization
to take over all of the Trust Property or the Trust Property allocated to a
series or class, as the case may be, or to carry on any business in which the
Trust shall directly or indirectly have an interest, and to sell, convey and
transfer the Trust Property or the Trust Property allocated to a series or
class, as the case may be, to any such corporation, trust, partnership,
association or organization in exchange for the shares or securities thereof or
otherwise, and to lend money to, subscribe for the shares or securities of, and
enter into any contracts with any such corporation, trust, partnership,
association or organization in which the Trust holds or is about to acquire
shares or any other interest. Subject to Section 9.3 hereof, the Trustees may
also cause a merger or consolidation between the Trust or any successor thereto
and any such corporation, trust, partnership, association or other organization
if and to the extent permitted by law, as provided under the law then in effect.
Nothing contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one or more
corporations, trusts, partnerships, associations or other organizations and
selling, conveying or transferring a portion of the Trust Property to such
organization or entities.
ARTICLE X
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders a
written financial report of the Trust, including financial statements which
shall at least annually be certified by independent public accountants.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Filing. This Declaration and any amendment hereto shall
be filed in the office of the Secretary of the Commonwealth of Massachusetts and
in such other places as may be required under the laws of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem appropriate.
Each amendment so filed shall be accompanied by a certificate signed and
acknowledged by a Trustee or by the Secretary or any Assistant Secretary of the
Trust stating that such action was duly taken in a manner provided herein. Such
amendment shall be effective as provided in Section 9.3
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<PAGE>
above. A restated Declaration, integrating into a single instrument all of the
provisions of the Declaration which are then in effect and operative, may be
executed from time to time by a majority of the Trustees and shall, upon filing
with the Secretary of the Commonwealth of Massachusetts, be conclusive evidence
of all amendments contained therein and may thereafter be referred to in lieu of
the original Declaration and the various amendments thereto.
Section 11.2. Resident Agent. The name of the Trust's resident agent is
CT Corporation System, and its post office address is 2 Oliver Street, Boston,
Massachusetts 02109.
Section 11.3. Governing Law. This Declaration is executed by the
Trustees with reference to the laws of the Commonwealth of Massachusetts, and
the rights of all parties shall be subject to and construed according to the
laws of said State.
Section 11.4. Counterparts. The Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 11.5. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust, appears to be a Trustee
hereunder, or Secretary or Assistant Secretary of the Trust, certifying to: (a)
the number or identity of Trustees or Shareholders, (b) the due authorization of
the execution of any instrument or writing, (c) the form of any vote passed at a
meeting of Trustees or Shareholders, (d) the fact that the number of Trustees or
Shareholders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (e) the form of any By-Laws
adopted by or the identity of any officers elected by the Trustees, or (f) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust, shall be conclusive evidence as to the matters so certified in favor of
any person dealing with the Trustees and their successors.
Section 11.6. Provisions in Conflict with Law or Regulations. (a) The
provisions of the Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provisions shall be deemed never to have constituted a part of the
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of the Declaration or render invalid or improper any
action taken or omitted prior to such determination.
(b) If any provision of the Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attain only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned have executed this instrument this
23rd day of October 1989.
/S/ JAMES E.MOLTZ
- ----------------------
James E. Moltz
/S/ JOHN G. FOERST, JR.
- -----------------------
John G. Foerst, Jr.
/S/ GENE APRUZZI
- -----------------------
Gene Apruzzi
/S/ RICHARD KARL GOELTZ
- -----------------------
Richard Karl Goeltz
/S/ H.B. ALVORD
- -----------------------
H.B. Alvord
xxvi
<PAGE>
THE 59 WALL STREET TRUST
(a) The principal place of business of The 59 Wall Street Trust is
located at 1290 Avenue of the Americas, New York, New York 10104-0101.
(b) The names and residences of its Trustees are as follows:
Name Residence
James E. Moltz 29 Indian Spring Trail
Darien, CT 06820
Gene Apruzzi 20 West 64th Street, Apt. 25E
New York, New York 10023
H. B. Alvord 1450 Oleada Road
Pebble Beach, CA 93953
John G. Foerst, Jr. 77 Dover Road
Manhasset, NY 11030
Richard Karl Goeltz 953 Fifth Avenue
New York, NY 10021
xxvii
<PAGE>
THE 59 WALL STREET TRUST
CERTIFICATE OF AMENDMENT TO DECLARATION OF TRUST
The undersigned, constituting a majority of the Trustees of The 59 Wall
Street Trust (the "Trust"), a business trust organized under the laws of the
Commonwealth of Massachusetts, pursuant to a Declaration of Trust, amended and
restated as of October 23, 1989 (the "Declaration"), do hereby certify, as
provided by the provisions of the first sentence of Section 9.3(a) of the
Declaration, by vote duly adopted by a majority of the shareholders of the Trust
on September 23, 1991, and by a majority of the Trustees on August 13, 1991,
that Section 7.4 of the Declaration was duly amended and restated in full as
follows:
"Section 7.4. Redemptions of Accounts of Less Than a Specified
Amount. With respect to each series of the Trust, the Shareholder
Servicing Agent and each Eligible Institution may establish for their
respective customers an involuntary redemption requirement. If the
value of a Shareholder's holdings falls below that amount because of a
redemption of Shares, the Shareholder's remaining Shares may be
redeemed. If such remaining Shares are to be redeemed, the Shareholder
shall be notified that the value of such Shareholder's holdings has
fallen below the applicable specified minimum amount and be allowed 60
days to make an additional investment to enable the Shareholder to meet
the applicable specified minimum amount requirement before the
redemption is processed. The terms "Shareholder Servicing Agent" and
"Eligible Institution" shall have the meanings ascribed to them in the
then-current prospectus of the series whose Shares are subject to such
involuntary redemption requirement."
IN WITNESS WHEREOF, the undersigned have executed this Certificate this
10th day of December, 1991.
/S/ J.V. SHIELDS, JR.
J.V. Shields, Jr.
/S/ H.B. ALVORD
H.B. Alvord
/S/ DAVID P. FELDMAN
David P. Feldman
/S/ ARTHUR D. MILTENBERGER
Arthur D. Miltenberger
/S/ ROSS JONES
Ross Jones
<PAGE>
THE 59 WALL STREET TRUST
CERTIFICATE OF AMENDMENT TO DECLARATION OF TRUST
The undersigned, constituting a majority of the Trustees of The 59 Wall
Street Trust (the "Trust"), a business trust organized under the laws of the
Commonwealth of Massachusetts, pursuant to a Declaration of Trust, amended and
restated as of October 23, 1989 (the "Declaration"), do hereby certify, as
provided by the provisions of the first sentence of Section 9.3(a) of the
Declaration, by vote duly adopted by a majority of the shareholders of the Trust
on September 23, 1991, and by a majority of the Trustees on August 13, 1991,
that the second sentence of Section 6.8 of the Declaration was duly amended and
restated in full as follows:
"Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote, except that Shares held
in the treasury of the Trust as of the record date, as determined in
accordance with the By-Laws, shall not be voted and except that all
Shares shall be voted by individual series on any matter submitted to a
vote of the Shareholders except as provided in Section 6.9(g) hereof."
and that Section 6.9(g) of the Declaration was duly amended as restated in full
as follows:
"(g) Notwithstanding any provision hereof to the contrary, on
any matter submitted to a vote of Shareholders, all Shares then
entitled to vote shall be voted by individual series, except that (i)
when required by the 1940 Act to be voted in the aggregate, Shares
shall not be voted by individual series, and (ii) when the Trustees
have determined that the matter affects the interests of Shareholders
of more than one series, Shareholders of all such affected series shall
vote in the aggregate."
IN WITNESS WHEREOF, the undersigned have executed this Certificate this
10th day of December, 1991.
/S/ J.V. SHIELDS, JR.
J.V. Shields, Jr.
/S/ H.B. ALVORD
H.B. Alvord
/S/ DAVID P. FELDMAN
David P. Feldman
/S/ ARTHUR D. MILTENBERGER
Arthur D. Miltenberger
/S/ ROSS JONES
Ross Jones
<PAGE>
THE 59 WALL STREET TRUST
CERTIFICATE OF AMENDMENT TO DECLARATION OF TRUST
The undersigned, constituting a majority of the Trustees of The 59 Wall
Street Trust (the "Trust"), a business trust organized under the laws of the
Commonwealth of Massachusetts, pursuant to a Declaration of Trust, amended and
restated as of October 23, 1989 (the "Declaration"), do hereby certify, as
provided by the provisions of the first sentence of Section 9.3(a) of the
Declaration, by vote duly adopted by a majority of the shareholders of the Trust
on September 23, 1991, and by a majority of the Trustees on August 13, 1991,
that Section 6.8 of the Declaration was duly amended by adding the following
sentences immediately following the fourth sentence thereof:
"At any meeting of Shareholders of the Trust or any series of the
Trust, an Eligible Institution may vote any Shares of such series as to
which such Eligible Institution is the holder or agent of record and
which are not otherwise represented in person or by proxy at the
meeting, proportionately in accordance with the votes cast by holders
of all Shares of such series otherwise represented at the meeting in
person or by proxy as to which such Eligible Institution is the holder
or agent of record. Any Shares of such series so voted by an Eligible
Institution shall be deemed represented at the meeting for all
purposes, including quorum purposes. The term "Eligible Institution"
shall have the meaning ascribed to it in the then-current prospectus of
the series whose Shares are being so voted."
IN WITNESS WHEREOF, the undersigned have executed this Certificate this
10th day of December, 1991.
/S/ J.V. SHIELDS, JR.
J.V. Shields, Jr.
/S/ H.B. ALVORD
H.B. Alvord
/S/ DAVID P. FELDMAN
David P. Feldman
/S/ ARTHUR D. MILTENBERGER
Arthur D. Miltenberger
/S/ ROSS JONES
Ross Jones
<PAGE>
THE 59 WALL STREET TRUST
Establishment and
Designation of Series of Shares of
Beneficial Interest (par value $0.01 per share)
Pursuant to Section 6.9 of the Declaration of Trust, amended and
restated as of October 23, 1989 (the "Declaration of Trust"), of The 59 Wall
Street Trust (the "Trust"), the Trustees of the Trust hereby establish and
designate a series of Shares (as defined in the Declaration of Trust) (the
"Fund") to have the following special and relative rights:
1. The Fund shall be designated as follows:
The 59 Wall Street U.S. Treasury Money Fund
2. The Fund shall be authorized to hold cash, invest in securities,
instruments and other properties and use investment techniques as from time to
time described in the Trust's then currently effective registration statement
under the Securities Act of 1933 to the extent pertaining to the offering of
Shares of the Fund ("Shares"). Each Share shall be redeemable, shall be entitled
to one vote (or fraction thereof in respect of a fractional share) on matters on
which Shares shall be entitled to vote, shall represent a pro rata beneficial
interest in the assets allocated or belonging to the Fund, and shall be entitled
to receive its pro rata share of the net assets of the Fund upon liquidation of
the Fund, all as provided in Section 6.9 of the Declaration of Trust. The
proceeds of sales of Shares, together with any income and gain thereon, less any
diminution or expenses thereof, shall irrevocably belong to the Fund, unless
otherwise required by law.
3. Shareholders of the Fund shall vote separately as a class on any
matter to the extent required by, and any matter shall be deemed to have been
effectively acted upon with respect to the Fund as provided in, Rule 18f-2, as
from time to time in effect, under the Investment Company Act of 1940, as
amended, or any successor rule, and by the Declaration of Trust.
4. At any meeting of shareholders of the Fund, an Eligible Institution
(as that term may from time to time be defined in the applicable then-current
prospectus of the Fund) may vote any Shares as to which such Eligible
Institution is the holder or agent of record and which are not otherwise
represented in person or by proxy at the meeting, proportionately in accordance
with the votes cast by holders of all Shares otherwise represented at the
meeting in person or by proxy as to which such Eligible Institution is the
holder or agent of record. Any Shares so voted by an Eligible Institution will
be deemed represented at the meeting for all purposes, including quorum
purposes.
5. All Shares shall be subject to redemption and redeemable at the
option of the Trust. The Board of Trustees may by resolution from time to time
authorize the Trust to require the redemption of all or any part of any
outstanding Shares, without the vote or consent of shareholders (including
through the establishment of uniform standards with respect to the minimum net
asset value of a shareholder account), upon the sending of written notice
thereof to each shareholder any of whose Shares are so redeemed and upon such
terms and
<PAGE>
conditions as the Board of Trustees shall deem advisable, out of funds legally
available therefor, at net asset value per Share determined in accordance with
the provisions of the applicable then-current prospectus of the Fund and to take
all other steps deemed necessary or advisable in connection therewith. The Board
of Trustees may authorize the closing of those accounts not meeting the
specified minimum standards of net asset value by redeeming all of the Shares in
such accounts.
6. The Fund's Shareholder Servicing Agent and each Eligible Institution
(as those terms are defined in the applicable then-current prospectus of the
Fund) may establish for their respective customers an involuntary redemption
requirement. If the value of a shareholder's holdings falls below that amount
because of a redemption of Shares, the shareholder's remaining Shares may be
redeemed. If such remaining Shares are to be redeemed, the shareholder will be
notified that the value of his holdings has fallen below that amount and be
allowed 60 days to make an additional investment to enable the shareholder to
meet the minimum requirement before the redemption is processed.
7. The assets and liabilities of the Trust shall be allocated to the
Fund as set forth in Section 6.9 of the Declaration of Trust.
8. Subject to the provisions of Section 6.9 and Article IX of the
Declaration of Trust, the Trustees (including any successor Trustees) shall have
the right at any time and from time to time to reallocate assets and expenses or
to change the designation of the Fund or any other Funds hereafter created, or
to otherwise change the special and relative rights of the Fund.
IN WITNESS WHEREOF, the undersigned Trustees have executed this
instrument this 12th day of February, 1991.
Trustee and
/S/ J.V. SHIELDS, JR. Chairman of the Board
J.V. Shields, Jr.
/S/ H.B. ALVORD Trustee
H.B. Alvord
/S/ DAVID P. FELDMAN Trustee
David P. Feldman
/S/ ARTHUR D. MILTENBERGER Trustee
Arthur D. Miltenberger
/S/ ROSS JONES Trustee
Ross Jones
WS5041
<PAGE>
WS5041
THE 59 WALL STREET TRUST
Establishment and
Designation of Series of Shares of
Beneficial Interest (par value $0.01 per share)
Pursuant to Section 6.9 of the Declaration of Trust, amended and
restated as of October 23, 1989 (the "Declaration of Trust"), of The 59 Wall
Street Trust (the "Trust"), the Trustees of the Trust hereby establish and
designate a series of Shares (as defined in the Declaration of Trust) (the
"Fund") to have the following special and relative rights:
1. The Fund shall be designated as follows:
The 59 Wall Street Tax Free Short/Intermediate Fixed Income
Fund
2. The Fund shall be authorized to hold cash, invest in securities,
instruments and other properties and use investment techniques as from time to
time described in the Trust's then currently effective registration statement
under the Securities Act of 1933 to the extent pertaining to the offering of
Shares of the Fund ("Shares"). Each Share shall be redeemable, shall be entitled
to one vote (or fraction thereof in respect of a fractional share) on matters on
which Shares shall be entitled to vote, shall represent a pro rata beneficial
interest in the assets allocated or belonging to the Fund, and shall be entitled
to receive its pro rata share of the net assets of the Fund upon liquidation of
the Fund, all as provided in Section 6.9 of the Declaration of Trust. The
proceeds of sales of Shares, together with any income and gain thereon, less any
diminution or expenses thereof, shall irrevocably belong to the Fund, unless
otherwise required by law.
3. Shareholders of the Fund shall vote separately as a class on any
matter to the extent required by, and any matter shall be deemed to have been
effectively acted upon with respect to the Fund as provided in, Rule 18f-2, as
from time to time in effect, under the Investment Company Act of 1940, as
amended, or any successor rule, and by the Declaration of Trust.
4. At any meeting of shareholders of the Fund, an Eligible Institution
(as that term may from time to time be defined in the applicable then-current
prospectus of the Fund) may vote any Shares as to which such Eligible
Institution is the holder or agent of record and which are not otherwise
represented in person or by proxy at the meeting, proportionately in accordance
with the votes cast by holders of all Shares otherwise represented at the
meeting in person or by proxy as to which such Eligible Institution is the
holder or agent of record. Any Shares so voted by an Eligible Institution will
be deemed represented at the meeting for all purposes, including quorum
purposes.
5. All Shares shall be subject to redemption and redeemable at the
option of the Trust. The Board of Trustees may by resolution from time to time
authorize the Trust to require the redemption of all or any part of any
outstanding Shares, without the vote or consent of shareholders (including
through the establishment of uniform standards with respect to the minimum net
asset value of a shareholder account), upon the sending of written notice
thereof to each shareholder any of whose Shares are so redeemed and upon such
terms and conditions as the Board of Trustees shall deem advisable, out of funds
legally
<PAGE>
available therefor, at net asset value per Share determined in accordance with
the provisions of the applicable then-current prospectus of the Fund and to take
all other steps deemed necessary or advisable in connection therewith. The Board
of Trustees may authorize the closing of those accounts not meeting the
specified minimum standards of net asset value by redeeming all of the Shares in
such accounts.
6. The presence in person or by proxy of the holders of record of
one-third of the shares issued and outstanding and entitled to vote thereat
shall constitute a quorum for the transaction of any business at all meetings of
the stockholders except as otherwise provided by law or in the Declaration of
Trust.
7. The Fund's Shareholder Servicing Agent and each Eligible Institution
(as those terms are defined in the applicable then-current prospectus of the
Fund) may establish for their respective customers an involuntary redemption
requirement. If the value of a shareholder's holdings falls below that amount
because of a redemption of Shares, the shareholder's remaining Shares may be
redeemed. If such remaining Shares are to be redeemed, the shareholder will be
notified that the value of his holdings has fallen below that amount and be
allowed 60 days to make an additional investment to enable the shareholder to
meet the minimum requirement before the redemption is processed.
8. The assets and liabilities of the Trust shall be allocated to the
Fund as set forth in Section 6.9 of the Declaration of Trust.
9. Subject to the provisions of Section 6.9 and Article IX of the
Declaration of Trust, the Trustees (including any successor Trustees) shall have
the right at any time and from time to time to reallocate assets and expenses or
to change the designation of the Fund or any other Funds hereafter created, or
to otherwise change the special and relative rights of the Fund.
IN WITNESS WHEREOF, the undersigned Trustees have executed this
instrument this 9th day of June, 1992.
Trustee and
/S/ J.V. SHIELDS, JR. Chairman of the Board
J.V. Shields, Jr.
/S/ H.B. ALVORD Trustee
H.B. Alvord
/S/ DAVID P. FELDMAN Trustee
David P. Feldman
/S/ ARTHUR D. MILTENBERGER Trustee
Arthur D. Miltenberger
/S/ ROSS JONES Trustee
Ross Jones
WS5041
THE 59 WALL STREET FUND
By-Laws
ARTICLE I
Shareholders
Section 1. Place of Meeting. All meetings of the Shareholders shall be
held at the principal office of the Trust in the Commonwealth of Massachusetts
or at such other place within the United States as may from time to time be
designated by the Trustees and stated in the notice of such meeting.
Section 2. Special or Extraordinary Meetings. Special or extraordinary
meetings of the Shareholders for any purpose or purposes may be called by the
Chairman or a majority of the Trustees, and shall be called by the Secretary
upon receipt of the request in writing signed by Shareholders holding not less
than twenty-five per cent (25%) of the Shares issued and outstanding and
entitled to vote thereat. Such request shall state the purpose or purposes of
the proposed meeting. The Secretary shall inform such Shareholders of the
reasonably estimated costs of preparing and mailing such notice of meeting and
upon payment to the Trust of such costs, the Secretary shall give notice stating
the purpose or purposes of the meeting as required in this Article and By-Law to
all Shareholders entitled to notice of such meeting. No special meeting need be
called upon the request of the holders of Shares entitled to cast less than a
majority of all votes entitled to be cast at such meeting to consider any matter
which is substantially the same as a matter voted upon at any special meeting of
Shareholders held during the preceding twelve months.
Section 3. Notice of Meetings. Not less than ten days' or more than
ninety days' written or printed notice of every meeting of Shareholders, stating
the time and place thereof (and the general nature of the business proposed to
be transacted at any special or extraordinary meeting), shall be given to each
Shareholder entitled to vote thereat by leaving the same with him or at his
residence or usual place of business or by mailing it, postage prepaid, and
addressed to him at his address as it appears upon the books of the Trust. If
mailed, notice shall be deemed to he given when deposited in the United States
mail addressed to the Shareholder as aforesaid.
No notice of the time, place or purpose of any meeting of Shareholders
need be given to any Shareholder who attends in person or by proxy or to any
Shareholder who executes a written waiver of such notice, either before or after
the meeting is held, and which notice is filed with the records of the meeting.
Section 4. Record Dates. The Trustees may fix, in advance, a date not
more than sixty (60) or less than ten (10) days preceding the date of any
meeting of Shareholders as a record date for the determination of the
Shareholders entitled to notice of and to vote at such meeting; and only
Shareholders of record on such date shall be entitled to notice of and to vote
at such meeting.
Section 5. Quorum and Adjournment of Meetings. The presence in person
or by proxy of the holders of record of a majority of the Shares of the Trust
<PAGE>
issued and outstanding and entitled to vote thereat shall constitute a quorum at
all meetings of the Shareholders except as otherwise provided in the Declaration
of Trust. If, however, such quorum shall not be present or represented at any
meeting of the Shareholders, the holders of a majority of the Shares present in
person or by proxy shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until the requisite
amount of Shares entitled to vote at such meeting shall be present. At such
adjourned meeting at which the requisite amount of Shares entitled to vote
thereat shall be represented any business may be transacted which might have
been transacted at the meeting as originally notified.
Section 6. Voting and Inspectors. At all meetings, Shareholders of
record entitled to vote thereat shall have one vote for each Share standing in
his name on the books of the Trust (and such Shareholders of record holding
fractional shares, if any, shall have proportionate voting rights) on the date
of the determination of Shareholders entitled to vote at such meeting, either in
person or by proxy appointed by instrument in writing subscribed by such
Shareholder or his duly authorized attorney. No proxy shall be valid eleven
months after its date. Pursuant to a resolution of a majority of the Trustees,
proxies may be solicited in the name of one or more Trustees or officers of the
Trust.
All elections shall be had and all questions decided by a majority of
the votes cast at a duly constituted meeting, except as otherwise provided by
statute or by the Declaration of Trust or by these By-Laws.
At any election of Trustees, the Chairman of the meeting may, and upon
the request of the holders of ten per cent (10%) of the Shares entitled to vote
at such election shall, appoint two inspectors of election who shall first
subscribe an oath or affirmation to execute faithfully the duties of inspectors
at such election with strict impartiality and according to the best of their
ability, and shall after the election make a certificate of the result of the
vote taken. No candidate for the office of Trustee shall be appointed such
Inspector.
Section 7. Conduct of Meetings. The meetings of the Shareholders shall
be presided over by the Chairman, or if he is not present, by the President, or
if none of them is present, by a Chairman to be elected at the meeting. The
Secretary of the Trust, if present, shall act as a Secretary of such meetings,
or if he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor any Assistant Secretary is present, then the meeting shall elect
its Secretary.
Section 8. Concerning Validity of Proxies, Ballots, etc. At every
meeting of the Shareholders, all proxies shall be received and taken in charge
of and all ballots shall be received and canvassed by the Secretary of the
meeting, who shall decide all questions touching the qualification of voters,
the validity of the proxies and the acceptance or rejection of votes, unless
inspectors of election shall have been appointed by the Chairman of the meeting,
in which event such inspectors of election shall decide all such questions.
Section 9. Action Without Meeting. Except as otherwise provided by law,
<PAGE>
the provisions of these By-Laws relating to notices and meetings to the contrary
notwithstanding, any action required or permitted to be taken at any meeting of
Shareholders may be taken without a meeting if a majority of the Shareholders
entitled to vote upon the action consent to the action in writing and such
consents are filed with the records of the Trust. Such consent shall be treated
for all purposes as a vote taken at a meeting of Shareholders.
ARTICLE II
Trustees
Section 1. Number and Tenure of Office. The property of the Trust shall
be controlled by and the business and affairs of the Trust shall be conducted
and managed by not less than two (2) or more than fifteen (15) Trustees, as may
be fixed from time to time by a written instrument signed by a majority of the
Trustees then in office. Trustees need not be Shareholders. The tenure of office
of each Trustee shall be set by resolution of the Trustees, except that any
Trustee may resign his office or be removed from office for cause pursuant to
the provisions of the Declaration of Trust.
Section 2. Vacancies. In case of any vacancy or vacancies in the office
of Trustee through death, resignation or other cause, other than an increase in
the number of Trustees, a majority of the remaining Trustees, although a
majority is less than a quorum, by an affirmative vote, or the sole remaining
Trustee, may elect a successor or successors, as the case may be, to hold
office.
Section 3. Increase or Decrease in Number of Directors. The Trustees,
by the vote of a majority of all the Trustees then in office, may increase the
number of Trustees and may elect Trustees to fill the vacancies created by any
such increase in the number of Trustees. The Trustees, by the vote of a majority
of all the Trustees then in office, may likewise decrease the number of Trustees
to a number not less than two.
Section 4. Place of Meeting. The Trustees may hold their meetings, have
one or more offices, and keep the books of the Trust, outside the Commonwealth
of Massachusetts, at any office or offices of the Trust or at any other place as
they may from time to time by resolution determine, or in the case of meetings,
as they may from time to time by resolution determine or as shall be specified
or fixed in the respective notices or waivers of notice thereof.
Section 5. Regular Meetings. Regular meetings of the Trustees shall be
held at such time and on such notice as the Trustees may from time to time
determine.
Section 6. Special Meetings. Special meetings of the Trustees may be
held from time to time upon call of the Chairman, the Secretary or two or more
of the Trustees, by oral or telegraphic or written notice duly served on or sent
or mailed to each Trustee not less than one day before such meeting. No notice
of any special meeting need be given to any Trustee who attends in person or to
any Trustee who executes a written waiver of such notice, either before or after
the meeting is held, and which notice is filed with the records of the meeting.
Such notice or waiver of notice need not state the purpose or purposes of such
meeting.
<PAGE>
Section 7. Quorum. One-third of the Trustees then in office shall
constitute a quorum for the transaction of business, provided that a quorum
shall in no case be less than two Trustees. If at any meeting of Trustees there
shall be less than a quorum present, a majority of those present may adjourn the
meeting from time to time until a quorum shall have been obtained. The act of
the majority of the Trustees present at any meeting at which there is a quorum
shall be the act of the Trustees, except as otherwise specifically provided by
statute or by the Declaration of Trust or by these By-Laws.
Section 8. Committees. The Trustees, by the majority vote of all the
Trustees then in office, may appoint from the Trustees committees which shall in
each case consist of such number of Trustees (not less than two) and shall have
and may exercise such powers as the Trustees may determine in the resolution
appointing them. A majority of all the members of any such committee may
determine its action and fix the time and place of its meetings, unless the
Trustees shall otherwise provide. The Trustees shall have power at any time to
change the members and powers of any such committee, to fill vacancies and to
discharge any such committee.
Section 9. Telephone Meetings. Trustees or a committee of the Trustees
may participate in a meeting by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means
constitutes presence in person at the meeting.
Section 10. Action Without a Meeting. Any action required or permitted
to be taken at any meeting of the Trustees or any committee thereof may be taken
without a meeting, if a written consent to such action is signed by all the
Trustees then in office or all members of such committee, as the case may be,
and such written consent is filed with the minutes of the proceedings of the
Trustees or committee.
Section 11. Compensation. No Trustee shall receive any stated salary or
fees from the Trust for his services as such if such Trustee is, otherwise than
by reason of being such Trustee, an interested person (as such term is defined
by the Investment Company Act of 1940) of the Trust or of its investment adviser
or principal underwriter. Except as provided in the preceding sentence, Trustees
shall be entitled to receive such compensation from the Trust for their services
as may from time to time be voted by the Trustees.
ARTICLE III
Officers
Section 1. Executive Officers. The executive officers of the Trust
shall be chosen by the Trustees. These shall include a Chairman (who shall be a
Trustee), a President, one or more Executive or other Vice-Presidents (the
number thereof to be determined by the Trustees), a Secretary and a Treasurer.
The Trustees may also in their discretion appoint Assistant Secretaries,
Assistant Treasurers and other officers, agents and employees, who shall have
such authority and perform such duties as the Trustees may determine. The
Trustees may fill any vacancy which may occur in any office. Any two offices,
except those of Chairman and any President, may be held by the same person,
<PAGE>
but no officer shall execute, acknowledge or verify any instrument in more than
one capacity, if such instrument is required by law or these By-Laws to be
executed, acknowledged or verified by two or more officers.
Section 2. Term of Office. The term of office of all officers shall be
one year and until their respective successors are chosen and qualified. Any
officer may be removed from office at any time with or without cause by the vote
of a majority of all the Trustees then in office.
Section 3. Powers and Duties. The officers of the Trust shall have such
powers and duties as generally pertain to their respective offices, as well as
such powers and duties as may from time to time be conferred by the Trustees.
ARTICLE IV
Share Interests
Section 1. Certificates for Shares. Shareholders are not entitled to
receive certificates evidencing their Share ownership, unless the Trustees
shall by resolution otherwise determine.
Section 2. Transfer of Shares. Shares of the Trust shall be
transferable on the register of the Trust by the holder thereof in person or by
his agent duly authorized in writing, upon delivery to the Trustees or the
Transfer Agent of a duly executed instrument of transfer, together with such
evidence of the genuineness of each such execution and authorization and of such
other matters as the Trust or its agents may reasonably require.
Section 3. Register of Shares. A register of the Trust, containing the
names and addresses of the Shareholders and the number of Shares held by them
respectively and a record of all transfers thereof, shall be kept at the
principal offices of the Trust or, if the Trust employs a Transfer Agent, at the
offices of the Transfer Agent of the Trust.
ARTICLE V
Seal
The Trustees may provide for a suitable seal, in such form and bearing
such inscriptions as they may determine.
ARTICLE VI
Fiscal Year
The fiscal year of the Trust shall begin on the first day of July and
shall end on the last day of June in each year.
<PAGE>
ARTICLE VII
Indemnification
A representative of the Trust shall be indemnified by the Trust with
respect to each proceeding against such representative, except a proceeding
brought by or on behalf of the Trust, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such representative in connection with such proceeding, provided
that such representative acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust and, with
respect to any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Trust and, with respect to any criminal proceeding,
had reasonable cause to believe that his conduct was unlawful.
A representative of the Trust shall be indemnified by the Trust, with
respect to each proceeding brought by or on behalf of the Trust to obtain a
judgment or decree in its favor, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust;
except that no indemnification shall be made in respect of any claim, issue, or
matter as to which such representative has been adjudged to be liable for
willful misfeasance, bad faith, gross negligence or reckless disregard in the
performance of his duty to the Trust, unless and only to the extent that the
court in which the proceeding was brought, or a court of equity in the county in
which the Trust has its principal office, determines upon application that,
despite the adjudication of liability but in view of all circumstances of the
case, such corporate representative is fairly and reasonably entitled to
indemnity for the expenses which the court considers proper.
To the extent that the representative of the Trust has been successful
on the merits or otherwise in defense of any proceeding referred to in the
preceding two paragraphs, or in defense of any claim, issue or matter therein,
the Trust shall indemnify him against all expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
Except as provided in the preceding paragraph any indemnification under
the first two paragraphs of this Article (unless ordered by a court) shall be
made by the Trust only as authorized in the specific case upon a determination
that indemnification of the representative of the Trust is proper in the
circumstances because he has met the applicable standard of conduct set forth in
such paragraphs. The determination shall be made (1) by the Trustees by a
majority vote of a quorum consisting of Trustees who were not parties to the
proceeding, or (2) if a quorum is not obtainable or if a quorum of disinterested
Trustees so directs, by independent legal counsel in a written opinion.
Expenses (including attorneys' fees) incurred in defending a proceeding
<PAGE>
may be paid by the Trust in advance of the final disposition thereof if (1)
authorized by a majority of a quorum of noninterested Trustees in the specific
case, and (2) the Trust receives an undertaking by or on behalf of the
representative of the Trust to repay the advance if it is not ultimately
determined that he is entitled to be indemnified by the Trust as authorized in
this Article.
The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which a representative of the Trust or other
person may be entitled under any agreement, vote of Shareholders or
disinterested Trustees or otherwise, both as to action in his official capacity
and as to action in another capacity while holding the office, and shall
continue as to a person who has ceased to be a Trustee, officer, employee or
agent and inure to the benefit of his heirs and personal representatives.
The Trust may purchase and maintain insurance on behalf of any person
who is or was a Trustee, officer, employee or agent of the Trust, or is or was
serving at the request of the Trust as a trustee, director, officer, employee or
agent of another trust, corporation, partnership, joint venture or other
enterprise against any liability asserted against him and incurred by him in any
such capacity or arising out of his status as such, regardless of whether the
Trust would have the power to indemnify him against the liability under the
provisions of this Article.
Nothing contained in this Section shall be construed to indemnify any
representative of the Trust against any liability to the Trust or to its
security holders to which he would otherwise be subject by reason of
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
As used in this Article "representative of the Trust" means an
individual (1) who is a present or former Trustee, officer, agent or employee of
the Trust or who serves or has served another trust, corporation, partnership,
joint venture or other enterprise in one of such capacities at the request of
the Trust, and (2) who by reason of his position is, has been or is threatened
to be made a party to a proceeding; and "proceeding" includes any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative.
ARTICLE VIII
Custodian
Section 1. The Trust shall have as custodian or custodians one or more
trust companies or banks of good standing, each having a capital, surplus and
undivided profits aggregating not less than fifty million dollars ($50,000,000),
and, to the extent required by the Investment Company Act of 1940, the funds and
securities held by the Trust shall be kept in the custody of one or more such
custodians, provided such custodian or custodians can be found ready and willing
to act, and further provided that the Trust may use as subcustodians, for the
purpose of holding any securities and related funds of the Trust such banks as
the Trustees may approve and as shall be permitted by
<PAGE>
law.
Section 2. The Trust shall upon the resignation or inability to serve
of its custodian or upon change of the custodian:
(i) in case of such resignation or inability to serve, use its
best efforts to obtain a successor custodian;
(ii) require that the cash and securities ovened by the Trust
be delivered directly to the successor custodian; and
(iii) in the event that no successor custodian can be found,
submit to the Shareholders before permitting delivery of the cash and
securities owned by the Trust otherwise than to a successor custodian,
the question whether the Trust shall be liquidated or shall function
without a custodian.
ARTICLE IX
Amendment of By-Laws
The By-Laws of the Trust may be altered, amended, added to or repealed
by the Shareholders or by majority vote of all the Trustees then in office; but
any such alteration, amendment, addition or repeal of the By-Laws by action of
the Trustees may be altered or repealed by Shareholders.
<PAGE>
WS5302
THE 59 WALL STREET TRUST
AMENDMENT OF BY-LAWS
RESOLVED: That Article I Section 2 of the By-Laws of the Trust is hereby
amended as follows:
Section 2. Special or Extraordinary Meetings. Special or
extraordinary meetings of the Shareholders for any purpose or purposes
may be called by the Chairman or a majority of the Trustees, and shall
be called by the Secretary upon receipt of the request in writing
signed by Shareholders holding not less than ten percent (10%) of the
Shares issued and outstanding and entitled to vote thereat. Such
request shall state the purpose or purposes of the proposed meeting.
The Secretary shall inform such Shareholders of the reasonably
estimated costs of preparing and mailing such notice of the meeting and
upon payment to the Trust of such costs, the Secretary shall give
notice stating the purpose or purposes of the meeting as required in
this Article and By-Laws to all Shareholders entitled to notice of such
meeting. No special meeting need be called upon the request of the
holders of Shares entitled to cast less than a majority of all votes
entitled to be cast at such meeting to consider any matter which is
substantially the same as a matter voted upon at any special meeting of
Shareholders held during the preceding twelve months.
Approved: February 22, 1995
THE 59 WALL STREET TRUST
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
AGREEMENT, originally made on the 9th day of June, 1992 as amended and
restated November 1, 1993 between THE 59 WALL STREET TRUST, a Massachusetts
business trust (the "Trust"), on behalf of The 59 Wall Street Tax Free
Short/Intermediate Fixed Income Fund (the "Fund"), a series of the Trust, and
BROWN BROTHERS HARRIMAN & CO., a New York limited partnership (the "Adviser"),
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the " 1 940
Act"); and
WHEREAS, the Trust desires to retain the Adviser to render investment
advisory services to the Fund, and the Adviser is willing to render such
services;
NOW, THEREFORE, this Agreement
WITNESSETH:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Trust here by appoints the Adviser to act as investment adviser
to the Fund for the period and on the terms set forth in this Agreement. The
Adviser accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. Subject to the general supervision of the Trustees of the Trust, the
Adviser shall manage the investment operations of the Fund and the composition
of the Fund's portfolio of securities and investments, including cash, the
purchase, retention and disposition thereof and agreements relating thereto, in
accordance with the Fund's investment objective and policies as stated in the
Prospectus (as defined in paragraph 3 of this Agreement) and subject to the
following understandings:
(a) the Adviser shall furnish a continuous investment program
for the Fund's portfolio and determine from time to time what
investments or securities will be purchased, retained, sold or lent by
the Fund, and what portion of the assets will be invested or held
uninvested as cash;
(b) the Adviser shall use the same skill and care in the
management of the Fund's portfolio as it uses in the administration of
other accounts for which it has investment responsibility as agent;
(c) the Adviser, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Trust's Declaration of Trust and By-Laws and the Prospectus of the Fund
and with the instructions and directions of the Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act
and all other applicable federal and state laws and regulations
including, without
<PAGE>
limitation, the regulations and rulings of the New York State Banking
Department;
(d) the Adviser shall determine the securities to be
purchased, sold or lent by the Fund and as agent for the Fund will
effect portfolio transactions pursuant to its determinations either
directly with the issuer or with any broker and/or dealer in such
securities; in placing orders with brokers and/or dealers the Adviser
intends to seek best price and execution for purchases and sales.
On occasions when the Adviser deems the purchase or sale of a security
to be in the best interest of the Fund as well as other customers, the
Adviser, may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to
be so sold or purchased in order to obtain the best execution and lower
brokerage commissions, if any. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in
the transaction, will be made by the Adviser in the manner it considers
to be the most equitable and consistent with its fiduciary obligations
to the Fund and to such other customers;
(e) the Adviser shall maintain books and records with respect
to the Fund's securities transactions and shall render to the Trust's
Trustees such periodic and special reports as the Trustees may
reasonably request; and
(f) the investment management services of the Adviser to the
Fund under this Agreement are not to be deemed exclusive, and the
Adviser shall be free to render similar services to others.
3. The Trust has delivered copies of each of the following documents to
the Adviser and will promptly notify and deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust of the Trust, filed with the
Secretary of the Commonwealth of Massachusetts on June 8, 1983, and
amendments thereto filed on October 27, 1983, August 22, 1984, July 20,
1989, October 24, 1989, February 14, 1991, December 20, 1991 and June
26, 1992 (such Declaration of Trust and amendments, as presently in
effect and as further amended from time to time, are herein called the
"Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as presently in effect
and as amended from time to time, are herein called the "ByLaws");
(c) Certified resolutions of the Trustees of the Trust
authorizing the appointment of the Adviser and approving the form of
this Agreement;
(d) Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N- I A (No. 33-48606) (the
"Registration Statement") as filed with the Securities and Exchange
Commission (the "Commission") on June 15, 1992 relating to the Trust
and the Fund shares, and all amendments thereto;
2
<PAGE>
(e) Notification of Registration of the Trust under the 1940
Act on Form N-8A as filed with the Commission on June 24, 1983 and all
amendments thereto; and
(f) Prospectus of the Fund, dated November 1, 1993 (such
prospectus, as presently in effect and as amended or supplemented with
respect to the Fund from time to time, is herein called the
"Prospectus").
4. The Adviser shall keep the Fund's books and records required to be
maintained by it pursuant to paragraph 2(e). The Adviser agrees that all records
which it maintains for the Fund are the property of the Fund and it will
promptly surrender any of such records to the Fund upon the Fund's request. The
Adviser further agrees to preserve for the periods prescribed by Rule 31 a-2 of
the Commission under the 194O Act any such records as are required to be
maintained by the Adviser with respect to the Fund by Rule 3 1 a- I of the
Commission under the 1940 Act.
5. During the term of this Agreement the Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement other than
the cost of securities and investments purchased for the Fund (including taxes
and brokerage commissions, if any).
6. For the services provided and the expenses borne pursuant to this
Agreement, the Adviser will receive from the Fund as full compensation therefor
a fee at an annual rate equal to 0.35% of the Fund's average daily net assets.
This fee will be computed based on net assets at 4:00 P.M. New York time on each
day the New York Stock Exchange is open for trading and New York banks are open
for business and will be paid to the Adviser monthly during the succeeding
calendar month.
7. The Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Fund in connection with the matters to
which this Agreement relates, except a loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set forth in
Section 36(b)(3) of the 1940 Act) or a loss resulting from wilful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
8. This Agreement shall continue in effect for two years from the date
of its execution and thereafter, but only so long as its continuance is
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated with
respect to the Fund by the Trust at any time, without the payment of any
penalty, by vote of a majority of all the Trustees of the Trust or by "vote of a
majority of the outstanding voting securities" of the Fund on 60 days written
notice to the Adviser, or by the Adviser at any time, without the payment of any
penalty, on 90 days written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its "assignment".
9. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized
3
<PAGE>
by the Trustees of the Trust from time to time, have no authority to act for or
represent the Fund or the Trust in any way or otherwise be deemed an agent of
the Fund or the Trust.
10. This Agreement may be amended by mutual consent, but the consent of
the Trust must be approved (a) by vote of a majority of those Trustees of the
Trust who are not parties to this Agreement or "interested persons" of any such
party, cast in person at a meeting called for the purpose of voting on such
amendment, and (b) by "vote of a majority of the outstanding voting securities"
of the Fund.
11. As used in this Agreement, the terms "assignment", "interested
persons" and "vote of a majority of the outstanding voting securities" shall
have the meanings assigned to them respectively in the 1940 Act.
12. Notices of any kind to be given to the Adviser by the Trust shall
be in writing and shall be duly given if mailed or delivered to the Adviser at
59 Wall Street, New York, New York 10005, Attention: Treasurer, or at such other
address or to such other individual as shall be specified by the Adviser to the
Trust. Notices of any kind to be given to the Trust by the Adviser shall be in
writing and shall be duly given if mailed or delivered to the Trust at The 59
Wall Street Trust, 6 St. James Avenue, Boston, Massachusetts 02116, Attention:
Secretary, or at such other address or to such other individual as shall be
specified by the Trust to the Adviser.
13. The Trustees have authorized the execution of this Agreement in
their capacity as Trustees and not individually and the Adviser agrees that
neither the shareholders nor the Trustees nor any officer, employee,
representative or agent of the Trust shall be personally liable upon, nor shall
resort be had to their private property for the satisfaction of, obligations
given, executed or delivered on behalf of or by the Trust, that the
shareholders, Trustees, officers, employees, representatives and agents of the
Trust shall not be personally liable hereunder, and the Adviser shall look
solely to the property of the Trust for the satisfaction of any claim hereunder.
14. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers or Partners designated below on the day and year
first above written.
THE 59 WALL STREET TRUST
ATTEST: By /s/J.V. SHIELDS, JR.
BROWN BROTHERS HARRIMAN & CO.
ATTEST: By /s/JOHN A. NIELSEN
4
Independent Auditors' Consent
We consent to the use in this Post-Effective Amendment No. 3 to
Registration Statement (No. 33-48606) of The 59 Wall Street Tax Free
Short/Intermediate Fixed Income Fund (a series of The 59 Wall Street Trust) of
our report dated August 11, 1995 appearing in the Statement of Additional
Information, which is a part of such Registration Statement, and to the
reference to us under the heading "Financial Highlights" appearing in the
Prospectus, which is also a part of such Registration Statement.
/s/DELOITTE & TOUCHE LLP
Boston, Massachusetts
October 25, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the 59 Wall
Street Trust Annual Report, dated 6/30/95 and is qualified inits entirety by
reference to such Annual Report.
</LEGEND>
<CIK> 0000722575
<NAME> THE 59 WALL STREET TRUST
<SERIES>
<NUMBER> 3
<NAME> THE 59 WALL STREET TAX FREE SHORT/INTERMEDATE FIXED INCOME F
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 47,411,987
<INVESTMENTS-AT-VALUE> 47,618,208
<RECEIVABLES> 1,576,302
<ASSETS-OTHER> 3,269,678
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 52,464,188
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 636,198
<TOTAL-LIABILITIES> 636,198
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 52,104,955
<SHARES-COMMON-STOCK> 5,044,084
<SHARES-COMMON-PRIOR> 6,649,421
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (483,186)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 206,221
<NET-ASSETS> 51,827,990
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,585,908
<OTHER-INCOME> 0
<EXPENSES-NET> 414,155
<NET-INVESTMENT-INCOME> 2,171,753
<REALIZED-GAINS-CURRENT> (401,310)
<APPREC-INCREASE-CURRENT> 1,220,494
<NET-CHANGE-FROM-OPS> 2,990,937
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,171,753
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 21,229,621
<NUMBER-OF-SHARES-REDEEMED> 38,082,365
<SHARES-REINVESTED> 608,425
<NET-CHANGE-IN-ASSETS> (15,425,135)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 207,074
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 557,871
<AVERAGE-NET-ASSETS> 59,164,061
<PER-SHARE-NAV-BEGIN> 10.11
<PER-SHARE-NII> 0.37
<PER-SHARE-GAIN-APPREC> 0.17
<PER-SHARE-DIVIDEND> 0.37
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.28
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
